WARRANT TO PURCHASE COMMON STOCK

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT FOR DISTRIBUTION, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED NEITHER THE WARRANT NOR THE SHARES MAY BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.  THIS WARRANT
MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION
PRECEDENT TO THE SALE, PLEDGE OR OTHER TRANSFER OF ANY INTEREST IN THIS WARRANT
OR THE SHARES ISSUABLE HEREUNDER.

Issuer:  American Security Resources Corporation
Class of Stock:  Common Stock
Issue Date:  July 28, 2006
Expiration Date:  July 28, 2009

THIS WARRANT TO PURCHASE COMMON STOCK is issued by American Security Resources
Corporation, a Nevada corporation (the “Company”) to Golden Gate Investors,
Inc., a California corporation (“Holder”).  On the Issue Date, $300,000 shall be
wired to the Company by Holder, representing the premium to be paid for the
warrants (the “Premium”).

ARTICLE 1
DESCRIPTION OF WARRANTS

1.1           Warrants.  The Company hereby grants to Holder the right to
purchase 50,000,000 shares of the Company’s Common Stock (the “Shares”) or
“Warrant Shares) at a price per share equal to the Exercise price set forth in
section 2.4 below.

1.2           Expiration of Warrants.  This Warrant shall expire and Holder
shall no longer be able to purchase the Warrant Shares on the Expiration Date.

ARTICLE 2
EXERCISE

2.1           Method of Exercise.  Holder may exercise this Warrant by
delivering a duly executed Warrant Notice of Exercise in substantially the form
attached as Appendix 1, together with the Exercise Price, to the principal
office of the Company.

2.2           Minimum Exercise Requirement.  Holder agrees that, beginning in
the first full calendar month after the Registration Statement is declared
effective, Holder will exercise that number of Warrants such that the Company
receives at least $250,000 per calendar month from the Exercise Price, provided
the Shares are available, registered and freely tradable.  If Holder exercises
more than the minimum amount of the Warrants in any calendar month, the excess
shall be credited against the next month’s minimum exercise amount.  In the
event Holder does not exercise the minimum amount of the Warrants in any
calendar month, the Company shall have the right to increase the Exercise Price
by 5% for the following calendar month.

2.3           Delivery of Certificate and New Warrant.  As promptly as
practicable after the receipt of the Warrant Notice of Exercise, but in any
event not more than two (2) Business Days after the Company’s receipt of the
Warrant Notice of Exercise, the Company shall issue the Warrant Shares being
purchased and cause to be mailed for delivery by overnight courier, or if a
Registration Statement covering the Shares has been declared effective by the
SEC cause to be electronically transferred, to Holder a certificate representing
the Shares acquired and, if this Warrant has not been fully exercised and has
not expired, a new Warrant substantially in the form of this Warrant
representing the right to acquire the portion of the Shares not so acquired.

2.4           Replacement of Warrants.  On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.

2.5           Exercise Price.  The Exercise Price of this Warrant shall be $0.04
per Share; provided, however, in no event shall the Exercise Price be lower than
80% of the average of the three lowest volume weighted average prices during the
twenty trading days prior to Holder’s election to exercise.  Upon the exercise
of the Warrant Shares, the Exercise Price shall be reduced pro rata to permit
the Holder to recapture the Premium.

2.5           Certain Exercise Limits.  If and to the extent that, on any date,
the holding by the Holder of this Warrant would result in the Holder’s being
deemed the beneficial owner of more than 9.9% of the then outstanding shares of
Common Stock, then the Holder shall not have the right, and the Company shall
not have the obligation, to exercise any portion of this Warrant as shall cause
Holder to be deemed the beneficial owner of more than 9.9% of the then
outstanding shares of Common Stock.

