Document:

THIS
        NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE
        NOT
        BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
        APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
        DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE MAKER OF
        AN
        OPINION OF COUNSEL IN THE FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY
        TO
        THE MAKER THAT THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
        HEREOF MAY BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION
        FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES
        LAWS.

      

      

      AIRSHIP
        LEASING CO., LLC

      AND

      TSI
        HOLDING CO., LLC

      

      Secured
        Convertible Promissory Note

      due
        February 21, 2008

      

        
          	
                  No.
                    CN-01

                	
                  $375,000

                
	
                  Dated:
                    August 24, 2007

                	 

        

      

      

      For
        value
        received, through funds advanced to William C. Robinson, on behalf of Airship
        Leasing Co., LLC, an Oklahoma limited liability company (“Airship”),
        and
        TSI Holding Co., LLC, a Georgia limited liability company (“TSI”,
        and
        together with Airship, “Maker”),
        hereby, jointly and severally, promise to pay to the order of Ayuda Funding
        Corp. (together with its successors, representatives, and permitted assigns,
        the
“Holder”),
        in
        accordance with the terms hereinafter provided, the principal amount of Three
        Hundred Seventy-Five Thousand Dollars ($375,000), together with interest
        thereon. 

       

      All
        payments under or pursuant to this Note shall be made in United States Dollars
        in immediately available funds to the Holder at
        the
        address of the Holder set forth in Section 4.1 hereof or at such other place
        as
        the Holder may designate from time to time in writing to the Maker or by
        wire
        transfer of funds to the Holder's account, instructions for which are attached
        hereto as Exhibit
        A. The
        outstanding principal balance of this Note shall be due and payable on February
        21, 2008 (the “Maturity
        Date”)
        or at
        such earlier time as provided herein. 

       

      ARTICLE
        I  

       

      Section
        1.1  Interest.
        Beginning on the issuance date of this Note (the “Issuance Date”), the
        outstanding principal balance of this Note shall bear interest, in arrears,
        at a
        rate per annum equal to fifteen percent (15%). Interest shall be payable,
        at the
        option of the Holder, in cash or shares of common stock, par value $0.001
        per
        share (the “Common Stock”) of Cyber Defense Systems, Inc. (“Cyber”). Except as
        otherwise provided herein, the interest on this Note shall be due and payable
        on
        the Maturity Date. The
        number of shares of Common Stock to be issued as payment of accrued and unpaid
        interest shall be determined by dividing the total amount of accrued and
        unpaid
        interest to be converted into Common Stock by the Conversion Price (as defined
        in Section 3.2 hereof). Interest
        shall be computed on the basis of a 360-day year of twelve (12) 30-day months
        and shall accrue commencing on the Issuance Date. Furthermore,
        upon the occurrence of an Event of Default (as defined in Section 2.1 hereof),
        then to the extent permitted by law, the Maker will pay interest to the Holder,
        payable on demand, on the outstanding principal balance of the Note from
        the
        date of the Event of Default until such Event of Default is cured at the
        rate of
        the lesser of twenty percent (20%) and the maximum applicable legal rate
        per
        annum. 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Section
        1.2  Pledge
        and Security Agreement. The obligations of the Maker hereunder are secured
        by a continuing security interest in certain assets of the Maker pursuant
        to the
        terms of a Pledge and Security Agreement dated as of August 21, 2007 by and
        among the Maker and the Holder. 

       

      Section
        1.3  Guaranty
        Agreement. The obligations of the Maker hereunder are guaranteed pursuant to
        the terms of a Guaranty Agreement dated as of August 21, 2007 by William
        C.
        Robinson and Proxity, Inc., as guarantors, to the Holder.

       

      Section
        1.4  Payment
        on Non-Business Days. Whenever any payment to be made shall be due on a
        Saturday, Sunday or a public holiday under the laws of the State of New York,
        such payment may be due on the next succeeding business day and such next
        succeeding day shall be included in the calculation of the amount of accrued
        interest payable on such date.

       

      Section
        1.5  Transfer.
        This Note may be transferred or sold, subject to the provisions of Section
        4.8
        of this Note, or pledged, hypothecated or otherwise granted as security by
        the
        Holder.

       

      Section
        1.6  Replacement.
        Upon receipt of a duly executed, notarized and unsecured written statement
        from
        the Holder with respect to the loss, theft or destruction of this Note (or
        any
        replacement hereof) and a standard indemnity, or, in the case of a mutilation
        of
        this Note, upon surrender and cancellation of such Note, the Maker shall
        issue a
        new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed
        or
        mutilated Note.

       

      Section
        1.7  Piggyback
        Registration Rights. Whenever the Maker proposes to file a registration
        statement (a “Registration Statement”) under the Securities Act of 1933,
        as amended (the “Act”), relating to any of its securities, the Maker shall give
        written notice thereof to the Holder as soon as practicable (but in any event
        at
        least thirty (30) days before such filing), offering the Holder the opportunity
        to register on such Registration Statement such number of shares of Common
        Stock
        issuable upon conversion of this Note and any interest accrued and outstanding
        on this Note (the “Conversion Shares”) as the Holder may request in
        writing not later than twenty (20) days after the date of such notice. Upon
        receipt by the Maker of any such request, the Maker shall use its best efforts
        to include such Conversion Shares in such Registration Statement and to cause
        such Registration Statement to become effective with respect to such Conversion
        Shares.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      ARTICLE
        II  

       

      EVENTS
        OF DEFAULT; REMEDIES

       

      Section
        2.1  Events
        of Default.
        The
        occurrence of any of the following events shall be an “Event of Default” under
        this Note:

       

      (a)  the
        Maker
        shall fail to make any principal or interest payments on the date such payments
        are due and such default is not fully cured within one (1) business day after
        the occurrence thereof; or

       

      (b)  the
        suspension from listing, without subsequent listing of Cyber’s Common Stock, on
        any one of, or the failure of the Common Stock to be listed on at least one
        of
        the OTC Bulletin Board, the American Stock Exchange, the Nasdaq National
        Market,
        the Nasdaq SmallCap Market or The New York Stock Exchange, Inc. for a period
        of
        five (5) consecutive Trading Days; or

       

      (c)  the
        Maker's or Cyber’s notice (as the case may be) to the Holder, including by way
        of public announcement, at any time, of its inability to comply (including
        for
        any of the reasons described in Section 3.6(a) hereof) or its intention not
        to
        comply with proper requests for conversion of this Note into shares of Common
        Stock; or

       

      (d)  the
        Maker
        shall fail to (i) cause Cyber to timely deliver the shares of Cyber’s Common
        Stock upon conversion of the Note or any interest accrued and unpaid or (ii)
        make the payment of any fees and/or liquidated damages under this Note, which
        failure in the case of this Section 2.1(d) is not remedied within three (3)
        business days after the incurrence thereof; or

       

      (e)  default
        shall be made in the performance or observance of (i) any material covenant,
        condition or agreement contained in this Note and such default is not fully
        cured within five (5) business days after the Holder delivers written notice
        to
        the Maker of the occurrence thereof or (ii) any material covenant, condition
        or
        agreement contained in the Pledge Agreement which is not covered by any other
        provisions of this Section 2.1 and such default is not fully cured within
        five
        (5) business days after the Holder delivers written notice to the Maker of
        the
        occurrence thereof; or

       

      (f)  any
        material representation or warranty made by the Maker herein or in the Pledge
        Agreement or the Guaranty Agreement shall prove to have been false or incorrect
        or breached in a material respect on the date as of which made; or

       

      (g)  the
        Maker
        shall (A) default in any payment of any amount or amounts of principal of
        or
        interest on any Indebtedness (other than the Indebtedness hereunder) the
        aggregate principal amount of which Indebtedness is in excess of
        $100,000 or
        (B)
        default in the observance or performance of any other agreement or condition
        relating to any Indebtedness or contained in any instrument or agreement
        evidencing, securing or relating thereto, or any other event shall occur
        or
        condition exist, the effect of which default or other event or condition
        is to
        cause, or to permit the holder or holders or beneficiary or beneficiaries
        of
        such Indebtedness to cause with the giving of notice if required, such
        Indebtedness to become due prior to its stated maturity; or 

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      (h)  the
        Maker
        shall (i) apply for or consent to the appointment of, or the taking of
        possession by, a receiver, custodian, trustee or liquidator of itself or
        of all
        or a substantial part of its property or assets, (ii) make a general assignment
        for the benefit of its creditors, (iii) commence a voluntary case under the
        United States Bankruptcy Code (as now or hereafter in effect) or under the
        comparable laws of any jurisdiction (foreign or domestic), (iv) file a petition
        seeking to take advantage of any bankruptcy, insolvency, moratorium,
        reorganization or other similar law affecting the enforcement of creditors'
        rights generally, (v) acquiesce in writing to any petition filed against
        it in
        an involuntary case under United States Bankruptcy Code (as now or hereafter
        in
        effect) or under the comparable laws of any jurisdiction (foreign or domestic),
        (vi) issue a notice of bankruptcy or winding down of its operations or issue
        a
        press release regarding same, or (vii) take any action under the laws of
        any
        jurisdiction (foreign or domestic) analogous to any of the foregoing; or
        

       

      (i)  a
        proceeding or case shall be commenced in respect of the Maker, without its
        application or consent, in any court of competent jurisdiction, seeking (i)
        the
        liquidation, reorganization, moratorium, dissolution, winding up, or composition
        or readjustment of its debts, (ii) the appointment of a trustee, receiver,
        custodian, liquidator or the like of it or of all or any substantial part
        of its
        assets in connection with the liquidation or dissolution of the Maker or
        (iii)
        similar relief in respect of it under any law providing for the relief of
        debtors, and such proceeding or case described in clause (i), (ii) or (iii)
        shall continue undismissed, or unstayed and in effect, for a period of thirty
        (30) days or any order for relief shall be entered in an involuntary case
        under
        United States Bankruptcy Code (as now or hereafter in effect) or under the
        comparable laws of any jurisdiction (foreign or domestic) against the Maker
        or
        action under the laws of any jurisdiction (foreign or domestic) analogous
        to any
        of the foregoing shall be taken with respect to the Maker and shall continue
        undismissed, or unstayed and in effect for a period of thirty (30) days;
        or

       

      (j)  the
        failure of Cyber to instruct its transfer agent to remove any legends from
        shares of Common Stock eligible to be sold under Rule 144 of the Act and
        issue
        such unlegended certificates to the Holder within five (5) business days
        of the
        Holder’s request so long as the Holder has provided reasonable assurances to
        Cyber that such shares of Common Stock can be resold pursuant to Rule
        144.

