<PAGE>   1
                                                                    EXHIBIT

                     AMENDED AND RESTATED LOAN AGREEMENT

     THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of December 2, 1997, is
among SECURITY ASSOCIATES INTERNATIONAL, INC., a Delaware corporation ("SAI"),
SECURITY ASSOCIATES COMMAND CENTER II, L.L.C., a Michigan limited liability
company ("SACC"), MONITOR SERVICE GROUP, L.L.C., a Delaware limited liability
company ("MSG"), ALL-SECURITY MONITORING SERVICES, L.L.C., an Illinois limited
liability company ("ASMS"), AMJ CENTRAL STATION CORPORATION, INC., a Delaware
corporation ("AMJ"), TELECOMMUNICATIONS ASSOCIATES GROUP, INC., an Ohio
corporation ("ERC"),and FINOVA CAPITAL CORPORATION, a Delaware corporation
("FINOVA"), in its individual capacity and as agent for all Lenders (this and
all other capitalized terms used herein are defined in Section 1.1 below).

                                R E C I T A L S:

     A. Borrowers and FINOVA are parties to a Loan Agreement dated December 31,
1996, as amended through the date hereof (the "Existing Loan Agreement")
pursuant to which FINOVA has made loans to Borrowers upon which there is a
principal balance owing of $14,934,730 (the "Existing Debt").

     B. Borrowers have requested that FINOVA make additional loans to Borrowers
in the aggregate amount not to exceed $15,065,270 (the "Additional Loans").

     C. FINOVA has agreed to make the Additional Loans upon the terms and
subject to the conditions set forth herein.

     NOW, THEREFORE, it is agreed that the Existing Loan Agreement is Amended
and Restated as follows:


                                   ARTICLE
                                     1.
                       DEFINITIONS AND DETERMINATIONS

     1.1. DEFINITIONS. As used in this Loan Agreement and in the other Loan
Instruments, unless otherwise expressly indicated herein or therein, the
following terms shall have the following meanings (such meanings to be
applicable equally to both the singular and plural forms of the terms defined):

     Account Debtor:  any Person who is obligated on or under an Account
Receivable.

     Accountants:  Arthur Andersen, L.L.P. or any other independent certified 
public accounting firm selected by Borrowers and reasonably satisfactory to 
Lenders.

     Accounting Changes: has the meaning assigned to that term in Section 1.3.


<PAGE>   2



     Accounts Receivable:  all presently existing and hereafter arising
accounts receivable and other rights to payment owing to any Borrower under 
Security Monitoring Contracts and/or Central Station Contracts.

     Accounts Receivable Decrease:  for any period, the excess of the Eligible 
Accounts at the beginning of such period over the Eligible Accounts at the end 
of such period.

     Accounts Receivable Increase:  for any period, the excess of Eligible 
Accounts at the end of such period over the Eligible Accounts at the beginning 
of such period.

     Acquisition: the acquisition by (i) MSG of Security Monitoring Contracts 
or (ii) by any Permitted Subsidiary of a Central Station Business or (iii) by 
SAI of all of the Equity Interests of a Person which owns and operates a 
Central Station Business.

     Acquisition Adjustment to Cash Flow: for any six-month period, the
product of (i)(A) if an Acquisition has been consummated during such period
an amount equal to the RMR of the Property that is the subject of such
Acquisition from the beginning of such period until the date such Acquisition
was consummated, and (B) in determining whether a proposed Acquisition
satisfies the conditions of subsection 4.3.2, an amount equal to the RMR of the
Property that is the subject of such Acquisition for such six-month period,
minus the aggregate of the pro forma expenses directly and indirectly related
to such RMR for the applicable period set forth in clause (A) or the six month
period set forth in clause (B), as determined to the satisfaction of Agent
based on financial and other information submitted to Agent by Borrowers and
subject to such adjustments for such period as Agent deems appropriate,
multiplied by (ii) two.

     Acquisition Closing:  the consummation of a Funded Acquisition.

     Acquisition Closing Date:  the date of an Acquisition Closing.

     Acquisition Instruments:  the purchase agreement and all other documents 
executed in connection with an Acquisition.

     Acquisition Loan Instruments:  collectively, the following documents, as 
applicable, to be executed and delivered in connection with each Acquisition:

     (i)     any amendments to the Loan Instruments and any mortgages, 
             security agreements, UCC Financing Statements and other    
             agreements reasonably required by Agent to (A) reflect the effect
             of such Acquisition, (B)grant to Agent a perfected first Lien,
             subject only to Permitted Prior Liens, upon all (x) Equity
             Interests of any Subsidiary which is the subject of or is formed
             to consummate such Acquisition, (y) existing and after-acquired
             Property of such Subsidiary and (z) other Property acquired by any
             Borrower pursuant to such Acquisition and (C) make any such


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             Subsidiary a "Borrower" under this Loan Agreement and a party to
             the Contribution Agreement.

     (ii)    a Landlord Consent and Waiver executed by each Landlord under 
             each Lease assumed or executed by any Borrower in connection with 
             such Acquisition; and

     (iii)   such other instruments and documents as Agent may reasonably 
             require in connection with such  Acquisition.

     ADA:  the Americans with Disabilities Act of 1990, as amended, any
successor statute thereto, and the rules and regulations issued thereunder, as
in effect from time to time. 

     Additional Loans: as defined in the Recitals.

     Adjusted Annualized Operating Cash Flow:  the Annualized Operating Cash 
Flow for the applicable period, plus the Acquisition Adjustment to Cash
Flow for such period.

     Adjusted Leverage Ratio: the ratio of the Adjusted Total Debt as of any 
Funding Date to Adjusted Annualized Operating Cash Flow for the period ending
on the most recent date for which Borrowers have delivered to Lenders financial
statements pursuant to subsection 6.3.1.

     Adjusted Total Debt: as of any Funding Date, the Total Debt as of such 
date plus the requested Advance.

     Advance: a disbursement of any portion of the Additional Loans.

     Affiliate: any Person that directly or indirectly, through one or more 
intermediaries, controls or is controlled by or is under common control with
another Person.  The term "control" means possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or equity interests,
by contract or otherwise.  For the purposes hereof, any Person which owns or
controls, directly or indirectly, 10% or more of the securities or equity
interests, as applicable, whether voting or non-voting, of any other Person
shall be deemed to "control" such Person.

     Agent: FINOVA, as agent for all Lenders.

     Alarm Licenses: a license or licenses issued by a state licensing
authority that authorize a Person to provide remote security monitoring 
services to consumers and/or businesses within such state.

     Amended and Restated Assignment of Leases: the Amended and Restated
Assignment of Leases of even date herewith executed by Borrowers in favor       
of Agent with respect to each Lease under which any Borrower is the lessee, as
hereafter amended.

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<PAGE>   4


     AMJ: as defined in the Preamble.

     Annualized Operating Cash Flow: as of any applicable date, the product of 
(i) the consolidated Operating Cash Flow of Borrowers for the six month period 
ending on such date, multiplied by (ii) two.

     Applicable Margin: as defined in subsection 2.4.1.

     Applicable Margin Ratio: the ratio of Total Debt as of the last day of 
any quarter to the Adjusted Annualized Operating Cash Flow of Borrowers for 
the period ending on such day.

     Applicable Ratio: on any day during a period set forth below, the ratio 
set forth opposite such period:

<TABLE>
<CAPTION>
         
           Each Day During the Period           Ratio
           --------------------------           -----
           <S>                                   <C>
           Closing Date through 12/31/98         4.00
           1/1/99 through 3/31/99                3.75
           4/1/99 through 6/30/99                3.50
           7/1/99 through 9/30/99                3.25
           10/1/99 through 3/31/00               3.00
           4/1/00 through 9/30/00                2.75
           10/1/00 through 3/31/01               2.50
           4/01/01 through 9/30/01               2.25
           10/1/01 and thereafter                2.00
           
</TABLE>


     ASMS: has the meaning assigned to that term in the Preamble to this Loan 
Agreement.

     Assignee: any Person to which a Loan Assignment is made in compliance 
with the provisions of subsection 9.1.1.

     Assignment of Leases: the Amended and Restated Assignment of Leases
executed by Borrowers in favor of Agent of even date herewith.

     Assignments of Acquisition Instruments: the assignments of Acquisition 
Instruments executed by the applicable Borrower in connection with each
Acquisition made by such Borrower on or after the Closing Date, each such
assignment to be consented to by the applicable sellerDecember 1, 1997 if such
consent is required by the terms of the Acquisition Instruments, and each such
assignment and consent to be in form acceptable to Agent.

     Assignments of Key Man Life Insurance: the assignments of each policy of 
Key Man Life Insurance, each executed by SAI and in form and substance 
acceptable to Agent.


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<PAGE>   5


     Bankruptcy Code: the United States Bankruptcy Code and any successor
statute thereto, and the rules and regulations issued thereunder, as in effect 
from time to time.

     Base Rate: the per annum rate of interest announced or published publicly 
from time to time by Citibank, N.A. in New York, New York as its        
corporate base (or equivalent) rate of interest, which rate shall change
automatically without notice and simultaneously with each change in such
corporate base rate.  The Base Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer
by Citibank, N.A. in New York, New York.

     Basic Financial Statements: as defined in subsection 6.3.3.

     Borrower: any of the Borrowers.

     Borrowers: SAI, SACC, MSG, ASMS, AMJ, ERC and each Permitted Subsidiary.

     Borrowers' Obligations: (i) any and all Indebtedness due or to become due, 
now existing or hereafter arising, of Borrowers to Lenders and/or Agent
pursuant to the terms of this Loan Agreement or any other Loan Instrument and
(ii) the performance of the covenants of Borrowers contained in the Loan
Instruments.

     Brannen: James S. Brannen.

     Business Day: any day other than a Saturday, Sunday or other day on which 
banks in Phoenix, Arizona are required to close.

     Business Insurance: such property, casualty, business interruption and
other insurance, other than the Key Man Life Insurance, as Agent from time to
time reasonably requires Borrowers to maintain.

     Capital Expenditures:  payments that are made or liabilities that are 
incurred by any Borrower for the lease, purchase, improvement, construction or
use of any Property, the value or cost of which under GAAP is required to be
capitalized and appears on such Borrower's balance sheet in the category of
property, plant or equipment, without regard to the manner in which such
payments or the instruments pursuant to which they are made are characterized
by any Borrower or any other Person, but excluding payments made or liabilities
incurred in connection with an Acquisition.  Except for the purpose of
determining Excess Cash Flow, a Capital Expenditure shall be deemed to be made
as of the time the Property which is the subject thereof is put into service by
the applicable Borrower.

     Capitalized Lease:  any lease of Property, the obligations for the rental 
of which are required to be capitalized in accordance with GAAP.


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<PAGE>   6


     Cash Equivalents: the aggregate of each Borrower's (i) cash on hand or in 
any bank or trust company, and checks on hand and in transit, (ii) monies
on deposit in any money market account, and (iii) treasury bills, certificates
of deposit, commercial paper and readily marketable securities at current
market value having, in each instance, a maturity of not more than 180 days.

     Cash Instruments: all cash, checks, drafts and other similar writings for 
the payment of money.

     Central Station Business: the business of owning and operating a central 
monitoring station and businesses related thereto and providing service 
pursuant to Central Station Contracts.

     Central Station Contracts: contracts with Dealers to provide monitoring 
services to the customers of the Dealers.

     Chief Financial Officer: the chief financial officer of each Borrower, who
shall be a duly elected officer, member or manager of such Borrower.

     Closing: the disbursement of the Initial Portion.

     Closing Certificate: a closing certificate executed by Borrowers in form 
and substance satisfactory to Agent.

     Closing Date: the date of the Closing.

     Code: the Internal Revenue Code of 1986, as amended, and any successor 
statute thereto, and the rules and regulations issued thereunder, as in effect 
from time to time.

     Collateral:  (i) all existing and after-acquired Property of each
Borrower, including without limitation all existing and after-acquired  
Accounts Receivable, equipment, inventory and general intangibles, (ii) the
Membership Interests, (iii) the Pledged Capital Stock, (iv) the Key Man Life
Insurance, and (v) all proceeds of the foregoing.

     Collected Funds: defined in subsection 2.11.1(b).

     Compliance Certificate:  a Compliance Certificate executed by Borrowers 
in the form of EXHIBIT 1.1(A) attached hereto.

     Contribution Agreement: the Amended and Restated Contribution Agreement 
among Borrowers with respect to Borrowers' Obligations of even date herewith.

     Covenant Leverage Ratio: the ratio of Total Debt as of the last day of 
any period to Adjusted Annualized Operating Cash Flow for the period ending 
on such day.


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<PAGE>   7


     Davis: Ronald Davis.

     Dealer:  any Person whose primary business is the installation of 
servicing alarm equipment and the sale of monitoring services.

     Dealer Holdback Debt: any Indebtedness for Borrowed Money owed by MSG to
Dealers in connection with the purchase of Security Monitoring Contracts.

     Dealer Holdback Report: the monthly report produced by Borrowers which 
provides due dates and amounts owed to each Dealer to whom a portion of the 
Dealer Holdback Debt is owed.

     Debt Service:  during any period, all payments of principal, interest, 
premium, fees and other charges with respect to Indebtedness for Borrowed
Money, which payments are required or permitted to be made pursuant to this
Loan Agreement and are due and payable during such period, but excluding the
Loan Fee and any Prepayment Premium.

     Debt Service Coverage Ratio: as of the last day of any quarter, the ratio 
of the Adjusted Annualized Operating Cash Flow for the period ending on such 
day to the Debt Service for the four quarter period ending on such day.

     Default Rate: a per annum rate equal to the applicable Base Rate in effect 
plus 4.0% per annum.

     Default Rate Period: a period of time commencing on the date that an
Event of Default has occurred and ending on the date that such Event of Default 
is cured or waived.

     Eligible Accounts: at any given time, the aggregate of the face amount of 
the accounts receivable of each Borrower not over 75 days past due.

     Employee Benefit Plan:  any employee benefit plan within the meaning of 
Section 3(3) of ERISA which (i) is maintained for employees of any      
Borrower or any ERISA Affiliate or (ii) has at any time within the preceding
six years been maintained for the employees of any Borrower or any current or
former ERISA Affiliate.

     Environmental Audit: (i) a Phase I audit report with respect to a parcel 
of real estate and such other studies and reports as Agent deems        
necessary after review of the results of such Phase I audit report, including,
if reasonably required by Agent, soil and ground water tests, each such report
and study to be in form and content and issued by Persons reasonably acceptable
to Agent and (ii) a letter from each Person issuing each such report or study
entitling Lenders to rely thereon.

     Environmental Certificate:  an environmental certificate executed by
Borrowers in form and substance reasonably satisfactory to Agent.


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<PAGE>   8


     Environmental Compliance Certificate: an Environmental Compliance
Certificate in the form of EXHIBIT 1.1(B).

     Environmental Laws: any and all federal, state and local laws that relate 
to or impose liability or standards of conduct concerning public or
occupational health and safety or protection of the environment, as now or
hereafter in effect and as have been or hereafter may be amended or
reauthorized, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), the
Hazardous Materials Transportation Act (42 U.S.C. Section 1802 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.), the Clean Air Act (42
U.S.C. Section 7901 et seq.), the National Environmental Policy Act (42 U.S.C.
Section 4231, et seq.), the Refuse Act (33 U.S.C. Section 407, et seq.), the
Safe Drinking Water Act (42 U.S.C. Section 300(f) et seq.), the Occupational
Safety and Health Act (29 U.S.C. Section 651 et seq.), and all rules,
regulations, codes, ordinances and guidance documents promulgated or published
thereunder, and the provisions of any licenses, permits, orders and decrees
issued pursuant to any of the foregoing.

     Equity Interests: all of the outstanding capital stock of a corporation 
and all of the membership interests of a limited liablity company.

     ERC: as defined in the Preamble.

     ERISA: the Employee Retirement Income Security Act of 1974, as amended, 
any successor statute thereto, and the rules and regulations issued thereunder, 
as in effect from time to time.

     ERISA Affiliate: any Person who is a member of a group which is under 
common control with any Borrower, who together with any Borrower is treated
as a single employer within the meaning of Section 414(b), (c) and (m) of the
Code.

     Event of Default: any of the Events of Default set forth in Section 8.1.

     Excess Cash Flow: for any period, (i) the consolidated Operating Cash 
Flow of Borrowers for such period, (ii) plus, the Accounts Receivable
Decrease, if any, for such period and (iii) minus, the sum of the following for
such period: (A) Debt Service actually paid during such period, (B) all cash
payments made by Borrowers during such period with respect to Capital
Expenditures permitted pursuant to subsection 7.6, (C) all expenditures made by
Borrowers during such period for Non-Funded Acquisitions and (D) the Accounts
Receivable Increase, if any, for such period.

     Excess Interest: as defined in subsection 2.4.3.

     Existing Debt: as defined in the Recitals.


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     Existing Loan Agreement: as defined in the Recitals.

     Funded Acquisition: an Acquisition that is funded with an Advance.

     Funding Date:  the date of the disbursement of an Advance.

     Future Portion: the portion of the Additional Loans in excess of the
Initial Portion.

     GAAP: generally accepted accounting principles as in effect from time to 
time, which shall include but shall not be limited to the official
interpretations thereof by the Financial Accounting Standards Board or any
successor thereto.

     Good Funds: United States Dollars available in Federal funds to (i)
FINOVA at or before 2:00 p.m., Phoenix time, on a Business Day and (ii) any
other Lender at the place and at or before the time designated in the written
direction delivered by such Lender to Borrowers pursuant to clause (ii) of
Section 2.11.2.

     Governmental Body:  any foreign, federal, state, municipal or other
government or any department, commission, board, bureau, agency, public
authority or instrumentality thereof or any court or arbitrator.

     Hazardous Materials: any hazardous, toxic, dangerous or other waste,
substance or material defined as such in, regulated by or for purposes of any 
Environmental Law.

     Holding Companies: collectively, RMR Management Corp., Winnetka Investors, 
Inc. and MCAP Investors, Inc., each a Delaware corporation.

     Hurdle Amount:  the monthly estimate of Borrowers' accrued interest on 
the Principal Balance, as determined by Agent in its sole and absolute
discretion.

     Incipient Default: any event or condition which, with the giving of notice 
or the lapse of time, or both, would become an Event of Default.

     Indebtedness:  all liabilities, obligations and reserves, contingent or 
otherwise, which, in accordance with GAAP, would be reflected as a      
liability on a balance sheet or would be required to be disclosed in a
financial statement, including, without duplication: (i) Indebtedness for
Borrowed Money, (ii) obligations secured by any Lien upon Property, (iii)
guaranties, letters of credit and other contingent obligations and (iv)
liabilities in respect of unfunded vested benefits under any Pension Plan or in
respect of withdrawal liabilities incurred under ERISA by any Borrower or any
ERISA Affiliate to any Multiemployer Plan.

     Indebtedness for Borrowed Money: without duplication, all Indebtedness 
(i) in respect of money borrowed, (ii) evidenced by a note, debenture or
other like written obligation to pay money (including, without limitation, all
of Borrowers' Obligations, the Subordinated Debt and 

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<PAGE>   10


Permitted Senior Indebtedness), (iii) in respect of rent or hire of
Property under Capitalized Leases or for the deferred purchase price of
Property, (iv) in respect of obligations under conditional sales or other title
retention agreements and (v) all guaranties of any or all of the foregoing.