ARTICLE 3
ADJUSTMENT TO THE SHARES

The number of Shares purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:

3.1           Reclassification.  In case of any reclassification or change of
outstanding securities of the class issuable upon exercise of this Warrant then,
and in any such case, the Holder, upon the exercise hereof at any time after the
consummation of such reclassification or change, shall be entitled to receive in
lieu of each Share theretofore issuable upon exercise of this Warrant, the kind
and amount of shares of stock, other securities, money and/or property received
upon such reclassification or change by a holder of one Share.  The provisions
of this Section 3.1 shall similarly apply to successive reclassifications or
changes.

3.2           Subdivision or Combination of Shares.  If the Company at any time
while this Warrant remains outstanding and unexpired shall subdivide or combine
its Shares, the Exercise Price shall be proportionately decreased in the case of
a subdivision or increased in the case of a combination.

3.3           Stock Dividends.  If the Company, at any time while this Warrant
is outstanding shall pay a dividend with respect to its Shares payable in
Shares, or make any other distribution of Shares with respect to Shares (except
any distribution specifically provided for in Section 3.1 and Section 3.2
above), then the Exercise Price shall be adjusted, effective from and after the
date of determination of shareholders entitled to received such dividend or
distribution, to that price determined by multiplying the Exercise Price in
effect immediately prior to such date of determination by a fraction, (a) the
numerator of which shall be the total number of Shares outstanding immediately
prior to such dividend or distribution, and (b) the denominator of which shall
be the total number of Shares outstanding immediately after such dividend or
distribution.

3.4           Non-Cash Dividends.  If the Company at any time while this Warrant
is outstanding shall pay a dividend with respect to Shares payable in securities
other than Shares or other non-cash property, or make any other distribution of
such securities or property with respect to Shares (except any distribution
specifically provided for in Section 3.1 and Section 3.2 above), then this
Warrant shall represent the right to acquire upon exercise of this Warrant such
securities or property which a holder of Shares would have been entitled to
receive upon such dividend or distribution, without the payment by the Holder of
any additional consideration for such securities or property.

3.5           Effect of Reorganization and Asset Sales.  If any (i)
reorganization or reclassification of the Common Stock (ii) consolidation or
merger of the Company with or into another corporation, or (iii) sale or all or
substantially all of the Company’s operating assets to another corporation
followed by a liquidation of the Company (any such transaction shall be referred
to herein as an “Event”), is effected in such a way that holders of Common Stock
are entitled to receive securities and/or assets as a result of their Common
Stock ownership, the Holder, upon exercise of this Warrant, shall be entitled to
receive such shares of stock securities or assets which the Holder would have
received had it fully exercised this Warrant on or prior the record date for
such Event.  The Company shall not merge into or consolidate with another
corporation or sell all of its assets to another corporation for a consideration
consisting primarily of securities of such corporation, unless the successor or
acquiring corporation, as the case may be, shall expressly assume the due and
punctual observance and performance of each and every covenant and condition of
this Warrant to be performed or observed by the Company and all of the
obligations and liabilities hereunder, subject to such modification as shall be
necessary to provide for adjustments which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 2.  The foregoing
provisions shall similarly apply to successive mergers, consolidations or sales
of assets.

3.6           Adjustment of Number of Shares.  Upon each adjustment in the
Exercise Price, the number of Shares shall be adjusted, to the nearest whole
share, to the product obtained by multiplying the number of Shares, purchasable
immediately prior to such adjustment by a fraction, the numerator of which shall
be the Exercise Price immediately prior to such adjustment and the denominator
of which shall be the Exercise Price immediately thereafter.

3.7           No Impairment.  The Company shall not, by amendment of its
articles of incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out all of the provisions of
this Warrant and in taking all such action as may be reasonably necessary or
appropriate to protect Holder’s rights hereunder against impairment.  If the
Company takes any action affecting its Common Stock other than as described
above that adversely affects Holder’s rights under this Warrant, the Exercise
Price shall be adjusted downward and the number of Shares issuable upon exercise
of this Warrant shall be adjusted upward in such a manner that the aggregate
Exercise Price of this Warrant is unchanged.