       

      Section
        2.2  Remedies
        Upon An Event of Default.
        If an
        Event of Default shall have occurred and shall be continuing, the Holder
        of this
        Note may at any time at its option, (a) pursuant to Section 3.5(a) hereof,
        declare the entire unpaid principal balance of this Note, together with
interest
        payments in the amount set forth in Section 3.5(a),
        due and
        payable, and thereupon, the same shall be accelerated and so due and payable,
        without presentment, demand, protest, or notice, all of which are hereby
        expressly unconditionally and irrevocably waived by the Maker; provided,
        however, that upon the occurrence of an Event of Default described in (i)
        Sections 2.1 (h) or (i), the outstanding principal balance and accrued interest
        hereunder shall be automatically due and payable and (ii) Sections 2.1 (b)-(g),
        the Holder may demand the prepayment of this Note pursuant to Section 3.5
        hereof, (b) demand that the principal amount of this Note then outstanding
        and
interest
        payments in the amount set forth in Section 3.5(a)
        shall be
        converted into shares of Common Stock at a Conversion Price per share calculated
        pursuant to Section 3.1 hereof assuming that the date that the Event of Default
        occurs is the Conversion Date (as defined in Section 3.1 hereof), or (c)
        exercise or otherwise enforce any one or more of the Holder's rights, powers,
        privileges, remedies and interests under this Note, the Pledge Agreement
        or
        applicable law. No course of delay on the part of the Holder shall operate
        as a
        waiver thereof or otherwise prejudice the right of the Holder. No remedy
        conferred hereby shall be exclusive of any other remedy referred to herein
        or
        now or hereafter available at law, in equity, by statute or
        otherwise.

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

      ARTICLE
        III  

       

      -CONVERSION;
        ANTIDILUTION; PREPAYMENT

       

      Section
        3.1  Conversion
        Option.
        

       

      (a)  At
        any
        time on or after the Issuance Date, this Note shall be convertible (in whole
        or
        in part), at the option of the Holder, into such number of fully paid and
        non-assessable shares of Common Stock (the “Conversion
        Rate”)
        as is
        determined by dividing (x) that portion of the outstanding principal balance
        plus any accrued but unpaid interest under this Note as of such date that
        the
        Holder elects to convert by (y) the Conversion Price (as defined in Section
        3.2(a) hereof) then in effect on the date on which the Holder faxes a notice
        of
        conversion (the “Conversion
        Notice”),
        duly
        executed, to Cyber (facsimile number ( ) ____-____, Attn.: Chief Executive
        Officer) (the “Conversion
        Date”),
        provided, however, that the Conversion Price shall be subject to adjustment
        as
        described in Section 3.4 below. The Holder shall deliver this Note to Cyber
        at
        the address set forth in Section 4.1 at such time that this Note is fully
        converted. With respect to partial conversions of this Note, the Maker shall
        keep written records of the amount of this Note converted as of each Conversion
        Date. 

       

      Section
        3.2  Conversion
        Price.

       

      (a)  The
        term
“Conversion
        Price”
shall
        mean the lesser of $.10 per share of Cyber Common Stock or the average of
        the
        Closing Bid Price (as defined below) for the thirty (30) Trading Days preceding
        the Conversion Date, subject to adjustment under Section 3.4 hereof.

       

      (b)  The
        term
“Closing
        Bid Price”
shall
        mean, on any particular date (i) the last closing bid price per share of
        the
        Common Stock on such date on the OTC
        Bulletin Board or
        another registered national stock exchange on which the Common Stock is then
        listed, or if there is no such price on such date, then the last closing
        bid
        price on such exchange or quotation system on the date nearest preceding
        such
        date, or (ii) if the Common Stock is not listed then on the OTC Bulletin
        Board
        or any registered national stock exchange, the last trading price for a share
        of
        Common Stock in the over-the-counter market, as reported by the OTC Bulletin
        Board or in the National Quotation Bureau Incorporated or similar organization
        or agency succeeding to its functions of reporting prices) at the close of
        business on such date, or (iii) if the Common Stock is not then reported
        by the
        OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar
        organization or agency succeeding to its functions of reporting prices),
        then
        the average of the “Pink Sheet” quotes for the relevant conversion period, as
        determined in good faith by the Holder, or (iv) if the Common Stock is not
        then
        publicly traded the fair market value of a share of Common Stock as determined
        by the Holder and reasonably acceptable to Cyber. 

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

       

      Section
        3.3  Mechanics
        of Conversion. 

       

      (a)  Not
        later
        than three (3) Trading Days after any Conversion Date, Cyber or its designated
        transfer agent, as applicable, shall issue and deliver to the Depository
        Trust
        Company (“DTC”)
        account on the Holder’s behalf via the Deposit Withdrawal Agent Commission
        System (“DWAC”)
        as
        specified in the Conversion Notice, registered in the name of the Holder
        or its
        designee, for the number of shares of Common Stock to which the Holder shall
        be
        entitled. In the alternative, not later than three (3) Trading Days after
        any
        Conversion Date, Cyber shall deliver to the applicable Holder by express
        courier
        a certificate or certificates which shall be free of restrictive legends
        and
        trading restrictions representing the number of shares of Common Stock being
        acquired upon the conversion of this Note (the “Delivery
        Date”).
        Notwithstanding the foregoing to the contrary, Cyber or its transfer agent
        shall
        only be obligated to issue and deliver the shares to the DTC on the Holder’s
        behalf via DWAC (or certificates free of restrictive legends) if such conversion
        is in connection with a sale and the Holder has complied with the applicable
        prospectus delivery requirements (as evidenced by documentation furnished
        to and
        reasonably satisfactory to Cyber). If in the case of any Conversion Notice
        such
        certificate or certificates are not delivered to or as directed by the
        applicable Holder by the Delivery Date, the Holder shall be entitled by written
        notice to the Maker at any time on or before its receipt of such certificate
        or
        certificates thereafter, to rescind such conversion, in which event the Maker
        shall immediately return this Note tendered for conversion, whereupon the
        Maker
        and the Holder shall each be restored to their respective positions immediately
        prior to the delivery of such notice of revocation, except that any amounts
        described in Sections 3.3(b) and (c) shall be payable through the date notice
        of
        rescission is given to the Maker. 

       

      (b)  Each
        of
        the Maker and Cyber understands that a delay in the delivery of the shares
        of
        Common Stock upon conversion of this Note beyond the Delivery Date could
        result
        in economic loss to the Holder. If Cyber fails to deliver to the Holder such
        shares via DWAC or a certificate or certificates pursuant to this Section
        hereunder by the Delivery Date, Maker and Cyber shall pay to such Holder,
        in
        cash, an amount per Trading Day for each Trading Day until such shares are
        delivered via DWAC or certificates are delivered, together with interest
        on such
        amount at a rate of 10% per annum, accruing until such amount and any accrued
        interest thereon is paid in full, equal to the greater of (A) (i) 1% of the
        aggregate principal amount of the Notes requested to be converted for the
        first
        five (5) Trading Days after the Delivery Date and (ii) 2% of the aggregate
        principal amount of the Notes requested to be converted for each Trading
        Day
        thereafter and (B) $2,000 per day (which amount shall be paid as liquidated
        damages and not as a penalty). Nothing herein shall limit a Holder's right
        to
        pursue actual damages for Cyber's failure to deliver certificates representing
        shares of Common Stock upon conversion within the period specified herein
        and
        such Holder shall have the right to pursue all remedies available to it at
        law
        or in equity (including, without limitation, a decree of specific performance
        and/or injunctive relief). Notwithstanding anything to the contrary contained
        herein, the Holder shall be entitled to withdraw a Conversion Notice, and
        upon
        such withdrawal Cyber shall only be obligated to pay the liquidated damages
        accrued in accordance with this Section 3.3(b) through the date the Conversion
        Notice is withdrawn.

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      (c)  In
        addition to any other rights available to the Holder, if Cyber fails to cause
        its transfer agent to transmit to the Holder a certificate or certificates
        representing the shares of Common Stock issuable upon conversion of this
        Note on
        or before the Delivery Date, and if after such date the Holder is required
        by
        its broker to purchase (in an open market transaction or otherwise) shares
        of
        Common Stock to deliver in satisfaction of a sale by the Holder of the shares
        of
        Common Stock issuable upon conversion of this Note which the Holder anticipated
        receiving upon such exercise (a “Buy-In”),
        then
        Cyber shall (1) pay in cash to the Holder the amount by which (x) the Holder’s
        total purchase price (including brokerage commissions, if any) for the shares
        of
        Common Stock so purchased exceeds (y) the amount obtained by multiplying
        (A) the
        number of shares of Common Stock issuable upon conversion of this Note that
        Cyber was required to deliver to the Holder in connection with the conversion
        at
        issue times (B) the price at which the sell order giving rise to such purchase
        obligation was executed, and (2) at the option of the Holder, either reinstate
        the portion of the Note and equivalent number of shares of Common Stock for
        which such conversion was not honored or deliver to the Holder the number
        of
        shares of Common Stock that would have been issued had Cyber timely complied
        with its conversion and delivery obligations hereunder. For example, if the
        Holder purchases Common Stock having a total purchase price of $11,000 to
        cover
        a Buy-In with respect to an attempted conversion of shares of Common Stock
        with
        an aggregate sale price giving rise to such purchase obligation of $10,000,
        under clause (1) of the immediately preceding sentence Cyber shall be required
        to pay the Holder $1,000. The Holder shall provide Cyber written notice
        indicating the amounts payable to the Holder in respect of the Buy-In, together
        with applicable confirmations and other evidence reasonably requested by
        Cyber.
        Nothing herein shall limit a Holder’s right to pursue any other remedies
        available to it hereunder, at law or in equity including, without limitation,
        a
        decree of specific performance and/or injunctive relief with respect to Cyber’s
        failure to timely deliver certificates representing shares of Common Stock
        upon
        conversion of this Note as required pursuant to the terms hereof.

       

      Section
        3.4  Adjustment
        of Conversion Price.

       

      (a)  The
        Conversion Price shall be subject to adjustment from time to time as
        follows:

       

      (i)  Adjustments
        for Stock Splits and Combinations.
        If
        Cyber shall at any time or from time to time after the Issuance Date, effect
        a
        stock split of the outstanding Common Stock, the applicable Conversion Price
        in
        effect immediately prior to the stock split shall be proportionately decreased.
        If Cyber shall at any time or from time to time after the Issuance Date,
        combine
        the outstanding shares of Common Stock, the applicable Conversion Price in
        effect immediately prior to the combination shall be proportionately increased.
        Any adjustments under this Section 3.4(a)(i) shall be effective at the close
        of
        business on the date the stock split or combination occurs.

       

      (ii)    
        Adjustments
        for Certain Dividends and Distributions.
        If
        Cyber shall at any time or from time to time after the Issuance Date, make
        or
        issue or set a record date for the determination of holders of Common Stock
        entitled to receive a dividend or other distribution payable in shares of
        Common
        Stock, then, and in each event, the applicable Conversion Price in effect
        immediately prior to such event shall be decreased as of the time of such
        issuance or, in the event such record date shall have been fixed, as of the
        close of business on such record date, by multiplying, the applicable Conversion
        Price then in effect by a fraction:

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

       

      (1) the
        numerator of which shall be the total number of shares of Common Stock issued
        and outstanding immediately prior to the time of such issuance or the close
        of
        business on such record date; and

       

      (2) the
        denominator of which shall be the total number of shares of Common Stock
        issued
        and outstanding immediately prior to the time of such issuance or the close
        of
        business on such record date plus the number of shares of Common Stock issuable
        in payment of such dividend or distribution.

