THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.  IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE LENDER THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

SECURED PROMISSORY NOTE

         
Date of Issuance
$1,300,000
 
December 13, 2007

FOR VALUE RECEIVED, Golden Gate Investors, Inc., a California corporation (the
“Company”), hereby promises to pay American Security Resources Corporation, a
Nevada corporation (the “Lender”), the principal sum of One Million Three
Hundred Thousand Dollars ($1,300,000.00) (the “Principal Amount”), plus interest
calculated pursuant to Section 1 below. Unless earlier paid under the terms
hereof, the principal and accrued interest shall be due and payable by the
Company on demand by the Lender at any time after February 1, 2011 (the
“Maturity Date”).
 
This Secured Promissory Note (the “Note”) is issued in connection with that
certain Securities Purchase Agreement between the parties hereto, dated as of
the date hereof (the “Purchase Agreement”), and capitalized terms not defined
herein shall have the meaning set forth in the Purchase Agreement.
 
1. Interest.  The Company promises to pay interest to Lender at the rate of
seven and three-quarters percent (7 ¾ %) per annum, simple interest, on the
outstanding principal amount of this Note, which interest shall be calculated
from the date of this Note, until the date on which all amounts due and payable
on this Note are paid in full or this Note is otherwise cancelled, (the “Payoff
Date”).  Interest hereunder shall be paid on a monthly basis, commencing on the
15th date of the month following the month of issuance of this Note. All accrued
and unpaid interest shall be due and payable on the Payoff Date.  All
computations of interest shall be made on the basis of a year of 365 or 366
days, as the case may be, for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest is
payable.  Nothing contained in this Note shall require the Company at any time
to pay interest at a rate exceeding the maximum rate allowable under California
law and any payments in excess of such maximum shall be refunded to the Company
or credited to reduce the principal amount hereunder.
 
2. Payment.  All payments shall be made in lawful money of the United States of
America at the principal office of the Company, or at such other place as the
holder hereof may from time to time designate in writing to the
Company.  Payment shall be credited first to Costs (as defined below), if any,
then to accrued interest due and payable and any remainder applied to
principal.  Prepayment of principal, in part or in full, together with accrued
interest, may be made from time to time in the sole discretion of the Company
without the Lender’s consent.
 
3. Prepayment Obligation.  Notwithstanding the option of the Company to prepay
any portion of this Note, as set forth in Section 2 hereof, the Company shall
prepay, on a monthly basis, on any date(s) of such month during which this Note
remains outstanding (each such date referred to herein as the “Periodic
Prepayment Date”), an amount equal to not less than Two Hundred Fifty Thousand
Dollars ($250,000.00) (or such lesser amount that equals the remaining
outstanding principal and accrued and unpaid interest under this Note), with the
amount, if any, in excess of such sum to be determined by and in the sole and
absolute discretion of the Company, until all principal and accrued and unpaid
interest under this Note has been paid, subject to the satisfaction of each of
the following conditions on each Periodic Prepayment Date:
 
3.1 The Company may immediately sell all of the Common Stock Issued at
Conversion (as defined in the Debenture) pursuant to Rule 144 promulgated by the
SEC (as defined in the Debenture) pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC having substantially the same effect as such Rule;
 
3.2 No Event of Default (as defined in the Debenture) has occurred under the
Debenture;
 
3.3 The average Volume Weighted Average Price (as defined in the Debenture) for
every period of ten consecutive Trading Days (as defined in the Debenture)
during the term of this Note shall not be less than $0.01 per share (as adjusted
for any stock splits, stock dividends, combinations, subdivisions,
recapitalizations or the like); and
 
3.4 The Lender shall have honored all Conversion Notices (as defined in the
Debenture) submitted by the Holder (as defined in the Debenture) within the
applicable time period set forth in the Debenture.
 
The amount of any such prepayment made by the Company under the terms of this
Section 3 (each such prepayment referred to herein as a “Periodic Prepayment”)
shall be credited first to Costs, if any, then to accrued interest due and
payable under this Note and the remainder applied to principal.  Any prepayment
made by the Company under this Note in excess of any otherwise required Periodic
Prepayment may be applied to any future required Periodic Prepayment at the
option of the Company, subject to the sole and absolute discretion of the
Company.  In the event that the Company fails to deliver any Periodic Prepayment
that is otherwise required under the terms of this Section 3, the Lender’s sole
and exclusive remedy shall be limited to the Interest Rate being increased by
0.25 percentage points per Periodic Prepayment required under this Section 3
that is not paid by the Company to the Lender, provided however, that in no
event shall the Interest Rate exceed an amount equal to twelve and one-half
percent (12.5%).  In no event shall any failure by the Company to pay any
Periodic Prepayment required hereunder give any right to the Lender to collect
upon the Collateral or otherwise collect any outstanding sums under this Note.
 