3.8           Fractional Shares.  No fractional Shares shall be issuable upon
the exercise of this Warrant, and the number of Shares to be issued shall be
rounded down to the nearest whole share.

3.9           Certificate as to Adjustments.  Upon any adjustment of the
Exercise Price, the Company, at its expense, shall compute such adjustment and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based.  The Company
shall, upon written request, furnish Holder a certificate setting forth the
Exercise Price in effect upon the date thereof and the series of adjustments
leading to such Exercise Price.

3.10           No Rights of Shareholders.  This Warrant does not entitle Holder
to any voting rights or any other rights as a shareholder of the Company prior
to the exercise of Holder’s right to purchase Shares as provided herein.

ARTICLE 4
REPRESENTATIONS AND COVENANTS OF THE COMPANY

4.1           Representations and Warranties.  The Company hereby represents and
warrants to Holder that all Shares which may be issued upon the exercise of the
purchase right represented by this Warrant, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonasessable, and free of any liens
and encumbrances.

4.2           Notice of Certain Events.  If the Company proposes at any time (a)
to declare any dividend or distribution upon its Common Stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series of
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of Common Stock; (d) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (e) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the Company’s securities
for cash, then, in connection with each such event, the Company shall give
Holder (1) at least 20 days prior written notice of the date on which a record
will be taken for such dividend, distribution, or subscription rights (and
specifying the date on which the holders of Common Stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 20 days prior written notice of the date when the
same will take place (and specifying the date on which the holders of Common
Stock will be entitled to exchange their Common Stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given to the holders
of such registration rights.

4.3           Information Rights.  So long as Holder holds this Warrant and/or
any of the Shares, the Company shall deliver to Holder (a) promptly after
mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within ninety (90) days of their availability,
the annual audited financial statements of the Company certified by independent
public accountants of recognized standing, and (c) within forty-five (45) days
after the end of each fiscal quarter or each fiscal year, the Company’s
quarterly, unaudited financial statements.

4.4           Reservation of Warrant Shares.  The Company has reserved and will
keep available, out of the authorized and unissued shares of Common Stock, the
full number of shares sufficient to provide for the exercise of the rights of
purchase represented by this Warrant.

ARTICLE 5
REGISTRATION RIGHTS

5.1           Definitions.

(a)           As used in this Agreement, the following terms shall have the
meanings:

(i)           “Affiliate” of any specified Person means any other Person who
directly, or indirectly through one or more intermediaries, is in control of, is
controlled by, or is under common control with, such specified Person.  For
purposes of this definition, control of a Person means the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether by contract, securities, ownership or otherwise; and the
terms “controlling” and “controlled” have the respective meanings correlative to
the foregoing.

(ii)           “Commission” means the Securities and Exchange Commission.

(3)           “Person” means any individual, partnership, corporation, limited
liability company, joint stock company, association, trust, unincorporated
organization, or a government or agency or political subdivision thereof.

(iii)           “Prospectus” means the prospectus (including, without
limitation, any preliminary prospectus and any final prospectus filed pursuant
to Rule 424(b) under the Securities Act, including any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance on Rule 430A under the Securities Act)
included in the Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Registration Statement and by all
other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.

(iv)           “Public Offering” means an offer registered with the Commission
and the appropriate state securities commissions by the Company of its Common
Stock and made pursuant to the Securities Act.

(v)           “Registrable Securities” means the Common Stock issued (i) upon
exercise of the Warrants, and (ii) in connection with any distribution,
recapitalization, stock-split, stock adjustment or reorganization of the
Company; provided, however, a share of Common Stock shall cease to be a
Registrable Security for purposes of this Agreement when it no longer is a
Restricted Security.

(vi)           “Registration Statement” means a registration statement of the
Company filed on an appropriate form under the Securities Act providing for the
registration of, and the sale on a continuous or delayed basis by the holders of
all of the Registrable Securities pursuant to Rule 415 under the Securities Act,
including the Prospectus contained therein and forming a part thereof, any
amendments to such registration statement and supplements to such Prospectus,
and all exhibits to and other material incorporated by reference in such
registration statement and Prospectus.

