Document:

EXHIBIT
      10.28

     

    NOTE:
      CERTAIN
      PORTIONS OF THIS AGREEMENT HAVE BEEN OMMITTED PURSUANT TO A REQUEST FOR
      CONFIDENTIAL TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER
      RULE 24b-2. THE LOCATIONS OF THESE OMISSIONS ARE INDICATED THROUGHOUT THE
      AGREEMENT BY THE FOLLOWING MARKINGS: [***].

    

    CONFIDENTIAL
      SETTLEMENT AGREEMENT

    

    The
      undersigned, Pro Tech Monitoring, Inc., a Delaware corporation with a
      principal place of business at 2549 Success Drive, Odessa Florida
      (“Pro Tech”), and iSECUREtrac, a Delaware corporation with a principal
      place of business at 5078 South 111th Street,
      Omaha, Nebraska (“iSt”), hereby enter into this Settlement Agreement
      (“Agreement”), based on Mr. Peter Grilli’s (mediator) proposal, which has a
      date of October 17, 2007.

     

    
      	 	
              A.

            	
              RECITALS

            

    

     

    1. On
      March 8, 2007, Pro Tech filed a lawsuit against iSt in the
      United States District Court for the Middle District of Florida (the
“Lawsuit”). The Lawsuit is currently styled Pro Tech
      Monitoring, Inc. v. iSECUREtrac Corp.,
      Case
      No. 8:07-cv-00422-SDM-TBM. In this Lawsuit, Pro Tech alleged that iSt
      infringed and continues to infringe U.S. Patent No. 5,731,757, issued
      March 24, 1998, entitled “Portable Tracking Apparatus for Continuous
      Position Determination of Criminal Offenders and Victims” (the
“’757 patent”), and Pro Tech sought a permanent injunction and
      damages. iSt denied infringing the ’757 patent, asserted defenses
      contending the ’757 patent was invalid and unenforceable, and counterclaimed for
      declarations of non-infringement, invalidity, and unenforceability of the ’757
      patent.

     

    2. The
      parties have entered into this Agreement to compromise, settle, and dispose
      of
      all disputes that the parties asserted or could have asserted in the
      Lawsuit.

     

    3. Pro Tech
      and iSt understand and agree that, by entering into this Agreement and providing
      the consideration that is set forth in the Agreement, they are settling claims
      that are contested and disputed. Therefore, the parties have entered into this
      Agreement to compromise and settle all claims and disputes now at issue in
      this
      Lawsuit.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4. In
      consideration of the promises, mutual covenants, and agreements hereinafter
      set
      forth, and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, Pro Tech and iSt agree to the
      specific terms, conditions, and considerations described more particularly
      and
      in the attached exhibits.

     

    
      	 	
              B.

            	
              DEFINITIONS

            

    

     

    1. As
      it is
      used in this Agreement, the term “Pro Tech” refers to and includes
      Pro Tech Monitoring, Inc., as well as all of its subsidiaries, affiliates,
      employees, officers, directors, representatives, agents, successors and assigns,
      and all other persons acting on its behalf.

     

    2. As
      it is
      used in this Agreement, the term “iSt” refers to and includes iSECUREtrac
      Corporation, as well as all of its subsidiaries, affiliates, employees,
      officers, directors, representatives, agents, successors and assigns, and all
      other persons acting on its behalf.

     

    3. As
      it is
      used in this Agreement, the term “Accused Products” refers to iSt’s 2150 (only
      those units having cellular capability), 2250, and 5000 product models,
      including revisions thereof, that are deployed in the
      United States.

     

    4. As
      it is
      used in this Agreement, the term “PTU” refers to the apparatus of the Accused
      Products adapted to communicate with a body worn device and comprising a housing
      enclosing a Global Positioning System receiver. In no event shall the term
      PTU
      be defined, interpreted, construed, or deemed to refer to a body-worn device
      or
      cuff, a base station or charger, a sever-side component, software, or any other
      apparatus utilized in conjunction with the Accused Products.

     

    5. The
      term
“Equivalents” as it is used in this Agreement and in connection with an
      identified component or structure shall mean those components or structures
      that
      are equivalent to the identified component or structure according to the
      doctrine of equivalents as used and defined in the patent laws of the
      United States, including Chapter 35 of the United States Code and
      related decisions of the Federal Courts of the United States.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    6. The
      term
“Components to be Eliminated” as it is used in this Agreement shall mean the
[***].

     

    7. The
      term
[***]
      as it is
      used in this Agreement shall mean [***].
      Notwithstanding the foregoing, in no event shall the term [***]
      as it is
      used in this Agreement be defined, interpreted, construed, or deemed to include
      (i) electronic components designed primarily for the purpose of detecting
      location, tampering, or proximity to another device, (ii) electronic
      components designed primarily for the purpose of communicating with another
      device, (iii) electronic components designed to serve a primary function
      other than [***] or (iv) any component or part presently in the PTU of the
      Accused Products other than the Components to be Eliminated.

     

    8. The
      term
“Relevant Claims”, as it is used in this Agreement shall mean claims 1, 10
      and 16 of the ’757 patent.

     

    9. The
      term
“Patent Change Date” shall mean the earlier of i) the expiration date of
      the ’757 patent, ii) the date on which the United States Patent and
      Trademark Office or a court of competent jurisdiction declares invalid or
      unenforceable any of the Relevant Claims, and iii) the date on which the
      United States Patent and Trademark Office or a court of competent
      jurisdiction substantively amends any of the Relevant Claims.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    10. The
      term
“Acceptance Date” as it is used in this Agreement shall mean November 27,
      2007.

     

    
      	 	
              C.

            	
              AGREEMENTS
                AND REPRESENTATIONS

            

    

     

    1. Settlement
      Fee.
      By no
      later than the Acceptance Date, iSt will pay into the Trust Account of
      Pro Tech’s counsel the amount of eight hundred thousand dollars
      ($800,000.00).

     