4. Recourse.  Each party hereto accepts and agrees that this Note is a full
recourse promissory note and that subject to the terms of this Note, Lender may
exercise any and all remedies available to it under law.
 
5. Security Interest.
 
5.1 To secure the payment and performance of the Company’s obligations under
this Note, provided however that any obligations of the Company to prepay any
amounts under this Note pursuant to Section 3 are not so secured, the Company
hereby grants to Lender a security interest in the Company’s entire right,
title, and interest in and to all of the following, wherever located and whether
now existing or owned or hereafter acquired or arising (collectively, the
“Collateral”):
 
(a) all accounts, accounts receivable, contract rights, rights to payment,
letters of credit, documents, securities, promissory notes, debentures, money,
and investment property, whether held directly or through a securities
intermediary, and other obligations of any kind owed to the Company, however
evidenced;
 
(b) all inventory, including, without limitation, all materials, components,
work in progress, finished goods, merchandise, and all other goods which are
held for sale, lease or other disposition or furnished under contracts of
service or consumed in the Company’s business;
 
(c) all equipment, including, without limitation, all machinery, furniture,
furnishings, fixtures, tools, parts, automobiles, trucks, and other vehicles,
appliances, computer and other electronic data processing equipment and other
office equipment, computer programs and related data processing software, and
all additions, substitutions, replacements, parts, accessories, and accessions
to and for the foregoing;
 
(d) all books, records and other written, electronic or other documentation in
whatever form maintained by or for the Company in connection with the ownership
of its assets or the conduct of its business; and
 
(e) all products and proceeds, including insurance proceeds, of any and all of
the foregoing.
 
Notwithstanding the foregoing, no security interest is granted in any contract
rights if such grant causes a default enforceable under applicable law or if a
third party has the right enforceable under applicable law to terminate the
Company’s rights under or with respect to any such contract and such third party
has exercised such right of termination.
 
5.2 The security interest on the Collateral granted by this Note shall continue
and remain in effect until terminated pursuant to subsection 5.4 below.
 
5.3 The Company shall execute any further documents reasonably requested by
Lender, which are necessary or appropriate to perfect Lender’s security interest
in the Collateral.
 
5.4 Upon the Payoff Date, the security interest granted pursuant to this Section
5 shall terminate, and Lender shall promptly execute and deliver to the Company
such documents and instruments reasonably requested by the Company as shall be
necessary to evidence termination of all security interests given by the Company
to Lender hereunder.
 
5.5 So long as an Event of Default does not exist, the Company shall have the
right to possess the Collateral, manage its property and sell its inventory in
the ordinary course of business.
 
6. Event of Default.  An “Event of Default” shall exist under this Note upon the
happening of a failure of the Company to pay the outstanding Principal Amount
and all other outstanding sums under this Note, including accrued and unpaid
interest thereon, on the Maturity Date, provided that such sums have not
previously been paid, at the Company’s sole option, prior to the Maturity Date,
which failure is not cured within 30 days after the receipt of written notice
thereof by Lender to the Company.  Any failure by the Company to pay any
Periodic Prepayment that may otherwise be due under this Note shall not be an
Event of Default under this Note.  Upon the occurrence of an Event of Default,
Lender shall have all of the rights and remedies afforded by the Uniform
Commercial Code as from time to time in effect in the State of California or
afforded by other applicable law.
 
7. Subordination.  The indebtedness evidenced by this Note shall be subordinated
to any Senior Indebtedness of the Company.  For the purposes of this Note,
“Senior Indebtedness” shall mean the principal of (and premium, if any) and
unpaid interest on, indebtedness of the Company, or with respect to which the
Company is a guarantor, to banks, insurance companies, lease financing
institutions or other lending or financial institutions regularly engaged in the
business of lending money, which is for money borrowed (or purchase or lease of
equipment in the case of lease financing) by the Company, and which is approved
by the Board of Directors of the Company, whether or not secured, and whether or
not previously incurred or incurred in the future.  Senior Indebtedness shall
include all obligations of the Company pursuant to any modifications, renewals
and extensions of such Senior Indebtedness.  Lender acknowledges that the
Company may incur additional Senior Indebtedness and that such Senior
Indebtedness shall be senior in repayment preference to the Note.  Upon written
request of the Company, Lender agrees to execute a subordination agreement from
any lender of Senior Indebtedness in order to give effect to this Section 7.
 
