NOTE AND WARRANT ACQUISITION AGREEMENT

NOTE AND WARRANT ACQUISITION AGREEMENT

Argyle Security Acquisition Corporation

200 Concord Plaza Suite 700

San Antonio, TX 78216

The undersigned (the “ Investor ”), hereby confirms its agreement with you as follows:

1.   This Note and Warrant Acquisition Agreement (the “ Agreement ”) is made as of the date set forth below between Argyle Security Acquisition Corporation, a Delaware corporation (the “ Company ”), and the Investor.

2.   The Company is selling notes in the aggregate principal amount of $300,000 (each a “ Note ”) bearing an interest rate of 4% in the form of Exhibit A hereto and 37,500 warrants in the form of Exhibit B hereto (each a “ Warrant ” and, together with the Notes, the “ Securities ”), each warrant to purchase one share of the common stock of the Company (the “ Common Stock ”), to the investors in a private placement (the “ Offering ”).

3.   The terms and conditions of Annex I are incorporated by reference into this Agreement.

4.   The Company will issue to the Investor (i) $32,000 aggregate principal amount of Notes on the Closing Date, (ii) 4,000 Warrants.

5.   All transferees of the Securities and the Common Stock into which the Securities are exercisable shall be bound by the restrictions set forth herein, the Note and the Warrant.

Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose.

AGREED AND ACCEPTED:

ARGYLE SECURITY ACQUISITION CORPORATION

By:  /s/ Bob Marbut                                                  

Print Name: Bob Marbut

Title:            Co-Chief Executive Officer

ANNEX I

1.   Waiver of Liquidation Distributions . In connection with the Securities purchased pursuant to this Agreement, the Investor hereby waives any and all right, title, interest or claim of any kind in or to any liquidating distributions by the Company in the event of a liquidation of the Company upon the Company's failure to timely complete a Business Combination (as defined in the Company’s Second Amended and Restated Certificate of Incorporation).

2.   Lock-Up Agreement . The Investor may not sell, assign, hypothecate, or transfer any of the Securities purchased pursuant to this Agreement until the earlier of consummation of a Business Combination or liquidation of the Company.

3.   Representations and Warranties of the Investors . The Investor represents and warrants to the Company that:

3.1   The Investor is an “accredited investor” as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

3.2   The Securities are being acquired for the Investor’s own account, only for investment purposes and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act.

3.3   The Investor has the full right, power and authority to enter into this Agreement and this Agreement is a valid and legally binding obligation of the Investor enforceable against the Investor in accordance with its terms.

4.   Registration Rights .

4.1   Demand Registration . At any time and from time to time on or after the date on which the Company has consummated a Business Combination, persons holding a majority-in-interest of the shares of Common Stock underlying the Warrants sold on the date hereof (the “Registrable Securities”) may make a written demand for registration under the Securities Act of all or part of their Registrable Securities (a “Demand Registration”). Any demand for a Demand Registration shall specify the number of Registrable Securities proposed to be sold. The Company will notify all holders of Registrable Securities of the demand, and each holder of Registrable Securities who wishes to include all or a portion of such holder’s Registrable Securities in the Demand Registration (each such holder including shares of Registrable Securities in such registration, a “Demanding Holder”) shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice from the Company. Upon any such request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration.

The Company shall, as expeditiously as possible and in any event within sixty (60) days after receipt of a request for a Demand, prepare and file with the SEC a registration statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of all Registrable Securities to be registered thereunder, and shall use its best efforts to cause such registration statement to become effective as promptly as practicable.

The Company shall not be obligated to effect more than two Demand Registrations in respect of the Registrable Securities.

4.2   “ Piggyback” Registration Rights . Subject to the last sentence of this Section 4.2, at any time after a Business Combination, if the Company shall determine to proceed with the actual preparation and filing of a new registration statement under the Securities Act in connection with the proposed offer and sale of any of its securities by it or any of its security holders (other than a registration statement on Form S-4, S-8 or other limited purpose form), the Company will give written notice of its determination to the Investor or its nominee. Upon the written request from a majority-in-interest of the Registrable Securities, within 15 days after receipt of any such notice from the Company, the Company will, except as herein provided, cause all of the Registrable Securities covered by such request (the “Requested Stock”) held by the Investors making such request (the “Requesting Holders”) to be include