April 1, 2011

Cornucopia, Ltd.
Butterfield Square, Leeward Highway
Providenciales, Turks and Caicos Islands, BVI

 
Re:          Binding Letter of Intent Re: Proposed Financing

 
Dear Mr. Sullivan:

This binding letter of intent (the “LOI”) sets forth the understanding of the
mutual intentions of the below parties regarding the proposed transaction
between: (i) Tactical Air Defense Services, Inc., a Nevada corporation (“TADF”)
and (ii) Cornucopia, Ltd., a Turks and Caicos International Business Corporation
(“Cornucopia”) (TADF and Cornucopia may be referred to hereinafter individually
as a “Party” and collectively as the “Parties”). Each Party understands and
acknowledges that this is a binding Letter of Intent and this Letter of Intent
does create a binding contract, which will be subject to more definitive
agreements (the “Definitive Agreements” as defined herein).

1.           Financing Architecture.    Cornucopia shall provide up to One
Million Dollars (US$1,000,000) in cash financing as follows:

a.           Initial Financing Terms.  Cornucopia shall provide an initial
financing of Four Hundred Thousand Dollars (US$400,000 and the “Initial
Financing”) through the sale and issuance by TADF of shares of preferred stock
(the “Preferred Stock”) to be designated. The Initial Financing and number of
shares of Preferred Stock: (i) shall be convertible into 533,333,200 shares of
TADF’s restricted common stock, par value $0.001 (the “Common Stock”); (ii)
shall maintain a number of votes equal to the number of shares of Common Stock
the Preferred Stock is convertible into; (iii) shall provide for a 12% annual
coupon payment; (iv) shall be collateralized by certain TADF assets to be agreed
upon by the Parties in the Definitive Agreements; (v) shall provide for a right
of participation in the TADF operating profits to be agreed upon by the Parties
in the Definitive Agreements; and (vi) shall include (A) a warrant to purchase
up to 533,333,200 shares of Common Stock at a strike price of $0.00075 for a one
year warrant period and (B) a warrant to purchase up to 800,000,000 shares of
Common Stock at a strike price of the lesser of (I) $0.0025 or (II) a fifty
percent (50%) discount to the average closing price of the Common Stock for the
thirty (30) trading days prior to exercise of the warrant for a one year warrant
period; provided, however, in the event TADF requests any funding under a
Subsequent Financing (as defined below) pursuant to the terms outlined below,
and Cornucopia refuses to provide such Subsequent Financing funding, the
warrants described in this Section 1(a)(vi)(B), and all rights thereunder, shall
be automatically cancelled, rescinded and terminated.
 
b.           Subsequent Financing Terms.  Cornucopia shall provide a subsequent
financing amount of Six Hundred Thousand Dollars (US$600,000 and the “Subsequent
Financing”), as required by and requested by TADF, subject to Cornucopia
approval which shall not be unreasonably withheld, through the sale and issuance
by TADF of additional shares of Preferred Stock. The Subsequent Financing and
shares of Preferred Stock: (i) shall be convertible into shares of Common Stock
at a conversion price equal to a fifty percent (50%) discount to the average
closing price of TADF Common Stock for the thirty (30) day period prior to each
Subsequent Financing; (ii) shall maintain a number of votes equal to the number
of shares of Common Stock the Subsequent Financing Preferred Stock is
convertible into; (iii) shall provide for a 12% annual coupon payment; (iv)
shall be collateralized by certain TADF assets to be agreed upon by the Parties
in the Definitive Agreements; and (v) shall provide for a right of participation
in the TADF operating profits to be agreed upon by the Parties in the Definitive
Agreements. (The above Initial Financing and Subsequent Financing may be
referred to hereinafter as the “Transaction”).

2.           Initial Financing Closing.  The Parties shall use their
commercially best efforts to close the Initial Financing within five (5)
business days of execution by both Parties of this LOI, although such closing
may take place following 5 business days from execution of this LOI upon written
agreement by both Parties. The closing of any Subsequent Financing shall be at
the request of TADF.

3.           Definitive Agreements.    Following further negotiations, the
Parties shall commence preparation of definitive legal agreements that will
affect the Transaction and other commitments contemplated herein (the
“Definitive Agreements”). The Definitive Agreements will contain the general
provisions outlined herein in addition to the usual and customary
representations and warranties, covenants, conditions, and indemnifications for
transaction of this kind.

4.           Transaction Document Expenses.  Each Party shall be solely
responsible for all fees and expenses of the Parties agents, advisors, attorneys
and accountants with respect to the negotiation of this LOI, the negotiation and
drafting of the Definitive Agreements and, if Definitive Agreements are
executed, the closing of the Transaction.

5.           Confidentiality, Non-Disclosure and Subsequent Public
Announcement.    The Parties agree to not release any public information
regarding or in connection with this LOI prior to the execution of this LOI in
order to protect each Party’s confidential and proprietary information related
to each company and the Transaction. Following the execution of the LOI, TADF
shall release a Form 8-K with the SEC and related press release regarding the
LOI and Transaction providing and disclosing the terms of this LOI.

6.           Acknowledgments and Assent.  The Parties acknowledge that they were
advised to consult with an independent attorney prior to signing this LOI and
that they have in fact consulted with counsel of their own choosing prior to
executing this LOI. The Parties agree that they have read this LOI and
understand the content herein, and freely and voluntarily assent to all of the
terms herein.

We trust that these terms accurately reflect our understanding. If there are any
questions or comments regarding the same, please feel to contact me at your
convenience. Otherwise kindly execute this LOI acknowledging your agreement to
the terms outlined above.

Dated: April 1, 2011

Agreed and accepted by:

Tactical Air Defense Services, Inc.
 
 
/s/ Alexis Korybut
_________________________________
By: Alexis Korybut
Its: Chief Executive Officer
Cornucopia, Ltd.
 
 
/s/ Sean Sullivan
_________________________________
By: Sean Sullivan
Its:  Director