Document:

EX-10.26

    

    REVOLVING
      CREDIT FACILITY

     

    

     

    CREDIT
      AGREEMENT

     

    by
      and among

     

    INTEGRATED
      ALARM SERVICES GROUP, INC.,

     

    CRITICOM
      INTERNATIONAL CORPORATION, MONITAL SIGNAL CORPORATION, INTEGRATED ALARM
      SERVICES, INC., PAYNE SECURITY GROUP, L.L.C., AMERICAN HOME SECURITY,
      INC.

     

    and

     

    THE
      GUARANTORS PARTY HERETO

     

    and

     

    THE
      BANKS PARTY HERETO

     

    and

     

    LASALLE
      BANK NATIONAL ASSOCIATION, as Agent

     

    

     

    

     

    

     

    Dated:
      November 16, 2004

     

    

    
    

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
      OF CONTENTS

     

    

      
        	
                Section

              	
                Heading
                  

              	
                Page

              
	 	 	 	 	 
	
                1

              	
                CERTAIN
                  DEFINITIONS

              	
                1

              
	 	 	 	 	 
	 	
                1.1

              	 	
                Certain
                  Definitions.

              	
                1

              
	 	
                1.2

              	 	
                Construction.

              	
                17

              
	 	 	
                1.2.1

              	
                Number;
                  Inclusion.

              	
                17

              
	 	 	
                1.2.2

              	
                Determination.

              	
                18

              
	 	 	
                1.2.3

              	
                Agent's
                  Discretion and Consent.

              	
                18

              
	 	 	
                1.2.4

              	
                Documents
                  Taken as a Whole.

              	
                18

              
	 	 	
                1.2.5

              	
                Headings.

              	
                18

              
	 	 	
                1.2.6

              	
                Implied
                  References to this Agreement.

              	
                18

              
	 	 	
                1.2.7

              	
                Persons.

              	
                18

              
	 	 	
                1.2.8

              	
                Modifications
                  to Documents.

              	
                18

              
	 	 	
                1.2.9

              	
                From,
                  To and Through.

              	
                18

              
	 	 	
                1.2.10

              	
                Shall;
                  Will.

              	
                19

              
	 	
                1.3

              	 	
                Accounting
                  Principles.

              	
                19

              
	 	
                1.4

              	 	
                Concerning
                  Corporate Terms.

              	
                19

              
	 	 	 	 	 
	
                2

              	
                REVOLVING
                  CREDIT FACILITY

              	
                19

              
	 	 	 	 	 
	 	
                2.1

              	 	
                Revolving
                  Credit Commitments.

              	
                19

              
	 	 	
                2.1.1

              	
                Generally

              	
                19

              
	 	
                2.2

              	 	
                Nature
                  of Banks' Obligations with Respect to Revolving Credit
                  Loans.

              	
                20

              
	 	
                2.3

              	 	
                Commitment
                  Fee.

              	
                20

              
	 	
                2.4

              	 	
                Revolving
                  Credit Loan Requests.

              	
                20

              
	 	
                2.5

              	 	
                Making
                  Revolving Credit Loans.

              	
                21

              
	 	
                2.6

              	 	
                Revolving
                  Credit Notes.

              	
                21

              
	 	
                2.7

              	 	
                Use
                  of Proceeds.

              	
                21

              
	 	
                2.8

              	 	
                Unused
                  Commitment Fee.

              	
                21

              
	 	 	 	 	 
	
                3

              	
                INTEREST
                  RATES

              	
                22

              
	 	 	 	 	 
	 	
                3.1

              	 	
                Interest
                  Rate Options.

              	
                22

              
	 	 	
                3.1.1

              	
                Revolving
                  Credit Interest Rate Options.

              	
                22

              
	 	 	
                3.1.2

              	
                Amount
                  of Borrowing Tranche.

              	
                22

              
	 	 	
                3.1.3

              	
                Rate
                  Quotations.

              	
                22

              
	 	
                3.2

              	 	
                Interest
                  Periods.

              	
                22

              
	 	
                3.3

              	 	
                Interest
                  After Default.

              	
                23

              
	 	 	
                3.3.1

              	
                Acknowledgment.

              	
                23

              
	 	
                3.4

              	 	
                LIBOR
                  Rate Unascertainable; Illegality; Increased Costs; Deposits Not
                  Available.

              	
                23

              
	 	 	
                3.4.1

              	
                LIBOR
                  Rate Unascertainable.

              	
                23

              
	 	 	
                3.4.2

              	
                Illegality;
                  Increased Costs; Deposits Not Available.

              	
                23

              
	 	 	
                3.4.3

              	
                Agent's
                  and Bank's Rights.

              	
                24

              
	 	
                3.5

              	 	
                Selection
                  of Interest Rate Options.

              	
                24

              
	 	 	 	 	 
	
                4

              	
                PAYMENTS

              	
                25

              
	 	 	 	 	 
	 	
                4.1

              	 	
                Payments.

              	
                25

              
	 	
                4.2

              	 	
                Pro
                  Rata Treatment of Banks.

              	
                25

              
	 	
                4.3

              	 	
                Interest
                  Payment Dates.

              	
                25

              
	 	
                4.4

              	 	
                Voluntary
                  Prepayments.

              	
                26

              
	 	 	
                4.4.1

              	
                Right
                  to Prepay.

              	
                26

              
	 	 	
                4.4.2

              	
                Replacement
                  of a Bank.

              	
                26

              
	 	 	
                4.4.3

              	
                Change
                  of Lending Office.

              	
                27

              

      

      
 

      
        
           

        

        
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              Section

            	
              Heading
                

            	
              Page

            
	 	 	 	 	 
	 	
              4.5

            	 	
              Mandatory
                Prepayments.

            	
              27

            
	 	 	
              4.5.1

            	
              Sale
                of Assets.

            	
              27

            
	 	 	
              4.5.2

            	
              Application
                Among Interest Rate Options.

            	
              27

            
	 	
              4.6

            	 	
              Additional
                Compensation in Certain Circumstances.

            	
              28

            
	 	 	
              4.6.1

            	
              Increased
                Costs or Reduced Return Resulting from Taxes, Reserves, Capital Adequacy
                Requirements, Expenses, Etc.

            	
              28

            
	 	 	
              4.6.2

            	
              Indemnity.

            	
              28

            
	 	 	 	 	 
	
              5

            	
              REPRESENTATIONS
                AND WARRANTIES

            	
              29

            
	 	 	 	 	 
	 	
              5.1

            	 	
              Representations
                and Warranties.

            	
              29

            
	 	 	
              5.1.1

            	
              Organization
                and Qualification.

            	
              29

            
	
               

            	
               

            	
              5.1.2

            	
              Capitalization
                and Ownership.

            	
              29

            
	
               

            	
               

            	
              5.1.3

            	
              Subsidiaries.

            	
              30

            
	
               

            	
               

            	
              5.1.4

            	
              Power
                and Authority.

            	
              30

            
	
               

            	
               

            	
              5.1.5

            	
              Validity,
                Delivery, and Binding Effect.

            	
              30

            
	
               

            	
               

            	
              5.1.6

            	
              No
                Conflict.

            	
              30

            
	
               

            	
               

            	
              5.1.7

            	
              Litigation.

            	
              31

            
	
               

            	
               

            	
              5.1.8

            	
              Financial
                Statements.

            	
              31

            
	
               

            	
               

            	
              5.1.9

            	
              Use
                of Proceeds; Margin Stock; Section 20 Subsidiaries.

            	
              32

            
	
               

            	
               

            	
              5.1.10

            	
              Full
                Disclosure.

            	
              32

            
	
               

            	
               

            	
              5.1.11

            	
              Taxes.

            	
              33

            
	
               

            	
               

            	
              5.1.12

            	
              Consents
                and Approvals.

            	
              33

            
	
               

            	
               

            	
              5.1.13

            	
              No
                Event of Default; Compliance with Instruments.

            	
              33

            
	
               

            	
               

            	
              5.1.14

            	
              Patents,
                Trademarks, Copyrights, Licenses, Etc.

            	
              33

            
	
               

            	
               

            	
              5.1.15

            	
              Security
                Interests.

            	
              34

            
	
               

            	
               

            	
              5.1.16

            	
              Real
                Property.

            	
              34

            
	
               

            	
               

            	
              5.1.17

            	
              Status
                of the Pledged Collateral.

            	
              34

            
	
               

            	
               

            	
              5.1.18

            	
              Insurance.

            	
              35

            
	
               

            	
               

            	
              5.1.19

            	
              Compliance
                with Laws.

            	
              35

            
	
               

            	
               

            	
              5.1.20

            	
              Material
                Contracts; Burdensome Restrictions.

            	
              35

            
	
               

            	
               

            	
              5.1.21

            	
              Investment
                Companies; Regulated Entities.

            	
              36

            
	
               

            	
               

            	
              5.1.22

            	
              Plans
                and Benefit Arrangements.

            	
              36

            
	
               

            	
               

            	
              5.1.23

            	
              Employment
                Matters.

            	
              37

            
	
               

            	
               

            	
              5.1.24

            	
              Environmental
                Matters.

            	
              37

            
	
               

            	
               

            	
              5.1.25

            	
              Alarm
                Contracts.

            	
              37

            
	
               

            	
               

            	
              5.1.26

            	
              Alarm
                Systems.

            	
              38

            
	
               

            	
               

            	
              5.1.27

            	
              Telephone
                Numbers.

            	
              38

            
	
               

            	
               

            	
              5.1.28

            	
              Regarding
                Borrowers.

            	
              38

            
	
               

            	
               

            	
              5.1.29

            	
              Convertible
                Debt

            	
              38

            
	
               

            	
              5.2

            	
               

            	
              Updates
                to Schedules.

            	
              39

            
	
               

            	
               

            	
               

            	 	 
	
              6

            	
              CONDITIONS
                OF LENDING

            	
              39

            
	 	 	 	 	 
	 	
              6.1

            	 	
              On
                the Closing Date:

            	
              39

            
	 	 	
              6.1.1

            	
              Officer's
                Certificate.

            	
              39

            
	 	 	
              6.1.2

            	
              Secretary's
                Certificate.

            	
              39

            
	 	 	
              6.1.3

            	
              Delivery
                of Loan Documents.

            	
              40

            
	 	 	
              6.1.4

            	
              Opinion
                of Counsel.

            	
              40

            
	 	 	
              6.1.5

            	
              Legal
                Details.

            	
              40

            
	 	 	
              6.1.6

            	
              Payment
                of Fees.

            	
              40

            

    

    
    

    

     

    

    
      
         

      

      
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                Section

              	
                Heading
                  

              	
                Page

              
	 	 	 	 	 
	 	 	
                6.1.7

              	
                Officer's
                  Certificate Regarding MACs.

              	
                40

              
	 	 	
                6.1.8

              	
                Due
                  Diligence.

              	
                41

              
	 	 	
                6.1.9

              	
                Consents.

              	
                41

              
	 	 	
                6.1.10

              	
                No
                  Violation of Laws.

              	
                41

              
	 	 	
                6.1.11

              	
                No
                  Actions or Proceedings.

              	
                41

              
	 	 	
                6.1.12

              	
                Insurance
                  Policies; Certificates of Insurance; Endorsements.

              	
                41

              
	 	 	
                6.1.13

              	
                Intentionally
                  omitted.

              	
                41

              
	 	 	
                6.1.14

              	
                Repayment
                  of Debt.

              	
                41

              
	 	
                6.2

              	 	
                On
                  the Funding Date.

              	
                42

              
	 	
                6.3

              	 	
                Each
                  Additional Loan.

              	
                42

              
	 	 	 	 	 
	
                7

              	
                COVENANTS

              	
                42

              
	 	 	 	 	 
	 	
                7.1

              	 	
                Affirmative
                  Covenants.

              	
                42

              
	 	 	
                7.1.1

              	
                Preservation
                  of Existence, Etc.

              	
                42

              
	 	 	
                7.1.2

              	
                Payment
                  of Liabilities, Including Taxes, Etc.

              	
                43

              
	 	 	
                7.1.3

              	
                Maintenance
                  of Insurance.

              	
                43

              
	 	 	
                7.1.4

              	
                Maintenance
                  of Properties and Leases.

              	
                44

              
	 	 	
                7.1.5

              	
                Maintenance
                  of Patents, Trademarks, Etc.

              	
                45

              
	 	 	
                7.1.6

              	
                Visitation
                  Rights.

              	
                45

              
	 	 	
                7.1.7

              	
                Keeping
                  of Records and Books of Account.

              	
                45

              
	 	 	
                7.1.8

              	
                Plans
                  and Benefit Arrangements.

              	
                45

              
	 	 	
                7.1.9

              	
                Compliance
                  with Laws.

              	
                45

              
	 	 	
                7.1.10

              	
                Use
                  of Proceeds.

              	
                46

              
	 	 	
                7.1.11

              	
                Further
                  Assurances.

              	
                46

              
	 	 	
                7.1.12

              	
                Intentionally
                  Omitted.

              	
                46

              
	 	 	
                7.1.13

              	
                Interest
                  Rate Hedging.

              	
                46

              
	 	 	
                7.1.14

              	
                Operating
                  and Lockbox Accounts.

              	
                46

              
	 	 	
                7.1.15

              	
                Field
                  Audits.

              	
                46

              
	 	 	
                7.1.16

              	
                Compliance
                  with Federal Law ' Patriot Act..

              	
                47

              
	 	
                7.2

              	 	
                Negative
                  Covenants.

              	
                47

              
	 	 	
                7.2.1

              	
                Indebtedness.

              	
                47

              
	 	 	
                7.2.2

              	
                Liens.

              	
                48

              
	 	 	
                7.2.3

              	
                Guaranties.

              	
                48

              
	 	 	
                7.2.4

              	
                Loans
                  and Investments.

              	
                48

              
	 	 	
                7.2.5

              	
                Dividends
                  and Related Distributions.

              	
                48

              
	 	 	
                7.2.6

              	
                Liquidations,
                  Mergers, Consolidations, Acquisitions.

              	
                49

              
	 	 	
                7.2.7

              	
                Dispositions
                  of Assets or Subsidiaries.

              	
                50

              
	 	 	
                7.2.8

              	
                Affiliate
                  Transactions.

              	
                51

              
	 	 	
                7.2.9

              	
                Subsidiaries,
                  Partnerships and Joint Ventures.

              	
                51

              
	 	 	
                7.2.10

              	
                Continuation
                  of or Change in Business.

              	
                52

              
	 	 	
                7.2.11

              	
                Plans
                  and Benefit Arrangements.

              	
                52

              
	 	 	
                7.2.12

              	
                Fiscal
                  Year.

              	
                53

              
	 	 	
                7.2.13

              	
                Issuance
                  of Stock.

              	
                53

              
	 	 	
                7.2.14

              	
                Changes
                  in Documents.

              	
                53

              
	 	 	
                7.2.15

              	
                Minimum
                  Fixed Charge Coverage Ratio.

              	
                53

              
	 	 	
                7.2.16

              	
                Intentionally
                  Omitted.

              	
                53

              
	 	 	
                7.2.17

              	
                Senior
                  Revolving Debt to Eligible RMR.

              	
                53

              
	 	 	
                7.2.18

              	
                Availability
                  Requirement.

              	
                53

              
	 	 	 	 	 

      

      
      

    

    

    
      
         

      

      
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              Section

            	
              Heading
                

            	
              Page

            
	 	 	 	 	 
	 	
              7.3

            	 	
              Reporting
                Requirements.

            	
              53

            
	 	 	
              7.3.1

            	
              Monthly
                Financial Statements.

            	
              54

            
	 	 	
              7.3.2

            	
              Annual
                Financial Statements.

            	
              54

            
	 	 	
              7.3.3

            	
              Certificate
                of the Borrower.

            	
              54

            
	 	 	
              7.3.4

            	
              Borrowing
                Base Certificate.

            	
              55

            
	 	 	
              7.3.5

            	
              Notice
                of Default.

            	
              56

            
	 	 	
              7.3.6

            	
              Notice
                of Litigation.

            	
              56

            
	 	 	
              7.3.7

            	
              Certain
                Events.

            	
              56

            
	 	 	
              7.3.8

            	
              Budgets,
                Forecasts, Other Reports and Information.

            	
              56

            
	 	 	
              7.3.9

            	
              Notices
                Regarding Plans and Benefit Arrangements.

            	
              57

            
	 	 	 	 	 
	
              8

            	
              DEFAULT

            	
              58

            
	 	 	 	 	 
	 	
              8.1

            	 	
              Events
                of Default.

            	
              58

            
	 	 	
              8.1.1

            	
              Payments
                Under Loan Documents.

            	
              58

            
	 	 	
              8.1.2

            	
              Breach
                of Warranty.

            	
              59

            
	 	 	
              8.1.3

            	
              Breach
                of Certain Covenants or Visitation Rights.

            	
              59

            
	 	 	
              8.1.4

            	
              Breach
                of Other Covenants.

            	
              59

            
	 	 	
              8.1.5

            	
              Defaults
                in Other Agreements or Indebtedness.

            	
              59

            
	 	 	
              8.1.6

            	
              Final
                Judgments or Orders.

            	
              59

            
	 	 	
              8.1.7

            	
              Loan
                Document Unenforceable.

            	
              59

            
	 	 	
              8.1.8

            	
              Uninsured
                Losses; Proceedings Against Assets.

            	
              60

            
	 	 	
              8.1.9

            	
              Notice
                of Lien or Assessment.

            	
              60

            
	 	 	
              8.1.10

            	
              Insolvency.

            	
              60

            
	 	 	
              8.1.11

            	
              Events
                Relating to Plans and Benefit Arrangements.

            	
              60

            
	 	 	
              8.1.12

            	
              Cessation
                of Business.

            	
              61

            
	 	 	
              8.1.13

            	
              Change
                of Control.

            	
              61

            
	 	 	
              8.1.14

            	
              Involuntary
                Proceedings.

            	
              61

            
	 	 	
              8.1.15

            	
              Voluntary
                Proceedings.

            	
              61

            
	 	
              8.2

            	 	
              Consequences
                of Event of Default.

            	
              62

            
	 	 	
              8.2.1

            	
              Events
                of Default Other Than Bankruptcy, Insolvency or Reorganization
                Proceedings.

            	
              62

            
	 	 	
              8.2.2

            	
              Bankruptcy,
                Insolvency or Reorganization Proceedings.

            	
              62

            
	 	 	
              8.2.3

            	
              Set-off.

            	
              62

            
	 	 	
              8.2.4

            	
              Suits,
                Actions, Proceedings.

            	
              63

            
	 	 	
              8.2.5

            	
              Application
                of Proceeds.

            	
              63

            
	 	 	
              8.2.6

            	
              Rights
                with Respect to Collateral Assignment of Telephone
                Numbers.

            	
              63

            
	 	 	
              8.2.7

            	
              Other
                Rights and Remedies.

            	
              63

            
	 	
              8.3

            	 	
              Notice
                of Sale.

            	
              64

            
	 	
              8.4

            	 	
              Notice
                of Default.

            	
              64

            
	 	 	 	 	 
	
              9

            	
              THE
                AGENT

            	
              64

            
	 	 	 	 	 
	 	
              9.1

            	 	
              Appointment.

            	
              64

            
	 	
              9.2

            	 	
              Delegation
                of Duties.

            	
              64

            
	 	
              9.3

            	 	
              Nature
                of Duties; Independent Credit Investigation.

            	
              64

            
	 	
              9.4

            	 	
              Actions
                in Discretion of Agent; Instructions From the Banks.

            	
              65

            
	 	
              9.5

            	 	
              Reimbursement
                and Indemnification of Agent by the Borrower.

            	
              65

            
	 	
              9.6

            	 	
              Exculpatory
                Provisions; Limitation of Liability.

            	
              66

            
	 	
              9.7

            	 	
              Reimbursement
                and Indemnification of Agent by Banks.

            	
              66

            
	 	
              9.8

            	 	
              Reliance
                by Agent.

            	
              67

            

    

    
    

    

    
      
         

      

      
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                Section

              	
                Heading
                  

              	
                Page

              
	 	 	 	 	 
	 	
                9.9

              	 	
                Notice
                  of Default.

              	
                67

              
	 	
                9.10

              	 	
                Notices.

              	
                67

              
	 	 	
                9.11

              	
                Banks
                  in Their Individual Capacities; Agent in its Individual
                  Capacity.

              	
                67

              
	 	 	
                9.12

              	
                Holders
                  of Notes.

              	
                68

              
	 	 	
                9.13

              	
                Equalization
                  of Banks.

              	
                68

              
	 	 	
                9.14

              	
                Successor
                  Agent.

              	
                68

              
	 	 	
                9.15

              	
                Agent's
                  Fees.

              	
                69

              
	 	 	
                9.16

              	
                Availability
                  of Funds.

              	
                69

              
	 	 	
                9.17

              	
                Calculations.

              	
                69

              
	 	 	
                9.18

              	
                Beneficiaries.

              	
                70

              
	 	 	
                9.19

              	
                Addition
                  of Additional Banks.

              	
                70

              
	 	
                9.2

              	 	
                Borrower
                  Cooperation.

              	
                70

              
	 	 	 	 	 
	
                10

              	
                MISCELLANEOUS

              	
                71

              
	 	 	 	 	 
	 	
                10.1

              	 	
                Modifications,
                  Amendments or Waivers.

              	
                71

              
	 	 	
                10.1.1

              	
                Increase
                  of Commitment; Extension of Expiration Date.

              	
                71

              
	 	 	
                10.1.2

              	
                Extension
                  of Payment; Reduction of Principal, Interest or Fees; Modification
                  of
                  Terms of Payment.

              	
                71

              
	 	 	
                10.1.3

              	
                Release
                  of Collateral.

              	
                71

              
	 	 	
                10.1.4

              	
                Miscellaneous.

              	
                71

              
	 	
                10.2

              	 	
                No
                  Implied Waivers; Cumulative Remedies; Writing Required.

              	
                72

              
	 	
                10.3

              	 	
                Reimbursement
                  and Indemnification of Banks by the Borrower; Taxes.

              	
                72

              
	 	
                10.4

              	 	
                Holidays.

              	
                72

              
	 	
                10.5

              	 	
                Funding
                  by Branch, Subsidiary or Affiliate.

              	
                73

              
	 	 	
                10.5.1

              	
                Notional
                  Funding.

              	
                73

              
	 	 	
                10.5.2

              	
                Actual
                  Funding.

              	
                73

              
	 	
                10.6

              	 	
                Notices.

              	
                73

              
	 	
                10.7

              	 	
                Severability.

              	
                74

              
	 	
                10.8

              	 	
                Governing
                  Law.

              	
                74

              
	 	
                10.9

              	 	
                Prior
                  Understanding.

              	
                74

              
	 	
                10.1

              	 	
                Duration;
                  Survival.

              	
                74

              
	 	
                10.1

              	 	
                Successors
                  and Assigns.

              	
                75

              
	 	
                10.1

              	 	
                Confidentiality.

              	
                76

              
	 	 	
                10.12.1

              	
                General.

              	
                76

              
	 	 	
                10.12.2

              	
                Sharing
                  Information With Affiliates of the Banks.

              	
                76

              
	 	
                10.1

              	 	
                Counterparts.

              	
                76

              
	 	
                10.1

              	 	
                Agent's
                  or Bank's Consent.

              	
                77

              
	 	
                10.2

              	 	
                Exceptions.

              	
                77

              
	 	
                10.2

              	 	
                CONSENT
                  TO FORUM; WAIVER OF JURY TRIAL.

              	
                77

              
	 	
                10.2

              	 	
                Tax
                  Withholding Clause.

              	
                77

              
	 	
                10.2

              	 	
                Joinder
                  of Borrowers and Guarantors.

              	
                78

              
	 	
                10.2

              	 	
                Loan
                  Party Agency.

              	
                79

              
	 	
                10.2

              	 	
                Entire
                  Agreement.

              	
                79

              
	 	 	 	 	 
	
                11

              	
                Nonsolicitation
                  and Nondisclosure

              	
                80

              
	 	 	 	 	 
	 	
                11.1

              	 	
                Nonsolicitation
                  and Nonacceptance.

              	
                80

              
	 	
                11.2

              	 	
                Nondisclosure.

              	
                80

              
	 	
                11.3

              	 	
                Employees.

              	
                81

              
	 	
                11.4

              	 	
                Acknowledgment.

              	
                81

              
	 	
                11.5

              	 	
                Representations.

              	
                81

              
	 	
                11.6

              	 	
                Remedies.

              	
                82

              
	 	
                11.7

              	 	
                Severability.

              	
                82

              
	 	
                11.8

              	 	
                Consent
                  to Jurisdiction, Service and Venue.

              	
                82

              

      

      
      

    

    
      
         

      

      
        i6

        
          

        

      

      
         

      

    

     

    

       

    

    
    

    LIST
      OF SCHEDULES AND EXHIBITS

     

    
      

        
          	
                  SCHEDULES

                	
                   

                	
                   

                	
                   

                
	 	 	 	 
	
                   

                	
                  SCHEDULE
                    1.1(B)

                	
                   

                	
                  COMMITMENTS
                    OF BANKS & ADDRESSES FOR NOTICES 

                
	
                   

                	
                   

                	
                   

                	
                   

                
	
                   

                	
                  SCHEDULE
                    1.1(P)

                	
                   

                	
                  PERMITTED
                    LIENS

                
	
                   

                	
                  SCHEDULE
                    5.1.1

                	
                   

                	
                  QUALIFICATIONS
                    TO DO BUSINESS

                
	
                   

                	
                  SCHEDULE
                    5.1.2

                	
                   

                	
                  CAPITALIZATION

                
	
                   

                	
                  SCHEDULE
                    5.1.3

                	
                   

                	
                  SUBSIDIARIES

                
	
                   

                	
                  SCHEDULE
                    5.1.7

                	
                   

                	
                  LITIGATION

                
	
                   

                	
                  SCHEDULE
                    5.1.8

                	
                   

                	
                  PROJECTIONS

                
	
                   

                	
                  SCHEDULE
                    5.1.12

                	
                   

                	
                  CONSENTS
                    AND APPROVALS

                
	
                   

                	
                  SCHEDULE
                    5.1.14

                	
                   

                	
                  PATENTS,
                    TRADEMARKS, COPYRIGHTS, LICENSES, ETC.

                
	
                   

                	
                  SCHEDULE
                    5.1.16

                	
                   

                	
                  REAL
                    PROPERTY

                
	
                   

                	
                  SCHEDULE
                    5.1.17

                	
                   

                	
                  PARTNERSHIP
                    AGREEMENTS; LLC AGREEMENTS

                
	
                   

                	
                  SCHEDULE
                    5.1.18

                	
                   

                	
                  INSURANCE
                    POLICIES

                
	
                   

                	
                  SCHEDULE
                    5.1.20

                	
                   

                	
                  MATERIAL
                    CONTRACTS

                
	
                   

                	
                  SCHEDULE
                    5.1.22

                	
                   

                	
                  EMPLOYEE
                    BENEFIT PLAN DISCLOSURES

                
	
                   

                	
                  SCHEDULE
                    5.1.24

                	
                   

                	
                  ENVIRONMENTAL
                    DISCLOSURES

                
	
                   

                	
                   

                	
                   

                	
                   

                
	
                  EXHIBITS

                	
                   

                	
                   

                	
                   

                
	 	 	 	 
	
                   

                	
                  EXHIBIT
                    1.1(A)

                	
                   

                	
                  ASSIGNMENT
                    AND ASSUMPTION AGREEMENT

                
	
                   

                	
                  EXHIBIT
                    1.1(G)

                	
                   

                	
                  GUARANTY
                    JOINDER

                
	
                   

                	
                  EXHIBIT
                    1.1 (J)

                	
                   

                	
                  BORROWER
                    JOINDER AGREEMENT

                
	
                   

                	
                  EXHIBIT
                    1.1(R)

                	
                   

                	
                  REVOLVING
                    CREDIT NOTE

                
	
                   

                	
                  EXHIBIT
                    2.4

                	
                   

                	
                  LOAN
                    REQUEST

                
	
                   

                	
                  EXHIBIT
                    7.2.6

                	
                   

                	
                  ACQUISITION
                    COMPLIANCE CERTIFICATE

                
	
                   

                	
                  EXHIBIT
                    7.3.3

                	
                   

                	
                  COMPLIANCE
                    CERTIFICATE

                
	
                   

                	
                  EXHIBIT
                    7.3.4

                	
                   

                	
                  BORROWING
                    BASE CERTIFICATE

                
	
                   

                	
                  EXHIBIT
                    9.19

                	
                   

                	
                  BANK
                    ADDITION AGREEMENT

                
	
                   

                	
                   

                	
                   

                	
                   

                

        

         

         

      

      
        
           

        

        
          i7

          
            

          

        

        
           

        

      

    

     

    CREDIT
      AGREEMENT

     

    THIS
      CREDIT AGREEMENT is dated November 16, 2004 and is made by and among
      INTEGRATED
      ALARM SERVICES GROUP, INC.,
      a
      Delaware corporation ("IASG"), CRITICOM INTERNATIONAL CORPORATION, a New Jersey
      Corporation ("Criticom"), MONITAL SIGNAL CORPORATION, a New Jersey corporation
      ("Monital'), INTEGRATED ALARM SERVICES, INC., a Delaware corporation ("IAS"),
      PAYNE SECURITY GROUP, L.L.C., a New Jersey limited liability company ("Payne"),
      and AMERICAN HOME SECURITY, INC., a Nevada corporation ("AHS"; hereinafter
      IASG,
      Criticom, Monital, IAS, Payne and AHS are collectively referred to as
      "Borrower"), and LASALLE
      BANK N. A.,
      as
      "Bank" and in its capacity as agent for any additional lenders that may become
      a
      party as a Bank as defined below (hereinafter referred to in such capacity
      as
      the "Agent").

     

    WITNESSETH:

    

    WHEREAS,
      the Borrower has requested the Bank to provide a senior secured revolving credit
      facility to Borrower in an aggregate principal amount not to exceed Thirty
      Million and 00/100 Dollars ($30,000,000.00); and

     

    WHEREAS,
      the revolving credit provided hereunder shall be used for acquisitions of
      security alarm companies and pools of security alarm contracts and the related
      subscribers, for acquisitions of wholesale security alarm companies and the
      related subscribers and for general corporate purposes, all as described herein;
      and 

     

    WHEREAS,
      the Bank is willing to provide such credit upon the terms and conditions
      hereinafter set forth;

     

    NOW,
      THEREFORE, the parties hereto, in consideration of their mutual covenants and
      agreements hereinafter set forth and intending to be legally bound hereby,
      covenant and agree as follows:

     

    
      	1.  	
              CERTAIN
                DEFINITIONS

            

    

     

    
      	1.1  	
              Certain
                Definitions.

            

    

     

    In
      addition to words and terms defined elsewhere in this Agreement, the following
      words and terms shall have the following meanings, respectively, unless the
      context hereof clearly requires otherwise:

     

    Additional
      Banks
      shall
      mean any Bank that joins and becomes subject to this Agreement by executing
      a
      Bank Addition Agreement. In order for a Bank to be considered as an Additional
      Bank, such financial institution or the holding company of which it is a part
      must have a minimum of $1.0 billion in assets.

     

    Affiliate
      as to
      any Person shall mean any other Person (i) which directly or indirectly
      controls, is controlled by, or is under common control with such Person, (ii)
      which beneficially owns or holds 10% or more of any class of the voting or
      other
      equity interests of such Person, or 

     

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    (iii)
      10%
      or more of any class of voting interests or other equity interests of which
      is
      beneficially owned or held, directly or indirectly, by such Person. Control,
      as
      used in this definition, shall mean the possession, directly or indirectly,
      of
      the power to direct or cause the direction of the management or policies of
      a
      Person, whether through the ownership of voting securities, by contract or
      otherwise, including the power to elect a majority of the directors or trustees
      of a corporation or trust, as the case may be.

     

    Agent
      shall
      mean LaSalle Bank National Association, acting in its capacity as agent
      hereunder, and its successors and assigns.

     

    Agent's
      Letter
      shall
      have the meaning assigned to that term in Section 9.15.

     

    Agreement
      shall
      mean this Credit Agreement, as the same may be supplemented or amended from
      time
      to time, including all schedules and exhibits.

     

    Alarm
      Contract
      shall
      mean all Monitoring Contracts and all other contracts, agreements and other
      similar obligations related to the alarm security business conducted by
      Borrower, as the same may from time to time be amended, supplemented or
      modified, including all rights to: (a) receive money due and to become due
      thereunder or in connection therewith; (b) damages arising out of any breach
      or
      default in respect thereof; and (c) perform and to exercise remedies
      thereunder.

     

    Applicable
      Margin
      shall
      mean, for any Type of Loans, 2.00% for Base Rate Loans and 3.50% for LIBOR
      Rate
      Loans.

     

    Anything
      herein to the contrary notwithstanding, the Applicable Margin shall be
      calculated by adding an additional 3% per annum to the Applicable Margin
      pursuant to the terms and provisions of this section for both Base Rate Loans
      and LIBOR Loans (i) during any period when an Event of Default shall have
      occurred and be continuing or (ii) if any Compliance Certificate shall not
      be
      delivered when required by Section 7.3.3
      (but
      only, in the case of this clause (ii) with respect to the portion of such
      Payment Period prior to the delivery of such certificate).

     

    Assignment
      and Assumption Agreement
      shall
      mean an Assignment and Assumption Agreement by and among a Purchasing Bank,
      a
      Transferor Bank and the Agent, in its own capacity and on behalf of the
      remaining Banks, substantially in the form of Exhibit 1.1(A).

     

    Assignment
      of Lease
      shall
      mean the several assignments of lease regarding each Loan Parties' leasehold
      interests in any Property.

     

    Authorized
      Officer
      shall
      mean as to IASG, its President, Chief Executive Officer, Chief Financial
      Officer, Treasurer, Secretary and those individuals, designated by written
      notice to the Agent from the Borrower, authorized to execute notices, reports
      and other documents on behalf of Borrower required hereunder. The Borrower
      may
      amend such list of individuals from time to time by giving written notice of
      such amendment to the Agent.

     

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    

     

    Bank
      or Banks
      shall
      mean, collectively, the financial institutions named on Schedule 1.1(B)
      and
      their respective successors and assigns as permitted hereunder, each of which
      is
      referred to herein as a Bank.

     

    Bank
      Addition Agreement shall
      mean the Bank Addition Agreement, in the form attached hereto as Exhibit 9.19
      pursuant to which Additional Banks are added as a Bank hereunder.

     

    Base
      Rate
      shall
      mean the greater of: (i) the interest rate per annum announced from time to
      time
      by the Agent at its Principal Office as its then prime rate, which rate may
      not
      be the lowest rate then being charged commercial borrowers by the Agent; or
      (ii)
      the Federal Funds Effective Rate plus one-half percent (0.5%) per
      annum.