     Initial Portion: a portion of the Additional Loans in the amount of
$____________ to be disbursed on the Closing Date.

     Instruments: collectively, the (i) Loan Instruments, (ii) Contribution 
Agreement and (iii) Subordinated Debt Instruments.

     Key Man Life Insurance: the life insurance on the lives of Brannen and 
Davis required pursuant to subsection 6.6.1.

     Landlord: a lessor under a lease of real property.

     Landlord Consent and waiver: a landlord consent and waiver in the form of 
EXHIBIT 1.1(D).

     Leases: the leases of real property described in EXHIBIT 5.5.5.

     Leasehold Property:  any real estate which is the subject of a Lease under 
which any Borrower is the lessee.

     Lender Addition Agreement: an agreement executed by a Lender and an 
Assignee pursuant to Section 9.1.

     Lenders: FINOVA and each Assignee.

     Lenders' Decisions: all determinations to be made by Lenders pursuant to 
the terms of the Loan Instruments, including, without limitation, any
amendment or modification of any of the Loan Instruments, determinations with
respect to the declaration of Events of Default and acceleration of Borrowers'
Obligations or any other obligation of any Obligor, waivers of affirmative or
negative covenants or other provisions of the Loan Instruments, advancement of
funds pursuant to any of the Loan Instruments or the exercise of any rights or
remedies granted to Lenders or Agent pursuant to the terms of any of the Loan
Instruments.

     Lien: any mortgage, pledge, assignment, lien, charge, encumbrance or
security interest of any kind, or the interest of a vendor or lessor under any
conditional sale agreement, Capitalized Lease or other title retention
agreement.

     Loan: the Existing Debt and the Additional Loans.

     Loan Agreement: this Amended and Restated Loan Agreement.


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<PAGE>   11


     Loan Assignment: the assignment by a Lender of (i) any portion of such 
Lender's interest in Borrowers' Obligations and (ii) any of such Lender's 
other rights under any of the Loan Instruments.

     Loan Fee: the fee to be paid by Borrowers to FINOVA in accordance with 
Section 2.7.

     Loan Instruments:

     (i)    Loan Agreement;
     
     (ii)   Note;
     
     (iii)  Security Instruments;
     
     (iv)   Subordination Agreement;
     
     (v)    Closing Certificate;
     
     (vi)   Solvency Certificate;
     
     (vii)  Environmental Certificate;
     
     (viii) Uniform Commercial Code financing statements delivered to Agent 
     prior to the Closing and any such statements required by Agent on or 
     after the Closing Date;

     (ix)   Acquisition Loan Instruments when delivered pursuant to this Loan 
     Agreement; and

     (x)    such other instruments and documents as Agent reasonably may 
     require in connection with the transactions contemplated by this Loan 
     Agreement.

     Loan Year: a period of time from the Closing Date or any anniversary of 
the Closing Date to the immediately succeeding anniversary of the Closing Date.

     Lockboxes: the lockboxes identified in the Lockbox Account Agreement into 
which all Cash Instruments received by any Borrower from an Account Debtor 
shall be deposited.

     Lockbox Accounts: the accounts identified in the Lockbox Account
Agreement which shall be credited for all Cash Instruments deposited in the 
Lockboxes.

     Lockbox Account Agreement: the Amended and Restated Restricted Lockbox 
and Cash Collateral Accounts Agreement among Lenders, Borrowers and Lockbox
Bank of even date herewith, as hereafter amended.

     
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<PAGE>   12



     Lockbox Bank:  shall mean American National Bank and Trust Company of 
Chicago or any other financial institution acceptable to Lenders and Borrowers.

     Manager: Brannen.

     Material Adverse Effect: (i) a material adverse effect upon the business, 
operations, Property or financial condition of any Borrower or (ii) a material
impairment of the ability of any Obligor to perform its obligations under any
Loan Instrument to which it is a party.

     Maximum Rate: as defined in subsection 2.4.3.
     
     Membership Interests: all of the outstanding membership interests,
warrants, options and other equity interests of SACC, MSG, ASMS and any
Permitted Subsidiary.

     MSG: as defined in the Preamble.

     Multiemployer Plan: any multiemployer plan as defined pursuant to
Section 3(37) of ERISA to which any Borrower or any ERISA Affiliate makes,
or accrues an obligation to make, contributions, or has made, or been obligated
to make, contributions within the preceding six years.

     Non-Funded Acquisition:  an Acquisition which is not funded with an
Advance, provided that immediately after such Acquisition, Borrowers have Cash 
Equivalents of not less than $150,000.

     Note:  a promissory note in form and substance satisfactory to FINOVA in 
the principal amount of $30,000,000 executed and delivered by Borrowers to
FINOVA to evidence the Loan, and any notes issued in substitution therefor
pursuant to subsection 9.1.3.

     Obligor: any of the Obligors.

     Obligors:  collectively, Borrowers and the Holding Companies.

     Operating Cash Flow: for any period for each Borrower, the net income of 
such Borrower for such period:

         (i)    plus the sum of the following (without duplication), to the
     extent deducted in determining such net income for such period:

                (A)    losses from sales, exchanges and other dispositions of
         Property or other extraordinary losses not in the ordinary course of 
         business;


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<PAGE>   13



                (B)    interest paid or accrued on Indebtedness, including,
         without limitation, interest on Capitalized Leases that is imputed
         in accordance with GAAP and any other Debt Service, except interest
         paid during such period on the Subordinated Debt;

                (C)    depreciation and amortization of assets;

                (D)    income taxes which are accrued but not paid during such
         period; and

                (E)    any non-cash compensation to employees of any Borrower 
         and any non-cash compensation to dealers of Borrowers in connection
         with incentive programs; and

         (ii)   minus the sum of the following (without duplication), to the
     extent included in determining net income for such period:

                (A)    gains from sales, transactions, exchanges and other
         dispositions of Property or other extraordinary gains not in the 
         ordinary course of business; and

                (B)    proceeds of any insurance other than business 
         interruption insurance.

     Operating Lease: any lease which, under GAAP, is not required to be
capitalized.

     Original Loan Year: a Loan Year as defined in the Existing Loan
Agreement.

     Participant:  any Person to which a Lender sells or assigns a 
Participation.

     Participation: a sale or an assignment by a Lender of a participating 
interest in (i) any portion of such Lender's interest in Borrowers'
Obligations and (ii) any of such Lender's rights under any of the Loan
Instruments.

     PBGC: the Pension Benefit Guaranty Corporation or any Governmental Body 
succeeding to the functions thereof.

     Pension Plan: any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Part 3 of Title I of ERISA, Title
IV of ERISA, or Section 412 of the Code and which (i) is maintained for
employees of any Borrower or any ERISA Affiliate, or (ii) has at any time
within the preceding six years been maintained for the employees of any
Borrower or any of their current or former ERISA Affiliates.

     Permitted Liens: any of the following Liens:

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<PAGE>   14


         (i)    the Security Interests;

         (ii)   the Permitted Senior Indebtedness Liens;

         (iii)  Liens for taxes or assessments and similar charges, which 
     either are (A) not delinquent or (B) being contested diligently and
     in good faith by appropriate proceedings, and as to which the applicable
     Borrower has set aside reserves on its books which are satisfactory to
     Agent;

         (iv)   statutory Liens, such as mechanic's, materialman's, 
     warehouseman's, carrier's or other like Liens, incurred in good faith
     in the ordinary course of business, provided that the underlying
     obligations relating to such Liens are paid in the ordinary course of
     business, or are being contested diligently and in good faith by
     appropriate proceedings and as to which the applicable Borrower has set
     aside reserves on its books satisfactory to Agent, or the payment of which
     obligations are otherwise secured in a manner reasonably satisfactory to
     Agent;

         (v)    zoning ordinances, easements, licenses, reservations, 
     provisions, covenants, conditions, waivers or restrictions on the use of
     Property and other title exceptions, in each case, that are reasonably
     acceptable to Agent;

         (vi)   Liens in respect of judgments or awards with respect to which 
     no Event of Default would exist pursuant to subsection 8.1.6; and

         (vii)  Liens to secure payment of insurance premiums (A) to be paid 
     in accordance with applicable laws in the ordinary course of business
     relating to payment of worker's compensation, or (B) that are required for
     the participation in any fund in connection with worker's compensation,
     unemployment insurance, old-age pensions or other social security
     programs.

Permitted Prior Liens: any of the following Liens:

         (i)    the Permitted Senior Indebtedness Liens;

         (ii)   the Permitted Liens described in clauses (iii) and (iv) of the 
     definition of Permitted Liens that are accorded priority to the
     Security Interests by law; and

         (iii)   the Permitted Liens described in clauses (v) and (vii) of the 
     definition of Permitted Liens, subject to the limitations set forth 
     therein.

     Permitted Senior Indebtedness: Indebtedness, other than Borrowers'
Obligations, incurred by any Borrower to purchase tangible personal     
property or Indebtedness incurred to lease tangible personal property pursuant
to Capitalized Leases, provided that (i) the aggregate amount 


                                     14


<PAGE>   15


of such Indebtedness of all Borrowers at any one time outstanding shall not
exceed $200,000, and (ii) no Event of Default exists at the time or will be
caused as a result of the incurrence of any Indebtedness described in clause
(i).

     Permitted Senior Indebtedness Liens: Liens that secure Permitted Senior 
Indebtedness, provided that (i) each such Lien attaches only to the     
Property purchased or leased with the proceeds of the Permitted Senior
Indebtedness incurred with respect to such Property and (ii) Agent is granted a
Lien upon such Property, subject only to the Lien granted to the holder of the  
applicable Permitted Senior Indebtedness.

     Permitted Subsidiary: any Subsidiary (i) the Equity Interests of which 
are the subject of a proposed Acquisition or which is formed to consummate such
Acquisition and (ii) the Equity Interests of which will be wholly owned by SAI
upon the consummation of such Acquisition, provided that Borrowers and such
Subsidiary (A) execute and deliver to Agent all applicable Acquisition Loan
Instruments in connection with such Acquisition and (B) satisfy the applicable
requirements of Section 4.2.

     Person:  any individual, firm, corporation, limited liability company, 
business enterprise, trust, association, joint venture, partnership,
Governmental Body or other entity, whether acting in an individual, fiduciary
or other capacity.

     Pledge Agreement: the Amended and Restated Pledge Agreement of even date 
herewith executed by the Obligors pursuant to which Agent is granted a Lien
upon the Membership Interests and the Pledged Capital Stock, as hereafter
amended.

     Pledged Capital Stock:  all of the issued and outstanding capital stock, 
warrants, options and other equity interests of AMJ, ERC and any Permitted 
Subsidiary which is a corporation.

     Prepayment Premium: defined in subsection 2.9.1(a).

     Principal Balance: the unpaid principal balance of the Loan or any
specified portion thereof outstanding from time to time.

     Property: all types of real, personal or mixed property and all types of 
tangible or intangible property.

     Qualified Depository:  a member bank of the Federal Reserve System having 
a combined capital and surplus of at least $100,000,000.

     Remainder Funds: defined in subsection 2.11.1(b).

     RMR: the amount payable on Security Monitoring Contracts or Central 
Station Contracts per month by an Account Debtor.

                                     15

<PAGE>   16



     Rubin: Steven Rubin.

     SAI: as defined in the Preamble.

     Securities Act: the Securities Act of 1933, as amended, or any similar 
Federal statute, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, as in effect from time to time.

     Security Agreement: the Amended and Restated Security Agreement executed 
by Borrowers in favor of Agent of even date herewith, as hereafter amended.

     Security Interests: the Liens in the Collateral granted to Agent pursuant 
to the Security Instruments and any other document now or hereafter
executed by any Obligor which purports to grant a Lien on the Property of such
Obligor in favor of Agent.

     Security Instruments: collectively, the Assignment of Leases, the
Assignments of Key Man Life Insurance, the Assignments of Acquisition 
Instruments, the Security Agreement, the Pledge Agreement and the Lockbox
Account Agreement.

     Security Monitoring Business: the business of providing remote
security monitoring services and operating Central Station Businesses.

     Security Monitoring Contracts: any contract between MSG and a retail
customer involving the provision of remote security monitoring services to 
such customer.

     Solvency Certificate: a solvency certificate executed by Borrowers in 
form and substance reasonably satisfactory to Agent.

     Stated Rate: as defined in subsection 2.4.3.

     Subordinated Debt: the Indebtedness in the principal amount of $5,000,000 
owed by SAI to TJS Partners, as evidenced by the Subordinated Debt Instruments.

     Subordinated Debt Instruments:  all instruments and documents executed 
and/or delivered in connection with the Subordinated Debt.

     Subordination Agreement: the Amended and Restated Subordination Agreement
among Agent, TJS Partners and SAI of even date herewith.

     Subsidiary: a corporation or a limited liability company which is not a 
Borrower.

     Termination Event: (i) a "Reportable Event" described in Section 4043 of 
ERISA and the regulations issued thereunder; or (ii) the withdrawal of
any Borrower or any ERISA Affiliate from a Pension Plan during a plan year in
which it was a "substantial employer" as defined in 


                                     16

<PAGE>   17


Section 4001(a)(2); or (iii) the termination of a Pension Plan, the filing of
a notice of intent to terminate a Pension Plan or the treatment of a Pension
Plan amendment as a termination under Section 4041 of ERISA; or (iv) the
institution of proceedings to terminate, or the appointment of a trustee with
respect to, any Pension Plan by the PBGC; or (v) any other event or condition
which would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension
Plan; or (vi) the partial or complete withdrawal of any Borrower or any ERISA
Affiliate from a Multiemployer Plan; or (vii) the imposition of a lien pursuant
to Section 412 of the Code or Section 302 of ERISA; or (viii) any event or
condition which results in the reorganization or insolvency of a Multiemployer
Plan under Sections 4241 or 4245 of ERISA; or (ix) any event or condition which
results in the termination of a Multiemployer Plan under Section 4041A of ERISA
or the institution by the PBGC of proceedings to terminate a Multiemployer Plan
under Section 4042 of ERISA.

     TJS Partners: TJS Partners, L.P., a New York limited partnership.

     Total Debt:  as of any date, the sum of Borrowers' Obligations and Dealer 
Holdback Debt as of such date.

     UL Certification: underwriters laboratories approval of a Central Station 
Business.

     Unused Commitment Fee: the fee to be paid by Borrowers to FINOVA in
accordance with Section 2.8.

     1.2. TIME PERIODS. In this Loan Agreement and the other Loan Instruments, 
in the computation of periods of time from a specified  date to a later
specified date, (i) the word "from" means "from and including," (ii) the words
"to" and "until" each mean "to, but excluding" and (iii) the words "through,"
"end of" and "expiration" each mean "through and including."  Unless otherwise
specified, all references in this Loan Agreement and the other Loan Instruments
to (i) a "month" shall be deemed to refer to a calendar month, (ii) a "quarter"
shall be deemed to refer to a calendar quarter and (iii) a "year" shall be
deemed to refer to a calendar year.

     1.3. ACCOUNTING TERMS AND DETERMINATIONS.  All accounting terms not
specifically defined herein shall be construed, all accounting determinations
hereunder shall be made and all financial statements required to be delivered
pursuant hereto shall be prepared in accordance with GAAP as in effect at the
time of such interpretation, determination or preparation, as applicable.  In
the event that any "Accounting Changes" (as hereinafter defined) occur and such
changes result in a change in the method of calculation of financial covenants,
standards or terms contained in this Loan Agreement, then Borrowers and Lenders
agree to enter into negotiations to amend such provisions of this Loan
Agreement so as to reflect such Accounting Changes with the desired result that
the criteria for evaluating the financial condition of Borrowers shall be the
same after such Accounting Changes as if such Accounting Changes had not been
made.  For purposes hereof, "Accounting Changes" shall mean (i) changes in
generally accepted accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants 


                                     17


<PAGE>   18


(or any successor thereto) or other appropriate authoritative body and (ii)
changes in accounting principles as approved by the Accountants.

     1.4. REFERENCES. All references contained in (i) this Loan Agreement to
"Article," "Section," "subsection," "subparagraph," "clause" or "Exhibit,"
unless otherwise indicated, shall be deemed to refer to an Article, Section,
subsection, subparagraph, clause or Exhibit, as applicable, of this Loan
Agreement, and (ii) any Loan Instrument to any Loan Instrument at any given
time shall be to such Loan Instrument as the same shall have been amended,
supplemented, restated or otherwise modified as of such time.

     1.5. LENDER'S OR AGENT'S DISCRETION.  Whenever the terms "satisfactory to
Lenders or Agent," "determined by Lenders or Agent," "acceptable to Lenders or
Agent," "Lenders or Agent shall elect," "Lenders or Agent shall request," "at
the option or election of Lenders or Agent," or similar terms are used in the
Loan Instruments, except as otherwise specifically provided therein, such terms
shall mean satisfactory to, at the election or option of, determined by,
acceptable to or requested by Lenders or Agent, as applicable, in their or its
sole and unlimited discretion.

     1.6. BORROWERS' KNOWLEDGE. Any statements, representations or warranties 
that are based upon the best knowledge of Borrowers or an officer or manager 
thereof shall be deemed to have been made after due inquiry by Borrowers or an 
officer or manager, as applicable, with respect to the matter in question.


                                   ARTICLE
                                     2.
                          LOAN AND TERMS OF PAYMENT

     2.1.  INITIAL PORTION.

           2.1.1. AMOUNT AND DISBURSEMENT. The Initial Portion shall consist 
of a disbursement to be made by Agent to Borrowers in the amount of
$__________ on the Closing Date, provided that all of the terms and conditions
set forth in Section 4.1 have been satisfied.

           2.1.2. USE OF PROCEEDS. The proceeds of the Initial Portion shall 
be used (i) to consummate a Funded Acquisition, (ii) to pay transaction costs
and (iii) for working capital.

     2.2.  FUTURE PORTION.

           2.2.1. AMOUNT AND DISBURSEMENT. The Future Portion shall consist of
Advances to be made by Lenders to Borrowers up to the maximum amount of 
$____________ from time to time after the Closing Date until the end of the
first Loan Year, provided that all of the terms and conditions set forth in
subsection 2.2.3 have been satisfied.


                                     18


<PAGE>   19


           2.2.2. USE OF PROCEEDS. The proceeds of the Future Portion shall 
be used to (i)  consummate Funded Acquisitions, (ii) pay SAI all or a portion
of the amount which SAI has advanced in connection with a Non-Funded
Acquisition and (iii) pay transaction costs.

           2.2.3. CONDITIONS PRECEDENT TO ADVANCES. The obligation of each 
Lender to make any Advance shall be subject to the satisfaction of the
following conditions:

           (A)    no Incipient Default or Event of Default exists or would be
     created by the disbursement of such Advance;

           (B)    each such Advance shall be in a minimum amount of $250,000 and
     integral multiples of $50,000 in excess of that amount;

           (C)    Agent shall have received a Request for Advance from Borrowers
     in the form of EXHIBIT 2.2.3 with respect to each such Advance no later 
     than 12:00 p.m., Chicago time, at least five (5) Business Days prior to 
     the proposed Funding Date with respect to such Advance, which Funding 
     Date shall be on a Business Day;

           (D)    the terms and conditions of Sections 4.2 and 4.3 shall have
     been satisfied;

           (E)    the Property which has been or is being acquired and the terms
     and conditions of the Acquisition to be consummated with such Advance 
     must be approved by Agent; and

           (F)     on the applicable Funding Date the representations and
     warranties of each Obligor set forth in the Loan Instruments to which
     such Obligor is a party shall be true and correct in all material respects
     when made and at and as of the time of the Funding Date, except to the
     extent that such representations and warranties expressly relate to an
     earlier date.

