Exhibit 10.3

CYBER DIGITAL, INC. AND CERTAIN OF ITS SUBSIDIARIES
MASTER SECURITY AGREEMENT

To: Laurus Master Fund, Ltd.
c/o M&C Corporate Services Limited
P.O. Box 309 GT
Ugland House
South Church Street
George Town
Grand Cayman, Cayman Islands

Executed as of June 22, 2007 for effectiveness as of June 1, 2007

To Whom It May Concern:

To secure the payment of all Obligations (as hereafter defined), CYBER DIGITAL,
INC., a New York corporation (the "Company"), each of the other undersigned
parties (other than Laurus Master Fund, Ltd., ("Laurus")) and each other entity
that is required to enter into this Master Security Agreement (each an
"Assignor" and, collectively, the "Assignors") hereby assigns and grants to
Laurus a continuing security interest in all of the following property now owned
or at any time hereafter acquired by such Assignor, or in which such Assignor
now has or at any time in the future may acquire any right, title or interest
(the "Collateral"): all cash, cash equivalents, accounts, accounts receivable,
deposit accounts, inventory, equipment, goods, fixtures, documents, instruments
(including, without limitation, promissory notes), contract rights, commercial
tort claims set forth on Exhibit B to this Master Security Agreement, general
intangibles (including, without limitation, payment intangibles and an absolute
right to license on terms no less favorable than those current in effect among
such Assignor's affiliates but specifically excluding any intellectual property
rights), chattel paper, supporting obligations, investment property (including,
without limitation, all partnership interests, limited liability company
membership interests and all other equity interests owned by any Assignor),
letter-of-credit rights, all proceeds and products thereof (including, without
limitation, proceeds of insurance) and all additions, accessions and
substitutions thereto or therefor. Except as otherwise defined herein, all
capitalized terms used herein shall have the meanings provided such terms in the
Securities Purchase Agreement referred to below. All items of Collateral which
are defined in the UCC shall have the meanings set forth in the UCC.  For
purposes hereof, the term "UCC" means the Uniform Commercial Code as the same
may, from time to time, be in effect in the State of New York; provided, that in
the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to, Laurus'
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions of this Agreement relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions; provided further, that to the extent that the UCC is used to define
any term herein and such term is defined differently in different Articles or
Divisions of the UCC, the definition of such term contained in Article or
Division 9 shall govern.

The term "Obligations" as used herein shall mean and include all debts,
liabilities and obligations owing by each Assignor to Laurus arising under, out
of, or in connection with: (i) that certain Securities Purchase Agreement dated
as of the date hereof by and between the Company and Laurus (the "Securities
Purchase Agreement") and (ii) the Related Agreements referred to in the
Securities Purchase Agreement (the Securities Purchase Agreement and each
Related Agreement, as each may be amended, modified, restated or supplemented
from time to time, collectively, the "Documents"), and in connection with any
documents, instruments or agreements relating to or executed in connection with
the Documents or any documents, instruments or agreements referred to therein or
otherwise, and in connection with any other indebtedness, obligations or
liabilities of each such Assignor to Laurus, whether now existing or hereafter
arising, direct or indirect, liquidated or unliquidated, absolute or contingent,
due or not due and whether under, pursuant to or evidenced by a note, agreement,
guaranty, instrument or otherwise, including, without limitation, obligations
and liabilities of each Assignor for post-petition interest, fees, costs and
charges that accrue after the commencement of any case by or against such
Assignor under any bankruptcy, insolvency, reorganization or like proceeding
(collectively, the "Debtor Relief Laws") in each case, irrespective of the
genuineness, validity, regularity or enforceability of such Obligations, or of
any instrument evidencing any of the Obligations or of any collateral therefor
or of the existence or extent of such collateral, and irrespective of the
allowability, allowance or disallowance of any or all of the Obligations in any
case commenced by or against any Assignor under any Debtor Relief Law.

