LOAN
      AGREEMENT

    


    This
      LOAN
      AGREEMENT is entered into this 30th
      day of
      September 2008,
      by and
      between Argyle Security, Inc. a Delaware corporation (hereinafter "Lender"),
      and
      ISI Security Group, Inc. a Delaware corporation (hereinafter
      "Borrower").

    


    WHEREAS,
      Lender is the direct owner of all of the issued and outstanding capital stock
      of
      Borrower; and

    


    WHEREAS,
      Borrower desire to obtain a loan and other financial accommodations from Lender
      and Lender is willing to provide such loan and accommodations all in accordance
      with the terms of this Agreement.

    


    NOW,
      THEREFORE, in consideration of the premises, and other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      Lender and the Borrower do hereby agree as follows:

    


    
      	1.	
              THE
                LOAN

            


    

    


    
      	
              1.1.

            	
              The
                Loan.
                On the date hereof, the Lender agrees to make, subject to the conditions
                hereof, and Borrower agrees to take, a Loan (hereinafter "Loan")
                in the
                principal amount of Two Million Dollars
                ($2,000,000).

            


    

    


    
      	
              1.2.

            	
              The
                Note.
                Borrower shall execute a promissory note in favor of the Lender in
                a form
                substantially similar to that completed promissory note attached
                hereto as
                Exhibit A (hereinafter, "the Note") and payable to the order of the
                Lender. The Note shall be dated the date of this Loan Agreement.
                The Note
                shall provide that the principal of the Loan and all accrued and
                unpaid
                interest shall be repaid on October 31, 2008.


            


    

    


    
      	
              1.3.

            	
              The
                Terms of the Loan.
                The aforesaid Loan shall be for a term of one month commencing from
                the
                date of the Note. The principal balance of the Loan, together with
                all
                interest accrued thereon, shall be payable monthly by Borrower as
                required
                by the terms of this Loan Agreement and the
                Note.

            


    

    


    
      	
              1.4.

            	
              Rate
                and Payment of Interest.
                The aforesaid Note shall bear interest at the rate of six percent
                (6%) per
                annum calculated on the basis of a 365-day year. Interest shall be
                payable
                by Borrower upon the date for the repayment of principal set forth
                in
                Section 1.2 above.

            


    

    


    
      	
              1.5.

            	
              Prepayments.
                The
                Borrower may prepay the Note in whole or in part with accrued interest
                to
                the date of such prepayment on the amount prepaid, provided that
                each
                partial prepayment shall be applied to the principal installments
                of the
                Note, set forth in Section 1.2 hereof, in the inverse order of their
                maturities.

            


    

    


    
      	
              1.6

            	
              Waivers
                by Borrower.
                To the fullest extent permitted by applicable law, Borrower waives:
                (a) presentment, demand and protest, and notice of presentment,
                dishonor, intent to accelerate, acceleration, protest, default,
                nonpayment, maturity, release, compromise, settlement, extension
                or
                renewal of the Loan Agreement or this Note; (b) all rights to notice
                and a
                hearing prior to allowing Lender to exercise any of its remedies;
                and (c)
                the benefit of all valuation, appraisal and exemption
                laws.

            


    


    
      
        
        

      

      
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      	2.	
              DEFAULT

            


    

    


    Upon
      the
      happening of any of the following events, each of which shall constitute a
      default hereunder, Lender may declare that all liabilities of the Borrower
      to
      the Lender under shall be accelerated and become immediately due and payable;
      provided, that upon the occurrence of any default specified in Sections (c)
      or
      (d) below, all liabilities of the Borrower to Lender shall become immediately
      due and payable without declaration, notice or demand by Lender: (a) failure
      of
      the Borrower (which shall include any endorser, surety or Guarantor) to perform
      any material term, covenant, or agreement contained herein, which is not cured
      within ten (10) days from the date of occurrence; (b) dissolution of the
      Borrower; (c) filing of any petition in Bankruptcy by or against the Borrower;
      (d) application by the Borrower for the appointment of a receiver, or making
      of
      a general assignment for the benefit of creditors by, or insolvency of the
      Borrower; or (e) determination by any officer of the Lender that a material
      adverse change has occurred in the financial condition of the Borrower.