       

      (iii)  
        Adjustment
        for Other Dividends and Distributions.
        If
        Cyber shall at any time or from time to time after the Issuance Date, make
        or
        issue or set a record date for the determination of holders of Common Stock
        entitled to receive a dividend or other distribution payable in other than
        shares of Common Stock, then, and in each event, an appropriate revision
        to the
        applicable Conversion Price shall be made and provision shall be made (by
        adjustments of the Conversion Price or otherwise) so that the holders of
        this
        Note shall receive upon conversions thereof, in addition to the number of
        shares
        of Common Stock receivable thereon, the number of securities of Cyber which
        they
        would have received had this Note been converted into Common Stock on the
        date
        of such event and had thereafter, during the period from the date of such
        event
        to and including the Conversion Date, retained such securities (together
        with
        any distributions payable thereon during such period), giving application
        to all
        adjustments called for during such period under this Section 3.4(a)(iii)
        with
        respect to the rights of the holders of this Note; provided,
        however,
        that if
        such record date shall have been fixed and such dividend is not fully paid
        or if
        such distribution is not fully made on the date fixed therefor, the Conversion
        Price shall be adjusted pursuant to this paragraph as of the time of actual
        payment of such dividends or distributions.

       

      (iv)  
        Adjustments
        for Reclassification, Exchange or Substitution.
        If the
        Common Stock issuable upon conversion of this Note at any time or from time
        to
        time after the Issuance Date shall be changed to the same or different number
        of
        shares of any class or classes of stock, whether by reclassification, exchange,
        substitution or otherwise (other than by way of a stock split or combination
        of
        shares or stock dividends provided for in Sections 3.4(a)(i), (ii) and (iii),
        or
        a reorganization, merger, consolidation, or sale of assets provided for in
        Section 3.4(a)(v)), then, and in each event, an appropriate revision to the
        Conversion Price shall be made and provisions shall be made (by adjustments
        of
        the Conversion Price or otherwise) so that the Holder shall have the right
        thereafter to convert this Note into the kind and amount of shares of stock
        and
        other securities receivable upon reclassification, exchange, substitution
        or
        other change, by holders of the number of shares of Common Stock into which
        such
        Note might have been converted immediately prior to such reclassification,
        exchange, substitution or other change, all subject to further adjustment
        as
        provided herein.

       

      (v)   
        Adjustments
        for Reorganization, Merger, Consolidation or Sales of Assets.
        If at
        any time or from time to time after the Issuance Date there shall be a capital
        reorganization of the Maker (other than by way of a stock split or combination
        of shares or stock dividends or distributions provided for in Section 3.4(a)(i),
        (ii) and (iii), or a reclassification, exchange or substitution of shares
        provided for in Section 3.4(a)(iv)), or a merger or consolidation of the
        Maker
        or Cyber with or into another corporation where the holders of outstanding
        voting securities prior to such merger or consolidation do not own over fifty
        percent (50%) of the outstanding voting securities of the merged or consolidated
        entity, immediately after such merger or consolidation, or the sale of all
        or
        substantially all of the Maker's or Cyber’s properties or assets to any other
        person (an “Organic
        Change”),
        then
        as a part of such Organic Change, (A) if the surviving entity in any such
        Organic Change is a public company that is
        registered pursuant to the Securities Exchange Act of 1934, as amended, and
        its
        common stock is listed or quoted on a national securities exchange, a national
        automated quotation system or the OTC Bulletin Board, an
        appropriate revision to the Conversion Price shall be made and provision
        shall
        be made (by adjustments of the Conversion Price or otherwise) so that the
        Holder
        shall have the right thereafter to convert such Note into the kind and amount
        of
        shares of stock and other securities or property of the Maker or Cyber or
        any
        successor corporation resulting from Organic Change, and (B) if the surviving
        entity in any such Organic Change is not a public company that is
        registered pursuant to the Securities Exchange Act of 1934, as amended, or
        its
        common stock is not listed or quoted on a national securities exchange, a
        national automated quotation system or the OTC Bulletin Board,
        the
        Holder shall have the right to demand prepayment pursuant to Section 3.5(b)
        hereof. In any such case, appropriate adjustment shall be made in the
        application of the provisions of this Section 3.4(a)(v) with respect to the
        rights of the Holder after the Organic Change to the end that the provisions
        of
        this Section 3.4(a)(v) (including any adjustment in the applicable Conversion
        Price then in effect and the number of shares of stock or other securities
        deliverable upon conversion of this Note) shall be applied after that event
        in
        as nearly an equivalent manner as may be practicable.

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

       

      (vi) Adjustments
        for Issuance of Additional Shares of Common Stock.
        In the
        event Cyber, shall, at any time, from time to time, issue or sell any additional
        shares of common stock (otherwise than as provided in the foregoing subsections
        (i) through (v) of this Section 3.4(a) or pursuant to Common Stock Equivalents
        (hereafter defined) granted or issued prior to the Issuance Date) (“Additional
        Shares of Common Stock”),
        at a
        price per share less than the Conversion Price then in effect or without
        consideration, then the Conversion Price upon each such issuance shall be
        reduced to a price equal to the consideration per share paid for such Additional
        Shares of Common Stock.

       

      (vii) Issuance
        of Common Stock Equivalents.
        If
        Cyber, at any time after the Issuance Date, shall issue any securities
        convertible into or exchangeable for, directly or indirectly, Common Stock
        (“Convertible
        Securities”),
        other
        than the Notes, or any rights or warrants or options to purchase any such
        Common
        Stock or Convertible Securities, shall be issued or sold (collectively, the
        “Common
        Stock Equivalents”)
        and
        the aggregate of the price per share for which Additional Shares of Common
        Stock
        may be issuable thereafter pursuant to such Common Stock Equivalent, plus
        the
        consideration received by Cyber for issuance of such Common Stock Equivalent
        divided by the number of shares of Common Stock issuable pursuant to such
        Common
        Stock Equivalent (the “Aggregate
        Per Common Share Price”)
        shall
        be less than the applicable Conversion Price then in effect, or if, after
        any
        such issuance of Common Stock Equivalents, the price per share for which
        Additional Shares of Common Stock may be issuable thereafter is amended or
        adjusted, and such price as so amended shall make the Aggregate Per Share
        Common
        Price be less than the applicable Conversion Price in effect at the time
        of such
        amendment or adjustment, then the applicable Conversion Price upon each such
        issuance or amendment shall be adjusted as provided in subsection (vi) of
        this
        Section 3.4(a) on the basis that (1) the maximum number of Additional Shares
        of
        Common Stock issuable pursuant to all such Common Stock Equivalents shall
        be
        deemed to have been issued (whether or not such Common Stock Equivalents
        are
        actually then exercisable, convertible or exchangeable in whole or in part)
        as
        of the earlier of (A) the date on which Cyber shall enter into a firm contract
        for the issuance of such Common Stock Equivalent, or (B) the date of actual
        issuance of such Common Stock Equivalent. No adjustment of the applicable
        Conversion Price shall be made under this subsection (vii) upon the issuance
        of
        any Convertible Security which is issued pursuant to the exercise of any
        warrants or other subscription or purchase rights therefor, if any adjustment
        shall previously have been made to the exercise price of such warrants then
        in
        effect upon the issuance of such warrants or other rights pursuant to this
        subsection (vii). No adjustment shall be made to the Conversion Price upon
        the
        issuance of Common Stock pursuant to the exercise, conversion or exchange
        of any
        Convertible Security or Common Stock Equivalent where an adjustment to the
        Conversion Price was made as a result of the issuance or purchase of any
        Convertible Security or Common Stock Equivalent.

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

       

      (viii) Consideration
        for Stock.
        In case
        any shares of Common Stock or any Common Stock Equivalents shall be issued
        or
        sold:

       

      (1) in
        connection with any merger or consolidation in which Cyber is the surviving
        corporation (other than any consolidation or merger in which the previously
        outstanding shares of Common Stock of Cyber shall be changed to or exchanged
        for
        the stock or other securities of another corporation), the amount of
        consideration therefor shall be, deemed to be the fair value, as determined
        reasonably and in good faith by the Board of Directors of Cyber, of such
        portion
        of the assets and business of the nonsurviving corporation as such Board
        may
        determine to be attributable to such shares of Common Stock, Convertible
        Securities, rights or warrants or options, as the case may be; or

       

      (2) in
        the
        event of any consolidation or merger of the Maker in which Cyber is not the
        surviving corporation or in which the previously outstanding shares of Common
        Stock of Cyber shall be changed into or exchanged for the stock or other
        securities of another corporation, or in the event of any sale of all or
        substantially all of the assets of Cyber for stock or other securities of
        any
        corporation, Cyber shall be deemed to have issued a number of shares of its
        Common Stock for stock or securities or other property of the other corporation
        computed on the basis of the actual exchange ratio on which the transaction
        was
        predicated, and for a consideration equal to the fair market value on the
        date
        of such transaction of all such stock or securities or other property of
        the
        other corporation. If any such calculation results in adjustment of the
        applicable Conversion Price, or the number of shares of Common Stock issuable
        upon conversion of the Notes, the determination of the applicable Conversion
        Price or the number of shares of Common Stock issuable upon conversion of
        the
        Notes immediately prior to such merger, consolidation or sale, shall be made
        after giving effect to such adjustment of the number of shares of Common
        Stock
        issuable upon conversion of the Notes. In the event Common Stock is issued
        with
        other shares or securities or other assets of Cyber for consideration which
        covers both, the consideration computed as provided in this Section 3.4(viii)
        shall be allocated among such securities and assets as determined in good
        faith
        by the Board of Directors of Cyber.

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

       

      (b)  Record
        Date.
        In case
        Cyber shall take record of the holders of its Common Stock for the purpose
        of
        entitling them to subscribe for or purchase Common Stock or Convertible
        Securities, then the date of the issue or sale of the shares of Common Stock
        shall be deemed to be such record date.

       

      (c)  Certain
        Issues Excepted.
        Anything herein to the contrary notwithstanding, Cyber shall not be required
        to
        make any adjustment to the Conversion Price in connection with (i) securities
        issued (other than for cash) in connection with a merger, acquisition, or
        consolidation, (ii) securities issued pursuant to the conversion or exercise
        of
        convertible or exercisable securities issued or outstanding on or prior to
        the
        date hereof (so long as the conversion or exercise price in such securities
        are
        not amended to lower such price and/or adversely affect the Holders), (iii)
        securities issued in connection with bona fide strategic license agreements
        or
        other partnering arrangements so long as such issuances are not for the purpose
        of raising capital and (iv) Common Stock issued or the issuance or grants
        of
        options to purchase Common Stock pursuant to the Company’s stock option plans
        and employee stock purchase plans outstanding as they exist on the date hereof
        as set forth on Schedule 3.4(c) hereof. 

