THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

ISI DETENTION CONTRACTING GROUP, INC.
(A CALIFORNIA CORPORATION)
GUARANTEED CONVERTIBLE PROMISSORY NOTE (L)

$1,500,000.00
January 1, 2008
 
San Antonio, Texas
   

FOR VALUE RECEIVED, ISI Detention Contracting Group, Inc., a California
corporation (the “Company”) promises to pay to Peterson Detention Inc., a
California corporation (“PDI”) or its transferees (“Holder”) in lawful money of
the United States of America the principal sum of ONE MILLION FIVE HUNDRED
THOUSAND DOLLARS ($1,500,000.00), or such lesser amount as shall equal the
outstanding principal amount hereof, together with interest from the date of
this Note on the unpaid principal balance at a rate equal to 6.0% per annum,
computed on the basis of the actual number of days elapsed and a year of 365
days. All unpaid principal, together with any then unpaid and accrued interest
and other amounts payable hereunder, shall be due and payable on the earlier of
(i) December 31, 2012 (the “Maturity Date”), or (ii) when, upon or after the
occurrence of an Event of Default (as defined below), such amounts are declared
due and payable by Holder or made automatically due and payable in accordance
with the terms hereof. Until the Maturity Date, and in the absence of an Event
of Default whereby this Note becomes due and payable, payments shall be due and
payable in accordance with the Payment Schedule attached hereto as Schedule A.
This Note is issued pursuant to the Asset Purchase Agreement effective as of
January 1, 2008 (as previously or hereafter amended, modified or supplemented,
the “Purchase Agreement”) between the Company and PDI, and is guaranteed by ISI
Detention Contracting Group, a Texas corporation (“ISI Texas”), ISI Security
Group, Inc., a Delaware corporation (“ISI”), and Argyle Security, Inc., a
Delaware corporation (“Argyle”), (affiliates of the Company) pursuant to
guaranty agreements of even date herewith (“Guaranty Agreements”), copies of
which are attached hereto as Exhibits A, B and C. All payments due and owing
under this Note shall be paid to: Peterson Detention Inc., 577 N. Batavia,
Orange, CA.

The following is a statement of the rights of Holder and the conditions to which
this Note is subject, and to which Holder, by the acceptance of this Note,
agrees:

1. Definitions. As used in this Note, the following capitalized terms have the
following meanings:

A. “Company” includes the corporation executing this Note and any Person which
shall succeed to or is permitted to assume the obligations of the Company under
this Note.
 
 
1

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B. “Event of Default” has the meaning given in Section 5 hereof.

C. “Holder” shall mean the Person specified in the introductory paragraph of
this Note or any Person who shall, at any time, be the holder of this Note.

D. “Purchase Agreement” has the meaning given in the introductory paragraph
hereof.

E. “Obligations” shall mean and include all loans, advances, debts, liabilities
and obligations, howsoever arising, owed by the Company to Holder of every kind
and description (whether or not evidenced by any note or instrument and whether
or not for the payment of money), now existing or hereafter arising under or
pursuant to the terms of this Note, including, all interest, fees, charges,
expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable
to and payable by the Company hereunder, in each case, whether direct or
indirect, absolute or contingent, due or to become due, and whether or not
arising after the commencement of a proceeding under Title 11 of the United
States Code (11 U.S.C. Section 101 et seq.), as amended from time to time
(including post-petition interest) and whether or not allowed or allowable as a
claim in any such proceeding.

F. “Person” shall mean and include an individual, a partnership, a corporation
(including a business trust), a joint stock company, a limited liability
company, an unincorporated association, a joint venture or other entity or a
governmental authority.