(vii)           “Restricted Security” means any share of Common Stock issued
upon exercise of warrants except any such share that (i) has been registered
pursuant to an effective registration statement under the Securities Act and
sold in a manner contemplated by the prospectus included in such registration
statement, (ii) has been transferred in compliance with the resale provisions of
Rule 144 under the Securities Act (or any successor provision thereto) or is
transferable pursuant to paragraph (k) of Rule 144 under the Securities Act (or
any successor provision thereto) or (iii) otherwise has been transferred and a
new share of Common Stock not subject to transfer restrictions under the
Securities Act has been delivered by or on behalf of the Company.

(viii)                      “Securities Act” means the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder, or any
similar successor statute.

5.2           Registration.

(a)           Filing and Effectiveness of Registration Statement.  The Company
shall prepare and file with the Commission as soon as practicable a Registration
Statement relating to the offer and sale of the Registrable Securities and shall
use its best efforts to cause the Commission to declare such Registration
Statement effective under the Securities Act as promptly as practicable but in
no event later than ninety (90) days from the date hereof (the “Deadline”).  The
Company shall promptly (and, in any event, no more than 24 hours after it
receives comments from the Commission), notify the Holder when and if it
receives any comments from the Commission on the Registration Statement and
promptly forward a copy of such comments, if they are in writing, to
Holder.  The Company shall notify Holder by written notice that such
Registration Statement has been declared effective by the Commission within 24
hours of such declaration by the Commission.  In the event that the Registration
Statement is not declared effective by the Deadline, or if after the
Registration Statement is declared effective such Registration Statement is
thereafter no longer effective, then the Company shall pay to Holder, in
addition to any damages incurred by the Holder as a result thereof, $10,000 for
each 30 day period or portion thereof for the first 60 days during which the
Registration Statement has not been declared effective and $15,000 for each 30
day period or portion thereof after the 60th day it has not been declared
effective.

5.3           Obligations of the Company.

In connection with the registration of the Registrable Securities, the Company
shall:

(a)           Promptly (i) prepare and file with the Commission such amendments
to the Registration Statement and supplements to the Prospectus as may be
necessary to keep the Registration Statement continuously effective and in
compliance with the provisions of the Securities Act applicable thereto so as to
permit the Prospectus forming part thereof to be current and useable by Holder
for resale of the Registrable Securities for a period of five (5) years from the
date on which the Registration Statement is first declared effective by the
Commission (the “Effective Time”) or such shorter period that will terminate
when all the Registrable Securities covered by the Registration Statement have
been sold pursuant thereto in accordance with the plan of distribution provided
in the Prospectus, transferred pursuant to Rule 144 under the Securities Act or
otherwise transferred in a manner that results in the delivery of new securities
not subject to transfer restrictions under the Securities Act (the “Registration
Period”) and (ii) take all lawful action such that each of (A) the Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, not misleading
and (B) the Prospectus forming part of the Registration Statement, and any
amendment or supplement thereto, does not at any time during the Registration
Period include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;

(b)           (i) Prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or delivery of
any Prospectus (including any supplements thereto), provide draft copies thereof
to Holder and reflect in such documents all such comments as Holder (and its
counsel) reasonably may propose and (ii) furnish to Holder whose Registrable
Securities are included in the Registration Statement and its legal counsel
identified to the Company, (A) promptly after the same is prepared and publicly
distributed, filed with the Commission, or received by the Company, one copy of
the Registration Statement, each Prospectus, and each amendment or supplement
thereto and (B) such number of copies of the Prospectus and all amendments and
supplements thereto and such other documents, as Holder may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by
Holder;

(c)           (i) Register or qualify the Registrable Securities covered by the
Registration Statement under such securities or “blue sky” laws of such
jurisdictions as Holder reasonably requests, (ii) prepare and file in such
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof at all times during the Registration Period,
(iii) take all such other lawful actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period and (iv) take all such other lawful actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions.

