EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of
April 24, 2011 by and among Tactical Air Defense Services, Inc., a Nevada
corporation (the "Company"), and Alexis Korybut, an individual (the “Employee”).

RECITALS

WHEREAS, the Company and the Employee entered into a prior employment agreement
dated January 1, 2010 (the “Original Agreement”), with such Original Agreement
technically terminated as of December 31, 2010.

WHEREAS, the Employee has continued providing the services outlined in the
Original Agreement and hereunder from January 1, 2011 through the date of this
Agreement with no compensation whatsoever.

WHEREAS, the parties desire this Agreement to replace and supersede the Original
Agreement and to compensate the Employee for the services described herein both
for the period from January 1, 2011 to the date of this Agreement, and the for
the remainder of the Term (as defined herein) in connection with the employment
of Employee by the Company subject to the terms and conditions of this
Agreement.

AGREEMENT

NOW THEREFORE, in consideration of the mutual covenants set forth below, the
Company agrees to employ Employee, and Employee agrees to be employed by the
Company, commencing January 1, 2011 (hereinafter, the “Effective Date”), and as
set forth in this Agreement.

1.           DESCRIPTION OF DUTIES.

1.1           Position.  Employee shall be employed in the capacity of Chief
Executive Officer, President, and Chief Financial Officer of the Company and in
such other capacities as may be mutually agreed upon from time to time by the
Company and Employee.  Employee may be removed or terminated only by the
majority of the Board of Directors of the Company.

1.2           Essential Job Functions and Duties.  Employee shall perform such
duties as are customarily performed by other persons in similar such positions.

1.3           Duty of Loyalty and Best Efforts.  Employee shall devote his/her
attention, knowledge, and skills to the Company's business interests, and shall
do so in good faith and with best efforts.  Notwithstanding the above, the
Company acknowledges and agrees that Employee may become employed by additional
companies in any capacity whatsoever, so long as Employee’s devotion of such
attention, knowledge, and skills do not substantially interfere with Employee’s
duty of loyalty and best efforts to the Company.  Employee agrees to refrain
from any interest or participation, of any kind whatsoever, in any business
directly competitive to the Company’s business, for a term of one (1) year from
the termination or expiration of this Agreement.

1.4           Place of Employment.  The Company agrees that Employee, in his/her
sole discretion, shall in good faith determine his/her place of
employment.  Notwithstanding the foregoing, Employee acknowledges that his/her
presence shall be required from time-to-time at the registered place of business
of the Company, or at such other location as may be determined by the Company,
at the expense of the Company.

1.5           Term Of Employment.  Employee’s employment with the Company is for
a term of one (1) year from the Effective Date (the “Term”).

2.  
COMPENSATION TERMS.

2.1           Base Salary.  Employee shall receive a base salary (the “Base
Salary”), of one hundred and twenty-thousand dollars ($120,000) per year,
payable bi-weekly on the 15th and 30th of each month, in
arrears.  Notwithstanding the above, it is hereby agreed between the parties
that at the end of each calendar quarter of the Employee’s employ with the
Company (each a “Quarter”), Employee shall be issued a convertible promissory
note (a “Note,” a specimen copy of which has been attached hereto as Exhibit A)
equal to the amount of any accrued and unpaid Base Salary and unpaid Expenses
(as described below) or other reimbursable items for such Quarter, which Note
shall: (a) have a term of three (3) years; (b) an annual interest rate of twelve
(12%) percent; (c) shall be convertible into shares of common stock of the
Company at a conversion price equal to the lesser of: (i) the average closing
price of the Company’s common stock for the ninety (90) day period prior to the
issuance of any such Note; or (ii) the lowest price of any shares of common
stock or any other securities of the Company sold or issued, directly or
indirectly, during the term of this Agreement or of said Note; and (d) shall
have full ratchet anti-dilution protection and other protective provisions as
described herein and in the terms of the template Note attached hereto. In
addition, in the event the Company shall, at any time during the term of this
Agreement or of said Note, sell or issue any securities convertible into Common
Stock or enter into any other transaction for the issuance of any securities
convertible into Common Stock, either directly or indirectly (each a “3rd Party
Financing”) the Corporation shall offer to the Holder such securities offered in
such 3rd Party Financing such that any such Note shall receive the same like and
kind treatment of such 3rd Party Financing. (For example, if the Employee was to
be issued a $40,000 Note for services provided in any relevant Quarter and,
during such Quarter, the Company entered into a 3rd Party Financing wherein they
issued a $100,000 convertible promissory note with a conversion price of $0.001
(the “3P Note”) and warrants to purchase 100,000 shares of Company Common Stock
(the “3P Warrant”), the Note for such relevant Quarter would be issued with the
conversion price of the 3P Note and the Employee would be issued additional
warrants on the same terms as the 3P Warrant.

2.2           Stock Incentive.  As a stock incentive and signing bonus, the
Employee shall be issued a one-time grant of 1,000,000 fully-vested shares of
Series A Preferred Stock of the Company as an inducement to enter into this
Agreement (referred to hereinafter as the “Series A Preferred Stock,” a copy of
the Certificate of Designation designating the rights, preferences and
privileges of such stock attached hereto as Exhibit B).  In the event that the
Employee is issued warrants, either directly or indirectly, notwithstanding of
the terms of such warrant, such warrant shall contain the right to cashless
exercise.

2.3           Performance Bonus.  In connection with each calendar year, partial
or otherwise, in which Employee is employed by the Company, Employee shall
participate in a management bonus pool, the terms and conditions of which shall
be determined by the Board of Directors of the Company.

2.4           Exempt Status.  Employee understands that at all times he/she is
employed as a salaried/exempt employee and, therefore, he/she is not entitled to
overtime wages.  Employee shall not receive overtime compensation for the
services performed under this Agreement, unless specifically agreed to in
writing.

2.5           Expense Reimbursement.  Employee shall be entitled to
reimbursement of any or all reasonably incurred expenses incurred in the
performance of the functions and duties under this Agreement.  In addition,
until such time as the Company provides a fixed place of employment for
Employee, the Company shall pay to Employee an office expense budget of $1,000
per month to be used at employee’s sole discretion.  In order to receive
reimbursement, Employee must timely provide the Company with an itemized account
of all expenditures.

3.           BENEFITS.

3.1           Health Insurance.  The Company agrees that upon the Effective
Date, Employee shall be eligible to participate in the Company health insurance
plan (the “Company Health Plan”), if such Company Health Plan is in-place.  In
the event that a Company Health Plan is in-place, the Company agrees to pay the
cost of an individual or family policy for Employee.  In the event that a
Company Health Plan is not in-place or if Employee chooses to not participate in
a Company Health Plan, the Company shall reimburse Employee up to $1,000 per
month for his/her out-of-pocket costs for any other individual health insurance
plan or medical expenses.

3.2           Director & Officer Liability Insurance.  The Company agrees that
upon the Effective Date, Employee shall be eligible to participate in the
Company director and officer liability insurance plan (the “Company D&O Plan”),
if such Company D&O Plan is in-place.  In the event that a Company D&O Plan is
in-place, the Company agrees to pay the cost of an individual policy for
Employee.  In the event that a Company D&O Plan is not in place, the Company
agrees to pay Employee a fee of $1,000 per month for each month, partial or
otherwise, that a Company D&O Plan is not in place.

3.3           Vacation.  Employee is entitled to up to six (6) weeks of paid
vacation per year, which if unused shall accrue.

4.           TERMINATION.

4.1           Events of Termination.  The Employee's employment with the Company
shall terminate upon any one of the following:

4.1.1           Thirty (30) days after the date of a written notice sent to the
Employee stating the Company's determination made in good faith that it is
terminating the Employee for “Cause” as defined under Section 4.2 below
(“Termination for Cause”); or

4.1.2           Thirty (30) days after the date of a written notice sent to the
Employee stating the Company's determination made in good faith that, due to a
mental or physical incapacity, the Employee has been unable to perform his
duties under this Agreement for a period of not less than six (6) consecutive
months (“Termination for Disability”); or

4.1.3           Upon the Employee's death (“Termination Upon Death”); or

4.1.4           Upon the date of a written notice sent to the Company stating
the Employee's determination made in good faith of “Constructive Termination” by
the Company, as defined under Section 6.3 below (“Constructive Termination”); or

4.1.5           Thirty (30) days after the date of a notice sent to the Employee
stating that the Company is terminating his employment, without Cause, which
notice can only be given by the Company at any time after the Effective Date at
the Company's sole discretion, for any reason or for no reason (“Termination
Without Cause”); or

4.1.6           The date of a notice sent to the Company from the Employee
stating that the Employee is electing to terminate his employment with the
Company (“Voluntary Termination”).