    2. VB
      Units.
      iSt
      will order 400 MEMS 3000 VB units (“MEMS Units”) at a price of one thousand five
      hundred dollars ($1,500) each to be paid and delivered in 2007. iSt has the
      option to order within one year of the Acceptance Date an additional 400 MEMS
      Units at a price of one thousand five hundred dollars ($1,500) each. Any
      payments under this section are to be paid upon delivery. In addition to
      providing the MEMS Units, Pro Tech shall, at no additional costs, provide
      iSt with i) all server-side hardware and software required for iSt to
      install and utilize the MEMS Units, ii) on-site installation and
      configuration services reasonably requested by iSt, iii) technical support
      and software maintenance for all hardware and software provided for a period
      of
      one year following delivery (“Initial Maintenance Term”) and, iv) after the
      Initial Maintenance Term, technical support and software maintenance at a price
      at least as low as the lowest price Pro Tech charges, and upon terms at
      least as favorable as Pro Tech offers, others for equivalent support and
      maintenance. Further, Pro Tech agrees to offer and sell i) all
      accessories, disposables, service parts, and maintenance parts available or
      required for the MEMS Units, and ii) repair and maintenance services for
      the MEMS Units, to iSt for as long as Pro Tech offers, provides, or sells
      such products and services to others and upon terms at least as favorable as
      Pro Tech offers or charges others for equivalent products and services. An
      order form and price list for the MEMS Units are attached to this Agreement
      as
      Exhibit C. However, the parties agree that, to the extent there is any
      conflict or inconsistency between the terms of this Agreement and the terms
      of
      Exhibit C, the terms of this Agreement shall be binding and prevail, and
      the inconsistent or conflicting terms of Exhibit C shall have no
      effect.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    3. Modification
      of PTUs of the Accused Products.
      Within
      ten (10) months of the Acceptance Date, iSt will alter all units of the PTUs
      of
      the Accused Products available for sale, in the field “on-leg,” and spare units,
      to eliminate or disable the Components to be Eliminated. All units of the
      Accused Products with PTUs so altered shall be referred to as “Modified Units.”
All units of the Accused Products with PTUs not so altered shall be referred
      to
      as “Unmodified Units.” iSt further agrees that it shall not add or re-enable any
[***]
      back
      into any Modified Unit in the United States prior to the Patent Change
      Date. Should the United States Patent and Trademark Office or a court of
      competent jurisdiction substantively amend any of the Relevant Claims, and
      should iSt subsequently add a [***]
      back
      into any Modified Unit deployed in the United States, and should Pro Tech
      thereafter, upon proper investigation and due diligence, determine that such
      Modified Unit infringes a remaining or amended claim of the ’757 patent,
      this Agreement shall not bar Pro Tech from instituting infringement
      litigation with respect to such Modified Units.

     

    4. Inspection.
      iSt
      will provide Pro Tech with due opportunity to inspect a representative
      sample PTU of a Modified Unit of each Accused Product, and upon promptly
      confirming that the PTU has been modified according to the terms and conditions
      of this Agreement, Pro Tech shall affirm explicitly and in writing that
      products with PTUs so modified do not infringe the ’757 patent.
      Pro Tech shall inspect such sample PTU within fourteen (14) days of iSt’s
      notice of opportunity to do so (“Inspection Period”). Should, upon inspection,
      Pro Tech determine in good faith that the PTU has not been modified
      according to the terms and conditions of this Agreement, Pro Tech shall
      provide iSt written notice describing in reasonable detail the basis for its
      conclusion (“Noncompliance Notice”) within five (5) business days of such
      inspection (“Affirmation Period”). Should Pro Tech fail to inspect such
      sample PTU within the Inspection Period or fail to provide (i) a written
      affirmation of non-infringement in the form attached hereto as Exhibit B
      (“Compliance Notice”) or (ii) a Noncompliance Notice within the Affirmation
      Period, such failure shall be deemed an explicit affirmation that units with
      PTUs so modified do not infringe the ’757 patent and no such unit shall be
      considered an Unmodified Unit subject to penalty under paragraph 5 (Penalty
      for Unmodified PTUs) herebelow.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    5. Penalty
      for Unmodified PTUs.
      For all
      Unmodified Units in the United States that are “on-leg” after two (2)
      months from the Acceptance Date, iSt will pay directly to Pro Tech an
      amount of two and a half percent (2.5%) of the amount actually collected by
      iSt
      for daily use of such Unmodified Unit beginning two (2) months from the
      Acceptance Date and ending ten (10) months from the Acceptance Date or when
      such
      Unmodified Unit is taken “off leg” or modified according to the terms and
      conditions of this Agreement or the Patent Change Date, whichever occurs sooner.
      For all Unmodified Units “on-leg” after ten (10) months from the Acceptance
      Date, iSt will pay Pro Tech, as a penalty and sole remedy, [***] beginning
      ten (10) months from the Acceptance Date and ending twelve (12) months from
      the
      Acceptance Date or when such Unmodified Unit is taken “off leg” or modified
      according to the terms and conditions of this Agreement or upon the Patent
      Change Date, whichever occurs sooner. For all Unmodified Units “on leg” after
      twelve (12) months from the Acceptance Date, iSt will pay Pro Tech, as a
      penalty and sole remedy, [***] beginning twelve (12) months from the Acceptance
      Date and ending when such Unmodified Unit is taken “off leg” or modified
      according to the terms and conditions of this Agreement or upon the Patent
      Change Date, whichever occurs sooner. All payments under this section are to
      be
      paid monthly.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    6. Stipulation
      of Dismissal with Prejudice.
      By no
      later than the Acceptance Date, Pro Tech’s and iSt’s counsel of record in
      the Lawsuit shall sign the Stipulation of Dismissal attached as Exhibit A.
      The parties agree that Pro Tech’s counsel will file a copy of
      Exhibit A with the United States District Court for the Middle
      District of Florida for entry in the Lawsuit. Each party in the Lawsuit shall
      bear its own attorneys’ fees and court costs.

     

    7. No
      Interpretation of the ’757 Patent, Admission of Liability, or Waiver of Defense,
      Counterclaim or Cross Claim.
      Pro Tech and iSt agree that they are entering into this Agreement without
      admission of liability and solely to avoid the expense and uncertainty of
      litigation, and to buy peace as to matters as of the Acceptance Date.
      Accordingly, nothing in this Agreement shall be deemed, interpreted, or
      construed to (i) admit that any device does or does not infringe any claim
      of the ’757 patent or otherwise serve as an admission of liability,
      (ii) serve as an interpretation or construction of any portion of the ’757
      patent in any future litigation between the parties or otherwise,
      (iii) admit that any structure, component or device is or is not equivalent
      to any structure identified in the ’757 patent under the doctrine of
      equivalents, 35 U.S.C. § 112(6), or the decisions of the Federal
      Courts of the United States of America, (iv) serve as an admission of
      validity or invalidity, or enforceability or unenforceability of any claim
      of
      the ’757 patent, or (v) waive or otherwise preclude any defense,
      counterclaim, or cross claim raised, or that may be raised, by any party hereto
      in future litigation. Notwithstanding the foregoing, the parties agree that
      any
      Compliance Notice duly executed by Pro Tech or explicit affirmation made or
      deemed made by Pro Tech pursuant to section C(4) (Inspection) of this
      Agreement shall be a binding admission by Pro Tech that iSt products so
      modified do not infringe any claim of the ’757 patent.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    D. MUTUAL
      RELEASES

     

    1. Pro Tech
      and iSt, for themselves and their officers, directors, shareholders, attorneys,
      and employees, hereby forever and irrevocably release, and forever and
      irrevocably mutually discharge, each other and their officers, directors,
      shareholders, attorneys, and employees from any and all manner of liabilities,
      accounts, debts, contracts, damages, including past damages, claims, and causes
      of action that each party may have, now has, or might have had whether known
      or
      unknown, against each other prior to the Acceptance Date, including but not
      limited to any and all such manner of liabilities, accounts, debts, contracts,
      damages, including past damages, claims, and causes of action arising out of
      the
      transactions and occurrences that are the subject of the Lawsuit, the Accused
      Products, or any conduct related thereto occurring prior to the Acceptance
      Date.