(d)           As promptly as practicable after becoming aware of such event,
notify Holder of the occurrence of any event, as a result of which the
Prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
promptly prepare an amendment to the Registration Statement and supplement to
the Prospectus to correct such untrue statement or omission, and deliver a
number of copies of such supplement and amendment to Holder may reasonably
request;

(e)           As promptly as practicable after becoming aware of such event,
notify Holder of the issuance by the Commission of any stop order or other
suspension of the effectiveness of the Registration Statement at the earliest
possible time and take all lawful action to effect the withdrawal, recession or
removal of such stop order or other suspension;

(f)           Cause all the Registrable Securities covered by the Registration
Statement to be listed on the principal national securities exchange, and
included in an inter-dealer quotation system of a registered national securities
association, on or in which securities of the same class or series issued by the
Company are then listed or included;

(g)           Cooperate with Holder who holds Registrable Securities being
offered to facilitate the timely preparation and delivery of certificates for
the Registrable Securities to be offered pursuant to the registration statement
and enable such certificates for the Registrable Securities to be in such
denominations or amounts, as the case may be, as Holder reasonably may request
and registered in such names as Holder may request; and, within three (3)
business days after a registration statement which includes Registrable
Securities is declared effective by the Commission, deliver and cause legal
counsel selected by the Company to deliver to the transfer agent for the
Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such registration statement) an appropriate
instruction and, to the extent necessary, an opinion of such counsel;

(h)           Take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by Holder of its Registrable Securities
in accordance with the intended methods therefore provided in the Prospectus
which are customary under the circumstances; and

(i)           (i) Make reasonably available for inspection by Holder, any
underwriter participating in any disposition pursuant to the Registration
Statement, and any attorney, accountant or other agent retained by such
Investors or any such underwriter all relevant financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries, and (ii) cause the Company's officers, directors and employees to
supply all information reasonably requested by Holder or any such underwriter,
attorney, accountant or agent in connection with the Registration Statement, in
each case, as is customary for similar due diligence examinations; provided,
however, that all records, information and documents that are designated in
writing by the Company, in good faith, as confidential, proprietary or
containing any material nonpublic information shall be kept confidential by such
Investors and any such underwriter, attorney, accountant or agent (pursuant to
an appropriate confidentiality agreement in the case of any such holder or
agent), unless such disclosure is made pursuant to judicial process in a court
proceeding (after first giving the Company an opportunity promptly to seek a
protective order or otherwise limit the scope of the information sought to be
disclosed) or is required by law, or such records, information or documents
become available to the public generally or through a third party not in
violation of an accompanying obligation of confidentiality; and provided,
further, that, if the foregoing inspection and information gathering would
otherwise disrupt the Company’s conduct of its business, such inspection and
information gathering shall, to the maximum extent possible, be coordinated on
behalf of the investors and the other parties entitled thereto by one firm of
counsel designed by and on behalf of the majority in interest of Investors and
other parties.

5.4           Obligations of Holder.

In connection with the registration of the Registrable Securities, Holder shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request.

5.5           Expenses of Registration.

All expenses, other than underwriting discounts and commissions, incurred in
connection with registrations, filings or qualifications pursuant to Section 5,
but including, without limitation, all registration, listing, and qualifications
fees, printing and engraving fees, accounting fees, and the fees and
disbursements of counsel for the Company, and the reasonable fees of one firm of
counsel to the holders of a majority in interest of the Registrable Securities
shall be borne by the Company.