4.2           “Cause” Defined.  For purposes of this Agreement, “Cause” for the
Employee's termination will exist at any time after the occurrence of one or
more of the following events:

4.2.1           Any willful act or acts of dishonesty undertaken by the Employee
intended to result in substantial gain or personal enrichment of the Employee at
the expense of the Company; or

4.2.2           Any willful act of gross misconduct which could reasonably be
expected to materially and demonstrably result in damage to the Company.  No
act, or failure to act, by the Employee shall be considered “willful” if done,
or omitted to be done, by him in good faith and in the reasonable belief that
his act or omission was in the best interest of the Company and/or required by
applicable law.

4.3           “Constructive Termination” Defined.  “Constructive Termination”
shall mean:

4.3.1           A material reduction in the Employee's salary or benefits not
agreed to by the Employee;

4.3.2           A material change in the Employee's responsibilities not agreed
to by the Employee;

4.3.3           The Company's breach or failure to comply in any material
respect with any material term of this Agreement after thirty (30) days written
notice of the Employee’s claim of such failure; or

4.3.4           A requirement that the Employee relocate to an office that would
increase the Employee's one-way commute distance by more than 60 miles from his
home.

4.4           “Termination Without Cause” shall mean:

4.4.1           Termination of the Employee’s employment with the Company for
any reason other than Cause.

4.5           Effect of Termination.

4.5.1           Termination for Cause or Voluntary Termination.  In the event of
any termination of the Employee's employment pursuant to Section 4.1.1 or
Section 4.1.6, the Company shall immediately pay to the Employee the
compensation and benefits accrued and otherwise payable to the Employee under
Section 2 through the date of termination.  The Employee's rights under the
Company's benefit plans of general application shall be determined under the
provisions of those plans.

4.5.2           Termination for Disability.  In the event of termination of
employment pursuant to Section 4.1.2:

4.5.2.1                                The Company shall immediately pay to the
Employee the compensation and benefits accrued and otherwise payable to the
Employee under Section 5 through the date of termination; and

4.5.2.2                                The Employee shall receive any other
benefit payments as provided in the Company's standard benefit plans applicable
to disability.

4.5.3           Termination Upon Death.  In the event of termination of
employment pursuant to Section 4.1.3, all obligations of the Company and the
Employee shall cease, except the Company shall immediately pay to the Employee
(or to the Employee's estate) the compensation and benefits accrued and
otherwise payable to the Employee under Section 5 through the date of
termination.

4.6           Constructive Termination or Termination Without Cause.  In the
event of any termination of this Agreement pursuant to Section 4.1.4 or
Section 4.1.5, the Company shall immediately pay to the Employee the
compensation and benefits accrued and otherwise payable to the Employee under
entire term of this Agreement.

5.           COVENANTS.

5.1           Non-Disclosure of Trade Secrets and Other Proprietary
Information.  Employee agrees not to use, disclose, or communicate, in any
manner, proprietary information about the Company, its operations, clientele, or
any other proprietary information, that relate to the business of the
Company.  This includes, but is not limited to, the names of the Company’s
customers, clients, vendors, employees, or independent contractors, or any other
information of any kind which would be deemed confidential or proprietary
information of the Company.

5.2           Non-Solicitation Covenant.  Employee agrees that for a period of
two (2) years following termination of employment, for any reason whatsoever,
Employee will not solicit, including but not limited to the following:
customers, clients, vendors, employees, or independent contractors, of the
Company.

6.           INDEMNIFICATION FOR THIRD PARTY CLAIMS.   The Company agrees to
indemnify and hold harmless Employee to the fullest extent permitted by law,
from and against any and all losses, claims, damages, liabilities, obligations,
penalties, judgments, awards, costs, expenses, and disbursements (and any and
all actions, suits, proceedings and investigations in respect thereof and any
and all legal and other costs, expenses and disbursements in giving testimony or
furnishing documents in response to a subpoena or otherwise), including, without
limitation, the costs, expenses, and disbursements, as and when incurred, of
investigating, preparing, or defending any such action, suit, proceeding, or
investigation (whether or not in connection with litigation in which Employee is
a party), directly or indirectly, caused by, relating to, based upon, arising
out of, or in connection with, Employee’s acting for the Company, including,
without limitation, any act or omission by Employee in connection with his/her
acceptance of or the performance or nonperformance of his/her duties and
obligations under this Agreement. If any action, suit, proceeding, or
investigation is commenced, as to which Employee proposes to demand
indemnification, he/she shall notify the Company with reasonable
promptness.  Employee shall have the right to retain counsel of his/her own
choice to represent him/her, which counsel shall be reasonably acceptable to the
Company, and the Company shall pay the fees, expenses, and disbursements of such
counsel, and such counsel shall, to the extent consistent with its professional
responsibilities, cooperate with the Company and any counsel designated by the
Company.  The Company shall be liable for any settlement of any claim against
Employee.  The Company shall not, without the prior written consent of Employee,
settle or compromise any claim, or permit a default or consent to the entry of
any judgment in respect thereof, unless such settlement, compromise, or consent
includes, as an unconditional term thereof, the giving by the claimant to
Employee of an unconditional and irrevocable release from all liability in
respect of such claim. Neither termination nor completion of the employment of
Employee shall affect these Indemnification Provisions which shall then remain
operative and in full force and effect.

7.           ATTORNEYS’ FEES AND COSTS.   Employee and the Company agree that
should any action be instituted by either party against the other regarding the
enforcement of the terms of this Agreement, the prevailing party will be
entitled to all of its expenses related to such litigation including, but not
limited to, reasonable attorneys' fees and costs, both before and after
judgment.

8.           COUNTERPARTS.   For the convenience of the parties, any number of
counterparts of this Agreement may be executed by the parties hereto.  Each such
counterpart shall be, and shall be deemed to be, an original instrument, but all
such counterparts taken together shall constitute one and the same Agreement.

9.           MISCELLANEOUS.

9.1           Notices.  The parties agree that any notices that are required to
be given under this Agreement shall be given in writing, sent by certified mail,
return receipt requested, to the principal place of business of the Company or
residence of Employee as set forth herein.

9.2           Modifications.  This Agreement embodies the entire agreement and
understanding of the parties hereto and supersedes any and all prior agreements,
arrangements, and understanding relating to the matters provided for
herein.  Any modifications to this Agreement may only be done in writing and
must be signed by an officer of the Company and Employee.

9.3           Severability of Agreement.  To the extent that any provision
hereof is deemed unenforceable, all remaining provisions of this Agreement shall
not be affected thereby and shall remain in full force and effect.

9.4           Waiver of Breach.  The waiver by the Company of a breach of any
provision of this Agreement by Employee shall not operate as a waiver of any
subsequent breach by the Employee.  No waiver shall be valid unless placed in
writing and signed by an officer of the Company.

9.5           Choice of Law, Jurisdiction and Venue.  Employee agrees that this
Agreement shall be interpreted and construed in accordance with the laws of the
State of Florida, and that any claims brought against the Company related to the
terms or conditions of employment shall be brought within a court of competent
jurisdiction within the county of Miami-Dade, Florida.  Employee also consents
to jurisdiction of any claims by the Company related to the terms or conditions
of employment by a court of competent jurisdiction within the county of
Miami-Dade, Florida.

***SIGNATURE PAGE FOLLOWS***

 
 

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SIGNATURE PAGE

IN WITNESS WHEREOF the parties have executed this Employment Agreement effective
as of the day and year first above written.

EMPLOYEE
 
Alexis C. Korybut
COMPANY
 
Tactical Air Defense Services, Inc.
 