     

    
      
        E.
          REPRESENTATIONS
          AND WARRANTIES

      

    

     

    1. No
      Undocumented Representations.
      Each
      party to this Agreement expressly warrants and represents that, in entering
      into
      this Agreement, it is not relying on any promise, agreement or statement,
      whether oral or written, that is not fully set forth in this Agreement.
      Specifically, each of the parties acknowledges that it is not relying on any
      promise, agreement or statement, whether written or oral, in entering into
      this
      Agreement: (i) that has been made by a party to this Agreement; or
      (ii) that has been made by any representative or agent of a party to this
      Agreement, and which is not set forth, in full, in the terms of this
      Agreement.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    2. Independent
      Judgment.
      Pro Tech and iSt are relying on their own independent judgment in entering
      into this Agreement. Each of the parties understands that this Agreement shall
      operate as a full, complete and final release and settlement of any and all
      of
      their claims against each other in the Lawsuit, as set forth above.

     

    3. No
      Previous Assignment.
      The
      parties represent and warrant that they have not made any previous assignment
      before the Acceptance Date of this Agreement of any of the claims and causes
      of
      action, in whole or in part, that they have released in this
      Agreement.

     

    4. Components
      to be Eliminated.
      iSt
      represents and warrants that the Components to be Eliminated are the only
[***]
      in the
      PTUs of the Accused Products.

     

    5. Ongoing
      Royalty.
      The
      parties represent and warrant that they will bargain in good faith for a period
      of at least four months following the effective date of this Agreement regarding
      an ongoing royalty. The parties further agree that, should they enter into
      an
      ongoing royalty agreement, any product or unit subject to such an agreement
      would not be subject to any additional royalty or penalty pursuant to any
      provision of this Agreement including, without limitation, section C(5)
      (Penalty for Unmodified PTUs).

     

    6. Most
      Favorable Terms for MEMS Units.
      Pro Tech represents and warrants that the prices and terms in
      Exhibit C relating to MEMS Units are at least as low as the lowest prices
      Pro Tech charges, and at least as favorable as the most favorable terms
      Pro Tech offers, others for equivalent products and services. Pro Tech
      further represents and warrants that, should it offer or sell equivalent
      products or services to others at lower prices, or upon terms more favorable
      to
      the buyer, than those listed in Exhibit C, Pro Tech shall so notify
      iSt and shall offer to sell iSt those products and services at the lower price
      or upon the more favorable terms.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    7. No
      Challenge Provision.
      iSt
      agrees that, Prior to the Patent Change Date, it will not (i) directly or
      indirectly initiate, or encourage third parties to initiate, legal or
      administrative proceedings to contest the validity of the ’757 patent or
      (ii) make public comments referencing the ’757 patent (“No Challenge
      Provision”). This No Challenge Provision, however, shall not apply, and shall
      not limit or restrict iSt in any way whatsoever, should Pro Tech institute,
      or should iSt otherwise have a reasonable apprehension of, litigation or
      administrative or other legal proceedings against iSt asserting this Agreement,
      the ’757 patent (or any patent, application or instrument claiming priority to
      the ’757 patent), or any other agreement, notice or instrument addressing or
      relying on, the ’757 patent or this Agreement. Furthermore, nothing in this No
      Challenge Provision shall prevent, limit or restrict iSt from responding to
      discovery or similar requests, or commenting on the validity of the ’757 patent
      should litigation or other legal proceedings be instituted between Pro Tech
      and third parties provided, however, that such proceedings were not initiated
      at
      the encouragement or direction of iSt.

     

    
      
        F.
          MISCELLANEOUS

      

    

     

    1. Severability.
      The
      parties each intend that if, for any reason, any specific part, term, paragraph
      or provision of this Agreement is determined to be illegal or invalid, in whole
      or in part, then the remaining valid and legal portions of the Agreement shall
      continue in full effect and shall be fully enforced.

     

    2. Multiple
      Counterparts.
      This
      Agreement may be signed in multiple counterparts or with detachable signature
      pages, and may also be signed via fax, provided that any fax signature shall
      ultimately be replaced with an original signature. All signed multiple
      counterparts of the Agreement, if any, shall be construed together and shall
      be
      effective as if all signed in one, unified document.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    3. Binding
      Effect.
      The
      parties agree and acknowledge that all of the terms of this Agreement are
      contractual and not mere recitals, and that the terms of this Agreement shall
      be
      binding on Pro Tech and iSt.

     

    4. No
      Adverse Inference from Drafting.
      The
      terms and provisions of this Agreement were arrived at by mutual negotiations
      among Pro Tech and iSt, with assistance from their respective officers,
      attorneys, and representatives. Therefore, no ambiguity, if any, in this
      Agreement that may arise in the future shall be interpreted against or adversely
      to a party based upon the party or attorney who may have originally drafted
      the
      language of any term or provision that is included in the
      Agreement.

     

    5. Choice
      of Laws.
      This
      Agreement and questions thereunder shall be governed by the law of Florida,
      and
      each party agrees to submit to the exclusive jurisdiction of the District Court
      for the Middle District of Florida, Tampa Division.

     

    6. Confidentiality.
      It is
      expressly agreed by Pro Tech and iSt, and by their respective lawyers,
      agents, partners, employees and all other persons acting at their direction
      or
      on their behalf, that the terms of this Agreement (and the negotiations,
      discussions, and correspondence that led up to this Agreement) shall remain
      confidential and shall not be disclosed to the media or to any other person,
      entity, agency or company, except as expressly required by law, the reporting
      requirements of the IRS, the U.S. Securities and Exchange Commission, or the
      Financial Services Authority. Notwithstanding the foregoing: (a) each party
      may disclose information about the Agreement itself to its attorneys,
      accountants, or agents if necessary for business purposes, if the disclosing
      party advises the recipient of the confidential nature of such information
      and
      the requirement for confidentiality; (b) each party may also disclose
      information about the Agreement after having obtained prior written consent
      of
      the other party;
      and (c) each party may also disclose the fact that this Lawsuit has been
      settled and dismissed as disclosed in the publicly-filed Stipulation and Order
      of Dismissal. Pro Tech and iSt also expressly agree and acknowledge that
      they will not use or disclose to third parties the content of any settlement
      negotiations, drafts or settlement correspondence, mediation statements, or
      any
      confidential or proprietary information they received during this
      Lawsuit.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    SIGNATURES:

     

    Pro Tech
      Monitoring, Inc.