Each Assignor hereby jointly and severally represents, warrants and covenants to
Laurus that:

it is a corporation, partnership or limited liability company, as the case may
be, validly existing, in good standing and formed under the respective laws of
its jurisdiction of formation set forth on Schedule A, and each Assignor will
provide Laurus thirty (30) days' prior written notice of any change in any of
its respective jurisdiction of formation;

its legal name is as set forth in its Certificate of Incorporation or other
organizational document (as applicable) as amended through the date hereof and
as set forth on Schedule A, and it will provide Laurus thirty (30) days' prior
written notice of any change in its legal name;

its organizational identification number (if applicable) is as set forth on
Schedule A hereto, and it will provide Laurus thirty (30) days' prior written
notice of any change in its organizational identification number;

it is the lawful owner of its Collateral and it has the sole right to grant a
security interest therein and will defend the Collateral against all claims and
demands of all persons and entities;

it will keep its Collateral free and clear of all attachments, levies, taxes,
liens, security interests and encumbrances of every kind and nature
("Encumbrances"), except (i) Encumbrances securing the Obligations and (ii)
Encumbrances securing indebtedness of each such Assignor not to exceed $50,000
in the aggregate for all such Assignors so long as all such Encumbrances are
removed or otherwise released to Laurus' satisfaction within ten (10) days of
the creation thereof;

it will, at its and the other Assignors' joint and several cost and expense keep
the Collateral in good state of repair (ordinary wear and tear excepted) and
will not waste or destroy the same or any part thereof other than ordinary
course discarding of items no longer used or useful in its or such other
Assignors' business;

it will not, without Laurus' prior written consent, sell, exchange, lease or
otherwise dispose of any Collateral, whether by sale, lease or otherwise, except
for the sale of inventory in the ordinary course of business and for the
disposition or transfer in the ordinary course of business during any fiscal
year of obsolete and worn-out equipment or equipment no longer necessary for its
ongoing needs, having an aggregate fair market value of not more than $25,000
and only to the extent that:

the proceeds of each such disposition are used to acquire replacement Collateral
which is subject to Laurus' first priority perfected security interest, or are
used to repay the Obligations or to pay general corporate expenses; or

following the occurrence of an Event of Default which continues to exist the
proceeds of which are remitted to Laurus to be held as cash collateral for the
Obligations;

(i) it will insure or cause the Collateral to be insured in Laurus' name (as an
additional insured and lender loss payee) against loss or damage by fire, theft,
burglary, pilferage, loss in transit and such other hazards as Laurus shall
specify in amounts and under policies by insurers acceptable to Laurus and all
premiums thereon shall be paid by such Assignor and the policies delivered to
Laurus. If any such Assignor fails to do so, Laurus may procure such insurance
and the cost thereof shall be promptly reimbursed by the Assignors, jointly and
severally, and shall constitute Obligations;

(ii) it will expressly agree that if additional loss payees and/or lender loss
payees, other than Laurus, are named to the Collateral, Laurus will always be
assigned to first lien position until all Laurus obligations have been met

it will at all reasonable times allow Laurus or Laurus' representatives free
access to and the right of inspection of the Collateral;

such Assignor (jointly and severally with each other Assignor) hereby
indemnifies and saves Laurus harmless from all loss, costs, damage, liability
and/or expense, including reasonable attorneys' fees, that Laurus may sustain or
incur to enforce payment, performance or fulfillment of any of the Obligations
and/or in the enforcement of this Master Security Agreement or in the
prosecution or defense of any action or proceeding either against Laurus or any
Assignor concerning any matter growing out of or in connection with this Master
Security Agreement, and/or any of the Obligations and/or any of the Collateral
except to the extent caused by Laurus' own gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and
nonappealable decision); and

all commercial tort claims (as defined in the Uniform Commercial Code as in
effect in the State of New York) held by any Assignor are set forth on Schedule
C to this Master Security Agreement; each Assignor hereby agrees that it shall
promptly, and in any event within five (5) Business Days after the same is
acquired by it, notify Laurus of any commercial tort claim acquired by it and
unless otherwise consented to in writing by Laurus, it shall enter into a
supplement to this Master Security Agreement granting to Laurus a security
interest in such commercial tort claim, securing the Obligations.