     2.3.  NOTE AND REBORROWING.

           2.3.1. NOTE. The Loan shall be evidenced by the Note.
           
           2.3.2. REBORROWING.  Borrowers shall not be entitled to reborrow any
     portion of the Loan which is repaid or prepaid.

     2.4.  INTEREST.

           2.4.1. INTEREST RATE.  Except during a Default Rate Period as 
     provided in Section 2.10, Borrowers' Obligations shall bear
     interest at the Base Rate in effect from time to time plus the Applicable
     Margin. The "Applicable Margin" for any quarter shall be the percentage
     set forth below opposite the Applicable Margin Ratio, determined as of the
     last day of the second quarter immediately preceding such quarter:


                                     19


<PAGE>   20



<TABLE>
<CAPTION>

           Applicable         Applicable
           Margin Ratio       Margin
           ------------       ----------
           <S>                     <C>
           greater than            2.00%
           or equal to 3.5
           
           greater than            1.75%
           or equal to 2.5
           but less than 3.5
           
           less than 2.5           1.50%
</TABLE>   


The Applicable Margin shall be 2.00% per annum until Lenders receive (i)        
written notice from Borrowers requesting an adjustment in the Applicable Margin
accompanied by (ii) the financial statements indicating that the requested
adjustment is appropriate.

           2.4.2. INTEREST COMPUTATION. Interest shall be computed on the 
basis of a year consisting of 360 days and charged for the actual number
of days during the period for which interest is being charged. In computing
interest, the date of funding of an advance of the Loan shall be included and
the date of payment shall be excluded.

           2.4.3. MAXIMUM INTEREST. Notwithstanding any provision to the 
contrary contained herein or in any other Loan Instrument, Lenders shall
not collect a rate of interest on any obligation or liability due and owing by
Borrowers to Lenders in excess of the maximum contract rate of interest
permitted by applicable law ("Excess Interest"). Lenders and Borrowers agree
that the interest laws of the State of Arizona govern the relationship among
them, but in the event of a final adjudication to the contrary, Borrowers shall
be obligated to pay, nunc pro tunc, to Lenders only such interest as then shall
be permitted by the laws of the state found to govern the contract relationship
among Lenders and Borrower. If any Excess Interest is provided for or
determined by a court of competent jurisdiction to have been provided for in
this Loan Agreement or any other Loan Instrument, then in such event (i) no
Obligor shall be obligated to pay such Excess Interest, (ii) any Excess
Interest collected by Lenders shall be, at Lenders' option, (A) applied to the
Principal Balance or to accrued and unpaid interest not in excess of the
maximum rate permitted by applicable law or (B) refunded to the payor thereof,
(iii) the interest rates provided for herein (collectively, the "Stated Rate")
shall be automatically reduced to the maximum rate allowed from time to time
under applicable law (the "Maximum Rate") and this Loan Agreement and the other
Loan Instruments, as applicable, shall be deemed to have been, and shall be,
modified to reflect such reduction, and (iv) neither any Borrower nor any other
Obligor shall have any action against Lenders for any damages arising out of
the payment or collection of such Excess Interest; provided, however, that if
at any time thereafter the Stated Rate is less than the Maximum Rate, Borrowers
shall, to the extent permitted by law, continue to pay interest at the Maximum
Rate until such time as the total interest received by Lenders is 

  
                                     20


<PAGE>   21


equal to the total interest which Lenders would have received had the Stated
Rate been (but for the operation of this provision) the interest rate payable.
Thereafter, the interest rate payable shall be the Stated Rate unless and until
the Stated Rate again exceeds the Maximum Rate, in which event the provisions
contained in this subsection 2.4.3 shall again apply.

     2.5.  PRINCIPAL AND INTEREST PAYMENTS.

           2.5.1. INTEREST.  Except as otherwise provided in subsections 
2.9.1(c) and 2.9.2(c), interest on the Principal Balance shall be payable
monthly in arrears on the first Business Day of each month beginning with the
month following the month in which the Closing Date occurs. PRINCIPAL. The
Principal balance shall be payable in consecutive quarterly installments on the
first Business Day of each quarter set forth below in an amount equal to the
product of (i) the percentage set forth below opposite such quarter, multiplied
by (ii) the outstanding Principal Balance as of the end of the first Loan Year
as follows:


<TABLE>
<CAPTION>
                                            Percentage of Outstanding
                                           Principal Balance as of end
                                            of first Loan Year Due as
     Quarter Beginning                            an Installment
     -----------------                            --------------
     <S>                                                <C>
     April, 1999                                        2.5%
     July, 1999                                         2.5%
     October, 1999                                      2.5%
     January, 2000                                      2.5%
     April, 2000                                        4.0%
     July, 2000                                         4.0%
     October, 2000                                      4.0%
     January, 2001                                      4.0%
     April, 2001                                        5.0%
     July, 2001                                         5.0%
     October, 2001                                      5.0%
     January, 2002                                      5.0%
     April, 2002                                        5.5%
     July, 2002                                         5.5%
     October, 2002                                      5.5%
     
</TABLE>


     The remaining Principal Balance, together with any other sums which then
     are due and payable pursuant to the terms of the Loan Instruments, shall
     be due and payable in full on the last Business Day of the quarter
     commencing October, 2002.

     2.6. LATE CHARGES. If a payment of principal or interest to be made 
pursuant to this Loan Agreement becomes past due for a period in excess of
five days, Borrowers shall pay on demand to Lenders a late charge of 2% of the
amount of such overdue payment.


                                     21


<PAGE>   22


     2.7. LOAN FEE. Borrowers shall pay a loan fee to FINOVA in the amount of
$222,000, which shall be deemed to be fully earned and payable on the Closing
Date.

     2.8. UNUSED COMMITMENT FEE.  For the first Loan Year, Borrowers shall pay 
to Agent a fee (the "Unused Commitment Fee") monthly in arrears on the first
Business Day of each month beginning with the month following the month in
which the Closing Date occurs in an amount equal to the product of (i) (A)
$30,000,000 minus (B) the average daily balance of the outstanding Principal
Balance during such preceding month, multiplied by (ii) one-half of one percent
(.50%) on a per annum basis. The Unused Commitment Fee expires at the end of
the first Loan Year.

     2.9. PREPAYMENTS.

          2.9.1.  VOLUNTARY PREPAYMENT OF LOAN. Borrowers may at any time 
     voluntarily prepay in whole or in part the Principal Balance, subject to 
     the following conditions:

                  (A)  PREPAYMENT PREMIUM.  Except as provided in subsection 
     2.9.3, concurrently with any voluntary prepayment of all or any part
     of the Principal Balance, Borrowers shall pay to Lenders a prepayment
     premium (the "Prepayment Premium") equal to a percentage of the amount of
     the Principal Balance prepaid, determined in accordance with the following
     schedule:

<TABLE>
<CAPTION>
                                                 Percentage of Principal
     Period of Prepayment                            Balance Prepaid
     --------------------                            ---------------
     <S>                                                   <C>
     First Original Loan Year                              4.0%
     Second Original Loan Year                             3.0%
     Third Original Loan Year                              2.0%
     Fourth Original Loan Year                             1.0%
     Thereafter                                            0.0% 
     
</TABLE>


                  (B) NOTICE OF PREPAYMENT; NUMBER AND AMOUNT OF PREPAYMENTS. 
          Not less than 20 days prior to the date upon which Borrowers desire
          to make any voluntary prepayment of the Principal Balance, Borrowers
          shall deliver to Lenders notice of their intention to prepay, which
          notice shall state the prepayment date and the amount of the
          Principal Balance to be prepaid. The amount of any partial prepayment
          of the Principal Balance shall be not less than $100,000 or integral
          multiples thereof. A prepayment of the Principal Balance shall not be
          made more frequently than once a month. If Borrowers deliver to
          Lenders a notice of prepayment and fail to make such prepayment,
          Borrowers shall reimburse Lenders on demand in the amount of any
          loss, cost and/or expense reasonably incurred by Lenders as a result
          of Lenders' reliance on such notice, including without limitation,
          any loss, cost or expense resulting from Lenders' 

                                     22


<PAGE>   23

          contractual obligations in connection with the reinvestment of the
          amount indicated in such notice of prepayment.

                  (C) ADDITIONAL PAYMENTS.  Concurrently with any prepayment 
          of the Principal Balance pursuant to this subsection 2.9.1,
          Borrowers shall pay to Lenders accrued and unpaid interest on the
          PORTION of the Principal Balance which is being prepaid to the date
          on which Lenders are in receipt of Good Funds, and any other sums
          which are due and payable pursuant to the terms of any of the Loan
          Instruments.

                  (D) APPLICATION OF PARTIAL PREPAYMENTS.  Any partial 
          prepayment of the Principal Balance pursuant to this subsection 2.9.1
          shall be applied to the installments of the Principal Balance in the
          inverse order of maturity.

          2.9.2.  MANDATORY PREPAYMENTS OF THE LOAN.

                  (A) EXCESS CASH FLOW PAYMENTS. Until the Loan is paid in 
          full, for each year commencing with the year 1998 Borrowers shall
          pay to Lenders not later than the earlier of (x) 30 days after
          receipt by Lenders OF THE BASIC FINANCIAL STATEMENTS FOR SUCH YEAR
          AND (Y) 120 DAYS AFTER THE END OF such year, an amount equal to the
          lesser of (i) 75% of the Excess Cash Flow for such year and (ii) the
          amount by which the Cash Equivalents as of the date such payment is
          to be made exceeds $300,000.

                  (B) PROCEED OF KEY MAN LIFE INSURANCE.  All proceeds of Key 
          Man Life Insurance received by Agent shall be applied as a
          PREPAYMENT of Borrowers' Obligations in accordance with subparagraph
          (c) below.

                  (C) APPLICATION OF MANDATORY PREPAYMENTS.  Prepayments 
          received by Lenders pursuant to this subsection 2.9.2 shall be
          applied in the following order of priority to the payment of:  (i)
          any and all sums which are due and payable pursuant to the terms of
          the Loan Instruments, EXCEPT the Principal Balance and accrued
          interest thereon, (ii) accrued and unpaid interest on the portion of
          the Principal Balance being prepaid and (iii) the installments of the
          Principal Balance in the inverse order of maturity.

          2.9.3.  NO PREPAYMENT PREMIUM.  No Prepayment Premium shall be 
          payable with respect to prepayments pursuant to subsection 2.9.2.

          2.9.4.  INVOLUNTARY PREPAYMENT.  Concurrently with any payment of the
          Principal Balance received by Lenders resulting from the exercise by
          Agent and/or Lenders of any remedy available to Agent and/or Lenders
          subsequent to the occurrence of an Event of Default and the 
          acceleration of Borrowers' Obligations, Borrowers shall pay to 
          Lenders a Prepayment Premium in an amount 


                                     23

<PAGE>   24


           equal to the Prepayment Premium which would be payable if such
           payment was made pursuant to  subsection 2.9.1.

     2.10. DEFAULT RATE PERIOD. During a Default rate period, (i) Borrowers'
Obligations shall bear interest at the Default Rate and (ii) all payments
received by Lenders shall be applied in accordance with Section 8.4.

     2.11. METHOD OF PAYMENT.

           2.11.1.  LOCKBOXES AND LOCKBOX ACCOUNTS; PAYMENTS; APPLICATION OF 
     FUNDS.

                (A) MAINTENANCE OF LOCKBOXES AND LOCKBOX ACCOUNTS. Borrowers 
           shall maintain at Lockbox Bank the Lockboxes and Lockbox
           Accounts.  The Lockboxes and Lockbox Accounts shall be under the
           sole dominion and control of Agent and no Borrower shall have any
           right of withdrawal therefrom. Promptly after the Closing Date, each
           Borrower which has not previously done so shall notify such
           Borrower's Account Debtors under Security Monitoring Contracts that
           all payments shall be made directly to the applicable Lockbox or, if
           by wire transfer, to the applicable Lockbox Account.  All items
           deposited in the applicable Lockbox shall be credited to the Lockbox
           Account.

                (B) HURDLE AMOUNT.  On the first Business Day of each month, 
           Agent shall notify Lockbox Bank of the Hurdle Amount for such
           month. Upon the opening of business on each Business Day of each
           month, Lockbox Bank shall calculate the amount of collected funds on
           deposit in the Lockbox Accounts for such month (the "Collected
           Funds"). For each month, beginning with the second Business Day
           following the Business Day on which the Lockbox Bank has determined
           that the Collected Funds exceed the Hurdle Amount for such month
           (the amount of such excess hereinafter is referred to as the
           "Remainder Funds"), Lockbox Bank shall remit the Remainder Funds to
           Borrowers until the end of such month.

                (C) MONTHLY PAYMENTS FROM THE LOCKBOX.  Beginning WITH the first
           Business Day of the month following the month in which the Closing
           occurs, Lockbox Bank shall remit the Hurdle Amount to Agent in Good
           Funds prior to 1:00 P.M. Chicago time for application to Borrowers'
           Obligations in the following order of priority:  (i) first, to the
           payment of all Borrowers' Obligations then due and payable other
           than the Principal Balance and accrued and unpaid interest thereon,
           and (ii) second, to the payment of accrued and unpaid interest then
           due and payable on the Principal Balance.  If no Event of Default
           or Incipient Default then exists, the remainder, if any, shall be
           remitted to Borrowers.  If an Event of Default exists such
           remainder may, at the option of Agent, be applied in accordance
           with Section 8.4.


                                     24

<PAGE>   25


                (D) CASH INSTRUMENTS RECEIVED BY BORROWERS. At the CLOSE of each
           Business Day following the Closing Date, each Borrower shall
           transmit, in the form received, all Cash Instruments received by
           such Borrower since the close of business on the preceding Business
           Day to the applicable Lockbox or directly to the Lockbox Bank for
           deposit in the applicable Lockbox Account.  All Cash Instruments
           received by each Borrower shall be held in express trust for
           Lenders until delivery thereof is made to the applicable Lockbox or
           the Lockbox Bank for deposit in the applicable Lockbox Account and
           shall not be commingled with any other Property of such Borrower.

          2.11.2. OTHER PAYMENTS.  All payments other than those specified in
     subsection 2.11.1 to be made pursuant to the Loan Instruments by
     Borrowers to (i) FINOVA shall be made by wire transfer of Good Funds to
     the account of FINOVA at Citibank, N.A., 399 Park Avenue, New York, New
     York, ABA 021000089, Credit: FINOVA Capital Corporation, Credit Account
     No. 40680477, or to such other account as FINOVA shall have given five
     Business Days prior written notice to Borrowers, and (ii) any other
     Lender shall be made by wire transfer of Good Funds to such account as
     such Lender shall notify Borrowers.


                                   ARTICLE
                                     3.
                                  SECURITY

     Borrowers' Obligations shall be secured by a Lien upon all of the
Collateral, which at all times shall be superior and prior to all other Liens,
except Permitted Prior Liens.


                                   ARTICLE
                                     4.
                   CONDITIONS OF CLOSING AND ACQUISITIONS

     4.1.  INITIAL PORTION. The obligation of FINOVA to disburse the Initial 
Portion shall be subject to the satisfaction of all of the following conditions
on or before the Closing Date in a manner, form and substance reasonably
satisfactory to FINOVA:

           4.1.1. REPRESENTATIONS AND WARRANTIES. On the Closing Date the
     representations and warranties of each Obligor set forth in the
     Instruments to which such Obligor is a party shall be true and correct in
     all material respects.

           4.1.2. DELIVERY OF DOCUMENTS.  The following shall have been 
     delivered to FINOVA, except to the extent previously delivered to FINOVA, 
     each duly authorized and executed, where applicable:

           (A)    the Loan Instruments;


                                     25


<PAGE>   26

           (B)    a good standing or similar certificate, dated a recent date
     prior to the Closing Date, for each Borrower from the Secretary of State
     in each state in which such Borrower organized or is qualified to transact
     business;

           (C)    copies of (i) the articles of ORGANIZATION and any amendments
     thereto of ASMS, SACC and MSG, certified by the Secretary of State of
     their respective states of organization, as of a recent date prior to the
     Closing Date, (ii) the articles of incorporation and all amendments
     thereto of SAI, AMJ and ERC and each of the Holding Companies, certified
     by the  Secretary of State of their respective states of incorporation as
     of a recent date prior to the Closing Date, and (iii) the following, each
     certified by the Manager or President of the applicable Borrower, as
     applicable: (A) the operating agreements of each of ASMS, SACC and MSG,
     (B) all other agreements among the holders of any Membership Interests,
     (C) the by-laws of SAI, AMJ, ERC and each of the Holding Companies and (D)
     all agreements among the shareholders of SAI, AMG and ERC;

           (D)    certified copies of resolutions ADOPTED by the board of
     directors of each of SAI, AMJ and ERC authorizing the execution and        
     delivery of the Instruments to which each such Person is a party;

           (E)    certified copies of a CONSENT of the Manager and the members 
     of each of ASMS, SACC and MSG authorizing the execution and delivery of
     each Instrument to which each such Person is a party.

           (F)    signature and incumbency CERTIFICATES of the members or
     Manager of ASMS, SACC and MSG and the President of SAI executing any of 
     the Loan Instruments on behalf of such Persons;

           (G)    certified or executed original copies of each of the 
     following, the terms ad conditions of all of which shall be satisfactory 
     to FINOVA:

                  (i)   the Contribution Agreement;

                  (ii)  the Leases not previously delivered to FINOVA;

                  (iii) the Subordinated Debt Instruments; and

                  (iv)  all instruments and documents evidencing Permitted
                        Senior Indebtedness existing as of the Closing Date; and

           (H)    such other instruments, documents, certificates, consents,
     waivers and opinions as FINOVA may reasonably request; and


                                     26


<PAGE>   27


           4.1.3. PERFORMANCE; NO DEFAULT. Each Obligor shall have, in all 
     material respects, performed and complied with all agreements and
     conditions contained in the Instruments to be performed by or complied
     with by such Person prior to or at the Closing, and no Event of Default or
     Incipient Default then shall exist.

           4.1.4. OPINIONS OF COUNSEL; DIRECTION FOR DELIVERY. FINOVA shall have
     received an opinion dated the Closing Date from Howard Schickler,
     in-house counsel to the Obligors, addressed to FINOVA, as a Lender and as
     Agent, in such form and covering such matters as FINOVA may require.

           4.1.5. APPROVAL OF INSTRUMENTS AND SECURITY INTERESTS. FINOVA shall 
     have received evidence that the approval or consent shall have been
     obtained from all Governmental Bodies and all other Persons whose approval
     or consent is required to enable (i) each Obligor to enter into and
     perform their respective obligations under the Instruments to which each
     such Person is a party and (ii) each Obligor to grant to Agent the
     Security Interests contemplated in the Instruments to which such Obligor
     is a party.

           4.1.6. SECURITY INTERESTS.  All filings of Uniform Commercial Code
     financing statements and all other filings and actions necessary to
     perfect and maintain the Security Interests as first, valid and perfected
     Liens in the Property covered thereby, subject only to Permitted Prior
     Liens, shall have been filed or taken and FINOVA shall have received such
     UCC, state and federal tax Lien, pending suit, judgment and other Lien
     searches as it deems necessary to confirm the foregoing.