    
      	 	 	 	 
	 	 	 	 
	By: 
/s/
              Guy Greitser 	 	 	Date:
11/27/2007
	
              
                

              

              Name:
Guy
                Greitser

            	 	 	
            
	
              Title:
Director

            	 	 	
            
	 	 	 	 
	 	 	 	 
	iSECUREtrac
              Corporation	 	 	 
	 	 	 	 
	 	 	 	 
	By:  /s/
              Peter A. Michel 	 	 	Date: 27
              Nov 07
	
              
                

              

              Name:
Peter
                A. Michel

              Title:
CEO

            	 	 	 

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    EXHIBIT A

     

    UNITED
      STATES DISTRICT COURT

    MIDDLE
      DISTRICT OF FLORIDA

    TAMPA
      DIVISION

     

    PRO
      TECH
      MONITORING, INC.,

     

    
      	
              Plaintiff/Counter-Defendant,

            	
              Case
                No. 8:07-cv-00422-23-SDM-TMB

            
	 	 
	
              v.

            	 
	 	 
	
              ISECURETRAC
                CORPORATION,

            	
              Judge
                Steven D. Merryday

            
	 	 
	
              Defendant/Counter-Plaintiff.

            	 
	
              _____________________________________/

            	 

    

     

    STIPULATION
      OF DISMISSAL

     

    IT
      IS
      HEREBY STIPULATED AND AGREED by and between Plaintiff/Counter-Defendant
      Pro Tech Monitoring, Inc. (“Pro Tech”), and
      Defendant/Counter-Plaintiff iSECUREtrac Corporation (‘iSt”) that, pursuant to
      Rule 41(a)(l)(ii), Fed. R. Civ. P., Pro Tech’s claims against iSt and
      iSt’s claims against Pro Tech in the above-captioned action be, and hereby
      are, dismissed with prejudice. Pro Tech and iSt agree and represent
      that:

     

    1. The
      parties have entered into a Confidential Settlement Agreement executed on
      November 27, 2007 (“Agreement”).

     

    2. This
      stipulation is expressly conditioned on the terms and conditions of the
      Agreement executed by the parties.

     

    3. The
      Court
      shall retain jurisdiction, pursuant to Kokkonen v.
      Guardian Life Ins. Co. of America,
      511 U.S. 375, 114 S. Ct. 1673 (1994) and the inherent authority of the
      Court over the subject matter of this action and the Agreement for purposes
      of
      construing and enforcing the Agreement.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    4. Each
      party will bear its own costs and attorneys’ fees for this action.

     

    Agreed
      To
      and Accepted By:

     

    
      	 	 	 	 
	By:	 	 	By:
	
              
                

              

              William
                H. Frankel

            	 	 	
              
                

              

              Andrew
                C. Greenberg

            
	
              Kent
                E. Genin

            	 	 	
              Thomas
                J. Roehn

            
	
              David
                H. Bluestone

            	 	 	
              Christopher
                M. Saco

            
	
              David
                P. Lindner

            	 	 	
              William
                G. Giltinan

            
	
              BRINKS
                HOFER GILSON & LIONE

            	 	 	
              CARLTON
                FIELDS, P.A.

            
	
              NBC
                Tower - Suite 3600

            	 	 	
              Corporate
                Center Three at International

            
	
              455
                North Cityfront Plaza Drive

            	 	 	
              Plaza

            
	
              Chicago,
                Illinois 60611-5599

            	 	 	
              4221
                West Boy Scout Boulevard

            
	
              (312) 321-4200
                (phone)

            	 	 	
              Tampa,
                Florida 33607-5736

            
	
              (312) 321-4299
                (facsimile)

            	 	 	
              ATTORNEYS
                FOR

            
	 	 	 	
              DEFENDANT/COUNTER-

            
	
            	 	 	
              PLAINTIFF

            
	
              H.
                William Larson

            	 	 	 
	
              Fla.
                Bar No. 0969930

              Ruth
                E. Freeburg

              Fla.
                Bar No.0018106

              
                LARSON
                  & LARSON, P.A.

              

              11199
                69th Street
                North

              Largo,
                FL 33773

              ATTORNEYS
                FOR

              PLAINTIFF/COUNTER-DEFENDANT,

              PRO
                TECH MONITORING, INC.

               

              SO
                ORDERED this _____ day of _______________, 2007

            
	 	 	 	 
	 	 	 	 
	 	 	 	
              

              Honorable
                Steven D. Merryday

              United
                States District Judge

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    EXHIBIT B

     

    COMPLIANCE
      NOTICE

     

    The
      undersigned, Pro Tech Monitoring, Inc., a Delaware corporation with a
      principal place of business at 2549 Success Drive, Odessa, Florida
      (“Pro Tech”) hereby gives this Compliance Notice to iSECUREtrac, a Delaware
      corporation with a principal place of business at
      5078 South 111th Street,
      Omaha, Nebraska (‘iSt”) pursuant to the certain Settlement Agreement entered
      into between Pro Tech and iSt on November _____, 2007.

     

    A. RECITALS

     

    1. On
      November _____, 2007, Pro Tech and iSt entered into a Settlement
      Agreement (the “Agreement”) for the purpose of resolving litigation and disputes
      concerning allegations of iSt’s infringement of U.S. Patent No. 5,731,757,
      issued March 24, 1998, entitled “Portable Tracking Apparatus for Continuous
      Position Determination of Criminal Offenders and Victims” (the
“’757 patent”).

     

    2. Pursuant
      to the Agreement iSt has provided Pro Tech with due opportunity to inspect
      a representative sample of certain iSt products modified as specified herein
      and, upon promptly confirming that such sample has been modified according
      to
      the terms and conditions of the Agreement, Pro Tech now explicitly affirms
      that iSt products so modified do not infringe the ’757 patent.

     

    B. NOTICE

     

    On
      __________, _____, the undersigned, on behalf of, and authorized by,
      Pro Tech had due opportunity to inspect, and did so inspect, a
      _________________________________
      _____________________________________________
      ____________________________________________________________ bearing serial
      number ________________
      ___________________ (the “Unit”). iSt represents the Unit has been modified as
follows:
      _____________________________________________________________________
      _________.
      Pro Tech has inspected the Unit, confirmed that such modification has
      occurred, and hereby explicitly acknowledges that units so modified do not
      infringe any claim of the ’757 patent.

     

    
      	
              Pro Tech
                Monitoring, Inc.

            	 	 	
              iSECUREtrac
                Corporation

            	 
	 	 	 	 	 
	 	 	 	 	 
	By:	Date: __________	 	By:	Date: __________
	
              
                

              

            	 	 	
              
                
 

            	 
	
              Name:

            	 	 	
              
                Name:

              

            	 
	
              
                
 

            	 	 	
              
                
 

            	 
	
              Title:
                

            	 	 	
              
                Title:
                  

              

            	 
	
              
                
 

            	 	 	
              
                
 

            	 

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    Exhibit C

     

    November 13,
      2007

     

    ISECUREtrac
      Corp.

    5078 S. 111th
      Street

    Omaha,
      NE
      68137

     

    Dear
      Sirs,

     

    Re:
      Elmo-Tech
      Software and Hardware Price List

     

    Attached
      please find our pricing for MEMS3000 monitoring software and extended
      warranty.

     

    Initial
      400 MEMS3000 VB units will be provided with a 12 months warranty
      FOC. Items not covered under the warranty and extended warranty, losses and
      damages, are priced according to the attached pricelist.