G. “Securities Act” shall mean the Securities Act of 1933, as amended.

H. “Senior Indebtedness” means, all principal of (and premium, if any) and
interest on all indebtedness of Company, whether outstanding on the date of this
Note or thereafter created, incurred or assumed, arising only under (i) that
certain Loan and Security Agreement by and between LaSalle Bank, NA, Company,
and the affiliates of Company party thereto dated as of October 21, 2004, as it
has been and may be amended from time to time, and (ii) that certain Note and
Warrant Purchase Agreement (the ”Blair Indebtedness”) by and among William Blair
Mezzanine Capital Fund III, L.P., a Delaware limited partnership, Company, and
affiliates of Company party thereto dated as of October 22, 2004, as it has been
and may be amended from time to time (collectively, the “Senior Indebtedness”).
Senior Indebtedness shall include any such indebtedness or any notes or other
evidence of indebtedness issued in exchange for such Senior Indebtedness, or any
indebtedness arising from the satisfaction of such Senior Indebtedness by a
guarantor. No other indebtedness of the Company shall be considered Senior
Indebtedness.

2. Interest. Accrued interest on this Note shall be payable in accordance with
Schedule A until the outstanding principal amount hereof shall be paid in full.
Any accrued but unpaid interest on this Note shall be payable at the time this
Note is to be paid in full.
 
 
2

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

 

3. Prepayment. This Note may be prepaid at any time after February 28, 2008,
without the consent of the Holder.

4. Subordination.

A.  LaSalle Subordination. The obligations evidenced hereby are subordinate in
the manner and to the extent set forth in that certain Subordination Agreement
(the “Subordination Agreement”) created as of January 1, 2008, among, without
limitation, Peterson Detention, Inc. a California corporation (“Subordinated
Lender”), ISI Detention Contracting Group, Inc., a California corporation and
LaSalle Bank National Association, a national banking association (“Senior
Lender”) to the obligations (including interest) owed by ISI Security Group,
Inc., a Delaware corporation to the holders of all of the notes issued pursuant
to that certain Loan and Security Agreement dated as of October 21, 2004,
between ISI Security Group, Inc. and Senior Lender, as such Agreement may be
supplemented, modified, restated or amended from time to time; and each holder
hereof, by its acceptance hereof, shall be bound by the provisions of the
Subordination Agreement.

B.  Blair Subordination. The indebtedness evidenced by this Note is hereby
expressly subordinated in right of payment to the prior payment in full of all
of the Company’s Senior Indebtedness relating to the Blair Indebtedness.

C. In addition to any other obligations of the Holder relating to the
subordination of Senior Indebtedness, Holder hereby agrees to execute and
deliver such documents as may be reasonably requested from time to time by the
Company or a holder of any Senior Indebtedness, including reasonable and
customary forms of subordination agreement requested from time to time by a
holder of Senior Indebtedness, in order to implement Section 4 hereof, so long
as such documentation is not in conflict with the provisions of this Section 4.

5. Events of Default. The occurrence of any of the following shall constitute an
“Event of Default” under this Note:

A. Failure to Pay. The Company shall fail to pay (i) when due any principal or
interest payment or (ii) any other payment required under the terms of this Note
when due and such payment shall not have been made within five days after
Holder’s written notice to the Company of such failure to pay; or

B. Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply
for or consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property, (ii) be
unable, or admit in writing its inability, to pay its debts generally as they
mature, (iii) make a general assignment for the benefit of its or any of its
creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term
may be defined or interpreted under any applicable statute), (vi) commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or consent to any such relief or to
the appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vii) take any
action for the purpose of effecting any of the foregoing; or
 
 
3

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C. Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the
appointment of a receiver, trustee, liquidator or custodian of the Company or of
all or a substantial part of the property thereof, or an involuntary case or
other proceedings seeking liquidation, reorganization or other relief with
respect to the Company or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within 30
days of commencement.