     

    Base
      Rate Option
      or
Revolving
      Credit Base Rate Option
      shall
      mean the option of the Borrower to have Revolving Credit Loans bear interest
      at
      the rate and under the terms and conditions set forth in Section
      3.1.1((i)).

     

    Beacon
      Score
      shall
      mean the Consumer Credit Scoring System promulgated by Equifax,
      Trans Union or Experian.

     

    Benefit
      Arrangement
      shall
      mean at any time an "employee benefit plan," within the meaning of Section
      3(3)
      of ERISA, which is neither a Plan nor a Multiemployer Plan and which is
      maintained, sponsored or otherwise contributed to by any member of the ERISA
      Group.

     

    Borrower
      shall
      mean, individually and collectively, IASG, Criticom, Monital, IAS, Payne, AHS
      and any Person, including all of the Borrower's Subsidiaries which shall execute
      hereafter a Borrower Joinder; "Borrower" or "Borrowers" shall mean all such
      Persons collectively.

     

    Borrower
      Joinder
      shall
      mean a joinder by a Person as a Borrower under this Agreement, the Note and
      the
      other Loan Documents in the form of Exhibit 1.1 (J).

     

    Borrowing
      Base Certificate
      shall
      mean the consolidated and consolidating Borrowing Base Certificate prepared
      and
      delivered by the IASG, on behalf of all Borrowers, as and when required by
      Section 7.3.4; the form of the Borrowing Base Certificate is attached hereto
      as
      Exhibit 7.3.4.

     

    Borrowing
      Date
      shall
      mean, with respect to any Loan, the date for the making thereof or the renewal
      or conversion thereof at or to the same or a different Interest Rate Option,
      which shall be a Business Day.

     

    Borrowing
      Tranche
      shall
      mean specified portions of Loans outstanding as follows: (i) any Loans to which
      a LIBOR Rate Option applies which become subject to the same Interest Rate
      Option under the same Loan Request by the Borrower and which have the same
      Interest Period shall constitute one Borrowing Tranche, and (ii) all Loans
      to
      which a Base Rate Option applies shall constitute one Borrowing
      Tranche.

     

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    Business
      Day shall
      mean
      any day other than a Saturday or Sunday or a legal holiday on which commercial
      banks are authorized or required to be closed for business in Chicago, Illinois,
      and if the applicable Business Day relates to any Loan to which the LIBOR Rate
      Option applies, such day must also be a day on which dealings are carried on
      in
      the London interbank market. 

     

    Capital
      Expenditures
      shall
      mean all expenditures (by the expenditure of cash or the incurrence of
      Indebtedness) during any measuring period for any fixed assets or improvements
      or for replacements, substitutions, or additions thereto, that have a useful
      life of more than one year and that are required to be capitalized under GAAP,
      excluding those expenditures in connection with (i) the installation of Alarm
      Contracts and (ii) Permitted Acquisitions.

     

    Closing
      Date
      shall
      mean the date hereof. The closing shall take place at 11:00 a.m. in the offices
      of McGuireWoods, LLP in Chicago, Illinois, or at such other time and place
      as
      the parties agree.

     

    Collateral
      shall
      mean the Pledged Collateral, the Real Estate Collateral and the UCC
      Collateral.

     

    Collateral
      Assignment of Contracts
      shall
      mean the Collateral Assignment of Contracts dated the Closing Date executed
      and
      delivered by the Loan Parties in respect of (i) all of the Alarm Contracts
      and
      other service contracts to which they are party, other than those wholesale
      alarm contracts which serve as collateral for the Convertible Debt as of the
      date hereof; (ii) all third party monitoring contracts; (iii) all non-compete
      agreements executed and delivered to, or assigned to, a Loan Party, (iv)
      non-solicitation agreements, if any, and (v) any such other agreements
      as
      may be described in the Collateral Assignment of Contracts.

     

    Collateral
      Assignment of Life Insurance
      shall
      mean, collectively, those forms of collateral assignment of life insurance
      policies provided by the applicable insurance companies in respect of the key
      man life insurance policies issued on the lives of Timothy M. McGinn ("McGinn")
      and Thomas J. Few ('Few").

     

    Collateral
      Assignment of Telephone Numbers
      shall
      mean the Collateral Assignment of Telephone Numbers dated as of the Closing
      Date
      executed and delivered by the Loan Parties relating to all of the Loan Parties'
      Alarm Contracts and service relationships.

     

    Commitment
      or
Revolving
      Credit Commitment
      shall
      mean, as to any Bank at any time, the amount initially set forth opposite its
      name on Schedule
      1.1(B)
      in the
      column labeled "Amount of Commitment for Revolving Credit Loans," and thereafter
      on Schedule I to the most recent Assignment and Assumption Agreement, and
      Commitments or Revolving Credit Commitments shall mean the aggregate Revolving
      Credit Commitments of all of the Banks, all as may be reduced from time to
      time
      hereunder. 

     

    Compliance
      Certificate
      shall
      have the meaning set forth in Section 7.3.3.

     

    Consideration
      shall
      mean with respect to any Permitted Acquisition, the aggregate, without
      duplication, of (i) the cash paid by any of the Loan Parties, directly or
      indirectly, to the seller in connection therewith, (ii) the Indebtedness
      incurred or assumed by any of the Loan Parties, whether in favor of the seller
      or otherwise and whether fixed or contingent, (iii) any 

     

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    Guaranty
      given or incurred by any Loan Party in connection therewith, and
      (iv) any
      other
      consideration given or obligation incurred by any of the Loan Parties in
      connection therewith.

     

    Consolidated
      EBITDA
      shall
      mean, for any Person and for any period, for such Person and its Subsidiaries
      on
      a consolidated basis, an amount equal to Consolidated Net Income for such
      period, plus
      (a) the following to the extent deducted in calculating such Consolidated
      Net Income: (i) Consolidated Interest Charges for such period,
      (ii) the provision for federal, state, local and foreign income taxes
      payable by such Person and its Subsidiaries for such period, and (iii) the
      amount of depreciation and amortization expense deducted in determining such
      Consolidated Net Income, and minus
      (b) all
      non-cash items increasing Consolidated Net Income for such period.

     

    Consolidated
      Fixed Charges
      shall
      mean for any period of determination on the date of determination the sum
      (without duplication) of cash Consolidated Interest Charges on all Indebtedness
      other than with respect to the Second Lien Notes, scheduled principal payments
      on all Indebtedness excluding principal payments with respect to Convertible
      Debt, but only if such principal is repaid with available Revolving Credit
      Loans, cash income taxes, management fees paid, cash distributions and all
      Capital Expenditure payments under capitalized leases in each case of a Borrower
      and its Subsidiaries for such period determined and consolidated in accordance
      with GAAP.

     

    Consolidated
      Interest Charges
      shall
      mean, for any Person and for any period, for such Person and its Subsidiaries
      on
      a consolidated basis, the sum of (a) all interest, premium payments,
      debt
      discount, fees, charges and related expenses of such Person and its restricted
      Subsidiaries in connection with borrowed money (including capitalized interest)
      or in connection with the deferred purchase price of assets, in each case to
      the
      extent treated as interest in accordance with GAAP, and (b) the portion
      of
      rent expense of such Person and its Subsidiaries with respect to such period
      under capital leases that is treated as interest in accordance with
      GAAP.

     

    Consolidated
      Net Income
      shall
      mean, for any period, on a consolidated basis, the net income of the Borrower
      and its Subsidiaries (excluding extraordinary gains and extraordinary losses)
      for that period.

     

    Consolidated
      Net Worth
      shall
      mean, at any time, shareholders' equity of the Borrower and its Subsidiaries
      on
      a consolidated basis.

     

    Convertible
      Debt
      shall
      mean that certain Indebtedness described in those certain $5,500,000.00 secured
      convertible promissory notes due September 1, 2005 issued by IASG.

     

    Depreciation
      shall
      mean the total amounts added to depreciation, amortization, obsolescence,
      valuation and other proper reserves, as reflected on the Borrower's financial
      statement and determined in accordance with GAAP.

     

    Dollar,
      Dollars, U.S. Dollars
      and the
      symbol $ shall mean lawful money of the United States of America.

     

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    Eligible
      RMR
      means as
      of any time, the aggregate amount of RMR associated with enforceable written
      Alarm Contracts in effect between customers and Borrower or any of its
      Subsidiaries in which no person other than Borrower or any of it Subsidiaries
      and the Agent has any interest, net of any amounts per month payable to any
      person as a percentage of RMR or in the nature of discounting, factoring or
      other accounts receivable financing; provided, however, that Eligible RMR will
      not include any revenue (a) from customers whose balances are more than ninety
      (90) days past the invoice date; (b) that is not periodic in nature, but rather
      relates to installation purchase payments or one-time assessments or charges;
      (c) from Alarm Contracts as to which Borrower or any of its Subsidiaries has
      received notice of a pending termination; (d) from wholesale monitoring
      accounts; (e) from customers whose Beacon Score is below 625; (f) for
      customers from whom twelve (12) consecutive months of prompt payment have not
      been received; (g) that pertains to lease agreements which expire within twelve
      (12) months after the date of making or which provide the customer with the
      option of buying the system for a nominal amount; (h) from stand alone service
      agreements; (i) from Alarm Contracts which are not freely assignable and which
      are not in writing; or (j) from customers who have received two (2) or more
      full
      credits with respect to such customer's monthly payment in a twelve (12) month
      period.

     

    Environmental
      Law
      shall
      mean any and all laws relating to protection of the environment or to emissions,
      discharges, releases or threatened releases of pollutants, contaminants,
      petrochemicals or petroleum, chemicals or industrial, toxic or hazardous
      substances or wastes into the environment including ambient air, surface water,
      ground water or land or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
      or wastes.

     

    ERISA
      shall
      mean the Employee Retirement Income Security Act of 1974, as the same may be
      amended or supplemented from time to time, and any successor statute of similar
      import, and the rules and regulations thereunder, as from time to time in
      effect.

     

    ERISA
      Group
      shall
      mean, at any time, the Borrower and all members of a controlled group of
      corporations and all trades or businesses (whether or not incorporated) under
      common control and all other entities which, together with the Borrower, are
      treated as a single employer under Section 414 of the Internal Revenue
      Code.

     

    Event
      of Default
      shall
      mean any of the events described in Section 8.1 and referred to therein as
      an
      "Event of Default."

     

    Expiration
      Date
      shall
      mean, with respect to the Revolving Credit Commitments, November 16,
      2007.

     

    Federal
      Funds Effective Rate
      for any
      day shall mean the rate per annum (based on a year of 360 days and actual days
      elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal
      Reserve Bank of New York (or any successor) on such day as being the weighted
      average of the rates on overnight federal funds transactions arranged by federal
      funds brokers on the previous trading day, as computed and announced by such
      Federal Reserve Bank (or any successor) in substantially the same manner as
      such
      Federal 

     

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    Reserve
      Bank computes and announces the weighted average it refers to as the "Federal
      Funds Effective Rate" as of the date of this Agreement; provided, if such
      Federal Reserve Bank (or its successor) does not announce such rate on any
      day,
      the "Federal Funds Effective Rate" for such day shall be the Federal Funds
      Effective Rate for the last day on which such rate was announced.

     

    Financial
      Projections
      shall
      have the meaning assigned to that term in Section 5.1.8((ii)).

     

    Fixed
      Charge Coverage Ratio
      shall
      mean, the ratio of (x) Consolidated EBITDA, less
      Capital
      Expenditures, less
      Taxes,
      to (y) Consolidated Fixed Charges, for such period, calculated on a rolling
      twelve
      (12)
      month
      basis beginning on January
      31,
      2005
      and continuing each month thereafter.

     

    Funding
      Date
      shall
      mean the date on which the first advance of the Loans is made pursuant to the
      terms and conditions hereof.

     

    GAAP
      shall
      mean generally accepted accounting principles as are in effect from time to
      time
      in the opinions and pronouncements of the Accounting Principles Board and the
      American Institute of Certified Public Accountants and the statements and
      pronouncements of the Financial Accounting Standards Board, subject to the
      provisions of Section 1.3, and applied on a consistent basis both as to
      classification of items and amounts.

     

    Guarantor
      Joinder
      shall
      mean a joinder by a Person as a Guarantor under this Agreement, the Guaranty
      Agreement, the Security Agreement and the other Loan Documents in the form
      of
      Exhibit 1.1(G).

     

    Guarantors
      shall
      mean the guarantors under the Guaranty Agreement and any Person, including
      all
      of the Borrower's Subsidiaries, who execute hereafter a Guarantor Joinder.
      As of
      the Closing Date, the Guarantors are Integrated Alarm and Security, LLC, a
      New
      Jersey limited liability company ("IASLLC"), Morlyn Financial Group, L.L.C.,
      a
      New Jersey limited liability company ("Morlyn") and Guardian Group, LLC, a
      New
      Jersey limited liability company ("Guardian").

     

    Guaranty
      of any
      Person shall mean any obligation of such Person guaranteeing or in effect
      guaranteeing any liability or obligation of any other Person in any manner,
      whether directly or indirectly, including any agreement to indemnify or hold
      harmless any other Person, any performance bond or other suretyship arrangement
      and any other form of assurance against loss, except endorsement of negotiable
      or other instruments for deposit or collection in the ordinary course of
      business.

     

    Guaranty
      Agreement
      shall
      mean the Guaranty Agreement dated the Closing Date executed and delivered by
      the
      Guarantors to the Agent for the benefit of the Banks.

     

    Historical
      Statements
      shall
      have the meaning assigned to that term in Section 5.1.8.

     

    Indebtedness
      shall
      mean, as to any Person at any time, any and all indebtedness, obligations or
      liabilities (whether matured or unmatured, liquidated or unliquidated, direct
      or
      indirect, absolute or contingent, or joint or several) of such Person for or
      in
      respect of: (i) borrowed money, (ii) amounts raised under or liabilities in
      respect of any note purchase or 

     

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    acceptance
      credit facility, (iii) reimbursement obligations (contingent or otherwise)
      under
      any letter of credit, currency swap agreement, interest rate swap, cap, collar
      or floor agreement or other interest rate management device, (iv) any other
      transaction (including forward sale or purchase agreements, capitalized leases
      and conditional sales agreements but excluding operating leases, trade payables
      and accrued expenses incurred in the ordinary course of business which are
      not
      represented by a promissory note or other evidence of indebtedness and which
      are
      not the subject of a genuine dispute or are not more than ninety (90) days
      past
      due, or if more than ninety (90) days past due, for which adequate reserves
      in
      conformity with GAAP have been established on the books of said Person) having
      the commercial effect of a borrowing of money entered into by such Person to
      finance its operations or capital requirements, or (v) any Guaranty of
      Indebtedness for borrowed money.

     

    Indenture
      shall
      mean that certain Indenture of even date herewith entered into among IASG,
      its
      Subsidiaries and the Trustee, as amended, supplemented, amended and restated
      or
      otherwise modified from time to time, governing the rights and duties of IASG
      under the Second Lien Notes.

     

    Ineligible
      Security
      shall
      mean any security which may not be underwritten or dealt in by member banks
      of
      the Federal Reserve System under Section 16 of the Banking Act of 1933 (12
      U.S.C. Section 24, Seventh), as amended.

     

    Insolvency
      Proceeding
      shall
      mean, with respect to any Person, (a) a case, action or proceeding with respect
      to such Person (i) before any court or any other Official Body under any
      bankruptcy, insolvency, reorganization or other similar Law now or hereafter
      in
      effect, or (ii) for the appointment of a receiver, liquidator, assignee,
      custodian, trustee, sequestrator, conservator (or similar official) of any
      Loan
      Party or otherwise relating to the liquidation, dissolution, winding-up or
      relief of such Person, or (b) any general assignment for the benefit of
      creditors, composition, marshaling of assets for creditors, or other, similar
      arrangement in respect of such Person's creditors generally or any substantial
      portion of its creditors; undertaken under any Law.

     

    Intercreditor
      Agreement
      means
      that certain Intercreditor Agreement, dated of even date herewith, entered
      into
      by and among the Agent, the Borrower and the Trustee.

     

    Interest
      Period
      shall
      mean the period of time selected by the Borrower in connection with (and to
      apply to) any election permitted hereunder by the Borrower to have Revolving
      Credit Loans bear interest under the LIBOR Rate Option. Subject to the last
      sentence of this definition, such period shall be one, two or three Months
      if
      the Borrower selects the LIBOR Rate Option. Such Interest Period shall commence
      on the effective date of such Interest Rate Option, which shall be (i) the
      Borrowing Date if the Borrower is requesting new Loans, or (ii) the date of
      renewal of or conversion to the LIBOR Rate Option if the Borrower is renewing
      or
      converting to the LIBOR Rate Option applicable to outstanding Loans.
      Notwithstanding the second sentence hereof: (A) any Interest Period which would
      otherwise end on a date which is not a Business Day shall be extended to the
      next succeeding Business Day unless such Business Day falls in the next calendar
      month, in which case such Interest Period shall end on the next preceding
      Business Day, and (B) the Borrower shall not select, convert to or renew an
      Interest Period for any portion of the Loans that would end after the Expiration
      Date.

     

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    Interest
      Rate Agreement
      shall
      mean any one or more interest rate hedging or management agreements or
      arrangements of the type described in and required by Section 7.1.13 [Interest
      Rate Hedging], including any swap agreement (on a standard ISDA form) provided
      by LaSalle Bank.

     

    Interest
      Rate Option
      shall
      mean any LIBOR Rate Option or Base Rate Option.

     

    Interim
      Statements
      shall
      have the meaning assigned to that term in Section 5.1.8.

     

    Internal
      Revenue Code
      shall
      mean the Internal Revenue Code of 1986, as the same may be amended or
      supplemented from time to time, and any successor statute of similar import,
      and
      the rules and regulations thereunder, as from time to time in
      effect.

     

    Inventory
      shall
      have the meaning ascribed that term under GAAP.

     

    Labor
      Contracts
      shall
      mean all employment agreements, employment contracts, collective bargaining
      agreements and other agreements among Borrower or a Subsidiary of Borrower
      and
      its employees.

     

    Landlord
      Waivers
      shall
      mean any one or more landlord waivers which relate to any Property, executed
      from time to time in form and substance satisfactory to the Agent. 

     

    LaSalle
      Bank
      shall
      mean LaSalle Bank National Association, its successors and assigns.

     

    Law
      shall
      mean any law (including common law), constitution, statute, treaty, regulation,
      rule, ordinance, opinion, release, ruling, order, injunction, writ, decree,
      bond, judgment, authorization or approval, lien or award of or settlement
      agreement with or issued by any Official Body.

     

    Liabilities
      shall
      mean at all times all liabilities of the Borrower that would be shown as such
      on
      a balance sheet of the Borrower prepared in accordance with GAAP.

     

    LIBOR
      Rate
      shall
      mean, with respect to the Loans comprising any Borrowing Tranche to which the
      LIBOR Rate Option applies for any Interest Period, a
      rate of
      interest equal to the per annum rate of interest at which United States dollar
      deposits for a period equal to the relevant Interest Period are offered in
      the
      London Interbank Eurodollar market at 11:00 a.m. (London time) two Business
      Days
      prior to the commencement of each Interest Period, as displayed in the Bloomberg
      Financial Markets system, or other authoritative source selected by the Bank
      in
      its sole discretion, divided by a number determined by subtracting from 1.00
      the
      maximum reserve percentage for determining reserves to be maintained by member
      banks of the Federal Reserve System for Eurocurrency liabilities, such rate
      to
      remain fixed for such Interest Period. The Bank's determination of LIBOR shall
      be conclusive, absent manifest error.

     

    LIBOR
      Rate Option
      or
Revolving
      Credit LIBOR Rate Option
      shall
      mean the option of the Borrower to have Revolving Credit Loans bear interest
      at
      the rate and under the terms and conditions set forth in Section
      3.1.1((ii)).

     

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    LIBOR
      Rate Reserve Percentage
      shall
      mean as of any day the maximum percentage in effect on such day, as prescribed
      by the Board of Governors of the Federal Reserve System (or any successor)
      for
      determining the reserve requirements (including supplemental, marginal and
      emergency reserve requirements) with respect to Eurocurrency funding (currently
      referred to as "Eurocurrency Liabilities").

     

    Lien
      shall
      mean any mortgage, deed of trust, pledge, lien, security interest, charge or
      security arrangement of any nature whatsoever or other encumbrance of like
      kind,
      whether voluntarily or involuntarily given, including any conditional sale
      or
      title retention arrangement, and any assignment, deposit arrangement or lease
      intended as, or having the effect of, security and any filed financing statement
      (other than precautionary financing statement filed in respect of operating
      leases) or other notice of any of the foregoing (whether or not a lien or other
      encumbrance is created or exists at the time of the filing).

     

    LLC
      Interests
      shall
      mean in respect of any limited liability company, its outstanding limited
      liability company interests or units and the voting rights associated
      therewith.

     

    Loan
      Documents
      shall
      mean this Agreement, all of the Guaranty Agreements, the Note, the Pledge
      Agreement, the Security Agreement, financing statements, the Assignment of
      Lease, the Landlord Waivers, any Interest Rate Agreement entered into with
      LaSalle Bank, the Collateral Assignment of Contracts, the Collateral Assignment
      of Telephone Numbers, the Nonsolicitation Agreement, the Collateral Assignment
      of Life Insurance, the Lockbox Agreement, the Patent, Trademark and Copyright
      Security Agreement, the Assignment and Assumption Agreement, the Borrower
      Joinder, the Intercreditor Agreement and any other instruments, certificates
      or
      documents executed and delivered or contemplated to be executed and delivered
      hereunder or thereunder or in connection herewith or therewith, as the same
      may
      be supplemented or amended from time to time in accordance herewith or
      therewith, and Loan Document shall mean any of the Loan Documents.

     

    Loan
      Party or Loan Parties
      shall
      mean the Borrowers and the Guarantors.

     

    Loan
      Request
      shall
      have the meaning given to such term in Section 2.4.

     

    Loans
      or
Revolving
      Credit Loans
      shall
      mean collectively, and Loan or Revolving Credit Loan shall mean separately,
      all
      Revolving Credit Loans or any Revolving Credit Loan made by the Banks or one
      of
      the Banks to the Borrower pursuant to Section 2.1.

     

    Lockbox
      Agreement
      shall
      mean any lockbox agreement between any Borrower and the Agent in respect of
      the
      restricted access account or accounts maintained in Borrower's name at LaSalle
      Bank.

     

    Material
      Adverse Change
      shall
      mean any set of circumstances or events which (a) has or could reasonably be
      expected to have any material adverse effect whatsoever upon the validity or
      enforceability of this Agreement or any other Loan Document, (b) is or could
      reasonably be expected to be material and adverse to the business, properties,
      assets, financial condition or results of operations of the Loan Parties taken
      as a whole, (c) impairs or could reasonably be expected to impair the ability
      of
      the Loan Parties to duly and punctually pay or perform their Indebtedness,
      or
      (d) impairs or could reasonably be expected to impair the ability of the Agent
      or any of the Banks, to the extent permitted thereunder, to enforce their legal
      remedies pursuant to this Agreement or any other Loan Document.

     

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    Maximum
      Availability
      shall
      have the meaning ascribed to that term in Section 2.1.

     

    Monitoring
      Contract
      shall
      mean a contract for providing central station monitoring and/or similar services
      for security alarm and/or similar equipment or devices to residential or
      commercial customers and including all recurring monthly revenue from
      maintenance and service contracts with customers who are parties to monitoring
      contracts, but excluding contracts to provide "wholesale" services for other
      alarm dealers, retailers or companies and excluding all contracts providing
      for
      guard, patrol or response services. 

     

    Month,
      with
      respect to an Interest Period under the LIBOR Rate Option, shall mean the
      interval between the days in consecutive calendar months numerically
      corresponding to the first day of such Interest Period. If any LIBOR Rate
      Interest Period begins on a day of a calendar month for which there is no
      numerically corresponding day in the month in which such Interest Period is
      to
      end, the final month of such Interest Period shall be deemed to end on the
      last
      Business Day of such final month.

     

    Multiemployer
      Plan
      shall
      mean any employee benefit plan which is a "multiemployer plan" within the
      meaning of Section 4001(a)(3) of ERISA and to which the Borrower or any member
      of the ERISA Group is then making or accruing an obligation to make
      contributions or, within the preceding five Plan years, has made or had an
      obligation to make such contributions.

     

    Multiple
      Employer Plan
      shall
      mean a Plan which has two or more contributing sponsors (including the Borrower
      or any member of the ERISA Group) at least two of whom are not under common
      control, as such a plan is described in Sections 4063 and 4064 of
      ERISA.

     

    Non-compete
      Agreement
      shall
      mean any agreement entered into by and between any Loan Party and any employee,
      officer, director, agent, officer, director, shareholder or other third-party
      which contains any restrictions or limitations upon competition with a Loan
      Party or its business or the solicitation of any Loan Party's customers,
      prospective customers or employees.

     

    Nonsolicitation
      Agreement
      shall
      mean the Nonsolicitation and Nondisclosure Agreements in favor of the Agent
      and
      the Banks executed and delivered on the Closing Date by McGinn and
      Few.

     

    Notes
      or
Revolving
      Credit Notes
      shall
      mean collectively and Note
      or
Revolving
      Credit Note
      shall
      mean separately all of the Revolving Credit Note of the Borrower in the form
      of
      Exhibit 1.1(R) evidencing the Revolving Credit Loans together with all
      amendments, extensions, renewals, replacements, refinancings or refundings
      thereof in whole or in part.

     

    Notices
      shall
      have the meaning assigned to that term in Section 10.6.

     

    Obligation
      shall
      mean any obligation or liability of any Loan Party to the Agent or any of the
      Banks, howsoever created, arising or evidenced, whether direct or indirect,
      absolute or contingent,
      now or hereafter existing, or due or to become due, under or in connection
      with
      this Agreement, the Notes, any Interest Rate Agreement with any Bank or any
      other Loan Document.

     

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

     

    Official
      Body
      shall
      mean any national, federal, state, local or other government or political
      subdivision or any agency, authority, board, bureau, central bank, commission,
      department or instrumentality thereof or any court, tribunal, grand jury or
      arbitrator, in each case whether foreign or domestic.

     

    Partnership
      Interests
      shall
      mean in respect of any limited or general partnership, its outstanding
      partnership interests (general and limited) and the voting rights associated
      therewith.

     

    Patent,
      Trademark and Copyright Security Agreement
      shall
      mean the Patent, Trademark and Copyright Security Agreement dated the Closing
      Date and executed and delivered by the Borrower to the Bank and the Agent for
      the benefit of the Banks.

     

    PBGC
      shall
      mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle
      A
      of Title IV of ERISA or any successor.

     

    Permitted
      Acquisitions
      shall
      mean acquisitions described in and permitted by Section 7.2.6
      (2).

     

    Permitted
      Investments
      shall
      mean:

     

    (i) direct
      obligations of the United States of America or any agency or instrumentality
      thereof or obligations backed by the full faith and credit of the United States
      of America maturing in twelve (12) months or less from the date of
      acquisition;

     

    (ii) commercial
      paper maturing in 180 days or less rated not lower than A-1, by Standard &
      Poor's or P-1 by Moody's Investors Service, Inc. on the date of
      acquisition;

     

    (iii) demand
      deposits, time deposits or certificates of deposit maturing within one year
      in
      commercial banks whose obligations are rated A-1, A or the equivalent or better
      by Standard & Poor's on the date of acquisition; 

     

    (iv) money
      market mutual funds maintained as part of a mutual funds complex with assets
      under management of not less than $1,000,000,000; and

     

    (v) 
Permitted
      Acquisitions.

     

        Permitted
      Liens
      shall
      mean:

     

    (i) Liens
      for
      taxes, assessments, or similar charges, incurred in the ordinary course of
      business and which are not yet due and payable or liens on property to secure
      claims for labor, materials or supplies relating to such property and pertaining
      to obligations not yet overdue;

     

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    (ii) Pledges
      or deposits made in the ordinary course of business to secure payment of worker
      compensation, or to participate in any fund in connection with worker
      compensation, unemployment insurance, old-age pensions or other social security
      programs;

     

    (iii) Liens
      of
      mechanics, materialmen, warehousemen, carriers, or other like Liens imposed
      by
      law, securing obligations incurred in the ordinary course of business that
      are
      not yet due and payable and Liens of landlords securing obligations to pay
      lease
      payments that are not yet either due and payable or in default;

     

    (iv) Good-faith
      pledges or deposits made in the ordinary course of business to secure
      performance of bids, tenders, contracts (other than for the repayment of
      borrowed money) or leases, not in excess of the aggregate amount due thereunder,
      or to secure statutory obligations, appeal bonds or surety, indemnity,
      performance or other similar bonds required in the ordinary course of
      business;

     

    (v) Encumbrances
      consisting of zoning ordinances and restrictions, easements, encroachments,
      covenants, rights of way, minor defects, irregularities or encumbrances on
      title
      or other restrictions on the use of real property, none of which materially
      impairs the use of such property or the value thereof, and none of which is
      violated in any material respect by existing or proposed structures or land
      use;

     

    (vi) Liens,
      security interests and mortgages in favor of the Agent for the benefit of the
      Banks;

     

    (vii) Liens
      on
      property leased by any Loan Party under capital and operating leases not
      prohibited by this Agreement and securing obligations of the Loan Parties to
      the
      lessor under such leases, provided there is no default by any Loan Party under
      such leases;

     

    (viii) Any
      Lien
      existing on the date of this Agreement and described on Schedule
      1.1(P),
      provided that the principal amount secured thereby is not hereafter increased,
      and no additional assets become subject to such Lien;

     

    (ix) Purchase
      Money Security Interests, provided
      that the
      aggregate amount of loans and deferred payments secured by such Purchase Money
      Security Interests shall not exceed $100,000
      (excluding for the purpose of this computation any loans or deferred payments
      secured by Liens described on Schedule
      1.1(P));

     

    (x)  The
      Liens
      existing on the date of this Agreement on those wholesale alarm contracts
      granted in connection with the Convertible Debt; 

     

    (xi)  Liens
      granted to the Second Lien Noteholders by the Second Lien Loan Documents;
      and

     

    (xi) The
      following, (A) if the validity or amount thereof is being contested in good
      faith by appropriate and lawful proceedings diligently conducted so long as
      levy
      and execution thereon have been stayed and continue to be stayed or (B) if
      a
      final judgment is entered and such judgment is discharged within thirty (30)
      days of entry, and in either case they do not affect the Collateral or, in
      the
      aggregate, impair the ability of the Loan Parties to perform their Obligations
      hereunder or under the other Loan Documents:

     

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

     

     

    (1) Claims
      or
      Liens for taxes, assessments or charges due and payable and subject to interest
      or penalty, provided
      that the
      applicable Loan Parties maintain such reserves or other appropriate provisions
      as shall be required by GAAP and pay all such taxes, assessments or charges
      forthwith upon the commencement of proceedings to foreclose upon any such
      Lien;

     

    (2) Claims,
      Liens or encumbrances upon, and defects of title to, real or personal property,
      including any attachment of personal or real property or other legal process
      prior to adjudication of a dispute on the merits;

     

    (3) Claims
      or
      Liens of mechanics, materialmen, warehousemen, carriers, or other statutory
      nonconsensual Liens; or

     

    (4) Liens
      resulting from final judgments or orders described in Section 8.1.6 not in
      excess of the amount set forth therein.

     

    Person
      shall
      mean any individual, corporation, partnership, limited liability company,
      association, joint-stock company, trust, unincorporated organization, joint
      venture, government or political subdivision or agency thereof, or any other
      entity.

     

    Plan
      shall
      mean at any time an employee pension benefit plan (including a Multiple Employer
      Plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or
      is
      subject to the minimum funding standards under Section 412 of the Internal
      Revenue Code and either (i) is maintained by any member of the ERISA Group
      for
      employees of any member of the ERISA Group or (ii) has at any time within the
      preceding five years been maintained by any entity which was at such time a
      member of the ERISA Group for employees of any entity which was at such time
      a
      member of the ERISA Group.

     

    Pledge
      Agreement
      shall
      mean the Pledge Agreement dated the Closing Date executed and delivered by
      IASG
      in respect of all of the outstanding stock of the other Borrowers and the
      Guarantors.

     

    Pledged
      Collateral
      shall
      mean the property of the Loan Parties in which security interests are to be
      granted under the Pledge Agreement, the Collateral Assignment of Contracts
      or
      the Collateral Assignment of Telephone Numbers.

     

    Potential
      Default
      shall
      mean any event or condition that if it continues uncured will with the passage
      of time or the giving of notice or any combination of the foregoing, constitute
      an Event of Default.

     

    Principal(s)
      means,
      individually and/or collectively, McGinn and Few.

     

    Principal
      Office
      shall
      mean the main banking office of the Agent in Chicago, Illinois.

     

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

    Prior
      Security Interest
      shall
      mean a valid and enforceable perfected first-priority security interest under
      the Uniform Commercial Code in the Collateral which is subject only to Permitted
      Liens.

     

    Prohibited
      Transaction
      shall
      mean any prohibited transaction as defined in Section 4975 of the Internal
      Revenue Code or Section 406 of ERISA for which neither an individual nor a
      class
      exemption has been issued by the United States Department of Labor.

     

    Property
      shall
      mean all real property owned or leased by any Loan Party or Subsidiary of any
      Loan Party; all such property is described on Schedule 5.1.16.

     

    Purchasing
      Bank
      shall
      mean a Bank which becomes a party to this Agreement by executing an Assignment
      and Assumption Agreement.

     

    Purchase
      Money Security Interest
      shall
      mean Liens upon tangible personal property securing loans to any Loan Party
      or
      deferred payments by such Loan Party for the purchase, construction, repair
      or
      improvement of such tangible personal property.

     

    Ratable
      Share
      shall
      mean the proportion that a Bank's Commitment bears to the Commitments of all
      of
      the Banks.

     

    Regulation
      U
      shall
      mean Regulation U, T or X as promulgated by the Board of Governors of the
      Federal Reserve System, as amended from time to time.

     

    Reportable
      Event
      shall
      mean a reportable event described in Section 4043 of ERISA and regulations
      thereunder with respect to a Plan or Multiemployer Plan.

     

    Required
      Banks
      shall
      mean (i) if there are no Loans outstanding, (a) Banks whose Commitments
      aggregate at least 66 2/3% of the Commitments of all of the Banks, or (b) if
      there are two (2) or fewer Banks, all such Banks, (ii) if there are Loans
      outstanding, any Bank or group of Banks (a) if the sum of the Loans of such
      Banks then outstanding aggregates at least 66 2/3% of the total principal amount
      of all of the Loans then outstanding or (b) if there are two (2) or fewer Banks,
      all such Banks. 