     

    Returned
      equipment that is found damaged after internal RMA procedures will, unless
      specifically instructed otherwise be fixed and charged accordingly.

     

    MEMS
      alcohol sensor calibration is not covered under the agreement. iST can either
      purchase the calibration kit and perform the calibration independently, or
      ship
      units that require calibration to ElmoTech per the price in the attached
      pricelist. According to manufacturing recommendations, the MEMS should be
      calibrated every 6 months.

     

    Unless
      otherwise specified in our agreement, payment terms are
      NET 30.

     

    Shipments
      are per CIF delivery conditions (INCOTERMS 2000).

     

    Please
      do
      not hesitate to contact me if you need any other clarifications.

     

    Yours
      sincerely,

     

    Guy
      Greitser

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    Exhibit
      C

     

    Part
      1 - Monitoring System Pricing (MEMS3000 monitoring module)

    

    
      	 	 	
              System
                set

              up

            	 	
              SW
                & HW

              License

              year1

            	 	
              SW
                & HW

              License

              year2
                and

              above

            	 	
              Maintenance

              and
                support year2 and

              above

            	 	
              Remarks

            	 
	 	 	 	 	 	 	 	 	 	 	 	 
	
              MEMS
                3000

            	 	 	
              FOC

            	 	 	
              FOC

            	 	 	
              FOC1

            	 	
              $

              
              

            	
              10,000

              
              

            	 	 	
              1Licensed
                up to 800 offenders

              
              

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Monitoring

              System

            	 	 	 	 	 	 	 	 	 	 	 	
              annually2

            	 	 	
              2All
                software and hardware related issues that pertain to the ElmoTech
                system
                are covered. Hardware and 3rd
                party software is covered

            	 

    

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    Exhibit C

     

    Part
      2 - Hardware & 3rd Party
      SW:

    

    
      	
              Ln

            	 	
              Internal
                PN

            	 	
              Description

            	 	
              Quantity

            	 	
              Remarks

            
	 	 	 	 	 	 	 	 	 
	
              1

            	 	
              38010014

            	 	
              Cabinet
                SYS US High Availability

            	 	
              1

            	 	 
	 	 	 	 	 	 	 	 	 
	
              3

            	 	
              38110002

            	 	
              UPS
                Net Management Card AP9617

            	 	
              1

            	 	 
	 	 	 	 	 	 	 	 	 
	
              4

            	 	
              38110006

            	 	
              UPS
                3000 RM3U 120V

            	 	
              1

            	 	 
	 	 	 	 	 	 	 	 	 
	
              7

            	 	
              6411060

            	 	
              ASSY
                TOP FOR ACTUATOR USB BOX

            	 	
              2

            	 	
              ElmoTech
                Proprietary for modem resets

            
	 	 	 	 	 	 	 	 	 
	
              8

            	 	
              381 0605

            	 	
              MODEM
                V.92 56K USR5686E for US

            	 	
              10

            	 	 
	 	 	 	 	 	 	 	 	 
	
              9

            	 	
              40111063

            	 	
              METAL
                RACK FOR ACT. MODEMS USR-1

            	 	
              2

            	 	
              ElmoTech
                Proprietary for modems in cabinet

            
	 	 	 	 	 	 	 	 	 
	
              10

            	 	
              382900014

            	 	
              PowerCord
                1FT US

            	 	
              15

            	 	 
	 	 	 	 	 	 	 	 	 
	
              11

            	 	
              38150006

            	 	
              SWITCH
                - 10/100 19” 24 PORT

            	 	
              1

            	 	 
	 	 	 	 	 	 	 	 	 
	
              12

            	 	
              38390005

            	 	
              Backup
                PC

            	 	
              1

            	 	
              For
                daily DB backups

            
	 	 	 	 	 	 	 	 	 
	
              13

            	 	
              100101116

            	 	
              MODEM
                GSM SIEMENS TC-65

            	 	
              2

            	 	
              Cellular
                modes for text messaging

            
	 	 	 	 	 	 	 	 	 
	
              14

            	 	
              381200010

            	 	
              SUN

              V210,
                2xCPU,2GBRAM, 2x 72GBHD

            	 	
              1

            	 	
              Main
                servers, 2 CPU, memory - 2 GB RAM and 2 hard drives with 72 GB
                each

            
	 	 	 	 	 	 	 	 	 
	
              16

            	 	
              38380002

            	 	
              LICENSE
                - SUN Solaris Instl. Pack

            	 	
              1

            	 	 
	 	 	 	 	 	 	 	 	 
	
              18

            	 	
              38380003

            	 	
              LICENSE
                FOR WIN. 2003 server

            	 	
              1

            	 	 
	 	 	 	 	 	 	 	 	 
	
              21

            	 	
              38180006

            	 	
              Dell
                PowerEdge 1950 for DCC

            	 	
              1

            	 	
              DCC,
                1 CPU, 1 GB RAM, 2 power supplies,

              2 hard
                drives, 160 GB each in RAID 1
                configuration

            

    

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    Exhibit C

     

    Part
      3 - MEMS3000 VB Extended Warranty:

     

    All
      newly
      purchased equipment comes with a 12 months warranty. MEMS3000 VB kit
      extended warranty (including MEMS3000 VB receiver) is $200 per year per
      unit. Items not covered under the warrant and extended warranty, losses and
      damages, are priced according to the attached pricelist.

     

    MEMS3000
      VB Receivers (damages)

     

    
      	
              Item

            	 	
              Price
                ($)

            	 
	
              CPU
                board replacement

            	 	 	
              410.0

            	 
	
              CPU
                board repair

            	 	 	
              130.0

            	 
	
              CPU
                Micro PIC replacement

            	 	 	
              55.0

            	 
	
              CPU
                I.C. flash replacement

            	 	 	
              40.0

            	 
	
              CPU
                modem replacement

            	 	 	
              150.0

            	 
	
              Battery
                lithum 3V 190mA 3pin

            	 	 	
              20.0

            	 
	
              Battery
                7.2V 3.6A NIMH replacement

            	 	 	
              90.0

            	 
	
              RF
                board replacement

            	 	 	
              110.0

            	 
	
              RF
                board repair

            	 	 	
              65.0

            	 
	
              RF
                board calibration

            	 	 	
              35.0

            	 
	
              IR
                board replacement

            	 	 	
              45.0

            	 
	
              IR
                board repair

            	 	 	
              30.0

            	 
	
              Camera
                replacement

            	 	 	
              170.0

            	 
	
              Camera
                board replacement

            	 	 	
              110.0

            	 
	
              Camera
                board repair

            	 	 	
              50.0

            	 
	
              Camera
                main chip (OV528-T64) replacement

            	 	 	
              85.0

            	 
	
              Camera
                slave chip (OV7640-T28) replacement

            	 	 	
              80.0

            	 
	
              Camera
                lens replacement

            	 	 	
              35.0

            	 
	
              Antenna
                318 loop replacement

            	 	 	
              30.0

            	 
	