      

      (d)  No
        Impairment.
        Cyber
        shall not, by amendment of its Articles of Incorporation or through any
        reorganization, transfer of assets, consolidation, merger, dissolution, issue
        or
        sale of securities or any other voluntary action, avoid or seek to avoid
        the
        observance or performance of any of the terms to be observed or performed
        hereunder by Cyber, but will at all times in good faith, assist in the carrying
        out of all the provisions of this Section 3.4 and in the taking of all such
        action as may be necessary or appropriate in order to protect the Conversion
        Rights of the Holder against impairment. In the event a Holder shall elect
        to
        convert any Notes as provided herein, Cyber cannot refuse conversion based
        on
        any claim that such Holder or any one associated or affiliated with such
        Holder
        has been engaged in any violation of law, violation of an agreement to which
        such Holder is a party or for any reason whatsoever, unless, an injunction
        from
        a court, or notice, restraining and or adjoining conversion of all or of
        said
        Notes shall have issued and Cyber posts a surety bond for the benefit of
        such
        Holder in an amount equal to one hundred thirty percent (130%) of the amount
        of
        the Notes the Holder has elected to convert, 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 (as liquidated damages) in the event
        it
        obtains judgment.

      

      (e)  Certificates
        as to Adjustments.
        Upon
        occurrence of each adjustment or readjustment of the Conversion Price or
        number
        of shares of Common Stock issuable upon conversion of this Note pursuant
        to this
        Section 3.4, Cyber at its expense shall promptly compute such adjustment
        or
        readjustment in accordance with the terms hereof and furnish to the Holder
        a
        certificate setting forth such adjustment and readjustment, showing in detail
        the facts upon which such adjustment or readjustment is based. Cyber shall,
        upon
        written request of the Holder, at any time, furnish or cause to be furnished
        to
        the Holder a like certificate setting forth such adjustments and readjustments,
        the applicable Conversion Price in effect at the time, and the number of
        shares
        of Common Stock and the amount, if any, of other securities or property which
        at
        the time would be received upon the conversion of this Note. Notwithstanding
        the
        foregoing, Cyber shall not be obligated to deliver a certificate unless such
        certificate would reflect an increase or decrease of at least one percent
        (1%)
        of such adjusted amount.

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

       

      (f)   Issue
        Taxes.
        Cyber
        shall pay any and all issue and other taxes, excluding federal, state or
        local
        income taxes, that may be payable in respect of any issue or delivery of
        shares
        of Common Stock on conversion of this Note pursuant thereto; provided,
        however,
        that
        Cyber shall not be obligated to pay any transfer taxes resulting from any
        transfer requested by the Holder in connection with any such
        conversion.

       

      (g)  Fractional
        Shares.
        No
        fractional shares of Common Stock shall be issued upon conversion of this
        Note.
        In lieu of any fractional shares to which the Holder would otherwise be
        entitled, Cyber shall pay cash equal to the product of such fraction multiplied
        by the average of the Closing Bid Prices of the Common Stock for the five
        (5)
        consecutive Trading Days immediately preceding the Conversion Date.

       

      (h)  Reservation
        of Common Stock.
        Cyber
        shall at all times when this Note shall be outstanding, reserve and keep
        available out of its authorized but unissued Common Stock, such number of
        shares
        of Common Stock as shall from time to time be sufficient to effect the
        conversion of this Note and all interest accrued thereon; provided
        that the
        number of shares of Common Stock so reserved shall at no time be less than
        one
        hundred fifty percent (150%) of the number of shares of Common Stock for
        which
        this Note and all interest accrued thereon is at any time convertible. Cyber
        shall, from time to time in accordance with Nevada law, increase the authorized
        number of shares of Common Stock if at any time the unissued number of
        authorized shares shall not be sufficient to satisfy Cyber’s obligations under
        this Section 3.4(h).

       

      (i)  Regulatory
        Compliance.
        If any
        shares of Common Stock to be reserved for the purpose of conversion of this
        Note
        or any interest accrued thereon require registration or listing with or approval
        of any governmental authority, stock exchange or other regulatory body under
        any
        federal or state law or regulation or otherwise before such shares may be
        validly issued or delivered upon conversion, Cyber shall, at its sole cost
        and
        expense, in good faith and as expeditiously as possible, endeavor to secure
        such
        registration, listing or approval, as the case may be.

       

      Section
        3.5      Prepayment.

      

      (a)  Prepayment
        Upon an Event of Default.
        Notwithstanding anything to the contrary contained herein, upon the occurrence
        of an Event of Default described in Section 2.1 hereof, the Holder shall
        have
        the right, at such Holder's option, to require the Maker to prepay in cash
        all
        or a portion of this Note at a price equal to one hundred twenty percent
        (120%)
        of the aggregate principal amount of this Note plus an amount equal
        to
        the
        aggregate interest payments that would have been payable on this Note had
        the
        prepayment occurred on the Maturity Date. Nothing
        in this Section 3.5(a) shall limit the Holder's rights under Section 2.2
        hereof.

      

      (b)  Prepayment
        Option Upon Major Transaction.
        In
        addition to all other rights of the Holder contained herein, simultaneous
        with
        the occurrence of a Major Transaction (as defined below), the Holder shall
        have
        the right, at the Holder's option, to require the Maker to prepay in cash
        all or
        a portion of the Holder's Notes at a price equal to one hundred twenty percent
        (120%) of the aggregate principal amount of this Note plus an amount equal
        to
        the
        aggregate interest payments that would have been payable on this Note had
        the
        prepayment occurred on the Maturity Date (the
        “Major
        Transaction Prepayment Price”);
        provided that the Maker shall pay the Major Transaction Prepayment Price
        in cash
        or shares of Common Stock at the sole option of the Holder. If the Holder
        elects
        to receive payment of the Major Transaction Prepayment Price in shares of
        Common
        Stock, the price per share shall be based upon the Conversion Price then
        in
        effect on the day preceding the date of delivery of the Notice of Prepayment
        at
        Option of Holder Upon Major Transaction (as hereafter defined). 

       

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

       

      (c)  Prepayment
        Option Upon Triggering Event. In addition to all other rights of the Holder
        contained herein, after a Triggering Event (as defined below), the Holder
        shall
        have the right, at the Holder's option, to require the Maker to prepay all
        or a
        portion of this Note in cash at a price equal to one hundred twenty percent
        (120%) of the aggregate principal amount of this Note plus an amount equal
        to
        the
        aggregate interest payments that would have been payable on this Note had
        the
        prepayment occurred on the Maturity Date (the
        “Triggering Event Prepayment Price,” and, collectively with the Major
        Transaction Prepayment Price, the “Prepayment Price”); provided that the Maker
        shall pay the Triggering Event Prepayment Price in cash or shares of Common
        Stock at the sole option of the Holder. If the Holder elects to receive payment
        of the Triggering Event Prepayment Price in shares of Common Stock, the price
        per share shall be based upon the Conversion Price then in effect on the
        day
        preceding the date of delivery of the Notice of Prepayment at Option of Holder
        Upon Triggering Event (as hereafter defined). 

       

      (d)  Major
        Transaction. A “Major Transaction” shall be deemed to have occurred at such time
        as any of the following events:

       

      (i)     
        the
        consolidation, merger or other business combination of the Maker or Cyber
        with
        or into another Person (as defined in Section 4.13 hereof) (other than (A)
        pursuant to a migratory merger effected solely for the purpose of changing
        the
        jurisdiction of incorporation of the Maker or Cyber or (B) a consolidation,
        merger or other business combination in which holders of the Maker's or Cyber’s
        voting power immediately prior to the transaction continue after the transaction
        to hold, directly or indirectly, the voting power of the surviving entity
        or
        entities necessary to elect a majority of the members of the board of directors
        (or their equivalent if other than a corporation) of such entity or
        entities).

       

      (ii)     
        the
        sale
        or transfer of more than fifty percent (50%) of the Maker’s or Cyber’s assets
        (based on the fair market value as determined in good faith by the Maker’s or
        Cyber’s Board of Directors) other than inventory in the ordinary course of
        business in one or a related series of transactions; or

       

      (iii)   
        closing
        of a purchase, tender or exchange offer made to the holders of more than
        fifty
        percent (50%) of the outstanding shares of Common Stock in which more than
        fifty
        percent (50%) of the outstanding shares of Common Stock were tendered and
        accepted.

       

      (e)  Triggering
        Event.
        A
“Triggering
        Event”
shall
        be deemed to have occurred at such time as any of the following
        events:

       

      (i) the
        suspension from listing, without subsequent listing on any one of, or the
        failure of the Common Stock to be listed on at least one of the OTC Bulletin
        Board, the American Stock Exchange, the Nasdaq National Market, the Nasdaq
        SmallCap Market or The New York Stock Exchange, Inc., for a period of five
        (5)
        consecutive Trading Days;

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

       

      (ii)  the
        Maker's or Cyber’s notice (as the case may be) to any holder of the Notes,
        including by way of public announcement, at any time, of its inability to
        comply
        (including for any of the reasons described in Section 3.6) or its intention
        not
        to comply with proper requests for conversion of any Notes into shares of
        Common
        Stock; or

       

      (iii)     
        the
        Maker's failure to cause Cyber to comply with a Conversion Notice tendered
        in
        accordance with the provisions of this Note within ten (10) business days
        after
        the receipt by Cyber of the Conversion Notice; or

       

      (iv)    
        Cyber
        deregisters its shares of Common Stock and as a result such shares of Common
        Stock are no longer publicly traded; or

       

      (v)  Cyber
        consummates a “going private” transaction and as a result the Common Stock is no
        longer registered under Sections 12(b) or 12(g) of the Exchange Act;
        or

       

      (vi)    
        the
        Maker
        or Cyber consummates an underwritten public offering; or

       

      (vii)   
        the
        Maker
        breaches any representation, warranty, covenant or other term or condition
        this
        Note or any other agreement, document, certificate or other instrument delivered
        in connection with the transactions contemplated thereby or hereby, except
        to
        the extent that such breach would not have a Material Adverse Effect and
        except,
        in the case of a breach of a covenant which is curable, only if such breach
        continues for a period of a least ten (10) business days.

       

      (f)  Mechanics
        of Prepayment at Option of Holder Upon Major Transaction.
        No
        sooner than fifteen (15) days nor later than ten (10) days prior to the
        consummation of a Major Transaction, but not prior to the public announcement
        of
        such Major Transaction, the Maker shall deliver written notice thereof via
        facsimile and overnight courier (“Notice
        of Major Transaction”)
        to the
        Holder of this Note. At any time after receipt of a Notice of Major Transaction
        (or, in the event a Notice of Major Transaction is not delivered at least
        ten
        (10) days prior to a Major Transaction, at any time within ten (10) days
        prior
        to a Major Transaction), any holder of the Notes then outstanding may require
        the Maker to prepay, effective immediately prior to the consummation of such
        Major Transaction, all of the holder's Notes then outstanding by delivering
        written notice thereof via facsimile and overnight courier (“Notice
        of Prepayment at Option of Holder Upon Major Transaction”)
        to the
        Maker, which Notice of Prepayment at Option of Holder Upon Major Transaction
        shall indicate (i) the principal amount of the Notes that such holder is
        electing to have prepaid and (ii) the applicable Major Transaction Prepayment
        Price, as calculated pursuant to Section 3.5(b) above.