The occurrence of any of the following events or conditions shall constitute an
"Event of Default" under this Master Security Agreement:

any covenant or any other term or condition of this Master Security Agreement is
breached in any material respect and such breach, to the extent subject to cure,
shall continue without remedy for a period of fifteen (15) days after the
occurrence thereof;

any representation or warranty, or statement made or furnished to Laurus under
this Master Security Agreement by any Assignor or on any Assignor's behalf
should prove to any time be false or misleading in any material respect on the
date as of which made or deemed made;

the loss, theft, substantial damage, destruction, sale or encumbrance to or of
any of the Collateral or the making of any levy, seizure or attachment thereof
or thereon except to the extent:

such loss is covered by insurance proceeds which are used to replace the item or
repay Laurus; or

said levy, seizure or attachment does not secure indebtedness in excess of
$100,000 in the aggregate for all Assignors and such levy, seizure or attachment
has been removed or otherwise released within ten (10) days of the creation or
the assertion thereof;

an Event of Default shall have occurred under and as defined in any Document.

Upon the occurrence of any Event of Default and at any time thereafter, Laurus
may declare all Obligations immediately due and payable and Laurus shall have
the remedies of a secured party provided in the UCC as in effect in the State of
New York, this Agreement and other applicable law. Upon the occurrence of any
Event of Default and at any time thereafter, Laurus will have the right to take
possession of the Collateral and to maintain such possession on any Assignor's
premises or to remove the Collateral or any part thereof to such other premises
as Laurus may desire. Upon Laurus' request, each Assignor shall assemble or
cause the Collateral to be assembled and make it available to Laurus at a place
designated by Laurus. If any notification of intended disposition of any
Collateral is required by law, such notification, if mailed, shall be deemed
properly and reasonably given if mailed at least ten (10) days before such
disposition, postage prepaid, addressed to the applicable Assignor either at
such Assignor's address shown herein or at any address appearing on Laurus'
records for such Assignor. Any proceeds of any disposition of any of the
Collateral shall be applied by Laurus to the payment of all expenses in
connection with the sale of the Collateral, including reasonable attorneys' fees
and other legal expenses and disbursements and the reasonable expenses of
retaking, holding, preparing for sale, selling, and the like, and any balance of
such proceeds may be applied by Laurus toward the payment of the Obligations in
such order of application as Laurus may elect, and each Assignor shall be liable
for any deficiency. For the avoidance of doubt, following the occurrence and
during the continuance of an Event of Default, Laurus shall have the immediate
right to withdraw any and all monies contained in any deposit account in the
name of any Assignor and controlled by Laurus and apply same to the repayment of
the Obligations (in such order of application as Laurus may elect). The parties
hereto each hereby agree that the exercise by any party hereto of any right
granted to it or the exercise by any party hereto of any remedy available to it
(including, without limitation, the issuance of a notice of redemption,
a borrowing request and/or a notice of default), in each case, hereunder, under
the Securities Purchase Agreement or under any other Related Agreement
shall not constitute confidential information and no party shall have any duty
to the other party to maintain such information as confidential.

If any Assignor defaults in the performance or fulfillment of any of the terms,
conditions, promises, covenants, provisions or warranties on such Assignor's
part to be performed or fulfilled under or pursuant to this Master Security
Agreement, Laurus may, at its option without waiving its right to enforce this
Master Security Agreement according to its terms, immediately or at any time
thereafter and without notice to any Assignor, perform or fulfill the same or
cause the performance or fulfillment of the same for each Assignor's joint and
several account and at each Assignor's joint and several cost and expense, and
the cost and expense thereof (including reasonable attorneys' fees) shall be
added to the Obligations and shall be payable on demand with interest thereon at
the highest rate permitted by law, or, at Laurus' option, debited by Laurus from
any other deposit accounts in the name of any Assignor and controlled by Laurus.

Each Assignor hereby appoints Laurus, or any other Person whom Laurus may
designate as such Assignor's attorney, with power to: (a)(i)

