Unassociated Document


     

    LOCK-UP
      AGREEMENT

    


    by
      and between

    Argyle
      Security Acquisition Corporation 

    and
      

     

    
      
        

      

    

     

    THIS
      LOCK-UP AGREEMENT
      (this
“Lock-Up Agreement”), dated as of ___________, 2006, by and among ARGYLE
      SECURITY ACQUISITION CORPORATION,
      a
      Delaware corporation (the “Company”) and ______________ (the
“Stockholder”).

     

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

    


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

    


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

    


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

    


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

    


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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


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

    


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

    


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

    


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

    


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

    


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

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    


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

    


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

     

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

     

    if
      to the
      Company, to:


     

    Argyle
      Security Acquisition Corporation

    200
      Concord Plaza, Suite 700

    San
      Antonio, TX 78216

    Attn:
      Bob
      Marbut

    Telecopy:
      (210) 828-7300

     

    with
      a
copy
      to:


     

    Loeb
      & Loeb LLP

    345
      Park
      Avenue

    New
      York,
      New York 10154

    Attention:
      Mitchell S. Nussbaum

    Telecopy:
      

     

    if
      to the
Stockholder:


     

    c/o
      ISI
      Detention Contracting Group, Inc.

    12903
      Delivery Drive  

    
      
        San
          Antonio, Texas 78247

      

    

    Attention:
      Sam Youngblood

    Telecopy:
      210.495.5613

     

    with
      a
copy
      to:


     

    Hughes
      & Luce, LLP

    111
      Congress Ave; Ste. 900

    Austin,
      TX 78701

    Attention:
      Hull Youngblood

    Telecopy
      : 512.482.6859

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

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

    


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

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    


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

     

    
      	 	 	 
	 	
              ARGYLE
                SECURITY ACQUISITION CORP.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
	 	Title:
              


    

     

    
      	 	 	 
	 	STOCKHOLDER:
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:




    
      
        
        

      

      
        -5-