      

      (g)  Mechanics
        of Prepayment at Option of Holder Upon Triggering Event. Within one (1)
        business day after the occurrence of a Triggering Event, the Maker shall
        deliver
        written notice thereof via facsimile and overnight courier (“Notice of
        Triggering Event”) to each holder of the Notes. At any time after the earlier of
        a holder's receipt of a Notice of Triggering Event and such holder becoming
        aware of a Triggering Event, any holder of this Note then outstanding may
        require the Maker to prepay all of the Notes on a pro rata basis by delivering
        written notice thereof via facsimile and overnight courier (“Notice of
        Prepayment at Option of Holder Upon Triggering Event”) to the Maker, which
        Notice of Prepayment at Option of Holder Upon Triggering Event shall indicate
        (i) the amount of the Note that such holder is electing to have prepaid and
        (ii)
        the applicable Triggering Event Prepayment Price, as calculated pursuant
        to
        Section 3.5(c) above. A holder shall only be permitted to require the Maker
        to
        prepay the Note pursuant to Section 3.5 hereof for the greater of a period
        of
        ten (10) days after receipt by such holder of a Notice of Triggering Event
        or
        for so long as such Triggering Event is continuing.

       

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

       

      (h)  Payment
        of Prepayment Price.
        Upon
        the Maker's receipt of a Notice(s) of Prepayment at Option of Holder Upon
        Triggering Event or a Notice(s) of Prepayment at Option of Holder Upon Major
        Transaction from any holder of the Notes, the Maker shall immediately notify
        each holder of the Notes by facsimile of the Maker's receipt of such Notice(s)
        of Prepayment at Option of Holder Upon Triggering Event or Notice(s) of
        Prepayment at Option of Holder Upon Major Transaction and each holder which
        has
        sent such a notice shall promptly submit to the Maker such holder's certificates
        representing the Notes which such holder has elected to have prepaid. The
        Maker
        shall deliver the applicable Triggering Event Prepayment Price, in the case
        of a
        prepayment pursuant to Section 3.5(g), to such holder within five (5) business
        days after the Maker's receipt of a Notice of Prepayment at Option of Holder
        Upon Triggering Event and, in the case of a prepayment pursuant to Section
        3.5(f), the Maker shall deliver the applicable Major Transaction Prepayment
        Price immediately prior to the consummation of the Major Transaction; provided
        that a holder's original Note shall have been so delivered to the Maker;
        provided further that if the Maker is unable to prepay all of the Notes to
        be
        prepaid, the Maker shall prepay an amount from each holder of the Notes being
        prepaid equal to such holder's pro-rata amount (based on the number of Notes
        held by such holder relative to the number of Notes outstanding) of all Notes
        being prepaid. If the Maker shall fail to prepay all of the Notes submitted
        for
        prepayment (other than pursuant to a dispute as to the arithmetic calculation
        of
        the Prepayment Price), in addition to any remedy such holder of the Notes
        may
        have under this Note, the applicable Prepayment Price payable in respect
        of such
        Notes not prepaid shall bear interest at the rate of two percent (2%) per
        month
        (prorated for partial months) until paid in full. Until the Maker pays such
        unpaid applicable Prepayment Price in full to a holder of the Notes submitted
        for prepayment, such holder shall have the option (the “Void
        Optional Prepayment Option”)
        to, in
        lieu of prepayment, require the Maker to promptly return to such holder(s)
        all
        of the Notes that were submitted for prepayment by such holder(s) under this
        Section 3.5 and for which the applicable Prepayment Price has not been paid,
        by
        sending written notice thereof to the Maker via facsimile (the “Void
        Optional Prepayment Notice”).
        Upon
        the Maker's receipt of such Void Optional Prepayment Notice(s) and prior
        to
        payment of the full applicable Prepayment Price to such holder, (i) the
        Notice(s) of Prepayment at Option of Holder Upon Triggering Event or the
        Notice(s) of Prepayment at Option of Holder Upon Major Transaction, as the
        case
        may be, shall be null and void with respect to those Notes submitted for
        prepayment and for which the applicable Prepayment Price has not been paid,
        (ii)
        the Maker shall immediately return any Notes submitted to the Maker by each
        holder for prepayment under this Section 3.5(h) and for which the applicable
        Prepayment Price has not been paid and (iii) the Conversion Price of such
        returned Notes shall be adjusted to the lesser of (A) the Conversion Price
        as in
        effect on the date on which the Void Optional Prepayment Notice(s) is delivered
        to the Maker and (B) the lowest Closing Bid Price during the period beginning
        on
        the date on which the Notice(s) of Prepayment of Option of Holder Upon Major
        Transaction or the Notice(s) of Prepayment at Option of Holder Upon Triggering
        Event, as the case may be, is delivered to the Maker and ending on the date
        on
        which the Void Optional Prepayment Notice(s) is delivered to the Maker; provided
        that no adjustment shall be made if such adjustment would result in an increase
        of the Conversion Price then in effect. A holder's delivery of a Void Optional
        Prepayment Notice and exercise of its rights following such notice shall
        not
        effect the Maker's obligations to make any payments which have accrued prior
        to
        the date of such notice. Payments provided for in this Section 3.5 shall
        have
        priority to payments to other stockholders in connection with a Major
        Transaction. 

       

      
        
           

        

        
          -15-

          
            

          

        

        
           

        

      

       

      (i) Maker
        Prepayment Option.
        Commencing at any time following the effective date of the Registration
        Statement, the Maker may prepay in cash all or any portion of the outstanding
        principal amount of this Note together with all accrued and unpaid interest
        thereon upon forty-five (45) days prior written notice to the Holder (the
        “Maker's
        Prepayment Notice”)
        at a
        price (the “Maker's
        Prepayment Price”)
        equal
        to one hundred twenty percent (120%)
        of the
        aggregate principal amount of this Note plus
        an
        amount equal to
        the
        aggregate interest payments that would have been payable on this Note had
        the
        prepayment occurred on the Maturity Date.
        Notwithstanding
        the foregoing to the contrary, if a holder has delivered a Conversion Notice
        to
        the Maker or delivers a Conversion Notice within such forty-five (45) day
        period
        following delivery of the Maker’s Prepayment Notice, the principal amount of
        this Note plus any accrued but unpaid interest designated to be converted
        may
        not be prepaid by the Maker and shall be converted in accordance with Section
        3.3 hereof, and provided further that if during the period between delivery
        of
        the Maker's Prepayment Notice and the Maker's Prepayment Date (as defined
        below), a holder shall become entitled to deliver a Notice of Prepayment
        at
        Option of Holder Upon Major Transaction or Notice of Prepayment at Option
        of
        Holder upon Triggering Event, then the such rights of the holders shall take
        precedence over the previously delivered Maker Prepayment Notice. The Maker's
        Prepayment Notice shall state the date of prepayment which date shall be
        the
        forty-sixth (46th)
        day
        after the Maker has delivered the Maker's Prepayment Notice (the “Maker's
        Prepayment Date”)
        and
        the Maker’s Prepayment Price. The Maker shall deliver the Maker's Prepayment
        Price on the Maker’s Prepayment Date, provided,
        that if
        the holder(s) delivers a Conversion Notice before the Maker's Prepayment
        Date,
        then the portion of the Maker's Prepayment Price which would be paid to prepay
        the Notes covered by such Conversion Notice shall be returned to the Maker
        upon
        delivery of the Common Stock issuable in connection with such Conversion
        Notice
        to the holder(s). On the Maker's Prepayment Date, the Maker shall pay the
        Maker's Prepayment Price, subject to any adjustment pursuant to the immediately
        preceding sentence, to the Holder on a pro rata basis. If the Maker fails
        to pay
        the Maker's Prepayment Price by the forty-sixth (46th)
        day
        after the Maker has delivered the Maker's Prepayment Notice, the prepayment
        will
        be declared null and void and the Maker shall lose its right to serve a Maker
        's
        Prepayment Notice pursuant to this Section 3.5(i) in the future. Notwithstanding
        the foregoing to the contrary, the Maker may effect a prepayment pursuant
        to
        this Section 3.5(i) only if (A) a Registration Statement is effective and
        has
        been effective, without lapse or suspension of any kind, for a period thirty
        (30) consecutive calendar days immediately preceding the Maker’s Prepayment
        Notice through the Maker’s Prepayment Date, (B) trading
        in the Common Stock shall not have been suspended by the Securities and Exchange
        Commission or the OTC Bulletin Board (or other exchange or market on which
        the
        Common Stock is trading), (C) the Maker is in compliance with the terms and
        conditions of this Note, and (D) the Maker is not in possession of any material
        non-public information.
        

       

      
        
           

        

        
          -16-

          
            

          

        

        
           

        

      

       

      Section
        3.6        Inability
        to Fully Convert.

       

      (a)  Holder's
        Option if Cyber Cannot Fully Convert.
        If,
        upon Cyber's receipt of a Conversion Notice, Cyber cannot issue shares of
        Common
        Stock registered for resale under the Registration Statement for any reason,
        including, without limitation, because Cyber does not have a sufficient number
        of shares of Common Stock authorized and available, then Cyber shall issue
        as
        many shares of Common Stock as it is able to issue in accordance with the
        Holder's Conversion Notice and, with respect to the unconverted portion of
        this
        Note, the Holder, solely at Holder's option, can elect to:

       

      (i)  require
        the Maker to prepay that portion of this Note for which Cyber is unable to
        issue
        Common Stock in accordance with the Holder's Conversion Notice (the
“Mandatory
        Prepayment”)
        at a
        price per share equal to the Triggering Event Prepayment Price as of such
        Conversion Date (the “Mandatory
        Prepayment Price”);

       

      (ii)  exercise
        its rights under the Pledge Agreement and/or the Guaranty Agreement and take
        possession of the shares of Common Stock pledged to the Holder under the
        Pledge
        Agreement;

       

      (iii)  void
        its
        Conversion Notice and retain or have returned, as the case may be, this Note
        that was to be converted pursuant to the Conversion Notice (provided that
        the
        Holder's voiding its Conversion Notice shall not effect the Maker's obligations
        to make any payments which have accrued prior to the date of such
        notice);

       

      (iv)  exercise
        its Buy-In rights pursuant to and in accordance with the terms and provisions
        of
        Section 3.3(c) of this Note.

       

      In
        the
        event a Holder shall elect to convert any portion of its Notes as provided
        herein, the Maker cannot refuse conversion based on any claim that such Holder
        or any one associated or affiliated with such Holder has been engaged in
        any
        violation of law, violation of an agreement to which such Holder is a party
        or
        for any reason whatsoever, unless, an injunction from a court, on notice,
        restraining and or adjoining conversion of all or of said Notes shall have
        been
        issued and the Maker or Cyber posts a surety bond for the benefit of such
        Holder
        in an amount equal to 130% of the principal amount of the Notes the Holder
        has
        elected to convert, 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 in the event it obtains judgment. 