           4.1.7. MATERIAL ADVERSE CHANGE.  No event shall have occurred which 
     has had or reasonably could be expected to have a Material Adverse
     Effect since the end of the most recent period for which Borrowers have
     delivered to FINOVA financial statements pursuant to Section 6.3.1 of the
     Existing Loan Agreement.

           4.1.8. PROCEEDINGS AND DOCUMENTS.  All corporate, limited liability 
     company and other proceedings in connection with the transactions
     contemplated by the Instruments and all documents and instruments incident
     to such transactions shall be reasonably satisfactory to FINOVA, and
     FINOVA shall have received all such counterpart originals or certified or
     other copies as FINOVA may reasonably request.

           4.1.9. USE OF ASSETS.  FINOVA shall be reasonably satisfied that 
     Borrowers at all times shall be entitled to the use and quiet enjoyment
     of all Property necessary for the continued ownership and operation of the
     Security Monitoring Business conducted by Borrowers, including, without
     limitation, the use of equipment, fixtures, licenses, offices and means of
     ingress and egress thereto, and any easements or rights-of-way necessary
     to reach any equipment or other items necessary for the operation of such
     Security Monitoring Business.


                                     27

<PAGE>   28


           4.1.10. BROKER FEES. If the services of a broker or other agent 
     have been used in connection with the Loan, all fees owed to such broker
     or agent shall have been paid by Borrowers and FINOVA shall have received
     evidence of such payment.

           4.1.11. LANDLORD CONSENT AND WAIVER.  FINOVA shall have received a 
     Landlord Consent and Waiver from each Landlord under each Lease
     designated by Agent.

           4.1.12. INSURANCE.  At least three Business Days prior to the 
     Closing Date Borrowers shall have delivered to FINOVA evidence
     satisfactory to FINOVA that all insurance coverage required pursuant to
     Section 6.6 is in full force and effect and all premiums then due thereon
     have been paid in full.

           4.1.13. ENVIRONMENTAL AUDIT.  At the request of Agent, Agent shall 
     have received an Environmental Audit with respect to any real estate
     which is the subject of a Lease.

           4.1.14. PAYMENT OF FEES AND EXPENSES.  Borrowers shall have paid 
     the Loan Fee and all fees and expenses described in subsection 11.1.1
     incurred in connection with the Loan.

           4.1.15. SECURITY MONITORING CONTRACTS.  FINOVA shall have received a
     certified copy of the assignment assigning all the Security Monitoring
     Contracts owned by SAI to MSG prior to or on the Closing Date.

           4.1.16 UL CERTIFICATIONS.  Agent shall have received (i) certified 
     copies of the UL Certifications which are necessary for the operation
     of Borrowers' Security Monitoring Business and (ii) evidence that (A) such
     UL Certifications are in full force and effect as of the Closing Date and
     (B) no event has occurred which could result in the termination,
     revocation or non-renewal of any such UL Certification.

           4.1.17. ALARM LICENSES. Agent shall have received (i) certified 
     copies of the Alarm Licenses which are necessary for the operation of
     Borrowers' Security Monitoring Business and (ii) evidence that (A) such
     Alarm Licenses are in full force and effect as of the Closing Date and (B)
     no event has occurred which could result in the termination, revocation or
     non-renewal of any such Alarm License.

           4.1.18. ADJUSTED COVENANT LEVERAGE RATIO.  Agent shall have 
     received evidence that the Adjusted Covenant Leverage Ratio shall not
     exceed 4.00:1 as calculated as of the Funding Date.

           4.1.19. RMR.  Agent shall have received evidence that the Adjusted 
     Total Debt as of the Closing Date does not exceed the sum of (i) 22
     times the RMR for Security Monitoring Contracts which are owned by
     Borrowers on the Closing Date and (ii) 12 

                                     28


<PAGE>   29

     times the RMR for Central Station Contracts which are owned by Borrowers
     on the Closing Date.

     4.2. ALL ACQUISITIONS.  The right of any Borrower to make an  Acquisition 
shall be subject to the satisfaction of all of the following conditions in a 
manner reasonably satisfactory to Agent:

          4.2.1. CONSUMMATION OF ACQUISITIONS.  Prior to or concurrently with 
     each Acquisition Closing, Agent shall have received evidence that
     (i) such Acquisition is in accordance with the terms of the applicable
     Acquisition Instruments with such modifications as are reasonably
     satisfactory to Agent and (ii) (A) the Borrower consummating such
     Acquisition will acquire concurrently with the Acquisition Closing, good
     and marketable title to the Property which is the subject to such
     Acquisition and (B) if the subject of such Acquisition is a Subsidiary,
     such Subsidiary will on the Acquisition Closing Date own good and
     marketable title to all of its Property, in each case free and clear of
     all Liens and Indebtedness, except the Dealer Holdback Debt.

          4.2.2. DELIVERY OF DOCUMENTS.  The following shall have been 
     delivered to FINOVA, each duly authorized and executed where applicable:

                 (A)  the Acquisition Loan Instruments;

                 (B)  all documents required to make any Subsidiary which is the
          subject of an Acquisition a Permitted Subsidiary, and if such 
          Subsidiary is a corporation, the certificates representing all of the
          capital stock of such Subsidiary and stock powers for each
          certificate in form acceptable to FINOVA;

                 (C)  such certificates of incumbency, good-standing and 
          corporate and limited liability company resolutions as Agent may
          reasonably require in connection with such Acquisition;

                 (D)  certified or executed original copies of each of the
          following, the terms and conditions of all of which shall be
          reasonably satisfactory to Agent:

                 (i)  the applicable Acquisition Instruments; and

                 (ii) the Leases assumed or entered into by any Borrower in 
                      connection with such Acquisition; and

                 (E)  such other instruments, documents, certificates, consents,
          waivers and opinions as Agent may reasonably require.


                                     29



<PAGE>   30



          4.2.3.  OPINIONS OF COUNSEL.  Agent shall have received such 
     opinions of counsel as Agent reasonably may require in connection
     with such Acquisition and the Liens to be granted to Agent upon the
     Property acquired in connection therewith.

          4.2.4.  UL CERTIFICATIONS.  With respect to any Central Station 
     Business which is the subject of such Acquisition, Agent shall have
     received evidence that the Borrower which will operate such Business has
     acquired, or will ACQUIRE concurrently with the Acquisition Closing, the
     UL Certification necessary for the operation of such Central Station
     Business.

          4.2.5.  ALARM LICENSES.  Agent shall have received (i) certified 
     copies of the Alarm Licenses which are necessary to own or operate the
     Property which is the subject of such Acquisition and (ii) evidence that
     (A) any transfer or assignment of such Alarm Licenses to the applicable
     Borrower is final, (B) such Alarm LICENSES are in full force and effect as
     of the Acquisition Closing Date and (C) no event has occurred which could
     reasonably be expected to result in the termination, revocation or
     non-renewal of any such Alarm License. 

          4.2.6.  SECURITY INTEREST.  Agent shall have received evidence that 
     it has or will acquire upon the Acquisition Closing Date a
     perfected FIRST lien on all of the Property, and all the Property of any
     Subsidiary, which is the subject of such Acquisition, in each case subject
     only to Permitted Prior Liens.

          4.2.7.  ENVIRONMENTAL AUDIT.  Agent shall have received an 
     Environmental Audit with respect to any real estate which is the
     subject of an Acquisition and, at the request of Agent, any real estate
     which is the subject of a Lease which is being assumed or entered into by
     such Borrower in connection with such Acquisition.

          4.2.8.  INSURANCE; SURVEY.  Borrower SHALL deliver to Agent such title
     insurance and surveys with respect to each parcel of real estate being
     acquired in connection with such Acquisition.

          4.2.9.  PAYMENT OF FEES.  Borrowers SHALL have paid all fees and 
     expenses described in subsection 11.1.1 incurred in connection with such
     Acquisition and any Advance made in connection therewith.

          4.2.10. ACQUISITION OF A CENTRAL STATION BUSINESS.  If the SUBJECT of 
     the Acquisition is a Central Station Business, SAI or a Permitted
     Subsidiary are the only Persons permitted to consummate such Acquisition.

          4.2.11. ACQUISITION OF SECURITY MONITORING CONTRACTS.  If the SUBJECT 
     OF THE ACQUISITION IS SECURITY MONITORING CONTRACTS, MSG SHALL BE THE
     BORROWER making such Acquisition.


                                     30


<PAGE>   31


     4.3   FUNDED ACQUISITIONS. In addition to the satisfaction of the
conditions set forth in Section 4.2, the right of any Borrower to make a Funded
Acquisition or to receive an Advance pursuant to Section 2.2 shall be subject
to the satisfaction of all of the following conditions in a manner reasonably
satisfactory to Agent:

           4.3.1. FINANCIAL STATEMENTS, REPORTS AND PROJECTIONS. Agent shall
     have received such financial statements, reports and projections with
     respect to the operation of the business which is the subject of the
     Funded Acquisition as Agent may reasonably require.

           4.3.2. COMPLIANCE WITH APPLICABLE RATIO.  As of the Funding Date,
     after giving effect to such Funded Acquisition, the Adjusted Leverage
     Ratio shall not exceed the Applicable RATIO as calculated as of such
     date.

           4.3.3. MAXIMUM TIMES RMR.  The Adjusted Total Debt as of the
     requested Funding Date shall not exceed the sum of (i) 22 times the RMR
     for Security Monitoring Contracts which are (A) the subject of the Funded
     Acquisition and (B) owned by Borrowers prior to the consummation of such
     Funded Acquisition, and (ii) 12 times the RMR for Central Station
     Contracts which are (A) the subject of the Funded Acquisition and (B)
     owned by Borrowers prior to the consummation of such Funded Acquisition.

                                   ARTICLE
                                     5.
                       REPRESENTATIONS AND WARRANTIES

     Each Borrower represents and warrants to Agent and Lenders as follows:

     5.1. EXISTENCE AND POWER.  Each Obligor is a corporation or limited 
liability company duly formed and validly existing under the laws of the
state of its organization or incorporation.  Each Obligor is in good standing
and qualified to transact business in each jurisdiction in which the failure so
to qualify could have a Material Adverse Effect.  Each Obligor has all
requisite power and authority to own its Property and to carry on its business
as now conducted and as proposed to be conducted following the Closing Date.

     5.2. AUTHORITY.  Each Obligor has full power and authority to enter into,
execute, deliver and carry out the terms of the Instruments to which it is a
party and to incur the obligations provided for therein, all of which have been
duly authorized by all proper and necessary action and are not prohibited by
the organizational instruments of such Obligor.

     5.3. CAPITAL STOCK, MEMBERSHIP INTERESTS AND RELATED MATTERS.

          5.3.1. CAPITALIZATION.  There is set forth in EXHIBIT 5.3.1 a complete
description of the Equity Interests of each Obligor other than SAI. All of the
Equity Interests of the 

                                     31


<PAGE>   32


     Obligors are validly issued, fully paid and non-assessable, and
     have been issued and sold in compliance with all applicable federal and
     state laws, rules and regulations, including, without limitation, all
     so-called "Blue-Sky" laws, excepting only possible instances of
     noncompliance which in the aggregate are not material. The Equity
     Interests of the Obligors other than SAI are owned beneficially and of
     record by the Persons and in the respective percentages set forth on
     EXHIBIT 5.3.1, and are free and clear of all Liens except the Security
     Interests.

          5.3.2. RESTRICTIONS.  Except as set forth on EXHIBIT 5.3.2, no Obligor
     other than SAI (i) is a party to, or has knowledge of any agreements
     restricting the transfer of the Equity Interests of any Obligor, except
     the Loan Instruments, (ii) has issued any rights which can be convertible
     into or exchangeable or exercisable for any of such Obligor's Equity
     Interests, or any rights to subscribe for or to purchase, or any options
     for the purchase of, or any agreements providing for the issuance
     (contingent or otherwise) of, or any calls, commitments or claims of any
     character relating to, any of such Obligor's Equity Interests or any
     securities convertible into or exchangeable or exercisable for any of
     such Obligor's Equity Interests and (iii) is subject to any obligation
     (contingent or otherwise) to repurchase or otherwise acquire or retire
     any of such Obligor's Equity Interests or any convertible rights or
     options.  No Obligor, except SAI is required to file or has filed,
     pursuant to the Securities Act of 1933 or Section 12 of the Securities
     Exchange Act of 1934, as amended, a registration statement relating to
     any class of debt or equity securities and SAI has duly and timely made
     all necessary filings.

     5.4. BINDING AGREEMENTS.  This Loan Agreement and the other Instruments, 
when executed and delivered, will constitute the valid and legally binding
obligations of each Obligor to the extent such Obligor is a party thereto,
enforceable against such Obligor in accordance with their respective terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect affecting the enforcement of creditors' rights generally, and (ii)
equitable principles whether or not any action to enforce such document is
brought at law or in equity).

     5.5. BUSINESS AND PROPERTY OF BORROWERS.

          5.5.1.  BUSINESS AND PROPERTY.  Each Borrower is the owner of all 
     Property and the holder of all UL Certifications, Alarm Licenses,
     Central Station Contracts and Security Monitoring Contracts necessary to
     conduct such Borrower's Security Monitoring Business in the places where
     it is now conducted.  All of such UL Certifications, Alarm Licenses,
     Central Station Contracts and Security Monitoring Contracts are in full
     force and effect and no invalidity, default or breach exists thereunder. 
     There is set forth in EXHIBIT 5.5.1 a description of all UL Certifications
     and Alarm Licenses which have been issued to any Borrower.  Borrowers do
     not engage or propose to engage in any business or activity other than the
     Security Monitoring Business.


                                     32


<PAGE>   33


          5.5.2.  FACILITY SITES.  There is set forth in EXHIBIT 5.5.2 the 
     location of the chief executive office of each Borrower and the
     locations all central station monitoring operations, offices and other
     Property used in the operation of each Borrower's Security Monitoring
     Business.

          5.5.3.  LEASES.  There is set forth in EXHIBIT 5.5.3 a list of all 
     leases of real property under which any Borrower is the lessee, together
     with a complete and accurate address and legal description of each such
     parcel of Leasehold Property and the current Landlord under each Lease. 
     Each Lease is in full force and effect, there has been no material default
     in the performance of any of its terms or conditions by any party thereto,
     and no claims of default have been asserted with respect thereto.  To the
     best knowledge of Borrowers, the present and contemplated use of the
     Leasehold Property is in material compliance with all applicable zoning
     ordinances and regulations and other laws and regulations.

          5.5.4.  REAL ESTATE. No Borrower owns any real property.

          5.5.5.  OPERATION AND MAINTENANCE OF EQUIPMENT. To the best 
     knowledge of each Borrower, no Person owning or operating any
     equipment necessary for the operation of Borrowers' Security Monitoring
     Business has used, operated or maintained the same in a manner which now
     or hereafter could result in the cancellation or termination of the right
     of any Borrower to use or make use of the same or which could result in
     any material liability of any Borrower for damages in connection
     therewith.  All of the equipment and other tangible personal property
     owned by each Borrower on the Closing Date is, in all material respects,
     in good operating condition and repair (subject to normal wear and tear)
     and has to the best knowledge of each Borrower, been used, operated and
     maintained in substantial compliance with all applicable laws, rules and
     regulations.

     5.6. TITLE TO PROPERTY; LIENS.  Upon the Closing each Borrower shall have 
(i) good and marketable title to all of its Property, except (A) any UL
Certification which cannot be transferred without the consent of a Governmental
Body and (B) the portion thereof consisting of a leasehold estate and (ii) a
valid leasehold estate in each portion of its Property which consists of a
leasehold estate.  Upon the Closing, all of such Property shall be free and
clear of all Liens, except Permitted Liens.  Upon the proper filing with the
appropriate Governmental Bodies of appropriate Uniform Commercial Code
financing statements, the applicable Loan Instruments will create valid and
perfected Liens in the Property described therein, subject only to Permitted
Prior Liens.

     5.7. PROJECTIONS AND FINANCIAL STATEMENTS.

          5.7.1.  FINANCIAL STATEMENTS.  Borrowers have delivered to FINOVA the
     financial statements described in EXHIBIT 5.7.1 pertaining to Borrowers'   
     Security Monitoring Business. Such financial statements present fairly in
     all material respects the results of operations of Borrowers' Security
     Monitoring Business for the periods covered 


                                     33


<PAGE>   34


     thereby and the financial condition of Borrowers' Security Monitoring
     Business as of the dates indicated therein.  All of such financial
     statements have been prepared in conformity with GAAP. Since October 31,
     1997 there has been no change which has had a Material Adverse Effect. 
     Borrowers also have delivered to FINOVA pro-forma consolidated and
     consolidating balance sheets as of the Closing Date.  Such pro-forma
     balance sheets, which assume the consummation of the transactions
     contemplated by the Loan Instruments, presents fairly in all material
     respects the anticipated financial condition of Borrowers as of the
     Closing Date.

           5.7.2.  PROJECTIONS.  Borrowers have delivered to FINOVA the 
     projections described in EXHIBIT 5.7.2 of the future operations of
     Borrowers.  Such projections represent the best estimates of Borrowers as
     of the Closing Date of Borrowers' future financial performance.

     5.8.  LITIGATION.  There is set forth in EXHIBIT 5.8 a description of all
actions and suits, arbitration proceedings and claims pending or, to the best
knowledge of Borrowers, threatened against any Obligor or maintained by any
Obligor at law or in equity or before any Governmental Body.  None of the
matters set forth in such EXHIBIT 5.8, if adversely determined, could have a
Material Adverse Effect.

     5.9.  DEFAULTS IN OTHER AGREEMENTS; CONSENTS; CONFLICTING AGREEMENTS.  No
Borrower is in default under any agreement to which such Borrower is a party or
by which such Borrower or any of the Property of such Borrower is bound, the
effect of which default could have a Material Adverse Effect. No authorization,
consent, approval or other action by, and no notice to or filing with, any
Governmental Body or any other Person which has not already been obtained,
taken or filed, as applicable, is required (i) for the due execution, delivery
or performance by any Borrower of any of the Loan Instruments to which such
Borrower is a party or (ii) as a condition to the validity or enforceability of
any of the Loan Instruments to which any Borrower is a party or any of the
transactions contemplated thereby or the priority of the Security Interests,
except for certain filings to establish and perfect the Security Interests.  No
provision of any material mortgage, indenture, contract, agreement, statute,
rule, regulation, judgment, decree or order binding on any Borrower or
affecting the Property of any Borrower conflicts with, or requires any consent
which has not already been obtained under, or would in any way prevent the
execution, delivery or performance of the terms of any of the Loan Instruments
or affect the validity or priority of the Security Interests.  The execution,
delivery or performance of the terms of the Loan Instruments will not
constitute a default under, or result in the creation or imposition of, or
obligation to create, any Lien upon the Property of Borrowers pursuant to the
terms of any such material mortgage, indenture, contract or agreement, other
than the Loan Instruments.

     5.10. TAXES. Each Borrower has filed all tax returns required to be filed,
and has paid, or made adequate provision for the payment of, all taxes
shown to be due and payable on such returns or in any assessments made against
any such Person, and no tax Liens have been filed and no claims are being
asserted in respect of such taxes which are required by GAAP to be reflected in
the financial statements of any Borrower and are not so reflected therein.  The


                                     34


<PAGE>   35


charges, accruals and reserves on the books of each Borrower with respect to
all federal, state, local and other taxes are considered by the management of
such Borrower to be adequate, and there is no unpaid assessment which is or
might be due and payable by any Borrower or create a Lien against any
Borrower's Property, except such assessments as are being contested in good
faith and by appropriate proceedings diligently conducted, and for which
adequate reserves have been set aside in accordance with GAAP.  None of the tax
returns of any Borrower are under audit.

