ANNEX XI
TO
SECURITIES PURCHASE AGREEMENT
<PROTOTYPE FOR EACH ISSUANCE>

FORM OF PROMISSORY NOTE

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
No. 08–  1-  2
 
US $__________3

 
ST. GEORGE INVESTMENTS, LLC

7.5% SECURED PROMISSORY NOTE SERIES 08-___4

FOR VALUE RECEIVED, ST. GEORGE INVESTMENTS LLC, a limited liability company
organized and existing under the laws of the State of Illinois (the "Debtor"),
promises to pay to AMERICAN SECURITY RESOURCES CORPORATION, the registered
holder hereof (the "Company"), the principal sum of _____________________
and  00/100  Dollars (US $_______)5 on the Maturity Date (as defined below) and
to pay interest on the principal sum outstanding from time to time in arrears at
the rate of 7.5% per annum, accruing from ______________, 20__,6 the date of
initial issuance of this Promissory Note (the “Issue Date”), to the Maturity
Date. Interest shall accrue monthly (pro-rated on a daily basis for any period
longer or shorter than a month) from the Issue Date and shall be payable in
cash.

This Promissory Note is being issued pursuant to the terms of the Securities
Purchase Agreement, dated as of February 28, 2008 (the “Securities Purchase
Agreement”), to which the Company and the Debtor are parties.  Capitalized terms
not otherwise defined herein shall have the meanings ascribed to them in the
Securities Purchase Agreement.

This Promissory Note represents all or a portion of the Debenture Purchase Price
for the Company’s 7.75% Convertible Debenture Series 08-__ No. 08-  -   , in the
original principal amount of $___________7 issued to the Debtor on the Issue
Date (the “Specific Debenture”).  This Promissory Note is the Specific Purchase
Note referred to in the Specific Debenture.

This Promissory Note is subject to the following additional provisions:

1.           This Promissory Notes will initially be issued in denominations
determined by the Debtor, but are exchangeable for an equal aggregate principal
amount of Promissory Notes of different denominations, as requested by the
Company surrendering the same.  No service charge will be made for such
registration or transfer or exchange.

2.           The Debtor shall be entitled to withhold from all payments of
principal of, and interest on, this Promissory Note any amounts required to be
withheld under the applicable provisions of the United States income tax laws or
other applicable laws at the time of such payments, and Company shall execute
and deliver all required documentation in connection therewith.

3.           A.           The Debtor shall have the right to prepay any or all
of the outstanding principal of this Promissory Note at any time or from time to
time, without the prior written consent of the Company in each instance,
provided, however, that any such payment shall be applied in the priority
provided in Section 3(B) hereof.

B.           Except as may specified in a specific provision of this Promissory
Note, any payments under this Promissory Note shall be applied in the following
order of priority: (i)  first to Other Costs (as defined below), (ii) then, to
accrued but unpaid interest; and (iii) then, to principal in the inverse order
of maturity.

4.           A.           The term “Maturity Date” means the earlier of (i)
__________, 20__8 (the “Scheduled Maturity Date”) or (ii) the Required
Prepayment Date (as defined below).

B.           The term “Required Prepayment Date” means, subject, however, to the
provisions of Section 4(C) through (E) below, (i) if this Promissory Note is No.
1 of this Series, the date which is six (6) months after the Issue Date, and
(ii) if this Promissory Note is No. 2 or higher of this Series, the date which
is one month after the Required Prepayment Date of the Promissory Note with the
immediate preceding No. of this Series.9

C.           Any other provision hereof to the contrary notwithstanding, if, but
for the giving of notice or the passage of time or both, there would an Event of
Default under the Specific Debenture (a “Potential Event of Default”) on the
Required Prepayment Date, then the Required Prepayment Date shall be deferred
until the date which is twenty (20) Trading Days after there has been no
Potential Event of Default under the Specific Debenture.  If the Required
Prepayment Date of any Promissory Note in this Series is deferred as a result of
this Section 4(C), the provisions of clause (ii) of Section 4(B) shall continue
to apply with respect to the Required Payment Date of the Promissory Note or
Notes, if any, with succeeding No(s). of this Series.  If applicable, the
provisions of Section 4(D) or Section 4(E) hereof shall supersede the provisions
of this Section 4(C).