              Antenna
                Stern replacement

            	 	 	
              30.0

            	 
	
              Power
                Supply replacement

            	 	 	
              55.0

            	 
	
              Plastic
                base replacement

            	 	 	
              30.0

            	 
	
              Plastic
                Cover replacement

            	 	 	
              45.0

            	 
	
              Plastic
                back cover replacement

            	 	 	
              40.0

            	 
	
              Plastic
                camera holder replacement

            	 	 	
              30.0

            	 
	
              Plastic
                cap tube replacement

            	 	 	
              45.0

            	 
	
              Rubber
                tube blow replacement (including metal tubes)

            	 	 	
              55.0

            	 
	
              Mirror
                replacement

            	 	 	
              25.0

            	 
	
              BTI
                board replacement

            	 	 	
              615.0

            	 

    

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    Exhibit
      C

     

    
      	
              Item

            	 	
              Price
                ($)

            	 
	
              BTI
                Sensor + Heater

            	 	 	
              300.0

            	 
	
              BTI
                Pump without heater and clip

            	 	 	
              275.0

            	 
	
              BTI
                Chip

            	 	 	
              110.0

            	 
	
              BTI
                Pressure Transducer

            	 	 	
              90.0

            	 
	
              BTI
                Buzzer

            	 	 	
              50.0

            	 
	
              Touch
                Panel replacement

            	 	 	
              50.0

            	 
	
              Siren
                replacement

            	 	 	
              30.0

            	 
	
              CABLE
                2W 18AWG FM/FM FOR CPU/BAT

            	 	 	
              15.0

            	 
	
              CABEL
                FLAT FM/FM 10P FOR BAT DAT

            	 	 	
              15.0

            	 
	
              Battery
                support

            	 	 	
              15.0

            	 
	
              Power
                supply AC/DC 110 VAC-12VDC/4A

            	 	 	
              30.0

            	 
	
              Cable
                telephone black

            	 	 	
              10.0

            	 
	
              MEMS
                Calibration

            	 	 	
              60.0

            	 
	
              MEMS
                Carry Case

            	 	 	
              30.0

            	 

    

    

    
      
        
        

      

      
        20SKINS
      INC.

    

    SECURED
      PROMISSORY NOTE

    

    $__________February
      __, 2008

    

    FOR
      VALUE
      RECEIVED, the undersigned, SKINS INC., a company organized under the laws of
      the
      State of Nevada (the “Company”), promises to pay to the order of _____________
      or his registered assigns (the “Holder”), the principal sum of ________________
      Dollars (US$________________), with interest from the date hereof at the rate
      of
      five percent (5%) per annum on the unpaid balance hereof until paid. The purpose
      of this Note is to provide bridge financing for the Company until it is able
      to
      complete an equity or debt financing (the “Financing”).

    

    1. Payment.
      The
      Company agrees to pay in full all principal and interest due under this Note
      upon the closing of the Financing and from the proceeds of such financing.
      Notwithstanding, repayment of this Note in full shall occur no later than six
      (6) months from the date hereof.

    

    2. Interest.
      Interest on the unpaid principal balance of this Note shall accrue at the rate
      of five percent (5%) per annum compounded annually (computed on the basis of
      a
      365-366 day year (as applicable) based on actual days elapsed) commencing on
      the
      date hereof, and payable in accordance with Paragraph 1, above.

    

    3. Security.

    

    (a) Company.
      In
      order to secure the payment of the Note, the Company hereby grants to Holder
      a
      continuing first priority security interest in intellectual property rights,
      patents, copyrights, trademarks in which the Company now has or hereafter may
      acquire any right, title or interest, all proceeds and products thereof and
      all
      additions, accessions and substitutions thereto or therefore (the
“Security”).

    

    (b) Subsidiary.
      In
      order to secure the payment of the Note, Skins Footwear Inc., a Delaware
      corporation and the wholly-owned subsidiary of the Company (the “
      Subsidiary”),
      hereby grants to Holder a continuing first priority security interest in the
      Security.

     

    Holder
      shall have the rights of a secured party under the Uniform Commercial Code.
      To
      effect the foregoing, each of the Company and the Subsidiary agrees to execute
      promptly such additional security documentation as Holder may request and hereby
      authorizes Holder to file financing and other statements as Holder deems
      advisable to perfect the first priority security interest granted
      herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4. Shares
      of Common Stock.
      As a
      part of the consideration of entering into this Note, the Holder shall receive
      ________________________ (_________) shares of Common Stock of the Company
      (the
“Shares”).

    

    5. Piggy-back
      Registration Rights.
      The
      Shares shall be eligible for registration pursuant to the Securities Act under
      the following terms and conditions:

    

    (a) At
      any time that the Shares are not freely saleable under Rule 144 under the
      Securities Act, the Company agrees to include the Shares, at the option of
      the
      Holder, in the first registration statement it files with the Securities and
      Exchange Commission, whether on its own account or on behalf of other
      shareholders, excluding registration statements on Forms S-4 or S-8 (an
“
      Eligible Registration Statement”).

    

    (b) All
      registration expenses will be borne by the Company, whether or not the
      registration statement becomes effective and whether or not any Shares are
      sold
      pursuant to such registration statement; provided, however, that such expenses
      shall not include (i) any underwriting discount or commissions with respect
      to
      the Holder’s shares and/or (ii) cost of special counsel for the
      Holder.

    

    (c) In
      the event of a registration statement filed in connection with an underwritten
      offering, these registration rights are subject to the requirement that the
      Holder submits to any lock-up provisions and cut-backs, if any, as may be
      proposed by the underwriter(s).

    

    (d) The
      Company shall send to the Holder written notice of any decision to file an
      Eligible Registration Statement at least fifteen (15) days prior to the initial
      filing date; if within five (5) days after receipt of such notice, the Holder
      requests in writing that some or all of such Holder’s Shares be included in such
      registration statement, the Company shall then cause the registration under
      the
      Securities Act of all or part of the Holder’s Shares, as requested by
      holder;
      provided, however
      , that
      if at any time after giving written notice of its intention to register any
      securities and prior to the effective date of the Eligible Registration
      Statement, the Company shall determine for any reason not to register, or to
      delay registration of, such securities, the Company may, at its election, give
      written notice of such determination to the Holder and, thereupon, (i) in the
      case of a determination not to register, shall be relieved of its obligation
      to
      register any Shares in connection with such registration and (ii) in the case
      of
      a determination to delay registering, shall be permitted to delay registering
      any Shares for the same period as the delay in registering any other
      securities.