     5.11. COMPLIANCE WITH APPLICABLE LAWS.  No Borrower is in default in 
respect of any judgment, order, writ, injunction, decree or decision of
any Governmental Body, which default would have a Material Adverse Effect. 
Except as otherwise provided herein, each Borrower is in compliance in all
material respects with all applicable statutes and regulations, including,
without limitation, all laws, statutes and regulations relating to UL
Certification, all Environmental Laws, ERISA, ADA and all laws and regulations
relating to unfair labor practices, equal employment opportunity and employee
safety, of all Governmental Bodies, a violation of which could have a Material
Adverse Effect. No material condemnation, eminent domain or expropriation has
been commenced or, to the best knowledge of Borrowers, threatened against the
Property which Borrowers will own upon the Closing.

     5.12. PATENTS, TRADEMARKS, FRANCHISES, AGREEMENTS.  Upon the Closing, 
Borrowers will own, possess or have the right to use all patents,
trademarks, service marks, tradenames, copyrights, franchises and rights with
respect thereto, necessary for the conduct of Borrowers' Security Monitoring
Business as proposed to be conducted by Borrowers after the Closing Date,
without any known conflict with the rights of others and, in each case, free of
any Liens.

     5.13. ENVIRONMENTAL MATTERS. Each Borrower is in compliance with all 
applicable Environmental Laws and no portion of the Leasehold Property has
been used as a land fill.  There currently are not any known Hazardous
Materials generated, manufactured, released, stored, buried or deposited over,
beneath, in or on (or used in the construction and/or renovation of) the
Leasehold Property in violation of applicable Environmental Laws which could
have a Material Adverse Effect.

     5.14. APPLICATION OF CERTAIN LAWS AND REGULATIONS.  No Borrower or 
Affiliate of any Borrower is:

           5.14.1. INVESTMENT COMPANY ACT.  An "investment company," or a 
     company "controlled" by an "investment company," within the meaning of the
     Investment Company Act of 1940, as amended.

           5.14.2. HOLDING COMPANY ACT.  A "holding company," or a "subsidiary 
     company" of a "holding company," or an "affiliate" of a "holding
     company" or of a "subsidiary company" of a "holding company," as such
     terms are defined in the Public Utility Holding Company Act of 1935, as
     amended.


                                     35


<PAGE>   36


           5.14.3. FOREIGN OR ENEMY STATUS.  (i) An "enemy" or an "ally of an 
     enemy" within the meaning of Section 2 of the Trading with the Enemy
     Act, (ii) a "national" of a foreign country designated in Executive Order
     No. 8389, as amended, or of any "designated enemy country" as defined in
     Executive Order No. 9095, as amended, of the President of the United
     States of America, in each case within the meaning of such Executive
     Orders, as amended, or of any regulation issued thereunder, (iii) a
     "national of any designated foreign country" within the meaning of the
     Foreign Assets Control Regulations or of the Cuban Assets Control
     Regulations of the United States of America (Code of Federal Regulations,
     Title 31, Chapter V, Part 515, Subpart B, as amended), or (iv) an alien or
     a representative of any alien or foreign government within the meaning of
     Section 310 of Title 47 of the United States Code.

           5.14.4. REGULATIONS AS TO BORROWING.  Subject to any statute or 
     regulation which regulates the incurrence of any Indebtedness for Borrowed
     Money, including, without limitation, statutes or regulations relative to
     common or interstate carriers or to the sale of electricity, gas, steam,
     water, telephone, telegraph or other public utility services.

     5.15. MARGIN REGULATIONS.  None of the transactions contemplated by this 
Loan Agreement or any of the other Loan Instruments, including the use of the
proceeds of the Loan, will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto, including, without limitation, Regulations G, T, U and X, and no
Borrower owns or intends to carry or purchase any "margin security" within the
meaning of such Regulation U or G.

     5.16. OTHER INDEBTEDNESS.  Upon the Closing, no Borrower will have any
Indebtedness for Borrowed Money, except (i) Borrowers' Obligations, (ii)
Permitted Senior Indebtedness permitted to exist as of the Closing Date
pursuant to this Loan Agreement, (iii) the Subordinated Debt and (iv) the
Dealer Holdback Debt.  There is set forth in EXHIBIT 5.16 a true, correct and
complete copy of the Dealer Holdback Report dated as of _____________, 1997.

     5.17. NO MISREPRESENTATION.  Neither this Loan Agreement nor any other Loan
Instrument, certificate, information or report furnished or to be furnished by
or on behalf of any Borrower to Agent or any Lender in connection with any of
the transactions contemplated hereby or thereby, contains or will contain a
misstatement of material fact, or omits or will omit to state a material fact
required to be stated in order to make the statements contained herein or
therein, taken as a whole, not misleading in the light of the circumstances
under which such statements were made.  There is no fact, other than
information known to the public generally, known to or reasonably foreseen by
Borrowers after diligent inquiry, that would be expected to have a Material
Adverse Effect that has not expressly been disclosed to FINOVA in writing.


                                     36

<PAGE>   37



     5.18. EMPLOYEE BENEFIT PLANS.

           5.18.1. NO OTHER PLANS.  Neither any Borrower nor any ERISA Affiliate
     maintains or contributes to, or has any obligation under, any Employee
     Benefit Plan other than those identified on EXHIBIT 5.18.1. Borrowers
     have provided Agent accurate and complete copies of all Contracts,
     agreements and documents described on EXHIBIT 5.18.1.

           5.18.2. ERISA AND CODE COMPLIANCE AND LIABILITY.  Each Borrower and 
     each ERISA Affiliate is in compliance with all applicable provisions of
     ERISA with respect to all Employee Benefit Plans except where failure to
     comply would not result in a material liability to any Borrower and except
     for any required amendments for which the remedial amendment period as
     defined in Section 401(b) of the Code has not yet expired. Each Employee
     Benefit Plan that is intended to be qualified under Section 401(a) of the
     Code has been determined by the Internal Revenue Service to be so
     qualified, and each trust related to such plan has been determined to be
     exempt under Section 501(a) of the Code, except for any amendments for
     which the remedial amendment period as defined in Section 401(b) of the
     Code has not yet expired.  No material liability has been incurred by any
     Borrower or ERISA Affiliate which remains unsatisfied for any taxes or
     penalties with respect to any Employee Benefit Plan or any Multiemployer
     Plan.

           5.18.3 FUNDING.  No Pension Plan has been terminated, nor has any
     accumulated funding deficiency (as defined in Section 412 of the Code)
     been insured (without regard to any waiver granted under Section 412 of
     the Code), nor has any funding waiver from the Internal Revenue Service
     been received or requested with respect to any Pension Plan, nor has any
     Borrower or any ERISA Affiliate failed to make any contributions or to
     pay any amounts due and owing as required by Section 412 of the Code,
     Section 302 of ERISA or the terms of any Pension Plan prior to the due
     dates of such contributions under Section 412 of the Code or Section 302
     of ERISA, nor has there been any event requiring any disclosure under
     Section 4041(c)(3)(C), 4063(a) or 4068 of ERISA with respect to any
     Pension Plan.

           5.18.4. PROHIBITED TRANSACTIONS AND PAYMENTS.   Neither any Borrower
     nor any ERISA Affiliate has: (i) engaged in a nonexempt "prohibited
     transaction" as such term is defined in Section 406 of ERISA or Section
     4975 of the Code; (ii) incurred any liability to the PBGC which remains
     outstanding other than the payment of premiums and there are no premium
     payments which are due and unpaid; (iii) failed to make a required
     contribution or payment to a Multiemployer Plan; or (iv) failed to make a
     required installment or other required payment under Section 412 of the
     Code. 

           5.18.5. NO TERMINATION EVENT.  No Termination Event has occurred or
     is reasonably expected to occur.

           5.18.6. ERISA LITIGATION.  No material proceeding, claim, lawsuit 
     and/or investigation is existing or, to the best knowledge of Borrowers,
     threatened concerning or 


                                     37


<PAGE>   38


     involving any (i) employee welfare benefit plan (as defined in Section
     3(1) of ERISA) currently maintained or contributed to by any Borrower, or
     any ERISA Affiliate, (ii) Pension Plan or (iii) Multiemployer Plan.

     5.19. EMPLOYEE MATTERS.

           5.19.1. COLLECTIVE BARGAINING AGREEMENTS; GRIEVANCES. (i) None of the
     employees of any Borrower is subject to any collective bargaining
     agreement, (ii) no petition for certification or union election is
     pending with respect to the employees of any Borrower and no union or
     collective bargaining unit has sought such certification or recognition
     with respect to the employees of any Borrower and (iii) there are no
     strikes, slowdowns, work stoppages, unfair labor practice complaints,
     grievances, arbitration proceedings or controversies pending or, to the
     best knowledge of Borrowers, threatened against any Borrower by any
     Borrower's employees, other than employee grievances or controversies
     arising in the ordinary course of business that could not in the
     aggregate be expected to have a Material Adverse Effect.

           5.19.2. CLAIMS RELATING TO EMPLOYMENT.  Neither any Borrower nor, to
     Borrower's best knowledge, any partner, shareholder or employee of any
     Borrower, is subject to any employment agreement or non-competition
     agreement with any former employer or any other Person which agreement
     would have a Material Adverse Effect due to (i) any information which
     such Borrower would be prohibited from using under the terms of such
     agreement or (ii) any legal considerations relating to unfair
     competition, trade secrets or proprietary information.

     5.20. BURDENSOME OBLIGATIONS.  After giving effect to the transactions
contemplated by the Loan Instruments, (i) neither Borrower (A) will be a party
to or be bound by any franchise, agreement, deed, lease or other instrument, or
be subject to any restriction, which is so unusual or burdensome so as to
cause, in the foreseeable future, a Material Adverse Effect and (B) intends to
incur, or believes that it will incur, debts beyond its ability to pay such
debts as they become due, and (ii) each Borrower (A) owns and will own
Property, the fair saleable value of which is (I) greater than the total amount
of its liabilities (including contingent liabilities) and (II) greater than the
amount that will be required to pay the probable liabilities of its then
existing debts as they become absolute and matured, and (B) has and will have
capital that is not unreasonably small in relation to its business as presently
conducted and as proposed to be conducted.  No Borrower presently anticipates
that future expenditures needed to meet the provisions of federal or state
statutes, orders, rules or regulations will be so burdensome so as to have a
Material Adverse Effect.

     5.21. HOLDING COMPANIES.  The Holding Companies do not engage or propose to
engage in any business other than the ownership of the Membership Interests of
MSG.



                                     38


<PAGE>   39


                                   ARTICLE
                                     6.
                            AFFIRMATIVE COVENANTS

     Until all of Borrowers' Obligations are paid and performed in full each
Borrower agrees that it will:

     6.1. LEGAL EXISTENCE; GOOD STANDING.  Maintain its existence and its good
standing in the jurisdiction of its formation and its qualification in each
jurisdiction in which the failure so to qualify would have a Material Adverse
Effect, and in any event in each jurisdiction in which any portion of the
System owned or operated by such Borrower is located.

     6.2. INSPECTION.  Permit representatives of Agent and Lenders, upon two
Business Days prior notice if no Event of Default exists, or at any time if any
Event of Default exists, to (i) visit its offices, (ii) examine its books and
records and Accountants' reports relating thereto, (iii) make copies or
extracts therefrom, (iv) discuss its affairs with its employees, (v) examine
and inspect its Property and (vi) meet and discuss its affairs with the
Accountants, and such Accountants, as a condition to their retention by such
Borrower, are hereby irrevocably authorized by such Borrower to fully discuss
and disclose all such affairs with Agent and Lenders (the foregoing items (i)
through (vi) hereinafter are referred to collectively as an "Inspection").
Notwithstanding the foregoing, if no Event of Default exists, Agent shall not
(A) conduct an Inspection more than once a quarter and (B) charge the Borrowers
more than $2,000 on account of such Inspection.  For purposes of this Section
6.2, Agent agrees to comply with the rules and regulations with respect to UL
Certifications.

     6.3. FINANCIAL STATEMENTS AND OTHER INFORMATION.  Maintain a standard 
system of accounting in accordance with GAAP and furnish to each Lender:

          6.3.1.  MONTHLY STATEMENTS.  As soon as available and in any event 
     within 30 days after the close of each month:

                  (A) the consolidated balance sheet of Obligors and the
          consolidating balance sheet for each Borrower as of the end of such
          month,

                  (B) the consolidated statements of operations and Operating 
          Cash Flow of Obligors and the consolidating statements of operations
          and Operating Cash Flow of each Borrower for such month and for the
          period from the beginning of the then current year to the end of such
          month, setting forth in each case in comparative form the
          corresponding figures for the corresponding period in the preceding
          year, and

                  (C) a report providing the following information as of the 
          end of such month: (i) the number of Security Monitoring
          Contracts owned by each Borrower; 


                                     39

<PAGE>   40



          (ii) the number of Central Station Contracts monitored by each
          Borrower; and (iii) the RMR for the Security Monitoring Contracts and
          Central Station Contracts,

     all in reasonable detail, containing such information as Lenders
     reasonably may require, and certified by the Chief Financial Officer of
     such Borrower as complete and correct, subject to normal year-end
     adjustments.

           6.3.2. QUARTERLY AGINGS.  As soon as available and in any event 
     within 45 days after the close of each quarter of each year, an aging of
     each Borrower's outstanding accounts payable and accounts receivable as of
     the end of such quarter, all in reasonable detail, containing such
     information as Lenders reasonably may require, and certified by the Chief
     Financial Officer of such Borrower as complete and correct, subject to
     normal year-end adjustments.

           6.3.3. ANNUAL STATEMENTS.  As soon as available and in any event 
     within 120 days after the close of each year:

                  (A)  the consolidated balance sheet of Obligors as of the end
           of such year and the consolidated statements of operations, cash
           flows, shareholders' equity or members' equity of Obligors for such
           year (collectively, the "Basic Financial Statements"), the
           consolidating balance sheet of each Borrower as of the end of such
           year, the consolidated statements of operations, cash flows and
           shareholders' equity or members' equity, as applicable, of Obligors
           for such year and the consolidated and consolidating statements of
           Operating Cash Flow and Excess Cash Flow of Obligors for such year,
           setting forth in each case in comparative form the corresponding
           figures for the preceding year,

                  (B)  an opinion of the Accountants which shall accompany the 
           Basic Financial Statements, which opinion shall be unqualified as 
           to going concern and scope of audit, stating that (i) the
           examination by the Accountants in connection with such Basic
           Financial Statements has been made in accordance with generally
           accepted auditing standards, (ii) such Basic Financial Statements
           have been prepared in conformity with GAAP and in a manner
           consistent with prior periods, and (iii) such Basic Financial
           Statements fairy present in all material respects the financial
           position and results of operations of Borrowers, and

                  (C) a letter from the Accountants stating that the statements
           of Operating Cash Flow and Excess Cash Flow were computed in
           accordance with the requirements of this Loan Agreement.

           6.3.4. COMPLIANCE CERTIFICATES.  The financial statements described 
     in subsections 6.3.1, 6.3.2 and 6.3.3 shall be accompanied by a Compliance
     Certificate.

                                     40


<PAGE>   41


           6.3.5. ACCOUNTANTS' CERTIFICATE.  Simultaneously with the delivery 
     of the certified Basic Financial Statements required by subsection
     6.3.3, copies of a certificate of the Accountants stating that (i) they
     have checked the computations delivered by Borrowers in compliance with
     subsection 6.3.3, and (ii) in making the examination necessary for their
     audit of the Basic Financial Statements of Borrowers for such year,
     nothing came to their attention of a financial or accounting nature that
     caused them to believe that (A) Borrowers were not in compliance with the
     terms, covenants, provisions or conditions of any of the Loan Instruments,
     or (B) there shall have occurred any condition or event which would
     constitute an Event of Default, or, if so, specifying in such certificate
     all such instances of non-compliance and the nature and status thereof.

           6.3.6. AUDIT REPORTS.  Promptly upon receipt thereof, a copy of each
     report, other than the reports referred to in subsection 6.3.3, including
     any so-called "Management Letter" or similar report, submitted to
     Borrowers by the Accountants in connection with any annual, interim or
     special audit made by the Accountants of the books of Borrowers.

           6.3.7. BUSINESS PLANS.  Before the end of each year, a business 
     plan for the following year setting forth in reasonable detail the
     projected operations budget of the Borrower's business for such year and
     such other information as Lenders reasonably may request, for such
     following year.

           6.3.8. NOTICE OF DEFAULTS; LOSS.  Prompt notice if:  (i) any 
     Indebtedness of any Borrower is declared or shall become due and
     payable prior to its declared or stated maturity, or called and not paid
     when due, (ii) an event has occurred that enables the holder of any note,
     or other evidence of such Indebtedness, certificate or security evidencing
     any such Indebtedness of any Borrower to declare such Indebtedness due and
     payable prior to its stated maturity, (iii) there shall occur and be
     continuing an Incipient Default or Event of Default, accompanied by a
     statement setting forth what action Borrowers propose to take in respect
     thereof, or (iv) any event shall occur which has a Material Adverse
     Effect, including the amount or the estimated amount of any loss or
     depreciation or adverse effect.

           6.3.9. NOTICE OF SUITS, ADVERSE EVENTS.  Prompt notice of: (i) any
     citation, summons, subpoena, order to show cause or other order naming
     any Borrower a party to any proceeding before any Governmental Body which
     might reasonably be expected to have a Material Adverse Effect and
     include with such notice a copy of such citation, summons, subpoena,
     order to show cause or other order, (ii) any lapse or other termination
     of any UL Certification, Alarm License, license, permit, franchise,
     AGREEMENT or other authorization issued to any Borrower by any
     Governmental Body or any other Person that is material to the operation
     of Borrowers' Security Monitoring Business, (iii) any refusal by any
     Governmental Body or any other Person to renew or extend any such UL
     Certification, Alarm License, license, permit, franchise, agreement or
     other authorization and (iv) any dispute between Borrowers and any
     Governmental Body 

                                     41


<PAGE>   42


     or any other Person, which lapse, termination, refusal or dispute
     referred to in clauses (ii) and (iii) above or in this clause (iv) could
     reasonably be expected to have a Material Adverse Effect.

             6.3.10. REPORTS TO SHAREHOLDERS, MEMBERS, CREDITORS AND 
     GOVERNMENTAL BODIES.

                   (A) Promptly upon becoming available, copies of all financial
             statements, reports, notices and other statements sent or made
             available generally by any Borrower to such Borrower's shareholders
             or members to the extent the same contain any information not
             included in any financial statements previously furnished to
             Lenders pursuant to subsections 6.3.1, 6.3.2 or 6.3.3, of all
             regular and periodic reports and all registration statements and
             prospectuses filed by any Borrower with any securities exchange or
             with the Securities and Exchange Commission or any Governmental
             Body succeeding to any of its functions, and of all statements
             generally made available by each Borrower or others concerning
             material developments in the business of any Borrower.

                   (B) Promptly upon becoming available, copies of any 
             periodic or special reports filed by any Borrower with any
             Governmental Body or Person, if such reports indicate any material
             change in the business, operations, affairs or condition of such
             Borrower, or if copies thereof are requested by Lender, and copies
             of any material notices and other communications from any
             Governmental Body or Person which specifically relate to any
             Borrower.