 
 
___________________________________
 
 
/s/ Alexis C. Korybut
___________________________________
By: Alexis C. Korybut
By: Alexis C. Korybut
An individual
Its: Chief Executive Officer and Director
 
 
 
/s/ Michael Cariello
___________________________________
 
By: Michael Cariello
 
Its: Chief Operating Officer, Secretary and Director
 
 
 
/s/ Peter C. Maffit
___________________________________
 
By: Peter C. Maffit
 
Its: Director

A FACSIMILE COPY OF THIS AGREEMENT SHALL HAVE THE SAME LEGAL EFFECT AS AN
ORIGINAL OF THE SAME.

 
 

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EXHIBIT A

Specimen Promissory Note

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), NOR ANY STATE SECURITIES LAWS AND NEITHER THIS NOTE NOR
ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) THE
CORPORATION RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF THIS NOTE, WHICH
COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE CORPORATION, THAT THIS
NOTE MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER
CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
APPLICABLE STATE SECURITIES LAWS.

Tactical Air Defense Services, Inc.
(a Nevada corporation)

CONVERTIBLE PROMISSORY NOTE

Issue Date: XXXXXXXXXXX

Total Note: US $XXXXXXXXXX

Tactical Air Defense, a Nevada corporation (the “Corporation”), for value
received, promises to pay (subject to the conversion provisions set forth
herein) to the order of Alexis C. Korybut (the “Holder”) or its assignee, on
XXXXXXXX (the “Due Date”), upon presentation of this Convertible Promissory Note
(the “Note”), $XXXXXXX (“Principal Amount”) together with any accrued and unpaid
interest.  The Note is convertible into shares of common stock (the “Common
Stock”) of the Corporation.
 
The Corporation covenants, promises and agrees as follows:
 
1.           Interest.  Subject to the Holder's right to convert, interest
payable on this Note shall accrue at the annual rate of twelve percent (12%) and
be payable in arrears on the Due Date, accelerated or otherwise, when the
Principal Amount and remaining accrued but unpaid interest shall be due and
payable, or sooner as described below.

2.           Conversion.

2.1.           Option to Convert.  The Holder shall have the right, from and
after the issuance of this Note and then at any time until this Note is fully
paid, at his option, to convert, in whole or in part, subject to the terms and
provisions hereof, the then outstanding balance of the Principal Amount of the
Note, and at the Holder's election, the interest accrued on the Note, into such
number of shares of Common Stock as equals the dollar amount being converted
divided by the Conversion Price.  The term “Conversion Price” shall be and mean
$XXXX, which Conversion Price shall have full-ratchet anti-dilution protection
in connection with any securities sold or issued, direct or otherwise, by the
Corporation prior to the date of conversion of the Note.

2.2.           Exercise of Conversion Right. The conversion right shall be
exercised, if at all, by surrender of the Note to the Corporation, together with
written notice of election executed by the Holder, (hereinafter referred to as
the “Conversion Notice,” a form of which has been attached hereto as Exhibit A)
to convert such Note or a specified portion thereof into Common Stock.

The date of conversion (the “Date of Conversion”) shall be the date on which the
Conversion Notice is received by the Corporation and the person or persons
entitled to receive the Common Stock issuable upon such conversion shall be
treated for all purposes as the record Holder or Holders of such Common Stock on
such date.

2.3.           Maximum Conversion.  The Holder shall not be entitled to convert
an amount of the Note which would result in beneficial ownership by the Holder,
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder, of more than 4.99% of the outstanding
shares of Common Stock of the Corporation at any time. The Holder shall have the
sole responsibility to determine whether the restriction contained herein shall
limit any conversion hereunder.

2.4.           Reservation of Shares. The Corporation shall have the obligation
at all times to reserve and keep available, free from preemptive rights,
unissued or treasury shares of Common Stock sufficient to effect the conversion
of this Note.

3.           Prepayment.   The Corporation shall have the right to prepay this
Note, in whole or in part, without penalty or a premium, upon thirty (30) days
written notice to the Holder.

4.           Investment Representations of Holder.  The Holder hereby makes the
following representations and warranties to the Corporation as its successor
interest, each of which shall apply with respect to the acquisition of this
Note.

4.1           Restricted Securities.

4.1.1           Holder has been advised that the Note and Common Stock
underlying any of the foregoing (collectively, the “Securities”), have not been
registered under the Securities Act or any other applicable securities laws, and
that Securities are being offered and sold pursuant to Section 4(2) of the
Securities Act and/or Rule 506 of Regulation D thereunder, or under Regulation
S, and that the Corporation’s reliance upon Section 4(2) and/or Rule 506 of
Regulation D and/or on Regulation S, is predicated in part on Holders
representations as contained herein.  Holder acknowledges that the Securities
will be issued as “restricted securities” as defined by Rule 144 promulgated
pursuant to the Securities Act, and that the Securities will bear substantially
the following legend:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.  THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREOF UNDER THE
SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF ANY STATE HAVING
JURISDICTION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
 
4.2           Preexisting Relationship.  The Holder has a preexisting personal
or business relationship with the Corporation, one or more of its officers,
directors, or controlling persons.
 
5.           Default.

5.1.           Payment of this Note shall, at the election of the Holder, be
accelerated immediately upon the occurrence of any of the following events (an
“Event of Default”):

(a)           The non-payment by the Corporation when due of the Principal
Amount and interest as provided in this Note; or

(b)           The occurrence of any other material breach of the provisions of
this Note which has not been cured after a reasonable time after receipt by the
Corporation of written notice of such breach, other than a Non-Registration
Event, as defined in Section 6.4, the liquidated damages for which are set forth
below.

5.2.           Each right, power, or remedy of the Holder hereof during the
continuation of any Event of Default as provided for in this Note or now or
hereafter existing at law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other right, power, or remedy
provided for in this Note or now or hereafter existing at law or in equity or by
statute, and the exercise by the Holder of any one or more of such rights,
powers, or remedies shall not preclude the simultaneous or later exercise by the
Holder hereof of any or all such other rights, powers, or remedies.

5.3.           If and for as long as an Event of Default has occurred and is
continuing then the annual rate of interest shall increase to eighteen percent
(18%) until such time as the Principle Amount and remaining accrued but unpaid
interest has been paid.

6.           Registration Rights.
 
6.1           Registration Rights Granted.  If the Corporation at any time
proposes to register any of its securities under the 1933 Act for sale to the
public, whether for its own account or for the account of other security holders
or both, except with respect to registration statements on Forms S-4, S-8 or
another form not available for registering the Registrable Securities for sale
to the public, provided the Registrable Securities are not otherwise registered
for resale by the Holder pursuant to an effective registration statement, each
such time it will give at least fifteen (15) days' prior written notice to the
record holder of the Registrable Securities of its intention so to do. Upon the
written request of the Holder, received by the Corporation within ten (10) days
after the giving of any such notice by the Corporation, to register any of the
Registrable Securities not previously registered, the Corporation will cause
such Registrable Securities as to which registration shall have been so
requested to be included with the securities to be covered by the registration
statement proposed to be filed by the Corporation, all to the extent required to
permit the sale or other disposition of the Registrable Securities so registered
by the holder of such Registrable Securities (the “Seller”). In the event that
any registration pursuant to this Section 6.1 shall be, in whole or in part, an
underwritten public offering of common stock of the Corporation, the number of
shares of Registrable Securities to be included in such an underwriting may be
reduced by the managing underwriter if and to the extent that the Corporation
and the underwriter shall reasonably be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the Corporation
therein; provided, however, that the Corporation shall notify the Seller in
writing of any such reduction. Notwithstanding the foregoing provisions, or
Section 6.4 hereof, the Corporation may withdraw or delay or suffer a delay of
any registration statement referred to in this Section 6.1 without thereby
incurring any liability to the Seller.
 