D.           Any other provision hereof (including, but not necessarily limited
to the provisions of Section 4(C) or 4(E) hereof) notwithstanding, if, at any
time on or before the Required Prepayment Date (as originally scheduled or as
deferred by this Section 4(C)), there is an Event of Default under the Specific
Debenture (either because there is no requirement for the giving of notice or
the passage of time or both or if, and to the extent, so provided in the
Specific Debenture, the relevant notice has been given or the relevant passage
of time has occurred or both have occurred), then the there shall be no
obligation to make any payment on a Required Prepayment Date for this Promissory
Note or for any Promissory Note or Notes, if any, with succeeding No(s). of this
Series.

E.           Any other provision hereof (including, but not necessarily limited
to the provisions of Section 4(C) or 4(D) hereof) notwithstanding, no Required
Prepayment Date for this Note shall occur until the Company shall have provided
the Holder with a written opinion of counsel to the Company that, subject only
to the payment or other satisfaction in full of this Note, the Holder would be
eligible to sell all Conversion Shares issuable on conversion of the Specific
Debenture under Rule 144 on or after the date which is the later of (i) the
Conversion Date (as used in the Specific Debenture) for such share or (ii) the
date which is six months from the Issue Date.

5.           Subject to the terms of the Securities Purchase Agreement, no
provision of this Promissory Note shall alter or impair the obligation of the
Debtor, which is absolute and unconditional, to pay the principal of, and
interest on, this Promissory Note at the time, place, and rate, and in the coin
or currency as applicable, as herein prescribed.

6.           A.           The obligations of the Debtor under this Promissory
Note are secured under the terms of that certain Security Interest and Pledge
Agreement, dated as of February ___, 2008 (the “Pledge Agreement”), to which the
Debtor and the Company are parties, the terms of which are incorporated herein
by reference. If the Company forecloses on any of the Pledged Certificates, the
obligations of the Debtor will be reduced only to the extent of the proceeds
actually realized from such foreclosure, in the priority specified in Section
3(B) hereof.

7.           Except as provided in Sections 4 and 5 above or in a separate
instrument signed by the party to be charged therewith, no recourse shall be had
for the payment of the principal of, or the interest on, this Promissory Note,
or for any claim based hereon, or otherwise in respect hereof (including, but
not limited to, a claim for Other Costs), against any incorporator, shareholder,
officer or director, as such, past, present or future, of the Debtor or any
successor entity, whether by virtue of any constitution, statute or rule of law,
or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.

8.           All payments contemplated hereby to be made “in cash” shall be made
in immediately available good funds of United States of America currency by wire
transfer to an account designated in writing by the Company to the Debtor (which
account may be changed by notice similarly given).

9.           The Company, by acceptance hereof, agrees that this Promissory Note
is being acquired for investment and that the Company will not offer, sell or
otherwise dispose of this Promissory Note, except under circumstances which will
not result in a violation of the Securities Act of 1933, as amended, or any
applicable state Blue Sky or foreign laws or similar laws relating to the sale
of securities.

10.           A.           This Promissory Note shall be governed by and
construed in accordance with the laws of the State of Illinois for contracts to
be wholly performed in such state and without giving effect to the principles
thereof regarding the conflict of laws.  Each of the parties consents to the
exclusive jurisdiction of the federal courts whose districts encompass any part
of the City of Chicago or the state courts of the State of Illinois sitting in
the City of Chicago in connection with any dispute arising under this Promissory
Note and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non coveniens, to the bringing of any
such proceeding in such jurisdictions.