5.6           Indemnification and Contribution.

(a)           Indemnification by the Company.  The Company shall indemnify and
hold harmless Holder and each underwriter, if any, which facilitates the
disposition of Registrable Securities, and each of their respective officers and
directors and each person who controls Holder or underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act (each such
person being sometimes hereinafter referred to as an “Indemnified Person”) from
and against any losses, claims, damages or liabilities, joint or several, to
which such Indemnified Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement of a
material fact contained in any Registration Statement or an omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, not misleading, or arise out of or are based upon an untrue
statement of a material fact contained in any Prospectus or an omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and the Company hereby agrees to reimburse such
Indemnified Person for all reasonable legal and other expenses incurred by them
in connection with investigating or defending any such action or claim as and
when such expenses are incurred; provided, however, that the Company shall not
be liable to any such Indemnified Person in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon (i) an
untrue statement made in, or an omission from, such Registration Statement or
Prospectus in reliance upon and in conformity with written information furnished
to the Company by such Indemnified Person expressly for use therein or (ii) the
use by the Indemnified Person of an outdated or defective Prospectus after the
Company has provided to such Indemnified Person an updated Prospectus correcting
the untrue statement or omission giving rise to such loss, claim, damage or
liability.

(b)           Notice of Claims, etc.  Promptly after receipt by a party seeking
indemnification pursuant to this Section 5.6 (an “Indemnified Party”) of written
notice of any investigation, claim, proceeding or other action in respect of
which indemnification is being sought (each, a “Claim”), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section 5.6 is being sought (the “Indemnifying Party”) of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially prejudiced and
forfeits substantive rights and defenses by reason of such failure. In
connection with any Claim as to which both the Indemnifying Party and the
Indemnified Party are parties, the Indemnifying Party shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying Party, the Indemnified Party shall have the right to
employ separate legal counsel and to participate in the defense of such Claim,
and the Indemnifying Party shall bear the reasonable fees, out-of-pocket costs
and expenses of such separate legal counsel to the Indemnified Party if (and
only if): (x) the Indemnifying Party shall have agreed to pay such fees, costs
and expenses, (y) the Indemnified Party and the Indemnifying Party shall
reasonably have concluded that representation of the Indemnified Party by the
Indemnifying Party by the same legal counsel would not be appropriate due to
actual or, as reasonably determined by legal counsel to the Indemnified Party,
potentially differing interests between such parties in the conduct of the
defense of such Claim, or if there may be legal defenses available to the
Indemnified Party that are in addition to or disparate from those available to
the Indemnifying Party or (z) the Indemnifying Party shall have failed to employ
legal counsel reasonably satisfactory to the Indemnified Party within a
reasonable period of time after notice of the commencement of such Claim.  If
the Indemnified Party employs separate legal counsel in circumstances other than
as described in clauses (x), (y) or (z) above, the fees, costs and expenses of
such legal counsel shall be borne exclusively by the Indemnified Party.  Except
as provided above, the Indemnifying Party shall not, in connection with any
Claim in the same jurisdiction, be liable for the fees and expenses of more than
one firm of counsel for the Indemnified Party (together with appropriate local
counsel).  The Indemnified Party shall not, without the prior written consent of
the Indemnifying Party (which consent shall not unreasonably be withheld),
settle or compromise any Claim or consent to the entry of any judgment that does
not include an unconditional release of the Indemnifying Party from all
liabilities with respect to such Claim or judgment.

(c)           Contribution.  If the indemnification provided for in this Section
5.6 is unavailable to or insufficient to hold harmless an Indemnified Person
under subsection (A) or (B) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations.

(d)           Notwithstanding any other provision of this Section 5.6, in no
event shall any (i) Holder be required to undertake liability to any person
under this Section 5.6 for any amounts in excess of the dollar amount of the
proceeds to be received by Holder from the sale of Holder's Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) pursuant to any Registration Statement under which such Registrable
Securities are to be registered under the Securities Act and (ii) underwriter be
required to undertake liability to any Person hereunder for any amounts in
excess of the aggregate discount, commission or other compensation payable to
such underwriter with respect to the Registrable Securities underwritten by it
and distributed pursuant to the Registration Statement.

(e)           The obligations of the Company under this Section 5.6 shall be in
addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 5 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 5.6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.