     6.3.11. ERISA NOTICES AND REQUESTS.

                   (A) With reasonable promptness, and in any event within 25
             Business Days after occurrence of any of the following, Borrowers
             will give notice of and/or deliver to Agent copies of: (i) the
             establishment of any new Pension Plan or Multiemployer Plan; (ii)
             the commencement of contributions to any Pension Plan or
             Multiemployer Plan to which any Borrower or any of its ERISA
             Affiliates was not previously contributing or any increase in the
             benefits of any existing Pension Plan or Multiemployer Plan; (iii)
             each funding waiver request filed with respect to any Pension Plan
             and all communications received or sent by any Borrower or any
             ERISA Affiliate with respect to such request; and (iv) the failure
             of any Borrower or ERISA Affiliate to make a required installment
             or payment to a Pension Plan under Section 302 of ERISA or Section
             412 of the Code by the due date.

                   (B) Promptly and in any event within 10 BUSINESS Days of 
             becoming aware of the occurrence of or forthcoming occurrence of
             any (i) Termination Event or (ii) non-exempt "prohibited
             transaction", as such term is defined in Section 406 of ERISA or
             Section 4975 of the Code, in connection with any 

                                     42


<PAGE>   43


             Pension Plan or any trust created thereunder, Borrowers will
             deliver to Agent a notice specifying the nature thereof, what
             action the applicable Borrower has taken, is taking or proposes to
             take with respect thereto and, when known, any action taken or
             threatened by the Internal Revenue Service, the Department of
             Labor or the PBGC with respect thereto.

                   (C) With reasonable promptness but in any event within 10 
             Business Days after the occurrence of, or receipt of, any
             of the FOLLOWING, Borrowers will deliver to Agent copies of: (i)
             any favorable or unfavorable determination letter from the
             Internal Revenue Service regarding the qualification of an
             Employee Benefit Plan under Section 401(a) of the Code; (ii) all
             notices received by any Borrower or any ERISA Affiliate of the
             PBGC's intent to terminate any Pension Plan or to have a trustee
             appointed to administer any Pension Plan; (iii) each Schedule B
             (Actuarial Information) to the annual report (Form 5500 Series)
             filed by any Borrower or any ERISA Affiliate with the Internal
             Revenue Service with respect to each Pension Plan; and (iv) all
             notices received by any Borrower or any ERISA Affiliate from a
             Multiemployer Plan sponsor concerning the imposition or amount of
             withdrawal liability pursuant to Section 4202 of ERISA. Borrowers
             will notify Agent in writing within two Business Days of any
             Borrower or any ERISA Affiliate that has filed a notice of intent
             to terminate any Pension Plan under a distress termination within
             the meaning of Section 4041(c) of ERISA.

     6.3.12. OTHER INFORMATION.

                   (A) Immediate notice of any change in the location of any 
             Property of any Borrower, which is material to or necessary for
             the continued operation of such Borrower's Security Monitoring
             Business, any change in the name of any Borrower, any sale or
             purchase of Property outside the regular course of business of any
             Borrower, and any change in the business or financial affairs of
             any Borrower, which change would have a Material Adverse Effect.

                   (B) Promptly upon request therefor, such other information 
             and reports relating to the past, present or future
             financial condition, operations, plans and projections of
             Borrowers as Lenders reasonably may request from time to time.

     6.4     REPORTS TO GOVERNMENTAL BODIES AND OTHER PERSONS. Timely file all 
material reports, applications, documents, instruments and information
required to be filed pursuant to all rules, regulations or requests of any
Governmental Body or other Person having jurisdiction over the operation of
Borrowers' Security Monitoring Business, including, but not limited to, such of
the Loan Instruments as are required to be filed with any such Governmental
Body or other Person pursuant to applicable rules and regulations promulgated
by such Governmental Body or other Person.


                                     43


<PAGE>   44


     6.5. MAINTENANCE OF UL CERTIFICATIONS, ALARM LICENSES, LICENSES, 
FRANCHISES AND OTHER AGREEMENTS.

          6.5.1. MAINTENANCE OF UL CERTIFICATIONS AND ALARM LICENSES.

          Maintain in full force and effect at all times, and apply in a
     timely manner for renewal of, all UL Certifications and Alarm Licenses     
     necessary for the operation of Borrowers' Security Monitoring Business,
     the loss of any of which would have a Material Adverse Effect, and deliver
     to Agent (i) at least 30 days prior notice of the proposed amendment of
     any of such UL Certifications and Alarm Licenses and (ii) (A) evidence of
     the filing of any application for renewal of such UL Certifications and
     Alarm Licenses not less than the earlier of (x) 60 days prior to the
     expiration of such UL Certifications and Alarm Licenses or (y) the last
     day such application may be filed in accordance with applicable law and
     (B) copies of any petition or other document filed to deny or object to
     any such renewal application promptly after receipt thereof by Borrowers.

          6.5.2. MAINTENANCE OF LICENSES, FRANCHISES AND AGREEMENTS.  Maintain 
     in full force and effect at all times, and apply in a timely manner for
     renewal of licenses, franchises, trademarks, tradenames and agreements
     necessary for the operation of Borrowers' Security Monitoring Business,
     the loss of any of which would have a Material Adverse Effect, and deliver
     to Agent (i) at least 30 days prior notice of the proposed amendment of
     any of such licenses, franchises, trademarks, tradenames and agreements
     and (ii) (A) evidence of the filing of any application for renewal of such
     licenses, franchises, trademarks, tradenames and agreements not less than
     the earlier of (x) 60 days prior to the expiration of such licenses,
     license or franchise or (y) the last day such application may be filed in
     accordance with applicable law and (B) copies of any petition or other
     document filed to deny or object to any such renewal application promptly
     after receipt thereof by Borrowers.

     6.6. INSURANCE.

           6.6.1. KEY MAN LIFE INSURANCE.  Maintain in full force and effect 
     at all times policies of insurance in such form and issued by such
     insurers as shall be reasonably acceptable to Agent, insuring the life of
     (i) Brannen in the amount of $1,250,000 and (ii) Davis in the amount of
     $500,000, and deliver to Agent, from time to time as Agent reasonably may
     request, evidence of compliance with this subsection 6.6.1.

           6.6.2. BUSINESS INSURANCE.  Maintain in full force and effect at 
     all times Business Insurance as required by the insurance letter
     agreement between Borrowers and FINOVA, a copy of which is attached hereto
     as EXHIBIT 6.6.2, all of which shall be written by insurers and in amounts
     and forms reasonably satisfactory to Agent and otherwise comply with the
     terms of such insurance letter agreement, and deliver to Agent, from time
     to time as Agent reasonably may request, evidence of compliance with this
     subsection 6.6.2.


                                     44


<PAGE>   45

           6.6.3. CLAIMS AND PROCEEDS. Each Borrower hereby directs all 
     insurers under all policies of Business Insurance to pay all proceeds
     payable thereunder directly to Agent and each Borrower hereby authorizes
     Agent to collect all such proceeds.  Each Borrower irrevocably appoints
     Agent (and all officers, employees or agents designated by Agent) as such
     Borrower's true and lawful attorney and agent in fact for the purpose of
     and with power to make, settle and adjust claims under such policies of
     insurance, endorse the name of such Borrower on any check, draft,
     instrument or other item of payment for the proceeds of such policies of
     insurance, and to make all determinations and decisions with respect to
     such policies of insurance.  Each Borrower acknowledges that such
     appointment of Agent as its attorney and agent in fact is a power coupled
     with an interest and therefore is irrevocable.  Each Borrower shall
     promptly notify Agent of any loss, damage, destruction or other casualty
     to the Collateral.  The insurance proceeds received on account of any
     loss, damage, destruction or other casualty shall, at the option of
     Lenders, be (i) applied in reduction of Borrowers' Obligations in the
     following order of priority: (A) first, to the payment of any and all sums
     which are then due and payable pursuant to the terms of the Loan
     Instruments, other than the Principal Balance and accrued and unpaid
     interest thereon, (B) next, to accrued and unpaid interest on the
     Principal Balance and (C) then to the Principal Balance in the inverse
     order of the maturity of the installments thereof, or (ii) held by Agent
     and applied to pay for the cost of repair or replacement of the Collateral
     subject to such loss, damage, destruction or other casualty, in which
     event such proceeds shall be made available in the manner and under such
     conditions as Agent reasonably may require.  Notwithstanding anything to
     the contrary contained in this subsection 6.6.3, if the amount of the
     proceeds from any loss, damage, destruction or other casualty to the
     Collateral reasonably is expected to be less than $100,000 and neither an
     Event of Default nor an Incipient Default then shall exist, Borrowers
     shall have the right to make, settle and adjust any claim regarding such
     proceeds and Agent shall collect such proceeds and make such proceeds
     available to Borrowers to pay for the repair or replacement of the
     Collateral which was the subject of such loss, damage, destruction or
     other casualty in the manner and under such terms and conditions as Agent
     reasonably may require.  In the event the proceeds are to be applied to
     the repair or replacement of Collateral, the Collateral shall be repaired
     or replaced so as to be of at least equal value and substantially the same
     character as prior to such loss, damage, destruction or other casualty.

     6.7. FUTURE LEASES.  Deliver to Agent, concurrently with the execution by 
any Borrower, as lessee, of any lease pertaining to real property, (i) an
executed copy thereof, (ii) at the option of Agent, either a leasehold mortgage
upon or a collateral assignment of such lease in favor of Agent, in  either
case in a form reasonably acceptable to Agent, and (iii) a Landlord Consent and
Waiver from the lessor under such lease.

     6.8. FUTURE ACQUISITIONS OF REAL PROPERTY. Deliver to Agent concurrently 
with the (i) execution by any Borrower of any contract relating to the
purchase by such Borrower of real property, an executed copy of such contract
and (ii) closing of the purchase of such real property, 


                                     45

<PAGE>   46

(A) a first mortgage or deed of trust in favor of Agent on such real property,
in form and content satisfactory to Agent, (B) a lender's policy of title
insurance, in such form and amount and containing such endorsements as shall be
reasonably satisfactory to Agent, (C) an ALTA/ACSM survey of such real property
and (D) such other documents and assurances with respect to such real property
as Agent may require.

     6.9.  ENVIRONMENTAL MATTERS.

           6.9.1. COMPLIANCE.  At all times comply with, and be responsible for,
     its obligations under all Environmental Laws applicable to the
     Leasehold Property, any parcel of real estate acquired in connection with
     an Acquisition and any other Property owned by such Borrower or used by
     such Borrower in the operation of its business.  At its sole cost and
     expense, each Borrower shall (i) comply in all respects with (A) any
     notice of any violation or administrative or judicial complaint or order
     having been filed against such Borrower, any portion of the Leasehold
     Property, any parcel of real estate acquired in connection with an
     Acquisition or any other Property owned by such Borrower or used by such
     Borrower in the operation of its business alleging violations of any law,
     ordinance and/or regulation requiring such Borrower to take any action in
     connection with the release, transportation and/or clean-up of any
     Hazardous Materials, and (B) any notice from any Governmental Body or any
     other Person alleging that such Borrower is or may be liable for costs
     associated with a response or clean-up of any Hazardous Materials or any
     damages resulting from such release or transportation, or (ii) diligently
     contest in good faith by appropriate proceedings any demands set forth in
     such notices, provided (A) reserves in an amount satisfactory to Agent to
     pay the costs associated with complying with any such notice  are
     established by such Borrower and (B) no Lien would or will attach to the
     Property which is the subject of any such notice as a result of any
     compliance by such Borrower which is delayed during any such contest.
     Promptly upon receipt of any notice described in the foregoing clause (i),
     Borrowers shall deliver to Agent a copy thereof.
           
           6.9.2. CERTIFICATION. Deliver to Agent, not later than January 1 of 
     each year, an Environmental Compliance Certificate.

     6.10. COMPLIANCE WITH LAWS. Comply with all laws, statutes and regulations
relating to UL Certification and all other federal, state and local laws,
ordinances, requirements and regulations and all judgments, orders, injunctions
and decrees applicable to such Borrower and its operations, the failure to
comply with which would have a Material Adverse Effect.

     6.11. TAXES AND CLAIMS.  Pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits,
or upon any Property belonging to it, prior to the date on which penalties
attach thereto, and all lawful claims which, if unpaid, might become a Lien
(other than a Permitted Lien) upon the Property of such Borrower, provided that
so long as no Lien has attached to the Property of any Borrower as a result of
any of the foregoing, no Borrower shall be required by this Section 6.11 to pay
any such amount if the same 


                                     46


<PAGE>   47


is being contested diligently and in good faith by appropriate proceedings
and as to which the applicable Borrower has set aside reserves on its books
satisfactory to Agent.

     6.12. MAINTENANCE OF PROPERTIES. Maintain all of its Property necessary 
in the operation of such Borrower's Security Monitoring Business in GOOD
working order and condition.

     6.13. GOVERNMENTAL APPROVALS.  Upon  the exercise by Agent and/or Lenders 
of any  power, right or privilege pursuant to the provisions of any of the Loan
Instruments requiring any consent, approval or authorization of any
Governmental Body (including, without limitation, transfers of UL
Certifications), promptly execute and cause the execution of all applications,
certificates, instruments and other documents that Agent and/or Lenders may
reasonably be required to obtain for such consent, approval or authorization.

     6.14. NON-FUNDED ACQUISITION. Promptly after the consummation of each 
Non-Funded Acquisition, Borrowers shall notify Agent of the terms and
CONDITIONS of such acquisition and provide Agent with any other information
with respect thereto as Agent may reasonably request.

                                   ARTICLE
                                     7.
                             NEGATIVE COVENANTS

     Until all of Borrowers' Obligations are paid and performed in full, no
Borrower, except SAI as to Section 7.15, shall:

     7.1.  BORROWING. Create, incur, assume or suffer to exist any liability for
Indebtedness for Borrowed Money except (i) Borrowers' Obligations, (ii)
Permitted Senior Indebtedness, (iii) the Subordinated Debt and (iv) the Dealer
Holdback Debt.

     7.2.  LIENS. Create, incur, assume or suffer TO exist any Lien upon any of
its Property, whether now owned or hereafter acquired, except Permitted Liens.

     7.3.  MERGER AND ACQUISITION. Consolidate with or merge with or into any 
Person, or acquire directly or indirectly all or substantially all of the 
capital stock, equity interests, membership interests or Property of any 
Person, except Acquisitions made in compliance with this Loan Agreement.

     7.4.  CONTINGENT LIABILITIES.  Assume, guarantee, endorse, contingently 
agree to purchase, become liable in respect of any letter of credit, or
otherwise become liable upon the obligation of any Person, except (i) Dealer
Holdback DEBT, (ii) liabilities arising from the endorsement of negotiable
instruments for deposit or collection (iii) the posting of bonds to secure
performance to the extent necessary in connection with Borrowers' Security
Monitoring Business and similar transactions in the ordinary course of business
and (iv) guaranties by SAI of the obligations of any other Borrower under any
Lease.


                                     47


<PAGE>   48


     7.5.  DISTRIBUTIONS.  Pay any dividends or make any distributions with 
respect to, or purchase or redeem all or any portion of its Equity Interests,
except that any Borrower other than SAI, may pay dividends or make
distributions to SAI.

     7.6.  CAPITAL EXPENDITURES.  Make or incur any Capital Expenditures in 
any year set forth in EXHIBIT 7.6 if the aggregate amount of all Capital
Expenditures made by Borrowers with respect to such year would exceed the
amount set forth opposite such year. 


     7.7.  PAYMENTS OF INDEBTEDNESS FOR BORROWED MONEY.  Make any (i) 
voluntary or optional prepayment of any Indebtedness for Borrowed Money
other than Borrowers' Obligations and payments made in the ordinary course of
business with respect TO the Dealer Holdback Debt or (ii) any payments with
respect to the Subordinated Debt, except as permitted pursuant to the
Subordination Agreement.

     7.8.  OBLIGATIONS AS LESSEE UNDER OPERATING LEASES. Enter into any 
arrangement as lessee of Property under any Operating Lease if the
aggregate rentals for Borrowers for all such Operating Leases during any year
would exceed $750,000.

     7.9.  INVESTMENTS, LOANS. At any time PURCHASE or otherwise acquire, hold 
or invest in the capital stock of, or any other interest in, any Person, or make
any loan or advance to, or enter into any arrangement for the purpose of
providing funds or credit to, or make any other investment, whether by way of
capital contribution or otherwise, in or with any Person, including, without
limitation, any Affiliate, except (i) investments in direct obligations of, or
instruments unconditionally guaranteed by, the United States of America or in
certificates of deposit issued by a Qualified Depository, (ii) investments in
commercial or finance paper which, at the time of investment, is rated either
"A" or better by Moody's Investors Service, Inc., or Standard & Poor's
Corporation, respectively, or at the equivalent rate by any of their respective
successors, (iii) any interests in any money market account maintained, at the
time of investment, with a Qualified Depository, the investments of which, at
the time of investment, are restricted to the types specified in clause (i)
above, (iv) in connection with an Acquisition, (v) the formation and
capitalization of Permitted Subsidiaries and (vi) an investment by SAI in an
amount not to exceed $500,000 in the capital stock of Alarm Funding
Corporation, 60% of the Equity Interests of which will at all times be owned by
SAI.  All investments permitted pursuant to clauses (i), (ii) and (iii) of this
Section 7.9 shall have a maturity not exceeding one year.

     7.10. FUNDAMENTAL BUSINESS CHANGES.  MATERIALLY change the nature of its
business or engage in any business other than the Security Monitoring Business.

     7.11. FACILITY SITES.  Change the locations of its chief executive office,
Central Station Businesses, studios, offices or other Property used in the
operation of such Borrower's Security Monitoring Business unless (i) Agent
shall have received at least 30 days' prior notice thereof, (ii) Borrowers
shall have complied with all applicable laws, rules and regulations and shall
have received all required consents and approvals from any Governmental Body,
(iii) Agent shall have 


                                     48

<PAGE>   49



received satisfactory evidence that such change could not reasonably be
expected to affect adversely the operations or business prospects of Borrowers
and (iv) Borrowers shall have executed and delivered to Agent any documents
Agent may reasonably require in order to maintain the validity and priority of
the Security Interests.

     7.12. SALE OR TRANSFER OF ASSETS.  Sell, lease, assign, transfer or 
otherwise dispose of any Property (other than in the ordinary course of
business) except for the sale or disposition of (i) Property which is not
material to or necessary for the continued operation of its business and (ii)
obsolete or unusable items of equipment which promptly are replaced with new
items of equipment of like function and comparable value to the unusable items
of equipment when the same were new or not obsolete or unusable, provided such
replacement items of equipment shall become subject to the Security Interests.

     7.13. AMENDMENT OF CERTAIN DOCUMENTS. Amend, modify or waive any term or
provision of the (i) the articles of organization or operating agreements of
SACC, MSG or ASMS or any Permitted Subsidiary which is a limited liability
company, (ii) the articles of incorporation or by-laws of SAI, AMJ, ERC, the
Holding Companies or any Permitted Subsidiary which is a corporation (iii) the
Contribution Agreement or (iv) the Subordinated Debt Instruments except to make
any covenant contained therein less restrictive.

     7.14. ACQUISITION OF ADDITIONAL PROPERTIES.  Acquire any additional 
Property except (i) such Property as is necessary to or useful in the
operation of such Borrower's Security Monitoring Business, provided such
acquisitions shall be subject to the conditions and limitations set forth in
this Loan Agreement, (ii) Funded Acquisitions and (iii) Non-Funded
Acquisitions.

