Exhibit 10.3

$495,000
         San Diego, California
May 27, 2008

PEPPERBALL TECHNOLOGIES, INC.

PROMISSORY NOTE

        PepperBall Technologies, Inc., a Delaware corporation (the “Company”),
for value received, hereby acknowledges the receipt from Security With Advanced
Technology, Inc., a Colorado corporation (“Holder”), of Four Hundred Ninety-Five
Thousand Dollars and no/100 ($495,000). This promissory note (this “Note”) is
issued by the Company in connection with that certain Agreement and Plan of
Merger and Reorganization of even date herewith among the Company, the Holder
and PTI Acquisition Corp., a Delaware corporation (the “Agreement”). Capitalized
terms not otherwise defined herein shall have the meanings given them in the
Agreement.

        1.    Payment. The Company shall only be obligated to repay the amount
of this Note in the event the Merger is not consummated due to either (i) the
Company’s failure to obtain the Company Stockholder Approval, or (ii) the
Company Board Recommendation is withdrawn (the occurrence of (i) or (ii) is
referred to herein as a “Repayment Event”). The amount of this Note shall be
payable to the Holder within 90 days of a Repayment Event (the “Repayment
Period”).

        2.    Forgiveness. All obligations of the Company under this Note,
including without limitation the Company’s obligation repay any amount under
this Note, shall, without any further action by the Company or the Holder, be
automatically forgiven if the Merger is not consummated for any reason other
than the occurrence of a Repayment Event.

        3.    License. Upon the occurrence of a Repayment Event, the Holder may,
by written notice delivered to the Company prior to the expiration of the
Repayment Period, waive the return of $250,000 of the amount of this Note in
exchange for (x) a mutual settlement of all claims and matters relating to Case
No. ‘07CV 0672 JAH POR, PepperBall Technologies, Inc. v. Security With Advanced
Technology, Inc., Vizer Group, Inc. and Avurt International, Inc., pending in
the United States District Court, Southern District of California, and (y) a
non-exclusive worldwide license to use the Company’s intellectual property
rights for projectiles and any technology contained in the launchers or
subsequent versions of such launchers the Holder is having produced by Tiberius
Arms (the “License”). The License shall have an initial term of five years (with
the Holder having the right to renew for additional five year terms unless the
Holder is in default under the License), carry a royalty equal to 3% of the
Holder’s net sales of non-lethal projectiles and launchers (subject to a
$100,000 per year royalty maximum) and provide for the Holder to pay the Company
$250,000 upon the signing of the License (which shall be paid by the Holder’s
waiver of the return of $250,000 of the principal amount of this Note as
described above), with 50% of such payment to be treated as a royalty
prepayment.

        4.    Interest. This Note shall not bear interest.

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        5.    Default. If the Company fails to pay any amount when due
hereunder, the Holder may elect, by written notice delivered to the Company, to
take at any time any or all of the following actions: (i) declare this Note to
be forthwith due and payable, whereupon the entire unpaid principal amount of
this Note shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Company, anything contained herein to the contrary
notwithstanding, and (ii) exercise any and all other remedies provided hereunder
or available at law or in equity. If the Company fails to pay any amount when
due hereunder, the Company agrees to pay, in addition to the principal amount of
this Note, reasonable attorneys’ fees and any other reasonable costs and
expenses incurred by the Holder in connection with its pursuit of its remedies
under this Note.

        6.    Miscellaneous.

                 6.1   Transfer of Note. This Note shall not be transferable or
assignable in any manner without the express written consent of the Company, and
any such attempted disposition of this Note or any portion hereof shall be of no
force or effect.

                 6.2   Titles and Subtitles. The titles and subtitles used in
this Note are for convenience only and are not to be considered in construing or
interpreting this Note.

                 6.3   Notices. Any notice required or permitted under this Note
shall be given in writing in accordance with the Agreement.

                 6.4   Amendments and Waivers. Any term of this Note may be
amended and the observance of any term of this Note may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the Holder. No delay
or omission by the Holder in exercising any of its rights, remedies, powers or
privileges hereunder or at law or in equity and no course of dealing between the
Holder and the Company or any other party shall be deemed a waiver by the Holder
of any such rights, remedies, powers or privileges, even if such delay or
omission is continuous or repeated, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise
thereof by the Holder or the exercise of any other right, remedy, power or
privilege by the Holder.

                 6.5   Severability. If one or more provisions of this Note are
held to be unenforceable under applicable law, such provision shall be excluded
from this Note and the balance of the Note shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

                 6.6   Governing Law. This Note shall be governed by and
construed and enforced in accordance with the laws of the State of California as
applied to agreements among California residents entered into and to be
performed entirely within California.

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        IN WITNESS WHEREOF, the Company has caused this Note to be duly executed
by its officer, thereunto duly authorized as of the date first above written.

PEPPERBALL TECHNOLOGIES, INC.

By: /s/ Eric P. Wenaas

ACKNOWLEDGED AND AGREED:

SECURITY WITH ADVANCED TECHNOLOGY, INC.

By: /s/ Jeffrey McGonegal

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