      

      (b)  Mechanics
        of Fulfilling Holder's Election.
        The
        Maker shall cause Cyber to immediately send via facsimile to the Holder,
        upon
        receipt of a facsimile copy of a Conversion Notice from the Holder which
        cannot
        be fully satisfied as described in Section 3.6(a) above, a notice of Cyber's
        inability to fully satisfy the Conversion Notice (the “Inability
        to Fully Convert Notice”).
        Such
        Inability to Fully Convert Notice shall indicate (i) the reason why Cyber
        is
        unable to fully satisfy such holder's Conversion Notice, (ii) the amount
        of this
        Note which cannot be converted and (iii) the applicable Mandatory Prepayment
        Price. The Holder shall notify Cyber of its election pursuant to Section
        3.6(a)
        above by delivering written notice via facsimile to Cyber (“Notice
        in Response to Inability to Convert”).

       

      
        
           

        

        
          -17-

          
            

          

        

        
           

        

      

       

      (c)  Payment
        of Prepayment Price.
        If the
        Holder shall elect to have this Notes prepaid pursuant to Section 3.6(a)(i)
        above, the Maker shall pay the Mandatory Prepayment Price to the Holder within
        thirty (30) days of the Maker's or Cyber’s receipt of the Holder's Notice in
        Response to Inability to Convert, provided
        that
        prior to the Maker's receipt of the Holder's Notice in Response to Inability
        to
        Convert the Maker has not delivered a notice to the Holder stating, to the
        satisfaction of the Holder, that the event or condition resulting in the
        Mandatory Prepayment has been cured and all Conversion Shares issuable to
        the
        Holder can and will be delivered to the Holder in accordance with the terms
        of
        this Note. If the Maker shall fail to pay the applicable Mandatory Prepayment
        Price to the Holder on the date that is one (1) business day following the
        Maker's or Cyber’s receipt of the Holder's Notice in Response to Inability to
        Convert (other than pursuant to a dispute as to the determination of the
        arithmetic calculation of the Prepayment Price), in addition to any remedy
        the
        Holder may have under this Note, such unpaid amount shall bear interest at
        the
        rate of two percent (2%) per month (prorated for partial months) until paid
        in
        full. Until the full Mandatory Prepayment Price is paid in full to the Holder,
        the Holder may (i) void the Mandatory Prepayment with respect to that portion
        of
        the Note for which the full Mandatory Prepayment Price has not been paid,
        (ii)
        receive back such Note, and (iii) require that the Conversion Price of such
        returned Note be adjusted to the lesser of (A) the Conversion Price as in
        effect
        on the date on which the Holder voided the Mandatory Prepayment and (B) the
        lowest Closing Bid Price during the period beginning on the Conversion Date
        and
        ending on the date the Holder voided the Mandatory Prepayment. 

       

      (d)  Intentionally
        Omitted.

       

      Section
        3.7 No
        Rights
        as Shareholder. Nothing contained in this Note shall be construed as conferring
        upon the Holder, prior to the conversion of this Note, the right to vote
        or to
        receive dividends or to consent or to receive notice as a shareholder in
        respect
        of any meeting of shareholders for the election of directors of Cyber or
        of any
        other matter, or any other rights as a shareholder of Cyber.

       

      ARTICLE
        IV

       

      MISCELLANEOUS

       

      Section
        4.1  -Notices.
        Any
        notice, demand, request, waiver or other communication required or permitted
        to
        be given hereunder shall be in writing and shall be effective (a) upon hand
        delivery, telecopy or facsimile at the address set forth below (if delivered
        on
        a business day during normal business hours where such notice is to be
        received), or the first business day following such delivery (if delivered
        other
        than on a business day during normal business hours where such notice is
        to be
        received) or (b) on the second business day following the date of mailing
        by
        express courier service, fully prepaid, addressed to such address, or upon
        actual receipt of such mailing, whichever shall first occur. 

      

        
          	
                  If
                    to the Maker:

                	
                  10460
                    Roosevelt Blvd. North

                
	 	
                  Suite
                    187

                
	 	
                  St.
                    Petersburg, FL 33716

                
	 	
                  Attention:
                    William C. Robinson

                
	 	
                  Tel.
                    No.: (___) ___-______

                
	 	
                  Fax
                    No.: (___) ___-______

                

        

         

        
          
             

          

          
            -18-

            
              

            

          

          
             

          

        

         

        
          	
                  If
                    to the Holder:

                	
                  Ayuda
                    Funding Corp.

                
	 	
                  135
                    Kinnelon Road, Suite 104

                
	 	
                  Kinnelon,
                    NJ 07405

                
	 	
                  Attention:
                    Manny Bello

                
	 	
                  Tel.
                    No.: (973) 283-8505

                
	 	
                  Fax
                    No.: (973) 283-8508

                

        

      

      

      The
        Maker
        will give written notice to the Holder at least ten (10) days prior to the
        date
        on which the Maker takes a record (x) with respect to any dividend or
        distribution upon the Common Stock, (y) with respect to any pro rata
        subscription offer to holders of Common Stock or (z) for determining rights
        to
        vote with respect to any Organic Change, dissolution, liquidation or winding-up
        and in no event shall such notice be provided to such holder prior to such
        information being made known to the public. The Maker will also give written
        notice to the Holder at least ten (10) days prior to the date on which any
        Organic Change, dissolution, liquidation or winding-up will take place and
        in no
        event shall such notice be provided to the Holder prior to such information
        being made known to the public. The Maker shall promptly notify the Holder
        of
        this Note of any notices sent or received.

       

      Section
        4.2  Governing
        Law. This Note shall be governed by and construed in accordance with the
        internal laws of the State of New York, without giving effect to any of the
        conflicts of law principles which would result in the application of the
        substantive law of another jurisdiction. This Note shall not be interpreted
        or
        construed with any presumption against the party causing this Note to be
        drafted.

       

      Section
        4.3  Headings.
        Article and section headings in this Note are included herein for purposes
        of
        convenience of reference only and shall not constitute a part of this Note
        for
        any other purpose.

       

      Section
        4.4  Remedies,
        Characterizations, Other Obligations, Breaches and Injunctive Relief. The
        remedies provided in this Note shall be cumulative and in addition to all
        other
        remedies available under this Note, at law or in equity (including, without
        limitation, a decree of specific performance and/or other injunctive relief),
        no
        remedy contained herein shall be deemed a waiver of compliance with the
        provisions giving rise to such remedy and nothing herein shall limit a holder's
        right to pursue actual damages for any failure by the Maker to comply with
        the
        terms of this Note. Amounts set forth or provided for herein with respect
        to
        payments, conversion and the like (and the computation thereof) shall be
        the
        amounts to be received by the holder thereof and shall not, except as expressly
        provided herein, be subject to any other obligation of the Maker (or the
        performance thereof). The Maker acknowledges that a breach by it of its
        obligations hereunder will cause irreparable and material harm to the Holder
        and
        that the remedy at law for any such breach may be inadequate. Therefore the
        Maker agrees that, in the event of any such breach or threatened breach,
        the
        Holder shall be entitled, in addition to all other available rights and
        remedies, at law or in equity, to seek and obtain such equitable relief,
        including but not limited to an injunction restraining any such breach or
        threatened breach, without the necessity of showing economic loss and without
        any bond or other security being required. 

       

      
        
           

        

        
          -19-

          
            

          

        

        
           

        

      

       

      Section
        4.5  Enforcement
        Expenses. The Maker agrees to pay all costs and expenses of enforcement of
        this Note, including, without limitation, reasonable attorneys' fees and
        expenses.

       

      Section
        4.6  Binding
        Effect. The obligations of the Maker and the Holder set forth herein shall
        be binding upon the successors and assigns of each such party, whether or
        not
        such successors or assigns are permitted by the terms hereof.

       

      Section
        4.7  Amendments.
        This Note may not be modified or amended in any manner except in writing
        executed by the Maker and the Holder.

       

      Section
        4.8  Compliance
        with Securities Laws. The Holder of this Note acknowledges that this Note is
        being acquired solely for the Holder's own account and not as a nominee for
        any
        other party, and for investment, and that the Holder shall not offer, sell
        or
        otherwise dispose of this Note. This Note and any Note issued in substitution
        or
        replacement therefor shall be stamped or imprinted with a legend in
        substantially the following form:

       

      “THIS
        NOTE
        AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
        APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE
        ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE MAKER OF AN OPINION OF COUNSEL
        IN
        THE FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE MAKER THAT THIS
        NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE
        MAY BE
        SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION
        FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS.”

      

      Section
        4.9  Consent
        to Jurisdiction.
        Each of
        the Maker and the Holder (i) hereby irrevocably submits to the exclusive
        jurisdiction of the United States District Court sitting in the Southern
        District of New York and the courts of the State of New York located in New
        York
        county for the purposes of any suit, action or proceeding arising out of
        or
        relating to this Note and (ii) hereby waives, and agrees not to assert in
        any
        such suit, action or proceeding, any claim that it is not personally subject
        to
        the jurisdiction of such court, that the suit, action or proceeding is brought
        in an inconvenient forum or that the venue of the suit, action or proceeding
        is
        improper. Each of the Maker and the Holder consents to process being served
        in
        any such suit, action or proceeding by mailing a copy thereof to such party
        at
        the address in effect for notices to it in Section 4.1 and agrees that such
        service shall constitute good and sufficient service of process and notice
        thereof. Nothing in this Section 4.9 shall affect or limit any right to serve
        process in any other manner permitted by law. Each of the Maker and the Holder
        hereby agree that the prevailing party in any suit, action or proceeding
        arising
        out of or relating to this Note shall be entitled to reimbursement for
        reasonable legal fees from the non-prevailing party. 

       

      
        
           

        

        
          -20-

          
            

          

        

        
           

        

      

       

      Section
        4.10  -Parties
        in Interest. This Note shall be binding upon, inure to the benefit of and
        be
        enforceable by the Maker, the Holder and their respective successors and
        permitted assigns.

       

      Section
        4.11  -Failure
        or Indulgence Not Waiver. No failure or delay on the part of the Holder in
        the
        exercise of any power, right or privilege hereunder shall operate as a waiver
        thereof, nor shall any single or partial exercise of any such power, right
        or
        privilege preclude other or further exercise thereof or of any other right,
        power or privilege.

       

      Section
        4.12  -Maker
        Waivers. Except as otherwise specifically provided herein, the Maker and
        all
        others that may become liable for all or any part of the obligations evidenced
        by this Note, hereby waive presentment, demand, notice of nonpayment, protest
        and all other demands' and notices in connection with the delivery, acceptance,
        performance and enforcement of this Note, and do hereby consent to any number
        of
        renewals of extensions of the time or payment hereof and agree that any such
        renewals or extensions may be made without notice to any such persons and
        without affecting their liability herein and do further consent to the release
        of any person liable hereon, all without affecting the liability of the other
        persons, firms or Maker liable for the payment of this Note, AND DO HEREBY
        WAIVE
        TRIAL BY JURY.