     7.15. ISSUANCE OF EQUITY INTERESTS. Issue or sell, permit to be issued or 
sold, or otherwise consent to the transfer of, any additional Equity
Interests or any interests convertible into or exercisable for any such
additional Equity Interests, other than Equity Interests issued by a Permitted
Subsidiary upon its formation.

     7.16. TRANSACTIONS WITH AFFILIATES.  Sell, lease, assign, transfer or 
otherwise dispose of any Property to any Obligor or any Affiliate of any
Obligor, lease Property, render or receive services or purchase assets from any
Obligor or any such Affiliate, or otherwise enter into any contractual
relationship with any Obligor or any Affiliate of any Obligor, except that (i)
subject to the restrictions contained in Section 7.21, Borrowers may pay annual
salaries to Brannen, Davis and Rubin and (ii) Borrowers may engage in the
transactions described on EXHIBIT 7.16.

     7.17. COMPLIANCE WITH ERISA.

                (A) Permit the occurrence of any Termination Event which would 
           result in a liability to any Borrower or ERISA Affiliate in excess 
           of $50,000;

                                     49


<PAGE>   50


                (B) Permit the present value of all benefit liabilities under 
           all Pension Plans to exceed the current value of the assets of such
           Pension Plans allocable to such benefit liabilities by more than
           $50,000;

                (C) Permit any accumulated funding deficiency in excess of 
           $50,000 (as  defined in Section 302 of ERISA and Section 412 of the
           Code) with respect to any Pension Plan, whether or not waived;

                (D) Fail to make any contribution or payment to any 
           Multiemployer Plan which any Borrower or ERISA Affiliate may be
           required to make under any agreement relating to such Multiemployer
           Plan, or any law pertaining thereto which results in or is likely to
           result in a liability in excess of $50,000;

                (E) Engage, or permit any Borrower or ERISA Affiliate to 
           engage, in any "prohibited transaction" as such term is
           defined in Section 406 of ERISA or Section 4975 of the Code for
           which a civil penalty pursuant to Section 502(i) of ERISA or a tax
           pursuant to Section 4975 Of the Code in excess of $50,000 is
           imposed;

                (F) Permit the establishment of any Employee Benefit Plan 
           providing post-retirement welfare benefits or establish or amend
           any Employee Benefit Plan which establishment or amendment could
           result in liability to any Borrower or ERISA Affiliate or increase
           the obligation of any Borrower or ERISA Affiliate to a Multiemployer
           Plan which liability or increase, individually or together with all
           similar liabilities and increases, is material to any Borrower or
           ERISA Affiliate; or

                (G) Fail, or permit any Borrower or ERISA Affiliate to fail, to
           establish, maintain and operate each Employee Benefit Plan in
           compliance in all material respects with ERISA, the Code and all
           other applicable laws and regulations and interpretations thereof.

     7.18. COVENANT LEVERAGE RATIO. Permit the Covenant Leverage Ratio as of 
the last day of any quarter to be greater than the Applicable Ratio for such 
day.

     7.19. DEBT SERVICE COVERAGE RATIO. Permit the Debt Service Coverage Ratio 
for each four quarter period ending as of each quarter to be less than the
ratio of 1.35:1. For the purpose of determining compliance with this Section
7.19 there shall be deducted from the Operating Cash Flow for any six-month
period used in making such determination the interest paid during such period
on the Subordinated Debt.

     7.20. MINIMUM RMR.


                                     50

<PAGE>   51


           7.20.1. MINIMUM RMR FOR SECURITY MONITORING CONTRACTS.  Permit the 
     RMR with respect to Security Monitoring Contracts for any quarter set
     forth in EXHIBIT 7.20.1 to be less than the amount set forth opposite such
     quarter.

           7.20.2. MINIMUM RMR FOR CENTRAL STATION CONTRACTS. Permit the RMR 
     with respect to Central Station Contracts for any quarter set forth
     in EXHIBIT 7.20.2 to be less than the amount set forth opposite such
     quarter.

     7.21. COMPENSATION. Pay any salary, bonuses, fees or other forms of 
compensation in cash to Brannen, Davis or Rubin if the aggregate amount
thereof paid by all Borrowers to (i) Brannen would exceed $250,000 per year,
(ii) Davis would exceed $250,000 per year and (iii) Rubin would exceed $200,000
per year.

     7.22. HOLDING COMPANIES. Permit any Holding Company to engage in any 
business other than the ownership of the MSG Membership Interests.

     7.23. NON-FUNDED ACQUISITION.  Consummate a Non-Funded Acquisition if Cash
Equivalents after such consummation are less than $150,000.


                                   ARTICLE
                                     8.
                            DEFAULT AND REMEDIES

     8.1. EVENTS OF DEFAULT.  The occurrence of any of the following shall
constitute an Event of Default under the Loan Instruments:

          8.1.1. DEFAULT IN PAYMENT.  If any Borrower shall fail to pay all or 
     any portion of Borrowers' Obligations when the same become due and payable.

          8.1.2. BREACH OF COVENANTS.

                 (A) If any Borrower shall fail to observe or perform any 
          covenant or agreement made by such Borrower contained in Section
          6.1, 6.2, 6.5.1, 6.6, 6.9 or in Article VII;

                 (B) If any Obligor shall fail to observe or perform any 
          covenant or agreement (other than those referred to in
          subparagraph (a) above or specifically addressed elsewhere in this
          Section 8.1) made by such Person in any of the Loan Instruments to
          which such Person is a party, and such failure shall continue for a
          period of 30 days after notice of such failure is given by Lenders,
          provided that, if such failure is in connection with subsection
          6.5.2, such Obligor shall have an additional 30 days to cure such
          failure, if such Obligor (i) is diligently pursuing a 


                                     51

<PAGE>   52


          cure for such failure and (ii) provides Agent with evidence to that
          effect in form and substance reasonably satisfactory to Agent.

          8.1.3.  BREACH OF WARRANTY. If any representation or warranty made 
     by or on behalf of any Obligor in or pursuant to any of the Loan
     Instruments or in any instrument or document furnished in compliance with
     the Loan Instruments shall prove to be false or misleading in any material
     respect on the date as of which made.

          8.1.4. DEFAULT UNDER OTHER INDEBTEDNESS FOR BORROWED MONEY. If (i) any
     Borrower at any time shall be in default (as principal or guarantor or
     other surety) in the payment of any principal of or premium or interest
     on any Indebtedness for Borrowed Money (other than Borrowers'
     Obligations) beyond the grace period, if any, applicable thereto and the
     aggregate amount of such payments then in default beyond such grace
     period shall exceed $25,000 or (ii) any default shall occur in respect of
     any issue of Indebtedness for Borrowed Money of any Borrower (other than
     Borrowers' Obligations) outstanding in a principal amount of at least
     $50,000, or in respect of any agreement or instrument relating to any
     such issue of Indebtedness for Borrowed Money, and such default shall
     continue beyond the grace period, if any, applicable thereto.

          8.1.5. BANKRUPTCY.

                 (A) If any Obligor shall (i) generally not be paying its, his 
          or her debts as they become due, (ii) file, or consent, by
          answer or otherwise, to the filing against it, him or her of a 
          petition for relief or reorganization or arrangement or any other
          petition in bankruptcy or insolvency under the laws of any
          jurisdiction, (iii) make an assignment for the benefit of creditors,
          (iv) consent to the appointment of a custodian, receiver, trustee  or
          other officer with similar powers for such Obligor, or for any
          substantial part of the Property of such Obligor or (v) be
          adjudicated insolvent.

                 (B) If any Governmental Body of competent jurisdiction shall 
          enter an order appointing, without consent of such Obligor, a
          custodian, receiver, trustee or other officer with similar powers
          with respect to such Obligor, or with respect to any substantial part
          of the Property belonging to any such Person, or if an order for
          relief shall be entered in any case or proceeding for liquidation or
          reorganization or otherwise to take advantage of any bankruptcy or
          insolvency law of any jurisdiction, or ordering the dissolution,
          winding-up or liquidation of any Obligor or if any petition for any
          such relief shall be filed against any Obligor and such petition
          shall not be dismissed or stayed within 60 days.

          8.1.6. JUDGMENTS. If there shall exist a final judgment or award 
     against any Borrower which shall have been outstanding for a period of
     30 days or more from the date of the entry thereof and shall not have been
     discharged or paid in full or stayed 


                                     52


<PAGE>   53


     pending appeal, if the aggregate amount of all such judgments and awards 
     exceeds $50,000.

          8.1.7.  IMPAIRMENT OF LICENSES; OTHER AGREEMENTS. If (i) any 
     Governmental Body shall revoke, terminate, suspend or adversely modify
     any UL Certification or Alarm License of any Borrower, the
     non-continuation of which could reasonably be expected to have a Material
     Adverse Effect, or (ii) there shall exist any violation or default in the
     performance of, or a material failure to comply with any agreement, or
     condition or term of any UL Certification or Alarm License, which
     violation, default or failure has a Material Adverse Effect, or any such
     UL Certification or Alarm Licenses shall cease to be in full force and
     effect, or (iii) any agreement which is necessary to the operation of any
     Borrower's Security Monitoring Business shall be revoked or terminated and
     not replaced by a substitute acceptable to Lenders within 30 days after
     the date of such revocation or termination, and such revocation or
     termination and non-replacement could reasonably be expected to have a
     Material Adverse Effect.

          8.1.8.  COLLATERAL.  If any material portion of the Collateral shall 
     be seized or taken by a Governmental Body or Person, or Borrowers shall 
     fail to maintain or cause to be maintained the Security Interests and 
     priority of the Loan Instruments as against any Person, or the title
     and rights of any Obligor to any material portion of the Collateral shall
     have become the subject matter of litigation which could reasonably be
     expected to result in impairment or loss of the security provided by the
     Loan Instruments.
     
          8.1.9.  INTERRUPTION OF OPERATIONS. If the operations of any portion 
     of Borrowers' Security Monitoring Business is interrupted at any time for
     more than 48 hours during any period of 10 consecutive days, unless
     Borrowers shall be entitled to receive during such period of interruption
     proceeds of business interruption insurance sufficient to assure that the
     per diem Operating Cash Flow of such portion of Borrowers' Security
     Monitoring Business during such period is at least equal to its per diem
     Operating Cash Flow for the month preceding the initial date of
     interruption.

           8.1.10 PLANS. If an event or condition specified in subsection 6.3.11
     hereof shall occur or exist with respect to any Pension Plan or
     Multiemployer Plan and, as a result of such event or condition, together
     with all other such events or conditions, Borrowers or any member of a
     Controlled Group shall incur, or in the opinion of Lender be reasonably
     likely to incur, a liability to a Pension Plan or Multiemployer Plan or
     the PBGC (or any of them) which, in the reasonable judgment of Lender,
     would have a Material Adverse Effect.

           8.1.11. CHANGE IN CONTROL. If at any time (i) SAI ceases to be the 
     sole shareholder of each of the Holding Companies, AMJ, ERC and each
     Permitted Subsidiary which is a corporation, (ii) SAI and SACC cease to be
     the only members in ASMS, (iii) SAI and MSG cease to be the only members
     in SACC (iv) the Holding 

                                     53


<PAGE>   54



     Companies cease to be the only members in MSG or (v) SAI ceases to be
     the only member of a Permitted Subsidiary which is a limited liability
     company.

          8.1.12. CHANGE IN MANAGEMENT.  If at any time (i) Brannen, or any 
     successor to Brannen reasonably acceptable to Agent, ceases to (A) be the
     President and Chief Executive Officer of SAI, (B) be the Manager of any
     Borrower which is a limited liability company, or (C) manage the
     day-to-day operation of Borrowers' Security Monitoring Business or (ii)
     Davis, or any successor to Davis reasonably acceptable to Agent, ceases to
     be the Chairman of SAI.

     8.2. ACCELERATION OF BORROWERS' OBLIGATIONS.  Upon the occurrence of:

                  (a)  any Event of Default described in clauses (ii), (iii), 
          (iv) and (v) of subsection 8.1.5(a) or in 8.1.5(b), all of
          Borrowers' Obligations at that time outstanding automatically shall
          mature and become due, and

                  (b)  any other Event of Default, Lenders, at any time 
          (unless such Event of Default shall have been waived in writing or
          remedied), at their option, without further notice or demand, may
          declare all of Borrowers' Obligations due and payable, whereupon
          Borrowers' Obligations immediately shall mature and become due and
          payable,

all without presentment, demand, protest or notice (other than the declaration
referred to in clause (b) above), all of which hereby are waived.

     8.3. REMEDIES ON DEFAULT. If Borrowers' Obligations have been accelerated
pursuant to Section 8.2, Lenders, at their option, may:

          8.3.1. ENFORCEMENT OF SECURITY INTERESTS. Enforce their rights and 
     remedies under the Loan Instruments in accordance with their respective 
     terms.

          8.3.2. OTHER REMEDIES. Enforce any of the rights or remedies 
     accorded to Lenders and/or Agent at equity or law, by virtue of statute 
     or otherwise.

     8.4. APPLICATION OF FUNDS. Any funds received by Lenders or Agent 
pursuant to the exercise of any rights accorded to Lenders and/or Agent
pursuant to, or by the operation of any of the terms of, any of the Loan
Instruments, including, without limitation, insurance proceeds, condemnation
proceeds or proceeds from the sale of Collateral, shall be applied to
Borrowers' Obligations in the following order of priority:

          8.4.1. EXPENSES.  First, to the payment of (i) all reasonable fees and
     expenses actually incurred, including, without limitation, court costs,
     fees of appraisers, title charges, costs of maintaining and preserving
     the Collateral, costs of sale, and all other costs incurred by Lenders
     and Agent in exercising any rights accorded to such Persons 


                                     54

<PAGE>   55


     pursuant to the Loan Instruments or by applicable law, including,
     without limitation, reasonable attorneys' fees, and (ii) all Liens
     (excluding Permitted Liens other than the Security Interests) superior to
     the Liens of Agent except such superior Liens subject to which any sale of
     the Collateral may have been made.

          8.4.2. BORROWERS' OBLIGATIONS.  Next, to the payment of the remaining
     portion of Borrowers' Obligations in such order as Lenders may determine.

     8.5. SURPLUS. Any surplus, to the Person or Persons entitled thereto.

     8.6. PERFORMANCE OF BORROWERS' OBLIGATIONS. If any Borrower fails to (i)
maintain in force and pay for any insurance policy or bond which such Borrower
is required to provide pursuant to any of the Loan Instruments, (ii) keep the
Collateral free from all Liens except for Permitted Liens, (iii) pay when due
all taxes, levies and assessments on or in respect of the Collateral, except as
otherwise permitted pursuant to the terms hereof, (iv) make all payments and
perform all acts on the part of such Borrower to be paid or performed in the
manner required by the terms hereof and by the terms of the other Loan
Instruments with respect to any of the Collateral, including, without
limitation, all expenses of protecting, storing, warehousing, insuring,
handling and maintaining the Collateral, (v) keep fully and perform promptly
any other of the obligations of such Borrower hereunder or under any of the
other Loan Instruments, and (vi) keep fully and perform promptly the
obligations of such Borrower with respect to any issue of Indebtedness for
Borrowed Money secured by a Permitted Prior Lien, then Agent or Lenders may
(but shall not be required to) procure and pay for such insurance policy or
bond, place such Collateral in good repair and operating condition, pay,
contest or settle such Liens or taxes or any judgments based thereon or
otherwise make good any other aforesaid failure of such Borrower. Borrowers
shall reimburse Agent and Lenders immediately upon demand for all reasonable
sums paid or advanced on behalf of any Borrower for any such purpose, together
with reasonable and/or necessary costs and expenses (including reasonable
attorneys' fees) paid or incurred by Agent and Lenders in connection therewith
and interest on all sums advanced from the date of advancement until repaid to
Agent and Lenders at the Default Rate.  All such sums advanced by Agent and
Lenders, with interest thereon, immediately upon advancement thereof, shall be
deemed to be part of Borrowers' Obligations.


                                   ARTICLE
                                     9.
                     ADDITIONAL LENDERS AND PARTICIPANTS

     9.1. ASSIGNMENT TO OTHER LENDERS.

          9.1.1. ASSIGNMENT. FINOVA may make one or more Loan Assignments, and 
     each Assignee, with the prior written consent of FINOVA (which may
     be given or denied in the sole discretion of FINOVA), may make a Loan
     Assignment of the rights and obligations which were assigned to such
     Assignee.  Each Person making a Loan 


                                     55

<PAGE>   56


     Assignment shall give notice thereof to Borrowers within 10 Business
     Days thereafter.  Notwithstanding the foregoing, FINOVA shall not assign
     at any one time or collectively during the term of the Loan more than
     49.9% of FINOVA's interest in Borrowers' Obligations.

          9.1.2. EFFECT OF LOAN ASSIGNMENT. Each Assignee to which FINOVA 
     makes a Loan Assignment, and each subsequent Assignee, to the extent of
     such Loan Assignment, shall have the same rights, benefits and obligations
     under the Loan Instruments as such Assignee would have had if such
     Assignee were an original party to the Loan Instruments.  Borrowers shall
     not incur any costs or expenses in connection with any Loan Assignment.

          9.1.3. SUBSTITUTION OF NOTE. Simultaneously with the delivery by any 
     Lender to Borrowers of any Note which is the subject of a Loan
     Assignment and which is marked "canceled," Borrowers shall execute and
     deliver to such Lender for delivery to (i) the Assignee to which such Loan
     Assignment is made, a promissory note payable to the order of such
     Assignee in an amount equal to the amount assigned to such Assignee, and
     (ii) such Lender making such Loan Assignment, a promissory note payable to
     the order of such assigning Lender in an amount equal to the amount
     retained by such Lender, each such Note to be substantially in the form of
     the canceled Note.

          9.1.4. INSPECTIONS. Any action which any Assignee shall desire to 
     undertake pursuant to Section 6.2 of the Loan Agreement shall be
     coordinated by such Assignee through Agent, and Agent shall accompany each
     such Assignee which desires to undertake any such action pursuant to such
     Section 6.2.

     9.2. PARTICIPATIONS. Each Lender shall have the right to sell 
Participations. In the event of the sale of a Participation, the obligations of
the Lender selling such a Participation shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof, such Lender shall
remain the holder of any Note which previously has been delivered to Lender
pursuant to the terms of this Loan Agreement, and Borrowers shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Loan Agreement. Notwithstanding the sale of
any Participation, all amounts payable by Borrowers pursuant to the terms of
the Loan Instruments shall be determined as if no such Participation had been
sold. No Participant shall be entitled to require a Lender to take or omit to
take any action pursuant to the Loan Instruments except as provided in the
Participation Agreement executed by and between the Participant and such
Lender.

     9.3. APPOINTMENT AND FUNCTION OF AGENT.  FINOVA is hereby appointed as 
Agent hereunder to act in such capacity on behalf of all Lenders under this
Loan Agreement and the other Loan Instruments.  FINOVA agrees that it shall
continue to act as Agent throughout the term of the Loan.  In performing its
functions and duties under this Agreement, Agent shall act solely as an agent
of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for any other
Person. 

                                     56


<PAGE>   57


Notwithstanding the appointment of FINOVA as Agent hereunder, Agent shall have 
the same rights hereunder as any other Lender, and may exercise such rights as 
though FINOVA had not been appointed as Agent hereunder.