6. Rights of Holder upon Default. Upon the occurrence or existence of any Event
of Default (other than an Event of Default described in Sections 5.B or 5.C) and
at any time thereafter during the continuance of such Event of Default, Holder
may, by written notice to the Company, declare all outstanding Obligations
payable by the Company hereunder to be immediately due and payable without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived. Upon the occurrence or existence of any Event of
Default described in Sections 5.B and 5.C, immediately and without notice, all
outstanding Obligations payable by the Company hereunder shall automatically
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived. In addition
to the foregoing remedies, upon the occurrence or existence of any Event of
Default, without the necessity of taking any action against, or providing any
notice to, the Company or any other Person, Holder may exercise its rights under
the Guaranty Agreements and exercise any other right power or remedy permitted
to it by law.

7. Conversion.

A. Optional Conversion by the Holder. On February 28, 2008 (the “Conversion
Date”), Holder may convert up to $750,000 of the outstanding balance of this
Note into unregistered newly issued common stock or treasury shares (“Common
Stock”) of the parent company of the Company, Argyle Security, Inc. (“Argyle”),
at the average closing price of Argyle’s common stock for the 20 trading days
preceding the Conversion Date (the “Conversion Price”); provided the Conversion
Price shall be no less than $8.00 per share. Upon such conversion of this Note,
Holder hereby agrees to execute and deliver to the Company all transaction
documents reasonably required by the Company or Argyle, including an Investor
Questionnaire and other ancillary agreements, with customary representations and
warranties and transfer restrictions (including a 180-day lock-up agreement in
connection with any public offering by the Company or Argyle), and having
similar terms as those agreements entered into by other sellers in purchase
agreements entered into by the Company or Argyle. Holder also agrees to deliver
the original of this Note (or a notice to the effect that the original Note has
been lost, stolen or destroyed together with an agreement, in customary form
reasonably acceptable to the Company, whereby Holder agrees to indemnify the
Company from any loss incurred by it in connection with the loss of this Note)
to the Company upon its election to convert for cancellation and, if any portion
of this Note remains outstanding, issuance of a replacement note for the balance
of the amount outstanding on substantially the same terms and conditions as this
Note, absent the conversion provisions in this Section 7.A, and recalculating
the payment schedule such that it is paid in full on the Maturity Date;
provided, however, that upon satisfaction of the conditions set forth in this
Section 7.A, the portion of this Note that has been converted shall be of no
further force and effect, whether or not it is delivered for cancellation as set
forth in this sentence. Notwithstanding anything to the contrary contained in
this Section 7.A, the Company may, in its sole discretion, permit Holder to
exercise his conversion rights on dates in addition to the Conversion Date.
 
 
4

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

 

B. The Company’s Election. At any time on or after June 1, 2009, but before
November 15, 2009, the Company may, in its sole discretion, require Holder to
choose one of the following options (the “Company’s Election”) within 10 days of
delivery of the Company’s written notice to Holder of the Company’s Election
(the “Election Notice”): (i) the conversion of $250,000 of the outstanding
principal of this Note into Common Stock of Argyle at 95% of the average closing
price of Argyle’s common stock for the 20 trading days preceding delivery of the
Election Notice; or (ii) the Company’s payment to Holder of $7,500 in exchange
for which the payment schedule of the Note shall be amended such that $250,000
of the principal due in 2010 shall be due and payable on Monday, January 3,
2011, with interest continuing to accrue on all unpaid principal amounts. If the
Holder of this Note is different than the holder of a second substantially
similar note issued contemporaneously, the Holder and the holder of that note
are required to choose the same option. In the event that they are unable to
agree on the same option, the Company shall have the right to choose between
options (i) and (ii) above and shall do so within 10 days after the expiration
of the 10 day period previously referred to. In the event that this Note is
converted pursuant to option (i) herein, Holder hereby agrees to execute and
deliver to the Company all transaction documents reasonably required by the
Company or Argyle, including an Investor Questionnaire and other ancillary
agreements, with customary representations and warranties and transfer
restrictions (including a 180-day lock-up agreement in connection with any
public offering by the Company or Argyle), and having the similar terms to those
agreements entered into by other sellers in purchase agreements entered into by
the Company or Argyle. Holder also agrees to deliver the original of this Note
(or a notice to the effect that the original Note has been lost, stolen or
destroyed together with an agreement, in customary form, reasonably acceptable
to the Company whereby the Holder agrees to indemnify the Company from any loss
incurred by it in connection with the loss of this Note) to the Company for
cancellation and, if any portion of this Note remains outstanding, issuance of a
replacement note for the balance of the amount outstanding on substantially the
same terms and conditions as this Note, absent the conversion provisions in this
Section 7.B, and recalculating the payment schedule such that it is paid in full
on the Maturity Date; provided, however, that upon satisfaction of the
conditions set forth in this Section 7.B, the portion of this Note that has been
converted shall be of no further force and effect, whether or not it is
delivered for cancellation as set forth in this sentence.
 