           6.2.           Registration Procedures. If and whenever the
Corporation is required by the provisions of Section 6.1 to affect the
registration of any Registrable Securities under the 1933 Act, the Corporation
will, as expeditiously as possible:
 
(a)           subject to the timelines provided in this Agreement, prepare and
file with the SEC a registration statement required by Section 6, with respect
to such securities and use its best efforts to cause such registration statement
to become and remain effective for the period of the distribution contemplated
thereby (determined as herein provided), promptly provide to the Holder of the
Registrable Securities copies of all filings and SEC letters of comment (but not
any information that is material, non-public information unless such information
is also promptly publicly disclosed) and notify Holder (by facsimile and/or by
e-mail addresses provided by Holder) on or before 6 pm ET on the same business
day that the Corporation receives notice that (i) the SEC has no comments or no
further comments on the registration statement, and (ii) the registration
statement has been declared effective (failure to timely provide notice as
required by this Section 6.2(a) shall be a material breach of the Corporation’s
obligation and an Event of Default as defined in the Note and a Non-Registration
Event as defined in Section 6.4 of this Note);
 
(b)           prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective until such
registration statement has been effective for a period of two (2) years, and
comply with the provisions of the 1933 Act with respect to the disposition of
all of the Registrable Securities covered by such registration statement in
accordance with the Sellers’ intended method of disposition set forth in such
registration statement for such period;
 
(c)           furnish to the Seller, at the Corporation’s expense, such number
of copies of the registration statement and the prospectus included therein
(including each preliminary prospectus) as such persons reasonably may request
in order to facilitate the public sale or disposition of the Common Stock
covered by such registration statement;
 
(d)           use its commercially reasonable best efforts to register or
qualify the Registrable Securities covered by such registration statement under
the securities or “blue sky” laws of such jurisdictions as the Seller shall
request in writing, provided, however, that the Corporation shall not for any
such purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction;
 
(e)           if applicable, list the Registrable Securities covered by such
registration statement with any securities exchange on which the Common Stock of
the Corporation is then listed;
 
(f)           immediately notify the Seller when a prospectus relating thereto
is required to be delivered under the 1933 Act, of the happening of any event of
which the Corporation has knowledge as a result of which the prospectus
contained in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and
 
(g)           provided same would not be in violation of the provision of
Regulation FD under the 1934 Act, make available for inspection by the
Seller,  and any attorney, accountant or other agent retained by the Seller or
underwriter, all publicly available, non-confidential financial and other
records, pertinent corporate documents and properties of the Corporation, and
cause the Corporation's officers, directors and employees to supply all publicly
available, non-confidential information reasonably requested by the Seller,
attorney, accountant or agent in connection with such registration statement.
 
6.3.           Provision of Documents.  In connection with each registration
described in this Section 6, Seller will furnish to the Corporation in writing
such information and representation letters with respect to itself and the
proposed distribution by it as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities laws.
 
6.4.           Non-Registration Events.  The Corporation and the Seller agree
that the Seller will suffer damages if the Registrable Securities are not
included after written request therefore, in any registration statement
described in Section 6.1 and maintained in the manner and within the time
periods contemplated by Section 6 hereof, and it would not be feasible to
ascertain the extent of such damages with precision.  Accordingly, if and to the
extent that the Registrable Securities are not included in any registration
statement described in Section 6.1 (such an event referred to as a
"Non-Registration Event"), then the Corporation shall deliver to the Holder, as
Liquidated Damages, an amount equal to one percent (1%) for each thirty (30)
days (or part thereof) thereafter, of that portion of the Principal Amount which
cannot be converted into Registrable Securities that are, at the time of
conversion, fully registered for resale under an effective Registration
Statement. The Corporation must pay the Liquidated Damages in cash or an amount
equal to one hundred and fifty percent (150%) of that portion of the Liquidated
Damages if paid in additional shares of registered unlegended free-trading
Common Stock.  Such Common Stock shall be valued at a per share value equal to
the average of the five (5) lowest closing bid prices of the Common Stock as
reported by Bloomberg L.P. for the twenty (20) trading days preceding the first
day of each forty-five (45) day or shorter period for which Liquidated Damages
are payable.  The Liquidated Damages must be paid within ten (10) days after the
end of each forty-five (45) day period or shorter part thereof for which
Liquidated Damages are payable.  In the event a Registration Statement is filed
by the Filing Date but is withdrawn prior to being declared effective by the
SEC, then such Registration Statement will be deemed to have not been filed. All
oral or written and accounting comments received from the SEC relating to the
Registration Statement must be responded to within ten (10) business
days.  Failure to timely respond to SEC comments is a Non-Registration Event for
which Liquidated Damages shall accrue and be payable by the Corporation to the
holders of Registrable Securities at the same rate set forth
above.  Notwithstanding the foregoing, the Corporation shall not be liable to
the Holder under this Section 6.4 for any events or delays occurring as a
consequence of the acts or omissions of the Holder contrary to the obligations
undertaken by Holder in this Note.  Liquidated Damages will not accrue nor be
payable pursuant to this Section 6.4 nor will a Non-Registration Event be deemed
to have occurred for times during which Registrable Securities are transferable
by the holder of Registrable Securities pursuant to Rule 144(k) under the 1933
Act.
 
6.5.           Expenses.  All expenses incurred by the Corporation in complying
with Section 6, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Corporation, fees and expenses (including reasonable counsel
fees) incurred in connection with complying with state securities or “blue sky”
laws, fees of the National Association of Securities Dealers, Inc., transfer
taxes, fees of transfer agents and registrars, costs of insurance and fee of one
counsel for Seller are called “Registration Expenses.” All underwriting
discounts and selling commissions applicable to the sale of Registrable
Securities, including any fees and disbursements of one counsel to the Seller,
are called "Selling Expenses."  The Corporation will pay all Registration
Expenses in connection with the registration statement under Section 6.  Selling
Expenses in connection with each registration statement under Section 6 shall be
borne by the Seller.
 
6.6.           Indemnification and Contribution.
 
(a)           In the event of a registration of any Registrable Securities under
the 1933 Act pursuant to Section 6, the Corporation will, to the extent
permitted by law, indemnify and hold harmless the Seller, and, as applicable,
each officer of the Seller, each director of the Seller, each underwriter of
such Registrable Securities thereunder and each other person, if any, who
controls such Seller or underwriter within the meaning of the 1933 Act, against
any losses, claims, damages, or liabilities, joint or several, to which the
Seller or such underwriter or controlling person may become subject under the
1933 Act or otherwise, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such Registrable Securities was registered
under the 1933 Act pursuant to Section 6, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of, or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances when made, and will subject
to the provisions of Section 6.6(c) reimburse the Seller, each such underwriter
and each such controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the Corporation
shall not be liable to the Seller to the extent that any such damages arise out
of or are based upon an untrue statement or omission made in any preliminary
prospectus if (i) the Seller failed to send or deliver a copy of the final
prospectus delivered by the Corporation to the Seller with or prior to the
delivery of written confirmation of the sale by the Seller to the person
asserting the claim from which such damages arise, (ii) the final prospectus
would have corrected such untrue statement or alleged untrue statement or such
omission or alleged omission, or (iii) to the extent that any such loss, claim,
damage, or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by the Seller, or any such controlling person in
writing specifically for use in such registration statement or prospectus.
 
(b)           In the event of a registration of any of the Registrable
Securities under the 1933 Act pursuant to Section 6, Seller will, to the extent
permitted by law, indemnify and hold harmless the Corporation, and each person,
if any, who controls the Corporation within the meaning of the 1933 Act, each
officer of the Corporation who signs the registration statement, each director
of the Corporation, each underwriter and each person who controls any
underwriter within the meaning of the 1933 Act, against all losses, claims,
damages, or liabilities, joint or several, to which the Corporation or such
officer, director, underwriter or controlling person may become subject under
the 1933 Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement under which such Registrable Securities were
registered under the 1933 Act pursuant to Section 6, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Corporation and each
such officer, director, underwriter and controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action, provided, however,
that the Seller will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage, or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information pertaining to
Seller, as such, furnished in writing to the Corporation by Seller specifically
for use in such registration statement or prospectus, and provided, further,
however, that the liability of the Seller hereunder shall be limited to the net
proceeds actually received by the Seller from the sale of Registrable Securities
covered by such registration statement.
 
