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

        
          

        

      

      
         

      

    

    


    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

        
          

        

      

      
         

      

    

    


    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

        
          

        

      

      
         

      

    

    


    (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

        
          

        

      

      
         

      

    


    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

        
          

        

      

      
         

      

    


    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