       

      (a)  No
        delay
        or omission on the part of the Holder in exercising its rights under this
        Note,
        or course of conduct relating hereto, shall operate as a waiver of such rights
        or any other right of the Holder, nor shall any waiver by the Holder of any
        such
        right or rights on any one occasion be deemed a waiver of the same right
        or
        rights on any future occasion.

       

      (b)  THE
        MAKER
        ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL
        TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS
        RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH
        THE
        HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

       

      Section
        4.13 Definitions.
        For the
        purposes hereof, the following terms shall have the following
        meanings:

      

      “Indebtedness”
means
        (a) any liabilities for borrowed money or amounts (other than trade accounts
        payable incurred in the ordinary course of business), (b) all guaranties,
        endorsements and other contingent obligations in respect of Indebtedness
        of
        others, whether or not the same are or should be reflected in the Maker’s
        balance sheet (or the notes thereto), except guaranties by endorsement of
        negotiable instruments for deposit or collection or similar transactions
        in the
        ordinary course of business; and (c) the present value of any lease payments
        in
        excess of $25,000 due under leases required to be capitalized in accordance
        with
        GAAP.

       

      
        
           

        

        
          -21-

          
            

          

        

        
           

        

      

       

      “Material
        Adverse Effect”
means
        any material adverse effect on the business, operations, properties, prospects,
        or financial condition of the Maker and its Subsidiaries and/or any condition,
        circumstance, or situation that would prohibit or otherwise materially interfere
        with the ability of the Maker to perform any of its obligations under this
        Note
        in any material respect.

      

      “Person”
means
        an individual or a corporation, partnership, trust, incorporated or
        unincorporated association, joint venture, limited liability company, joint
        stock company, government (or an agency or political subdivision thereof)
        or
        other entity of any kind.

       

      “Trading
        Day”
means
        (a) a day on which the Common Stock is traded on the OTC Bulletin Board,
        or (b)
        if the Common Stock is not traded on the OTC Bulletin Board, a day on which
        the
        Common Stock is quoted in the over-the-counter market as reported by the
        National Quotation Bureau Incorporated (or any similar organization or agency
        succeeding its functions of reporting prices); provided,
        however,
        that in
        the event that the Common Stock is not listed or quoted as set forth in (a)
        or
        (b) hereof, then Trading Day shall mean any day except Saturday, Sunday and
        any
        day which shall be a legal holiday or a day on which banking institutions
        in the
        State of New York are authorized or required by law or other government action
        to close.

       

      
        	 	 	 
	 	
                AIRSHIP
                  LEASING CO., LLC

                        and

                TSI
                  HOLDING CO., LLC

              
	 
 	 
 	 
 
	Date: 	By:  	/s/ 
	 	
                
Name: William
                C. Robinson
	 	
                Title: President
                  of Cyber Defense Systems, Inc., 

                Manager
                  of Airship Leasing Co., LLC and 

                TSI
                  Holdings Co., LLC 

              

      

       

      
        
           

        

        
          -22-

          
            

          

        

        
           

        

      

      
EXHIBIT
        A

      

      WIRE
        INSTRUCTIONS

       

      

       

      Payee:
        ________________________________________________________

       

      Bank:
        ________________________________________________________

       

      Address:
        _____________________________________________________

       

      ______________________________________________________

       

      Bank
        No.:
        _____________________________________________________

       

      Account
        No.: __________________________________________________

       

      Account
        Name: _________________________________________________

       

      

      
        
           

        

        
          -23-

          
            

          

        

        
           

        

      

       

      FORM
        OF

       

      NOTICE
        OF
        CONVERSION

       

      (To
        be
        Executed by the Registered Holder in order to Convert the Note)

       

      The
        undersigned hereby irrevocably elects to convert $ ________________ of the
        principal amount of the above Note No. CN-____ into shares of Common Stock
        of
        Cyber Defense Systems, Inc. (“Cyber”) according to the conditions hereof, as of
        the date written below.

       

      Date
        of
        Conversion
        _____________________________________________________________________________

       

      Applicable
        Conversion Price
        ______________________________________________________________________

       

      Number
        of
        shares of Common Stock beneficially owned or deemed beneficially owned by
        the
        Holder on the Date of Conversion: _________________________

       

      Signature____________________________________________________________________________________

       

      [Name]

       

      Address:_____________________________________________________________________________________

       

      _____________________________________________________________________________________

       

      

      
        
           

        

        
          -24-PLEDGE
        AND
        SECURITY AGREEMENT

       

      WITH
        ASSIGNMENT OF RIGHTS AND INTERESTS 

       

      This
        PLEDGE
        AND SECURITY
        AGREEMENT WITH ASSIGNMENT OF RIGHTS AND INTERESTS ("Agreement"),
        is entered into on this the 24th
        of
        August, 2007, by and between TSI
        Holding CO., LLC and Airship Leasing Co., LLC (“Borrower)
        and Ayuda Funding Corp.,
        (“Lender”). 

       

      RECITALS

       

       

      A.  Borrower
        has requested a loan to replace the funds advanced to William C. Robinson
        on
        behalf of the Borrower in an amount of Three
        Hundred Seventy Five Thousand and No/100ths Dollars
        ($375,000.00).
        This
        Commercial Loan is evidenced by a Promissory Note. 

       

      B.  Borrower
        desires to borrow Three
        Hundred Seventy Thousand and No/100ths Dollars ($375,000.00)
as evidenced
        a Promissory Note with interest thereon at the rate of 15.00% per annum,
        with a
        maturity date of February 21, 2008 (the “Promissory Note”). As inducement for
        said loan, Borrower and Pledgor agrees to assign and pledge in favor of
        SpiritBank, a security interest in certain personal property, listed and
        described on Exhibit “A” attached hereto. 

       

      C.  Subject
        to Borrower’s compliance with all of the terms, conditions and covenants
        hereinafter set forth and predicated on Borrower’s representations and
        warranties, each of which is material and is being relied upon by Lender,
        Lender
        agrees to make the Loan and advance funds thereunder for the benefit of Borrower
        in the amount and on the terms hereinafter set forth up to the total of the
        Loan
        amount, or in such lesser sums as Borrower may request in accordance with
        the
        Promissory Note. 

       

      NOW
        THEREFORE,
        in
        consideration of the mutual promises, covenants, conditions, representations,
        and warranties hereinafter set forth and for other good and valuable
        consideration, the parties hereto mutually agree as follows:

       

      AGREEMENT

       

      1.  Definitions
        and Construction.

       

      1.1  Definitions.
        All
        initially capitalized terms used but not defined in this Agreement shall
        have
        the meanings assigned to such terms in the Promissory Note. In addition,
        the
        following terms, as used in this Agreement, have the following
        meanings:

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      "Bankruptcy
        Code"
        means
        Bankruptcy Reform Act of 1978 (11 U.S.C. Sections 101-1330), as amended or
        supplemented from time to time, and any successor statute, and any and all
        rules
        issued or promulgated in connection therewith.

       

      "Code"
        means
        the New York Uniform Commercial Code, as amended and supplemented from time
        to
        time, and any successor statute.

       

      “Collateral"
        means
        all of the following:

       

      (i)  
        All
        items listed and described under Exhibit “A”. 

       

      “Event
        of Default"
        has the
        meaning given to such term in Section
        9.

       

      "Guaranty"
        has the
        meaning set forth in the recitals hereto.

       

      "Guaranty
        Documents"
        documents signed by the guarantors. 

       

      “Secured
        Obligations"
        means
        all loans, advances, debts, principal, interest (including any interest that,
        but for the provisions of the Bankruptcy Code, would have accrued), premiums,
        liabilities (including all amounts charged to Borrower pursuant hereto),
        obligations, fees, charges, or costs (including any fees or expenses that,
        but
        for the provisions of the Bankruptcy Code, would have accrued), lease payments,
        guaranties, covenants, and duties owing by Borrower to Lender of any kind
        and
        description pursuant to or evidenced by the Guaranty Documents, due or to
        become
        due, absolute or contingent, and further including all interest not paid
        when
        due and all Lender’s expenses that Borrower is required to pay or reimburse by
        the terms of the Loan documents, security agreements, pledge, mortgage and
        Guaranty Documents, by law, or otherwise.

       

      1.2  Construction.
        Unless
        the context of this Agreement clearly requires otherwise, references to the
        plural include the singular, references to the singular include the plural,
        and
        the term "including" is not limiting. The words "hereof," "herein," "hereby,"
        "hereunder," and other similar terms refer to this Agreement as a whole and
        not
        to any particular provision of this Agreement. Any reference herein to any
        document includes any and all alterations, amendments, extensions,
        modifications, renewals, or supplements thereto or thereof, as applicable.
        Neither this Agreement nor any uncertainty or ambiguity herein shall be
        construed or resolved against the Lender whether under any rule of construction
        or otherwise. On the contrary, this Agreement has been reviewed by Borrower
        and
        Borrower has had the opportunity to consult with an attorney, and this Agreement
        shall be construed and interpreted according to the ordinary meaning of the
        words used so as to fairly accomplish the purposes and intentions of the
        Borrower and Lender.

       

      2.  Pledge.
        As
        security for the prompt and complete payment and performance of the Secured
        Obligations, Borrower and Pledgor hereby deliver, pledge and grant to Lender,
        for the benefit of the Lender, a continuing security interest in all of Borrower
        and Pledgor’s now-owned or hereafter-acquired right, title, and interest in and
        to the Collateral. All documents, certificates or instruments representing
        or
        evidencing the Collateral (excluding any mortgage documents) shall be held
        by
        the Borrower and/or Pledgor. Borrower
        shall notify Lender of any change in location, possession or control of the
        Collateral.
        Failure
        to notify Lender of any change in location, possession or control of the
        Collateral shall constitute a default under the terms of the Promissory
        Note.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      3.  Further
        Assurances.
        Borrower agree that it shall cooperate with Lender and shall execute and
        deliver, or cause to be executed and delivered, to Lender all control
        agreements, assignments, financing statements, instruments, and other documents,
        and shall take all further action, at the expense of Borrower, from time
        to time
        reasonably requested by Lender, in order to maintain a continuing,
        first-priority, perfected security interest in the Collateral in favor of
        Lender, and to enable Lender to exercise and enforce its rights and remedies
        hereunder with respect to the Collateral, and Borrower agree that it shall
        execute and deliver to Lender at Lender’s request any further control agreement,
        applications, agreements, documents and instruments, and shall perform any
        and
        all acts deemed reasonably necessary by Lender to carry into effect the terms,
        conditions, and provisions of this Agreement and the transactions connected
        herewith. Should Borrower fail to execute or deliver any such applications,
        agreements, documents, financing statements and instruments, or to perform
        any
        such acts, Pledgor and Borrower acknowledge that Lender may execute and deliver
        the same and perform such acts in the name of Borrower and on its behalf
        as its
        attorney-in-fact in accordance with Section
        10.