    


    
      	3.	
              MISCELLANEOUS

            


    

    


    
      	
              3.1.

            	
              Amendments,
                Etc.
                No amendment, modification, termination, or waiver of any provision
                of
                this Loan Agreement and the Note (“Loan Documents”) nor consent to any
                departure by the Borrower from any Loan Document, shall in any event
                be
                effective unless the same shall be in writing and signed by the Lender,
                and then such waiver or consent shall be effective only in the specific
                instance and for the specific purpose for which
                given.

            


    

    


    
      	
              3.2.

            	
              No
                Waiver. No
                failure or delay on the part of the Lender in exercising any right,
                power,
                or remedy hereunder shall operate as a waiver thereof; nor shall
                any
                single or partial exercise of any such right, power, or remedy preclude
                any other or further exercise thereof or the exercise of any other
                right,
                power, or remedy hereunder. The rights and remedies provided herein
                are
                cumulative, and are not exclusive of any other rights, powers, privileges,
                or remedies, now or hereafter existing, at law or in equity or
                otherwise.

            


    

    


    
      	
              3.3.

            	
              Successors
                and Assigns.
                This Loan Agreement shall be binding upon and inure to the benefit
                of the
                Borrower and the Lender and their respective successors and assigns,
                except that the Borrower may not assign or transfer any of its rights
                under any Loan Document to which the Borrower is a party without
                the prior
                written consent of the Lender.

            


    

    


    
      	
              3.4.

            	
              Subordination.
                The obligations evidenced hereby are subordinate in the manner and
                to the
                extent set forth in that certain Subordination Agreement (the
                “Subordination Agreement”) dated as of September 30, 2008, by and between
                Lender, and LaSalle Bank National Association, a national banking
                association (“Senior Lender”) to the obligations (including interest) owed
                by the Borrower to the holders of all of the notes issued pursuant
                to that
                certain Amended and Restated Loan and Security Agreement dated as
                of
                January 23, 2008, between the Borrower and Senior Lender, as such
                Agreement may be supplemented, modified, restated or amended from
                time to
                time; and each holder hereof, by its acceptance hereof, shall be
                bound by
                the provisions of the Subordination
                Agreement.

            


    


    
      
        
        

      

      
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              3.5.

            	
              Integration.
                This
                Loan Agreement and the Loan Documents contain the entire agreement
                between
                the parties relating to the subject matter hereof and supersede all
                oral
                statements and prior writings with respect
                thereto.

            


    

    


    
      	
              3.6.

            	
              Governing
                Law and Jurisdiction.
                This Loan Agreement and the
                Note shall be governed by, and construed in accordance with, the
                laws of
                the State of Texas without regard to conflicts-of-laws principles
                that
                would require the application of any other law. The parties hereby
                agree
                to submit any dispute arising out of or in connection with the Loan
                Documents to the exclusive jurisdiction of the courts of Bexar County
                in
                the State of Texas.

            


    

    


    
      	
              3.7.

            	
              Severability
                of Provisions. Any
                provision of any Loan Document which is prohibited or unenforceable
                in any
                jurisdiction shall, as to such jurisdiction, be ineffective to the
                extent
                of such prohibition
                or unenforceability without invalidating the remaining
                provisions
                of
                such Loan Document or affecting the validity or enforceability of
                such
                provision in any other
                jurisdiction.

            


    

    


    
      	
              3.8.

            	
              Headings.
                Article and Section headings in the Loan Documents are included in
                such
                Loan Documents for the convenience of reference only and shall not
                constitute a part of the applicable Loan Documents for any other
                purpose.

            


    

    


    
      	
              3.9.
                

            	
              Jury
                Trial Waiver.
                THE LENDER AND THE BORROWER
                HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR
                COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING
                OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS.
                NO
                OFFICER OF THE LENDER HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY
                THIS
                PROVISION.

            


    


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the undersigned have executed this Agreement on the date herein
      stated.

    


    
      	
              ARGYLE
                SECURITY, INC.

            
	 	 
	
              By:

            	
              /s/
                Donald F. Neville

            
	
              Name: 

            	
              Donald
                F. Neville

            
	
              Title:

            	
              Chief
                Financial Officer

            
	 
              	 
              
	 
              	 
              
	
              ISI
                SECURITY GROUP, INC.