(c)           Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 6.6(c) and shall only
relieve it from any liability which it may have to such indemnified party under
this Section 6.6(c), except and only if and to the extent the indemnifying party
is prejudiced by such omission. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent it shall wish, to assume and undertake the defense thereof
with counsel satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to assume and
undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 6.6(c) for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so selected, provided, however, that, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified parties, as a group, shall have the right to select one
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the reasonable expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
 
(d)           In order to provide for just and equitable contribution in the
event of joint liability under the 1933 Act in any case in which either (i)
Seller, or any controlling person of Seller, makes a claim for indemnification
pursuant to this Section 6.6 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 6.6 provides for indemnification in such case, or (ii) contribution
under the 1933 Act may be required on the part of the Seller or controlling
person of the Seller in circumstances for which indemnification is not provided
under this Section 6.6; then, and in each such case, the Corporation and the
Seller will contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (after contribution from others) in such proportion
so that the Seller is responsible only for the portion represented by the
percentage that the public offering price of its securities offered by the
registration statement bears to the public offering price of all securities
offered by such registration statement, provided, however, that, in any such
case, (y) the Seller will not be required to contribute any amount in excess of
the public offering price of all such securities sold by it pursuant to such
registration statement; and (z) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 6(f) of the 1933 Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
 
6.7.           Delivery of Unlegended Shares.
 
(a)           The Common Stock shall not contain any legend, provided (i) a
registration statement (including the Registration Statement) covering the
resale of such security is effective under the Securities Act, or (ii) following
any sale of such Common Stock pursuant to Rule 144, or (iii) if such Common
Stock are eligible for sale under Rule 144(k), or (iv) if such legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission).  A
holder of Common Stock may, by notice to the Corporation, require the
Corporation to reissue any Common Stock previously issued, so that new Common
Stock does not contain any legends.  Within five (5) business days (such fifth
(5th) business day being the “Unlegended Shares Delivery Date”) after the
business day on which the Corporation has received such holder’s request to
remove legends (along with receipt of any already existing legended securities
held by holder of appropriate Conversion Notices necessary for issuance of
shares, the Corporation shall deliver, and shall cause legal counsel selected by
the Corporation to deliver to its transfer agent (with copies to Holder) an
appropriate instruction and opinion of such counsel, directing the delivery of
shares of Common Stock without any legends, reissuable pursuant to any effective
and current Registration Statement described in Section 6 of this Agreement or
pursuant to Rule 144 under the 1933 Act (the “Unlegended Shares”); and the
Corporation shall cause the transmission of the certificates representing the
Unlegended Shares together with a legended certificate representing the balance
of the submitted  certificate, if any, to the Holder at the address specified in
the notice of sale, via express courier, by electronic transfer or otherwise on
or before the Unlegended Shares Delivery Date.  Transfer fees shall be the
responsibility of the Seller. In the event that the shares of Common Stock is
not registered or that unlegended shares are not able to be issued as a result
of the non-availability of an exemption under the 1933 Act, the Holder hereby
accepts issuance of restricted and appropriately legended shares.
 
(b)           In lieu of delivering physical certificates representing the
Unlegended Shares, if the Corporation’s transfer agent is participating in the
Depository Trust Company (“DTC”) Fast Automated Securities Transfer program,
upon request of a Holder, so long as the certificates therefore do not bear a
legend and the Holder is not obligated to return such certificate for the
placement of a legend thereon, the Corporation shall cause its transfer agent to
electronically transmit the Unlegended Shares by crediting the account of
Holder’s prime Broker with DTC through its Deposit Withdrawal Agent Commission
system.  Such delivery must be made on or before the Unlegended Shares Delivery
Date.

(c)           The Corporation understands that a delay in the delivery of the
Unlegended Shares pursuant to Section 6 hereof later than two business days
after the Unlegended Shares Delivery Date could result in economic loss to a
Holder.  As compensation to a Holder for such loss, the Corporation agrees to
pay late payment fees (as liquidated damages and not as a penalty) to the Holder
for late delivery of Unlegended Shares in the amount of $20 per business day
after the Delivery Date for each $10,000 of purchase price of the Unlegended
Shares subject to the delivery default.  If during any 365 day period, the
Corporation fails to deliver Unlegended Shares as required by this Section 6.7
for an aggregate of thirty (30) days, then Holder assignee holding Registrable
Securities subject to such default may, at its option, require the Corporation
to redeem all or any portion of the Common Stock subject to such default at a
price per share equal to 120% of the Conversion Price of such Common Stock or
120% of the fair market value of such Common Stock, whichever is higher
(“Unlegended Redemption Amount”).  The amount of the liquidated damages
described above that have accrued or paid for the twenty day period prior to the
receipt by the Holder of the Unlegended Redemption Amount shall be credited
against the Unlegended Redemption Amount.  The Corporation shall pay any
payments incurred under this Section in immediately available funds upon demand.

(d)           In addition to any other rights available to a Holder, if the
Corporation fails to deliver to a Holder Unlegended Shares as required pursuant
to this Agreement, and after the Unlegended Shares Delivery Date the Holder
purchases (in an open market transaction or otherwise) shares of common stock to
deliver in satisfaction of a sale by such Holder of the shares of Common Stock
which the Holder was entitled to receive from the Corporation (a "Buy-In"), then
the Corporation shall pay in cash to the Holder (in addition to any remedies
available to or elected by the Holder) the amount by which (A) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
common stock so purchased exceeds (B) the aggregate purchase price of the shares
of Common Stock delivered to the Corporation for reissuance as Unlegended
Shares together with interest thereon at a rate of 15% per annum, accruing until
such amount and any accrued interest thereon is paid in full (which amount shall
be paid as liquidated damages and not as a penalty).  For example, if a Holder
purchases shares of Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to $10,000 of purchase price of shares of Common
Stock delivered to the Corporation for reissuance as Unlegended Shares, the
Corporation shall be required to pay the Holder $1,000, plus interest. The
Holder shall provide the Corporation written notice indicating the amounts
payable to the Holder in respect of the Buy-In.

(e)           In the event a Holder shall request delivery of Unlegended Shares
as described in Section 6.7 and the Corporation is required to deliver such
Unlegended Shares pursuant to Section 6.7, the Corporation may not refuse to
deliver Unlegended Shares based on any claim that Holder or any one associated
or affiliated with Holder has been engaged in any violation of law, or for any
other reason, unless, an injunction or temporary restraining order from a court,
on notice, restraining and or enjoining delivery of such Unlegended Shares shall
have been sought and obtained and the Corporation has posted a surety bond for
the benefit of Holder in the amount of 120% of the Conversion Price of such
Common Stock or 120% of the fair market value of such Common Stock, whichever is
higher, which are subject to the injunction or temporary restraining order,
which bond shall remain in effect until the completion of arbitration/litigation
of the dispute and the proceeds of which shall be payable to such Holder to the
extent Holder obtains judgment in Holder’s favor.

7.           Anti-Dilution Adjustments. The Conversion Price shall be subject to
adjustment as follows, from the Issue Date of the Note and then until the Note
is fully paid:

(a)           In case the Corporation shall at any time subdivide or combine the
outstanding shares of Common Stock, declare a stock dividend, stock split,
reverse stock split or other similar transaction or reclassify its Common Stock,
the Conversion Price in effect immediately prior to such transaction shall be
proportionately adjusted to reflect the effect of such transaction. Any such
adjustment shall be effective at the close of business on the date such
transaction shall become effective.

(b)           In case of a consolidation or merger of the Corporation with or
into another corporation (other than a merger or consolidation in which the
Corporation is the continuing corporation and which does not result in a
reclassification of outstanding shares of Common Stock of the class issuable
upon the conversion of this Note and pursuant to which the security holders of
the Corporation are not entitled to receive securities of another issuer) other
than the Business Combination, or in case of any sale or conveyance to another
corporation of the property of the Corporation as an entirety or substantially
as an entirety, the Corporation or such successor or purchasing corporation, as
the case may be, shall execute an instrument providing that the Holder of this
Note shall have the right thereafter to convert this Note as set forth in the
first paragraph of this Note. The foregoing provisions of this Note shall
similarly apply to successive reclassification of shares of Common Stock and to
successive consolidations, mergers, sales, or conveyances by such successor
corporation.

