Document:

ASSET
      PURCHASE AGREEMENT 

     

    THIS
      ASSET PURCHASE AGREEMENT,
      dated
      as of the 14th day of July, 2006 (the “Agreement”),
      is
      entered into by and among Tactical Air Defense Services, Inc. (“Parent”),
      Genesis Aviation Acquisition Inc., Resource Financial Aviation Holdings Inc.,
      and OneSource Aviation Acquisition Inc. each a Nevada corporation and wholly
      owned subsidiary of Parent (each a “Subsidiary”,
      the
      Subsidiaries and Parent are each sometimes referred to herein as a “Purchaser”)
      as
      Purchasers and AeroGroup Incorporated, a Utah corporation (“AeroGroup”)
      and
      its wholly owned subsidiaries, Genesis Acquisition, Inc., Resource Financial
      Holdings Acquisition, Inc., and OneSource Acquisition, Inc., each a Delaware
      corporation, as sellers (each individually a “Seller
      Subsidiary”, the
      Seller Subsidiaries and AeroGroup each being sometimes referred to herein as
      a
“Seller”).

     

    RECITALS

     

    A. The
      Sellers own certain military training aircraft, flight simulators, intellectual
      property and other assets intended for use in civilian training of military
      pilots and providing certain kinds of military aviation support and research
      (the “Business”).
      

     

    B. The
      Sellers desire to sell to the Purchasers, and the Purchasers desire to purchase
      from the Sellers, certain assets relating to the Business, as further delineated
      on the schedules hereto(the “Purchased
      Assets”),
      on
      the terms and conditions hereinafter set forth.

     

    C. The
      Purchaser Parent has agreed to assume certain liabilities of Sellers associated
      with the Business, which liabilities are specified in Section 1(d)
      below;

     

    NOW,
      THEREFORE,
      the
      parties hereto, intending to be legally bound hereby, in consideration of the
      foregoing recitals and the mutual promises, covenants and representations herein
      contained, hereby agree as follows:

     

    1.  Purchase
      and Sale of Assets.

     

    (a)  Purchased
      Assets. Upon
      the
      terms and subject to the conditions set forth herein, at the Closing (as defined
      below), the Sellers shall sell, assign, transfer, convey and deliver to Parent,
      and Parent shall acquire from the Sellers (or cause the appropriate Subsidiary
      to acquire), all right, title and interest in and to the following assets and
      properties of Sellers, which assets shall be allocated among the Purchasers
      as
      indicated on the schedules attached hereto: 

     

    (i)  Contracts.
      All
      rights and interests in, to and under the agreements and contracts relating
      to
      the Business which are enumerated and set forth in Schedule
      (a)(i)
      (the
“Contracts”);
      provided,
      however,
      that
      Purchasers shall not be obligated to assume or perform any obligation or
      liability of Sellers pursuant to any contract or agreement except in accordance
      with Section 1(d) below. 

     

    (ii)  Intellectual
      Property.
      The
      term “Intellectual
      Property”
shall
      mean all of Sellers’ intellectual property rights that are owned by or licensed
      to Sellers throughout the world, including, without limitation, all patents
      and
      applications therefore, all continuations as partial/divisional continuations
      thereon, know-how, unpatented inventions, plans, procedures, developments,
      trade
      secrets, formulas, marks, business and marketing plans, including, all copyright
      registrations, all other copyrights (registered and unregistered) and copyright
      applications, trademarks and trademark applications, photographs, artwork,
      illustrations, diagrams, service marks and applications therefore, all other
      intellectual property rights as set forth on Schedule
      1(a)(ii),
      all
      names, trade names and applications therefore, and all names, fictitious names,
      logos, and slogans used by Sellers, the name(s) and names used by Sellers,
      including, without limitation, the Intellectual Property set forth on
Schedule
      1(a)(ii),
      hereto
      and any other intellectual property owned or transferable by Seller, in each
      case, wherever in the world that said rights or Intellectual Property may exist.
      whether such Intellectual Property rights are registered or not, and whether
      or
      not such Intellectual Property rights exist in common law, contract or by
      statute. Notwithstanding the forgoing, AeroGroup may continue, on a
      non-exclusive basis, to use the name “AeroGroup” other then in connection with
      the Business or with anything competitive with it.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii)  Licenses,
      Permits, and Approvals.
      All of
      Sellers’ worldwide licenses, permits, approvals, and authorizations of
      whatsoever kind and type, governmental or private, rights and licenses, issued,
      applied for, or pending, used in the conduct of or relating to the Business
      or
      in connection with any of Seller’s Intellectual Property, (the "Licenses
      and Permits").