 
5

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

 

C. Fractional Shares; Interest; Effect of Conversion. No fractional shares shall
be issued upon conversion of this Note. In lieu of the Company issuing any
fractional shares to Holder upon the conversion of this Note, the Company shall
pay to Holder an amount equal to the product obtained by multiplying the
applicable conversion price by the fraction of a share not issued pursuant to
the previous sentence.

8. Successors and Assigns. Subject to the restrictions on transfer set forth in
Section 10 below, this Note and the duties and obligations of the Company
hereunder, together with the Holder’s rights and privileges, (A) shall be fully
and freely assignable, in whole or in part, by the Holder; (B) may not be
delegated or transferred by the Company without the prior written consent of the
Holder, which consent shall not be unreasonably withheld; and (C) shall inure to
the benefit of, and be enforceable by, the Holder and its successors, assigns
and transferees, and its and their heirs, administrators, successors, assigns
and transferees. The duties and obligations of the Company shall bind the
Company and the Company’s successors and permitted delegatees.

9. Waiver and Amendment. Any provision of this Note may be amended, waived or
modified upon the written consent of the Company and Holder.

10. Transfer of the Note or the Securities Issuable on Conversion Hereof. With
respect to any offer, sale or other disposition of this Note or the securities
into which this Note may be converted, Holder will give written notice to the
Company and Argyle prior thereto, describing briefly the manner thereof,
together with, a written opinion of Holder’s counsel, or other evidence
reasonably satisfactory to the Company, to the effect that such offer, sale or
other distribution may be effected without registration or qualification (under
any federal or state law then in effect). Upon receiving such written notice and
reasonably satisfactory opinion, if so requested, or other reasonably
satisfactory evidence, the Company, as promptly as practicable, shall notify
Holder that Holder may sell or otherwise dispose of this Note or such
securities, in accordance with the terms of the notice delivered to the Company
and Argyle. If a determination has been made pursuant to this Section 10 that
the opinion of counsel for Holder, or other evidence, is not reasonably
satisfactory to the Company or Argyle, the Company shall so notify Holder
promptly after such determination has been made, stating with reasonable
specificity the reason(s) for such determination. Each Note thus transferred and
each certificate representing the securities thus transferred shall bear the
following legend (or a substantially similar legend) unless in the opinion of
counsel for the Company and Argyle, such legend is not required in order to
ensure compliance with the Securities Act:

THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
 
 
6

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

 

The Company or Argyle may issue stop transfer instructions to its transfer agent
in connection with such restrictions. Notwithstanding the forgoing, Holder (or
any assignee of the Holder permitted pursuant to the Section 10) may, after the
expiration of six months following the Closing Date of the Purchase Agreement,
transfer or assign all or any portion of this Note, upon 5 days advance written
notice to the Company, to any of the following entities, without securing prior
approval from the Company: (i) the Company; (ii) any affiliate of the Holder; or
(iii) any Immediate Family Member of Holder's assignee. As used herein the term
"Immediate Family Member" shall mean, with respect to a natural person, any
spouse, sibling, or child of such natural person, and any trust, custodianship,
guardianship, family limited partnership or similar entity created for the
primary benefit of one or more of the forgoing individuals.