     

    Revolving
      Credit Commitment
      shall
      mean, as to any Bank at the time, the amount set forth opposite its name on
      Schedule 1.1(B) in the column labeled "Amount of Commitment for Revolving Credit
      Loans," and all as may be reduced from time to time hereunder.

     

    Revolving
      Credit Loans
      shall
      mean the loans provided pursuant to the terms of Section 2.1.

     

    Revolving
      Credit Note
      shall
      mean the Note.

     

    Revolving
      Facility Usage
      shall
      mean the principal amount of all Loans outstanding.

     

     

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    

      RMR
        shall
        mean recurring revenues calculated on a monthly basis, whether received monthly,
        quarterly or annually (net of pass-through charges for signal circuit telephone
        lines, utility company or third-party pass-through charges, antenna rentals,
        panel use, franchise and licensing
        fees, assessments of taxes, charges payable to third parties responding to
        alarms associated with customer contracts and any customer discounts) then
        being
        received by a Loan Party; provided, however, that with respect to any rate
        increase affecting such revenue, the additional revenue generated by such
        an
        increase shall not be included in the calculation of RMR until such time
        as the
        additional revenue is actually received by Borrower; provided that upon the
        occurrence and during the continuation of an Event of Default (i) the Borrower
        cannot implement a rate increase with respect to such revenue without the
        Agent's prior written consent and (ii) no amount of additional revenue generated
        by any rate increase which has not previously been taken into account in
        determining Eligible RMR shall be included in the calculation of
        RMR.

    

     

    Second
      Lien Loan Documents
      shall
      mean the Indenture, the Intercreditor Agreement, the Noteholder Collateral
      Documents (as defined in the Intercreditor Agreement) and any other agreements
      entered into in connection with the Indenture.

     

    Second
      Lien Noteholders
      means
      those certain holders of the Second Lien Notes and any other trustee or other
      representative therefor.

     

    Second
      Lien Notes
      means
      those notes issued by IASG pursuant to the Indenture evidencing Indebtedness
      extended by the Second Lien Noteholders.

     

    Section
      20 Subsidiary
      shall
      mean the Subsidiary of the bank holding company controlling any Bank, which
      Subsidiary has been granted authority by the Federal Reserve Board to underwrite
      and deal in certain Ineligible Securities.

     

    Security
      Agreement
      shall
      mean the Security Agreement executed and delivered on the Closing Date by the
      Borrower to the Agent for the benefit of the Banks in respect of the personal
      property of Borrower in order to secure the respective obligations of the
      Borrower under the Loan Documents.

     

    Senior
      Revolving Debt
      means an
      amount equal to the Revolving Facility Usage.

     

    Shares
      shall
      mean the authorized, issued and outstanding LLC Interests, shares of capital
      stock or Partnership Interests, as the case may be, of a Loan
      Party.

     

    Standard
      & Poor's
      shall
      mean Standard & Poor's Ratings Services, a division of The McGraw-Hill
      Companies, Inc.

     

    Subordinated
      Debt
      shall
      mean that portion of the Liabilities of the Borrower which is subordinated
      to
      the Obligations in a manner reasonably satisfactory to the Bank, including,
      but
      not limited to, right and time of payment of principal and
      interest.

     

    Subsidiary
      of any
      Person at any time shall mean (i) any corporation or trust of which 50% or
      more
      (by number of shares or number of votes) of the outstanding capital stock or
      shares of beneficial interest normally entitled to vote for the election of
      one
      or more directors or trustees (regardless of any contingency which does or
      may
      suspend or dilute the voting rights) is at such time owned directly or
      indirectly by such Person or one or more of such Person's Subsidiaries, (ii)
      any
      partnership of which such Person is a general partner or 

     

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    of
      which
      50% or more of the partnership interests is at the time directly or indirectly
      owned by such Person or one or more of such Person's Subsidiaries, (iii) any
      limited liability company of which such Person is a manager or of which 50%
      or
      more of the limited liability company interests is at the time directly or
      indirectly owned by such Person or one or more of such Person's Subsidiaries
      or
      (iv) any corporation, trust, partnership, limited liability company or other
      entity which is controlled or capable of being controlled by such Person or
      one
      or more of such Person's Subsidiaries.

     

    Subsidiary
      Borrower
      shall
      mean each Subsidiary of IASG or another Person which is identified herein as
      a
      Borrower or hereafter joins this Agreement as a Borrower in accordance with
      Section 10.18.

     

    Subsidiary
      Shares
      shall
      have the meaning assigned to that term in Section 5.1.3.

     

    Tangible
      Assets
      shall
      mean the total of all assets appearing on a balance sheet of the Borrower
      prepared in accordance with GAAP (with Inventory being valued at the lower
      of
      cost or market), after deducting all proper reserves (including reserves for
      Depreciation, obsolescence and amortization) less the sum of (i) goodwill,
      patents, trademarks, prepaid expenses, deposits, deferred charges and other
      personal property which is classified as intangible property in accordance
      with
      GAAP, and (ii) any amounts due from shareholders, affiliates, officers or
      employees of the Borrower.

     

    Transferor
      Bank
      shall
      mean the selling Bank pursuant to an Assignment and Assumption
      Agreement.

     

    Trustee
      shall
      mean Wells Fargo Bank, N.A. in its capacity as Trustee under the
      Indenture.

     

    Type,
      when
      used in reference to any Loan, refers to whether the rate of interest on such
      Loan or Loans is determined by reference to the LIBOR Rate or the Base
      Rate.

     

    UCC
      Collateral
      shall
      mean the property of the Loan Parties in which security interests are to be
      granted under the Security Agreement (including the "Intellectual Property"
      described therein) and the Patent, Trademark and Copyright Security
      Agreement.

     

    Uniform
      Commercial Code
      shall
      have the meaning assigned to that term in Section 5.1.15.

     

    
      	1.2  	
              Construction.

            

    

     

    Unless
      the context of this Agreement otherwise clearly requires, the following rules
      of
      construction shall apply to this Agreement and each of the other Loan
      Documents:

     

    1.2.1  Number;
      Inclusion.

     

    references
      to the plural include the singular, the plural, the part and the whole; "or"
      has
      the inclusive meaning represented by the phrase "and/or," and "including" has
      the meaning represented by the phrase "including without
      limitation";

     

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    

     

    1.2.2  Determination.

     

    references
      to "determination" of or by the Agent or the Banks shall mean good-faith
      estimates by the Agent or the Banks (in the case of quantitative determinations)
      and good-faith beliefs by the Agent or the Banks (in the case of qualitative
      determinations) and such determination shall be conclusive absent manifest
      error;

     

    1.2.3  Agent's
      Discretion and Consent.

     

    whenever
      the Agent or the Banks are granted the right herein to act in its or their
      sole
      discretion or to grant or withhold consent such right shall be exercised in
      good
      faith;

     

    1.2.4  Documents
      Taken as a Whole.

     

    the
      words
      "hereof," "herein," "hereunder," "hereto" and similar terms in this Agreement
      or
      any other Loan Document refer to this Agreement or such other Loan Document
      as a
      whole and not to any particular provision of this Agreement or such other Loan
      Document;

     

    1.2.5  Headings.

     

    the
      section and other headings contained in this Agreement or such other Loan
      Document and the Table of Contents (if any), preceding this Agreement or such
      other Loan Document are for reference purposes only and shall not control or
      affect the construction of this Agreement or such other Loan Document or the
      interpretation thereof in any respect;

     

    1.2.6  Implied
      References to this Agreement.

     

    any
      references to article, section, subsection, clause, schedule and exhibit are
      to
      this Agreement or other Loan Document, as the case may be, unless otherwise
      specified;

     

    1.2.7  Persons.

     

    reference
      to any Person includes such Person's successors and assigns but, if applicable,
      only if such successors and assigns are permitted by this Agreement or such
      other Loan Document, as the case may be, and reference to a Person in a
      particular capacity excludes such Person in any other capacity;

     

    1.2.8  Modifications
      to Documents.

     

    reference
      to any agreement (including this Agreement and any other Loan Document together
      with the schedules and exhibits hereto or thereto), document or instrument
      means
      such agreement, document or instrument as amended, modified, replaced,
      substituted for, superseded or restated;

     

    1.2.9  From,
      To
      and Through.

     

    relative
      to the determination of any period of time, "from" means "from and including,"
      "to" means "to but excluding," and "through" means "through and including";
      and

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    1.2.10  Shall;
      Will.

     

    references
      to "shall" and "will" are intended to have the same meaning.

     

    
      	1.3  	
              Accounting
                Principles.

            

    

     

    Except
      as
      otherwise provided in this Agreement, all computations and determinations as
      to
      accounting or financial matters and all financial statements to be delivered
      pursuant to this Agreement shall be made and prepared in accordance with GAAP
      (including principles of consolidation where appropriate), and all accounting
      or
      financial terms shall have the meanings ascribed to such terms by GAAP;
provided,
      however,
      that
      all accounting terms used in Section 7.2 [Negative Covenants] (and all defined
      terms used in the definition of any accounting term used in Section 7.2 shall
      have the meaning given to such terms (and defined terms) under GAAP as in effect
      on the date hereof applied on a basis consistent with those used in preparing
      the Annual Statements referred to in Section 5.1.8 [Historical Statements].
      In
      the event of any change after the date hereof in GAAP, and if such change would
      result in the inability to determine compliance with the financial covenants
      set
      forth in Section 7.2 based upon the Borrower's regularly prepared financial
      statements by reason of the preceding sentence, then the parties hereto agree
      to
      endeavor, in good faith, to agree upon an amendment to this Agreement that
      would
      adjust such financial covenants in a manner that would not affect the substance
      thereof, but would allow compliance therewith to be determined in accordance
      with the Borrower's financial statements at that time. 

     

    
      	1.4  	
              Concerning
                Corporate Terms. 

            

    

     

    When
      terms such as "stock", "shares", "shareholders", "corporate", "company" and
      similar terms generally associated with corporations are used herein or in
      the
      Loan Documents, they shall be deemed as well to refer as applicable to limited
      liability member interests, owners of those interests and a limited liability
      company or similar entity, as the context may require, and references to
      corporate governance documents and procedures shall have their appropriate
      and
      correlative meanings with respect to limited liability companies, as the context
      may require.

     

       

      
        	2.  	
                REVOLVING
                  CREDIT FACILITY

              

      

       

    

    
      	2.1  	
              Revolving
                Credit Commitments.

            

    

     

    2.1.1  Generally

     

    
      Subject
        to the terms and conditions hereof, and relying upon the representations
        and
        warranties herein set forth, each Bank severally agrees to make Revolving
        Credit
        Loans to the Borrower at any time or from time to time on or after the date
        hereof to the Expiration Date, provided
        that,
        after
        giving effect to such Loan, the aggregate amount of Loans from such Bank
        shall
        not exceed such Bank's Revolving Credit Commitment and provided further that
        Revolving Facility Usage may never exceed the Maximum Availability. Within
        such
        limits of time and amount and subject to the other provisions of this Agreement,
        the Borrower may borrow, repay and reborrow pursuant to this Section 2.1.
        The
        Borrower shall, on or before the day of delivery of the reports under Section
        7.3 which show an excess of Revolving Facility Usage over Maximum Availability,
        prepay the principal amount of the Loans to the extent of such excess. As
        used
        herein, "Maximum Availability" shall mean, as of the date of calculation,
        an
        aggregate amount expressed in Dollars determined to be the product of (i)
        Eligible RMR multiplied
        by
        (ii) ten
        (10). Eligible RMR shall be calculated based on the information and amounts
        reported on the Borrowing Base Certificate and the other reports delivered
        to
        the Agent pursuant to Sections 7.3.

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

    

     

    
      	2.2  	
              Nature
                of Banks' Obligations with Respect to Revolving Credit Loans. 

            

    

     

    Each
      Bank
      shall be obligated to participate in each request for Revolving Credit Loans
      pursuant to Section 2.4 [Revolving Credit Loan Requests] in accordance with
      its
      Ratable Share. The aggregate of each Bank's Revolving Credit Loans outstanding
      hereunder to the Borrower at any time shall never exceed its Revolving Credit
      Commitment. The obligations of each Bank hereunder are several. The failure
      of
      any Bank to perform its obligations hereunder shall not (i) affect the
      Obligations of the Borrower to any other party, (ii) make any other
      party
      liable for such failure, or (iii) excuse any other Bank from performing
      its
      obligations hereunder. The Banks shall have no obligation to make Revolving
      Credit Loans hereunder on or after the Expiration Date.

     

    
      	2.3  	
              Commitment
                Fee.

            

    

     

     

    The
      Borrower agrees to pay to LaSalle Bank a commitment fee with respect to the
      Revolving Credit Loan in the amount of Five Hundred Fifty Thousand and 00/100
      Dollars ($550,000.00), Seventy-five Thousand and 00/100 Dollars ($75,000.00)
      of
      which Borrower has already paid to Bank and the balance of which shall be paid
      to Bank on the Closing Date.

     

    
      	2.4  	
              Revolving
                Credit Loan Requests.

            

    

     

    Except
      as
      otherwise provided herein, the Borrower may from time to time prior to the
      Expiration Date request the Banks to make Revolving Credit Loans, or renew
      or
      convert the Interest Rate Option applicable to existing Revolving Credit Loans
      pursuant to Section 3.2 [Interest Periods], by delivering to the Agent, not
      later than 10:00 a.m., Chicago time, (i) three (3) Business Days prior to the
      proposed Borrowing Date with respect to the making of Revolving Credit Loans
      to
      which the LIBOR Rate Option applies or the conversion to or the renewal of
      the
      LIBOR Rate Option for any Loans; and (ii) on the proposed Borrowing Date with
      respect to the making of a Revolving Credit Loan to which the Base Rate Option
      applies or the last day of the preceding Interest Period with respect to the
      conversion to the Base Rate Option for any Loan, of a duly completed request
      therefor substantially in the form of Exhibit 2.4 or a request by telephone
      promptly confirmed in writing by letter or facsimile in such form (each, a
      "Loan
      Request"), it being understood that the Agent may 

     

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    rely
      on
      the authority of any individual making such a telephonic request without the
      necessity of receipt of such written confirmation. Each Loan Request shall
      be
      irrevocable and shall specify (i) the proposed Borrowing Date; (ii) the
      aggregate amount of the proposed Loans comprising each Borrowing Tranche, which
      shall be in integral multiples of $100,000 and not less than $1,000,000 for
      each
      Borrowing Tranche to which the LIBOR Rate Option applies and not less than
      the
      lesser of $100,000 or the maximum amount available for Borrowing Tranches to
      which the Base Rate Option applies; (iii) whether the LIBOR Rate Option or
      Base
      Rate Option shall apply to the proposed Loans comprising the applicable
      Borrowing Tranche; and (iv) in the case of a Borrowing Tranche to which the
      LIBOR Rate Option applies, an appropriate Interest Period for the Loans
      comprising such Borrowing Tranche.

     

    
      	2.5  	
              Making
                Revolving Credit Loans.

            

    

     

    The
      Agent
      shall, promptly after receipt by it of a Loan Request pursuant to Section 2.4
      [Revolving Credit Loan Requests], notify the Banks of its receipt of such Loan
      Request specifying: (i) the proposed Borrowing Date and the time and method
      of
      disbursement of the Revolving Credit Loans requested thereby; (ii) the amount
      and type of each such Revolving Credit Loan and the applicable Interest Period
      (if any); and (iii) the apportionment among the Banks of such Revolving Credit
      Loans as determined by the Agent in accordance with Section 2.2 [Nature of
      Banks' Obligations]. Each Bank shall remit the principal amount of each
      Revolving Credit Loan to the Agent such that the Agent is able to, and the
      Agent
      shall, to the extent the Banks have made funds available to it for such purpose
      and subject to Section 6.2 [Each Additional Loan], fund such Revolving Credit
      Loans to the Borrowers in U.S. Dollars and immediately available funds at the
      Principal Office prior to 2:00 p.m., Chicago time, on the applicable Borrowing
      Date, provided that if any Bank has not notified the Agent prior to the date
      on
      which it is scheduled to make payment to the Agent that it does not intend
      to
      make such payment and fails to remit such funds to the Agent in a timely manner,
      the Agent may elect in its sole discretion to fund with its own funds the
      Revolving Credit Loans of such Bank on such Borrowing Date, and such Bank shall
      be subject to the repayment obligation in Section 9.16 [Availability of
      Funds].

     

    
      	2.6  	
              Revolving
                Credit Notes.

            

    

     

    The
      obligation of the Borrower to repay the aggregate unpaid principal amount of
      the
      Revolving Credit Loans made to it by each Bank, together with interest thereon,
      shall be evidenced by a Revolving Credit Note dated the Closing Date payable
      to
      the order of such Bank in a face amount equal to the Revolving Credit Commitment
      of such Bank. The obligations of Borrower under the Notes and the other Loan
      Documents shall be joint and several.

     

    
      	2.7  	
              Use
                of Proceeds.

            

    

     

    The
      proceeds of the Revolving Credit Loans shall be used for the purposes described
      in and in accordance with Section 7.1.10 [Use of Proceeds].

     

    
      	2.8  	
              Unused
                Commitment Fee.

            

    

     

    Borrowers
      shall pay the Agent a fee (the "Unused Commitment Fee") in the amount of
      one-half of one percent (.50%) per annum payable based upon the daily unused
      portion
      of the Revolving Credit Commitment amount hereunder. The Unused Commitment
      Fee
      shall be calculated quarterly and shall be payable quarterly in arrears
      commencing on [December 31, 2004] and continuing on the last day of each fiscal
      quarter thereafter.

     

    

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    

     

    
      	3.  	
              INTEREST
                RATES

            

    

     

    
      	3.1  	
              Interest
                Rate Options.

            

    

     

    The
      Borrower shall pay interest in respect of the outstanding unpaid principal
      amount of the Loans as selected by it from the Base Rate Option or LIBOR Rate
      Option set forth below applicable to the Loans, it being understood that,
      subject to the provisions of this Agreement, the Borrower may select different
      Interest Rate Options and different Interest Periods to apply simultaneously
      to
      the Loans comprising different Borrowing Tranches and may convert to or renew
      one or more Interest Rate Options with respect to all or any portion of the
      Loans comprising any Borrowing Tranche, provided that there shall not be at
      any
      one time outstanding more than seven (7) Borrowing Tranches in the aggregate
      among all of the Loans using the LIBOR Rate Option. If at any time the
      designated rate applicable to any Loan made by any Bank exceeds such Bank's
      highest lawful rate, the rate of interest on such Bank's Loan shall be limited
      to such Bank's highest lawful rate.

     

    3.1.1  Revolving
      Credit Interest Rate Options.

     

    The
      Borrower shall have the right to select from the following Interest Rate Options
      applicable to the Revolving Credit Loans:

     

    (i) Revolving
      Credit Base Rate Option: A fluctuating rate per annum (computed on the basis
      of
      a year of 360 days, and actual days elapsed) equal to the Base Rate plus the
      Applicable Margin, such rate to change automatically from time to time effective
      as of the date of each change in the Base Rate; or

     

    (ii) Revolving
      Credit LIBOR Rate Option: A rate per annum (computed on the basis of a year
      of
      360 days and actual days elapsed) equal to the LIBOR Rate plus the Applicable
      Margin.

     

    3.1.2  Amount
      of
      Borrowing Tranche.

     

    Each
      Borrowing Tranche of LIBOR Rate Loans shall be not less than $1,000,000 and
      in
      integral multiples of $100,000, and the Borrowing Tranche of Base Rate Loans
      shall be not less than $100,000 and in integral multiples of
      $100,000.

     

    3.1.3  Rate
      Quotations.

     

    The
      Borrower may call the Agent on or before the date on which a Loan Request is
      to
      be delivered to receive an indication of the rates then in effect, but it is
      acknowledged that such projection shall not be binding on the Agent or the
      Banks
      nor affect the rate of interest which thereafter is actually in effect when
      the
      election is made.

     

    
      	3.2  	
              Interest
                Periods.

            

    

     

    At
      any
      time when the Borrower shall select, convert to or renew a LIBOR Rate Option,
      the Borrower shall notify the Agent thereof at least three (3) Business Days
      prior to the effective date of such LIBOR Rate Option by delivering a Loan
      Request. The notice shall specify an Interest Period during which such Interest
      Rate Option shall apply. Notwithstanding the preceding sentence, in the case
      of
      the renewal of a LIBOR Rate Option at the end of an Interest Period, the first
      day of the new Interest Period shall be the last day of the preceding Interest
      Period, without duplication in payment of interest for such day.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    
      	3.3  	
              Interest
                After Default.

            

    

     

    To
      the
      extent permitted by Law, upon the occurrence of an Event of Default and until
      such time such Event of Default shall have been cured or waived the principal
      balance of the Loans and each other Obligation hereunder if not paid when due
      shall bear interest at a rate per annum equal to the sum of 3% per annum plus
      the highest Applicable Margin set forth in the definition of Applicable Margin
      for both Base Rate Loans and LIBOR Loans from the time such Obligation becomes
      due and payable and until it is paid in full.

     

    3.3.1  Acknowledgment.

     

    The
      Borrower acknowledges that the increase in rates referred to in this Section
      3.3
      reflects, among other things, the fact that such Loans or other amounts have
      become a substantially greater risk given their default status and that the
      Banks are entitled to additional compensation for such risk, and all such
      interest shall be payable by the Borrower upon demand by Agent.

     

    
      	3.4  	
              LIBOR
                Rate Unascertainable; Illegality; Increased Costs; Deposits Not
                Available.

            

    

     

    3.4.1  LIBOR
      Rate Unascertainable.

     

    If,
      with
      respect to any Interest Period, on any date on which a LIBOR Rate would
      otherwise be determined, the Agent shall have determined that:

     

    (i) deposits
      in Dollars (in the applicable amounts) in the Eurodollar market are unavailable
      or adequate and reasonable means do not exist for ascertaining such LIBOR Rate,
      or

     

    (ii) a
      contingency has occurred which adversely affects the London interbank Eurodollar
      market relating to the LIBOR Rate, then the Agent shall have the rights
      specified in Section 3.4.3.

     

    3.4.2  Illegality;
      Increased Costs; Deposits Not Available.

     

    If
      at any
      time any Bank shall have determined that:

    
       

      (i) the
        making, maintenance or funding of any Loan to which a LIBOR Rate Option applies
        has been made impracticable or unlawful by compliance by such Bank in good
        faith
        with any Law or any interpretation or application thereof by any Official
        Body
        or with any request or directive of any such Official Body (whether or not
        having the force of Law), or

       

    

    

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    (ii) such
      LIBOR Rate Option will not adequately cover the cost to such Bank of the
      establishment or maintenance of any such Loan, or

     

    (iii) after
      making all reasonable efforts, deposits of the relevant amount in Dollars for
      the relevant Interest Period for a Loan, or to banks generally, to which a
      LIBOR
      Rate Option applies, respectively, are not available to such Bank with respect
      to such Loan, or to banks generally, in the interbank Eurodollar
      market,

     

    then
      the
      Agent shall have the rights specified in Section 3.4.3.

    

    3.4.3  Agent's
      and Bank's Rights.

     

    In
      the
      case of any event specified in Section 3.4.1 above, the Agent shall promptly
      so
      notify the Banks and the Borrower thereof, and in the case of an event specified
      in Section 3.4.2 above, such Bank shall promptly so notify the Agent and endorse
      a certificate to such notice as to the specific circumstances of such notice,
      and the Agent shall promptly send copies of such notice and certificate to
      the
      other Banks and the Borrower. Upon such date as shall be specified in such
      notice (which shall not be earlier than the date such notice is given), the
      obligation of (i) the Banks, in the case of such notice given by the Agent,
      or
      (ii) such Bank, in the case of such notice given by such Bank, to allow the
      Borrower to select, convert to or renew a LIBOR Rate Option shall be suspended
      until the Agent shall have later notified the Borrower, or such Bank shall
      have
      later notified the Agent, of the Agent's or such Bank's, as the case may be,
      determination that the circumstances giving rise to such previous determination
      no longer exist. If at any time the Agent makes a determination under Section
      3.4.1 and the Borrower has previously notified the Agent of its selection of,
      conversion to or renewal of a LIBOR Rate Option and such Interest Rate Option
      has not yet gone into effect, such notification shall be deemed to provide
      for
      selection of, conversion to or renewal of the Base Rate Option otherwise
      available with respect to such Loans. If any Bank notifies the Agent of a
      determination under Section 3.4.2, the Borrower shall, as to any Loan of the
      Bank to which a LIBOR Rate Option applies, on the date specified in such notice
      either convert such Loan to the Base Rate Option otherwise available with
      respect to such Loan or prepay such Loan in accordance with Section 4.4
      [Voluntary Prepayments]. Absent due notice from the Borrower of conversion
      or
      prepayment, such Loan shall automatically be converted to the Base Rate Option
      otherwise available with respect to such Loan upon such specified
      date.

     

    
      	3.5  	
              Selection
                of Interest Rate Options.

            

    

     

    If
      the
      Borrower fails to select a new Interest Period to apply to any Borrowing Tranche
      of Loans under the LIBOR Rate Option at the expiration of an existing Interest
      Period applicable
      to such Borrowing Tranche in accordance with the provisions of Section 3.2
      [Interest Periods], the Borrower shall be deemed to have converted such
      Borrowing Tranche to the Revolving Credit Base Rate Option commencing upon
      the
      last day of the existing Interest Period.

     

    

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    

    
    

     

    
      	4.  	
              PAYMENTS

            

    

     

    
      	4.1  	
              Payments.

            

    

     

    All
      payments and prepayments to be made in respect of principal, interest, Facility
      Fees, Agent's Fee or other fees or amounts due from the Borrower hereunder
      shall
      be payable prior to 11:00 a.m., Chicago time, on the date when due without
      presentment, demand, protest or notice of any kind, all of which are hereby
      expressly waived by the Borrower, and without set-off, counterclaim or other
      deduction of any nature, and an action therefor shall immediately accrue. Such
      payments shall be made to the Agent at the Principal Office for the ratable
      accounts of the Banks with respect to the Loans in U.S. Dollars and in
      immediately available funds, and the Agent shall promptly distribute such
      amounts to the Banks in immediately available funds, provided that in the event
      payments are received by 11:00 a.m., Chicago time, by the Agent with respect
      to
      the Loans and such payments are not distributed to the Banks on the same day
      received by the Agent, the Agent shall pay the Banks the Federal Funds Effective
      Rate with respect to the amount of such payments for each day held by the Agent
      and not distributed to the Banks. The Agent's and each Bank's statement of
      account, ledger or other relevant record shall, in the absence of manifest
      error
      be conclusive as the statement of the amount of principal of and interest on
      the
      Loans and other amounts owing under this Agreement and shall be deemed an
      "account stated."

     

    
      	4.2  	
              Pro
                Rata Treatment of Banks.

            

    

     

    Each
      borrowing shall be allocated to each Bank according to its Ratable Share, and
      each selection of, conversion to or renewal of any Interest Rate Option and
      each
      payment or prepayment by the Borrower with respect to principal, interest,
      Facility Fees or other fees (except for the fees payable to the Agent pursuant
      to the Agent's Letter) or amounts due from the Borrower hereunder to the Banks
      with respect to the Loans, shall (except as provided in Section 3.4.3 [Agent's
      and Bank's Rights] in the case of an event specified in Section 3.4 [LIBOR
      Rate
      Unascertainable; Etc.], 4.4.2 [Replacement of a Bank] or 4.6 [Additional
      Compensation in Certain Circumstances]) be made in proportion to the applicable
      Loans outstanding from each Bank and, if no such Loans are then outstanding,
      in
      proportion to the Ratable Share of each Bank.

     

    
      	4.3  	
              Interest
                Payment Dates.

            

    

     

    Interest
      on Loans to which the Base Rate Option applies shall be due and payable in
      arrears on the last Business Day of each month after the date hereof and on
      the
      Expiration Date or upon acceleration of the Note. Interest on Loans to which
      the
      LIBOR Rate Option applies shall be due and payable on the last day of each
      Interest Period for those Loans. Interest on mandatory prepayments of principal
      under Section 4.5 [Mandatory Prepayments] shall be due on the date such
      mandatory prepayment is due. Interest on the principal amount of each Loan
      or
other
      monetary Obligation shall be due and payable on demand after such principal
      amount or other monetary Obligation becomes due and payable (whether on the
      stated maturity date, upon acceleration or otherwise).

     

    

    
      
         

      

      
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      	4.4  	
              Voluntary
                Prepayments.

            

    

     

    4.4.1  Right
      to
      Prepay.

     

    The
      Borrower shall have the right at its option from time to time to prepay the
      Loans in whole or part without premium or penalty (except as provided in Section
      4.4.2 below or in Section 4.6 [Additional Compensation in Certain
      Circumstances]):

     

    (i) at
      any
      time with respect to any Loan to which the Base Rate Option
      applies,

     

    (ii) on
      the
      last day of the applicable Interest Period with respect to Loans to which a
      LIBOR Rate Option applies (or on another date if the amounts required under
      Section 4.6.2 are paid contemporaneously therewith),

     

    (iii) on
      the
      date specified in a notice by any Bank pursuant to Section 3.4 [LIBOR Rate
      Unascertainable, Etc.] with respect to any Loan to which a LIBOR Rate Option
      applies.

     

     

    Whenever
      the Borrower desires to prepay any part of the Loans, it shall provide a written
      prepayment notice to the Agent by 11:00 a.m. (i) two (2) Business Days prior
      to
      any prepayment of LIBOR Rate Loans (except that no notice shall be required
      with
      respect to a prepayment pursuant to Section 4.4.1 (iii)) and (ii) one (1)
      Business Day prior to the prepayment of any Base Rate Loans setting forth the
      following information:

     

    (x) the
      date,
      which shall be a Business Day, on which the proposed prepayment is to be made;
      and

     

    (y) the
      total
      principal amount of such prepayment, which shall not be less than
      $100,000.00.

     

    All
      prepayment notices shall be irrevocable. The principal amount of the Loans
      for
      which a prepayment notice is given, together with interest on such principal
      amount except with respect to Loans to which the Base Rate Option applies,
      shall
      be due and payable on the date specified in such prepayment notice as the date
      on which the proposed prepayment is to be made. Except as provided in Section
      3.4.3 [Agent's and Bank's Rights], if the Borrower prepays a Loan but fails
      to
      specify the applicable Borrowing Tranche which the Borrower is prepaying, the
      prepayment shall be applied first to Loans to which the Base Rate Option
      applies, then to Loans to which the LIBOR Rate Option applies. Any prepayment
      hereunder shall be subject to the Borrower's obligations to indemnify the Banks
      under Section 4.6.2 [Indemnity].

     

    

    
      
         

      

      
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    4.4.2  Replacement
      of a Bank.

     

    In
      the
      event any Bank (i) gives notice under Section 3.4 [LIBOR Rate Unascertainable,
      Etc.] or Section 4.6.1 [Increased Costs, Etc.], (ii) does not fund Revolving
      Credit Loans, or (iii) becomes subject to the control of an Official Body (other
      than normal and customary supervision), then the Borrower shall have the right
      at its option, with the consent of the Agent, which shall not be unreasonably
      withheld, (a) to prepay the Loans of such Bank in whole, together with all
      interest accrued thereon, and terminate such Bank's Commitment one-hundred
      twenty (120) days after (x) receipt of such Bank's notice under Section 3.4
      [LIBOR Rate Unascertainable, Etc.] or 4.6.1 [Increased Costs, Etc.], (y) the
      date such Bank has failed to fund Revolving Credit Loans, or (z) the date such
      Bank became subject to the control of an Official Body, as applicable; provided
      that the Borrower shall also pay to such Bank at the time of such prepayment
      any
      amounts required under Section 4.6 [Additional Compensation in Certain
      Circumstances] and any accrued interest due on such amount and any related
      fees;
      provided, however, that the Commitment of such Bank shall be provided by one
      or
      more of the remaining Banks or a replacement bank acceptable to the Agent;
      provided, further, the remaining Banks shall have no obligation hereunder to
      increase their Commitments or (b) to replace such Bank with a lender of its
      choosing and reasonably acceptable to the Agent. Notwithstanding the foregoing,
      the Agent may only be replaced subject to the requirements of Section 9.14
      [Successor Agent].

     

    4.4.3  Change
      of
      Lending Office.

     

    Each
      Bank
      agrees that upon the occurrence of any event giving rise to increased costs
      or
      other special payments under Section 3.4.2 [Illegality, Etc.] or 4.6.1
      [Increased Costs, Etc.] with respect to such Bank, it will if requested by
      the
      Borrower, use reasonable efforts (subject to overall policy considerations
      of
      such Bank) to designate another lending office for any Loans affected by such
      event, provided
      that
      such designation is made on such terms that such Bank and its lending office
      suffer no economic, legal or regulatory disadvantage, with the object of
      avoiding the consequence of the event giving rise to the operation of such
      Section. Nothing in this Section 4.4.3 shall affect or postpone any of the
      Obligations of the Borrower or any other Loan Party or the rights of the Agent
      or any Bank provided in this Agreement.

     

    
      	4.5  	
              Mandatory
                Prepayments.

            

    

     

    4.5.1  Sale
      of
      Assets.

     

    Within
      five (5) Business Days of any sale of assets authorized by Section 7.2.7(v)
      [Disposition of Assets or Subsidiaries], the Borrower shall make a mandatory
      prepayment of principal on the Loans together with accrued interest on such
      principal amount, and the Commitments shall, unless otherwise agreed by the
      Required Banks in their sole discretion, permanently and automatically reduce
      in
      an amount equal to the after-tax proceeds of such sale.

     

    4.5.2  Application
      Among Interest Rate Options.

     

    All
      prepayments required pursuant to this Section 4.5 shall first be applied among
      the Interest Rate Options to the principal amount of the Loans subject to the
      Base Rate Option, then to Loans subject to a LIBOR Rate Option. In accordance
      with Section 4.6.2 [Indemnity], the Borrower shall indemnify the Banks for
      any
      loss or expense, including loss of margin, incurred with respect to any such
      prepayments applied against Loans subject to a LIBOR Rate Option on any day
      other than the last day of the applicable Interest Period.

     

    
      
         

      

      
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      	4.6  	
              Additional
                Compensation in Certain
                Circumstances.

            

    

     

    4.6.1  Increased
      Costs or Reduced Return Resulting from Taxes, Reserves, Capital Adequacy
      Requirements, Expenses, Etc.