execute any security related documentation on such Assignor's behalf and to
supply any omitted information and correct patent errors in any documents
executed by such Assignor or on such Assignor's behalf; (ii) to file financing
statements against such Assignor covering the Collateral (and, in connection
with the filing of any such financing statements, describe the Collateral as
"all assets and all personal property, whether now owned and/or hereafter
acquired" (or any substantially similar variation thereof)); (iii)
sign such Assignor's name on any invoice or bill of lading relating to any
accounts receivable, drafts against account debtors, schedules and assignments
of accounts receivable, notices of assignment, financing statements and other
public records, verifications of accounts receivable and notices to or from
account debtors;
and (iv) to do all other things Laurus deems necessary to carry out the terms of
Section 1 of this Master Security Agreement and (b)
upon the occurrence and during the continuance of an Event of Default; (v)
endorse such Assignor's name on any checks, notes, acceptances, money orders,
drafts or other forms of payment or security that may come into Laurus'
possession; (vi) sign such Assignor's name on any invoice or bill of lading
relating to any accounts receivable, drafts against account debtors, schedules
and assignments of accounts receivable, notices of assignment, financing
statements and other public records, verifications of accounts receivable and
notices to or from account debtors; (vii) verify the validity, amount or any
other matter relating to any accounts receivable by mail, telephone, telegraph
or otherwise with account debtors; (viii) do all other things necessary to carry
out this Agreement, any other Related Agreement and all other related documents;
and (ix) notify the post office authorities to change the address for delivery
of such Assignor's mail to an address designated by Laurus, and to receive, open
and dispose of all mail addressed to such Assignor.
Each Assignor hereby ratifies and approves all acts of the attorney and neither
Laurus nor the attorney will be liable for any acts of commission or omission,
nor for any error of judgment or mistake of fact or law other than gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision). This power being coupled
with an interest, is irrevocable so long as any Obligations remains unpaid.

No delay or failure on Laurus' part in exercising any right, privilege or option
hereunder shall operate as a waiver of such or of any other right, privilege,
remedy or option, and no waiver whatever shall be valid unless in writing,
signed by Laurus and then only to the extent therein set forth, and no waiver by
Laurus of any default shall operate as a waiver of any other default or of the
same default on a future occasion. Laurus' books and records containing entries
with respect to the Obligations shall be admissible in evidence in any action or
proceeding, shall be binding upon each Assignor for the purpose of establishing
the items therein set forth and shall constitute prima facie proof thereof.
Laurus shall have the right to enforce any one or more of the remedies available
to Laurus, successively, alternately or concurrently. Each Assignor agrees to
join with Laurus in executing such documents or other instruments to the extent
required by the UCC in form satisfactory to Laurus and in executing such other
documents or instruments as may be required or deemed necessary by Laurus for
purposes of affecting or continuing Laurus' security interest in the Collateral.

The Assignors shall jointly and severally pay all of Laurus' out-of-pocket costs
and expenses, including reasonable fees and disbursements of in-house or outside
counsel and appraisers, in connection with the preparation, execution and
delivery of the Documents, and in connection with the prosecution or defense of
any action, contest, dispute, suit or proceeding concerning any matter in any
way arising out of, related to or connected with any Document. The Assignors
shall also jointly and severally pay all of Laurus' reasonable fees, charges,
out-of-pocket costs and expenses, including fees and disbursements of counsel
and appraisers, in connection with (a) the preparation, execution and delivery
of any waiver, any amendment thereto or consent proposed or executed in
connection with the transactions contemplated by the Documents, (b) Laurus'
obtaining performance of the Obligations under the Documents, including, but not
limited to the enforcement or defense of Laurus' security interests, assignments
of rights and liens hereunder as valid perfected security interests, (c) any
attempt to inspect, verify, protect, collect, sell, liquidate or otherwise
dispose of any Collateral, (d) any appraisals or re-appraisals of any property
(real or personal) pledged to Laurus by any Assignor as Collateral for, or any
other Person as security for, the Obligations hereunder and (e) any
consultations in connection with any of the foregoing. The Assignors shall also
jointly and severally pay Laurus' customary bank charges for all bank services
(including wire transfers) performed or caused to be performed by Laurus for any
Assignor at any Assignor's request or in connection with any Assignor's loan
account (if any) with Laurus. All such costs and expenses together with all
filing, recording and search fees, taxes and interest payable by the Assignors
to Laurus shall be payable on demand and shall be secured by the Collateral. If
any tax by any nation or government, any state or other political subdivision
thereof, and any agency, department or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government (each, a "Governmental Authority") is or may be imposed on or as a
result of any transaction between any Assignor, on the one hand, and Laurus on
the other hand, which Laurus is or may be required to withhold or pay
(including, without limitation, as a result of a breach by any Assignor of
Section 6.16 of the Securities Purchase Agreement), the Assignors hereby jointly
and severally indemnify and hold Laurus harmless in respect of such taxes, and
the Assignors will repay to Laurus the amount of any such taxes which shall be
charged to the Assignors' account; and until the Assignors shall furnish Laurus
with indemnity therefor (or supply Laurus with evidence satisfactory to it that
due provision for the payment thereof has been made), Laurus may hold without
interest any balance standing to each Assignor's credit (if any) and Laurus
shall retain its liens in any and all Collateral.