11. Offset. The Purchase Agreement requires that Leonard Peterson become
employed by the Company pursuant to an Employment Agreement, and the parties
acknowledge that his continued involvement with the Company is important to the
Company’s enjoyment of the benefits of the assets being acquired pursuant to the
Purchase Agreement, and that Company would not have entered into the Purchase
Agreement, if Leonard Peterson had not entered into the Employment Agreement,
and agreed to the terms of this Section 11. Accordingly, Holder agrees and
acknowledges that any outstanding amount due and owing by Company pursuant to
this Note shall be automatically offset, upon ten (10) days prior written notice
from the Company, by an amount of up to $450,000 if Leonard Peterson voluntarily
resigns his employment with the Company, as that term is used in Section 6(b)
the Employment Agreement between him and the Company of even date herewith, and
not otherwise, at any time prior to the second anniversary of the date of this
Note as follows:

Date of Termination
 
Amount of Offset
 
Prior to 1st anniversary
 
$
450,000
 
From 1st anniversary to 2nd anniversary
 
$
300,000
 

12. Notices. All notices, requests, demands, consents, instructions or other
communications and determinations under this Note must be in writing and will be
deemed duly given (a) when delivered by hand, (b) two days after being given to
an express courier with a reliable system for tracking delivery, (c) one day
after being sent by confirmed facsimile with a copy sent by another means
specified in this provision or ((d) five days after the day of mailing, when
mailed by registered or certified mail, return receipt requested, postage
prepaid, and addressed as set forth below. A party may from time to time change
its address or designee for notification purposes by giving the other written
notice of the new address or designee and the date upon which it will become
effective.

If to the Company:
ISI Detention Contracting Group, Inc.
 
12903 Delivery Drive
 
San Antonio, TX 78247
 
Attention: Sam Youngblood
 
Facsimile: (210) 495-5613
 
email: syoungblood@isidet.com

 
 
7

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

 
 
with a copy to:
Hughes & Luce LLP
 
111 Congress Avenue, Suite 900
 
Austin, Texas 78701
 
Attention: D. Hull Youngblood, Jr.
 
Facsimile: (512) 482-6859
 
email: hyoungblood@hughesluce.com
   
If to Holder:
Peterson Detention Inc.
 
577 North Batavia
 
Orange, CA 92868

13. Usury. In the event any interest is paid on this Note which is deemed to be
in excess of the then legal maximum rate, then that portion of the interest
payment representing an amount in excess of the then legal maximum rate shall be
deemed a payment of principal and applied against the principal of this Note.

14. Waivers. The Company hereby waives notice of default, presentment or demand
for payment, protest or notice of nonpayment or dishonor and all other notices
or demands relative to this instrument and any defenses, cross complaints or
counterclaims of any kind, other than indefeasible payment in full.

15. Governing Law and Venue THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO THE
PRINCIPLES OF CONFLICTS OF LAWS OR ANY OTHER PRINCIPLE THAT COULD RESULT IN THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION. ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT MUST BE INSTITUTED IN
THE STATE OR FEDERAL COURTS LOCATED IN BEXAR COUNTY, TEXAS, TO THE JURISDICTION
OF WHICH EACH OF THE PARTIES HEREBY EXPRESSLY AND IRREVOCABLY AGREES TO SUBMIT.
THE PARTIES AGREE TO ENTER INTO MEDIATION PRIOR TO TRIAL IN ANY SUIT, ACTION, OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. THE PARTIES HEREBY
WAIVE ANY RIGHT TO A JURY TRIAL IN ANY SUIT, ACTION, OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT.

16. Miscellaneous.

(a) Costs and Expenses. The Company shall pay to Holder all reasonable costs and
expenses (including court costs and reasonable attorneys’ fees) incurred by
Holder in the preservation or enforcement of Holder’s rights and remedies
hereunder.