     

    If
      any
      Law, guideline or interpretation or any change in any Law, guideline or
      interpretation or application thereof by any Official Body charged with the
      interpretation or administration thereof or compliance with any request or
      directive (whether or not having the force of Law) of any central bank or other
      Official Body:

     

    (i) subjects
      any Bank to any tax or changes the basis of taxation with respect to this
      Agreement, the Notes, the Loans or payments by the Borrower of principal,
      interest, Facility Fees, or other amounts due from the Borrower hereunder or
      under the Notes (except for taxes on the overall net income of such
      Bank),

     

    (ii) imposes,
      modifies or deems applicable any reserve, special deposit or similar requirement
      against credits or commitments to extend credit extended by, or assets (funded
      or contingent) of, deposits with or for the account of, or other acquisitions
      of
      funds by, any Bank, or

     

    (iii) imposes,
      modifies or deems applicable any capital adequacy or similar requirement (A)
      against assets (funded or contingent) of, or letters of credit, other credits
      or
      commitments to extend credit extended by, any Bank, or (B) otherwise applicable
      to the obligations of any Bank under this Agreement, 

     

    and
      the
      result of any of the foregoing is to increase the cost to, reduce the income
      receivable by, or impose any expense (including loss of margin) upon any Bank
      with respect to this Agreement, the Notes or the making, maintenance or funding
      of any part of the Loans (or, in the case of any capital adequacy or similar
      requirement, to have the effect of reducing the rate of return on any Bank's
      capital, taking into consideration such Bank's customary policies with respect
      to capital adequacy) by an amount which such Bank in its sole discretion deems
      to be material, such Bank shall from time to time notify the Borrower and the
      Agent of the amount determined in good faith (using any averaging and
      attribution methods employed in good faith) by such Bank to be necessary to
      compensate such Bank for such increase in cost, reduction of income, additional
      expense or reduced rate of return. Such notice shall set forth in reasonable
      detail the basis for such determination. Such amount shall be due and payable
      by
      the Borrower to such Bank ten (10) Business Days after such notice is
      given.

            

            4.6.2  Indemnity.

     

    In
      addition to the compensation required by Section 4.6.1 [Increased Costs, Etc.],
      the Borrower shall indemnify each Bank against all liabilities, losses or
      expenses (including loss of margin, any loss or expense incurred in liquidating
      or employing deposits from third parties and any loss or expense incurred in
      connection with funds acquired by a Bank to fund or maintain Loans subject
      to a
      LIBOR Rate Option) which such Bank sustains or incurs as a consequence of
      any:

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    (i) payment,
      prepayment, conversion or renewal of any Loan to which a LIBOR Rate Option
      applies on a day other than the last day of the corresponding Interest Period
      (whether or not such payment or prepayment is mandatory, voluntary or automatic
      and whether or not such payment or prepayment is then due) other than a
      prepayment required by Section 3.4 [LIBOR Rate Unascertainable; Illegality,
      etc.],

     

    (ii) attempt
      by the Borrower to revoke (expressly, by later inconsistent notices or
      otherwise) in whole or part any Loan Requests under Section 2.4 [Revolving
      Credit Loan Requests] or Section 3.2 [Interest Periods] or notice relating
      to
      prepayments under Section 4.4 [Voluntary Prepayments], or

     

    (iii) default
      by the Borrower in the performance or observance of any covenant or condition
      contained in this Agreement or any other Loan Document, including any failure
      of
      the Borrower to pay when due (by acceleration or otherwise) any principal,
      interest, Facility Fee or any other amount due hereunder.

     

    If
      any
      Bank sustains or incurs any such loss or expense, it shall from time to time
      notify the Borrower of the amount determined in good faith by such Bank (which
      determination may include such assumptions, allocations of costs and expenses
      and averaging or attribution methods as such Bank shall deem reasonable) to
      be
      necessary to indemnify such Bank for such loss or expense. Such notice shall
      set
      forth in reasonable detail the basis for such determination. Such amount shall
      be due and payable by the Borrower to such Bank ten (10) Business Days after
      such notice is given.

     

    
      	5.  	
              REPRESENTATIONS
                AND WARRANTIES

            

    

     

    
      	5.1  	
              Representations
                and Warranties.

            

    

     

    The
      Loan
      Parties, jointly and severally, represent and warrant to the Agent and each
      of
      the Banks as follows:

     

    5.1.1  Organization
      and Qualification.

     

    IASG
      is a
      corporation duly organized, validly existing and in good standing under the
      laws
      of Delaware. Each other Loan Party is a corporation or other legal entity duly
      organized, validly existing and in good standing under the laws of its
      respective state of formation. Each Loan Party has the lawful power to own
      or
      lease its properties and to engage in the
      business it presently conducts or proposes to conduct. Each Loan Party is duly
      licensed or qualified and in good standing in each jurisdiction listed on
Schedule
      5.1.1
      and in
      all other jurisdictions where the property owned or leased by it or the nature
      of the business transacted by it, or both, makes such licensing or qualification
      necessary.

     

    

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    

     

    5.1.2  Capitalization
      and Ownership.

     

    The
      authorized, issued and outstanding shares of IASG and the Shares of each other
      Loan Party have been validly issued and sold in compliance with applicable
      Federal and state laws, rules and regulations and are owned as indicated on
      Schedule 5.1.2,
      except
      that in the case of IASG only those shareholders holding at least a five percent
      (5%) ownership interest in IASG shall be listed on Schedule 5.1.2.
      With
      respect to any Loan Party which is a corporation, all of the Shares of such
      Loan
      Party have been validly issued and are fully paid and nonassessable. There
      are
      no options, warrants or other rights outstanding to purchase any such Shares
      except as indicated on Schedule
      5.1.2.

     

    5.1.3  Subsidiaries.

     

    Schedule
      5.1.3
      states
      the name of each Subsidiary, if any (including the names of the Guarantors
      and
      the Borrowers other than IASG), and its jurisdiction of organization, its
      authorized capital stock, the issued and outstanding Shares and the owners
      thereof if it is a corporation, its outstanding Partnership Interests if it
      is a
      partnership and its outstanding LLC Interests if it is a limited liability
      company (collectively, the "Subsidiary Shares"). IASG has good title to all
      of
      the Subsidiary Shares, free and clear in each case of any Lien other than Liens
      in favor of the Agent under the Pledge Agreement and Liens granted to the Second
      Lien Noteholders. All Subsidiary Shares have been validly issued, and, if
      corporate Shares, are fully paid and nonassessable. All Subsidiaries of IASG
      are
      and shall either be Borrowers or Guarantors. All capital contributions and
      other
      consideration required to be made or paid in connection with the issuance of
      all
      Subsidiary Shares have been made or paid, as the case may be. There are no
      options, warrants or other rights outstanding to purchase any such Subsidiary
      Shares except as indicated on Schedule
      5.1.3.

     

    5.1.4  Power
      and
      Authority.

     

    Each
      Loan
      Party has full power to enter into, execute, deliver and carry out this
      Agreement and the other Loan Documents to which it is a party, to incur and
      to
      perform its Obligations under the Loan Documents to which it is a party, and
      all
      such actions have been duly authorized by all necessary proceedings on its
      part.

     

    5.1.5  Validity,
      Delivery, and Binding Effect.

     

    This
      Agreement has been duly and validly executed and delivered by each of the Loan
      Parties, and each other Loan Document which the Loan Parties are required to
      execute and deliver on or after the date hereof will have been duly executed
      and
      delivered by the Loan Parties that are parties to each such Loan Document on
      or
      before the required date of delivery of such Loan Document. This Agreement
      and
      each other Loan Document constitutes, or will constitute, legal, valid and
      binding obligations of the Loan Parties which are or will be a party thereto
      on
      and after its date of delivery thereof, enforceable against such Loan Party
      in
      accordance with its terms,
      except to the extent that enforceability of any such Loan Document may be
      limited by bankruptcy, insolvency, reorganization, moratorium or other similar
      laws affecting the enforceability of creditors' rights generally or limiting
      the
      right of specific performance.

     

    
      5.1.6  No
        Conflict.

       

      Neither
        the execution and delivery of this Agreement or the other Loan Documents
        by any
        Loan Party nor the consummation of the transactions herein or therein
        contemplated nor compliance with the terms and provisions hereof or thereof
        by
        any of them will conflict with, constitute a default under or result in any
        breach of (i) the terms and conditions of the certificate of incorporation,
        the
        certificate of limited partnership, the certificate of formation or organization
        or other organizational documents of any Loan Party or (ii) any Law, order,
        writ, judgment, injunction or decree by which any Loan Party or any of its
        Subsidiaries is bound or to which it is subject, or result in the creation
        or
        enforcement of any 

    

    

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    

     Lien,
      charge or encumbrance whatsoever upon any property (now or hereafter acquired)
      of any Loan Party or any of its Subsidiaries (other than Liens granted under
      the
      Loan Documents and Liens granted to the Second Lien Noteholders). In addition,
      neither the execution and delivery of this Agreement or the other Loan Documents
      by any Loan Party nor the consummation of the transactions herein or therein
      contemplated nor compliance with the terms and provisions hereof or thereof
      by
      any of them will conflict with, constitute a default under or result in any
      breach of (x) the terms and conditions of the bylaws, the partnership agreement
      or the limited liability company agreement of any Loan Party or (y) any
      agreement or instrument to which any Loan Party is a party; provided that with
      respect to (x) and (y) such breach is material to the business or financial
      condition of any Loan Party.

     

    5.1.7  Litigation.

        

            Except
      as set forth
      in Schedule 5.1.7 [Litigation],
      there
      are no actions, suits, proceedings or investigations pending or threatened
      against any Loan Party at law or equity before any Official Body which
      individually or in the aggregate would cause or constitute a Material Adverse
      Change. No Loan Party is in violation of any order, writ, injunction or any
      decree of any Official Body which would cause or constitute a Material Adverse
      Change.

     

    5.1.8  Financial
      Statements.

     

    (i) Historical
      Statements.
      Borrower has delivered to the Agent copies of the audited consolidated year-end
      financial statements of Borrower for and as of the end of the fiscal years
      ended
      December 31, 2002 and December 31, 2003 (the "Annual Statements"). In addition,
      Borrower has delivered to the Agent copies of unaudited monthly consolidated
      financial statements of the Borrower for the fiscal year ended December 31,
      2002
      and for the fiscal year ended December 31, 2003 (the "Interim Statements")
      (the
      Annual and Interim Statements being collectively referred to as the "Historical
      Statements"). The Historical Statements were compiled from the books and records
      maintained by Borrower, are correct and complete and fairly represent in all
      material respects the consolidated financial condition of Borrower and its
      Subsidiaries (subject to footnote disclosures and year-end audit adjustments
      for
      unaudited financial statements) as of their dates and the results of operations
      for the fiscal periods then ended and have been prepared in accordance with
      GAAP
      consistently applied.

     

                    (ii) Financial
      Projections.
      The
      consolidated financial projections of Borrower attached hereto as Schedule
      5.1.8,
      include
      a pro forma consolidated financial statement of Borrower as of June 30, 2004
      and
      such projections and pro forma financial statement have been derived from
      various assumptions of Borrower's management reasonably made in accordance
      with
      all applicable industry and accounting standards (the "Financial Projections").
      The Financial Projections represent expected results in light of the history
      of
      the business, present and foreseeable conditions and the intentions of
      Borrowers' management and are based upon and give effect to the terms hereof
      and
      the other Loan Documents. The Financial Projections accurately and completely
      disclose all liabilities, contingent or otherwise, and forward and long-term
      commitments and there are no unrealized or anticipated losses from commitments
      of Borrower. Forward projections and forecasts provided to the Agent and Banks
      are based on good faith assumptions and estimates believed by Borrower to be
      reasonable as of the date of the applicable projections and assumptions and
      the
      Agent and the Banks acknowledge that such Financial Projections contain forward
      looking statements and actual results or performance may differ from such
      Financial Projections.

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    5.1.9  Use
      of
      Proceeds; Margin Stock; Section 20 Subsidiaries.

     

    5.1.9.1  General.

            The
      Loan Parties
      shall use the proceeds of the Loans in accordance with Section 7.1.10 [Use
      of
      Proceeds].

     

    5.1.9.2  Margin
      Stock.

        

            None
      of the Loan
      Parties engages or intends to engage in the business of extending credit for
      the
      purpose, immediately, incidentally or ultimately, of purchasing or carrying
      margin stock (within the meaning of Regulation U). No part of the proceeds
      of
      any Loan has been or will be used, immediately, incidentally or ultimately,
      to
      purchase or carry any margin stock or to extend credit to others for the purpose
      of purchasing or carrying any margin stock or to refund Indebtedness originally
      incurred for such purpose, or for any purpose which entails a violation of
      or
      which is inconsistent with the provisions of the regulations of the Board of
      Governors of the Federal Reserve System. None of the Loan Parties intends to
      hold margin stock in such amounts that more than 25% of the reasonable value
      of
      the assets of such Loan Party are or will be represented by margin
      stock.

     

    5.1.9.3  Section
      20 Subsidiaries.

        

            The
      Loan Parties
      shall not use any portion of the proceeds of the Loans, directly or indirectly,
      to purchase during the underwriting period, or for thirty (30) days thereafter,
      Ineligible Securities being underwritten by a Section 20
      Subsidiary.

     

    5.1.10  Full
      Disclosure.

     

            Neither
      this
      Agreement nor any other Loan Document, nor the American Express Tax and Business
      Services operational review dated September 24, 2004 concerning the Loan
      Parties, nor the Financial Projections regarding Borrower prepared by or on
      behalf of Borrower, nor any certificate, agreement or other documents executed
      and furnished to the Agent or any Bank in connection herewith or any other
      Loan
      Document, contains any untrue statement of a material fact or omits to state
      a
      material fact necessary in order to make the statements contained herein and
      therein, in light of the circumstances under which they were made, not
      misleading. There is no fact known to any Loan Party (other than general
      economic conditions or matters affecting the security alarm industry as a whole)
      which materially adversely affects the business, property, assets, financial
      condition, results of operations or prospects of any Loan Party which has not
      been set forth in this Agreement or in the certificates, statements, agreements
      or other documents furnished in writing to the Agent and the Banks prior to
      or
      at the date hereof in connection with the transactions contemplated
      hereby.

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

    5.1.11  Taxes.

     

    All
      federal, state, local and other tax returns required to have been filed with
      respect to the Loan Parties have been filed, and payment or adequate provision
      has been made for the payment of all taxes, fees, assessments and other
      governmental charges which have or may become due pursuant to said returns
      or to
      assessments received, except to the extent that such taxes, fees, assessments
      and other charges are being contested in good faith by appropriate proceedings
      diligently conducted and for which such reserves or other appropriate provisions
      as shall be required by GAAP shall have been made. As of the Closing Date,
      there
      are no agreements or waivers extending the statutory period of limitations
      applicable to any federal income tax return of any Loan Party for any
      period.

     

    5.1.12  Consents
      and Approvals.

     

    Except
      for the filing of financing statements in the state and, if required, county
      filing offices, and filings in the United States Patent and Trademark Office
      or
      the United States Copyright Office in respect of the Collateral consisting
      of
      certain intellectual property, no consent, approval, exemption, order or
      authorization of, or a registration or filing with, any Official Body or any
      other Person is required by any Law or any agreement in connection with the
      execution, delivery and carrying out of this Agreement and the other Loan
      Documents by any Loan Party, except as listed on Schedule
      5.1.12,
      and
      except for any which shall have been obtained or made on or prior to the Closing
      Date.

     

    5.1.13  No
      Event
      of Default; Compliance with Instruments.

     

    No
      event
      has occurred and is continuing, and no condition exists or will exist after
      giving effect to the borrowings or other extensions of credit to be made on
      the
      Closing Date and to the borrowings on other extensions of credit to be made
      on
      the date of any additional Loans and to the borrowings or other extensions
      of
      credit under or pursuant to the Loan Documents, which constitutes an Event
      of
      Default or Potential Default. None of the Loan Parties is in violation of (i)
      any term of its certificate of incorporation, bylaws, certificate of limited
      partnership, partnership agreement, certificate of formation or organization,
      limited liability company agreement or other organizational documents or (ii)
      any agreement or instrument to which it is a party or by which it or any of
      its
      properties may be subject or bound which is material to the business or
      financial condition of the Loan Parties.

     

    5.1.14  Patents,
      Trademarks, Copyrights, Licenses, Etc.

     

    Each
      Loan
      Party owns or possesses all the patents, trademarks, service marks, trade names,
      copyrights, licenses, registrations, franchises, permits and rights necessary
      to
      own and operate their properties and to carry on their business as presently
      conducted and contemplated by the Loan Parties, without any possible, alleged
      or
      actual conflict with the rights of others except for such breaches which do
      not
      cause a Material Adverse Change. All such patents, trademarks, service marks,
      trade names, registered copyrights, licenses, registrations, franchises, and
      other types of items referenced in or required under this Section 5.1.14
      are listed and described on Schedule
      5.1.14.

     

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    5.1.15  Security
      Interests.

     

    The
      Liens
      on and security interests in the Collateral granted to the Agent for the benefit
      of the Banks pursuant to the Collateral Assignment of Contracts, the Pledge
      Agreement, the Security Agreement, the Assignment of Lease, the Collateral
      Assignment of Telephone Numbers, the Patent, Trademark and Copyright Security
      Agreement and the other Loan Documents constitute and will continue to
      constitute Prior Security Interests under the Uniform Commercial Code as in
      effect from time to time in each applicable jurisdiction (the "Uniform
      Commercial Code") or other applicable Law, entitled to all the rights, benefits
      and priorities provided by the Uniform Commercial Code or such Law. Upon the
      filing of financing statements relating to said security interests in each
      office and in each jurisdiction where required in order to perfect the security
      interests described above, taking possession of any stock certificates or other
      certificates evidencing the Pledged Collateral and recordation in the United
      States Patent and Trademark Office and United States Copyright Office, as
      applicable, all such action as is necessary or advisable to establish such
      rights of the Agent will have been taken, and there will be upon execution
      and
      delivery of the Collateral Assignment, the Pledge Agreement and the Security
      Agreement, and upon such filings and such taking of possession, no necessity
      for
      any further action in order to preserve, protect and continue such rights,
      except the filing of continuation statements with respect to such financing
      statements within six months prior to each five-year anniversary of the filing
      of such financing statements and the continuation of possession of any such
      stock certificates or other certificates evidencing the Pledged Collateral.
      All
      filing fees and other expenses in connection with each such action have been
      or
      will be paid by the Borrower. 

     

    5.1.16  Real
      Property.

     

    Monital
      is the record owner, free and clear of all Liens and encumbrances, except for
      Permitted Encumbrances (as defined in the Mortgage), of the real property listed
      on Schedule
      5.1.16.
      The
      Loan Parties occupy the locations described on Schedule
      5.1.16
      (which
      sets forth the street address, state, owner, lessor and lessee). All central
      station or other monitoring locations are also separately described on
Schedule
      5.1.16.
      The
      Loan Parties have valid leasehold interest in all properties, assets and other
      rights which it purports to lease or which are reflected as leased on its books
      and records, free and clear of all Liens and encumbrances except Permitted
      Liens, and subject to the terms and conditions of the applicable leases.
      All leases of property are in full force and effect without the necessity for
      any consent which has not previously been obtained upon consummation of the
      transactions contemplated hereby. 

     

    5.1.17  Status
      of
      the Pledged Collateral.

     

    All
      the
      shares of capital stock, Partnership Interests or LLC Interests included in
      the
      Pledged Collateral to be pledged pursuant to the Pledge Agreement or the
      Collateral Assignment are or will be upon issuance validly issued and
      nonassessable and owned beneficially and of record by the pledgor free and
      clear
      of any Lien or restriction on transfer, except as otherwise provided by the
      Pledge Agreement or the Collateral Assignment and except as the right of the
      Banks to dispose of the Shares, Partnership Interests or LLC Interests may
      be
      limited by the Securities Act of 1933, as amended, and the regulations
      promulgated by the Securities and Exchange Commission thereunder and by
      applicable 

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

       

      state
        securities laws, except for the Lien of the Second Lien Noteholders. There
        are
        no shareholder, partnership, limited liability company or other agreements
        or
        understandings with respect to the shares of capital stock, Partnership
        Interests or LLC Interests included in the Pledged Collateral except for
        certificates of incorporation or organization and bylaws and except for the
        partnership agreements, security agreements, pledge agreements and limited
        liability company agreements described on Schedule
        5.1.17.
        The
        Loan Parties have delivered true and correct copies of such certificates
        and
        agreements to the Agent.

    

     

    5.1.18  Insurance.

     

    Schedule
      5.1.18
      lists as
      of the Closing Date all insurance policies and other bonds to which any Loan
      Party is a party, all of which are as of the Closing Date valid and in full
      force and effect. No notice has been given or claim made and no grounds exist
      to
      cancel or avoid any of such policies or bonds or to reduce the coverage provided
      thereby except to the extent replaced by coverage under other policies. Such
      policies and bonds provide adequate coverage from reputable and financially
      sound insurers in amounts sufficient to insure the assets and risks of each
      Loan
      Party in accordance with prudent business practice in the industry of the Loan
      Parties. Without limiting the foregoing, Schedule
      5.1.18
      describes the errors and omissions insurance coverage as of the Closing Date,
      each Loan Party's existing insurance policies and the key man life insurance
      policies covered by the Collateral Assignment of Life Insurance.

     

    5.1.19  Compliance
      with Laws.

     

    The
      Loan
      Parties are, and after giving effect to the terms hereof and the other Loan
      Documents will be, in compliance in all respects with all applicable Laws in
      all
      jurisdictions in which the Loan Parties are presently or will be doing business
      except where the failure to do so does not constitute a Material Adverse Change.
      Without limiting the foregoing, the Loan Parties have provided, and after the
      Closing Date will provide and will require all dealers under any dealer program
      to provide, each residential customer with the 3-day right of rescission in
      strict compliance with the provisions of 16 CFR Part 429 (Cooling-Off Period
      for
      Door-to-Door Sales) and any applicable state laws. Each Loan Party acknowledges
      that any failure on its behalf to strictly comply with such regulation and
      laws
      in connection with any transaction
      involving a residential customer may result in such customer having the right
      to
      rescind or cancel such transaction.

     

    5.1.20  Material
      Contracts; Burdensome Restrictions.

     

    Schedule
      5.1.20
      lists,
      as of the Closing Date, all material contracts relating to the business
      operations of the Loan Parties, including all employee benefit plans and Labor
      Contracts. All such material contracts are valid, binding and enforceable upon
      the Loan Parties and each of the other parties thereto in accordance with their
      respective terms subject to bankruptcy laws and other laws affecting creditors'
      rights generally and except as enforcement thereof is subject to the general
      principals of equity and there is no default thereunder. No Loan Party is nor
      is
      any Subsidiary bound by any contractual obligation, or subject to any
      restriction in any organization document, or any requirement of Law which could
      result in a Material Adverse Change.

     

    
      
         

      

      
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    5.1.21  Investment
      Companies; Regulated Entities.

     

    None
      of
      the Loan Parties is an "investment company" registered or required to be
      registered under the Investment Company Act of 1940 or under the "control"
      of an
      "investment company" as such terms are defined in the Investment Company Act
      of
      1940 and shall not become such an "investment company" or under such "control."
      No Loan Party is subject to any other Federal or state statute or regulation
      limiting its ability to incur Indebtedness for borrowed money.

     

    5.1.22  Plans
      and
      Benefit Arrangements.

     

    Except
      as
      set forth on Schedule
      5.1.22:

     

    (i) The
      Borrower and each other member of the ERISA Group is in compliance in all
      material respects with any applicable provisions of ERISA with respect to all
      Benefit Arrangements, Plans and Multiemployer Plans. There has been no
      Prohibited Transaction with respect to any Benefit Arrangement or any Plan
      or
      with respect to any Multiemployer Plan or Multiple Employer Plan. The Borrower
      and all other members of the ERISA Group has made when due any and all payments
      required to be made under any agreement relating to a Multiemployer Plan or
      a
      Multiple Employer Plan or any Law pertaining thereto. With respect to each
      Plan
      and Multiemployer Plan, the Borrower and each other member of the ERISA Group
      (i) has fulfilled its obligations under the minimum funding standards of ERISA,
      (ii) has not incurred any liability to the PBGC, and (iii) has not had asserted
      against them any penalty for failure to fulfill the minimum funding requirements
      of ERISA.

     

    (ii) Each
      Multiemployer Plan and Multiple Employer Plan is able to pay benefits thereunder
      when due.

     

    (iii) No
      Borrower or any other member of the ERISA Group has instituted or intends to
      institute proceedings to terminate any Plan.

     

    (iv) No
      event
      requiring notice to the PBGC under Section 302(f)(4)(A) of ERISA has occurred
      or
      is reasonably expected to occur with respect to any Plan, and no amendment
      with respect to which security is required under Section 307 of ERISA has been
      made or is reasonably expected to be made to any Plan.

     

    (v) The
      aggregate actuarial present value of all benefit liabilities (whether or not
      vested) under each Plan, determined on a plan termination basis, as disclosed
      in, and as of the date of, the most recent actuarial report for such Plan,
      does
      not exceed the aggregate fair market value of the assets of such
      Plan.

     

    (vi) Neither
      the Borrower nor any other member of the ERISA Group has incurred or reasonably
      expects to incur any withdrawal liability under ERISA to any Multiemployer
      Plan
      or Multiple Employer Plan. The Borrower has not nor has any other member of
      the
      ERISA Group been notified by any Multiemployer Plan or Multiple Employer Plan
      that such Multiemployer Plan or Multiple Employer Plan has been terminated
      within the meaning of Title IV of ERISA and no Multiemployer Plan or Multiple
      Employer Plan is reasonably expected to be reorganized or terminated, within
      the
      meaning of Title IV of ERISA.

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

     

    (vii) To
      the
      extent that any Benefit Arrangement is insured, the Borrower and all other
      members of the ERISA Group have paid when due all premiums required to be paid
      for all periods through the Closing Date. To the extent that any Benefit
      Arrangement is funded other than with insurance, the Borrower and all other
      members of the ERISA Group have made when due all contributions required to
      be
      paid for all periods through the Closing Date.

     

    (viii) All
      Plans, Benefit Arrangements and Multiemployer Plans have been administered
      in
      accordance with their terms and applicable Law.

     

    5.1.23  Employment
      Matters.

     

    Each
      Loan
      Party is in compliance with the Labor Contracts and all applicable federal,
      state and local labor and employment Laws including those related to equal
      employment opportunity and affirmative action, labor relations, minimum wage,
      overtime, child labor, medical insurance continuation, worker adjustment and
      relocation notices, immigration controls and worker and unemployment
      compensation. There are no outstanding grievances, arbitration awards or appeals
      therefrom arising out of the Labor Contracts or current or threatened strikes,
      picketing, handbilling or other work stoppages or slowdowns at facilities of
      the
      Loan Parties. Borrower has delivered to the Agent true and correct copies of
      each of the Labor Contracts.

     

    5.1.24  Environmental
      Matters.

     

    Except
      as
      set forth on Schedule
      5.1.24,
      as of
      the Closing Date, there are no violations, or allegations thereof, of any
      Environmental Law applicable to any Property or to any real estate owned by
      any
      Loan Party and, to the best knowledge of the Loan Parties, to any property
      of
      any predecessor of the Loan Parties. 

     

    5.1.25  Alarm
      Contracts.

     

    All
      of
      the Alarm Contracts are valid, enforceable and in full force and effect in
      accordance with their terms subject to bankruptcy laws and other laws affecting
      creditors' rights generally
      and except as enforcement thereof is subject to the general principals of
      equity, are assignable to Agent without obtaining the consent of or providing
      notice to any customer or other Person, and contain terms and conditions which
      are standard within the electronic security industry, including those involving
      limitation of liability/liquidated damages, third-party indemnification,
      automatic renewals and specifications regarding the right to increases in
      customer rates. Upon demand of the Agent after the occurrence of an Event of
      Default, the Loan Parties shall deliver the originals of all of the Alarm
      Contracts. Without limiting the foregoing, the Borrower's business and all
      equipment used in connection with it, are now being utilized, operated and
      maintained in substantial conformity with the Alarm Contracts. The Loan Parties
      have not in any manner at any time failed to so utilize, operate and maintain
      its business in a manner that could now or hereafter result in cancellation
      or
      termination of any number of the Alarm Contracts, or in liability for damages
      under 

     

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

       

      any
        of
        the Alarm Contracts nor has any Loan Party defaulted in its obligations pursuant
        to any of the Alarm Contracts. The Loan Parties' predecessors under Alarm
        Contracts acquired by a Loan Party were, on and after the date of acquisition,
        governed by noncompetition or nonsolicitation agreements with at least 5
        years
        remaining on them and which are assignable to Agent. No person has any right
        to
        acquire any of the Borrower's accounts. None of the Loan Parties have sold
        or
        otherwise made its customer lists available to any third
        party.

    

     

    5.1.26  Alarm
      Systems.

     

    All
      of
      the alarm systems installed by the Loan Parties, or by sellers or their
      predecessors under contracts acquired by the Loan Parties, are in good working
      order and condition (subject to ordinary wear and tear, routine service needs
      and customer misuse), and have been installed and maintained in accordance
      with
      good and workmanlike practices prevailing in the security alarm industry at
      the
      time of installation in accordance with the specifications or standards
      appropriate for its business and all governmental authorities. All such alarm
      systems conform in all material respects to the contracts pursuant to which
      they
      were installed and in no case has an installation been made by a Loan Party
      or
      any predecessor of a Loan Party which at the time of installation was in
      violation of any applicable law, code or regulation. To the extent freely
      assignable, all manufacturer's warranties applicable to any such alarm systems
      are hereby assigned to Agent to secure the Obligations. No Loan Party is aware
      of any difficulty in obtaining replacement parts for its product lines or
      installed panels and equipment.

     

    5.1.27  Telephone
      Numbers.

     

    The
      Loan
      Parties have the exclusive contractual right to use all of the telephone lines
      and numbers applicable to the Loan Parties' accounts and can convert all such
      lines and numbers to communicate with another central station by means of a
      line
      switch. Schedule A to the Collateral Assignment of Telephone Numbers sets forth
      a list of all of the telephone numbers used in connection with the operation
      of
      the Loan Parties' business, which the Loan Parties shall assign to Agent
      pursuant to such Collateral Assignment of Telephone Numbers. To the Loan
      Parties' knowledge, as of the Closing Date, there are no announced pending
      plans
      by any telephone company to change the dialing procedures or exchange numbers
      within the areas servicing the Loan Parties' customers such that each Loan
      Party
      would need to reprogram their 

     

    customer's
      digital dialers except to the extent specific plans so to reprogram in a timely
      fashion have been made.

     

    5.1.28  Regarding
      Borrowers.

     

    The
      business conducted by the Borrowers is (i) providing financing to dealers,
      secured by subscriber alarm contracts, (ii) installing alarm and
      alarm-monitoring equipment (iii) providing services under Monitoring
      Contracts, and (iv) otherwise generating RMR, including Eligible RMR
      through the acquisition and monitoring of Alarm Contracts. The nature of the
      RMR
      generated by or owing to the Borrowers has been fully described to the
      Agent.

     

    5.1.29  Convertible
      Debt

     

    The
      Convertible Debt is secured only by wholesale Alarm Contracts.

     

    
      
         

      

      
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      	5.2  	
              Updates
                to Schedules.

            

    

     

    Should
      any of the information or disclosures provided on any of the Schedules attached
      hereto become outdated or incorrect, the Borrower shall promptly provide the
      Agent in writing with such revisions or updates to such Schedule as may be
      necessary or appropriate to update or correct same. Such revisions shall become
      effective upon the Borrower's delivery of the same to the Agent together with
      a
      certificate of an Authorized Officer, that such revision and restatement
      reflects changes that are permitted by this Agreement and the other Loan
      Documents but no such update or revision shall constitute a waiver of any breach
      under any Loan Document.

     

    
      	6.  	
              CONDITIONS
                OF LENDING.

            

    

     

    The
      obligation of each Bank to make Loans hereunder is subject to the performance
      by
      each of the Loan Parties of its Obligations to be performed hereunder at or
      prior to the making of any such Loans or issuance of such Loans and to the
      satisfaction of the following further conditions:

     

    
      	6.1  	
               On
                the Closing Date:

            

    

     

    6.1.1  Officer's
      Certificate.

     

    The
      representations and warranties of each of the Loan Parties contained in Section
      5 and in each of the other Loan Documents executed on the Closing Date shall
      be
      true and accurate on and as of the Closing Date with the same effect as though
      such representations and warranties had been made on and as of such date (except
      representations and warranties which relate solely to an earlier date or time,
      which representations and warranties shall be true and correct on and as of
      the
      specific dates or times referred to therein), and each of the Loan Parties
      shall
      have performed and complied with all covenants and conditions hereof and
      thereof, and no Event of Default or Potential Default shall have occurred and
      be
      continuing or shall exist.

     

    6.1.2  Secretary's
      Certificate.

     

    There
      shall be delivered to the Agent for the benefit of each Bank a certificate
      dated
      the Closing Date and signed by the Secretary, an Assistant Secretary, Manager
      or
      Managing Member of each of the Loan Parties, certifying as appropriate as
      to:

     

    (i) all
      organizational or corporate actions taken by such Loan Party as are necessary
      or
      appropriate in connection with authorizing, entering into and performance of
      this Agreement and the other Loan Documents;

     

    (ii) the
      names
      of the officer or officers authorized to sign this Agreement and the other
      Loan
      Documents and the true signatures of such officer or officers and specifying
      the
      Authorized Officers permitted to act on behalf of such Loan Party for purposes
      of this Agreement and the true signatures of such officers, on which the Agent
      and each Bank may conclusively rely; and

     

    (iii) copies
      of
      its organizational documents, including its certificate of incorporation,
      bylaws, certificate of limited partnership, partnership agreement, certificate
      of formation, and limited liability company agreement as in effect on the
      Closing Date certified by the appropriate state official where such documents
      are filed in a state office together with certificates from the appropriate
      state officials as to the continued existence and good standing of each Loan
      Party in each state where organized or qualified to do business.

     

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    6.1.3  Delivery
      of Loan Documents.

     

    The
      Loan
      Documents shall have been duly executed and delivered to the Agent for the
      benefit of the Banks, together with all appropriate stock powers and
      certificates evidencing the Subsidiary Shares, the Partnership Interests and
      the
      LLC Interests and all financing statements in respect of the Loan Documents
      shall have been delivered to the Agent for the benefit of the
      Banks.

     

    6.1.4  Opinion
      of Counsel.

     

    There
      shall be delivered to the Agent for the benefit of each Bank a written opinion
      of Gersten, Savage, Kaplowitz, Wolf & Marcus, LLP, counsel for the Loan
      Parties relating to the Loan Documents dated the Closing Date, and in form
      and
      substance satisfactory to the Agent and its counsel.