            
	 	 
	 	 
	
              By:

            	
              /s/
                Sam Youngblood

            
	
              Name: 

            	
              Sam
                Youngblood

            
	
              Title:
                

            	
              President

            


    

     

    
      
        
        

      

      
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    EXHIBIT
      “A”

     

    THE
      OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT
      SET
      FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (THE “SUBORDINATION AGREEMENT”)
      DATED AS OF SEPTEMBER 30, 2008, BY AND BETWEEN PARENT, AND LASALLE BANK NATIONAL
      ASSOCIATION, A NATIONAL BANKING ASSOCIATION (“SENIOR LENDER”) TO THE OBLIGATIONS
      (INCLUDING INTEREST) OWED BY OBLIGOR TO THE HOLDERS OF ALL OF THE NOTES ISSUED
      PURSUANT TO THAT CERTAIN AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT DATED
      AS OF JANUARY 23, 2008, BETWEEN OBLIGOR AND SENIOR LENDER, AS SUCH AGREEMENT
      MAY
      BE SUPPLEMENTED, MODIFIED, RESTATED OR AMENDED FROM TIME TO TIME; AND EACH
      HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF
      THE
      SUBORDINATION AGREEMENT.

     

    PROMISSORY
      NOTE

    


    
      	
              $2,000,000.00

            	
              September
                30, 2008

            


    

     

    FOR
      VALUE
      RECEIVED, ISI
      SECURITY GROUP, INC.
      a
      Delaware corporation, (hereinafter called "Maker"), promises to pay to
ARGYLE
      SECURITY, INC.
      (hereinafter called "Lender"), the principal sum of Two Million Dollars
      ($2,000,000) with interest thereon at the rates and on the dates specified
      in
      subsections 1.2 and 1.4 of the Loan Agreement between Maker and Lender dated
      September 30, 2008 (the “Loan Agreement”).

    


    Upon
      the
      happening of any default under the Loan Agreement, Lender may declare that
      all
      liabilities of the Maker to the Lender under shall be accelerated and become
      immediately due and payable; provided, that upon the occurrence of any default
      specified in Sections 2(c) or (d) of the Loan Agreement, all liabilities of
      the
      Maker to Lender shall become immediately due and payable without declaration,
      notice or demand by Lender 

    


    Maker
      shall pay all reasonable and documented costs and expenses incurred by or on
      behalf of Lender in connection with Lender’s exercise of any or all of its
      rights and remedies under this Note, including, without limitation, reasonable
      attorneys’ fees and expenses. 

     

    Any
      demand upon or notice to Maker shall be sufficiently served for all purposes
      if
      personally delivered or placed in the mail addressed to the address shown above
      or such other address as may be shown on Lender's records.

    


    There
      will be no pre-payment penalty on this Note.

    


    If
      any
      provision in this Note is held invalid or unenforceable by any court of
      competent jurisdiction, the other provisions of this Note will remain in full
      force and effect. Any provision of this Note held invalid or unenforceable
      only
      in part or degree will remain in full force and effect to the extent not held
      invalid or unenforceable.

    


    This
      Note
      will be governed by and construed under the laws of the State of Texas without
      regard to conflicts-of-laws principles that would require the application of
      any
      other law. Any dispute arising out of or in connection with this Note shall
      be
      submitted to the exclusive jurisdiction of the courts of Bexar County in the
      State of Texas.


    
      
        
        

      

      
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    To
      the
      fullest extent permitted by applicable law, Maker waives: (a) presentment,
      demand and protest, and notice of presentment, dishonor, intent to accelerate,
      acceleration, protest, default, nonpayment, maturity, release, compromise,
      settlement, extension or renewal of the Loan Agreement or this Note; (b) all
      rights to notice and a hearing prior to allowing Lender to exercise any of
      its
      remedies; and (c) the benefit of all valuation, appraisal and exemption
      laws.

    


    IN
      WITNESS WHEREOF, Maker has executed and delivered this Note as of the date
      first
      stated above.

     

    
      	
              ISI
                SECURITY GROUP,
                INC.

            
	 	 
	 	 
	
              By:
                

            	 
              
	
              Name:

            	
              Sam
                Youngblood

            
	
              Title:

            	
              President

            


    

    


    
      
        
        

      

      
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