     

    (iv)  Books
      and Records.
      All of
      Seller's books and records with respect to the Purchased Assets and Business
      including, without limitation, operating handbooks, training manuals, drawings,
      flowcharts, charts, research, data, illustrations, teaching aids, manuals,
      and
      other technical papers (provided, however, that access to such records shall
      be
      provided to Buyer upon written request).

     

    (v)  Confidential
      Information.
      All
      Computer programs and software developments, improvements, processes,
      techniques, methods, trade secrets and confidential information of any nature
      whatsoever pertaining to the Business or to the assets or properties of Sellers
      to be transferred pursuant to this Agreement, including, without limitation,
      all
      software and computer programs or data used in any aircraft, avionics, simulator
      or simulation software for whatever purpose. 

     

    (vi)  Rights.
      All
      rights (but not obligations) of Sellers under any agreement, purchase agreement,
      bill of sale, appraisal, or instrument used in connection with Sellers’
acquisition, financing, leasing or use of any of the Purchased Assets and any
      and all express or implied warranties from its suppliers, manufacturers, parts
      suppliers (OEM or otherwise) or of any person performing maintenance,
      renovations or modifications on any Purchased Asset. 

     

    (vii)  Furnishings
      and Equipment.
      All
      equipment, furniture, fixtures, spare parts, furnishings, vehicles, office
      equipment, telephones, telephone numbers, and all other tangible and intangible
      personal property, wherever located, owned by Seller and used or intended for
      use by it in connection with the Business as set forth on Schedule
      1(a)(ix).
      

     

    
      
        
        

      

      
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    (viii)  Aircraft.
      All of
      the aircraft set forth on Schedule
      1(a)(x)
      and all
      related parts, avionics, manuals, flight logs, maintenance logs, engine logs,
      avionics or other logs or records, permits, rights to import, export or operate,
      airworthiness or similar certificates, registrations, radio registrations or
      operator permits, operating handbooks, pilot operating handbooks or manuals
      and
      all rights and accessories relating to any of the foregoing, or any waivers
      granted by any government agency or other person from the requirements to obtain
      or maintain any of the forgoing. 

     

    (ix)  Flight
      Simulators.
      All of
      the flight training simulators and apparatus set forth on Schedule
      1(a)(xi)
      and all
      related parts or spare parts, computers, processors, hardware, software,
      warranties, outlines, controllers, teaching aids, licenses, permits and
      accessories, relating thereto.

     

    (x)  Insurance
      Policies.
      All
      insurance policies and proceeds thereof, including without limitation, those
      policies insuring the Business or any of its affiliates, or any of the Purchased
      Assets against loss, damage, fire, theft, or any other damages or liabilities
      caused by the Sellers, their agents or affiliates, and any proceeds of such
      policies whether the claims arise prior to or after the date of Closing.

     

    (xi)  Leases.
      All
      leases or subleases as set forth on Schedule
      1(a)(xiii) (the
      “Leases”).

     

    (b)  Excluded
      Assets.
      Sellers
      shall not sell, nor shall Purchasers purchase or have any right in, any assets
      other than the Purchased Assets specifically delineated in Section 1(a) above
      and in the related Schedules and, other than as specifically set forth in
      Section 1(d) and Section 12 below, Purchasers shall not, and shall not be
      required to, assume or be obligated to pay, discharge or perform, any debts,
      liabilities, adverse claims or obligations of any kind or nature whatsoever
      of
      the Sellers, whether in connection with the Purchased Assets or otherwise,
      and
      whether arising before or after the consummation of the transactions
      contemplated herein, or bear any cost or charge with respect thereto, other
      than
      as provided in writing.

     

    (c)  Sale
      Free and Clear of all Claims, Liens and Encumbrances.
       The
      Purchased Assets shall be sold, transferred, conveyed and assigned to the
      Purchasers on the Closing Date, free and clear of all claims, liens, security
      interests, and encumbrances, other than (i) with respect to certain of the
      assumed liabilities set forth in Section 1(d) below, and (ii) other encumbrances
      and restrictions on ownership, operation or transferability of military
      apparatus as more fully set forth in Section 4(e) below.