     

    6.1.5  Legal
      Details.

     

    All
      legal
      details and proceedings in connection with the transactions contemplated by
      this
      Agreement and the other Loan Documents shall be in form and substance
      satisfactory to the Agent and counsel for the Agent, and the Agent shall have
      received all such other counterpart originals or certified or other copies
      of
      such documents and proceedings in connection with such transactions, in form
      and
      substance satisfactory to the Agent and said counsel, as the Agent or said
      counsel may reasonably request. Without limiting the foregoing, the Acquisition
      shall have been
      completed on the Closing Date in accordance with the terms of the Acquisition
      Purchase Agreement.

     

    6.1.6  Payment
      of Fees.

     

    The
      Borrower shall have paid or caused to be paid to the Agent for itself and for
      the account of the Banks, to the extent not previously paid, any fees due under
      Section 9.15 [Agent's Fees], the Bank's commitment fee and all other fees
      accrued through the Closing Date and the costs and expenses for which the Agent
      and the Banks are entitled to be reimbursed.

     

    6.1.7  Officer's
      Certificate Regarding MACs.

     

    Since
      December 31, 2003, no Material Adverse Change shall have occurred and, prior
      to
      the Closing Date, there shall have been no change in the senior management
      of
      the Loan Parties and there shall have been delivered to the Agent for the
      benefit of each Bank a certificate to such effect dated the Closing Date and
      signed by the Chief Executive Officer, President or Chief Financial Officer
      of
      each Loan Party to such effect.

     

     

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

     

    6.1.8  Due
      Diligence.

     

    The
      Agent
      shall have received the due diligence report prepared by American Express and
      an
      analysis of each Loan Parties' business matters as the Agent may require in
      form
      and substance satisfactory to the Agent in all respects. Without limiting the
      foregoing, the Loan Parties shall deliver to the Agent on or before the Closing
      Date lien searches in respect of the Loan Parties demonstrating the absence
      of
      Liens on any of such Loan Parties' properties and assets other than Permitted
      Liens.

     

    6.1.9  Consents.

     

    All
      consents and approvals required to effectuate the transactions contemplated
      hereby shall have been obtained.

     

    6.1.10  No
      Violation of Laws.

     

    The
      making of the Loans shall not contravene any Law applicable to the Loan Parties
      or any of the Banks.

     

    6.1.11  No
      Actions or Proceedings.

     

    No
      action, proceeding, investigation, regulation or legislation shall have been
      instituted, threatened or proposed in writing before any court, governmental
      agency or legislative body to enjoin, restrain or prohibit, or to obtain damages
      in respect of, this Agreement, the other Loan Documents or the consummation
      of
      the transactions contemplated hereby or thereby or which, in the Agent's sole
      discretion, would make it inadvisable to consummate the transactions
      contemplated by this Agreement or any of the other Loan Documents.

     

    

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

    

    

     

    6.1.12  Insurance
      Policies; Certificates of Insurance; Endorsements.

     

    The
      Loan
      Parties shall have delivered evidence acceptable to the Agent that adequate
      insurance in compliance with Section 7.1.3 [Maintenance of Insurance], together
      with a certified copy of the Loan Parties' casualty insurance policy or policies
      evidencing coverage satisfactory to the Agent, with additional insured,
      mortgagee and lender loss payable special endorsements attached thereto in
      form
      and substance satisfactory to the Agent and its counsel naming the Agent as
      additional insured, mortgagee and lender loss payee.

     

    6.1.13  Intentionally
      omitted.

     

    6.1.14  Repayment
      of Debt.

     

    All
      debt
      listed on Borrower's balance sheet dated September 30, 2004 shall have been
      repaid with the proceeds received by IASG in connection with the Second Lien
      Notes, other than the Convertible Debt and other amounts owed to the
      Bank.

     

    6.1.15
      Second Lien Note Offering.

     

     

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

     

    IASG
      shall successfully complete an offering of the Second Lien Notes and receive
      all
      net cash proceeds in connection therewith.

     

    
      	6.2  	
              On
                the Funding Date.

            

    

     

    On
      or
      prior to the Funding Date, Borrower shall have delivered to Agent (i) updated
      Financial Projections dated as of the most recent fiscal quarter end in form
      and
      substance as set forth in Section 5.1.8(ii), (ii) an executed Landlord's Waiver
      from the lessor for each leased Collateral location, as listed on Schedule
      A to
      the Security Agreement and (iii) copies of policies of key man life insurance
      along with the Collateral Assignment of Life Insurance in respect of $2,000,000
      of such coverage for each of McGinn and Few, along with evidence satisfactory
      to
      the Agent that such policies are in full force and effect and that all premiums
      then due thereon have been paid.

    

     

    
      	6.3  	
              Each
                Additional Loan.

            

    

     

    At
      the
      time of making any Loans and after giving effect to the proposed extensions
      of
      credit: the representations and warranties of the Loan Parties contained in
      Section 5 and in the other Loan Documents shall be true and correct on and
      as of
      the date of such additional Loan with the same effect as though such
      representations and warranties had been made on and as of such date (except
      representations and warranties which expressly relate solely to an earlier
      date
      or time, which representations and warranties shall be true and correct on
      and
      as of the specific dates or times referred to therein) and the Loan Parties
      shall have performed and complied with all covenants and conditions hereof;
      no
      Event of Default or Potential Default shall have occurred and be continuing
      or
      shall exist; the making of the Loans shall not contravene
      any Law applicable to the Loan Parties or any of the Banks; and the Borrower
      shall have delivered to the Agent a duly executed and completed Loan Request.
      

     

    
      	7.  	
              COVENANTS

            

    

     

    
      	7.1  	
              Affirmative
                Covenants.

            

    

     

    Each
      Loan
      Party, jointly and severally, covenants and agrees that until payment in full
      of
      the Loans and interest thereon, satisfaction of all of the Loan Parties' other
      Obligations under the Loan Documents (other than contingent and indemnification
      obligations, which shall survive termination of this Agreement) and termination
      of the Commitments, the Loan Parties shall comply at all times with the
      following affirmative covenants:

     

    7.1.1  Preservation
      of Existence, Etc.

     

    Each
      Loan
      Party shall maintain its current legal existence as a corporation, limited
      partnership or limited liability company and its license or qualification and
      good standing in each jurisdiction in which its ownership or lease of property
      or the nature of its business makes such license or qualification necessary,
      except as otherwise expressly permitted in Section 7.2.6 [Liquidations, Mergers,
      Etc.] and except where failure to do so would not violate any other provision
      of
      this Agreement and cause or constitute a Material Adverse Change.

     

     

    
      
         

      

      
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    7.1.2  Payment
      of Liabilities, Including Taxes, Etc.

     

    Each
      Loan
      Party shall duly pay and discharge all liabilities to which it is subject or
      which are asserted against it, promptly as and when the same shall become due
      and payable, including all taxes, assessments and governmental charges upon
      it
      or any of its properties, assets, income or profits, prior to the date on which
      penalties attach thereto, except to the extent that such liabilities, including
      taxes, assessments or charges, are being contested in good faith and by
      appropriate and lawful proceedings diligently conducted and for which such
      reserve or other appropriate provisions, if any, as shall be required by GAAP
      shall have been made, but only to the extent that failure to discharge any
      such
      liabilities would not in the reasonable judgment of Agent constitute a Material
      Adverse Change; provided that the Loan Parties will pay all such liabilities
      forthwith upon the commencement of proceedings to foreclose any Lien which
      may
      have attached as security therefor.

     

    7.1.3  Maintenance
      of Insurance.

     

    7.1.3.1  Each
      Loan
      Party shall maintain, and cause each of its Subsidiaries to maintain, insurance
      covering its properties and assets against loss or damage by fire and against
      such other insurable hazards as such assets are commonly insured (including
      fire, extended coverage, property damage, workers' compensation, public
      liability and business interruption insurance) and against other risks
      (including errors and omissions) in such amounts as similar properties and
      assets are insured by prudent companies in similar circumstances carrying on
      similar businesses, and with reputable and financially sound insurers, including
      self-insurance to the extent customary. At the request of the Agent, the Loan
      Parties shall deliver to the
      Agent
      and each of the Banks (x) on the Closing Date and annually thereafter an
      original certificate of insurance signed by the Loan Parties' independent
      insurance broker describing and certifying as to the existence of the insurance
      on the Collateral required to be maintained by this Agreement and the other
      Loan
      Documents, together with a copy of the endorsement described in the next
      sentence attached to such certificate and (y) from time to time a summary
      schedule indicating all insurance then in force with respect to the Loan
      Parties. Such policies of insurance shall contain special endorsements, in
      form
      and substance acceptable to the Agent, which shall (i) specify the Agent as
      an
      additional insured, mortgagee and lender loss payee as its interests may appear,
      with the understanding that any obligation imposed upon the insured (including
      the liability to pay premiums) shall be the sole obligation of the Loan Parties
      and not that of the insured, (ii) provide that the interest of the Banks shall
      be insured regardless of any breach or violation by the Loan Parties of any
      warranties, declarations or conditions contained in such policies or any action
      or inaction of the Loan Parties or others insured under such 

     

    
      
         

      

      
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      policies,
        (iii) provide a waiver of any right of the insurers to set off or counterclaim
        or any other deduction, whether by attachment or otherwise, (iv) provide
        that
        any and all rights of subrogation which the insurers may have or acquire
        shall
        be, at all times and in all respects, junior and subordinate to the prior
        payment in full of the Indebtedness hereunder and that no insurer shall exercise
        or assert any right of subrogation until such time as the Indebtedness hereunder
        has been paid in full and the Commitments have terminated, (v) provide, except
        in the case of public liability insurance and worker's compensation insurance,
        that all insurance proceeds for losses of less than $500,000
        shall be
        adjusted with and payable to the Loan Parties and that all insurance proceeds
        for losses of $500,000
        or more
        shall be adjusted with and payable to the Agent, (vi) include effective waivers
        by the insurer of all claims for insurance premiums against the Agent, (vii)
        provide that no cancellation of such policies for any reason (including
        non-payment of premium) nor any change therein shall be effective until at
        least
        thirty (30) days after receipt by the Agent of written notice of such
        cancellation or change, (viii) be primary without right of contribution of
        any
        other insurance carried by or on behalf of any additional insureds with respect
        to their respective interests in the Collateral, and (ix) provide that inasmuch
        as the policy covers more than one insured, all terms, conditions, insuring
        agreements and endorsements (except limits of liability) shall operate as
        if
        there were a separate policy covering each insured. The Loan Parties shall
        notify the Agent promptly of any occurrence causing a material loss or decline
        in value of the Collateral and the estimated (or actual, if available) amount
        of
        such loss or decline. Without limiting the foregoing, the Borrower shall
        have on
        the Funding Date, $2,000,000 key-man insurance policies on each of the lives
        of
        McGinn and Few, which have been collaterally assigned to the Agent pursuant
        to
        the Collateral Assignment of Life Insurance. 

    

     

                7.1.3.2  UNLESS
      THE BORROWER PROVIDES THE AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED
      BY THIS AGREEMENT, THE AGENT MAY PURCHASE INSURANCE AT THE BORROWER'S EXPENSE
      TO
      PROTECT THE AGENT'S AND THE BANKS' INTERESTS IN THE COLLATERAL. THIS INSURANCE
      MAY, BUT NEED NOT, PROTECT THE BORROWERS' INTERESTS. THE COVERAGE THAT THE
      AGENT
      PURCHASES MAY NOT PAY ANY CLAIM THAT IS MADE AGAINST THE BORROWER IN CONNECTION
      WITH THE COLLATERAL. THE BORROWER MAY LATER CANCEL ANY INSURANCE PURCHASED
      BY
      THE AGENT, BUT ONLY AFTER PROVIDING THE AGENT WITH EVIDENCE THAT THE BORROWER
      HAS OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT. IF THE AGENT PURCHASES
      INSURANCE FOR THE COLLATERAL,
      THE BORROWER WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING
      INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED WITH THE PLACEMENT OF THE
      INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE
      INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE PRINCIPAL AMOUNT
      OF
      THE LOANS OWING HEREUNDER. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE
      COST
      OF THE INSURANCE THE BORROWER MAY BE ABLE TO OBTAIN ON ITS OWN.

     

    7.1.4  Maintenance
      of Properties and Leases.

     

    The
      Loan
      Parties shall maintain in good repair, working order and condition (ordinary
      wear and tear excepted) in accordance with the general practice of other
      businesses of similar character and size, all of those properties useful or
      necessary to its business, and from time to time, the Loan Parties will make
      or
      cause to be made all appropriate repairs, renewals or replacements thereof.
      The
      Loan Parties shall have and maintain certification by Underwriters Laboratories,
      Inc. of their central stations as such and shall, upon request, provide the
      Banks with evidence of such certification on the Closing Date.

     

     

    
      
         

      

      
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    7.1.5  Maintenance
      of Patents, Trademarks, Etc.

     

    The
      Loan
      Parties shall maintain in full force and effect all patents, trademarks, service
      marks, trade names, copyrights, licenses, franchises, permits and other
      authorizations necessary for the ownership and operation of its properties
      and
      business if the failure so to maintain the same would constitute a Material
      Adverse Change.

     

    7.1.6  Visitation
      Rights.

     

    Each
      Loan
      Party shall permit any of the officers or authorized employees or
      representatives of the Agent or any of the Banks to visit and inspect, during
      regular business hours, any of its properties and to examine and make excerpts
      from its books and records and discuss its business affairs, finances and
      accounts with its officers, all in such detail and at such times and as often,
      during regular business hours, as the Agent or any of the Banks may reasonably
      request, provided that upon and during the continuance of an Event of Default,
      such inspections and visits shall not be confined to regular business hours.
      

     

    7.1.7  Keeping
      of Records and Books of Account.

     

    The
      Borrower shall maintain and keep its books and records in accordance with sound
      business practices sufficient to enable the Borrower and its Subsidiaries to
      issue financial statements in accordance with GAAP and as otherwise required
      by
      applicable Laws of any Official Body having jurisdiction over the Borrower
      and
      in which full, true and correct entries shall be made in all material respects
      of all their dealings and business and financial affairs.

     

    7.1.8  Plans
      and
      Benefit Arrangements.

     

    Each
      Borrower shall, and shall cause each other member of the ERISA Group to, comply
      with ERISA, the Internal Revenue Code and other applicable Laws applicable
      to
      Plans and
      Benefit Arrangements except where such failure, alone or in conjunction with
      any
      other failure, would not result in a Material Adverse Change. The Borrower
      shall
      cause all of their Plans and all Plans maintained by any member of the ERISA
      Group to be funded in accordance with the minimum funding requirements of ERISA
      and shall make, and cause each member of the ERISA Group to make, in a timely
      manner, all contributions due to Plans, Benefit Arrangements and Multiemployer
      Plans.

     

    7.1.9  Compliance
      with Laws.

     

    Each
      Loan
      Party shall comply with all applicable Laws, provided that it shall not be
      deemed to be a violation of this Section 7.1.9 if any failure to comply with
      any
      Law would not result in fines, penalties, remediation costs, other similar
      liabilities or injunctive relief which in the aggregate would constitute a
      Material Adverse Change. Without limiting the foregoing, each Loan Party shall
      comply with all laws described in Section 5.1.19 [Compliance With
      Laws.]

     

    
      
         

      

      
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    7.1.10  Use
      of
      Proceeds.

     

    The
      Loan
      Parties will use the proceeds of the Loans only (i) for general corporate
      purposes, (ii) to finance the purchase price of the acquisitions of security
      alarm companies and the fees and expenses incurred in connection therewith,
      (iii) to finance acquisitions of wholesale security alarm companies and related
      subscriber accounts or (iv) to finance the acquisition of bulk RMR contracts
      pursuant to the terms and conditions hereof. The Loan Parties shall not use
      the
      proceeds of the Loans for any purpose which contravenes any applicable Law
      or
      any provision hereof.

     

    7.1.11  Further
      Assurances.

     

    Each
      Loan
      Party shall, from time to time, at its expense, faithfully preserve and protect
      the Agent's Lien on and Prior Security Interest in the Collateral as a
      continuing first priority perfected Lien, subject only to Permitted Liens,
      and
      shall do such other acts and things as the Agent may deem necessary or advisable
      from time to time in order to preserve, perfect and protect the Liens granted
      under the Loan Documents.

     

    7.1.12  Intentionally
      Omitted.

     

    7.1.13  Interest
      Rate Hedging.

     

    The
      Loan
      Parties shall enter into on or before sixty (60) days after the date that any
      amount of the Revolving Credit Facility Usage first becomes outstanding,
      Interest Rate Agreements or similar arrangements, in form and substance
      reasonably satisfactory to the Agent, with a term at least equal to the lesser
      of three years or the period remaining (from time to time) until the Expiration
      Date, on an ISDA standard form with one or more Banks or Affiliates thereof
      or
      with counterparties reasonably acceptable to the Agent, to hedge the interest
      rate with respect to not less than fifty percent (50%) of the Revolving Facility
      Usage; the Loan Parties shall continuously maintain such Interest Rate
      Agreements or similar arrangements with respect to met less than fifty percent
      (50%) of the Revolving Facility Usage until the Expiration Date, and any
      extension or renewal thereof.

     

    7.1.14  Operating
      and Lockbox Accounts.

     

    Within
      one
      hundred and twenty (120)
      days
      after the Closing Date, the Loan Parties shall maintain their principal
      operating and cash management accounts (including without limitations, lockbox
      accounts and blocked accounts) at Agent and shall grant to the Agent a security
      interest in such accounts and set off rights with respect to such
      accounts.

     

    7.1.15  Field
      Audits.

     

    The
      Loan
      Parties shall allow the Agent, at the Loan Parties' sole expense, to conduct
      a
      field examination of the accounts, inventory, books and records of the Loan
      Parties after the date hereof and prior to the Funding Date and, in addition,
      two
      (2) such
      field examinations per year
      thereafter so long as no Event of Default exists or is continuing. Upon the
      occurrence and during the continuance of an Event of Default, the Bank may
      conduct such field audits at Bank's sole discretion.

     

    
      
         

      

      
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    7.1.16  Compliance
      with Federal Law - Patriot Act. Borrower shall (a) ensure, and cause
      each
      subsidiary to ensure, that no person who owns a controlling interest in or
      otherwise controls Borrower or any subsidiary is or shall be listed on the
      Specifically Designated Nationals and Blocked Person List or other similar
      lists
      maintained by the Office of Foreign Assets Control ("OFAC"), the Department
      of
      the Treasury or included in any Executive Orders, (b) not use or permit the
      use
      of the proceeds of the Loans to violate any of the foreign asset control
      regulations of OFAC or any enabling statute or Executive Order relating thereto,
      and (c) comply, and cause each subsidiary to comply, with all applicable
      Bank Secrecy Act ("BSA") laws and regulations, as amended. As required by
      federal law and Lender's policies and practices, Lender may need to obtain,
      verify and record certain customer identification information and documentation
      in connection with opening or maintaining accounts, or establishing or
      continuing to provide services.

     

    
      	7.2  	
              Negative
                Covenants.

            

    

     

    Each
      Loan
      Party, jointly and severally, covenants and agrees, that until payment in full
      of the Loans, and interest thereon, satisfaction of all of the Loan Parties'
      other Obligations under the Loan Documents (other than contingent and
      indemnification obligations, which shall survive termination of this Agreement,
      and termination of the Commitments), the Loan Parties shall comply with the
      following negative covenants:

     

    7.2.1  Indebtedness.

     

    The
      Loan
      Parties shall not at any time create, incur, assume or suffer to exist any
      Indebtedness, except:

     

    (i) Indebtedness
      under the Loan Documents;

     

    (ii) Indebtedness
      related to Permitted Liens;

     

    (iii) Trade
      payables and accrued expenses incurred in the ordinary course of business which
      are not represented by a promissory note or other evidence of indebtedness
      and
      which are not the subject of a genuine dispute or are not more than ninety
      (90)
      days past due or, if more than ninety (90) days past due, for which adequate
      reserves in conformity with GAAP have been established on the books of the
      Loan
      Parties.

     

    (iv) Indebtedness
      in respect of any Interest Rate Agreement entered into pursuant to Section
      7.1.13 [Interest Rate Hedging] or in the ordinary course of business and not
      for
      speculative purposes;

     

    (v) Indebtedness
      resulting from a Loan Party's Guaranty of Indebtedness to the extent such
      Indebtedness is otherwise permitted by this Section 7.2.1; 

     

    (vi) Capitalized
      leases; 

     

    (vii) Indebtedness
      existing on the date hereof extended by the Agent to any Loan
      Party;

     

    
      
         

      

      
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    (viii) the
      Subordinated Debt; and

     

    (ix) the
      Convertible Debt.

     

    7.2.2  Liens.

     

    The
      Loan
      Parties shall not at any time create, incur, assume or suffer to exist any
      Lien
      on any of its respective property or assets, tangible or intangible, now owned
      or hereafter acquired, or agree or become liable to do so, except Permitted
      Liens.

     

    7.2.3  Guaranties.

     

    The
      Loan
      Parties shall not at any time, directly or indirectly, become or be liable
      in
      respect of any Guaranty, or assume, guarantee, become surety for, endorse or
      otherwise agree, become or remain directly or contingently liable upon or with
      respect to any obligation or liability of any other Person, except for
      Guaranties of Indebtedness of the Loan Parties to (i) the Banks and (ii) the
      Second Lien Noteholders.

     

    7.2.4  Loans
      and
      Investments.

     

    The
      Loan
      Parties shall not at any time make or suffer to remain outstanding any loan
      or
      advance to, or purchase, acquire or own any stock, bonds, notes or securities
      of, or any partnership interest (whether general or limited) or limited
      liability company interest in, or any other investment or interest in, or make
      any capital contribution to, any other Person, or agree, become or remain liable
      to do any of the foregoing, except:

     

    (i) trade
      credit extended on usual and customary terms in the ordinary course of
      business;

     

    (ii) advances
      to employees to meet routine expenses incurred by such employees in the ordinary
      course of business; 

     

    (iii)  the
      existing Indebtedness of Loan Parties to Protect America, Inc. which is
      guaranteed by Tyco International, Ltd.;

     

    (iv)  the
      existing fifty percent (50%) ownership interest in Everest Video, LLC, a
      Delaware limited liability company; and 

     

    (v) Permitted
      Investments.

     

    7.2.5  Dividends
      and Related Distributions.

     

    The
      Loan
      Parties shall not make or pay, or agree to become or remain liable to make
      or
      pay, any dividend or other distribution of any nature (whether in cash,
      property, securities or otherwise) on account of or in respect of its shares
      of
      capital stock, partnership interests or limited liability company interests,
      including without limitation, distributions on account of the purchase,
      redemption, retirement or acquisition of its shares of capital stock (or
      warrants, options or rights therefor), partnership interests or limited
      liability company interests, except distributions by any Subsidiary of a
      Borrower to a Borrower.

     

    
      
         

      

      
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    7.2.6  Liquidations,
      Mergers, Consolidations, Acquisitions.

     

    Each
      of
      the Loan Parties shall not dissolve, liquidate or wind-up its affairs, or become
      a party to any merger or consolidation, or acquire by purchase, lease or
      otherwise all or substantially all of the assets or capital stock of any other
      Person, provided that 

     

    (1) any
      Loan
      Party other than IASG may consolidate, liquidate or merge into another Loan
      Party, 

     

    (2) a
      Loan
      Party may acquire, whether by purchase or by merger, (A) all of the ownership
      interests of another Person if such Loan Party obtains the prior written consent
      of the Agent with respect to transactions where the total Consideration paid
      for
      such Person to be acquired is $5,000,000.00 or less and the prior written
      consent of the Required Banks for all other transactions, which consent shall
      not be unreasonably withheld, (B) all of the assets of another Person or of
      a
      business or division of another Person or (C) a bulk purchase of Alarm Accounts,
      provided
      that
      each of the following requirements is met (a "Permitted
      Acquisition"):

     

    (i) if
      such
      Loan Party is acquiring the ownership interests in such Person, such Person
      shall execute a joinder to this Agreement as a Loan Party pursuant to Section
      10.18 [Joinder of Guarantors and Borrowers] on or before the date of such
      Permitted Acquisition;

     

    (ii) such
      Loan
      Party, such Person and its owners, as applicable, shall grant Liens in the
      assets of or acquired from, and stock or other ownership interests in, such
      

     

    

    
      
         

      

      
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    Person
      acquired in such acquisition and otherwise comply with Section 10.18 [Joinder
      of
      Borrowers and Guarantors] on or before the date of such Permitted Acquisition;
      

     

    (iii) the
      board
      of directors or other equivalent governing body of such Person shall have
      approved such Permitted Acquisition;

     

    (iv) the
      business acquired or the business conducted by the Person whose ownership
      interests are being acquired shall be substantially the same as one or more
      line
      or lines of business conducted by the Loan Parties and, after giving effect
      to
      such Permitted Acquisition, the Loan Parties shall still comply with Section
      7.2.10 [Continuation of or Change in Business];

     

    (v) no
      Potential Default or Event of Default shall exist immediately prior to and
      after
      giving effect to such Permitted Acquisition;

     

    (vi) the
      Loan
      Parties shall demonstrate that they shall be in compliance with all loan
      covenants contained in Section 7 [Covenants] based upon calculations as of
      the
      end of the most recent period for which certificates under Section 7.3.3
      [Certificate of the Borrower] shall have been delivered and with the covenant
      contained in Section 7.2.18 [Availability Requirement] calculated as of the
      date
      of the acquisition, all giving effect to such Permitted Acquisition on a
      consolidated pro forma basis (including in such 

     

    
      
         

      

      
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      computation
        Indebtedness or other liabilities assumed or incurred in connection with
        such
        Permitted Acquisition and including RMR, but excluding income earned or expenses
        incurred by the Person, business or assets to be acquired prior to the date
        of
        such Permitted Acquisition) by delivering at least five (5) Business Days
        prior
        to such Permitted Acquisition a certificate in the form of Exhibit
        7.2.6
        evidencing such compliance;

    

     

    (vii) the
      Consideration paid by the Loan Parties for any one Permitted Acquisition shall
      not exceed $5,000,000.00 and the aggregate of the Consideration paid by the
      Loan
      Parties for all Permitted Acquisitions (other than as permitted by Sections
      7.2.6(3) and 7.2.6(4)) made in any twelve month period shall not exceed
      $15,000,000.00;

     

    (viii) the
      Loan
      Parties shall have collaterally assigned (or caused to be assigned) to the
      Agent
      the non-compete agreements and restrictive covenants arising out of or delivered
      in connection with such Permitted Acquisition (and the consent of the person
      bound thereby shall either have been obtained or shall not be required) and
      any
      seller notes or right to receive deferred payments or retain holdback,
      contingent payments or purchase price adjustments shall have been subordinated
      to the Loans on terms acceptable to the Agent; 

     

    (ix) the
      Loan
      Parties shall deliver to the Agent, at least five (5) Business Days before
      such
      Permitted Acquisition, copies of any agreements entered into or proposed to
      be
      entered into by such Loan Parties in connection with such Permitted Acquisition
      and shall deliver to the Agent such other information about such Person or
      its
      assets as any Loan Party may reasonably require; 

     

    (x) the
      assets acquired must consist of subscriber contracts made in the ordinary course
      of business; 

     

    (xi) the
      key
      employees of the target shall have entered into five (5) year Non-compete
      Agreements; and 

     

    (xii) in
      the
      case of 7.2.6(2) (B) and (C) above, all such assets or accounts purchased must
      be free and clear of any and all liens or encumbrances at the time of such
      acquisition, and

     

    (3) Permitted
      Acquisitions shall also include such other acquisitions or RMR purchase
      transactions involving the business described in Section 7.2.10 as may be
      approved by the Agent in its sole discretion based on the criteria set forth
      on
      Schedule 7.2.6 (3) hereto.

     

    7.2.7  Dispositions
      of Assets or Subsidiaries.

     

    Each
      of
      the Loan Parties shall not sell, convey, assign, lease, abandon or otherwise
      transfer or dispose of, voluntarily or involuntarily, any of its properties
      or
      assets, tangible or intangible (including sale, assignment, discount or other
      disposition of accounts, contract rights, chattel paper, equipment or general
      intangibles with or without recourse or of capital stock, shares of beneficial
      interest, partnership interests or limited liability company interests of a
      Subsidiary of a Loan Party), except:

     

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

     

    (i) transactions
      involving the sale of inventory in the ordinary course of business;

     

    (ii) any
      sale,
      transfer or lease in the ordinary course of business of assets which are no
      longer necessary or required in the conduct of a Loan Party or such Subsidiary?s
      business;

     

    (iii) any
      sale,
      transfer or lease in the ordinary course of business of assets which are
      replaced by substitute assets acquired, provided such substitute assets are
      subject to the Banks? Prior Security Interest; 

     

    (iv) the
      sale
      of other assets so long as the aggregate amount of after-tax proceeds from
      sales
      pursuant to this clause (iv) does not exceed $500,000.00
      in any
      one fiscal year;

     

    (v) any
      sale,
      transfer or lease of assets, other than those specifically excepted pursuant
      to
      clauses (i) through (iv) above, which is approved in advance by Agent so long
      as
      the after-tax proceeds (as demonstrated by the Loan Parties) are applied in
      accordance with the provisions of Section 4.5.1 [Sale of Assets]
      above.

     

    7.2.8  Affiliate
      Transactions.

     

    The
      Loan
      Parties shall not enter into or carry out any transaction with any Affiliate
      of
      any Loan Party (including purchasing property or services from or selling
      property or services
      to) except for: transactions not otherwise prohibited by this Agreement and
      entered into in the ordinary course of business upon fair and reasonable
      arm?s-length terms and conditions, in accordance with all applicable Law, and
      after the terms of which have been fully disclosed in writing to Agent in form
      and substance satisfactory to Agent.

     

    7.2.9  Subsidiaries,
      Partnerships and Joint Ventures.

     

    The
      Loan
      Parties shall not own or create directly or indirectly any Subsidiaries except
      after thirty (30) days prior written notice to Agent and, in all events,
      provided that such Subsidiary shall, on the date of formation, become a Borrower
      or Guarantor hereunder pursuant to Section 10.18 and, together with
      the
      other Loan Parties as necessary, shall grant to and cause to be perfected a
      Prior Security Interest in favor of the Agent for the benefit of the Banks
      in
      the assets held by, and stock of or other ownership interests in, such
      Subsidiary. Each Loan Party shall not become or agree to become (i) a general
      or
      limited partner in any general or limited partnership, (ii) a member or manager
      of, or hold a limited liability company interest in, a limited liability company
      which is not a Loan Party, or (iii) a joint venturer or hold a joint venture
      interest in any joint venture. In all events, IASG shall not own, acquire or
      create any direct Subsidiaries other than a Borrower or Guarantor and shall
      conduct no business other than owning Subsidiaries which have become Borrowers
      or Guarantors hereunder. The Loan Parties shall not permit any material amount
      of the business of the Loan Parties described in Section 7.2.10
      [Continuation if or Change in Business] to be conducted by any Affiliate other
      than a Borrower.

     

     

    
      
         

      

      
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    7.2.10  Continuation
      of or Change in Business.

     

    The
      Loan
      Parties shall not engage in any business other than as described in
      Section 5.1.28 [Regarding Borrowers] and the Loan Parties shall not
      permit
      any material change in such business.

     

    7.2.11  Plans
      and
      Benefit Arrangements.

     

    The
      Loan
      Parties shall not:

     

    (i) fail
      to
      satisfy the minimum funding requirements of ERISA and the Internal Revenue
      Code
      with respect to any Plan;

     

    (ii) request
      a
      minimum funding waiver from the United States Internal Revenue Service (?IRS?)
      with respect to any Plan;

     

    (iii) engage
      in
      a Prohibited Transaction with any Plan, Benefit Arrangement or Multiemployer
      Plan which, alone or in conjunction with any other circumstances or set of
      circumstances resulting in liability under ERISA, would constitute a Material
      Adverse Change;

     

    (iv) permit
      the aggregate actuarial present value of all benefit liabilities (whether or
      not
      vested) under each Plan, determined on a plan termination basis, as disclosed
      in
      the most recent actuarial report completed with respect to such Plan, to exceed,
      as of any actuarial valuation date, the fair market value of the assets of
      such
      Plan;

     

    (v) fail
      to
      make when due any contribution to any Multiemployer Plan that the Borrower
      or
      any member of the ERISA Group may be required to make under any agreement
      relating to such Multiemployer Plan, or any Law pertaining thereto;

     

    (vi) withdraw
      (completely or partially) from any Multiemployer Plan or withdraw (or be deemed
      under Section 4062(e) of ERISA to withdraw) from any Multiple Employer Plan,
      where any such withdrawal is likely to result in a material liability of the
      Borrower or any member of the ERISA Group;

     

    (vii) terminate,
      or institute proceedings to terminate, any Plan, where such termination is
      likely to result in a material liability to the Borrower or any member of the
      ERISA Group;

     

    (viii) make
      any
      amendment to any Plan with respect to which security is required under Section
      307 of ERISA; or

     

    (ix) fail
      to
      give any and all notices and make all disclosures and governmental filings
      required under ERISA or the Internal Revenue Code, where such failure is likely
      to result in a Material Adverse Change. 

     

     

    
      
         

      

      
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    7.2.12  Fiscal
      Year.

     

    The
      Loan
      Parties shall not change their fiscal year from the twelve-month period ending
      December 31.

     

    7.2.13  Issuance
      of Stock.

     

    After
      the
      occurrence of and during the continuance of an Event of Default, the Loan
      Parties shall not issue any additional shares of its capital stock or LLC
      Interests or any options, warrants or other rights in respect thereof except
      for
      such as is pledged to the Agent as Collateral or pursuant to any warrants
      described in Schedule
      5.1.2.
      Further, both before and after such issuance, the Loan Parties must be in
      compliance with all of the terms and conditions hereof and the use of proceeds
      of such issuance must not deviate from the business purposes as set forth in
      Section 5.1.28 hereof. 

     

    7.2.14  Changes
      in Documents.

     

    The
      Loan
      Parties shall not amend in any respect their respective certificate of
      incorporation (including any provisions or resolutions relating to capital
      stock), by-laws, certificate of limited partnership, partnership agreement,
      certificate of formation or organization, limited liability company agreement
      or
      other organizational documents without providing at least thirty (30) calendar
      days? prior written notice to the Agent and the Banks and, in the event such
      change would be adverse to the Banks as determined by the Agent in its sole
      discretion, obtaining the prior written consent of the Agent.

     

    7.2.15  Minimum
      Fixed Charge Coverage Ratio.

     

    At
      all
      times hereunder and measured monthly, the Loan Parties shall not permit the
      Fixed Charge Coverage Ratio to be less than 2.0 to 1.0.

     

    7.2.16  Intentionally
      Omitted.

     

    7.2.17  Senior
      Revolving Debt to Eligible RMR. 

     

    At
      all
      times hereunder and measured monthly, the Loan Parties shall not permit the
      Senior Revolving Debt to be greater than ten times (10x) Eligible
      RMR.