       

      4.  Lender’s
        Duties.
        The
        Lender shall not have any duties with respect to the Collateral other than
        the
        duty to use reasonable care if the Collateral is in its possession. In
        accordance with the Code, Lender shall be deemed to have used reasonable
        care if
        it observes substantially the same standard of care with respect to the custody
        or preservation of the Collateral as it observes with respect to similar
        assets
        owned or held in trust by Pledgor. Without limiting the generality of the
        foregoing, the Lender shall not be under any obligation to take any steps
        to
        preserve rights in the Collateral against any other parties, to sell the
        same if
        it threatens to decline in value, or to exercise any rights represented thereby
        (including rights with respect to calls, conversions, exchanges, maturities,
        or
        tenders); provided,
        however,
        that
        Lender may, at its option, after the occurrence and during the continuance
        of an
        Event of Default, do so, and any and all expenses incurred in connection
        therewith shall be for the account of the Borrowers.

       

      5.  Voting
        Rights; Dividends; Etc.
        During
        the term of this Agreement, and as long as no Event of Default has occurred
        and
        is then continuing:

       

      5.1  Pledgor
        shall be entitled to exercise any and all voting and other consensual rights
        pertaining to the Collateral or any part thereof; provided, however, no vote
        shall be cast or any consent, waiver or ratification given or any action
        taken
        which would violate or be inconsistent with the terms of this Agreement,
        the
        Promissory Note or any other instrument or agreement referred to therein
        or
        herein, or which could have the effect of materially impairing the value
        of the
        Collateral or any part thereof or the position or interest of Agent
        therein.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      6.  Representations,
        Warranties, and Covenants.
        Pledgor
        warrants, represents, and covenants that:

       

      6.1  The
        execution, delivery and performance of this Agreement are within Pledgor’s
        power, will not constitute an event of default under any material contract,
        obligation, indenture or other instrument to which Pledgor is a party; and
        there
        is no law, rule or regulation, nor is there any judgment, decree or order
        of any
        court or governmental authority binding on Pledgor which would be contravened
        by
        the execution, delivery, performance or enforcement of this
        Agreement.

       

      6.2  Pledgor
        has taken all action necessary to authorize the execution and delivery of
        this
        Agreement, and the consummation of the transactions contemplated hereby.
        Upon
        its execution and delivery in accordance with the terms hereof, this Agreement
        will constitute the legal, valid and binding agreement and obligation of
        Pledgor, enforceable against Pledgor in accordance with its terms, except
        as
        enforceability may be limited by bankruptcy, insolvency, and similar laws
        and
        equitable principles affecting the enforcement of creditors' rights
        generally.

       

      6.3  All
        of
        the Collateral is and shall remain free from all liens, claims, encumbrances,
        and purchase-money or other security interests except as created hereby and
        Permitted Liens, as defined in the Promissory Note.

       

      6.4  The
        execution and delivery of this Agreement creates a valid, perfected, and
        first-priority security interest in the Collateral in favor of Lender for
        the
        benefit of the Lender, and all actions necessary or desirable to such perfection
        have been duly taken or will be promptly taken upon execution of this
        Agreement.

       

      6.5  No
        authorization or other action by, and no notice to or filing with, any
        governmental authority or regulatory body is required either: (a) for the
        grant
        by Pledgor of the security interest granted hereby or for the execution,
        delivery, or performance of this Agreement by Pledgor; (b) for the perfection
        of
        or exercise by Lender of its rights and remedies hereunder (except as may
        have
        been taken by or at the direction of Borrowers or Pledgor, or as may be required
        in connection with a disposition of the Collateral by laws affecting the
        offering and sale of securities generally, or filings for perfection on
        proceeds).

       

      6.6  The
        pledge of the Collateral pursuant to this Agreement, and the making of the
        loans
        in accordance with the terms of the Promissory Note, does not violate
        Regulations T, U, or X of the Board of Governors of the Federal Reserve
        System.

       

      6.7  Pledgor
        has made its own arrangements for keeping informed of changes or potential
        changes affecting the Collateral and Pledgor agrees that it shall have the
        responsibility or liability for informing Lender of any such changes or
        potential changes or for taking any action or omitting to take any action
        with
        respect thereto.

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

       

      7.  Revocation
        of Trust.
        N/A.

       

      8.  Reporting
        Requirements.
        N/A.

       

      9.  Events
        of Default.
        The
        occurrence and continuation of any Event of Default under, and as defined
        in,
        the Promissory Note, this Agreement and accompanying documents shall constitute
        an event of default ("Event of Default").

       

      10.  Remedies
        Upon Default.
        Upon
        the occurrence of an Event of Default and during the continuance thereof,
        Lender
        shall have, in addition to any other rights given by law or in this Agreement,
        in the Promissory Note, or in any other agreement between Borrowers and Lender,
        all of the rights and remedies with respect to the Collateral of a secured
        party
        under the Code, and also shall have, without limitation, the following rights,
        which Borrowers and Pledgor hereby agree to be commercially
        reasonable:

       

      10.1  Transfer,
        sell, or dispose of all or any part of the Collateral.

       

      10.2  All
        rights of a Secured Party as provided for under Article 9 of the Code.
        

       

      10.3  Expenses
        payable by Borrowers in connection with any disposition under
        Section
        12
        shall
        include, but shall not be limited to, all costs including
        attorneys’ fees, court cost, collection cost and other reasonable
        and necessary costs. 

       

      11.  General
        Provisions.

       

      11.1  Cumulative
        Remedies; No Prior Recourse to Collateral.
        The
        enumeration herein of Lender’s rights and remedies is not intended to be
        exclusive, and such rights and remedies are in addition to and not by way
        of
        limitation of any other rights or remedies that Lender may have under the
        Promissory Note, the Guaranty Documents, the Code, or other applicable law.
        Lender shall have the right, in its sole discretion, to determine which rights
        and remedies are to be exercised and in which order. The exercise of one
        right
        or remedy shall not preclude the exercise of any others, all of which shall
        be
        cumulative.

       

      11.2  No
        Implied Waivers.
        No act,
        failure, or delay by Lender shall constitute a waiver of any of its or the
        Lender’s rights and remedies. No single or partial waiver by Lender of any
        provision of this Agreement or any other Loan Document or Guaranty Document,
        or
        of a breach or default hereunder or thereunder, or of any right or remedy
        which
        Lender may have, shall operate as a waiver of any other provision, breach,
        default, right, or remedy or of the same provision, breach, default, right,
        or
        remedy on a future occasion. No
        waiver by Lender shall affect its rights to require strict performance of
        this
        Agreement.

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

       

      11.3  Notices.
        All
        notices or demands by any party hereto to the other party and relating to
        this
        Agreement shall be sent in accordance with the terms of this Agreement and
        accompanying Loan Documents.

       

      12.  Successors
        and Assigns.
        This
        Agreement shall bind and inure to the benefit of the respective successors
        and
        assigns of the parties hereto; provided,
        however,
        that
        Borrowers may not assign this Agreement nor delegate any of its duties hereunder
        without Lender’s prior written consent and any prohibited assignment shall be
        absolutely void. Lender may assign this Agreement and its rights and duties
        hereunder and no consent or approval by Borrowers is required in connection
        with
        any such assignment.

       

      12.1  Section
        Headings.
        Headings and numbers have been set forth herein for convenience only. Unless
        the
        contrary is compelled by the context, everything contained in each section
        applies equally to this entire Agreement.

       

      12.2  Amendments
        in Writing.
        This
        Agreement cannot be changed or terminated orally, but only by a writing signed
        by each party hereto. All prior agreements, understandings, representations,
        warranties, and negotiations, if any, are merged into this
        Agreement.

       

      12.3  Counterparts;
        facsimile Execution.
        This
        Agreement may be executed in any number of counterparts and by different
        parties
        on separate counterparts, each of which, when executed and delivered, shall
        be
        deemed to be an original, and all of which, when taken together, shall
        constitute but one and the same Agreement. Delivery of an executed counterpart
        of this Agreement by facsimile shall be equally as effective as delivery
        of a
        manually executed counterpart of this Agreement. Any party delivering an
        executed counterpart of this Agreement by facsimile also shall deliver a
        manually executed counterpart of this Agreement but the failure to deliver
        a
        manually executed counterpart shall not affect the validity, enforceability,
        and
        binding effect of this Agreement.

       

      12.4  Termination
        By Lender.
        After
        termination of the Promissory Note and when Lender or its assigns have received
        payment and performance, in full, of the non-contingent Secured Obligations,
        Lender shall execute and deliver to Borrowers a termination of all of the
        security interests granted by Borrowers hereunder.

       

      12.5  Governing
        Law; Severability of Provisions.
        This
        Agreement shall be deemed to have been made in the State of New York and
        the
        validity, enforceability, construction, interpretation and enforcement of
        this
        Agreement and the rights of the parties hereto shall be determined under,
        governed by and construed in accordance with the laws of the State of New
        York,
        without regard to the principles of conflicts of law. If any provision of
        this
        Agreement or its exhibits shall be determined to be invalid, void or illegal,
        such provision shall be construed and amended in a manner which would permit
        its
        enforcement, but in no event shall such provision affect, impair or invalidate
        any other provision hereof.

       

      12.6  JURISDICTION
        AND VENUE; WAIVER OF JURY TRIAL.
        The
        parties hereto agree that all actions or proceedings arising in connection
        with
        this Agreement shall be tried and litigated only in the state or federal
        courts
        located in New York County, State of New York; provided,
        however,
        that
        nothing in this Agreement or the Guaranty Documents shall be deemed or operate
        to preclude Lender from bringing suit or taking other legal action in any
        other
        jurisdiction to protect or realize on the Collateral or any other security
        for
        the Secured Obligations, or to enforce a judgment or other court order.

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

       

      12.7  Resolution
        of Conflicts.
        In the
        event that any express provision or term of this Agreement conflicts with
        the
        express provisions and terms of the Promissory Note, the provision or term
        in
        the Promissory Note shall control.

       

      IN
        WITNESS WHEREOF,
        the
        parties hereto have executed and delivered this Agreement as of the day and
        year
        first written above.

       

      

        
          	 	 	
                  “PLEDGOR”

                
	 	 	 
	 	 	
                  TSI
                    Holding Co., LLC a Georgia limited liability and

                  Airship
                    Leasing Co., LLC, an Oklahoma limited liability

                  company
                    

                
	 	 	 
	 	By:	
                   

                
	
                   

                	 	
                  William
                    C. Robinson, President of Cyber Defense Systems,

                  Inc.,
                    Manager of TSI Holding Co., LLC and

                  Airship
                    Leasing Co., LLC

                

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Exhibit
        “A”

       

      All
        of
        Airship Leasing Co., LLC’s rights, title and interest in and that certain
        airship known as N681TS, and that certain airship (SA-60-A Spherical Airship)
        currently under construction. 

       

      All
        of
        Airship Leasing Co., LLC’s rights, title and interests in and to all account
        receivables, contract rights, lease rights, contract and lease payments,
        general
        intangibles, payment intangibles, licenses, license right, intellectual
        property, equipment, inventory, tools, work in process, furniture, fixtures,
        insurance proceeds, and all substitutions, replacements and modifications
        thereof.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]