     

    (d)  Assumed
      Liabilities.At
      the
      Closing, and as part of the consideration comprising the Purchase Price, the
      Parent shall assume and thereafter pay and satisfy (or cause to be satisfied)
      as
      they become due (and relieve and discharge Sellers from any obligations to
      pay
      or satisfy), only those obligations and indebtedness set forth as follows (the
      “Assumed
      Liabilities”):
      

     

    (i)  Cambar
      Loan.
      The
      purchase money loan owed to Cambar Associates, Inc. in the initial principal
      amount of $2,200,000 and all unpaid interest thereon (the “Cambar
      Note”),
      becoming payable on December 30, 2008, which Cambar Note shall be convertible
      subject to its terms at $.50 per share of the Parent’s common stock, par value
      $.001 per share (the “Common
      Stock”).
      

     

    
      
        
        

      

      
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    (ii)  Secured
      Daniels Debt.
      The
      convertible debt in the initial principal amount of $1,200,000 (the
“Secured
      Daniels Note”)
      owed
      to Mark T. Daniels (“Daniels”),
      which
      shall be secured by a first priority lien on the assets of the Purchasers and
      becoming convertible into Common Stock at a conversion price of $.50 of
      principal and interest converted for each share of Common Stock. 

     

    (iii)  Investor
      Debt.
      The
      various unsecured, convertible promissory notes issued to investors (the
“Investors”)
      listed
      on Schedule
      1(d)(iii)
      along
      with all outstanding interest thereon (the “Investor
      Notes”),
      which
      Investor Notes shall each automatically be deemed convertible loans of the
      Parent in accordance with their terms and in the principal amounts as set forth
      on Schedule
      1(d)(iii)
      which
      Investor Notes shall become convertible into Common Stock of Parent at the
      rates
      and conversion prices set forth on Schedule
      1(d)(iii).

     

    (iv)  Investor
      Warrants.
      The
      various warrants issued to the Investors and other persons listed on
Schedule
      1(d)(iv)
      (the
“Investor
      Warrants”),
      which
      Investor Warrants shall automatically be deemed warrants to purchase such number
      of shares of Common Stock of the Parent, and at such exercise prices as set
      forth on Schedule
      1(d)(iv).
      

     

    (v)  Wage
      Indebtedness.
      The
      indebtedness to former consultants, employees or independent contractors
      resulting from unpaid wages and fees, owed to the persons set forth on
Schedule
      1(d)(v)
      (the “Employee Debt”) in
      such
      amounts and containing such other provisions for interest and conversion as
      set
      forth opposite their names on Schedule
      1(d)(v). 

     

    (vi)  Contracts.
      The
      rights, obligations and liabilities of the Sellers relating to the Contracts.
      

     

    (vii)  Leases.
      The
      obligations and liabilities of AeroGroup relating to the Leases.

     

    2.  Purchase
      Price and Payment.

     

    (a)  Purchase
      Price.
      In
      consideration for the Purchased Assets and the other covenants, warranties
      and
      representations made herein, the Parent shall collectively pay the following
      consideration at the Closing (the "Purchase
      Price"):

     

    (i)  the
      Parent shall issue 14,989,800 restricted shares Common Stock to AeroGroup.
      

     

    (ii)  the
      Parent shall assume the Assumed Liabilities. 

     

    (b)  Taxes.
      Following the Closing, the Purchasers will collectively prepare (and the Sellers
      may review) IRS Form 8594, and any other notice or filing required pursuant
      to
      Section 1060 of the Internal Revenue Code of 1986, as amended. The parties
      hereto agree to execute and file the IRS Form 8594 prepared by the Purchasers
      (as reviewed and reasonably approved by the Sellers) and such other forms,
      notices and filings as required by applicable laws. The parties have agreed
      to
      allocate the Purchase Price among the Purchased Assets at or before Closing
      in a
      fashion that causes the least tax liabilities. 

     

    
      
        
        

      

      
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    3.  Closing.

     

    The
      closing of the transactions contemplated herein (the “Closing”)
      shall
      be held at the offices of Hodgson Russ LLP, 60 East 42nd Street, 37th Floor,
      New
      York, New York 10165, at 10:00 a.m. (local time) on the earlier of the fifth
      business day after the satisfaction or waiver of the conditions set forth in
      Sections 7 and 8 hereof, or on such other date as may be agreed upon by the
      parties (the date on which the Closing actually takes place shall be referred
      to
      as the “Closing
      Date”);
      provided, that if the Closing shall not have occurred within 75 days after
      the
      date that this Agreement is first entered into as indicated above (the
“Termination
      Date”),
      either party shall be entitled to terminate this Agreement without any liability
      whatsoever to any party. However, in the event a party shall have caused a
      delay
      in closing the transaction contemplated hereby by its failure to perform any
      covenant hereunder, such party shall not be entitled to terminate this Agreement
      as provided herein until the expiration of a period following such date
      corresponding to the period of the delay so caused. The Closing shall be deemed
      effective as of the opening of business on the Closing Date. The Termination
      Date may only be extended by consent of AeroGroup and Parent. 