     

    7.2.18  Availability
      Requirement.

     

    The
      Loan
      Parties shall not permit Revolving Facility Usage to exceed Maximum
      Availability.

     

    
      	7.3  	
              Reporting
                Requirements.

            

    

     

    The
      Loan
      Parties covenant and agree that until payment in full of the Loans, and interest
      thereon, and termination of the Commitments, the Loan Parties will furnish
      or
      cause to be furnished to the Agent and each of the Banks:

     

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

    7.3.1  Monthly
      Financial Statements.

     

    As
      soon
      as available and in any event within thirty (30) calendar days after the end
      of
      each calendar month commencing with the month in which the Closing Date occurs,
      consolidated financial statements of the Borrower, consisting of a consolidated
      balance sheet as of the end of such month and related consolidated statements
      of
      income, stockholders? equity and cash flows for the month then ended and the
      fiscal year through that date, all in reasonable detail and certified (subject
      to footnote disclosures and year-end adjustments) by the Chief Executive
      Officer, President or Chief Financial Officer of Borrower as having been
      prepared in accordance with GAAP, consistently applied, and, on a quarterly
      basis, setting forth in comparative form the respective financial statements
      for
      the corresponding date and period in the previous fiscal year, together with
      a
      comparison of such results against the Financial Projections.

     

    7.3.2  Annual
      Financial Statements.

     

    As
      soon
      as available and in any event within one hundred twenty (120) days after the
      end
      of each fiscal year (commencing with the period ending December 31, 2004) of
      IASG, audited financial statements of Borrower consisting of a consolidated
      and,
      upon Agent's request, consolidating balance sheet as of the end of such fiscal
      year, and related consolidated and consolidating statements of income,
      stockholders' and members' equity and cash flows for the fiscal year then ended,
      all in reasonable detail and setting forth in comparative form the financial
      statements as of the end of and for the preceding fiscal year, and certified
      by
      independent certified public accountants of nationally recognized standing
      satisfactory to the Agent. The certificate
      or report of accountants shall be free of qualifications (other than any
      consistency qualification that may result from a change in the method used
      to
      prepare the financial statements as to which such accountants concur) and shall
      not indicate the occurrence or existence of any event, condition or contingency
      which would impair the prospect of payment or performance of any covenant,
      agreement or duty of the Loan Parties under any of the Loan Documents. The
      Loan
      Parties shall deliver with such financial statements and certification by their
      accountants a letter of such accountants to the Agent and the Banks
      substantially (i) to the effect that, based upon their ordinary and customary
      examination of the affairs of the Borrower, performed in connection with the
      preparation of such consolidated financial statements, and in accordance with
      generally accepted auditing standards, they are not aware of the existence
      of
      any condition or event which constitutes an Event of Default or Potential
      Default insofar as they relate to accounting matters or, if they are aware
      of
      such condition or event, stating the nature thereof and confirming the
      Borrower's calculations with respect to the certificate to be delivered pursuant
      to Section 7.3.3 [Certificate of the Borrower] with respect to such financial
      statements and (ii) to the effect that the Banks are intended to rely upon
      such
      accountant's certification of the annual financial statements and that such
      accountants authorize the Loan Parties to deliver such reports and certificate
      to the Banks on such accountants' behalf.

     

    7.3.3  Certificate
      of the Borrower.

     

    (i) Concurrently
      with the financial statements of the Borrower furnished to the Agent and to
      the
      Banks pursuant to Sections 7.3.1 [Monthly Financial Statements] and 7.3.2
      [Annual Financial Statements], a certificate of the Borrower signed by the
      Chief
      Executive Officer, President or Chief Financial Officer of Borrower, in the
      form
      of Exhibit
      7.3.3
      (the
      "Compliance Certificate"), to the effect that, except as described pursuant
      to
      Section 7.3.5 [Notice of Default], (a) the representations and warranties of
      the
      Borrower 

     

     

    
      
         

      

      
        56

        
          

        

      

      
         

      

       

      contained
        in Section 5 and in the other Loan Documents are true on and as of the date
        of
        such certificate in all material respects with the same effect as though
        such
        representations and warranties had been made on and as of such date (except
        representations and warranties which expressly relate solely to an earlier
        date
        or time) and the Loan Parties have performed and complied with all covenants
        and
        conditions hereof, and (b) no Event of Default or Potential Default exists
        and
        is continuing on the date of such certificate, and such certificate shall
        contain calculations in sufficient detail to demonstrate compliance as of
        the
        date of such financial statements with all financial covenants contained
        in
        Section 7.2 [Negative Covenants]. Without limiting in any way Borrower's
        obligation to retain records for any other purpose, Borrower shall archive
        and
        maintain all RMR data upon which all monthly reports hereunder are based,
        organizing the data in a manner corresponding to such
        reports.

    

     

    (ii) With
      each
      such Compliance Certificate, the Loan Parties shall deliver reports of monthly
      cash collections in respect of Alarm Contracts and monthly billings in respect
      of Alarm Contracts.

     

    (iii) With
      each
      such Compliance Certificate, the Loan Parties shall deliver RMR roll forward
      reports.

     

    (iv)
       With
      each
      such Compliance Certificate, the Loan Parties shall deliver an accounts
      receivable aging summary report.

     

    (v) Attached
      to the Compliance Certificate submitted on a quarterly basis shall be an updated
      Schedule A to the Collateral Assignment of Contract Rights and Schedule A to
      the
      Collateral Assignment of Telephone Numbers and such Schedules to this Agreement
      or the other Loan Documents as, by changes in circumstances, become materially
      incorrect, incomplete or misleading.

     

    (vi) With
      each
      such Compliance Certificate, the Loan Parties hereby agree to deliver a schedule
      consisting of the following items with respect to all Permitted Acquisitions
      completed during the term hereof: the amount of the purchase price, the purchase
      multiple, RMR purchased, any holdback percentage, any holdback amount and the
      holdback funds paid out, if any.

     

    7.3.4  Borrowing
      Base Certificate.

     

    IASG,
      on
      behalf of all Borrowers, shall deliver a consolidated and consolidating
      Borrowing Base Certificate to the Agent and the Banks on each of the following
      dates:

     

    (i) at
      the
      request of the Agent;

     

    (ii) as
      soon
      as practical, but in no event later than 30 calendar days from the end of each
      calendar month if the Revolving Facility Usage is less than 97.5% of the Maximum
      Availability as of the end of such calendar month;

     

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

     

    (iii) if
      any
      determination has been made that the Revolving Facility Usage equals or exceeds
      97.5% of the Maximum Availability, then with each Loan Request; and

     

    (iv) with
      each
      Permitted Acquisition.

     

    7.3.5  Notice
      of
      Default.

     

    Promptly
      after any officer of any Loan Party has learned of the occurrence of an Event
      of
      Default or Potential Default, a certificate signed by the Chief Executive
      Officer, President or Chief Financial Officer of the Borrower setting forth
      the
      details of such Event of Default or Potential Default and the action which
      each
      Loan Party proposes to take with respect thereto.

     

    7.3.6  Notice
      of
      Litigation.

     

    Promptly
      after any Officer of any Loan Party has learned thereof, notice of all actions,
      suits, proceedings or investigations before or by any Official Body or any
      other
      Person against the Loan Parties or any Subsidiary of any Loan Party which relate
      to the Collateral, involve a claim or series of claims in excess of $100,000
      or which
      if adversely determined would constitute a Material Adverse Change.

     

    
    

    7.3.7  Certain
      Events.

     

    Written
      notice to the Agent:

     

    (i) at
      least
      thirty (30) calendar days prior thereto, with respect to any proposed sale
      or
      transfer of assets pursuant to Section 7.2.7 (v) [Dispositions of Assets or
      Subsidiaries];

     

    (ii) within
      the time limits set forth in Section 7.2.14 [Changes in Organizational
      Documents], any amendment to the organizational documents of any Loan
      Party;

     

    (iii) at
      least
      thirty (30) calendar days prior thereto, with respect to any change in any
      Loan
      Parties' locations from the locations set forth in Schedule A to the Security
      Agreement; and

     

    (iv) immediately
      upon the occurrence of any material loss or depreciation in the value of the
      Collateral, and such notice shall specify the amount of such loss or
      depreciation to the extent practicable.

     

    7.3.8  Budgets,
      Forecasts, Other Reports and Information.

     

    (i) the
      consolidated final annual budget and any forecasts or projections of the
      Borrower, to be supplied not later than sixty (60) days after the commencement
      of the fiscal year to which any of the foregoing may be applicable;
      and

     

    (ii) promptly
      upon their becoming available to the Borrower:

     

    
      
         

      

      
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    (A) any
      final
      reports including management letters submitted to the Borrower by independent
      accountants in connection with any annual, interim or special
      audit,

     

    (B) any
      final
      reports, notices or proxy statements generally distributed by IASG to its
      stockholders on a date no later than the date supplied to such stockholders
      (if
      such documents are not readily available on the EDGAR online
      service),

     

    (C)
       regular
      or periodic reports, including Forms 10-K, 10-Q and 8-K, registration statements
      and prospectuses, if any, filed by IASG with the Securities and Exchange
      Commission (if such documents are not readily available on the EDGAR online
      service),

     

    (D) a
      copy of
      any order in any proceeding to which the Borrower or any of its Subsidiaries
      is
      a party issued by any Official Body which would cause or constitute a Material
      Adverse Change, and

     

    (E) such
      other reports and information as any of the Banks may from time to time
      reasonably request. The Borrower shall also notify the Banks promptly upon
      the
      Borrower's becoming aware of the enactment or adoption of any Law which would
      cause or constitute a Material Adverse Change.

     

    7.3.9  Notices
      Regarding Plans and Benefit Arrangements.

     

    7.3.9.1  Certain
      Events.

     

    Promptly
      upon becoming aware of the occurrence thereof, notice (including the nature
      of
      the event and, when known, any action taken or threatened by the IRS or the
      PBGC
      with respect thereto) of:

     

    (i) any
      Reportable Event with respect to the Borrower or any other member of the ERISA
      Group (regardless of whether the obligation to report said Reportable Event
      to
      the PBGC has been waived),

     

    (ii) any
      Prohibited Transaction which could subject the Borrower or any other member
      of
      the ERISA Group to a material civil penalty assessed pursuant to Section 502(i)
      of ERISA or a material tax imposed by Section 4975 of the Internal Revenue
      Code
      in connection with any Plan, any Benefit Arrangement or any trust created
      thereunder,

     

    (iii) any
      assertion of material withdrawal liability with respect to any Multiemployer
      Plan,

     

    (iv) any
      partial or complete withdrawal from a Multiemployer Plan by the Borrower or
      any
      other member of the ERISA Group under Title IV of ERISA (or assertion thereof),
      where such withdrawal is likely to result in material withdrawal
      liability,

     

    (v) any
      cessation of operations (by the Borrower or any other member of the ERISA Group)
      at a facility in the circumstances described in Section 4062(e) of
      ERISA,

     

    
      
         

      

      
        59

        
          

        

      

      
         

      

    

     

    (vi) withdrawal
      by the Borrower or any other member of the ERISA Group from a Multiple Employer
      Plan,

     

    (vii) a
      failure
      by the Borrower or any other member of the ERISA Group to make a payment to
      a
      Plan required to avoid imposition of a Lien under Section 302(f) of
      ERISA,

     

    (viii) the
      adoption of an amendment to a Plan requiring the provision of security to such
      Plan pursuant to Section 307 of ERISA, or

     

    (ix) any
      change in the actuarial assumptions or funding methods used for any Plan, where
      the effect of such change is to materially increase or materially reduce the
      unfunded benefit liability or obligation to make periodic
      contributions.

     

    7.3.9.2  Notices
      of Involuntary Termination and Annual Reports.

     

    Promptly
      after receipt thereof, copies of (a) all notices received by the Borrower or
      any
      other member of the ERISA Group of the PBGC's intent to terminate any Plan
      administered or maintained by the Borrower or any member of the ERISA Group,
      or
      to have a trustee
      appointed to administer any such Plan; and (b) at the request of the Agent
      or
      any Bank each annual report (IRS Form 5500 series) and all accompanying
      schedules, the most recent actuarial reports and the most recent financial
      information concerning the financial status of each Plan administered or
      maintained by the Borrower or any other member of the ERISA Group, and schedules
      showing the amounts contributed to each such Plan by or on behalf of the
      Borrower or any other member of the ERISA Group in which any of their personnel
      participate or from which such personnel may derive a benefit, and each Schedule
      B (Actuarial Information) to the annual report filed by the Borrower or any
      other member of the ERISA Group with the IRS with respect to each such
      Plan.

     

    7.3.9.3  Notice
      of
      Voluntary Termination.

     

    Promptly
      upon the filing thereof, copies of any Form 500 or 600, or any successor or
      equivalent form to Forms 500 or 600, filed with the PBGC in connection with
      the
      termination of any Plan.

     

    
      	8.  	
              DEFAULT 

            

    

     

    
      	8.1  	
              Events
                of Default.

            

    

     

    An
      Event
      of Default shall mean the occurrence or existence of any one or more of the
      following events or conditions (whatever the reason therefor and whether
      voluntary, involuntary or effected by operation of Law):

     

    8.1.1  Payments
      Under Loan Documents.

     

    The
      Borrower shall fail to pay (i) any principal of or interest on any Loan
      (including scheduled installments, mandatory prepayments or the payment due
      at
      maturity), when such principal or interest becomes due or (ii) shall fail to
      pay
      any other amount owing hereunder or under the other Loan Documents after such
      other amount becomes due in accordance with the terms hereof or
      thereof;

     

    
      
         

      

      
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    8.1.2  Breach
      of
      Warranty.

     

    Any
      representation or warranty made at any time by the Loan Parties herein or by
      the
      Loan Parties in any other Loan Document, or in any certificate, other instrument
      or statement furnished pursuant to the provisions hereof or thereof, shall
      prove
      to have been false or misleading as of the time it was made or
      furnished;

     

    8.1.3  Breach
      of
      Certain Covenants or Visitation Rights.

     

    Any
      of
      the Loan Parties shall default in the observance or performance of any covenant
      contained in Section 7.1.6 [Visitation Rights] or contained in Section 7.2,
      or
      contained in Sections 7.3.1 through 7.3.4.

     

    8.1.4  Breach
      of
      Other Covenants.

     

    Any
      of
      the Loan Parties shall default in the observance or performance of any other
      covenant, condition or provision hereof or of any other Loan Document, and
      any
      of the foregoing defaults shall continue unremedied for a period of thirty
      (30)
      calendar
      days (such grace period to be applicable only in the event such default can
      be
      remedied by corrective action of the Loan Parties during such time period as
      determined by the Agent in its sole discretion);

     

    8.1.5  Defaults
      in Other Agreements or Indebtedness.

     

    A
      default
      or event of default shall occur at any time under the terms of any other
      agreement involving borrowed money or the extension of credit or any other
      Indebtedness under which any Loan Party may be obligated as a borrower or
      guarantor in excess of $250,000
      in the
      aggregate or any default or event of default by a Loan Party at any time under
      the terms of the Second Lien Notes, and such breach, default or event of default
      consists of the failure to pay (beyond any period of grace permitted with
      respect thereto) any Indebtedness when due (whether at stated maturity, by
      acceleration or otherwise) or if such breach or default permits or causes the
      acceleration of any Indebtedness (whether or not such right shall have been
      waived) or the termination of any commitment to lend;

     

    8.1.6  Final
      Judgments or Orders.

     

    Any
      final
      judgments or orders for the payment of money in excess of $250,000 in
      the
      aggregate shall be entered against any Loan Party by a court having jurisdiction
      in the premises, which judgment is not discharged, vacated, bonded or stayed
      pending appeal within a period of sixty (60) days from the date of
      entry;

     

    
      
         

      

      
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    8.1.7  Loan
      Document Unenforceable.

     

    Any
      of
      the Loan Documents shall cease to be legal, valid and binding agreements
      enforceable against the party executing the same or such party's successors
      and
      assigns (as permitted under the Loan Documents) in accordance with the
      respective terms thereof or shall in any way be terminated (except in accordance
      with its terms) or become or be declared ineffective or inoperative or shall
      in
      any way be challenged or contested or cease to give or provide the respective
      Liens, security interests, rights, titles, interests, remedies, powers or
      privileges intended to be created thereby;

     

    8.1.8  Uninsured
      Losses; Proceedings Against Assets.

     

    There
      shall occur any uninsured damage to or loss, theft or destruction of any of
      the
      Collateral in excess of $100,000
      or the
      Collateral or any other of any Loan Party or any of its Subsidiaries' assets
      are
      attached, seized, levied upon or subjected to a writ or distress warrant; or
      such come within the possession of any receiver, trustee, custodian or assignee
      for the benefit of creditors and the same is not cured within thirty (30) days
      thereafter;

     

    8.1.9  Notice
      of
      Lien or Assessment.

     

    A
      notice
      of Lien or assessment in excess of $100,000
      which is
      not a Permitted Lien is filed of record with respect to all or any part of
      any
      Loan Party's or any of its Subsidiaries' assets by the United States, or any
      department, agency or instrumentality thereof, or by any state, county,
      municipal or other governmental agency, including the PBGC, or any taxes or
      debts owing at any time or times hereafter to any one of these becomes payable
      and the same is not paid within thirty (30) days after the same becomes
      payable;

     

    8.1.10  Insolvency.

     

    Any
      Loan
      Party ceases to be solvent or becomes unable, admits in writing its inability
      to, or fails to pay its debts as they mature;

     

    8.1.11  Events
      Relating to Plans and Benefit Arrangements.

     

    Any
      of
      the following occurs: (i) any Reportable Event, which the Agent reasonably
      determines constitutes grounds for the termination of any Plan by the PBGC
      or
      the appointment of a trustee to administer or liquidate any Plan, shall have
      occurred and be continuing; (ii) proceedings shall have been instituted or
      other
      action taken to terminate any Plan, or a termination notice shall have been
      filed with respect to any Plan; (iii) a trustee shall be appointed to administer
      or liquidate any Plan; (iv) the PBGC shall give notice of its intent to
      institute proceedings to terminate any Plan or Plans or to appoint a trustee
      to
      administer or liquidate any Plan; and, in the case of the occurrence of (i),
      (ii), (iii) or (iv) above, the Agent reasonably determines that the amount
      of
      the Borrower's liability is likely to exceed 10% of their consolidated tangible
      net worth (as determined according to GAAP); (v) the Borrower or any member
      of
      the ERISA Group shall fail to make any contributions when due to a Plan or
      a
      Multiemployer Plan; (vi) the Borrower or any other member of the ERISA Group
      shall make any amendment to a Plan with respect to which security is required
      under Section 307 of ERISA; (vii) the Borrower or any other member of the ERISA
      Group shall withdraw completely or partially from a Multiemployer Plan; (viii)
      the Borrower or any other member of the ERISA Group shall withdraw (or shall
      be
      deemed under Section 4062(e) of ERISA to withdraw) from a Multiple Employer
      Plan; or (ix) any applicable Law is adopted, changed or interpreted by any
      Official Body with respect to or otherwise affecting one or more Plans,
      Multiemployer Plans or Benefit Arrangements and, with respect to any of the
      events specified in (v), (vi), (vii), (viii) or (ix), the Agent reasonably
      determines that any such occurrence would be reasonably likely to affect the
      total enterprise represented by the Borrower and the other members of the ERISA
      Group in such a manner as to constitute a Material Adverse Change;

     

    
      
         

      

      
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    8.1.12  Cessation
      of Business.

     

    Any
      Loan
      Party ceases to conduct its business as contemplated by Section 7.2.10, except
      as expressly permitted under Section 7.2.6 [Liquidations, Mergers, Etc.] or
      7.2.7 [Dispositions of Assets], or any Loan Party is enjoined, restrained or
      in
      any way prevented by court order from conducting all or any part of its business
      and such injunction, restraint or other preventive order is not dismissed within
      thirty (30) days after the entry thereof;

     

    8.1.13  Change
      of
      Control.

     

    A. The
      ownership of capital stock and debt instruments, or the capital structure of
      IASG's Subsidiaries shall cease to be as set forth in Schedule
      5.1.2;

     

    B. IASG
      shall cease to own 100% of the Shares of any Guarantor or any Subsidiary
      Borrower, except in the case of Monital;

     

    C. IASG
      shall cease to own 99.2% of the Shares of Monital;

     

    D. The
      employment of McGinn or Few terminates, voluntarily or involuntarily, for any
      reason, or materially changes.

     

    8.1.14   Involuntary
      Proceedings.

     

    A
      proceeding shall have been instituted in a court having jurisdiction in the
      premises seeking a decree or order for relief in respect of any Loan Party
      in an
      involuntary case under any applicable bankruptcy, insolvency, reorganization
      or
      other similar law now or hereafter in effect, or for the appointment of a
      receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
      (or similar official) of any Loan Party for any substantial part of its
      property, or for the winding-up or liquidation of its affairs, and such
      proceeding shall remain undismissed or unstayed and in effect for a period
      of
      thirty (30) days or such court shall enter a decree or order granting any of
      the
      relief sought in such proceeding; or

     

    8.1.15  Voluntary
      Proceedings.

     

    Any
      Loan
      Party shall commence a voluntary case under any applicable bankruptcy,
      insolvency, reorganization or other similar law now or hereafter in effect,
      shall consent to the entry of an order for relief in an involuntary case under
      any such law, or shall consent to the appointment or taking possession by a
      receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
      (or other similar official) of itself or for any substantial part of its
      property or shall make a general assignment for the benefit of creditors, or
      shall fail generally to pay its debts as they become due, or shall take any
      action in furtherance of any of the foregoing.

     

    
      
         

      

      
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      	8.2  	
              Consequences
                of Event of Default.

            

    

     

    8.2.1  Events
      of
      Default Other Than Bankruptcy, Insolvency or Reorganization
      Proceedings.

     

    If
      an
      Event of Default specified under Sections 8.1.1 through 8.1.13 shall occur
      and
      be continuing, the Banks and the Agent shall be under no further obligation
      to
      make Loans, and the Agent may, and upon the request of a majority of the Banks
      shall, by written notice to the Borrower, declare the entire unpaid principal
      balance of the Notes then outstanding and all interest accrued thereon, any
      unpaid fees and all other Indebtedness of the Borrower to the Banks hereunder
      and thereunder to be forthwith due and payable, and the same shall thereupon
      become and
      be
      immediately due and payable to the Agent for the benefit of each Bank without
      presentment, demand, protest or any other notice of any kind, all of which
      are
      hereby expressly waived. 

     

    8.2.2  Bankruptcy,
      Insolvency or Reorganization Proceedings.

     

    If
      an
      Event of Default specified under Section 8.1.14 [Involuntary Proceedings] or
      8.1.15 [Voluntary Proceedings] shall occur, the Banks shall be under no further
      obligations to make Loans hereunder and the unpaid principal balance of the
      Loans then outstanding and all interest accrued thereon, any unpaid fees and
      all
      other Indebtedness of the Borrower to the Banks hereunder and thereunder shall
      be immediately due and payable, without presentment, demand, protest or notice
      of any kind, all of which are hereby expressly waived; and

     

    8.2.3  Set-off.

     

    If
      an
      Event of Default shall occur and be continuing, any Bank to whom any Obligation
      is owed by the Loan Parties hereunder or under any other Loan Document or any
      participant of such Bank which has agreed in writing to be bound by the
      provisions of Section 9.13 [Equalization of Banks] and any branch, Subsidiary,
      assignee or Affiliate of such Bank or participant anywhere in the world shall
      have the right, in addition to all other rights and remedies available to it,
      without notice to such Loan Party, to set-off against and apply to the then
      unpaid balance of all the Loans and all other Obligations of the Borrower
      hereunder or under any other Loan Document any debt owing to, and any other
      funds held in any manner for the account of, any Loan Party by such Bank or
      participant or by such branch, Subsidiary, assignee or Affiliate, including
      all
      funds in all deposit accounts (whether time or demand, general or special,
      provisionally credited or finally credited, or otherwise) now or hereafter
      maintained by any or such other Loan Party for its own account (but not
      including funds held in custodian or trust accounts) with such Bank or
      participant or such branch, Subsidiary, assignee or Affiliate. Such right shall
      exist whether or not any Bank or the Agent shall have made any demand under
      this
      Agreement or any other Loan Document, whether or not such debt owing to or
      funds
      held for the account of any Loan Party is or are matured or unmatured and
      regardless of the existence or adequacy of any Collateral, Guaranty or any
      other
      security, right or remedy available to any Bank or the Agent; and

     

    
      
         

      

      
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    8.2.4  Suits,
      Actions, Proceedings.

     

    If
      an
      Event of Default shall occur and be continuing, and whether or not the Agent
      shall have accelerated the maturity of Loans pursuant to any of the foregoing
      provisions of this Section 8.2, the Agent or any Bank, if owed any amount with
      respect to the Loans, may proceed to protect and enforce its rights by suit
      in
      equity, action at law and/or other appropriate proceeding, whether for the
      specific performance of any covenant or agreement contained in this Agreement
      or
      the other Loan Documents and, if such amount shall have become due, by
      declaration or otherwise, proceed to enforce the payment thereof or any other
      legal or equitable right of the Agent or such Bank; and

     

    
    

    8.2.5  Application
      of Proceeds.

     

    From
      and
      after the date on which the Agent has taken any action pursuant to this Section
      8.2 and until all Obligations of the Loan Parties have been paid in full, any
      and all proceeds received by the Agent or any Bank from any sale or other
      disposition of the Collateral, or any part thereof, or the exercise of any
      other
      remedy by the Agent, shall be applied as follows:

     

    (i) first,
      to
      reimburse the Agent and the Banks for reasonable out-of-pocket costs, expenses
      and disbursements, including reasonable attorneys' and paralegals' fees and
      legal expenses, incurred by the Agent or the Banks in connection with realizing
      on the Collateral or collection of any Obligations of the Loan Parties under
      any
      of the Loan Documents, including advances made by the Banks or any one of them
      or the Agent for the reasonable maintenance, preservation, protection or
      enforcement of, or realization upon, the Collateral, including advances for
      taxes, insurance, repairs and the like and reasonable expenses incurred to
      sell
      or otherwise realize on, or prepare for sale or other realization on, any of
      the
      Collateral;

     

    (ii) second,
      to the repayment of all Indebtedness then due and unpaid of the Loan Parties
      to
      the Banks incurred under this Agreement or any of the other Loan Documents,
      whether of principal, interest, fees, expenses or otherwise, in such manner
      as
      the Agent may determine in its sole discretion; and

     

    (iii) the
      balance, if any, as required by Law.

     

    8.2.6  Rights
      with Respect to Collateral Assignment of Telephone Numbers.

     

    The
      Agent
      agrees that it shall only be able to exercise its rights under this Section
      8
      with respect to the Collateral Assignment of Telephone Numbers if an Event
      of
      Default shall have occurred and be continuing.

     

    8.2.7  Other
      Rights and Remedies.

     

    In
      addition to all of the rights and remedies contained in this Agreement or in
      any
      of the other Loan Documents, the Agent shall have all of the rights and remedies
      of a secured party under the Uniform Commercial Code or other applicable Law,
      all of which rights and remedies shall be cumulative and non-exclusive, to
      the
      extent permitted by Law. The Agent may, and upon the request of the Required
      Banks shall, exercise all post-default rights granted to the Agent and the
      Banks
      under the Loan Documents or applicable Law.

     

    
      
         

      

      
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      	8.3  	
              Notice
                of Sale.

            

    

     

    Any
      notice required to be given by the Agent of a sale, lease, or other disposition
      of the Collateral or any other intended action by the Agent, if given ten (10)
      days prior to such proposed action, shall constitute commercially reasonable
      and
      fair notice thereof to the Borrower.

     

    
      	8.4  	
              Notice
                of Default.

            

    

     

    The
      Agent
      and the Banks shall not be deemed to have knowledge or notice of the occurrence
      of any Potential Default or Event of Default unless the Agent has received
      written notice from the Borrower referring to this Agreement, describing such
      Potential Default or Event of Default and stating that such notice is a "notice
      of default."

    

    
      	9.  	
              THE
                AGENT

            

    

     

    
      	9.1  	
              Appointment.

            

    

     

    Each
      Bank
      hereby irrevocably designates, appoints and authorizes LaSalle Bank to act
      as
      Agent for such Bank under this Agreement and to execute and deliver or accept
      on
      behalf of each of the Banks the other Loan Documents. Each Bank hereby
      irrevocably authorizes, and each holder of any Note by the acceptance of a
      Note
      shall be deemed irrevocably to authorize, the Agent to take such action on
      its
      behalf under the provisions of this Agreement and the other Loan Documents
      and
      any other instruments and agreements referred to herein, and to exercise such
      powers and to perform such duties hereunder as are specifically delegated to
      or
      required of the Agent by the terms hereof, together with such powers as are
      reasonably incidental thereto. LaSalle Bank agrees to act as the Agent on behalf
      of the Banks to the extent provided in this Agreement.

     

    
      	9.2  	
              Delegation
                of Duties.

            

    

     

    The
      Agent
      may perform any of its duties hereunder by or through agents or employees
      (provided such delegation does not constitute a relinquishment of its duties
      as
      Agent) and, subject to Sections 9.5 [Reimbursement of Agent by the Borrower,
      Etc.] and 9.6 [Exculpatory Provisions, Etc.], shall be entitled to engage and
      pay for the advice or services of any attorneys, accountants or other experts
      concerning all matters pertaining to its duties hereunder and to rely upon
      any
      advice so obtained.

     

    
      	9.3  	
              Nature
                of Duties; Independent Credit
                Investigation.

            

    

     

    The
      Agent
      shall have no duties or responsibilities except those expressly set forth in
      this Agreement and no implied covenants, functions, responsibilities, duties,
      obligations, or liabilities shall be read into this Agreement or otherwise
      exist
      except as otherwise provided for under applicable law. The duties of the Agent
      shall be mechanical and administrative in nature; the Agent shall not have
      by
      reason of this Agreement a fiduciary or trust relationship in respect of any
      Bank; and nothing in this Agreement, expressed or implied, is intended to or
      shall be so construed as to impose upon the Agent any obligations in respect
      of
      this Agreement except as expressly set forth herein. Without limiting the
      generality of the foregoing, the use of the term "agent" in this Agreement
      with
      reference to the Agent is not intended to connote any fiduciary or other implied
      (or express) obligations arising under agency doctrine of any applicable Law.
      Instead, such term is used merely as a matter of market custom, and is intended
      to create or reflect only an administrative 

     

    

    
      
         

      

      
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    relationship
      between independent contracting parties. Each Bank expressly acknowledges (i)
      that the Agent has not made any representations or warranties to it and that
      no
      act by the Agent hereafter taken, including any review of the affairs of the
      Loan Parties, shall be deemed to constitute any representation or warranty
      by
      the Agent to any Bank; (ii) that it has made and will continue to make, without
      reliance upon the Agent, its own independent investigation of the financial
      condition and affairs and its own appraisal of the creditworthiness of the
      Loan
      Parties in connection with this Agreement and the making and continuance of
      the
      Loans hereunder; and (iii) except as expressly provided herein, that the Agent
      shall have no duty or responsibility, either initially or on a continuing basis,
      to provide any Bank with any credit or other information with respect thereto,
      whether coming into its possession before the making of any Loan or at any
      time
      or times thereafter.

     

    
      	9.4  	
              Actions
                in Discretion of Agent; Instructions From the
                Banks.

            

    

     

    The
      Agent
      agrees, upon the written request of the Required Banks, to take or refrain
      from
      taking any action of the type specified as being within the Agent's rights,
      powers or discretion herein, provided that the Agent shall not be required
      to
      take any action which exposes the Agent to personal liability or which is
      contrary to this Agreement or any other Loan Document or applicable Law. In
      the
      absence of a request by the Required Banks, the Agent shall have authority,
      in
      its sole discretion, to take or not to take any such action, unless this
      Agreement specifically requires the consent of the Required Banks or all of
      the
      Banks. Any action taken or failure to act pursuant to such instructions or
      discretion shall be binding on the Banks, subject to Section 9.6 [Exculpatory
      Provisions, Etc.]. Subject to the provisions of Section 9.6, no Bank shall
      have
      any right of action whatsoever against the Agent as a result of the Agent acting
      or refraining from acting hereunder in accordance with the instructions of
      the
      Required Banks, or in the absence of such instructions, in the absolute
      discretion of the Agent.

     

    
      	9.5  	
              Reimbursement
                and Indemnification of Agent by the
                Borrower.

            

    

     

    The
      Borrower unconditionally agrees to pay or reimburse the Agent and hold the
      Agent
      harmless against (i) liability for the payment of all reasonable out-of-pocket
      costs, expenses and disbursements, including fees and expenses of counsel
      (including the allocated costs of staff counsel), appraisers and environmental
      consultants, incurred by the Agent (a) in connection with the development,
      negotiation, preparation, printing, execution, administration, syndication,
      interpretation and performance of this Agreement and the other Loan Documents,
      (b) relating to any requested amendments, waivers or consents pursuant to the
      provisions hereof, (c) in connection with the enforcement of this Agreement
      or
      any other Loan Document or collection of amounts due hereunder or thereunder
      or
      the proof and allowability of any claim arising under this Agreement or any
      other Loan Document, whether in bankruptcy or receivership proceedings or
      otherwise and (d) in any workout or restructuring or in connection with the
      protection, preservation, exercise or enforcement of any of the terms hereof
      or
      of any rights hereunder or under any other Loan Document or in connection with
      any foreclosure, collection or bankruptcy proceedings and (ii) all liabilities,
      obligations, losses, damages, penalties, actions, judgments, suits, costs,
      expenses or disbursements of any kind or nature whatsoever which may be imposed
      on, incurred by or asserted against the Agent, in its capacity as such, in
      any
      way relating to or arising out of this Agreement or any other Loan Documents
      or
      any action taken or omitted by the Agent hereunder or thereunder, provided
      that
      the Borrower shall not be liable for any portion of such liabilities,
      obligations, losses, damages, penalties, actions, judgments, suits, costs,
      expenses or disbursements if the same results from the Agent's gross
      negligence or willful misconduct. In addition, the Borrower agrees to reimburse
      and pay all reasonable out-of-pocket expenses of the Agent's regular employees
      and agents engaged periodically to perform audits of the Loan Parties' books,
      records and business properties.
       

    

     

    
      
         

      

      
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      	9.6  	
              Exculpatory
                Provisions; Limitation of
                Liability.