(b) Amendment. Neither this Note nor any provision hereof may be amended,
altered, modified, changed, waived, discharged or terminated, except by an
instrument in writing signed by the Company and Holder.
 
 
8

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(c) Severability. Whenever possible this Note and each of its provisions shall
be interpreted in such manner as to be effective, valid and enforceable under
applicable law. Any provisions of this Note which are prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating its remaining provisions

(d) Relinquishment. Failure to insist upon strict compliance with any of the
terms hereof shall not be deemed a waiver of such terms, nor shall any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right
or power hereunder be deemed a waiver or relinquishment of such right or power.

(e) Number and Gender. Where the context requires, the singular shall include
the plural, the plural shall include the singular, and any gender shall include
all other genders.

(f) Section Headings. The section headings in this Note are for the purpose of
convenience only and shall not limit or otherwise affect any of the terms
hereof.

(g) Further Assurances. The Company agrees to execute and deliver additional
documents, including any documents or instruments reasonably requested by the
Holder, and take other actions that the Holder may reasonably request for
purposes of carrying out this Note.

(h) Cumulative Remedies. No failure on the part of any party hereto to exercise,
no course of dealing with respect to, and no delay in exercising any right,
power or remedy hereunder shall operate as a waiver. No single or partial
exercise of any rights, power or remedy shall preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The rights
and remedies provided in this Note are cumulative, and are in addition to any
rights or remedies provided by any other document or by law.

(i) Entire Instrument. This Note, including the attachments hereto, embodies the
entire agreement of the parties respecting the matters within its scope. It
supersedes all prior agreements of the parties hereto on the subject matter
hereof.

(j) Time of Essence. Time is expressly made of the essence of each and every
provision of this Note.
 
[Signature Page Follows]
 
 
9

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The Company has caused this Note to be issued as of the date first written
above.

This Note is guaranteed by the Guaranty Agreements of ISI Texas, ISI and Argyle,
copies of which are attached to this Note, and as the same shall exist from time
to time.

        THE COMPANY:  
ISI DETENTION CONTRACTING GROUP, INC.
a California corporation
 
   
   
  By:   /s/ Sam Youngblood  

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

Sam Youngblood,
CEO
 

 
AGREED AND ACCEPTED BY:

HOLDER:

PETERSON DETENTION INC.,
a California corporation

By:  /s/ Leonard Peterson 

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

Leonard Peterson,
Secretary
 
 
 
[Signature page to Convertible Promissory Note (L)]
 
 

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

 

Schedule A
(2 pages)

Payment Schedule

1. Interest only payments made quarterly beginning with the last day of the
first quarter on March 31, 2008 and continuing on the last day of the succeeding
eight calendar quarters as set forth below:
    

Due Date  
Amount
 
Prin Bal
 
March 31, 2008
 
$
22,500
 
$
1,500,000
 
June 30, 2008
 
$
22,500
 
$
1,500,000
 
September 30, 2008
 
$
22,500
 
$
1,500,000
 
December 31, 2008
 
$
22,500
 
$
1,500,000
 
March 31, 2009
 
$
22,500
 
$
1,500,000
 
June 30, 2009
 
$
22,500
 
$
1,500,000
 
September 30, 2009
 
$
22,500
 
$
1,500,000
 
December 31, 2009
 
$
22,500
 
$
1,500,000
 

 
2

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2. Thereafter, level principal and interest payments on the 28th day of each
month for 24 consecutive months, in the cumulative amount of $66,480.92 due
monthly beginning on the 28th day of the 25th month and ending on the 28th day
of the 48th month:
 