     

    4.  Representations
      and Warranties of Sellers.
      

     

    As
      an
      inducement to Purchasers to enter into this Agreement and to consummate the
      transactions contemplated hereby, each Seller represents and warrants as of
      the
      date hereof and at the Closing Date as follows:

     

    (a)  Seller
      Subsidiary is a corporation duly organized, validly existing and in good
      standing under the laws of the state of Delaware. AeroGroup is a corporation
      duly organized, validly existing and in good standing under the laws of the
      state of Utah. Seller has the power and the authority and all licenses and
      permits required by governmental authorities to own and operate its assets
      and
      carry on its business as now being conducted. AeroGroup does not have any
      subsidiaries other then Subsidiary Sellers and Subsidiary Sellers do not own
      beneficially or of record any equity interest in any corporation, company,
      partnership or other business organization or entity. Sellers do not have any
      indebtedness or liabilities owed to any person other then the Assumed
      Liabilities. 

     

    (b)  Seller
      has the requisite power and authority to execute and perform this Agreement
      and
      all other agreements, documents and instruments to be entered into in connection
      with the transactions contemplated hereby.

     

    (c)  AeroGroup
      is the sole stockholders of Subsidiary Sellers. The execution, delivery and
      performance of this Agreement and all other agreements to be entered into in
      connection with the transactions contemplated hereby have been duly authorized
      by the board of directors of Seller and by AeroGroup as the sole stockholder
      of
      the Subsidiary Sellers and do not violate or conflict with any provisions of
      the
      Certificate of Incorporation or Bylaws of any Seller or any agreement,
      instrument, law, order or regulation to which any Seller is a party or by which
      Seller is bound. No consent, approval or authorization of, or filing with or
      notification to, any lender (other then certain creditors with respect to the
      Assumed Liabilities), security holder, governmental agency or other person
      or
      entity is required by Seller or in connection with the execution, delivery
      and
      performance by the Seller of this Agreement and the consummation of the
      transactions contemplated hereby.

     

    
      
        
        

      

      
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    (d)  This
      Agreement, and all other instruments delivered by Seller in connection herewith
      or to be delivered by Seller at Closing, have been duly executed and delivered
      by the Seller and are legal, valid and binding obligations of Seller,
      enforceable in accordance with their respective terms.

     

    (e)  The
      Seller is the owner of and has good, valid and marketable title to the Purchased
      Assets which are indicated as being owned and transferred herein by such Seller
      on schedules hereto, free and clear of all liens other then liens relating
      to
      the Secured Daniels Note. Notwithstanding the foregoing, the parties understand
      that the assumption of the contracts, and the ownership, importation,
      exportation and operation of certain of the Purchased Assets requires ATF,
      CCR
      and ICAT permits and licenses (as well as permits from various agencies of
      foreign governments) which are the responsibilities of the respective parties
      herein. 

     

    (f)  Seller
      does not have any knowledge of any action, suit, litigation or proceeding
      pending or threatened against it or otherwise or relating to the Purchased
      Assets or Business, nor does Seller know of any basis for any such action,
      or of
      any governmental investigation relating to the Purchased Assets or the
      Business.

     

    (g)  Seller
      does not have knowledge of any order, writ, injunction or decree that has been
      issued by, or requested of, any court or governmental agency which is against,
      or binding on Seller which may affect, limit or control the Purchased Assets
      or
      Purchasers’ use thereof.

     

    (h)  Seller
      has obtained all required approvals or authorizations of this Agreement and
      any
      other agreements to be entered into in connection with the transactions
      contemplated hereby which are required by law or otherwise in order to make
      this
      Agreement or any other agreements entered into in connection with the
      transactions contemplated hereby binding upon Seller (subject to the requisite
      filings with the Federal Aviation Administration and similar foreign aviation
      authorities which are necessary in order to effect transfer of title, which
      actions and filings have been initiated at or prior to Closing).

     

    (i)  There
      are
      no liens for any federal, state, county or local franchise, income, excise,
      property, business, sales, commercial rent, employment or other taxes upon
      the
      Purchased Assets. Seller has timely filed all federal, state, county and local
      franchise, income, excise, property, business, sales, commercial rent and
      employment and other tax returns which are required to be filed through the
      Closing Date, and has paid, or will pay, all taxes which are due and payable
      on
      or before the Closing Date. 

     

    (j)  Seller
      has, in all material respects, complied and is in compliance with all laws,
      orders and regulations of any governmental authority applicable to Seller,
      its
      Business, assets or property or its operations, including, without limitation,
      laws relating to zoning, building codes, antitrust, occupational safety and
      health, environmental protection and conservation, water or air pollution,
      toxic
      and hazardous waste and substances control, consumer product safety, product
      liability, hiring, wages, hours, employee benefit plans and programs, collective
      bargaining and withholding and social security taxes. Notwithstanding the
      foregoing, AeroGroup has not complied with its reporting obligations under
      the
      Securities & Exchange Act of 1934, as amended (the “Exchange
      Act”).

     

    
      
        
        

      

      
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    (k)  Seller
      does not know of any facts or circumstances not disclosed to Purchasers which
      indicate that the Purchased Assets may be adversely affected or which otherwise
      should be disclosed to Purchaser in order to make any of the representations
      or
      warranties made herein on the part of the Seller not misleading. No
      representation or warranty by Seller contained in this Agreement, and no
      statement contained in any schedule, exhibit, certificate or other instrument
      furnished to Purchasers under or in connection with this Agreement, contains
      any
      untrue statement of any material fact, or omits to state any material fact
      necessary in order to make the statements contained herein or therein not
      misleading.

     

    (l)  The
      representations and warranties of Seller contained in this Agreement will be
      true and correct on and as of the Closing Date with the same force and effect
      as
      though such representations and warranties had been made on and as of the
      Closing Date.

     

    (m)  With
      respect to the Common Stock being issued to AeroGroup or otherwise underlying
      any of the Assumed Liabilities, said shares are being acquired for investment
      purposes only and not with a view towards resale or distribution. Sellers have
      had an opportunity to ask questions of Purchasers and have done so. The Common
      Stock are restricted securities that have not been registered for re-sale
      pursuant to the Securities Act of 1933, as amended (the “Act”).
      Sellers understand that the Common Stock may not be sold, transferred, assigned
      or hypothecated or otherwise distributed to its shareholders as a dividend
      or
      otherwise, absent the effectiveness of a registration statement covering the
      sale of such Common Stock or an exemption from the registration requirements
      the
      Act. 

     

    5.  Representations
      and Warranties of Purchaser.
      

     

    As
      an
      inducement to Sellers to enter into this Agreement and to consummate the
      transactions contemplated herein, each Purchaser represents and warrants as
      follows:

     

    (a)  Purchaser
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of its formation indicated above. Purchaser has the power and authority
      and
      all licenses and permits required by governmental authorities to own and operate
      its properties and carry on its business as now being conducted.

     

    (b)  Purchaser
      has the corporate power and authority to execute and perform this Agreement
      and
      all other agreements to be entered into in connection with the transactions
      contemplated hereby.

     

    (c)  The
      execution, delivery and performance of this Agreement and all other agreements
      to be entered into in connection therewith, the issuance of any shares or Common
      Stock or agreement to issue any shares of common stock underlying the Assumed
      Liabilities have all been duly authorized by the Board of Directors of the
      Purchaser and by all necessary corporate action, and do not violate or conflict
      with any provisions of the certificate of incorporation or bylaws of the
      Purchaser or with any agreement, instrument, law or regulation to which the
      Purchaser is a party or by which Purchaser is bound.

     

    
      
        
        

      

      
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    (d)  No
      approval or authorization of this Agreement or any other agreement to be entered
      into in connection with the transactions contemplated by this Agreement is
      required by law or otherwise in order to make this Agreement or any other
      agreements entered into in connection herewith binding upon Purchaser other
      than
      as already obtained. Upon the execution and delivery of this Agreement and
      any
      other agreement in connection therewith, this Agreement, and such agreements
      will constitute legal, valid and binding obligations of Purchaser, enforceable
      in accordance with their respective terms.

     

    (e)  Purchaser
      shall accept the Purchased Assets "as is" without warranty as to their
      condition, transferability and operation.

     

    (f) The
      shares of Common Stock to be issued to AeroGroup in accordance with
      Section(a)(i) above are, and will at the time of issuance be, duly authorized,
      validly issued and fully paid and non-assessable in all respects, free from
      any
      pre-emptive or other rights, and the issuance thereof will not violate any
      agreement or trigger the anti dilution, right of first refusal, co-sale or
      similar provisions of any agreement to which the Purchasers are
      bound.

    

    (g) Parent
      has reserved sufficient number of shares of Common Stock for issuance upon
      conversion or exercise of the Assumed Liabilities enumerated in Section 1(d),
      above (including the schedules thereto). Upon issuance in accordance with the
      terms of the relevant Assumed Liability to which such shares of Common Stock
      relate, such shares will be duly authorized, validly issued, fully paid and
      non-assessable in all respects, free from any pre-emptive or other rights (other
      than as entered into after the date of Closing), and the issuance thereof will
      not violate any agreement or trigger the anti dilution, right of first refusal,
      co-sale or similar provisions of any agreement to which the Purchasers are
      bound.

    

    (h) All
      of
      the reports filed by the Parent with the Securities & Exchange Commission
      pursuant to the Securities & Exchange Act of 1934, as amended, and rules
      thereunder, along with all financial statements comply with GAAP, and all
      exhibits to such annual, quarterly and other reports as available on the SEC’s
      EDGAR database website, are true, correct and complete in all material respects,
      and said reports do not fail disclose or omit any material fact, agreement
      or
      matter relating to the Corporation. 

    

    (i) The
      Parent has not entered into any other agreement with any party for the providing
      of services or relating to the issuance of any shares other then as disclosed
      in
      the reports set forth in the preceding paragraph or
      as
      otherwise already disclosed to sellers. 

    

    6.  Covenants
      Prior to Closing.
      

     

    During
      the period from the date hereof through the Closing, the Sellers covenant and
      agree with Purchasers that:

     

    
      
        
        

      

      
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    (a)  The
      Sellers will give to Purchaser's officers, employees, representatives, agents,
      counsel and accountants, full access at times mutually agreeable to all of
      its
      premises, properties, operations and books and records, and will cause the
      Sellers’ officers, employees, representatives, agents, counsel and accountants
      to furnish to Purchasers’ officers, employees, representatives, agents, counsel
      and accountants such financial and operating data and other information with
      respect to the business and properties of the Sellers as such officers,
      employees, representatives, agents, counsel and accountants shall
      request.

     

    (b)  The
      Sellers will use their best efforts to preserve intact its respective business
      organizations, keep available the services of Sellers’ present officers and
      employees and preserve Sellers’ present relationships with persons with whom it
      has significant business relations. 

     

    (c)  During
      the period from the date hereof through the Closing, except with the prior
      written consent of Purchasers, the Sellers shall conduct their business in
      the
      ordinary course.

     

    (d)  During
      the period from the date hereof through the Closing, the Sellers will
      not:

     

    (i)  incur
      any
      indebtedness or issue or commit to issue any of their securities,

     

    (ii)  grant
      or
      commit to grant any options, or other rights to subscribe for or purchase or
      otherwise acquire any shares of its membership interests or issue or commit
      to
      issue any securities convertible into or exchangeable for its membership
      interests,

     

    (iii)  declare,
      set aside or pay any dividend or distribution with respect to the Sellers’
securities,

     

    (iv)  directly
      or indirectly redeem, purchase or otherwise acquire or commit to acquire any
      securities of the Sellers or any option or other right to purchase or otherwise
      acquire any such membership interest,

     

    (v)  directly
      or indirectly agree or commit to terminate or reduce any bank line of credit
      or
      the availability of any funds under any other loan or financing
      agreement,

     

    (vi)  effect
      a
      split or reclassification of any securities or effect a recapitalization of
      any
      kind, 

     

    (vii)  amend
      the
      certificate of incorporation, by laws or other governing instruments of the
      Seller, unless required to do so to make Seller’s representations or warranties
      herein not untrue,

     

    (viii)  acquire
      or agree to acquire by merging or consolidating with, or by purchasing a
      substantial portion of the assets or stock of, or in any other manner, any
      business of any corporation, partnership, association or other business
      organization or division thereof, or acquire or agree to acquire the beneficial
      ownership of any class of the outstanding capital stock or other equity interest
      of any such entity, or otherwise acquire or agree to acquire any assets which
      are material to the Sellers, 

     

    
      
        
        

      

      
        -
          9
          -

        
          

        

      

      
        
        

      

    

     

    (ix)  sell,
      lease or otherwise dispose of, or grant any options with respect to, any of
      its
      assets which are material, individually or in the aggregate, to
      Seller,

     

    (x)  adopt
      or
      enter into any collective bargaining agreement or employee benefit
      plans,

     

    (xi)  pay
      any
      bonuses to, or incur any bonuses payable to, any of its officers or managing
      members, grant to any officer or managing members any increase in salaries,
      fees
      or other forms of compensation or in severance or termination pay, otherwise
      than as required by an agreement existing on the date hereof or enter into
      or
      amend any employment agreement with any officer or managing member,

     

    (xii)  take
      any
      action (including, without limitation, an action that might otherwise be
      permitted under this paragraph 6(d)) that would or might result in any of the
      representations and warranties of the Sellers in this Agreement becoming untrue
      or that would have been required to be set forth in any such representation
      or
      warranty or in the Schedules if such action had occurred prior to the date
      hereof,

     

    (xiii)  defer
      the
      payment of liabilities, or

     

    (xiv)  take
      any
      other action, or enter into any other transaction, not in the ordinary course
      of
      business and consistent with prior practices.

     

    (e)  The
      Sellers shall use its best efforts to obtain all consents and approvals of
      third
      parties which may be necessary or required for the consummation of this
      Agreement and the transactions contemplated hereby.

     

    (f)  The
      Sellers shall promptly (and in any event prior to the Closing) advise Purchasers
      orally, and in writing, of any change or event having, or which would have
      (insofar as can be reasonably foreseen), a material adverse effect on the
      business, properties, financial condition or results of operations of the
      Sellers or would constitute, or with the passage of time would constitute,
      a
      breach of any representation or warranty of the Sellers contained in this
      Agreement. Sellers agree that, with respect to their representations and
      warranties made in this Agreement, each of them will have a continuing
      obligation to supplement or amend the schedules hereto with respect to any
      matter hereafter arising or discovered which, if existing or known at the date
      of this Agreement, would have been required to be set forth or described in
      the
      schedules hereto; provided, however, that neither the supplementing or amending
      of any schedules by Sellers, nor the discovery of any matters by Purchasers
      in
      the course of their investigations, shall be deemed to cure any breach of any
      representation or warranty made in this Agreement or to have been disclosed
      as
      of the date of this Agreement.

     

    (g)  Pending
      the Closing Date, neither the Purchasers nor the Sellers shall take any action
      which is inconsistent with this Agreement. Additionally, Purchasers hereby
      covenant that they will not take any of the actions described in Section 6(a)
      through 6(h).

     

    
      
        
        

      

      
        -
          10
          -

        
          

        

      

      
        
        

      

    

     

    (h)  Sellers
      will not, and will each cause their respective managing members, officers,
      employees, agents and affiliates not to, directly or indirectly, solicit or
      initiate the submission of proposals from, or solicit, encourage, entertain
      or
      enter into any arrangement, agreement or understanding with, or engage in any
      discussions with, or furnish any information to, any person, other than
      Purchasers, or a representative thereof, with respect to the acquisition of
      all
      or any part of the Purchased Assets or Business (whether by merger, purchase
      of
      membership interests or otherwise).

     

    7.  Conditions
      to the Obligations of the Seller.
      

     

    The
      obligations of the Sellers hereunder are, at the option of the Sellers, subject
      to the following conditions:

     

    (a)  The
      representations and warranties of the Purchasers contained herein shall be
      true
      and correct on the date when made in all material respects and at and as of
      the
      Closing Date as if then made, and the Purchasers shall have performed and
      complied with all agreements, covenants and conditions required hereunder to
      be
      performed or complied with by it prior to or at the Closing.

     

    (b)  There
      shall not be any order, injunction or decree of any court having jurisdiction
      to
      restrain, enjoin, invalidate or otherwise prevent this Agreement and the
      consummation of the transactions contemplated hereby, and there shall not be
      any
      litigation or proceeding by any commission, agency or department of the federal
      or any foreign, state or local government to restrain, enjoin, invalidate or
      otherwise prevent this Agreement and the consummation of the transactions
      contemplated hereby. 

     

    (c)  All
      governmental approvals required for the consummation of this Agreement shall
      have been obtained (provided that filings reflecting the change of ownership
      of
      the aircraft and any Intellectual Property transfer filings that are required
      to
      be made shall be submitted at or about the time of the Closing
      Date).

     

    (d)  An
      Agreement of Assumption, substantially in the form as annexed hereto as
Exhibit
      7(d)
      (the
“Agreement
      of Assumption”)
      shall
      have been executed by Parent and each of the Investors, creditors and warrant
      holders described in Section 1(a) and the Schedules thereto.