            

    

     

    Neither
      the Agent nor any of its directors, officers, employees, agents, attorneys
      or
      Affiliates shall (i) be liable to any Bank for any action taken or omitted
      to be
      taken by it or them hereunder, or in connection herewith including pursuant
      to
      any Loan Document, unless caused by its or their own gross negligence or willful
      misconduct, (ii) be responsible in any manner to any of the Banks for the
      effectiveness, enforceability, genuineness, validity or the due execution of
      this Agreement or any other Loan Documents or for any recital, representation,
      warranty, document, certificate, report or statement herein or made or furnished
      under or in connection with this Agreement or any other Loan Documents, or
      (iii)
      be under any obligation to any of the Banks to ascertain or to inquire as to
      the
      performance or observance of any of the terms, covenants or conditions hereof
      or
      thereof on the part of the Loan Parties, or the financial condition of the
      Loan
      Parties, or the existence or possible existence of any Event of Default or
      Potential Default. No claim may be made by any Loan Party, any Bank, the Agent
      or any of their respective Subsidiaries against the Agent, any Bank or any
      of
      their respective directors, officers, employees, agents, attorneys or
      Affiliates, or any of them, for any special, indirect or consequential damages
      or, to the fullest extent permitted by Law, for any punitive damages in respect
      of any claim or cause of action (whether based on contract, tort, statutory
      liability, or any other ground) based on, arising out of or related to any
      Loan
      Document or the transactions contemplated hereby or any act, omission or event
      occurring in connection therewith, including the negotiation, documentation,
      administration or collection of the Loans, and the Loan Parties, the Agent
      and
      each Bank hereby waive, release and agree never to sue upon any claim for any
      such damages, whether such claim now exists or hereafter arises and whether
      or
      not it is now known or suspected to exist in its favor. Each Bank agrees that,
      except for notices, reports and other documents expressly required to be
      furnished to the Banks by the Agent hereunder or given to the Agent for the
      account of or with copies for the Banks, the Agent and each of its directors,
      officers, employees, agents, attorneys or Affiliates shall not have any duty
      or
      responsibility to provide any Bank with any credit or other information
      concerning the business, operations, property, condition (financial or
      otherwise), prospects or creditworthiness of the Loan Parties which may come
      into the possession of the Agent or any of its directors, officers, employees,
      agents, attorneys or Affiliates.

     

    
      	9.7  	
              Reimbursement
                and Indemnification of Agent by
                Banks.

            

    

     

    Each
      Bank
      agrees to reimburse and indemnify the Agent (to the extent not reimbursed by
      the
      Borrower and without limiting the Obligation of the Borrower to do so) in
      proportion to its Ratable Share from and against all liabilities, obligations,
      losses, damages, penalties, actions, judgments, suits, costs, expenses or
      disbursements, including attorneys' fees and disbursements (including the
      allocated costs of staff counsel), and costs of appraisers and environmental
      consultants, of any kind or nature whatsoever which may be imposed on, incurred
      by or asserted against the Agent, in its capacity as such, in any way relating
      to or arising out of this Agreement or any other Loan Documents or any action
      taken or omitted by the Agent hereunder
      or thereunder, provided that no Bank shall be liable for any portion of such
      liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
      costs, expenses or disbursements if the same results from the Agent's gross
      negligence or willful misconduct. In addition, each Bank agrees promptly upon
      demand to reimburse the Agent (to the extent not reimbursed by the Borrower
      and
      without limiting the Obligation of Borrower to do so) in proportion to its
      Ratable Share for all amounts due and payable by the Borrower to the Agent
      in
      connection with the Agent's periodic audit of the Loan Parties' books, records
      and business properties.

     

    
      
         

      

      
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      	9.8  	
              Reliance
                by Agent.

            

    

     

    The
      Agent
      shall be entitled to rely upon any writing, telegram or teletype message,
      resolution, notice, consent, certificate, letter, cablegram, statement, order
      or
      other document or conversation by telephone or otherwise believed by it to
      be
      genuine and correct and to have been signed, sent or made by the proper Person
      or Persons, and upon the advice and opinions of counsel and other professional
      advisers selected by the Agent. The Agent shall be fully justified in failing
      or
      refusing to take any action hereunder unless it shall first be indemnified
      to
      its satisfaction by the Banks against any and all liability and expense which
      may be incurred by it by reason of taking or continuing to take any such
      action.

     

    
      	9.9  	
              Notice
                of Default.

            

    

     

    The
      Agent
      shall not be deemed to have knowledge or notice of the occurrence of any
      Potential Default or Event of Default unless the Agent has received written
      notice from a Bank or the Borrower referring to this Agreement, describing
      such
      Potential Default or Event of Default and stating that such notice is a "notice
      of default."

     

    
      	9.10  	
              Notices.

            

    

     

    The
      Agent
      shall promptly send to each Bank a copy of all notices received from the
      Borrower pursuant to the provisions of this Agreement or the other Loan
      Documents promptly upon receipt thereof. 

     

    
      	9.11  	
              Banks
                in Their Individual Capacities; Agent in its Individual
                Capacity.

            

    

     

    With
      respect to its Revolving Credit Commitment, the Revolving Credit Loans, and
      any
      other rights and powers given to it as a Bank hereunder or under any of the
      other Loan Documents, the Agent shall have the same rights and powers hereunder
      as any other Bank and may exercise the same as though it were not the Agent,
      and
      the term "Bank" and "Banks" shall, unless the context otherwise indicates,
      include the Agent in its individual capacity. LaSalle Bank and its Affiliates
      and each of the Banks and their respective Affiliates may, without liability
      to
      account, except as prohibited herein, make loans to, issue letters of credit
      for
      the account of, acquire equity interests in, accept deposits from, discount
      drafts for, act as trustee under indentures of, and generally engage in any
      kind
      of banking, trust, financial advisory, underwriting or other business with,
      the
      Loan Parties and their Affiliates, in the case of the Agent, as though it were
      not acting as Agent hereunder and in the case of each Bank, as though such
      Bank
      were not a Bank hereunder, in each case 

     

    

    
      
         

      

      
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    without
      notice to or consent of the other Banks. The Banks acknowledge that, pursuant
      to
      such activities, the Agent or its Affiliates may (i) receive information
      regarding the Loan Parties or any of its Subsidiaries or Affiliates (including
      information that may be subject to confidentiality obligations in favor of
      the
      Loan Parties or such Subsidiary or Affiliate) and acknowledge that the Agent
      shall be under no obligation to provide such information to them, and (ii)
      accept fees and other consideration from the Loan Parties for services in
      connection with this Agreement and otherwise without having to account for
      the
      same to the Banks.

     

    
      	9.12  	
              Holders
                of Notes.

            

    

     

    The
      Agent
      may deem and treat any payee of any Note as the owner thereof for all purposes
      hereof unless and until written notice of the assignment or transfer thereof
      shall have been filed with the Agent. Any request, authority or consent of
      any
      Person who at the time of making such request or giving such authority or
      consent is the holder of any Note shall be conclusive and binding on any
      subsequent holder, transferee or assignee of such Note or of any Note or Notes
      issued in exchange therefor.

     

    
      	9.13  	
              Equalization
                of Banks.

            

    

     

    The
      Banks
      and the holders of any participations in any Notes agree among themselves that,
      with respect to all amounts received by any Bank or any such holder for
      application on any Obligation hereunder or under any Note or under any such
      participation, whether received by voluntary payment, by realization upon
      security, by the exercise of the right of set-off or banker's lien, by
      counterclaim or by any other non-pro rata source, equitable adjustment will
      be
      made in the manner stated in the following sentence so that, in effect, all
      such
      excess amounts will be shared ratably among the Banks and such holders in
      proportion to their interests in payments under the Notes, except as otherwise
      provided in Section 3.4.3 [Agent's and Bank's Rights], 4.4.2 [Replacement of
      a
      Bank] or 4.6 [Additional Compensation in Certain Circumstances]. The Banks
      or
      any such holder receiving any such amount shall purchase for cash from each
      of
      the other Banks an interest in such Bank's Loans in such amount as shall result
      in a ratable participation by the Banks and each such holder in the aggregate
      unpaid amount under the Notes, provided that if all or any portion of such
      excess amount is thereafter recovered from the Bank or the holder making such
      purchase, such purchase shall be rescinded and the purchase price restored
      to
      the extent of such recovery, together with interest or other amounts, if any,
      required by law (including court order) to be paid by the Bank or the holder
      making such purchase.

     

    
      	9.14  	
              Successor
                Agent.

            

    

     

    The
      Agent
      may resign as Agent by giving not less than thirty (30) days' prior written
      notice to the Banks and the Borrower. If the Agent shall resign under this
      Agreement, then either (i) the Required Banks shall appoint from among the
      Banks
      a successor agent for the Banks, subject to the consent of the Borrower, such
      consent not to be unreasonably withheld, or (ii) if a successor agent shall
      not
      be so appointed and approved within the thirty (30) day period following the
      Agent's notice to the Banks of its resignation, then the Agent shall appoint,
      with the consent of the Borrower, such consent not to be unreasonably withheld,
      a successor agent who shall serve as Agent until such time as the 

     

    

    
      
         

      

      
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    Required
      Banks, appoint and the Borrower consents to the appointment of, a successor
      agent. Upon its appointment pursuant to either clause (i) or (ii) above, such
      successor agent shall succeed to the rights, powers and duties of the Agent,
      and
      the term "Agent" shall mean such successor agent, effective upon its
      appointment, and the former Agent's rights, powers and duties as Agent shall
      be
      terminated without any other or further act or deed on the part of such former
      Agent or any of the parties to this Agreement. After the resignation of any
      Agent hereunder, the provisions of this Section 9 shall inure to the benefit
      of
      such former Agent and such former Agent shall not by reason of such resignation
      be deemed to be released from liability for any actions taken or not taken
      by it
      while it was an Agent under this Agreement.

     

    
      	9.15  	
              Agent's
                Fees.

            

    

     

    In
      the
      event of a syndication of the Loan, the Borrower shall pay to the Agent a
      nonrefundable fee and a periodic agent fee under and in accordance with the
      terms of a mutually agreeable letter (the "Agent's Letter") between the Borrower
      and the Agent, as amended from time to time. 

     

    
      	9.16  	
              Availability
                of Funds.

            

    

     

    The
      Agent
      may assume that each Bank has made or will make the proceeds of a Loan available
      to the Agent unless the Agent shall have been notified by such Bank on or before
      the later of (1) the close of Business on the Business Day preceding the
      Borrowing Date with respect to such Loan or (2) two (2) hours before the time
      on
      which the Agent actually funds the proceeds of such Loan to the Borrower
      (whether using their own funds pursuant to this Section 9.16 or using proceeds
      deposited with the Agent by the Banks and whether such funding occurs before
      or
      after the time on which Banks are required to deposit the proceeds of such
      Loan
      with the Agent). The Agent may, in reliance upon such assumption (but shall
      not
      be required to), make available to the Borrower a corresponding amount. If
      such
      corresponding amount is not in fact made available to the Agent by such Bank,
      the Agent shall be entitled to recover such amount on demand from such Bank
      (or,
      if such Bank fails to pay such amount forthwith upon such demand from the
      Borrower) together with interest thereon, in respect of each day during the
      period commencing on the date such amount was made available to the Borrower
      and
      ending on the date the Agent recovers such amount, at a rate per annum equal
      to
      (i) the Federal Funds Effective Rate during the first three (3) days after
      such
      interest shall begin to accrue and (ii) the applicable interest rate in respect
      of such Loan after the end of such three-day period.

     

    
      	9.17  	
              Calculations.

            

    

     

    In
      the
      absence of gross negligence or willful misconduct, the Agent shall not be liable
      for any error in computing the amount payable to any Bank whether in respect
      of
      the Loans, fees or any other amounts due to the Banks under this Agreement.
      In
      the event an error in computing any amount payable to any Bank is made, the
      Agent, the Borrower and each affected Bank shall, forthwith upon discovery
      of
      such error, make such adjustments as shall be required to correct such error,
      and any compensation therefor will be calculated at the Federal Funds Effective
      Rate.

     

    

    
      
         

      

      
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      	9.18  	
              Beneficiaries.

            

    

     

    Except
      as
      expressly provided herein or as required by applicable law, the provisions
      of
      this Section 9 are solely for the benefit of the Agent and the Banks, and the
      Loan Parties shall not have any rights to rely on or enforce any of the
      provisions hereof. In performing its functions and duties under this Agreement,
      the Agent shall act solely as agent of the Banks and does not assume and shall
      not be deemed to have assumed any obligation toward or relationship of agency
      or
      trust with or for any of the Loan Parties.

     

    
      	9.19  	
              Addition
                of Additional Banks.

            

    

     

    The
      terms
      of this Section 9 shall apply in the event any financial institutions are added
      to this Agreement as a Bank. Notwithstanding anything contained herein to the
      contrary, Agent shall have no obligation to permit such addition or to seek
      or
      obtain Additional Banks by syndication, participation, assignment or otherwise.
      Moreover, in the event Agent agrees with Borrowers to assist in the procurement
      of Additional Banks with respect to the Loans or any increase in the Loans,
      Agent's obligation shall be limited to exercising its reasonable efforts to
      identify and add Additional Banks hereto pursuant to terms and conditions
      substantially in the form of the Bank Addition Agreement; nothing contained
      in
      this Section 9.19 shall be construed as a commitment or representation by Agent
      that Additional Banks can reasonably be added as a Bank hereunder. Any financial
      institution added as a Bank hereunder must execute a Bank Addition Agreement
      and
      shall be bound by all the terms of such Bank Addition Agreement as well as
      all
      of the terms hereof, and any Borrower's obligations hereunder to the Bank shall
      inure to the benefit of any such Additional Banks. Any assignment shall be
      in
      the minimum of [$5,000,000.00] and shall be subject to the consent of the Agent
      and assigning Bank, in their sole and absolute discretion, and the consent
      of
      the Borrower, which consent shall not be unreasonably withheld. Each such
      Additional Bank shall only have voting rights with respect to (i) a decrease
      in
      fees, interest rate spreads or principal, (ii) an increase in the Commitments
      only if such Additional Bank's commitment is increased, (iii) an extension
      in
      the Expiration Date or (iv) any release of a Guarantor or a release of all
      or
      substantially all of the Collateral. Upon the consummation of an assignment,
      the
      assigning Bank shall pay a fee of $3,500.00 to the Agent.

     

    
      	9.20  	
              Borrower
                Cooperation.

            

    

     

    Each
      Borrower agrees in connection with any syndication, sale or assignment by Agent
      or other Bank to assist and cooperate with Agent and any such Bank in any manner
      reasonably requested by Agent or such Bank to effect such syndication or any
      such sale of a participation or an assignment, including without limitation
      assistance in the preparation of appropriate disclosure documents.

     

    
      
         

      

      
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      	10.  	
              MISCELLANEOUS

            

    

     

    
      	10.1  	
              Modifications,
                Amendments or Waivers.

            

    

     

    The
      Agent, acting on behalf of all the Banks, and the Loan Parties, may from time
      to
      time enter into written agreements amending or changing any provision of this
      Agreement or any
      other
      Loan Document or the rights of the Banks or the Loan Parties hereunder or
      thereunder, or may grant written waivers or consents to a departure from the
      due
      performance of the Obligations of the Loan Parties hereunder or thereunder.
      Any
      such agreement, waiver or consent made with such written consent shall be
      effective to bind all the Banks and the Loan Parties; provided, that, without
      the written consent of all the Banks, no such agreement, waiver or consent
      may
      be made which will:

     

    10.1.1  Increase
      of Commitment; Extension of Expiration Date.

     

    Increase
      the amount of the Revolving Credit Commitment of any Bank hereunder or extend
      the Expiration Date;

     

    10.1.2  Extension
      of Payment; Reduction of Principal, Interest or Fees; Modification of Terms
      of
      Payment.

     

    Whether
      or not any Loans are outstanding, extend the time for payment of principal
      or
      interest of any Loan, the Facility Fee or any other fee payable to any Bank,
      or
      reduce the principal amount of or the rate of interest borne by any Loan or
      reduce the Facility Fee or any other fee payable to any Bank, or otherwise
      affect the terms of payment of the principal of or interest of any Loan, the
      Facility Fee or any other fee payable to any Bank (it being understood that
      a
      waiver of the application of the default rate of interest pursuant to Section
      3.3 shall require only the approval of the Required Banks);

     

    10.1.3  Release
      of Collateral.

     

    Except
      for sales of assets permitted by Section 7.2.7 [Dispositions of Assets or
      Subsidiaries], or as a result of any merger or consolidation permitted by
      Section 7.2.6 [Liquidations, Mergers, Consolidations, Acquisitions], release
      any
      Collateral consisting of capital stock or other ownership interests of any
      Borrower or any Subsidiary or substantially all of the assets of any Loan Party,
      or any other security for any of the Loan Parties' Obligations; or

     

    10.1.4  Miscellaneous.

     

    Amend
      Section 4.2 [Pro Rata Treatment of Banks], 7.2.7 [Dispositions of Assets or
      Subsidiaries], 7.2.18 [Availability Requirement], 9.6 [Exculpatory Provisions,
      Etc.] or 9.13 [Equalization of Banks] or this Section 10.1, alter any provision
      regarding the pro rata treatment of the Banks, change the definition of Required
      Banks, or change any requirement providing for the Banks or the Required Banks
      to authorize the taking of any action hereunder;

     

    provided,
      further, that no agreement, waiver or consent which would modify the interests,
      rights or obligations of the Agent in its capacity as Agent shall be effective
      without the written consent of the Agent.

     

    
      
         

      

      
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      	10.2  	
              No
                Implied Waivers; Cumulative Remedies; Writing
                Required.

            

    

     

    No
      course
      of dealing and no delay or failure of the Agent or any Bank in exercising any
      right, power, remedy or privilege under this Agreement or any other Loan
      Document shall affect any other or future exercise thereof or operate as a
      waiver thereof, nor shall
      any
      single or partial exercise thereof or any abandonment or discontinuance of
      steps
      to enforce such a right, power, remedy or privilege preclude any further
      exercise thereof or of any other right, power, remedy or privilege. The rights
      and remedies of the Agent and the Banks under this Agreement and any other
      Loan
      Documents are cumulative and not exclusive of any rights or remedies which
      they
      would otherwise have. Any waiver, permit, consent or approval of any kind or
      character on the part of any Bank of any breach or default under this Agreement
      or any such waiver of any provision or condition of this Agreement must be
      in
      writing and shall be effective only to the extent specifically set forth in
      such
      writing.

     

    
      	10.3  	
              Reimbursement
                and Indemnification of Banks by the Borrower;
                Taxes.

            

    

     

    The
      Borrower agrees unconditionally upon demand to pay or reimburse to each Bank
      (other than the Agent, as to which the Borrower's Obligations are set forth
      in
      Section 9.5 [Reimbursement and Indemnification of Agent By the Borrower.])
      and
      to indemnify and save such Bank harmless against all liabilities, obligations,
      losses, damages, penalties, actions, judgments, suits, costs, expenses or
      disbursements of any kind or nature whatsoever which may be imposed on, incurred
      by or asserted against such Bank, in its capacity as such, in any way relating
      to or arising out of this Agreement or any other Loan Documents or any action
      taken or omitted by such Bank hereunder or thereunder, provided that the
      Borrower shall not be liable for any portion of such liabilities, obligations,
      losses, damages, penalties, actions, judgments, suits, costs, expenses or
      disbursements if the same results from such Bank's gross negligence or willful
      misconduct. The Banks will attempt to minimize the fees and expenses of legal
      counsel for the Banks which are subject to reimbursement by the Borrower
      hereunder by considering the usage of one law firm to represent the Banks and
      the Agent if appropriate under the circumstances. The Borrower agrees
      unconditionally to indemnify and pay all stamp, document, transfer, recording
      or
      filing taxes or fees and similar impositions now or hereafter determined by
      the
      Agent or any Bank to be payable in connection with this Agreement or any other
      Loan Document, and the Borrower agrees unconditionally to indemnify and save
      the
      Agent and the Banks harmless from and against any and all present or future
      claims, liabilities or losses with respect to or resulting from any omission
      to
      pay or delay in paying any such taxes, fees or impositions.

     

    
      	10.4  	
              Holidays.

            

    

     

    Whenever
      payment of a Loan to be made or taken hereunder shall be due on a day which
      is
      not a Business Day, such payment shall be due on the next Business Day and
      such
      extension of time shall be included in computing interest and fees, except
      that
      the Loans shall be due on the Business Day preceding the Expiration Date if
      the
      Expiration Date is not a Business Day. Whenever any payment or action to be
      made
      or taken hereunder (other than payment of the Loans) shall be stated to be
      due
      on a day which is not a Business Day, such payment or action shall be made
      or
      taken on the next following Business Day (except as provided in Section 3.2
      [Interest Periods] with respect to Interest Periods under the LIBOR Rate
      Option), and such extension of time shall be included in computing interest
      or
      fees, if any, in connection with such payment or action.

     

    

    
      
         

      

      
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      	10.5  	
              Funding
                by Branch, Subsidiary or Affiliate.

            

    

     

    10.5.1  Notional
      Funding.

     

    Each
      Bank
      shall have the right from time to time, without notice to the Borrower, to
      deem
      any branch, Subsidiary or Affiliate (which for the purposes of this Section
      10.5
      shall mean any corporation or association which is directly or indirectly
      controlled by or is under direct or indirect common control with any corporation
      or association which directly or indirectly controls such Bank) of such Bank
      to
      have made, maintained or funded any Loan to which the LIBOR Rate Option applies
      at any time, provided that immediately following (on the assumption that a
      payment were then due from the Borrower to such other office), and as a result
      of such change, the Borrower would not be under any greater financial obligation
      pursuant to Section 4.6 [Additional Compensation in Certain Circumstances]
      than
      it would have been in the absence of such change. Notional funding offices
      may
      be selected by each Bank without regard to such Bank's actual methods of making,
      maintaining or funding the Loans or any sources of funding actually used by
      or
      available to such Bank.

     

    10.5.2  Actual
      Funding.

     

    Each
      Bank
      shall have the right from time to time to make or maintain any Loan by arranging
      for a branch, Subsidiary or Affiliate of such Bank to make or maintain such
      Loan
      subject to the last sentence of this Section 10.5.2. If any Bank causes a
      branch, Subsidiary or Affiliate to make or maintain any part of the Loans
      hereunder, all terms and conditions of this Agreement shall, except where the
      context clearly requires otherwise, be applicable to such part of the Loans
      to
      the same extent as if such Loans were made or maintained by such Bank, but
      in no
      event shall any Bank's use of such a branch, Subsidiary or Affiliate to make
      or
      maintain any part of the Loans hereunder cause such Bank or such branch,
      Subsidiary or Affiliate to incur any cost or expenses payable by the Borrower
      hereunder or require the Borrower to pay any other compensation to any Bank
      (including any expenses incurred or payable pursuant to Section 4.6 [Additional
      Compensation in Certain Circumstances]) which would otherwise not be
      incurred.

     

    
      	10.6  	
              Notices.

            

    

     

    All
      notices, requests, demands, directions and other communications (as used in
      this
      Section 10.6, collectively referred to as "notices") given to or made upon
      any
      party hereto under the provisions of this Agreement shall be by telephone or
      in
      writing (including facsimile communication) unless otherwise expressly permitted
      hereunder and shall be delivered or sent by facsimile or via
      nationally-recognized overnight courier, by hand or U.S. mail to the respective
      parties at the addresses and numbers set forth under their respective names
      on
      Schedule 1.1(B) hereof or in accordance with any subsequent unrevoked written
      direction from any party to the others. All notices shall, except as otherwise
      expressly herein provided, be effective (a) in the case of facsimile, when
      received, (b) in the case of hand-delivered notice, when hand-delivered, (c)
      in
      the case of telephone, when telephoned, provided, however, that in order to
      be
      effective, telephonic notices must be confirmed in writing no later than the
      next Business Day by letter or facsimile, (d) if given by 

     

    

    
      
         

      

      
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    mail,
      four (4) days after such communication is deposited in the mail with first-class
      postage prepaid, return receipt requested, and (e) if given by any other means
      (including by air courier), when delivered; provided, that notices to the Agent
      shall not be effective until received. Any Bank giving any notice to any Loan
      Party shall simultaneously send a copy thereof to the Agent, and the Agent
      shall
      promptly notify the other Banks of the receipt by it of any such
      notice.

     

    
      	10.7  	
              Severability.

            

    

     

    The
      provisions of this Agreement are intended to be severable. If any provision
      of
      this Agreement shall be held invalid or unenforceable in whole or in part in
      any
      jurisdiction, such provision shall, as to such jurisdiction, be ineffective
      to
      the extent of such invalidity or unenforceability without in any manner
      affecting the validity or enforceability thereof in any other jurisdiction
      or
      the remaining provisions hereof in any jurisdiction.

     

    
      	10.8  	
              Governing
                Law.

            

    

     

    This
      Agreement shall be deemed to be a contract made within, and under the Laws
      of,
      the State of Illinois and for all purposes shall be governed by and construed
      and enforced in accordance with the internal laws of the State of Illinois
      without regard to its conflict of laws principles.

     

    
      	10.9  	
              Prior
                Understanding.

            

    

     

    This
      Agreement and the other Loan Documents supersede all prior understandings and
      agreements, whether written or oral, between the parties hereto and thereto
      relating to the transactions provided for herein and therein, including any
      prior confidentiality agreements and commitments.

     

    
      	10.10  	
              Duration;
                Survival.

            

    

     

    All
      representations and warranties of the Loan Parties contained herein or made
      in
      connection herewith shall survive the making of Loans and shall not be waived
      by
      the execution and delivery of this Agreement, any investigation by the Agent
      or
      the Banks, the making of Loans, or payment in full of the Loans. All covenants
      and agreements of the Loan Parties contained in Sections 7.1 [Affirmative
      Covenants], 7.2 [Negative Covenants] and 7.3 [Reporting Requirements] herein
      shall continue in full force and effect from and after the date hereof so long
      as the Borrower may borrow hereunder and until termination of the Commitments
      and payment in full of the Loans. All covenants and agreements of the Borrower
      contained herein relating to the payment of principal, interest, premiums,
      additional compensation or expenses and indemnification, including those set
      forth in the Notes, Section 4 [Payments] and Sections 9.5 [Reimbursement of
      Agent by the Borrower, Etc.], 9.7 [Reimbursement of Agent by Banks, Etc.] and
      10.3 [Reimbursement of Banks by the Borrower; Etc.], shall survive payment
      in
      full of the Loans and termination of the Commitments.

     

    
      
         

      

      
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      	10.11  	
              Successors
                and Assigns.

            

    

     

    (i)
      This
      Agreement shall be binding upon and shall inure to the benefit of the Banks,
      the
      Agent, the Loan Parties and their respective successors and assigns, except
      that
      the Loan
      Parties may not assign or transfer any of their rights and Obligations hereunder
      or any interest herein and any attested assignment or transfer in violation
      of
      this provision shall be deemed void. Each Bank may, at its own cost, make
      assignments of or sell participations in all or any part of its Commitments
      and
      the Loans made by it to one or more banks or other entities, subject to the
      consent of the Borrower and the Agent with respect to any assignee which is
      not
      a Bank or an Affiliate thereof, such consent not to be unreasonably withheld,
      provided that (1) no consent of the Borrower shall be required (A) if an Event
      of Default exists and is continuing, or (B) in the case of an assignment by
      a
      Bank to an Affiliate of such Bank, and (2) any assignment by a Bank to a Person
      other than an Affiliate of such Bank may not be made in amounts less than the
      lesser of $5,000,000
      or the
      amount of the assigning Bank's Commitment. In the case of an assignment, upon
      receipt by the Agent of the Assignment and Assumption Agreement, the assignee
      shall have, to the extent of such assignment (unless otherwise provided
      therein), the same rights, benefits and obligations as it would have if it
      had
      been a signatory Bank hereunder, the Commitments shall be adjusted accordingly,
      and upon surrender of any Note subject to such assignment, the Borrower shall
      execute and deliver a new Note to the assignee in an amount equal to the amount
      of the Revolving Credit Commitment assumed by it and a new Note to the assigning
      Bank in an amount equal to the Revolving Credit Commitment retained by it
      hereunder. Any Bank which assigns any or all of its Commitment or Loans to
      a
      Person other than an Affiliate of such Bank shall pay to the Agent a service
      fee
      in the amount of $5,000 for each assignment. In the case of a participation,
      the
      participant shall only have the rights specified in Section 8.2.3 [Set-off]
      (the
      participant's rights against such Bank in respect of such participation to
      be
      those set forth in the agreement executed by such Bank in favor of the
      participant relating thereto and not to include any voting rights except with
      respect to changes of the type referenced in Sections 10.1.1 [Increase of
      Commitment, Etc.], 10.1.2 [Extension of Payment, Etc.], or 10.1.3 [Release
      of
      Collateral]), all of such Bank's obligations under this Agreement or any other
      Loan Document shall remain unchanged, and all amounts payable by any Loan Party
      hereunder or thereunder shall be determined as if such Bank had not sold such
      participation. 

     

    (ii) Any
      assignee or participant which is not incorporated under the Laws of the United
      States of America or a state thereof shall deliver to the Borrower and the
      Agent
      the form of certificate described in Section 10.17 [Tax Withholding Clause]
      relating to federal income tax withholding. Each Bank may furnish any publicly
      available information concerning any Loan Party and any other information
      concerning any Loan Party in the possession of such Bank from time to time
      to
      assignees and participants (including prospective assignees or participants),
      provided that such assignees and participants agree to be bound by the
      provisions of Section 10.12 [Confidentiality].

     

    (iii) Notwithstanding
      any other provision in this Agreement, any Bank may at any time pledge or grant
      a security interest in all or any portion of its rights under this Agreement,
      its Note and the other Loan Documents to any Federal Reserve Bank in accordance
      with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR Section 203.14
      without notice to or consent of the Borrower or the Agent. No such pledge or
      grant of a security interest shall release the transferor Bank of its
      obligations hereunder or under any other Loan Document.

     

    

    
      
         

      

      
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      	10.12  	
              Confidentiality.

            

    

     

    10.12.1  General.

     

    The
      Agent
      and the Banks each agree to keep confidential all information obtained from
      the
      Loan Parties or their Subsidiaries which is nonpublic and confidential or
      proprietary in nature (including, without limitation, any information the
      Borrower specifically designates as confidential, such as financial information
      disclosed in Schedule 5.1.8(ii) hereof), except as provided below, and to use
      such information only in connection with their respective capacities under
      this
      Agreement and for the purposes contemplated hereby. The Agent and the Banks
      shall be permitted to disclose such information (i) to outside legal counsel,
      accountants and other professional advisors who need to know such information
      in
      connection with the administration and enforcement of this Agreement, subject
      to
      agreement of such Persons to maintain the confidentiality subject to the
      provisions of this Section 10.12.1, (ii) to assignees and participants as
      contemplated by Section 10.11, and prospective assignees and participants
      subject to agreement of such Persons to maintain the confidentiality subject
      to
      the provisions of this Section 10.12.1, (iii) to the extent requested by any
      bank regulatory authority or as otherwise required by applicable Law or by
      any
      subpoena or similar legal process, or in connection with any investigation
      or
      proceeding arising out of the transactions contemplated by this Agreement,
      (iv)
      if it becomes publicly available other than as a result of a breach of this
      Agreement or becomes available from a source not known to be subject to
      confidentiality restrictions or (v) if the Loan Party whose confidential
      information is disclosed shall have consented to such disclosure.

     

    10.12.2  Sharing
      Information With Affiliates of the Banks.

     

    The
      Loan
      Parties acknowledge that from time to time financial advisory, investment
      banking and other services may be offered or provided to the Borrower or one
      or
      more of its or their Affiliates (in connection with this Agreement or otherwise)
      by any Bank or by one or more Subsidiaries or Affiliates of such Bank and,
      effective upon any such Person's engagement or request for such service, each
      Loan Party hereby authorizes each Bank to share any information delivered to
      such Bank by the Loan Parties pursuant to this Agreement, or in connection
      with
      the decision of such Bank to enter into this Agreement, to any such Subsidiary
      or Affiliate of such Bank, it being understood that any such Subsidiary or
      affiliate of any Bank receiving such information shall be bound by the
      provisions of Section 10.12.1 as if it were a Bank hereunder. Such authorization
      shall survive the repayment of the Loans and other Obligations and the
      termination of the Commitments.

     

    
      	10.13  	
              Counterparts.

            

    

     

    This
      Agreement may be executed by different parties hereto on any number of separate
      counterparts, each of which, when so executed and delivered, shall be deemed
      to
      be an original, and all such counterparts shall together constitute one and
      the
      same instrument.

     

    

    
      
         

      

      
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      	10.14  	
              Agent's
                or Bank's Consent.

            

    

     

    Whenever
      the Agent's or any Bank's consent is required to be obtained under this
      Agreement or any of the other Loan Documents as a condition to any action,
      inaction, condition or event, the Agent and each Bank shall be authorized to
      give or withhold such consent in its sole and absolute discretion and to
      condition its consent upon the giving of additional collateral, the payment
      of
      money or any other matter.

     

    
      	10.15  	
              Exceptions.

            

    

     

    The
      representations, warranties and covenants contained herein shall be independent
      of each other, and no exception to any representation, warranty or covenant
      shall be deemed to be an exception to any other representation, warranty or
      covenant contained herein unless expressly provided, nor shall any such
      exceptions be deemed to permit any action or omission that would be in
      contravention of applicable Law.

     

    
      	10.16  	
              CONSENT
                TO FORUM; WAIVER OF JURY TRIAL.

            

    

     

    EACH
      LOAN
      PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF THE
      CIRCUIT COURT OF COOK COUNTY, ILLINOIS AND THE UNITED STATES DISTRICT COURT
      FOR
      THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION, AND WAIVES PERSONAL SERVICE
      OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS
      BE
      MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH LOAN PARTY AT THE
      ADDRESSES PROVIDED FOR IN SECTION 10.6 AND SERVICE SO MADE SHALL BE DEEMED
      TO BE
      COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH LOAN PARTY WAIVES ANY OBJECTION
      TO
      JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN
      AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE.
      EACH LOAN PARTY, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY
      ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED
      TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE COLLATERAL TO THE FULL EXTENT
      PERMITTED BY LAW.