5.7           Assignment.

The rights to have the Company register Registrable Securities pursuant to this
Agreement shall be automatically assigned by Holder to any transferee of all or
any portion of such Registrable Securities (or all or any portion of the
Warrants only if (a) Holder agrees in writing with the transferee or assignee to
assign such rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such assignment, (b) the Company is, within a
reasonable time after such transfer or assignment, furnished with written notice
of (i) the name and address of such transferee or assignee and (ii) the
securities with respect to which such registration rights arc being transferred
or assigned, (c) immediately following such transfer or assignment, the
securities so transferred or assigned to the transferee or assignee constitute
Restricted Securities and (d) at or before the time the Company received the
written notice contemplated by clause (b) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
contained herein.
 
ARTICLE 6
REPRESENTATIONS AND COVENANTS OF THE HOLDER

6.1           Private Issue. Holde
exercise of Holder's rights contained in the Warrant are not registered under
the Act or qualified under applicable state securities laws on the ground that
the issuance contemplated by the Warrant will be exempt from the registration
and qualifications requirements thereof, and (ii) that the Company’s reliance on
such exemption is predicated on Holder's representations set forth in this
Article 6.

6.2           Financial Risk.  Holder has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment and has the ability to bear the economic risks of its
investment.

6.3           Risk of No Registration.  Holder understands that if the Company
does not register with the Securities and Exchange Commission pursuant to
Section 12 of the Act, or file reports pursuant to Section 15(d), of the
Securities Exchange Act of 1934 (the “1934 Act”), or if a registration statement
covering the securities under the Act is not in effect when it desires to sell
(1) the right to purchase Shares pursuant to the Warrant, or (ii) the Shares
issuable upon exercise of the right to purchase, it may be required to hold such
securities for an indefinite period.

6.4           Accredited Investor.  Holder is an “accredited investor,” as such
term is defined in Regulation D promulgated pursuant to the Act.

6.5           Short Selling.  So long as this Warrant is outstanding, Holder
agrees and covenants on its behalf and on behalf of its affiliates that neither
Holder nor its affiliates shall at any time engage in any short sales with
respect to the Company’s Common Stock, or sell put options or similar
instruments with respect to the Company's Common Stock. The parties acknowledge
that Holder shall be entitled to sell the Shares from each Warrant exercise
immediately upon submission of the applicable Warrant Notice of Exercise, and
payment of the Exercise Price, to the Company, for such Shares.

ARTICLE 7
MISCELLANEOUS

7.1           Term.  This Warrant is exercisable, in whole or in part, at any
time and from time to time on or after the Issue Date and on or before the
Expiration Date set forth above.

7.2           Compliance with Securities Laws on Transfer.  This Warrant may not
be transferred or assigned in whole or in part without compliance with
applicable federal and state securities laws by the transferor and the
transferee (including, without limitation, the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, as reasonably requested by the Company). The Company shall not require
Holder to provide an opinion of counsel if the transfer is to an affiliate of
Holder.

7.3           Transfer Procedure.  Holder shall have the right without the
consent of the Company to transfer or assign in whole or in part this Warrant
and the Shares issuable upon exercise of this Warrant. Holder agrees that unless
there is in effect a registration statement under the Act covering the proposed
transfer of all or part of this Warrant, prior to any such proposed transfer the
Holder shall give written notice thereof to the Company (a “Transfer
Notice”).  Each Transfer Notice shall describe the manner and circumstances of
the proposed transfer in reasonable detail and, if the company so requests,
shall be accompanied by an opinion of legal counsel, in a form reasonably
satisfactory to the Company, to the effect that the proposed transfer may be
effected without registration under the Act; provided that the Company will not
require opinions of counsel for transactions involving transfers to affiliates
or pursuant to Rule 144 promulgated by the Securities and Exchange Commission
under the act, except in unusual circumstances.