    

    (e) 
      In connection with each registration statement covering the Shares, the Holder
      shall be required to furnish to the Company information regarding such Holder
      and the distribution of such Shares as is required by law to be disclosed in
      the
      registration statement, and the Company may exclude from such registration
      the
      Shares of the Holder if it fails to furnish such information within a reasonable
      time prior to the filing of such registration statement or any supplemented
      prospectus and/or amended registration statement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (f) Notwithstanding
      the foregoing, the Company shall not be required to register the Shares if
      the
      primary and direct cause of such failure to satisfy said obligations is as
      result of comments from the SEC regarding the ability of the Company to utilize
      and rely upon Rule 415 of the Securities Act of 1933, as amended, or the SEC’s
      refusal to permit the registration of securities issued after the filing of
      the
      initial Registration Statement. In the event the SEC does not permit the Company
      to register all of the securities covered by the Eligible Registration
      Statement, the Company shall be permitted to remove the Shares from such
      registration statement and, in such event, the Company agrees to use its best
      efforts to register the Shares that were not registered in such Eligible
      Registration Statement as promptly as possible thereafter and in a manner
      permitted by the SEC or otherwise ensure that the Shares are freely saleable,
      in
      full, under Rule 144 of the Securities Act.

    

    6. Restrictions
      on Transfer of Shares.
      The
      Holder, by acceptance hereof, agrees that, absent an effective registration
      statement filed with the SEC under the 1933 Act, covering the disposition or
      sale of the Shares and registration or qualification under applicable state
      securities laws, such Holder will not sell, transfer, pledge, or hypothecate
      any
      or all such Shares, as the case may be, unless either (i) the Company has
      received an opinion of counsel, in form and substance reasonably satisfactory
      to
      the Company, to the effect that such registration is not required in connection
      with such disposition or (ii) the sale of such securities is made pursuant
      to
      SEC Rule 144.

    

    7. Compliance
      With Securities Laws.
      By
      executing this Note, the Holder hereby represents, warrants and covenants that
      he/she/it qualify under either or both of Sections 7.1 and 7.2, and the Holder
      agrees to complete supporting documentation in connection with this Section
      7.

    

    (a) Accredited
      Investor.
      By
      execution of this Note, the Holder hereby represents, warrants and covenants
      that he/she/it is an “accredited investor” as that term is defined under Rule
      501 of Regulation D, that the Shares are acquired for investment only and not
      with a view to, or for sale in connection with, any distribution thereof, that
      the Holder has had such opportunity as such Holder has deemed adequate to obtain
      from representatives of the Company such information as is necessary to permit
      the Holder to evaluate the merits and risks of its investment in the Company;
      that the Holder is able to bear the economic risk of holding the Shares for
      an
      indefinite period; that the Holder understands that the Shares will not be
      registered under the 1933 Act (unless otherwise required pursuant to exercise
      by
      the Holder of the registration rights, if any, granted to the Holder) and will
      be “restricted securities” within the meaning of Rule 144 under the 1933 Act and
      that the exemption from registration under Rule 144 will not be available for
      at
      least one year from the date hereof under current laws, and even then will
      not
      be available unless a public market then exists for the stock, adequate
      information concerning the Company is then available to the public, and other
      terms and conditions of Rule 144 are complied with; and that all stock
      certificates representing the Shares will have affixed thereto a legend
      substantially in the following form:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

    

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE.
      THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
      AND
      MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND ANY
      APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
      THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
      FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER
      OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
      SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE
      IS
      IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
      LAWS.

    

    (b) Regulation
      S Investor.
      By
      execution of this Note, the Holder hereby represents, warrants and covenants
      that he/she/it to the representations and warranties contained in
      Appendix A
      ,
      attached hereto.

    

    8.  Currency.
      All
      references herein to “dollars” or “$” are to U.S. dollars, and all payments of
      principal of, and interest on, this Note shall be made in lawful money of the
      United States of America in immediately available funds.

    

    9. Waiver.
      The
      Company expressly waives presentment, protest, demand, notice of dishonor,
      notice of nonpayment, notice of maturity, notice of protest, presentment for
      the
      purpose of accelerating maturity, and diligence in collection.

    

    10. Attorneys’
      Fees and Costs.
      In the
      event of any legal proceedings in connection with this Note, all expenses in
      connection with such legal proceedings of the prevailing party, including
      reasonable legal fees and applicable costs and expenses, shall be reimbursed
      by
      the non-prevailing party upon demand. This provision shall not merge with any
      enforcement order or judgment on this Note and shall be applicable to any
      proceeding to enforce or appeal any judgment relating to the Note.

    

    11. Severability.
      If any
      one or more of the provisions contained herein, or the application thereof
      in
      any circumstance, is held invalid, illegal or unenforceable in any respect
      for
      any reason, the validity, legality and enforceability of any such provisions
      hereof shall not be in any way impaired, unless the provisions held invalid,
      illegal or unenforceable shall substantially impair the benefits of the
      remaining provisions hereof.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    12. Successors
      and Assigns.
      This
      Note shall inure to the benefit of the Holder and his successors and permitted
      assigns and shall be binding upon the undersigned and his successors and
      permitted assigns. As used herein, the term “Holder” shall mean and include the
      successors and permitted assigns of the Holder.

    

    13. Governing
      Law.
      The
      parties acknowledge and agree that this Note and the rights and obligations
      of
      all parties hereunder shall be governed by and construed under the laws of
      the
      State of New York, without regard to conflict of laws principles.

    

    14. Modification.
      This
      Note may not be modified or amended orally, but only by an agreement in writing
      signed by the party against whom such agreement is sought to be
      enforced.

    

    15. Entire
      Agreement.
      This
      Note constitutes the entire agreement between the parties with respect to the
      subject matter hereof and supersedes any and all prior written or oral
      agreements and understandings with respect to the matters covered
      hereby.

    

    16. Counterparts.
      This
      Note may be executed in two (2) counterparts, each of which shall be an original
      counterpart, but only all of which together shall constitute one original
      Note.

    

    [The
      next
      page is the signature page]

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    SIGNATURE
      PAGE TO SECURED PROMISSORY NOTE

    

    
      	
               

            	
              SKINS
                INC.,

            
	
               

            	
              a
                Nevada corporation

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              By:

            	
              Mark
                Klein

            
	
               

            	
              Its:

            	
              Chief
                Executive Officer

            
	
               

            	
              Address:

            	
              1115
                Broadway, 12th Floor

            
	
               

            	
               

            	
              New
                York, NY 10010

            
	
               

            	
              Fax:

            	
              (___)
                ___-____

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              SKINS
                FOOTWEAR INC.,

            
	
               

            	
              a
                Delaware corporation

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              By:

            	
              Mark
                Klein

            
	
               

            	
              Its:

            	
              Chief
                Executive Officer

            
	
               

            	
              Address:

            	
              1115
                Broadway, 12th Floor

            
	
               

            	
               

            	
              New
                York, NY 10010

            
	
               

            	
              Fax:

            	
              (___)
                ___-____

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              HOLDER,

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              Address:

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              Fax:

            	
               

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    APPENDIX
      A

    INVESTOR
      REPRESENTATIONS UNDER REGULATION S

    

    By
      executing the Note, the Holder hereby represents, warrants and covenants that
      he/she/it has received the Note and carefully read such Note; the decision
      to
      acquire the Shares has been taken solely in reliance upon the information
      contained in this Note and the Shares, and such other written information
      supplied by an authorized representative of the Company as the Holder may have
      requested. The Holder acknowledges that all documents, records and books
      pertaining to this investment have been made available for inspection by the
      Holder, its attorneys, accountants and purchaser representatives upon request
      prior to executing this Note and acquiring the Shares, and that it has been
      informed by the Company that its books and records will be available for
      inspection by the Holder or his/her/its agents and representatives at any time,
      and from time to time, during reasonable business hours and upon reasonable
      notice. The Holder further acknowledges that it (or its advisors, agents and/or
      representatives) has had a reasonable and adequate opportunity to ask questions
      of and receive answers from the Company concerning the terms and conditions
      of
      the acquisition of the Shares, the nature of this Note and the Shares and the
      business and operations of the Company, and to obtain from the Company such
      additional information, to the extent possessed or obtainable without
      unreasonable effort or expense, as is necessary to verify the accuracy of the
      information contained in the Note or otherwise provided by the Company; all
      such
      questions have been answered by the Company to the full satisfaction of the
      Holder. The Holder is not relying upon any oral information furnished by the
      Company or any other person in connection with its investment decision, and
      in
      any event, no such oral information has been furnished to the Holder which
      is in
      any way inconsistent with or contradictory to any information contained in
      the
      Note, or otherwise provided to the Holder by the Company in writing as described
      above.

    

    The
      Holder meets the criteria established below:

    

    The
      Holder is not a U.S. Person, as defined in Rule 901 of Regulation S, promulgated
      under the 1933 Act and the Holder represents and warrants that:

    

    (i) The
      Holder is not acquiring the Shares as a result of, and the Holder covenants
      that
      he, she or it will not engage in any “directed selling efforts” (as defined in
      Regulation S under the 1933 Act) in the United States in respect of the Shares
      which would include any activities undertaken for the purpose of, or that could
      reasonably be expected to have the effect of, conditioning the market in the
      United States for the resale of any of the Shares;

    

    (ii) The
      Holder is not acquiring the Shares for the account or benefit of, directly
      or
      indirectly, any U.S. Person;

    

    (iii) The
      Holder is a resident of the jurisdiction in which the Holder
      resides;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (iv) the
      offer and the sale of the Shares to the Holder complies with or is exempt from
      the applicable securities legislation of the jurisdiction in which the Holder
      resides;

    

    (v) The
      Holder is outside the United States when receiving and executing the Note and
      that the Holder will be outside the United States when acquiring the Shares,
      and

    

    (vi) the
      Holder covenants with the Company that:

    

    (1) offers
      and sales of any of the Shares prior to the expiration of a period of one year
      after the date of original issuance of the Shares (the one year period
      hereinafter referred to as the “Distribution Compliance Period” under current
      laws) shall only be made in compliance with the safe harbor provisions set
      forth
      in Regulation S, pursuant to the registration provisions of the 1933 Act or
      an
      exemption therefrom, and that all offers and sales after the Distribution
      Compliance Period shall be made only in compliance with the registration
      provisions of the 1933 Act or an exemption therefrom and in each case only
      in
      accordance with applicable state securities laws; and

    

    (2) The
      Holder will not engage in hedging transactions with respect to the Shares until
      after the expiration of the Distribution Compliance Period, or other such period
      as required under current federal securities laws.

    

    The
      Holder: (a) has adequate net worth and means of providing for current financial
      needs and possible personal contingencies, (b) has no need for liquidity in
      this
      investment; and (c) is able to bear the economic risks of an investment in
      the
      Shares for an indefinite period of time, and of losing the entire amount of
      such
      investment.

    

    The
      Holder understands and acknowledges that an acquirer of the Shares must be
      prepared to bear the economic risk of such investment for an indefinite period
      because of: (A) the heightened nature of the risks associated with an investment
      in the Company due to its status as a development stage company; (B) illiquidity
      of the Shares due to the fact such stock has not been registered under the
      1933
      Act or any state securities act (nor passed upon by the SEC or any state
      securities commission), and the Shares has not been registered or qualified
      by
      the Holder under federal or state securities laws solely in reliance upon an
      available exemption from such registration or qualification, and hence such
      Shares cannot be sold unless it is subsequently so registered or qualified
      (which is not likely), or are otherwise subject to any applicable exemption
      from
      such registration requirements; and (C) substantial restrictions on the transfer
      of the Shares, as set forth in, among other documents, the Shares and by legend
      on the face or reverse side of any certificate evidencing an ownership interest
      in the Company.

    

    The
      Holder either (i) has a pre-existing personal or business relationship with
      the
      Company, its officers, directors or affiliates; or (ii) alone or with its
      representatives, such knowledge and experience in financial and business matters
      that it is capable of evaluating the merits and risks of an investment in the
      Shares.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

    

     

    The
      Holder understands and acknowledges that an investment in the Shares is
      speculative in nature, and involves certain risks.

    

    The
      Holder is not a member of the National Association of Securities Dealers, FINRA,
      or of any other self-regulatory agency which would require approval prior to
      any
      acquisition of the Shares.

    

    The
      Holder is acquiring the Shares for its own investment, and not with a view
      toward the subdivision, resale, distribution, or fractionalization thereof.
      The
      Holder does not have any contract, undertaking, arrangement or obligation with
      or to any person to sell, transfer, or otherwise dispose of the Shares (or
      any
      portion thereof hereby acquired), nor has a present intention to enter into
      any
      such contract, undertaking, agreement or arrangement.

    

    The
      offering of the Shares was made only through direct, personal communication
      between the Holder (or a representative thereof) and the Company; the
      acquisition of the Shares by the Holder is not the result of any form of general
      solicitation or general advertising including, but not limited to, the
      following: (i) any advertisement, article, notice or other communication
      published in any newspaper, magazine, or other written communication, or
      broadcast over television, radio or any other medium; or (ii) any seminar or
      meeting to which the attendees had been invited by any general solicitation
      or
      general advertising.

    

    The
      Holder has been advised to consult with an attorney regarding legal matters
      concerning the acquisition and ownership of the Shares, and with a tax advisor
      regarding the tax consequences of acquiring such stock.

    

    The
      Holder has distributed the Shares and the Note, or any other information
      pertaining to the acquisition of the Shares hereunder, to anyone other than
      its
      representative and/or its investment, legal or accounting advisors in connection
      with its consideration of an acquisition of the Shares.

    

    The
      Holder was not organized for the specific purpose of acquiring the Shares,
      and
      has other investments or business activities besides investing in the Company,
      unless the Holder has indicated the contrary to the Company in writing. The
      Holder has specified in writing the number and character (i.e., individual,
      corporate, company, etc.) of the beneficial owners thereof.

     

    
      
        
        

      

      
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    SCHEDULE
      OF LENDERS

    

    

    Lender:
      Deborah Gargiulo

    Amount:
      $15,000

    No.
      of
      Shares: 32,609

    Date:
      February 28, 2008

     

    Lender:
      CAT Brokerage AG

    Amount:
      $250,000

    No.
      of
      Shares: 568,182

    Date:
      March 17, 2008

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