THIS MASTER SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS. All of the rights, remedies, options, privileges and elections given to
Laurus hereunder shall inure to the benefit of Laurus' successors and assigns.
The term "Laurus" as herein used shall include Laurus, any parent of Laurus',
any of Laurus' subsidiaries and any co-subsidiaries of Laurus' parent, whether
now existing or hereafter created or acquired, and all of the terms, conditions,
promises, covenants, provisions and warranties of this Agreement shall inure to
the benefit of each of the foregoing, and shall bind the representatives,
successors and assigns of each Assignor.

Each Assignor hereby consents and agrees that the state of federal courts
located in the County of New York, State of New York shall have exclusive
jurisdiction to hear and determine any claims or disputes between Assignor, on
the one hand, and Laurus, on the other hand, pertaining to this Master Security
Agreement or to any matter arising out of or related to this Master Security
Agreement, provided, that Laurus and each Assignor acknowledges that any appeals
from those courts may have to be heard by a court located outside of the County
of New York, State of New York, and further provided, that nothing in this
Master Security Agreement shall be deemed or operate to preclude Laurus from
bringing suit or taking other legal action in any other jurisdiction to collect,
the Obligations, to realize on the Collateral or any other security for the
Obligations, or to enforce a judgment or other court order in favor of Laurus.
Each Assignor expressly submits and consents in advance to such jurisdiction in
any action or suit commenced in any such court, and each Assignor hereby waives
any objection which it may have based upon lack of personal jurisdiction,
improper venue or forum non conveniens. Each Assignor hereby waives personal
service of the summons, complaint and other process issues in any such action or
suit and agrees that service of such summons, complaint and other process may be
made by registered or certified mail addressed to such assignor at the address
set forth on the signature lines hereto and that service so made shall be deemed
completed upon the earlier of such Assignor's actual receipt thereof or three
(3) days after deposit in the U.S. mails, proper postage prepaid.

The parties desire that their disputes be resolved by a judge applying such
applicable laws. Therefore, to achieve the best combination of the benefits of
the judicial system and of arbitration, the parties hereto waive all rights to
trial by jury in any action, suite, or proceeding brought to resolve any
dispute, whether arising in contract, tort, or otherwise between Laurus, and/or
any Assignor arising out of, connected with, related or incidental to the
relationship established between them in connection with this Master Security
Agreement or the transactions related hereto.

It is understood and agreed that any person or entity that desires to become an
Assignor hereunder, or is required to execute a counterpart of this Master
Security Agreement after the date hereof pursuant to the requirements of any
Document, shall become an Assignor hereunder by (x) executing a Joinder
Agreement in form and substance satisfactory to Laurus, (y) delivering
supplements to such exhibits and annexes to such Documents as Laurus shall
reasonably request and (z) taking all actions as specified in this Master
Security Agreement as would have been taken by such Assignor had it been an
original party to this Master Security Agreement, in each case with all
documents required above to be delivered to Laurus and with all documents and
actions required above to be taken to the reasonable satisfaction of Laurus.

All notices from Laurus to any Assignor shall be sufficiently given if mailed or
delivered to such Assignor's address set forth below.

Very truly yours,
CYBER DIGITAL, INC.

By: /s/ J.C. Chatpar
Name: J.C. Chatpar
Title: CEO
Address: 400 Oser Avenue, Suite 1650
Hauppauge, New York 11788

[Signatures continued on next page]

 

CYBD ACQUISITION, INC.

By: /s/ J.C. Chatpar
Name: J.C. Chatpar
Title: President
Address: 400 Oser Avenue, Suite 1650
Hauppauge, New York 11788

CYBD ACQUISITION II, INC.

By: /s/ J.C. Chatpar
Name: J.C. Chatpar
Title: President
Address: 400 Oser Avenue, Suite 1650
Hauppauge, New York 11788

 

ACKNOWLEDGED:

LAURUS MASTER FUND, LTD.

By: /s/ Eugene Grin
Name: Eugene Grin
Title