8. Amendments and Waivers; Cure Period.  This Note may not be amended without
the prior written consent of each of the Company and the Lender.  Any waiver by
the Company or the Lender of a breach of any provision of this Note shall not
operate as or be construed to be a waiver of any other breach of such provision
or of any breach of any other provision of this Note.  The failure of the
Company or the Lender to insist upon strict adherence to any term of this Note
on one or more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Note.  Any waiver by the Company or the Lender must be in
writing.  Any amendment or waiver effected in accordance with this Section 8
shall be binding upon Lender and Lender’s successors and assigns.  Any party to
this Note shall have a cure period of not less than thirty (30) days after
receipt of written notice of any alleged breach or default under the terms of
this Note to cure such alleged breach or default.
 
9. Transmittal of Notices.  Except as may be otherwise provided herein, any
notice or other communication or delivery 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:
 
(1)           If to the Lender, to:

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

(2)           If to the Company, to:
Golden Gate Investors, Inc.
7817 Herschel Avenue, Suite 200
La Jolla, California 92037
Telephone: 858-551-8789
Facsimile: 858-551-8779
 
Each of the Lender or the Company may change the foregoing address by notice
given pursuant to this Section 9.
 
10. Successors and Assigns.  This Note applies to, inures to the benefit of, and
binds the successors and assigns of the parties hereto.  Neither the Lender nor
the Company may assign its rights under this Note without the written consent of
the other party to this Note, provided, however, that the Company may assign its
obligations under this Note to any Affiliate of the Company in the sole and
absolute discretion of the Company, without any prior consent by the Lender,
provided that such transferee or assignee agrees in writing to be bound by and
subject to the terms and conditions of this Note.  Upon any such transfer of
this Note by the Company or the Lender, the Lender shall, upon notice, surrender
this Note to the Company for reissuance of a new note to the transferee.  Any
transfer of this Note may be effected only pursuant to the terms hereof and by
surrender of this Note to the Company and reissuance of a new note to the
transferee.  The Lender and any subsequent holder of this Note receives this
Note subject to the foregoing terms and conditions, and agrees to comply with
the foregoing terms and conditions for the benefit of the Company and any other
Lenders.
 
11. Officers and Directors Not Liable.  In no event shall any officer or
director of the Company be liable for any amounts due and payable pursuant to
this Note.
 
12. Expenses.  Should any party hereto employ an attorney for the purpose of
enforcing or construing this Note, or any judgment based on this Note, in any
legal proceeding whatsoever, including insolvency, bankruptcy, arbitration,
declaratory relief or other litigation, the prevailing party shall be entitled
to receive from the other party or parties thereto reimbursement for all
reasonable attorneys' fees and all reasonable costs, including but not limited
to service of process, filing fees, court and court reporter costs,
investigative costs, expert witness fees, and the cost of any bonds, whether
taxable or not (collectively, “Costs”), and that such reimbursement shall be
included in any judgment or final order issued in that proceeding.  The
"prevailing party" means the party determined by the court to most nearly
prevail and not necessarily the one in whose favor a judgment is rendered.
 
13. Remedies Not Waived.  No course of dealing between the parties hereto or any
delay in exercising any rights hereunder shall operate as a waiver by such
party.
 
14. Governing Law.  This Note shall be governed by and construed under the laws
of the State of California as applied to other instruments made by California
residents to be performed entirely within the State of California.  With respect
to any suit, action or proceedings relating to this Note, the Company
irrevocably submits to the exclusive jurisdiction of the courts of the State of
California sitting in San Diego and the United States District Court located in
the City of San Diego and hereby waives, to the fullest extent permitted by
applicable law, any claim that any such suit, action or proceeding has been
brought in an inconvenient forum.  Subject to applicable law, each of the
Company and the Lender agrees that final judgment against it in any legal action
or proceeding arising out of or relating to this Note shall be conclusive and
may be enforced in any other jurisdiction within or outside the United States by
suit on the judgment, a certified copy of which judgment shall be conclusive
evidence thereof and the amount of the indebtedness, or by such other means
provided by law.
 
15. Counterparts.  This Note may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.  Facsimile executions of this Note shall be deemed
original.

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