Payment
Number
 
Payment
 
Interest
 
Principal
 
Cumulative
Interest
 
Cumulative
Principal
 
Remaining
Balance
 
1
 
$
66,480.92
 
$
7,500.00
 
$
58,980.92
 
$
7,500.00
 
$
58,980.92
 
$
1,441,019.08
 
2
 
$
66,480.92
 
$
7,205.10
 
$
59,275.82
 
$
14,705.10
 
$
118,256.74
 
$
1,381,743.26
 
3
 
$
66,480.92
 
$
6,908.72
 
$
59,572.20
 
$
21,613.81
 
$
177,828.95
 
$
1,322,171.05
 
4
 
$
66,480.92
 
$
6,610.86
 
$
59,870.06
 
$
28,224.67
 
$
237,699.01
 
$
1,262,300.99
 
5
 
$
66,480.92
 
$
6,311.50
 
$
60,169.42
 
$
34,536.17
 
$
297,868.43
 
$
1,202,131.57
 
6
 
$
66,480.92
 
$
6,010.66
 
$
60,470.26
 
$
40,546.83
 
$
358,338.69
 
$
1,141,661.31
 
7
 
$
66,480.92
 
$
5,708.31
 
$
60,772.61
 
$
46,255.14
 
$
419,111.30
 
$
1,080,888.70
 
8
 
$
66,480.92
 
$
5,404.44
 
$
61,076.48
 
$
51,659.58
 
$
480,187.78
 
$
1,019,812.22
 
9
 
$
66,480.92
 
$
5,099.06
 
$
61,381.86
 
$
56,758.64
 
$
541,569.64
 
$
958,430.36
 
10
 
$
66,480.92
 
$
4,792.15
 
$
61,688.77
 
$
61,550.79
 
$
603,258.41
 
$
896,741.59
 
11
 
$
66,480.92
 
$
4,483.71
 
$
61,997.21
 
$
66,034.50
 
$
665,255.62
 
$
834,744.38
 
12
 
$
66,480.92
 
$
4,173.72
 
$
62,307.20
 
$
70,208.22
 
$
727,562.82
 
$
772,437.18
 

 
Payment
Number
 
Payment
 
Interest
 
Principal
 
Cumulative
Interest
 
Cumulative
Principal
 
Remaining
Balance
 
13
 
$
66,480.92
 
$
3,862.19
 
$
62,618.73
 
$
74,070.41
 
$
790,181.55
 
$
709,818.45
 
14
 
$
66,480.92
 
$
3,549.09
 
$
62,931.83
 
$
77,619.50
 
$
853,113.38
 
$
646,886.62
 
15
 
$
66,480.92
 
$
3,234.43
 
$
63,246.49
 
$
80,853.93
 
$
916,359.87
 
$
583,640.13
 
16
 
$
66,480.92
 
$
2,918.20
 
$
63,562.72
 
$
83,772.13
 
$
979,922.59
 
$
520,077.41
 
17
 
$
66,480.92
 
$
2,600.39
 
$
63,880.53
 
$
86,372.52
 
$
1,043,803.12
 
$
456,196.88
 
18
 
$
66,480.92
 
$
2,280.98
 
$
64,199.94
 
$
88,653.51
 
$
1,108,003.05
 
$
391,996.95
 
19
 
$
66,480.92
 
$
1,959.98
 
$
64,520.94
 
$
90,613.49
 
$
1,172,523.99
 
$
327,476.01
 
20
 
$
66,480.92
 
$
1,637.38
 
$
64,843.54
 
$
92,250.87
 
$
1,237,367.53
 
$
262,632.47
 
21
 
$
66,480.92
 
$
1,313.16
 
$
65,167.76
 
$
93,564.03
 
$
1,302,535.29
 
$
197,464.71
 
22
 
$
66,480.92
 
$
987.32
 
$
65,493.60
 
$
94,551.36
 
$
1,368,028.88
 
$
131,971.12
 
23
 
$
66,480.92
 
$
659.86
 
$
65,821.06
 
$
95,211.21
 
$
1,433,849.95
 
$
66,150.05
 
24*
 
$
66,480.80
 
$
330.75
 
$
66,150.05
 
$
95,541.96
 
$
1,500,000.00
 
$
0.00
 

*The final payment has been adjusted to account for payments having been rounded
to the nearest cent.

 
3

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