     9.4. SET OFF AND SHARING OF PAYMENTS. Upon the occurrence of any Event of
Default and the acceleration of Borrowers' Obligations, each Lender is
authorized by Borrowers, at any time or from time to time thereafter, without
notice to Borrowers or to any other Person, to set off and to appropriate and
apply any and all balances held by such Lender for the account of Borrowers,
and any other Property at any time held or owing  by such Lender to or for the
credit or for the account of Borrowers, against and on account of any of
Borrowers' Obligations which are not paid when due. Borrowers agree that (i)
each Lender may exercise its right to set off with respect to amounts in excess
of such Lender's share of Borrowers' Obligations and may sell Participations in
such excess to other Lenders and (ii) any Lender so purchasing a Participation
in the Loan made or other of Borrowers' Obligations held by other Lenders may
exercise all rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such Participation as fully as if such Lender were a direct
holder of the Loan and other of Borrowers' Obligations in the amount of such
Participation.

     9.5. LENDERS' DECISIONS. Until a Loan Assignment is made, all Lenders'
Decisions shall be made solely by FINOVA.  After a Loan Assignment is made, any
Lenders' Decisions which may be made pursuant to the Loan Instruments by
Lenders or as to which the Lenders shall have the right to consent shall be
made as set forth in the applicable Lender Addition Agreements.


                                   ARTICLE
                                     10.
                                   CLOSING

     The Closing Date shall be such date as the parties shall determine, and
the Closing shall take place on such date, provided all conditions for the
Closing as set forth in this Loan Agreement have been satisfied or otherwise
waived by FINOVA. The Closing shall take place at the office of Altheimer &
Gray, 10 South Wacker Drive, Chicago, Illinois, or such other place as the
parties hereto shall agree.  Unless the Closing occurs on or before December
31, 1997, this Loan Agreement shall terminate and be of no further force or
effect and, except for any obligation of Borrowers to FINOVA pursuant to
Article XI, none of the parties hereto shall have any further obligation to any
other party.


                                     57


<PAGE>   58


                                   ARTICLE
                                     11.
                           EXPENSES AND INDEMNITY

     11.1. ATTORNEYS' FEES AND OTHER FEES AND EXPENSES.  Whether or not any of 
the transactions contemplated by this Loan Agreement shall be consummated,
Borrowers agree to pay to Lenders on demand all reasonable expenses incurred by
Lenders in connection with the transactions contemplated hereby (including,
without limitation, any appraisal fees, environmental audit fees and title and
recording charges) and in connection with any amendments, modifications or
waivers (whether or not the same become effective) under or in respect of any
of the Loan  Instruments, including, without limitation:

           11.1.1. FEES AND EXPENSES FOR PREPARATION OF LOAN INSTRUMENTS.  All
     reasonable expenses, disbursements and reasonable attorneys' fees,
     actually incurred (including, without limitation, charges for required
     mortgagee's title insurance, lien searches, reproduction of documents,
     long distance telephone calls and overnight express carriers) of special
     counsel and other counsel  retained by Lenders in connection with the
     preparation and  negotiation of the Loan Instruments or any amendments,
     modifications or waivers hereto or thereto.

           11.1.2. FEES AND EXPENSES IN ENFORCEMENT OF RIGHTS OR DEFENSE OF LOAN
     INSTRUMENTS. Any reasonable expenses or other costs, including reasonable
     attorneys' fees and expert witness fees, actually incurred by Agent or
     Lenders in connection with the enforcement or collection against any
     Obligor of any provision of any of the Loan Instruments, and in
     connection with or arising out of any litigation, investigation or
     proceeding instituted by any Governmental Body or any other Person with
     respect to any of the Loan Instruments, whether or not suit is
     instituted, including, but not limited to, such costs or expenses arising
     from the enforcement or collection against any Obligor of any provision
     of any of the Loan Instruments in any state or federal bankruptcy or
     reorganization proceeding.

     11.2. INDEMNITY. Borrowers agree to indemnify and save Agent and Lenders
harmless of and from the following:

           11.2.1. BROKERAGE FEES. The fees, if any, of brokers and finders 
     engaged by Borrowers.

           11.2.2. GENERAL. Any loss, cost, liability, damage or expense 
     (including reasonable attorneys' fees and expenses) incurred by Agent or
     Lenders in investigating, preparing for, defending against, providing
     evidence, producing documents or taking other action in respect of any
     commenced or threatened litigation, administrative proceeding, suit
     instituted by any Person or investigation under any law, including any
     federal securities law, the Bankruptcy Code, any relevant state corporate
     statute or any other securities law, bankruptcy law or law affecting
     creditors generally of any 


                                     58

<PAGE>   59



     jurisdiction, or any regulation pertaining to any of the foregoing,
     or at common law or otherwise, relating to the transactions contemplated
     by or referred to in, or any other matter related to, the Loan
     Instruments, whether or not Agent or any Lender is a party to such
     litigation, proceeding or suit, or is subject to such investigation.

          11.2.3. OPERATION OF COLLATERAL; JOINT VENTURERS. Any loss, cost, 
     liability, damage or expense (including reasonable attorneys' fees and
     expenses) incurred in connection with the ownership, operation or
     maintenance of the Collateral, the construction of Agent or any Lender and
     Borrowers as having the relationship of joint venturers or partners or the
     determination that Agent or any Lender has acted as agent for Borrowers.

          11.2.4. ENVIRONMENTAL INDEMNITY. Any and all claims, losses, damages,
     out of pocket response costs, clean-up costs and expenses suffered
     and/or incurred at any time by Agent or any Lender arising out of or in
     any way relating to the existence at any time of any Hazardous Materials
     in, on, under, at, transported to or from, or  used in the construction
     and/or renovation of, any of the Leasehold Property, any parcel of real
     estate acquired in connection with an Acquisition, or otherwise with
     respect to any Environmental Law, and/or the failure of Borrowers to
     perform its obligations and covenants hereunder with respect to
     environmental matters, including, but not limited to:  (i) claims of any
     Persons for damages, penalties, response costs, clean-up costs, injunctive
     or other relief, (ii) costs of removal and restoration, including fees of
     attorneys and experts, and costs of reporting the existence of Hazardous
     Materials to any Governmental Body, and (iii) any expenses or obligations,
     including reasonable attorneys' fees and expert witness fees, incurred at,
     before and after any trial or other proceeding before any Governmental
     Body or appeal therefrom whether or not taxable as costs, including,
     without limitation, witness fees, deposition costs, copying and telephone
     charges and other expenses, all of which shall be paid by Borrowers to
     Agent or such Lender when incurred by Agent or such Lender, except where
     such costs were directly caused by the gross negligence or willful
     misconduct of FINOVA, any Lender, or by any agent, or third party acting
     on behalf of and at the direction of FINOVA or any Lender.


                                   ARTICLE
                                     12.
                                MISCELLANEOUS

     12.1 NOTICES. All notices and communications under this Loan Agreement 
shall be in writing and shall be (i) delivered in person, (ii) sent by
facsimile, or (iii) mailed, postage prepaid, either by registered or certified
mail, return receipt requested, or by overnight express carrier, addressed in
each case as follows:

<TABLE>
     <S>              <C>
     To Borrowers:    Security Associates International, Inc.
                      2101 Arlington Heights Road

</TABLE>
                         
                                     59


<PAGE>   60


<TABLE>
     <S>              <C>
                      Arlington Heights, Illinois  60005-4142
                      Attention: James S. Brannen, President
                      Facsimile No.:  847/956-9360

     Copy to:         Sachnoff & Weaver, Ltd.
                      30 South Wacker  Drive
                      Suite 2900
                      Chicago, Illinois  60606-7480
                      Attention: Jerold N. Siegan, Esq.
                      Facsimile No.:  312/207-6400

     To Lender:       FINOVA Capital Corporation
                      311 South Wacker  Drive, Suite 4400
                      Chicago, Illinois 60606
                      Attention: David J. Alexander
                      Facsimile No.: 312/322-3530

     Copy to:         FINOVA Capital Corporation
                      1850 N. Central Avenue
                      Phoenix, Arizona 85004
                      Attention: Vice  President, Law
                      Facsimile No.: 602/207-5036

     Copy to:         Altheimer & Gray
                      10 South Wacker Drive
                      Chicago, Illinois 60606
                      Attention: Maurice Jacobs, Esq.
                      Facsimile No.: 312/715-4000
</TABLE>


or to any other address or facsimile number, as to any of the parties hereto,
as such party shall designate in a notice to the other parties hereto.  All
notices sent pursuant to the terms of this Section 12.1 shall be deemed
received (i) if personally delivered, then on the Business Day of delivery,
(ii) if sent by facsimile before 2:00 p.m. Phoenix time, on the day sent if a
Business Day or if such day is not a Business Day or if sent after 2:00 p.m.
Phoenix time, then on the next Business Day, (iii) if sent by overnight,
express carrier, on the next Business Day immediately following the day sent,
or (iv) if sent by registered or certified mail, on the earlier of the fifth
Business Day following the day sent or when actually received.  Any notice by
facsimile shall be followed by delivery on the next Business Day by overnight,
express carrier or by hand.

     12.2 SURVIVAL OF LOAN AGREEMENT; INDEMNITIES. All covenants, agreements,
representations and warranties made in this Loan Agreement and in the
certificates delivered pursuant hereto shall survive the making by Lender of
the Loan and the execution and delivery to Lenders of the Note and of all other
Loan Instruments, and shall continue in full force and effect so long as any of
Borrowers' Obligations remain outstanding, unperformed or unpaid.


                                     60


<PAGE>   61


Notwithstanding the repayment of all amounts due under the Loan Instruments,
the cancellation of the Note and the release and/or cancellation of any and all
of the Loan Instruments or the foreclosure of any Liens on the Collateral, the
obligations of Borrowers to indemnify Agent and Lenders with respect to the
expenses, damages, losses, costs and liabilities described in Section 11.2
shall survive until all applicable statute of limitations periods with respect
to actions which may be brought against Agent or any Lender have run.

     12.3. FURTHER ASSURANCE. From time to time, Borrowers shall execute and 
deliver to Agent and Lenders such additional documents as Lenders reasonably may
require to carry out the purposes of the Loan Instruments and to protect
Lenders' rights thereunder, including, without limitation, using its best
efforts in the event any Collateral is to be sold to secure the approval by any
Governmental Body of any application required by such Governmental Body in
connection with such sale, and not take any action inconsistent with such sale
or the purposes of the Loan Instruments.

     12.4. TAXES AND FEES. Should any tax (other than taxes based upon the net 
income of any Lender), recording or filing fees become payable in respect of 
any of the Loan Instruments, or any amendment, modification or supplement 
thereof, Borrowers agree to pay the same on demand, together with any interest
or penalties thereon attributable to any delay by Borrowers in meeting any
Lender's demand, and agree to hold Lenders harmless with respect thereto.

     12.5. SEVERABILITY. In the event that any provision of this Loan Agreement
is deemed to be invalid by reason of the operation of any law, this Loan
Agreement shall be construed as not containing such provision and the
invalidity of such provision shall not affect the validity of any other
provisions hereof, and any and all other provisions hereof which otherwise are
lawful and valid shall remain in full force and effect.

     12.6. WAIVER. No delay on the part of Agent or any Lender in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, and no
single or partial exercise of any right, power or privilege hereunder shall
preclude other or further exercise thereof, or be deemed to establish a custom
or course of dealing or performance between the parties hereto, or preclude the
exercise of any other right, power or privilege.

     12.7. MODIFICATION OF LOAN INSTRUMENTS. No modification or waiver of any
provision of any of the Loan Instruments shall be effective unless the same
shall be in writing, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  No notice to or
demand on Borrowers in any case shall entitle Borrowers to any other or further
notice or demand in the same, similar or other circumstances.

     12.8. CAPTIONS. The headings in this Loan Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

     12.9. SUCCESSORS AND ASSIGNS. This Loan Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto.


                                     61

<PAGE>   62


     12.10. REMEDIES CUMULATIVE. All rights and remedies of Agent and Lenders 
pursuant to this Loan Agreement, any other Loan Instruments or
otherwise, shall be cumulative and non-exclusive, and may be exercised
singularly or concurrently. Neither Agent nor any Lender shall be required to
prosecute collection, enforcement or other remedies against any Obligor before
proceeding against any other Obligor or to enforce or resort to any security,
liens, collateral or other rights of  Agent or  Lenders.  One or more
successive actions may be brought against Borrowers and/or any other Obligor,
either in the same action or in separate actions, as often as Lenders deem
advisable, until all of Borrowers' Obligations are paid and performed in full.

     12.11. ENTIRE AGREEMENT; CONFLICT.  This Loan Agreement and the other Loan
Instruments executed pursuant hereto constitute the entire agreement among the
parties hereto with respect to the transactions contemplated hereby or thereby
and supersede any prior agreements, whether written or oral, relating to the
subject matter hereof.  In the event of a conflict between the terms and
conditions set forth herein and the terms and conditions set forth in any other
Loan Instrument, the terms and conditions set forth herein shall govern.

     12.12. APPLICABLE LAW.  THE LOAN INSTRUMENTS SHALL BE CONSTRUED IN 
ACCORDANCE WITH AND GOVERNED BY THE LAWS AND DECISIONS OF THE STATE OF
ARIZONA. FOR PURPOSES OF THIS SECTION 12.12, THE LOAN INSTRUMENTS SHALL BE
DEEMED TO BE PERFORMED AND MADE IN THE STATE OF ARIZONA.

     12.13. JURISDICTION AND VENUE.  EACH BORROWER HEREBY AGREES THAT ALL 
ACTIONS OR PROCEEDINGS INITIATED BY SUCH BORROWER AND ARISING DIRECTLY OR
INDIRECTLY OUT OF THE LOAN INSTRUMENTS SHALL BE LITIGATED IN THE SUPERIOR COURT
OF MARICOPA COUNTY, OR THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
ARIZONA OR, IF AGENT OR ANY LENDER INITIATES SUCH ACTION, IN ADDITION TO THE
FOREGOING COURTS, ANY COURT IN WHICH AGENT OR SUCH LENDER SHALL INITIATE OR TO
WHICH AGENT OR SUCH LENDER SHALL REMOVE SUCH ACTION, TO THE EXTENT SUCH COURT
HAS JURISDICTION.  EACH BORROWER HEREBY EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY AGENT OR
ANY LENDER IN OR REMOVED BY AGENT OR ANY LENDER TO ANY OF SUCH COURTS, AND
HEREBY AGREES THAT PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER
PROCESS OR PAPERS ISSUED THEREIN MAY BE SERVED IN THE MANNER PROVIDED FOR
NOTICES HEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER
PROCESS OR PAPERS MAY  BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
SUCH BORROWER AT THE ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO
SECTION 12.1.  EACH BORROWER WAIVES ANY CLAIM THAT MARICOPA COUNTY, ARIZONA OR
THE DISTRICT OF ARIZONA IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON
LACK OF 


                                     62


<PAGE>   63


VENUE. TO THE EXTENT PROVIDED BY LAW, SHOULD ANY BORROWER, AFTER BEING
SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR
PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING
THEREOF, SUCH BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT
MAY BE ENTERED BY THE COURT AGAINST SUCH BORROWER AS DEMANDED OR PRAYED FOR IN
SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS.  THE EXCLUSIVE CHOICE OF FORUM FOR
BORROWERS SET FORTH IN THIS SECTION 12.13 SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT BY AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM
OR THE TAKING BY AGENT OR ANY LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY
OTHER APPROPRIATE JURISDICTION, AND EACH BORROWER HEREBY WAIVES THE RIGHT TO
COLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.

     12.14. WAIVER OF RIGHT TO JURY  TRIAL. AGENT, LENDERS AND BORROWERS 
ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER ANY OF THE
LOAN INSTRUMENTS OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED THEREBY WOULD
BE BASED UPON DIFFICULT AND COMPLEX ISSUES AND, THEREFORE, THE PARTIES AGREE
THAT ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A COURT
OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

     12.15. TIME OF ESSENCE.  TIME IS OF THE ESSENCE FOR THE PERFORMANCE BY 
BORROWERS OF THE OBLIGATIONS SET FORTH IN THIS LOAN AGREEMENT AND THE OTHER LOAN
INSTRUMENTS.

     12.16. ESTOPPEL CERTIFICATE. Within 15 days after Agent or any Lender 
reasonably requests any Borrower to do so, such Borrower will execute and
deliver to Agent or such Lender a statement certifying (i) that this Loan
Agreement is in full force and effect and has not been modified except as
described in such statement, (ii) the date to which interest on the Note has
been paid, (iii) the Principal Balance, (iv) whether or not to its knowledge an
Incipient Default or Event of Default has occurred and is continuing, and, if
so, specifying in reasonable detail each such Incipient Default or Event of
Default of which it has knowledge, (v) whether to its knowledge it has any
defense, setoff or counterclaim to the payment of the Note in accordance with
its terms, and, if so, specifying each defense, setoff or counterclaim of which
it has knowledge in reasonable detail (including where applicable the amount
thereof), and (vi) as to any other matter reasonably requested by Agent or such
Lender.

     12.17. CONSEQUENTIAL DAMAGES. Neither Agent nor any Lender nor any agent or
attorney of Agent or such Lender shall be liable to any Borrower for
consequential damages arising from any breach of contract, tort or other wrong
relating to the establishment, 


                                     63

<PAGE>   64


administration or collection of the Borrowers' Obligations, except in the case
of such Person's gross negligence or willful misconduct.

     12.18. COUNTERPARTS. This Loan Agreement may be executed by the parties 
hereto in several counterparts and each such counterpart shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same agreement.

     12.19. NO FIDUCIARY  RELATIONSHIP. No provision in this Loan Agreement or 
in any other Loan Instrument, and no course of dealing among the parties 
hereto, shall be deemed to create any fiduciary duty by Agent or any Lender to 
any Borrower.

     12.20. NO STRICT CONSTRUCTION. The language used in this Loan Agreement 
shall be deemed to be the language chosen by the parties hereto to express 
their mutual intent, and no rule of strict construction shall be applied 
against any party hereto.

              [remainder of this page intentionally left blank]
     IN WITNESS WHEREOF, this Amended and Restated Loan Agreement has been
executed and delivered by each of the parties hereto by a duly authorized
officer of each such party on the date first set forth above.

                              SECURITY ASSOCIATES INTERNATIONAL, INC. and, AMJ
                              CENTRAL STATION CORPORATION, INC., each a
                              Delaware corporation

                              By:
                                 ----------------------------------------------
                                    James S. Brannen, President of each of
                                    the foregoing corporations President



                              SECURITY ASSOCIATES COMMAND CENTER II, L.L.C., a
                              Michigan limited liability company, ALL-SECURITY
                              MONITORING SERVICES, L.L.C., an Illinois limited
                              liability company, and MONITOR SERVICE GROUP,
                              L.L.C., a Delaware limited liability company

                              By:
                                 ----------------------------------------------
                                    James S. Brannen, Manager of each of
                                    the foregoing limited liability companies



                                     64


<PAGE>   65



                              TELECOMMUNICATIONS ASSOCIATES GROUP, INC., an
                              Ohio corporation d/b/a ERC


                              By: 
                                 ----------------------------------------------
                                    Ronald J. Carr
                                    President


                              FINOVA CAPITAL CORPORATION, a Delaware
                              corporation, in its individual capacity and as
                              agent for all Lenders


                              By:
                                 ----------------------------------------------
                                    David J.  Alexander
                                    Vice President



                                     65