(c)           In case the Corporation shall, at any time subsequent to the Issue
Date of the Note, sell or issue any new issuance of Common Stock or any other
securities or enter into any other transaction for the issuance of Common Stock
or any other securities convertible into Common Stock, either directly or
indirectly (each a “Subsequent Financing”): (i) in the event the issuance price
or conversion price of such Subsequent Financing is set at a price lower than
the Conversion Price herein, then the Conversion Price herein shall immediately
become and mean the lowest price at which any such shares of Common Stock were
sold or issued, either directly or indirectly; provided, however, such
Conversion Price reset feature (i.e. “ratchet clause”) shall not apply to the
conversion of any instrument issued prior to the Issue Date of the Note; and
(ii) in the event any other securities convertible into Common Stock are issued
in such Subsequent Financing, the Corporation shall issue the Holder such
additional securities offered in such Subsequent Financing1.

8.           Failure to Act and Waiver. No failure or delay by the Holder hereof
to insist upon the strict performance of any term of this Note or to exercise
any right, power or remedy consequent upon a Event of Default hereunder shall
constitute a waiver of any such term or of any such breach, or preclude the
Holder hereof from exercising any such right, power or remedy at any later time
or times. By accepting payment after the due date of any amount payable under
this Note, the Holder hereof shall not be deemed to waive the right either to
require payment when due of all other amounts payable under this Note, or to
declare a Event of Default for failure to effect such payment of any such other
amount.

The failure of the Holder of this Note to give notice of any failure or breach
of the Corporation under this Note shall not constitute a waiver of any right or
remedy in respect of such continuing failure or breach or any subsequent failure
or breach.

9.           Consent to Jurisdiction. The Corporation hereby agrees and consents
that any action, suit or proceeding arising out of this Note shall be brought in
any appropriate court in the State of Florida, and by the issuance and execution
of this Note the Corporation irrevocably consents to the jurisdiction of each
such court.

10.           Transfer/Assignability.  This Note shall be binding upon the
Corporation and its successors, and shall inure to the benefit of the Holder and
its successors and assigns. The Note and any shares of Common Stock converted
therefrom, and all of the terms and conditions described herein, are assignable
and may be transferred, sold, or pledged by the Holder at its sole discretion
with notice to the Corporation, a form of such assignment notice which has been
attached hereto as Exhibit B.

11.           Governing Law. This Note shall be governed by and construed and
enforced in accordance with the laws of the State of Florida, or, where
applicable, the laws of the United States, without regard to conflicts of law.

12.           Binding upon Successors.  (a) All covenants and agreements herein
contained by or on behalf of the Corporation shall bind its successors and
assigns and shall inure to the benefit of the Holder and his successors and
assigns; Corporation may not assign this Agreement or any rights or duties
hereunder without Holder’s prior written consent and any prohibited assignment
shall be absolutely void.  Holder reserves the right to sell, assign, transfer,
negotiate, or grant participation in all or any part of, or any interest in
Holder’s rights and benefits hereunder; provided, that Holder shall, for
informational purposes but not as a requirement, notify the Corporation of the
identity of all other assignees or participants who have acquired an ownership
interest in the Note, and upon conversion, in the equity of the Corporation as a
result thereof.  In connection with any such assignment or participation, Holder
may disclose all documents and information which Holder now or hereafter may
have relating to Corporation's business.

IN WITNESS WHEREOF, the Corporation has caused this Note to be duly executed as
of XXXXXXXXXX.

Tactical Air Defense Services, Inc.

By:
Its:

 
 

--------------------------------------------------------------------------------

 

 
EXHIBIT A
CONVERSION NOTICE

Tactical Air Defense Services, Inc.

The undersigned holder (the “Holder”) of a Convertible Promissory Note in the
principal amount of $_____________ (the “Note”), issued on _____________, to
____________________________, hereby elects to convert a principle amount of
$_____________, and accrued interest of $_____________, which in the aggregate
is an amount equal to $_____________, of said Note, at a conversion price of
$______ per common share, into _____________ shares of common stock of Tactical
Air Defense Services, Inc., in accordance with the terms of the Note.  Holder
hereby directs that any such shares be issued in the name of and delivered to
the Holder or if so specified, to the person or entity named below.

 
Date:                 
 
 
Name:                 
 
 
Signature:                                                                           
 
 
Address                 :_________________________                                                           
 
 
_________________________                                                           
 

 

 
________________________                                                
 
 

 
 

 
 

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EXHIBIT B
 
ASSIGNMENT OF CONVERTIBLE PROMISSORY NOTE ISSUED TO
________________________________ BY TACTICAL AIR DEFENSE SERVICES, INC.

For good and favorable consideration, the undersigned,
________________________________,  (“Assignor”), transfers and assigns to
_______________________________, (“Assignee”), and Assignee hereby acquires from
Assignor, $____________ of Principal Amount of Assignor’s right, title, and
interest in a certain Convertible Promissory Note (the “Note”) issued by
Tactical Air Defense Services, Inc., a Nevada corporation (“TADS”), which Note
has a face amount of $______________, and an Issue Date of ______________,
20___.  For the avoidance of doubt, the portion of the Note being assigned is
equal to $___________ of the Principal Amount of the Note and shall include the
right to any associated accrued interest.

By execution hereof below and acceptance of the assignment of the portion of the
Note being assigned herein, you hereby agree to and consent to the terms of the
Note, and further agree to execute all documents or instruments and take all
actions reasonable necessary or requested from time to time by TADS relating to
the Note, whether the same are in connection with the assumption of the Note by
TADS and registration of underlying securities or otherwise.

Assignor further represents and warrants the following:

1)  
That this assignment either does not require any approvals by the obligor or
that the requisite approvals have been obtained; and

2)  
That the Assignor has not assigned, converted, or encumbered the
$_______________ of Principal Amount or associated accrued interest of the Note
herein assigned to Assignee.

The undersigned have executed this Assignment on
this                                                                                                                          
day of                 ,.

 

(“Assignor”)

--------------------------------------------------------------------------------

 
1           For example, if the Conversion Price of the Note is originally
issued at $0.10 and the Corporation enters into a Subsequent Financing wherein
the Corporation issues another holder (a) a convertible promissory note at a
conversion price of $0.05 and (b) warrants to purchase an additional 100,000
shares of Common Stock at a strike price of $0.01 for a period of 2 years, then
(i) the Conversion Price of the Holder’s Note shall be automatically ratcheted
down to $0.05 and (ii) the Corporation shall issue the Holder warrants to
purchase an additional 100,000 shares of Common Stock at a strike price of $0.01
for a period of 2 years, all at no cost, charge or additional compensation to be
paid from the Holder.

 
 
 

 
 
 

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EXHIBIT B

 
CERTIFICATE OF DESIGNATION
OF
TACTICAL AIR DEFENSE SERVICES, INC.
A Nevada Corporation
__________________________________________________________________________________

TACTICAL AIR DEFENSE SERVICES, INC., a Nevada corporation (the “Corporation”)
organized and existing under and by virtue of the provisions of the Nevada
Revised Statutes of the State of Nevada (the “NRS”) does hereby certify:

WHEREAS, pursuant to the Corporation’s Articles of Incorporation (as amended),
the Corporation’s Board of Directors (the “Board”) is authorized to issue, by
resolution and without any action by the Corporation’s shareholders, up to
50,000,000 shares of preferred stock, par value $0.001 (the “Preferred Stock”),
in one or more series, and the Board may establish the designations, dividend
rights, dividend rate, conversion rights, voting rights, terms of redemption,
liquidation preferences, sinking fund terms and all other preferences and rights
of any series of Preferred Stock, including rights that could adversely affect
the voting power of the holders of the Corporation’s common stock;

WHEREAS, on or about March 21, 2007, the Corporation amended its Articles of
Incorporation by filing a Certificate of Designation designating shares of the
Preferred Stock as Series A Preferred Stock (the “Original Series A Preferred
Stock”);

WHEREAS, prior to the date of this Certificate of Designation, with no shares of
Original Series A Preferred Stock issued or outstanding, the Corporation retired
all shares of Original Series A Preferred Stock back into its treasury of
authorized but unissued shares of Preferred Stock;

WHEREAS, the Board believes it to be in the best interest of the Corporation and
its shareholders to re-designate a new class of Series A Preferred Stock (as
defined below);

RESOLVED, pursuant to the NRS, the Board hereby files this Certificate of
Designation (the “Certificate”) and designates a new class of Series A Preferred
Stock as follows:

A.           Series A Preferred Stock. The Corporation is authorized to issue up
to Fifty Million (50,000,000) shares of Preferred Stock. One Million (1,000,000)
shares of the authorized and unissued Preferred Stock of the Corporation are
hereby designated “Series A Preferred Stock” with the following rights,
preferences, powers, privileges and restrictions, qualifications and
limitations:

1.           Conversion into Common Stock.

1.1           Shareholder Conversion Rights.  Each one (1) share of Series A
Preferred Stock may be convertible as described herein into one hundred (100)
shares of Common Stock (the “Series A Conversion Ratio”) at anytime following
the issuance date of such shares. Each holder of Series A Preferred Stock who
desires to convert into the Corporation’s Common Stock must provide five (5)
days written notice (the date of receipt by the Corporation being the
“Conversion Date”) to the Corporation of its intent to convert one or more
shares of Series A Preferred Stock into Common Stock (each a “Conversion
Notice”). The Corporation may, in its sole discretion, waive the written notice
requirement and allow the immediate exercise of the right to convert.