7.4           Notices, etc.  All notices and other communications required or
permitted hereunder shall be in writing and shall be delivered personally, or
sent by telecopier machine or by a nationally recognized overnight courier
service, and shall be deemed given when so delivered personally, or by
telecopier machine or overnight courier service as follows:

If to the Company, to:

American Security Resources Corporation
9601 Katy Freeway, Suite 220
Houston, TX 77024
Telephone: 713-465-1001
Facsimile: 713-465-1080

If to the Holder, to:

Golden Gate Investors, Inc.
7817 Herschel Avenue, Suite 200
La Jolla, CA 92037
Telephone: 858-551-8769
Facsimile: 858-551-8779

or at such other address as the Company shall have furnished to the
Holder.  Each such notice or other communication shall for all purposes of this
agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or five
days after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid.

7.5           Counterparts.  This agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.  Facsimile execution shall be deemed originals.

7.6           Waiver.  This Warrant and any term hereof may be: changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such changes waiver, discharge or termination is
sought.

7.7           Attorneys Fees.  In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys fees.

7.8           Governing Law; Jurisdiction.  This Warrant shall be governed by
and construed in accordance with the laws of the State of California, without
giving effect to its principles regarding conflicts of law. Each of the parties
hereto consents to the jurisdiction of the federal courts whose districts
encompass any part of the City of San Diego or the state courts of the State of
California sitting in the City of San Diego in connection with any dispute
arising under this Warrant and hereby waives, to the maximum extent permitted by
law, any objection including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions.

7.9           Remedies.  The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transactions hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Warrant will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Warrant, that the Holder shall
be entitled, in addition to all other available remedies at law or in equity,
and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Warrant and to
enforce specifically the terms and provisions hereof, without the necessity of
showing economic loss and without any bond or other security being required.

IN WITNESS WHEREOF, the parties hereto have duly caused this Warrant to Purchase
Common Stock to be executed and delivered on the date first above written.
 
 

AMERICAN SECURITY RESOURCES CORPORATION
 
GOLDEN GATE INVESTORS, INC.
 
 
By:                                                             
By:                                                             
Name: Frank Neukomm
Name:                                                             
Its: CEO
Its:                                                             
 
 

 
 
 
 

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APPENDIX 1

WARRANT NOTICE OF EXERCISE

1.           The undersigned hereby elects to purchase _____ shares of the
Common Stock of American Security Resources Corporation pursuant to the terms of
the Warrant to Purchase Common Stock issued on July ___, 2006.

2.           Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as is specified below:

____________________
____________________
____________________
(Name and Address)

3.           The undersigned makes the representations and covenants set forth
in Article 5 of the Warrant to Purchase Common Stock.

_______________________________
(Signature)

______________________________
(Date)
 
 
 
 

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ADDENDUM TO WARRANT TO PURCHASE COMMON STOCK

This Addendum to Warrant to Purchase Common Stock is entered into as of the ___
day of August 2006 by and between American Security Resources Corporation, a
Nevada corporation (the “Company”) and Golden Gate Investors, Inc., a California
corporation (“Holder”).

WHEREAS, the Company and Holder are parties to that certain Warrant to Purchase
Common Stock dated as of July___, 2006 (“Warrant Agreement”); and

WHEREAS, the parties desire to amend the Warrant Agreement in certain respects.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Holder agree as
follows:

1.           All terms used herein shall have the definitions set forth in the
Warrant Agreement.

2.
The Premium shall be $150,000.  If the Registration Statement is not declared
effective by the Commission within six months of the Issue Date, Holder shall
have the right to demand the return of the Premium, in which case the Premium
shall be immediately due and payable in full.

3.           The fixed portion of the Exercise Price shall be $0.01, rather than
$0.04.

4.
Except as specifically amended herein, all other terms and conditions of the
Warrant Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the Company and Holder have caused this Addendum to Warrant
to Purchase Common Stock to be signed by its duly authorized officers on the
date first set forth above.

AMERICAN SECURITY RESOURCES CORPORATION
 
GOLDEN GATE INVESTORS, INC.
 
 
By:                                                             
By:                                                             
Name: Frank Neukomm
Name:                                                             
Its: CEO
Its: