Document:

Exhibit
      10.4

    

    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 REASONABLY 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     

            
	
              $1,275,000

            	 	
              April
                18, 2008     

            

    

     

    FOR
      VALUE
      RECEIVED, Golden Gate Investors, Inc., a California corporation (the “Company”),
      hereby promises to pay TraceGuard Technologies, Inc. (the “Lender”), the
      principal sum of One Million Two Hundred Seventy-Five Thousand Dollars
      ($1,275,000) (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 May 31, 2012 (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 One-Quarter
      Percent (7 1⁄4 %) per annum, simple interest (subject to adjustment as provided
      below) (the “Interest Rate”), 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. Notwithstanding the foregoing, in
      the
      event that the Lender’s Common Stock (the “Common Stock”) shall trade on the
      Trading Market (as defined in the Debenture) at a price per share that is
      $0.065per share or lower at any time during the six month period commencing
      on
      the date hereof and ending on the six month anniversary of the date hereof
      (as
      adjusted for any stock splits, stock dividends, combinations, subdivisions,
      recapitalizations or the like), then the Interest Rate shall immediately be
      decreased to Four and Three-Quarters Percent (4 3⁄4 %) and shall remain at such
      level for the duration of this Note.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    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
      date
      referred to herein as the “Periodic Prepayment Date”), an amount equal to not
      less than $200,000 (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) per share
      of
      the Lender’s Common Stock for the ten Trading Days (as defined in the Debenture)
      immediately preceding the Periodic Prepayment Date is not less than $0.098
      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.

    
       

      
        	
                _________________

                Initials

              	
                _________________

                Initials

              

      

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    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.

    
       

      
        	
                _________________

                Initials

              	
                _________________

                Initials

              

      

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    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.

     

    5.6 The
      Company represents and warrants that the value of the Collateral is not less
      than the principal amount of this Note.

     

    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 Company’s receipt of written notice thereof sent 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.

    
       

      
        	
                _________________

                Initials

              	
                _________________

                Initials

              

      

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    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:

              
	 	 
	 	
                TraceGuard
                  Technologies, Inc.

              
	 	
                330
                  Madison Avenue, 9th
                  Floor

              
	 	
                New
                  York, New York 10017

              
	 	
                Telephone:      866-401-5969

              
	 	
                Facsimile:       011-972-57-797-5364

              
	 	 
	
                (2)

              	
                With
                  a copy to:

              
	 	 
	 	
                Moses
                  & Singer LLP.

              
	 	
                405
                  Lexington Avenue, 12th
                  Floor

              
	 	
                New
                  York, New York 10474-1299

              
	 	
                Attention:
                  Allan Grauberd

              
	 	
                Telephone:     
                  212-554-7883

              
	 	
                Facsimile:       917-206-4381

              
	 	 
	
                (3)

              	
                If
                  to the Company, to:

              
	 	 
	 	
                Golden
                  Gate Investors, Inc.

              
	 	
                1150
                  Silverado Street, Suite 220

              
	 	
                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.

     

    
      	
              _________________

              Initials

            	
              _________________

              Initials

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    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, each of the Lender and 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.

     

    
      	
              _________________

              Initials

            	
              _________________

              Initials

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    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.

     

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

     

    
      	
              GOLDEN
                GATE INVESTORS, INC.

            
	 
	
              By:

            	 
	
              Name:

            	 
	
              Its:

            	 
	 	 
	
              TRACEGUARD
                TECHNOLOGIES, INC.

            
	 
	
              By:

            	 
	
              Name: 

            	 
	
              Its:

            	 

    

     

    
      	
              _________________

              Initials

            	
              _________________

              InitialsExhibit
      10.5

    

    THIS
      PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF SECURITIES
      IN
      AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN)
      PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
      AMENDED (THE “1933 ACT”). 

     

    NONE
      OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE
      “SUBSCRIPTION AGREEMENT”) RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR
      ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED
      OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS
      DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER
      THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933
      ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
      TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
      ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
      TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE
      WITH THE 1933 ACT.

     

    CONFIDENTIAL

    PRIVATE
      PLACEMENT SUBSCRIPTION AGREEMENT

    (Offshore
      Subscriber)

    

    
      	
              TO:

            	
              TraceGuard
                Technologies, Inc. (the “Company”) 

            

    

    330
      Madison Avenue

    New
      York,
      New York 10017

     

    Purchase
      of Shares and Warrants 

     

    
      	
              1.

            	
              Subscription

            

    

     

    1.1 The
      undersigned (the “Subscriber”) hereby irrevocably subscribes for and agrees to
      purchase from the Company, on the basis of the representations and warranties
      and subject to the terms and conditions set forth in this agreement (the
“Subscription Agreement”),                
      Units at
      the price of US$0.40 per Unit (the “Subscription Price”), each “Unit” consisting
      of one share of the Company's common stock, par value $0.001 per share (a
“Share”), and one warrant (a “Warrant”) exercisable for three years from the
      Payment Date (as defined below) to purchase one additional Share (a “Warrant
      Share”) at a price of US$0.80 per Warrant Share, for the aggregate purchase
      price of US$               
      (the
“Subscription Proceeds”).

     

    1.2 At
      the
      same time that Subscriber delivers this Subscription Agreement to the Company,
      the Subscriber shall pay the Subscription Proceeds to the Company pursuant
      to
      the instructions in Section 2.1. In connection therewith, and within 14 business
      days of the date on which the Company accepts the Subscription Agreement (the
      “Payment Date”), the Company shall deliver to Subscriber a number of Shares and
      a number of Warrants that together equal to the aggregate Units purchased
      hereunder. The number of Warrant Shares issuable pursuant to the Warrants shall
      be combined in a single Warrant.

     

    1.3 Upon
      acceptance of this Subscription Agreement by the Company, Subscriber
      acknowledges and agrees that Subscriber shall purchase the Units pursuant to
      the
      terms of this Subscription Agreement.

     

    
      	
              2.

            	
              Payment

            

    

     

    2.1 The
      Subscriber agrees to pay the Subscription Proceeds by wire transfer
      to:

    

    
      	
              Name:
                

            	
              TraceGuard
                Technologies, Inc.

            
	
              Bank:
                

            	
               

            
	
              Account:
                

            	
               

            
	
              SWIFT/ABA:      

            	
               

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.2 The
      Subscriber acknowledges and agrees that this Subscription Agreement, the
      Subscription Proceeds and any other documents delivered in connection herewith
      will be held on behalf of the Company until acceptance or rejection. In the
      event that this Subscription Agreement is rejected by the Company for whatever
      reason, which the Company expressly reserves the right to do, within 30 days
      of
      the delivery by the Subscriber of this executed Subscription Agreement, the
      Company shall return this Subscription Agreement, the Subscription Proceeds
      (without interest thereon) and any other documents delivered in connection
      herewith to the Subscriber at the address of the Subscriber as set forth in
      this
      Subscription Agreement. Following the payment of the Subscription Proceeds
      to
      the Company, and until the Company accepts or rejects the Subscription
      Agreement, the Company is entitled to treat such Subscription Proceeds as an
      interest-free loan to the Company.

     

    
      	
              3.

            	
              Documents
                Required from
                Subscriber

            

    

     

    3.1 The
      Subscriber must complete, sign and return to the Company an executed copy of
      this Subscription Agreement.

     

    3.2 The
      Subscriber shall complete, sign and return to the Company as soon as possible,
      on request by the Company, any documents, questionnaires, notices and
      undertakings as may be required by regulatory authorities and applicable
      law.

     

    
      	
              4.

            	
              Closing

            

    

     

    4.1 If
      the
      Subscription Agreement and the Subscription are accepted by the Company, the
      closing of the offering of the Units (the “Closing”) shall occur on the Payment
      Date. 

     

    
      	
              5.

            	
              Acknowledgements
                of Subscriber

            

    

     

    5.1 The
      Subscriber acknowledges and agrees that:

     

    
      	 	
              (a)

            	
              none
                of the Shares, Warrants or Warrant Shares have been registered under
                the
                Securities Act of 1933, as amended (“1933 Act”), or under any state
                securities or “blue sky” laws of any state of the United States, and,
                unless so registered, may not be sold or transferred except in accordance
                with the provisions of Regulation S promulgated pursuant to the 1933
                Act
                (“Regulation S”), pursuant to an effective registration statement under
                the 1933 Act, or pursuant to an exemption from, or in a transaction
                not
                subject to, the registration requirements of the 1933 Act and in
                each case
                in accordance with applicable state and local securities laws;
                

            

    

     

    
      	 	
              (b)

            	
              the
                Subscriber acknowledges that the Company has not undertaken, and
                will have
                no obligation to undertake, to register any of the Shares, Warrants
                or
                Warrant Shares under the 1933 Act;

            

    

     

    
      	 	
              (c)

            	
              the
                decision to execute this Subscription Agreement and acquire the Units
                hereunder has not been based upon any oral or written representation
                as to
                fact or otherwise made by or on behalf of the Company, and such decision
                is based entirely upon a review of the information filed by the Company
                with the U.S. Securities and Exchange Commission (the “SEC
                Filings”);

            

    

     

    
      	 	
              (d)

            	
              no
                securities commission or similar regulatory authority has reviewed
                or
                passed on the merits of the Units;

            

    

     

    
      	 	
              (e)

            	
              there
                are risks associated with an investment in the Units, as described
                in the
                SEC Filings;

            

    

     

    
      	 	
              (f)

            	
              the
                Subscriber has not acquired the Units as a result of, and will not
                itself,
                directly or indirectly, engage in any “directed selling efforts” (as
                defined in Regulation S) in the United States in respect of the Units
                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 the Units; provided,
                however,
                that the Subscriber may sell or otherwise dispose of the Units pursuant
                to
                registration thereof under the 1933 Act, pursuant to Regulation S,
                or
                under an exemption from such registration
                requirements;

            

    

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (g)

            	
              the
                Subscriber and the Subscriber's advisor(s) have had a reasonable
                opportunity to ask questions of and receive answers from the Company
                in
                connection with the purchase of the Units hereunder, and to obtain
                additional information, to the extent possessed or obtainable without
                unreasonable effort or expense, necessary to verify the accuracy
                of the
                information about the Company;

            

    

     

    
      	 	
              (h)

            	
              the
                Subscriber will indemnify and hold harmless the Company and, where
                applicable, its directors, officers, employees, agents, advisors
                and
                shareholders, from and against any and all loss, liability, claim,
                damage
                and expense whatsoever (including, but not limited to, any and all
                fees,
                costs and expenses whatsoever reasonably incurred in investigating,
                preparing or defending against any claim, lawsuit, administrative
                proceeding or investigation whether commenced or threatened) arising
                out
                of or based upon any representation or warranty of the Subscriber
                contained herein or in any document furnished by the Subscriber to
                the
                Company in connection herewith being untrue in any material respect
                or any
                breach or failure by the Subscriber to comply with any covenant or
                agreement made by the Subscriber to the Company in connection
                therewith;

            

    

     

    
      	 	
              (i)

            	
              the
                Shares are not listed on any stock exchange or automated dealer quotation
                system (other than the Over the Counter Bulletin Board (“OTC BB”)) and no
                representation has been made to the Subscriber that any of the Shares
                will
                become listed on any stock exchange or automated dealer quotation
                system
                (other than OTC BB);

            

    

     

    
      	 	
              (j)

            	
              the
                Company will refuse to register any transfer of the Units not made
                in
                accordance with the provisions of Regulation S, pursuant to an effective
                registration statement under the 1933 Act or pursuant to an available
                exemption from the registration requirements of the 1933 Act and
                in
                accordance with applicable state and local securities
                laws;

            

    

     

    
      	 	
              (k)

            	
              the
                statutory and regulatory basis for the exemption claimed for the
                offer of
                the Units, although in technical compliance with Regulation S, would
                not
                be available if the offering is part of a plan or scheme to evade
                the
                registration provisions of the 1933 Act or any applicable state and
                provincial securities laws; 

            

    

     

    
      	 	
              (l)

            	
              the
                Subscriber has been advised by the Company to consult the Subscriber's
                own
                legal, tax and other advisors with respect to the merits and risks
                of an
                investment in the Units and with respect to applicable resale
                restrictions, and the Subscriber is solely responsible (and the Company
                is
                not in any way responsible) for compliance
                with:

            

    

     

    
      	 	
              (i)

            	
              any
                applicable laws of the jurisdiction in which the Subscriber is resident
                in
                connection with the distribution of the Units hereunder;
                and

            

    

     

    
      	 	
              (ii)

            	
              applicable
                resale restrictions; and

            

    

     

    
      	 	
              (m)

            	
              this
                Subscription Agreement is not enforceable by the Subscriber unless
                it has
                been accepted by the Company.

            

    

     

    
      	
              6.

            	
              Representations,
                Warranties and Covenants of
                Subscriber

            

    

     

    6.1 The
      Subscriber hereby represents and warrants to and covenants with the Company
      (which representations, warranties and covenants shall survive the Closing)
      that:

     

    
      	 	
              (a)

            	
              the
                Subscriber has the legal capacity and competence to enter into and
                execute
                this Subscription Agreement and to take all actions required pursuant
                hereto;

            

    

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (b)

            	
              the
                entering into of this Subscription Agreement and the transactions
                contemplated hereby do not result in the violation of any of the
                terms and
                provisions of any law applicable to the Subscriber or of any agreement,
                written or oral, to which the Subscriber may be a party or by which
                the
                Subscriber is or may be bound;

            

    

     

    
      	 	
              (c)

            	
              the
                Subscriber has duly executed and delivered this Subscription Agreement
                and
                it constitutes a valid and binding agreement of the Subscriber enforceable
                against the Subscriber in accordance with its
                terms;

            

    

     

    
      	 	
              (d)

            	
              the
                Subscriber is acquiring the Units for such Subscriber's own account
                and/or
                benefit for investment and not as a nominee and not with a view to
                the
                distribution thereof.

            

    

     

    
      	 	
              (e)

            	
              the
                Subscriber is not acquiring the Units for the account or benefit
                of,
                directly or indirectly, any U.S.
                Person;

            

    

     

    
      	 	
              (f)

            	
              the
                Subscriber is not a U.S. Person (as defined in Regulation
                S);

            

    

     

    
      	 	
              (g)

            	
              the
                Subscriber is resident in the jurisdiction set out under the heading
“Name
                and Address of Subscriber” on the signature page of this Subscription
                Agreement;

            

    

     

    
      	 	
              (h)

            	
              the
                sale of the Units to the Subscriber as contemplated in this Subscription
                Agreement complies with or is exempt from the applicable securities
                legislation of the jurisdiction of residence of the
                Subscriber;

            

    

     

    
      	 	
              (i)

            	
              the
                Subscriber is acquiring the Units for investment only and not with
                a view
                to resale or distribution and, in particular, it has no intention
                to
                distribute either directly or indirectly any of the Units in the
                United
                States or to U.S. Persons; 

            

    

     

    
      	 	
              (j)

            	
              the
                Subscriber is outside the United States at the time of the offer
                and sale
                of the Units and when receiving and executing this Subscription Agreement
                and is acquiring the Units as principal for the Subscriber's own
                account,
                for investment purposes only, and not with a view to, or for, resale,
                distribution or fractionalisation thereof, in whole or in part, and
                no
                other person has a direct or indirect beneficial interest in such
                Units;

            

    

     

    
      	 	
              (k)

            	
              the
                Subscriber is not an underwriter of, or dealer in, the common shares
                of
                the Company, nor is the Subscriber participating, pursuant to a
                contractual agreement or otherwise, in the distribution of the
                Units;

            

    

     

    
      	 	
              (l)

            	
              the
                Subscriber (i) is able to fend for him/her/itself in the purchase
                of the
                Units; (ii) has such knowledge and experience in business matters
                as to be
                capable of evaluating the merits and risks of its prospective investment
                in the Units; and (iii) has the ability to bear the economic risks
                of its
                prospective investment and can afford the complete loss of such
                investment;

            

    

     

    
      	 	
              (m)

            	
              the
                Subscriber is not aware of any public solicitation or advertisement
                of an
                offer in connection with any of the Units;
                and

            

    

     

    
      	 	
              (n)

            	
              no
                person has made to the Subscriber any written or oral
                representations:

            

    

     

    
      	 	
              (i)

            	
              that
                any person will resell or repurchase any of the
                Units;

            

    

     

    
      	 	
              (ii)

            	
              that
                any person will refund the purchase price of any of the
                Units;

            

    

     

    
      	 	
              (iii)

            	
              as
                to the future price or value of any of the Units;
                or

            

    

     

    
      
        
        

      

      
        -
          4
          -

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (iv)

            	
              that
                any of the Shares will be listed and posted for trading on any stock
                exchange or automated dealer quotation system or that application
                has been
                made to list and post any of the Shares of the Company on any stock
                exchange or automated dealer quotation system, except that the Company’s
                common stock is currently approved for trading on OTC
                BB.

            

    

     

    
      	 	
              (o)

            	
              The
                Subscriber will not engage in hedging transactions with respect to
                the
                Units unless in compliance with the 1933
                Act.

            

    

     

    
      	
              7.

            	
              Acknowledgement
                and Waiver

            

    

     

    7.1 The
      Subscriber has acknowledged that the decision to purchase the Units was solely
      made on the basis of information contained in the SEC Filings, which is publicly
      available and filed on EDGAR. The Subscriber hereby waives, to the fullest
      extent permitted by law, any rights of withdrawal, rescission or compensation
      for damages to which the Subscriber might be entitled in connection with the
      distribution of the Units.

     

    
      	
              8.

            	
              Legending
                of Subject Units

            

    

     

    8.1 The
      Subscriber hereby acknowledges that upon the issuance thereof, and until such
      time as the same is no longer required under the applicable securities laws
      and
      regulations, the certificates representing any of the Shares, Warrants and
      Warrant Shares will bear a legend in substantially the following
      form:

     

    
      	 	
              “THE
                SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN AN OFFSHORE
                TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION
                S PROMULGATED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED
                (THE
                “ACT”)) PURSUANT TO REGULATION S. ACCORDINGLY, THE SECURITIES REPRESENTED
                BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE ACT, OR ANY
                U.S.
                STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
                HYPOTHECATED OR OTHERWISE DISPOSED OF (I) EXCEPT IN ACCORDANCE WITH
                THE
                PROVISIONS OF REGULATION S, (II) PURSUANT TO AN EFFECTIVE REGISTRATION
                STATEMENT UNDER THE ACT OR (III) PURSUANT TO AN EXEMPTION FROM THE
                ACT
                WHICH IS CONFIRMED IN AN OPINION OF COMPANY COUNSEL. IN ADDITION,
                HEDGING
                TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE
                MAY
                NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE
                ACT.”

            

    

     

    8.2 The
      Subscriber hereby acknowledges and agrees to the Company making a notation
      on
      its records or giving instructions to the registrar and transfer agent of the
      Company in order to implement the restrictions on transfer set forth and
      described in this Subscription Agreement. 

     

    
      	
              9.

            	
              Costs

            

    

     

    9.1 The
      Subscriber acknowledges and agrees that all costs and expenses incurred by
      the
      Subscriber (including any fees and disbursements of any special counsel retained
      by the Subscriber) relating to the purchase of the Units shall be borne by
      the
      Subscriber.