 1.2           Mechanics of Conversion.    No fractional shares of Common Stock
shall be issued upon conversion of Series A Preferred Stock and the number of
shares of Common Stock to be issued shall be determined by rounding to the
nearest whole share (a half share being treated as a full share for this
purpose). Such conversion shall be determined on the basis of the total number
of shares of Series A Preferred Stock the holder is at the time converting into
Common Stock and such rounding shall apply to the number of shares of Common
Stock issuable upon aggregate conversion. Prior to any conversion, the
certificate or certificates representing Series A Preferred Stock to be
converted shall be surrendered to the Corporation, duly endorsed with a
medallion stamp guarantee, at the office of the Corporation or its transfer
agent. The Corporation shall, within fifteen (15) business days, issue a
certificate or certificates for the number of shares of Common Stock to which
the holder shall be entitled.

1.3           Maximum Conversion.  Each holder of Series A Preferred Stock shall
not be entitled to convert on a Conversion Date that amount of Series A
Preferred Stock convertible into shares of Common Stock which would be in excess
of the sum of (i) the number of shares of Common Stock beneficially owned by
such holder on a Conversion Date, and (ii) the number of shares of Common Stock
issuable upon the conversion of the Series A Preferred Stock with respect to
which the determination of this provision is being made on a Conversion Date,
which would result in beneficial ownership by such shareholder of more than
4.99% of the outstanding shares of common stock of the Corporation on such
Conversion Date.  Beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3 thereunder.

1.4           Adjustment of Series A Conversion Ratio.
 
(a)           Stock Splits, Etc. The number and kind of securities issuable upon
the conversion of shares of Series A Preferred Stock (the “Series A Conversion
Shares”) and the Series A Conversion Ratio shall be subject to adjustment from
time to time upon the happening of any of the following. In case the Corporation
shall: (i) subdivide its outstanding shares of Common Stock into a greater
number of shares of Common Stock or (ii) combine its outstanding shares of
Common Stock into a smaller number of shares of  Common Stock, then the Series A
Conversion Ratio and number of Series A Conversion Shares issuable upon
conversion immediately prior thereto shall be adjusted so that the holder of
Series A Preferred Stock shall be entitled to receive the kind and number of
Series A Conversion Shares or other securities of the Corporation which they
would have owned or have been entitled to receive had such shares of Series A
Preferred Stock been converted in advance thereof.

(b)           Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Corporation shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Corporation is not the surviving corporation or where
there is a change in or distribution with respect to the Common Stock of the
Corporation), or sell, transfer or otherwise dispose of all or substantially all
its property, assets, or business to another corporation and, pursuant to the
terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor of acquiring
corporation, or any cash, shares of stock or other securities or property of any
nature whatsoever (including warrants or other subscription or purchase rights)
in addition to or in lieu of common stock of the successor or acquiring
corporation (“Other Property”), are to be received by or distributed to the
holders of Common Stock of the Corporation, then Series A Preferred Stock holder
shall have the right thereafter to receive, upon conversion, the number of
shares of common stock of the successor or acquiring corporation or of the
Corporation, if it is  the surviving corporation, and Other Property receivable
upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a holder of the number of shares of
Common Stock for which shares of Series A Preferred Stock are exercisable
immediately prior to such event.  In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Corporation) shall expressly
assume  the due and punctual observance and performance of each and every
covenant and condition of this designation to be performed and observed by the
Corporation and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board) in order to provide for adjustments of shares of Common
Stock convertible from shares of Series A Preferred Stock which shall be as
nearly equivalent as practicable to the adjustments provided for in this
Section.

(c)           Subsequent Issuances.   If the Corporation shall issue or agree to
issue any shares of Common Stock for consideration less than the Series A
Conversion Ratio in effect at the time of such issuance, then, and thereafter
successively upon each such issuance, the Series A Conversion Ratio shall be
reduced to match such subsequent lower issuance price. For purposes of this
adjustment, the issuance of any security carrying the right to convert such
security into shares of Common Stock or of any warrant, right or option to
purchase Common Stock shall result in an adjustment to the Series A Conversion
Ratio upon the issuance of the above-described security and again upon the
issuance of shares of Common Stock upon exercise of such conversion or purchase
rights if such issuance is at a price lower than the then applicable Series A
Conversion Ratio.

2.           Voting Rights.  The holders of Series A Preferred Stock shall be
entitled to notice of any stockholders’ meeting and to vote as a single class
upon any matter submitted to the stockholders for a vote as follows: each holder
of Series A Preferred Stock shall have such number of votes equal to the product
of: (a) the number of shares of Common Stock each share of Series A Preferred
Stock is convertible into on the record date of such vote multiplied by (b)
thirty (30)1. Such voting calculation is hereby authorized by the Corporation
and the Corporation acknowledges such calculation may result in the total number
of possible votes cast by the holders of Series A Preferred Stock and all other
classes of the Corporation’s stock in any given voting matter exceeding the
total aggregate number of shares which this Corporation shall have authority to
issue.

3.           Notices. Unless otherwise specified in the Corporation’s
Certificate of Incorporation or Bylaws, all notices or communications given
hereunder shall be in writing and, if to the Corporation, shall be delivered to
it as its principal executive offices, and if to any holder of Series A
Preferred Stock, shall be delivered to it at its address as it appears on the
stock books of the Corporation.

B.           Series B Preferred Stock. The Corporation is authorized to issue up
to Fifty Million (50,000,000) shares of Preferred Stock. Five Million
(5,000,000) shares of the authorized and unissued Preferred Stock of the
Corporation are hereby designated “Series B Preferred Stock” with the following
rights, preferences, powers, privileges and restrictions, qualifications and
limitations:

1. Coupon.   From and after the date of the issuance of any shares of Series B
Preferred Stock, each such share shall accrue a coupon payment, payable
annually, at the rate per annum equal to the product of: (a) the Series B
Preferred Stock purchase price as defined in the securities purchase agreement
related to the original issuance of each individual share of Series B Preferred
Stock (the “Series B Issuance Price” subject to appropriate adjustment in the
event of any stock dividend, stock split, combination or other similar
recapitalization with respect to the Series B Preferred Stock) multiplied by (b)
twelve percent (12%) (collectively, the “Coupon Payment”). The Coupon Payment
shall be payable to the holders of the Series B Preferred Stock, at the
Corporation’s sole discretion in: (a) cash; or (b) shares of Common Stock based
upon the Series B Conversion Ratio (defined below).

2.           Conversion into Common Stock.

2.1           Shareholder Conversion Rights.  Each one (1) share of Series B
Preferred Stock may be convertible as described herein into four hundred (400)
shares of Common Stock (the “Series B Conversion Ratio”) at anytime following
the issuance date of such shares.. Each holder of Series B Preferred Stock who
desires to convert into the Corporation’s Common Stock must provide five (5)
days written notice (the date of receipt by the Corporation being the
“Conversion Date”) to the Corporation of its intent to convert one or more
shares of Series B Preferred Stock into Common Stock (each a “Conversion
Notice”). The Corporation may, in its sole discretion, waive the written notice
requirement and allow the immediate exercise of the right to convert.