     

    
      	10.17  	
              Tax
                Withholding Clause.

            

    

     

    Each
      Bank
      or assignee or participant of a Bank that is not incorporated under the Laws
      of
      the United States of America or a state thereof (and, upon the written request
      of the Agent, each other Bank or assignee or participant of a Bank) agrees
      that
      it will deliver to each of the Borrower and the Agent two (2) duly completed
      appropriate valid Withholding Certificates (as defined under "1.1441-1(c)(16)
      of
      the Income Tax Regulations ("Regulations")) certifying its status (i.e., U.S.
      or
      foreign person) and, if appropriate, making a claim of reduced, or exemption
      from, U.S. withholding tax on the basis of an income tax treaty or an exemption
      provided by the Internal Revenue Code. Such delivery may be made by electronic
      transmission as described in "1.1441-1(e)(4)(iv) of the Regulations if the
      Agent
      establishes an electronic delivery system. The term "Withholding Certificate"
      means a Form 

     

    

    
      
         

      

      
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    W-9;
      a
      Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and
      certifications as required under "1.1441-1(e)(3) of the Regulations; a statement
      described in "1.871-14(c)(2)(v) of the Regulations; or any other certificates
      under the Code or Regulations that certify or establish the status of a payee
      or
      beneficial owner as a U.S. or foreign person. Each Bank, assignee or participant
      required to deliver to the Borrower and the Agent a valid Withholding
      Certificate pursuant to the preceding sentence shall deliver such valid
      Withholding Certificate as follows: (A) each Bank which is a party hereto on
      the
      Closing Date shall deliver such valid Withholding Certificate at least five
      (5)
      Business Days prior to the first date on which any interest or fees are payable
      by the Borrower hereunder for the account of such Bank; (B) each assignee or
      participant shall deliver such valid Withholding Certificate at least five
      (5)
      Business Days before the effective date of such assignment or participation
      (unless the Agent in its sole discretion shall permit such assignee or
      participant to deliver such Withholding Certificate less than five (5) Business
      Days before such date in which case it shall be due on the date specified by
      the
      Agent). Each Bank, assignee or participant which so delivers a valid Withholding
      Certificate further undertakes to deliver to each of the Borrower and the Agent
      two (2) additional copies of such Withholding Certificate (or a successor form)
      on or before the date that such Withholding Certificate expires or becomes
      obsolete or after the occurrence of any event requiring a change in the most
      recent Withholding Certificate so delivered by it, and such amendments thereto
      or extensions or renewals thereof as may be reasonably requested by the Borrower
      or the Agent. Notwithstanding the submission of a Withholding Certificate
      claiming a reduced rate of, or exemption from, United States withholding tax,
      the Agent shall be entitled to withhold United States federal income taxes
      at
      the full 30% withholding rate if in its reasonable judgment it is required
      to do
      so under the due diligence requirements imposed upon a withholding agent under
      "1.1441-7(b) of the Regulations. Further, the Agent is indemnified under
      "1.1461-1(e) of the Regulations against any claims and demands of any Bank
      or
      assignee or participant of a Bank for the amount of any tax it deducts and
      withholds in accordance with regulations under "1441 of the Internal Revenue
      Code.

     

    
      	10.18  	
              Joinder
                of Borrowers and Guarantors.

            

    

     

    Any
      Subsidiary of the Borrower which is required to join this Agreement as a
      Borrower pursuant to Section 7.2.9 [Subsidiaries, Partnerships and Joint
      Ventures] and any Person permitted or required to be a Guarantor hereunder
      shall
      execute and deliver to the Agent (i) a Joinder in substantially the form
      attached hereto as Exhibit
      1.1(J)
      or
Exhibit
      1.1(G)
      pursuant
      to which it shall join as a Borrower or as a Guarantor respectively in each
      of
      the Loan Documents to which a Borrower and a Guarantor are a party; (ii)
      documents in the forms described in Section 6.1 [First Loans] modified
      as
      appropriate to relate to such Subsidiary or new Guarantor; and (iii) documents
      necessary to grant and perfect Prior Security Interests to the Agent for the
      benefit of the Banks in all Collateral held by such Subsidiary or new Guarantor.
      The Loan Parties shall deliver such Joinder and related documents to the Agent
      within five (5) Business Days after the date of the filing of such Subsidiary's
      or new Guarantor's articles of incorporation if such party is a newly-formed
      corporation, the date of the filing of its certificate of limited partnership
      if
      it is a newly-formed limited partnership or the date of its organization if
      it
      is a newly-formed entity other than a limited partnership or corporation or
      the
      date of its acquisition by the Borrower if permitted.

     

    

    
      
         

      

      
        80

        
          

        

      

      
         

      

    

    

    

     

    
      	10.19  	
              Loan
                Party Agency.

            

    

     

    Each
      Loan
      Party hereby unconditionally and irrevocably agrees that IASG shall have the
      right to take on behalf of such Loan Party any and all actions required to
      be
      taken by Loan Parties under this Agreement and each of the other Loan Documents
      and such Loan Party hereby irrevocably makes, constitutes and appoints IASG
      (and
      any of IASG's officers, employees or agents, as designated by IASG) as its
      true
      and lawful attorney with power to execute such documents, instruments and
      certificates and to take any and all actions required to be taken by of such
      Loan Party under this Agreement or any other Loan Document. Such power, being
      coupled with an interest, is irrevocable until all of the Obligations have
      been
      fully paid and performed, and the Commitments have terminated, all in accordance
      with this Agreement and the other Loan Documents. Without limiting the
      generality of the foregoing, each Loan Party hereby agrees that on behalf of
      such Loan Party, IASG shall:

     

    (a)
      Deliver certificates and make certifications required to be delivered by or
      on
      behalf of the Loan Parties to the Agent including without limitation financial
      certificates, compliance certificates, and such other certificates, information
      and notices required to be delivered to the Agent under this Agreement or the
      Loan Documents and otherwise provide information on behalf of the Loan
      Parties;

     

    (b)
      Receive notices and communications from the Agent (it being agreed that notice
      to IASG shall be deemed to be notice to all Loan Parties); and

     

    (c)
      Take
      such other actions as any Loan Party may request on behalf of such Loan Party
      under this Agreement.

     

    Although
      IASG is authorized and directed to take the foregoing actions on behalf of
      each
      Loan Party, notwithstanding the foregoing, nothing contained herein shall in
      any
      way release any Loan Party from the performance of its obligations under this
      Agreement or under any other Loan Document, it being acknowledged and agreed
      that the actions authorized to be taken by IASG hereunder are solely for the
      purpose of administrative ease. Without limiting the foregoing, nothing herein
      shall vitiate or be held contrary to any Loan Party's representations, express
      or implied, or covenants or undertakings. The Agent shall be entitled to rely
      exclusively (but is not required to rely exclusively) on IASG's authority to
      act
      in each instance without inquiry or investigation, and each of IASG and the
      other Loan Parties hereby agrees to indemnify and hold harmless the Agent for
      any losses, costs, delays, errors, claims, penalties or charges arising from
      or
      out of Loan Parties' actions pursuant to this Section 10.19 provided that the
      Loan Parties shall not be liable for any losses, costs, delays, errors, claims,
      penalties or charges if the same results from Agent's gross negligence or
      willful misconduct. IASG, in the role described in this Section 10.19, is
      sometimes referred to as "Loan Agent."

     

    
      
         

      

      
        81

        
          

        

      

      
         

      

    

    
      	10.20  	
              Entire
                Agreement. 

            

    

     

    This
      Agreement is an integrated document, contains the entire agreement between
      the
      parties and wholly cancels, terminates and supercedes any and all previous
      and/or contemporaneous oral agreements, negotiations, commitments and writings
      between the parties with
      respect to the subject matter. No change, modification, extension, termination,
      discharge, abandonment or waiver of this Agreement or any of its provisions,
      nor
      any representation, promise or condition relating to this Agreement will be
      binding upon the parties unless made in writing and signed by each of the
      parties hereto (or in the case of Loan Parties, by IASG as the agent for such
      parties). The parties further agree that the prior drafts of this Agreement
      will
      not be used to interpret this Agreement and will not be admissible into evidence
      at any time.

     

    
      	11.  	
              Nonsolicitation
                and Nondisclosure

            

    

     

    
      	11.1  	
              Nonsolicitation
                and Nonacceptance.

            

    

     

    If
      any
      Event of Default shall have occurred which results in the acceleration of any
      of
      the Loans by Agent, each Principal hereby agrees not to, for a period of
five
      (5)
      years
      from the date of such acceleration, for themselves, as agent or employee, or
      on
      behalf of any person, association, partnership or corporation, either directly
      or indirectly, solicit or attempt to obtain business from, accept business
      from,
      do business with or service or indirectly aid or assist anyone else in the
      solicitation or acceptance of business from any of the then current customers
      or
      accounts of the Borrower included as part of the Collateral pursuant to the
      Credit Agreement (hereinafter, the "Customers") for the purpose of providing
      electronic security, monitoring of alarm security systems, guard, intercom,
      central vacuum, home automation, home theater, audio systems or related services
      or to provide financing for any of such activities or related contracts
      (collectively, the "Services"). This provision applies both to the Customers
      and
      the residence or place of business occupied by such Customers. In the event
      either Principal is contacted by such Customers, they will inform such Customers
      that they cannot provide Services to such Customer. Each Principal agrees to
      do
      so in a polite manner and to refer such Customers to Agent or its assignee
      with
      a positive recommendation. In addition, each Principal agrees that he will
      never
      disparage the services, business or reputation of Agent or its assignee by
      making false or misleading statements to another person. This Section 11, the
      parties' obligations hereunder and the period referred to in this Section 11.1,
      shall terminate upon the repayment in full of all of the
      Obligations.

     

    Notwithstanding
      the foregoing, each Principal is permitted to have up to an aggregate 3% passive
      ownership interest in a public company which solicits or accepts business from
      any of the customers or accounts included in the Collateral.

     

    
      	11.2  	
              Nondisclosure.

            

    

     

    Each
      Principal acknowledges that he possesses certain confidential, proprietary
      and
      trade secret information, materials and business concepts and know-how with
      respect to the Collateral, including information regarding marketing, sales
      volume, sales methods, sales proposals, products, services, vendors, customer
      lists and files, and other confidential customer information (including current,
      prospective and former customers), accounting data and methods, operating
      procedures, pricing policies, strategic plans, intellectual property, customer
      contracts and other agreements, manufacturer's warranties, information about
      Borrowers' employees or other confidential or proprietary information belonging
      to or related to Borrowers' affairs (collectively, the "Proprietary
      Information"). If any Event of Default shall have occurred which results in
      the
      acceleration of any of the Loans by Agent, each Principal agrees: (a) never
      to 

     

    

    
      
         

      

      
        82

        
          

        

      

      
         

      

    

    

    publish,
      copy, disclose, allow to be disclosed or use for his own benefit or for the
      benefit of any other person, firm, corporation or entity, other than for the
      benefit of the Borrowers, the Proprietary Information without the prior written
      consent of Agent, which can be withheld in its sole discretion; and (b) to
      maintain strictly the confidentiality of the Proprietary Information at all
      times; provided, however, that Principal may disclose such Proprietary
      Information to his and the Borrowers' attorneys, accountants, other advisors,
      tax and governmental authorities who need to know such information to fulfill
      their duties. Principals agree to take all necessary precautions to protect
      the
      Proprietary Information from unauthorized disclosure or use. Each Principal
      acknowledges and agrees that in any proceeding to enforce this Agreement it
      will
      be presumed that the Proprietary Information constitutes protectable trade
      secrets, and that the Principals will bear the burden of proving that any
      portion of the Proprietary Information was publicly or rightfully known and
      disclosed by such Principal. Upon the request of Agent, Principals agree to
      execute and deliver to Agent an affidavit as to the complete and proper return
      of all Proprietary Information.

     

    
      	11.3  	
              Employees.

            

    

     

    For
      a
      period of two
      (2)
      years
      following the acceleration of any of the Loans by Agent, the Principals will
      not, directly or indirectly, individually or through any other entity or
      otherwise, without the prior written consent of Agent or its assignee, which
      can
      be withheld in its sole discretion, knowingly solicit the Loan Parties' then
      current employees to engage in the security alarm business in any of the states
      in which any Loan Party then conducts business or maintains an office or
      facility for
      an
      employer other than the Loan Parties.

     

    
      	11.4  	
              Acknowledgment.

            

    

     

    Each
      Principal acknowledges and recognizes that: (a) this Agreement is necessary
      for the protection of the legitimate business interests of Agent in making
      the
      Loans contemplated by the Credit Agreement; (b) the execution and delivery
      of this Agreement is a mandatory condition precedent to the closing of the
      transactions contemplated by the Credit Agreement and the Loan Documents,
      without which such transactions will not close; (c) the enforcement
      of the
      language contained in this Section 11 is unrelated to, independent from
      and
      unaffected by any dispute that may arise under the Credit Agreement or the
      Loan
      Documents; (d) the scope of the language contained in this Section 11
      regarding duration and the level of activities restricted is reasonable;
      (e) each Principal has no intention of violating this Agreement;
      (f) the breach of the terms and provisions of this Section 11
      will be
      such that Agent will not have an adequate remedy at law because of the unique
      nature of the Collateral and the Proprietary Information, and the confusion
      to
      customers and the public that a breach would create; and (g) such Principal
      has a duty to inform his future employers of the restrictions imposed upon
      him
      by this Agreement, and in the event Agent has a reasonable belief that such
      Principal is violating this Agreement, Agent will be entitled to contact such
      Principal's employers to inform the employers of this Agreement and such
      Principal's obligations under it.

     

    
      	11.5  	
              Representations.

            

    

     

    Each
      Principal represents and warrants that: (a) he has the authority to
      enter
      into this Agreement and that, in doing so, he will not violate any agreement,
      order or law; (b) there are
      no
      third-party consents required for him to enter into this Agreement which have
      not been obtained and delivered to Agent; and (c) such Principal's
      expertise and capabilities are such that his obligations under this Agreement
      (and the enforcement thereof by injunction or otherwise) will not prevent him
      from earning a livelihood.

     

    
      
         

      

      
        83

        
          

        

      

      
         

      

    

     

    
      	11.6  	
              Remedies.

            

    

     

    Each
      Principal acknowledges and agrees that the rights of Agent with respect to
      the
      terms and conditions contained in this Section are of a specialized and unique
      character and that immediate and irreparable damage will result to Agent and
      the
      Collateral if such Principal fails to or refuses to perform his obligations
      under this Agreement and, notwithstanding any election by Agent to claim damages
      from such Principal as a result of any such failure or refusal, Agent may,
      in
      addition to any other remedies and damages available, seek an injunction in
      a
      court of competent jurisdiction, without the posting of a bond or other security
      to restrain any such failure or refusal. Each Principal further acknowledges
      that the obligations set forth in Sections 11.1 and 11.2 of this Agreement
      will be extended by the length of time during which any Principal is in breach
      of any of these obligations. These remedies are cumulative with all other
      remedies provided by law or contract and will not preclude Agent from later
      obtaining a judgment for money damages or specific acts against the breaching
      Principal or otherwise affect any other remedies that Agent may have. The
      exercise of any right or remedy will be without prejudice to the right to
      exercise any other right or remedy provided in this Section 11, by law or in
      equity. In any action by Agent to enforce its rights under this Section 11,
      any
      claims asserted by any Principal against Agent will not constitute a defense
      to
      Agent's enforcement action.

     

    
      	11.7  	
              Severability.

            

    

     

    If
      any
      provisions of this Section 11 as applied to any part or to any
      circumstances are adjudged by a court of competent jurisdiction to be invalid
      or
      unenforceable, the same will in no way affect any other provisions of this
      Agreement, the application of such provision in any other circumstances or
      the
      validity or enforceability of this Section of the Agreement. Agent and
      Principals intend this Section to be enforced as written. If any provision
      or
      any part of it is held to be invalid or unenforceable because of its scope
      or
      duration, the parties agree that the court making such determination will have
      the power to delete specific words or phrases and, in its modified form, such
      provision will then be enforceable. The foregoing clause is not intended to
      be
      an admission or evidence that the scope or duration of this Section is
      unreasonable.

     

    
      	11.8  	
              Consent
                to Jurisdiction, Service and Venue.

            

    

     

    FOR
      THE
      PURPOSE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
      SECTION, PRINCIPALS IRREVOCABLY CONSENT AND SUBMIT TO THE JURISDICTION AND
      VENUE
      OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN ILLINOIS.
      Principals
      agree that service of the summons and complaint and all other process which
      may
      be served in any such suit, action or proceeding may be effected by mailing
      by
      registered mail a copy of such process to Principal at the following
      address:

     

    

    
      
         

      

      
        84

        
          

        

      

      
         

      

    

    

    

     

    
      	
              Timothy
                M. McGinn

              26
                Port Huron Drive

              Schenectady,
                NY 12309

               

            	
              Thomas
                J. Few

              9
                Pima Court

              Oakland,
                NJ 07436

            

    

    

     

    Each
      Principal irrevocably waives any objections which they may now or hereafter
      have
      to the venue of any such suit, action or proceeding brought in such court and
      any claim that such suit, action or proceeding brought in such court has been
      brought in an inconvenient forum and agrees that service of process in
      accordance with this Section will be deemed in every respect effective and
      valid
      personal service of process upon Principals. Nothing in this Section will be
      construed to prohibit service of process by any other method permitted by law.
      The provisions of this Section will not limit or otherwise affect the right
      of
      Agent to institute and conduct an action in any other appropriate manner,
      jurisdiction or court. Each Principal agrees that final judgment in such suit,
      action or proceeding will be conclusive and may be enforced in any other
      jurisdiction by suit on the judgment or in any other manner provided by
      law.

     

    

     

    

    
      
         

      

      
        85

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
      authorized, have executed this Agreement as of the day and year first above
      written.

     

    
      
        	 
	 
	
                INTEGRATED
                  ALARM SERVICES GROUP,
                  INC.,
                  a
                  Delaware corporation,

                  
                  as Borrower

              
	
                 

              
	
                 

              
	
                By:
                   /s/
                  Timothy M. McGinn   

              
	
                Timothy
                  M. McGinn, Chairman
                  and CEO

              
	
                 

              
	
                 

              
	
                CRITICOM
                  INTERNATIONAL CORPORATION,
                  a
                  New Jersey

                  
                  corporation, as Borrower

              
	
                 

              
	
                 

              
	
                By:
                   /s/
                  Thomas J. Few, Sr.    

              
	
                Thomas
                  J. Few, Sr., CEO

              
	
                 

              
	
                 

              
	
                MONITAL
                  SIGNAL CORPORATION,

                   
                  a New Jersey corporation, as Borrower

              
	
                 

              
	
                 

              
	
                By:
                   /s/
                  Thomas J. Few Sr.    

              
	
                Thomas
                  J. Few, Sr., Chairman
                  and CEO

              
	
                 

              
	
                 

              
	
                INTEGRATED
                  ALARM SERVICES, INC.,

                   
                  a Delaware corporation, as Borrower 

              
	
                 

              
	
                 

              
	
                By:
                   /s/
                  Timothy M. McGinn   

              
	
                Timothy
                  M. McGinn, Chairman
                  and CEO

              
	
                 

              
	
                 

              
	
                PAYNE
                  SECURITY GROUP, L.L.C.,

                  
                  a New Jersey limited liability company, as
                  Borrower

              
	
                 

              
	
                 

              
	
                By:
                   /s/
                  Timothy M. McGinn   

              
	
                Timothy
                  M. McGinn, Manager

              

      

       

       

      
        
           

        

        
          86

          
            

          

        

        
           

        

      

       

      
        	
                 

              
	
                 

              
	
                AMERICAN
                  HOME SECURITY, INC.,

                   
                  a Nevada corporation, as Borrower 

              
	
                 

              
	
                 

              
	
                By:
                   /s/
                  Timothy M. McGinn   

              
	
                Timothy
                  M. McGinn, Chairman

              
	
                 

              
	
                 

              
	
                 

              
	
                LASALLE
                  BANK NATIONAL ASSOCIATION,

                   
                  individually as a Bank and as Agent

              
	
                 

              
	
                By:
                   /s/
                  Jessica Richardson    

              
	
                Jessica
                  Richardson, First
                  Vice President

              

      

    

    

     

    

     

    The
      Principals hereby acknowledge agree to be bound the terms and obligations set
      forth in Section 11 above

     

    

     

    /s/
      Timothy M. McGinn    

    Timothy
      M. McGinn

     

    /s/
      Thomas J. Few, Sr.    

    Thomas
      J.
      Few, Sr.

     

    
      
         

      

      
        87Exhibit 10.27

INTEGRATED
ALARM SERVICES GROUP, INC.

EMPLOYMENT
AGREEMENT

EMPLOYMENT
AGREEMENT made as
of this 2nd day of
March 2005 by and between
INTEGRATED ALARM SERVICES GROUP, INC., a
Delaware corporation, having an office at One Capital Center, 99 Pine Street,
Albany, New York 12207 (hereinafter referred to as "Employer") and Bruce
Quay, an
individual residing at 6 Shaker Bay Road, Latham, New York 12110 (hereinafter
referred to as "Employee");

W
I T N E S S E T H:

WHEREAS,
Employer desires to employ Employee as the Chief Operating Officer of Employer;
and

WHEREAS,
Employee is willing to be employed as the Chief Operating Officer of Employer in
the manner provided for herein, and to perform the duties of the Chief Operating
Officer of Employer upon the terms and conditions herein set forth;

NOW,
THEREFORE, in
consideration of the promises and mutual covenants herein set forth it is agreed
as follows:

1. Employment
of Chief Operating Officer. Employer
hereby employs Employee as Chief Operating Officer.

2. Term. 
(a)
Subject
to Section 9 and Section 10 below, the term of this Agreement shall be for a
period of thirty-six (36) months commencing on a date to be agreed upon by
Employee and Employer but no later than April 4, 2005 (the A
Term@). The
Term of this Agreement shall be automatically extended for additional one (1)
year periods, unless either party notifies the other in writing at least one (1)
year prior to the expiration of the then existing Term of its intention not to
extend the Term. During the Term, Employee shall devote substantially all of his
business time and efforts to Employer and its subsidiaries and affiliates.

3. Duties. The
Employee shall perform those functions generally performed by persons of such
title and position, shall attend all meetings of the stockholders and the Board,
shall perform any and all related duties and shall have any and all powers as
may be prescribed by resolution of the Board, and shall be available to confer
and consult with and advise the officers and directors of Employer at such times
that may be required by Employer. Employee shall report directly to the
Employer=s
President and Chief Executive Officer and ultimately to the Board. Employee
shall not enter into any transaction on behalf of the Employer, except as
authorized by the CEO, other than in the ordinary course of
business.

4. Compensation.

a. (i) Employee
shall be paid a minimum of $360,000 per year during the Term of this Agreement.
Employee shall be paid periodically in accordance with the policies of the
Employer during the term of this Agreement, but not less than
monthly.

(ii) Employee
is eligible for an annual bonus, if any, which will be determined and paid in
accordance with policies set from time to time by the Board. 

b. Employer
shall include Employee in its health insurance program available to Employer's
executive officers and shall pay 100% of the premiums for such
program.

c.
Employee shall have the right to participate in any other employee benefit plans
established by Employer.

d. Employee
shall be issued 25,000 options to purchase the Common Stock of Employer which
options shall have an exercise price equal to the closing bid price of the
Employer=s common
stock on the day prior to the date hereof. The options shall vest 1/3 upon
issuance, 1/3 one year from issuance and 1/3 two years from
issuance.

e. (i) In the
event of a "Change of Control" whereby: 

(A) A person
(other than a person who is an officer or a Director of Employer on the
effective date hereof), including a "group" as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, becomes, or obtains the right to become,
the beneficial owner of Employer securities having 51% or more of the combined
voting power of then outstanding securities of the Employer that may be cast for
the election of directors of the Employer; 

(B) At any
time, a majority of the Board-nominated slate of candidates for the Board is not
elected; 

(C) Employer
consummates a merger in which it is not the surviving entity; 

(D) Substantially
all Employer's assets are sold; or 

(E) Employer's
stockholders approve the dissolution or liquidation of Employer; or

(F)
Timothy McGinn ceases to be CEO of Employer; then

 

 

         (ii)  (A) All stock
options and warrants ("Rights") granted by Employer to Employee under any plan
or otherwise prior to the effective date of the Change of Control, shall become
vested, accelerate and become immediately exercisable. 

 

    (B) If at any
time within 6 months of the said Change of Control, Employee is not retained by
Employer or the surviving entity, as applicable, under terms and conditions
substantially similar to those herein, or if Employee=s duties
require employee to move to a location not acceptable to Employee, then in
addition, Employee shall be eligible to receive a one-time cash bonus, equal on
an after-tax basis to his average compensation for the three previous fiscal
years. Such compensation shall include salary, bonus, and any other compensation
pursuant hereto. Said bonus shall be paid within thirty (30) days of the Change
of Control.

5. Expenses.
Employee shall be reimbursed for all of his actual out-of-pocket expenses
incurred in the performance of his duties hereunder, provided such expenses are
acceptable to Employer, which approval shall not be unreasonably withheld, for
business related travel and entertainment expenses, and that Employee shall
submit to Employer reasonably detailed receipts with respect
thereto.

6. Vacation. Employee
shall be entitled to receive four (4) weeks paid vacation time after each year
of employment upon dates agreed upon by Employer. Upon separation of employment,
for any reason, vacation time accrued and not used shall be paid at the salary
rate of Employee in effect at the time of employment separation.

7. Secrecy. At no
time shall Employee disclose to anyone any confidential or secret information
(not already constituting information available to the public) concerning the
internal affairs, business operations, and trade secrets of Employer.

8. Covenant
Not to Compete.

(a)
Subject to, and limited by, Section 10(b), Employee will not, at any time,
during the term of this Agreement, and for one (1) year thereafter, either
directly or indirectly, engage in, with or for any enterprise, institution,
whether or not for profit, business, or company, competitive with the business
(as identified herein) of Employer as such business may be conducted on the date
thereof, as a creditor, guarantor, or financial backer, stockholder, director,
officer, consultant, advisor, employee, member, or otherwise of or through any
corporation, partnership, association, sole proprietorship or other entity;
provided, that an investment by Employee, his spouse or his children is
permitted if such investment is not more than four percent (4%) of the total
debt or equity capital of any such competitive enterprise or business and
further provided that said competitive enterprise or business is a publicly held
entity whose stock is listed and traded on a national stock exchange, the NASDAQ
Stock Market, or the over-the-counter bulletin board or any successor thereto.
As used in this Agreement, the business of Employer shall be deemed to include
wholesale monitoring and related support services, and financing solutions and
products, within the security alarm industry. 

 

(b) For a
period one year from the date of termination of this agreement Employee shall
not contact or solicit any of the Employers
dealers, customers, employees or suppliers.

9.
Termination.

a.
Termination
by Employer 

(i)
Employer may terminate this Agreement upon written notice for Cause. For
purposes hereof, "Cause" shall mean (A) Employee's failure or refusal to perform
his/her duties and responsibilities as set forth in paragraph 3 hereof, or the
failure of Employee to devote all of his/her business time and attention
exclusively to the business and affairs of the Employer in accordance with the
terms hereof, in each case if such failure or refusal is not cured (if curable)
within 10 days after receipt of written notice thereof to Employee by the
Employer; (B) the willful misappropriation of the funds or property of the
Employer (except for immaterial amounts of office supplies); (C) the use of
alcohol or illegal drugs, interfering with the performance of
Employees
obligations under this Agreement; (D) the conviction in a court of law of, or
entering a plea of guilty or nolo contendere, to a charge that either Employee
committed a felony or any crime involving moral turpitude, dishonesty or theft;
(E) the commission in bad faith by Employee of any act which injures the
reputation, business or business relationships of the Employer, or the
commission of an act which constitutes a nonconformance with the
Employer=s
policies against racial or sexual discrimination or harassment; (F) the gross or
habitual misconduct or gross or habitual negligence by Employee in the
performance of his/her duties, continuing after warning; (G)
Employee=s
engagement in any activity which constitutes a conflict of interest with the
Employer; and (H) any breach (not covered by any of the classes (a) through (a)
above) of any provision of this Agreement not cured within ten (10) days after
written notice thereof; Notwithstanding anything to the contrary in this Section
9(a)(i), Employer may not terminate Employee's employment under this Agreement
for Cause unless Employee shall have first received notice from the Board
advising Employee of the specific acts or omissions alleged to constitute Cause,
and such acts or omissions continue after Employee shall have had a reasonable
opportunity (at least 10 days from the date Employee receives the notice from
the Board) to correct the acts or omissions so complained of. However, Employee
shall have the right at any time during such notice periods, to relieve the
Employee of his office duties and responsibilities and to place Employee on a
paid leave of absence status. 

 

            (ii) This
agreement automatically shall terminate upon the death of Employee, except that
Employee's estate shall be entitled to receive any amount accrued under Section
4(a). 

b. Termination
by Employee

(i) Employee
shall have the right to terminate his employment under this Agreement upon 30
days' notice to Employer given within 90 days following the occurrence of any of
the following events (A) through (F) or within six month following the
occurrence of event (G):

 

    (A) Employee
is not elected or retained as Chief Operating Officer.

 

    (B) Employer
acts to materially reduce Employee's duties and responsibilities hereunder.
Employee's duties and responsibilities shall not be deemed materially reduced
for purposes hereof solely by virtue of the fact that Employer is (or
substantially all of its assets are) sold to, or is combined with, another
entity, provided that Employee shall continue to have the same duties and
responsibilities with respect to Employer's business, and Employee shall report
directly to the chief executive officer and/or board of directors of the entity
(or individual) that acquires Employer or its assets.

 

    (C) Employer
acts to change the geographic location of the performance of Employee's duties
from the Albany, New York area, subject to necessary travel requirements of his
position and duties hereunder. For purposes of this Agreement, the Albany, New
York area shall be deemed to be the area within 60 miles of the current address
of the Employer as set forth above.

 

    (D) A
Material Reduction (as hereinafter defined) in Employee's rate of base
compensation, or Employee's other benefits. "Material Reduction" shall mean a
ten percent (10%) differential;

 

    (E) A failure
by Employer to obtain the assumption of this Agreement by any
successor;

 

    (F) A
material breach of this Agreement by Employer, which is not cured within thirty
(30) days of written notice of such breach by Employer;

 

    (G) A Change
of Control.

(ii)
Anything herein to the contrary notwithstanding, Employee may terminate this
Agreement upon thirty (30) days written notice. 

(iii) If
Employee shall terminate this Agreement under Section 9(b)(i), Employee shall be
entitled to receive twelve months salary. Other than the payment of twelve
months salary to Employee and the immediate vesting of all options of Employee,
Employer shall have no further obligation to compensate Employee pursuant to
Section 4 above. If
Employee shall terminate this Agreement pursuant to Section 9(b)(ii), Employee
shall only be entitled to any accrued and unpaid compensation as of the date of
termination as provided in Section 4(a)(i).

 

10. Consequences
of Breach by Employer; Employment Termination

a. If this
Agreement is terminated pursuant to Section 9(b)(i) hereof, or if Employer shall
terminate Employee's employment under this Agreement in any way that is a breach
of this Agreement by Employer, the following shall apply:

(i) Employee
shall be entitled to payment of twelve months salary; and

(ii) Employee
shall be entitled to payment of any previously declared bonus as provided in
Section 4(a) above.

b. In the
event of termination of Employee's employment pursuant to Section 9(b)(i) of
this Agreement, the provisions of Section 8 shall not apply to
Employee.

11. Remedies.
Employer recognizes that because of Employee's special talents, stature and
opportunities in the alarm industry, and because of the special creative nature
of and compensation practices of said industry and the material impact that
individual projects can have on the Company's results of operations, in the
event of termination by Employer hereunder (except under Section 9(a)(i) or
(iii), or in the event of termination by Employee under Section 9(b)(i) before
the end of the agreed term), the Employer acknowledges and agrees that the
provisions of this Agreement regarding further payments of base salary, bonuses
and the exercisability of rights constitute fair and reasonable provisions for
the consequences of such termination, do not constitute a penalty, and such
payments and benefits shall not be limited or reduced by amounts' Employee might
earn or be able to earn from any other employment or ventures during the
remainder of the agreed term of this Agreement.

12. Excise
Tax. In the
event that any payment or benefit received or to be received by Employee in
connection with a termination of his employment with Employer would constitute a
"parachute payment" within the meaning of Code Section 280G or any similar or
successor provision to 280G and/or would be subject to any excise tax imposed by
Code Section 4999 or any similar or successor provision then Employer shall
assume all liability for the payment of any such tax and Employer shall
immediately reimburse Employee on a "grossed-up" basis for any income taxes
attributable to Employee by reason of such Employer payment and
reimbursements.

13. Attorneys'
Fees and Costs. If any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
he may be entitled.

14. Entire
Agreement; Survival. This
Agreement contains the entire agreement between the parties with respect to the
transactions contemplated herein and supersedes, effective as of the date hereof
any prior agreement or understanding between Employer and Employee with respect
to Employee's employment by Employer. The unenforceability of any provision of
this Agreement shall not effect the enforceability of any other provision. This
Agreement may not be amended except by an agreement in writing signed by the

 

 

Employee
and the Employer, or any waiver, change, discharge or modification as sought.
Waiver of or failure to exercise any rights provided by this Agreement and in
any respect shall not be deemed a waiver of any further or future
rights.

 

b. The
provisions of Sections 4, 7, 8, 9(a)(ii), 9(c), 10, 11, 12, 14, 16, 17 and 18
shall survive the termination of this Agreement.

15. Assignment. This
Agreement shall not be assigned to other parties.

16. Governing
Law. This
Agreement and all the amendments hereof, and waivers and consents with respect
thereto shall be governed by the internal laws of the State of New York, without
regard to the conflicts of laws principles thereof.

17. Notices. All
notices, responses, demands or other communications under this Agreement shall
be in writing and shall be deemed to have been given when 

a. delivered
by hand; 

b. sent be
telex or telefax, (with receipt confirmed), provided that a copy is mailed by
registered or certified mail, return receipt requested; or 

c. received
by the addressee as sent be express delivery service (receipt requested) in each
case to the appropriate addresses, telex numbers and telefax numbers as the
party may designate to itself by notice to the other parties: 

(i) if to
the Employer:    

           Integrated
Alarm Services Group, Inc.

99 Pine
Street, 5th
Floor

Albany,
New York

Attention:
Timothy McGinn

Telefax:
(518) 426-1515 

Telephone:(518)
426-0953 

Gersten,
Savage, Kaplowitz, 

Wolf
& Marcus LLP

101 East
52nd Street

9th
Floor

New York,
New York 10022

Attention:
Arthur S. Marcus, Esq.

Telefax:
(212) 980-5192

Telephone:
(212) 752-9700

(ii) if
to the Employee: 

                Bruce
Quay

6 Shaker
Bay Road

Latham,
New York 12110

18. Severability
of Agreement. Should
any part of this Agreement for any reason be declared invalid by a court of
competent jurisdiction, such decision shall not affect the validity of any
remaining portion, which remaining provisions shall remain in full force and
effect as if this Agreement had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties that they
would have executed the remaining portions of this Agreement without including
any such part, parts or portions which may, for any reason, be hereafter
declared invalid.

 

IN
WITNESS WHEREOF, the
undersigned have executed this Agreement as of the day and year first above
written.

INTEGRATED
ALARM SERVICES GROUP, INC.

By:
/s/
Timothy M. McGinn___________________    

Timothy
M. McGinn

Co-Chief
Executive Officer

/s/
Bruce Quay                            

Bruce
Quay

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