     

    
      	
              10.

            	
              Governing
                Law

            

    

     

    10.1 This
      Subscription Agreement is governed by the laws of the State of Nevada. The
      Subscriber, in its personal or corporate capacity and, if applicable, on behalf
      of each beneficial purchaser for whom it is acting, irrevocably consents to
      the
      jurisdiction of the courts of the State of New York to resolve any disputes
      arising hereunder.

     

    
      
        
        

      

      
        -
          5
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              11.

            	
              Survival

            

    

     

    11.1 This
      Subscription Agreement, including, without limitation, the representations,
      warranties and covenants contained herein, shall survive and continue in full
      force and effect and be binding upon the parties hereto notwithstanding the
      completion of the purchase of the Units by the Subscriber pursuant
      hereto.

     

    
      	
              12.

            	
              Assignment

            

    

     

    12.1 This
      Subscription Agreement is not transferable or assignable.

     

    
      	
              13.

            	
              Severability

            

    

     

    13.1 The
      invalidity or unenforceability of any particular provision of this Subscription
      Agreement shall not affect or limit the validity or enforceability of the
      remaining provisions of this Subscription Agreement.

     

    
      	
              14.

            	
              Entire
                Agreement

            

    

     

    14.1 Except
      as
      expressly provided in this Subscription Agreement and in the agreements,
      instruments and other documents contemplated or provided for herein, this
      Subscription Agreement contains the entire agreement between the parties with
      respect to the sale of the Units and there are no other terms, conditions,
      representations or warranties, whether expressed, implied, oral or written,
      by
      statute or common law, by the Company or by anyone else.

     

    
      	
              15.

            	
              Notices

            

    

    

    15.1
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed to have been duly given if mailed or transmitted by any standard form
      of
      telecommunication. Notices to the Subscriber shall be directed to the address
      on
      the signature page of this Subscription Agreement and all notices to the Company
      shall be delivered by facsimile to: TraceGuard Technologies, Inc., 330 Madison
      Avenue New York, New York 10017, Attention: David Ben-Yair, Chief Financial
      Officer, facsimile number: 011-972-57-797-5364, with a copy to Moses &
Singer LLP, 405 Lexington Avenue, 12th
      Floor,
      New York, NY 10174, Attention: Allan Grauberd, Esq., facsimile number (917)
      206-4381.

     

    
      	
              16.

            	
              Counterparts
                and Electronic Means

            

    

     

    16.1 This
      Subscription Agreement may be executed in any number of counterparts, each
      of
      which, when so executed and delivered, shall constitute an original and all
      of
      which together shall constitute one instrument. Delivery of an executed copy
      of
      this Subscription Agreement by electronic facsimile transmission or other means
      of electronic communication capable of producing a printed copy will be deemed
      to be execution and delivery of this Subscription Agreement as of the date
      hereinafter set forth.

     

    
      
        
        

      

      
        -
          6
          -

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF
      the
      Subscriber has duly executed this Subscription Agreement as of the date of
      acceptance by the Company.

    

    
      	 	 
	 	
              (Name
                of Subscriber – Please type or print)

            
	 	 
	 	 
	 	
              (Signature
                and, if applicable, Office of Subscriber)

            
	 	 
	 	 
	 	
              (Address
                of Subscriber)

            
	 	 
	 	 
	 	
              (City,
                State or Province, Postal Code of Subscriber)

            
	 	 
	 	 
	 	
              (Country
                of Subscriber)

            

    

    

    ACCEPTANCE

     

    The
      above-mentioned Subscription Agreement in respect of the Units is hereby
      accepted by TraceGuard Technologies, Inc.

     

    DATED
      as
      of the __ day of                ,
      2008.

     

    TRACEGUARD
      TECHNOLOGIES, INC.

    

    
      	
              Per:

            	 	 
	 	
              David
                Ben-Yair, Chief Financial Officer

            	 

    

     

    
      
        
        

      

      
        -
          7
          -

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