B.           In the event of any litigation or dispute arising from this
Debenture or any of the other Transaction Agreements, the parties agrees that
the party which is awarded the most money shall be deemed the prevailing party
for all purposes and such prevailing party shall be entitled to an additional
award from the other party for the full amount of the attorneys’ fees and
expenses paid or payable by such prevailing party in connection with the
litigation and/or dispute, without reduction or apportionment based upon the
individual claims or defenses giving rise to such fees and expenses.  If such
award is made in favor the Company, such award is referred to as “Other Costs.”
Nothing in this Section 10(B) shall restrict or impair a court’s power to award
fees and expenses to any party for frivolous or bad faith pleading by the other
party.

11.           JURY TRIAL WAIVER.   The Company and the Debtor hereby waive a
trial by jury in any action, proceeding or counterclaim brought by either of the
Parties hereto against the other in respect of any matter arising out of or in
connection with this Promissory Note.

12.           The term "Event of Default" means the Debtor shall default in the
payment of any outstanding principal or accrued but unpaid interest on this
Promissory Note or any other Promissory Note issued in this Series on the
Scheduled Maturity Date specified in such Promissory Note.

13.           Any notice required or permitted hereunder shall be given in
manner provided in the Section headed "NOTICES" in the Securities Purchase
Agreement, the terms of which are incorporated herein by reference.

14.           In the event for any reason, any payment by or act of the Debtor
or the Company shall result in payment of interest which would exceed the limit
authorized by or be in violation of the law of the jurisdiction applicable to
this Promissory Note, then ipso facto the obligation of the Debtor to pay
interest or perform such act or requirement shall be reduced to the limit
authorized under such law, so that in no event shall the Debtor be obligated to
pay any such interest, perform any such act or be bound by any requirement which
would result in the payment of interest in excess of the limit so
authorized.  In the event any payment by or act of the Debtor shall result in
the extraction of a rate of interest in excess of a sum which is lawfully
collectible as interest, then such amount (to the extent of such excess not
returned to the Debtor) shall, without further agreement or notice between or by
the Debtor or the Company, be deemed applied to the payment of principal, if
any, hereunder immediately upon receipt of such excess funds by the Company,
with the same force and effect as though the Debtor had specifically designated
such sums to be so applied to principal and the Company had agreed to accept
such sums as an interest-free prepayment of this Promissory Note.  If any part
of such excess remains after the principal has been paid in full, whether by the
provisions of the preceding sentences of this Section or otherwise, such excess
shall be deemed to be an interest-free loan from the Debtor to the Company,
which loan shall be payable immediately upon demand by the Debtor.  The
provisions of this Section shall control every other provision of this
Promissory Note.

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1 Insert unique series letter  for Promissory Notes issued on particular Closing
Date (e.g., A for Notes issued on Initial Closing Date, B for Promissory Notes
issued on first Additional Closing Date, etc.).
 
2Insert unique Note number for each Promissory Note in a series.
 
3Amount to be determined by Debtor, as provided in Section 1(c)(i) of the
Securities Purchase Agreement.
 
4See fn 1.
 
5See fn 3.
 
6Insert the relevant Closing Date.
 
7 Insert specific information from relevant Specific Debenture for which this
Promissory Note is the Specific Purchase Note.
 
8 Insert date which is the fourth anniversary of the relevant Closing Date.
 
9 Thus, No. 2 in this Series would have a Required Prepayment Date which is
seven (7) months after the Issue Date, No. 3 in this Series would have a
Required Prepayment Date which is eight (8) months after the Issue Date, and so
on.  If the provisions of Section 4(C) hereof apply, any such Required
Prepayment Date would be deferred as provided therein.

 
 

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IN WITNESS WHEREOF, the Debtor has caused this instrument to be duly executed by
an officer thereunto duly authorized.

 
ST. GEORGE INVESTMENTS LLC
 
 
   
Dated: _________________, 20___
By:_______________________________________
 
__________________________________________
 
(Print Name)
 
__________________________________________
 
 (Title)