 2.2           Mechanics of Conversion.    No fractional shares of Common Stock
shall be issued upon conversion of Series B Preferred Stock and the number of
shares of Common Stock to be issued shall be determined by rounding to the
nearest whole share (a half share being treated as a full share for this
purpose). Such conversion shall be determined on the basis of the total number
of shares of Series B Preferred Stock the holder is at the time converting into
Common Stock and such rounding shall apply to the number of shares of Common
Stock issuable upon aggregate conversion. Prior to any conversion, the
certificate or certificates representing Series B Preferred Stock to be
converted shall be surrendered to the Corporation, duly endorsed with a
medallion stamp guarantee, at the office of the Corporation or its transfer
agent. The Corporation shall, within fifteen (15) business days, issue a
certificate or certificates for the number of shares of Common Stock to which
the holder shall be entitled.

2.3           Maximum Conversion.  Each holder of Series B Preferred Stock shall
not be entitled to convert on a Conversion Date that amount of Series B
Preferred Stock convertible into shares of Common Stock which would be in excess
of the sum of (i) the number of shares of Common Stock beneficially owned by
such holder on a Conversion Date, and (ii) the number of shares of Common Stock
issuable upon the conversion of the Series B Preferred Stock with respect to
which the determination of this provision is being made on a Conversion Date,
which would result in beneficial ownership by such shareholder of more than
4.99% of the outstanding shares of common stock of the Corporation on such
Conversion Date.  Beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3 thereunder.

2.4           Adjustment of Series B Conversion Ratio.
 
(a)           Stock Splits, Etc. The number and kind of securities issuable upon
the conversion of shares of Series B Preferred Stock (the “Series B Conversion
Shares”) and the Series B Conversion Ratio shall be subject to adjustment from
time to time upon the happening of any of the following. In case the Corporation
shall: (i) subdivide its outstanding shares of Common Stock into a greater
number of shares of Common Stock or (ii) combine its outstanding shares of
Common Stock into a smaller number of shares of  Common Stock, then the Series B
Conversion Ratio and number of Series B Conversion Shares issuable upon
conversion immediately prior thereto shall be adjusted so that the holder of
Series B Preferred Stock shall be entitled to receive the kind and number of
Series B Conversion Shares or other securities of the Corporation which they
would have owned or have been entitled to receive had such shares of Series B
Preferred Stock been converted in advance thereof.

(b)           Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Corporation shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Corporation is not the surviving corporation or where
there is a change in or distribution with respect to the Common Stock of the
Corporation), or sell, transfer or otherwise dispose of all or substantially all
its property, assets, or business to another corporation and, pursuant to the
terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor of acquiring
corporation, or any cash, shares of stock or other securities or property of any
nature whatsoever (including warrants or other subscription or purchase rights)
in addition to or in lieu of common stock of the successor or acquiring
corporation (“Other Property”), are to be received by or distributed to the
holders of Common Stock of the Corporation, then Series B Preferred Stock holder
shall have the right thereafter to receive, upon conversion, the number of
shares of common stock of the successor or acquiring corporation or of the
Corporation, if it is  the surviving corporation, and Other Property receivable
upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a holder of the number of shares of
Common Stock for which shares of Series B Preferred Stock are exercisable
immediately prior to such event.  In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Corporation) shall expressly
assume  the due and punctual observance and performance of each and every
covenant and condition of this designation to be performed and observed by the
Corporation and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board) in order to provide for adjustments of shares of Common
Stock convertible from shares of Series B Preferred Stock which shall be as
nearly equivalent as practicable to the adjustments provided for in this
Section.

(c)           Subsequent Issuances.   If the Corporation shall issue or agree to
issue any shares of Common Stock for consideration less than the Series B
Conversion Ratio in effect at the time of such issuance, then, and thereafter
successively upon each such issuance, the Series B Conversion Ratio shall be
reduced to match such subsequent lower issuance price. For purposes of this
adjustment, the issuance of any security carrying the right to convert such
security into shares of Common Stock or of any warrant, right or option to
purchase Common Stock shall result in an adjustment to the Series B Conversion
Ratio upon the issuance of the above-described security and again upon the
issuance of shares of Common Stock upon exercise of such conversion or purchase
rights if such issuance is at a price lower than the then applicable Series B
Conversion Ratio.

3.           Redemption.

3.1           Corporation Discretionary Redemption.    Each share of Series B
Preferred Stock (and all related accrued Coupon Payments) may be redeemed at
anytime at the option of the Corporation, in whole or in part, at a cash
redemption price equal to the Series B Issuance Price per share then in effect
(upon redemption the “Redemption Price”).2 In the event the Corporation elects
to redeem and convert any share(s) of Series B Preferred Stock as described
herein, the Corporation shall provide written notice (each a “Redemption
Notice”) to such shareholder of its intent to redeem one or more shares of
Series B Preferred Stock (each a “Redemption Demand”) and such related
Redemption Price then in effect. Such shareholder may, within fifteen (15) days
of delivery of a Redemption Demand (each a “Refusal Period”), refuse such
Redemption Demand and instead invoke their right to convert such shares of
Series B Preferred Stock referred to in each Redemption Demand into Common
Stock. In the event the shareholder does not refuse the Redemption Demand and
provide a Conversion Notice to the Corporation in connection with the Redemption
Demand within the Refusal Period, the shares of Series B Preferred Stock (and
related Coupon Payment) referenced in the Redemption Demand shall be
automatically converted into a cash payment as described in this Section.
Following such redemption, all such redeemed shares shall be returned to the
Corporation’s treasury under the status of undesignated and un-issued Series B
Preferred Stock.

3.2           Corporation Mandatory Redemption.  Within thirty (30) days of the
end of each Corporation financial quarter, the Corporation shall provide each
holder of Series B Preferred Stock with written notice of the Corporation’s net
operating profits for each such individual quarter (the “Quarterly Net Profits”)
and provide such holder a Redemption Demand for a cash payment equal to fifty
percent (50%) of such Quarterly Net Profits, with such Redemption Demand subject
to all rights and procedures as described in Section 3.1.

4.           Voting Rights.  The holders of Series B Preferred Stock shall be
entitled to notice of any stockholders’ meeting and to vote as a single class
upon any matter submitted to the stockholders for a vote as follows: each holder
of Series B Preferred Stock shall have such number of votes equal to the number
of shares of Common Stock each share of Series B Preferred Stock is convertible
into on the record date of such vote3. Such voting calculation is hereby
authorized by the Corporation and the Corporation acknowledges such calculation
may result in the total number of possible votes cast by the holders of Series B
Preferred Stock and all other classes of the Corporation’s stock in any given
voting matter exceeding the total aggregate number of shares which this
Corporation shall have authority to issue.

5.           Notices. Unless otherwise specified in the Corporation’s
Certificate of Incorporation or Bylaws, all notices or communications given
hereunder shall be in writing and, if to the Corporation, shall be delivered to
it as its principal executive offices, and if to any holder of Series B
Preferred Stock, shall be delivered to it at its address as it appears on the
stock books of the Corporation.

SIGNATURE PAGE

 IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Designation of Tactical Air Defense Services, Inc. on April 25, 2011.

 
TACTICAL AIR DEFENSE SERVICES, INC.
 
 
 
 
 
By: Alexis C. Korybut
Its: Chief Executive Officer

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1           For example, if on the record date of a shareholder vote, a
shareholder is the shareholder of record of one million shares of Series A
Preferred Stock, such shareholder shall have a total of three billion votes (one
million shares of Series A Preferred Stock would be convertible into one hundred
million shares of common stock; those one hundred million shares of common stock
multiplied by thirty equal a total of three billion total votes.
 
 
2           For example, if the Corporation provided a Redemption Demand to a
shareholder holding one million two hundred fifty thousand shares of Series B
Preferred Stock issued and held by such shareholder for one year, and the Series
B Issuance Price for such shares was $0.32 per share, the Corporation would be
required to pay such shareholder a total amount of $448,000 (equal to $400,000
as the conversion amount and $48,000 as the related Coupon Payment)
 
 
3           For example, if on the record date of a shareholder vote, a
shareholder is the shareholder of record of one million two hundred fifty
thousand shares of Series B Preferred Stock, such shareholder shall have a total
of five hundred million votes (one million two hundred and fifty thousand shares
of Series B Preferred Stock would be convertible into five hundred million
shares of common stock which would equal a total of five hundred million total
votes.
 
 

 
 

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