     

    (e)  Daniels
      shall have received an executed security agreement from the Parent,
      substantially in the form as annexed hereto as Exhibit
      7(e)
      (the
“Security
      Agreement”)
      and
      from the Subsidiaries, substantially in the form as annexed hereto as Exhibit
      7(e)-I (the “Subsidiary
      Security Agreement”),
      granting a senior lien to Daniels on all of the assets of Purchasers, to secure
      the repayment of the Secured Daniels Note.

     

    (f)  Daniels
      shall have received an executed guaranty from the Subsidiary Purchasers with
      respect to the Secured Daniels Note substantially in the form as annexed hereto
      as Exhibit
      7(f)
      (the
“Guaranty”).

     

    (g)  Parent
      shall have obtained the requisite permits for ownership and operation of the
      Purchased Assets as more fully described in Section 4(e). Additionally,
Derick
      Sinclair, the Company’s existing sole Board member, shall, upon satisfaction of
      certain disclosure requirements that are required to be made pursuant to rules
      of the Exchange Act, appoint: Daniels to the Company’s Board of Directors and as
      Secretary and Treasurer; Lt. General Charles Searock as President; and Jeffrey
      Pear as Vice President (the “Interim
      Management”).
      Simultaneously, Mr. Sinclair shall resign from the Board. 

     

    
      
        
        

      

      
        -
          11
          -

        
          

        

      

      
        
        

      

    

     

    (h)  The
      Consolidated financial statements of the parties hereto for the years ended
      December 31 2004 and 2005, shall have been completed and the report of
      independent auditors with respect to such financial statements completed and
      submitted. 

     

    (i)  the
      deliveries of all Closing documents required to be delivered by Purchaser shall
      have been made. 

     

    8.  Conditions
      to the Obligations of the Purchaser.
      

     

    The
      obligations of the Purchasers hereunder are, at the option of Purchasers,
      subject to the following conditions:

     

    (a)  The
      representations and warranties of the Sellers contained herein shall be true
      and
      correct in all material respects on the date when made and at and as of the
      Closing Date as if then made and the Sellers shall have performed and complied
      with all agreements, covenants and conditions required hereunder to be performed
      or complied in all material respects with by them prior to or at the
      Closing.

     

    (b)  Sellers
      shall not have any notice of or reason to know of any order, injunction or
      decree of any court having jurisdiction to restrain, enjoin, invalidate or
      otherwise prevent this Agreement and the consummation of the transactions
      contemplated hereby, nor of any litigation or proceeding by any commission,
      agency or department of the federal or any foreign, state or local government
      to
      restrain, enjoin, invalidate or otherwise prevent this Agreement and the
      consummation of the transactions contemplated hereby.

     

    (c)  All
      governmental approvals required for the consummation of this Agreement and
      the
      other transactions contemplated hereby shall have been obtained and all consents
      and approvals of any other persons required for the consummation of this
      Agreement and the other transactions contemplated hereby, the withholding of
      which would have a material adverse effect on the financial condition or
      business of the Sellers, shall have been obtained, other than as set forth
      herein.

     

    (d)  Sellers
      shall have obtained and delivered to Purchasers copies of all consents,
      approvals, authorizations, waivers, permits, grants, franchise, licenses,
      exemptions or orders of any registration, certificate, qualification,
      declaration or filing with, or any notice to any person or entity, including,
      without limitation, any governmental authority.

     

    (e)  All
      governmental approvals required for the consummation of this Agreement shall
      have been obtained (provided that filings replacing change of ownership of
      the
      aircraft shall be submitted at or about the time of the Closing
      Date).

     

    
      
        
        

      

      
        -
          12
          -

        
          

        

      

      
        
        

      

    

     

    (f)  An
      Agreement of Assumption, shall have been executed by Parent and each of the
      creditors and warrant holders described in Section 1(a) and the schedules
      thereto.

     

    (g)  The
      Interim Management shall have been appointed, Derick Sinclair shall have
      resigned from all positions with the Purchasers and Parent and Subsidiaries
      shall have each obtained the requisite permits for ownership and operation
      of
      the Purchased Assets, as more fully set forth in Section 4(e) above.

     

    (h)  The
      Consolidated financial statements of the parties hereto for the years ended
      December 2004 and 2005, shall have been completed and the report of independent
      auditors with respect to such financial statements completed and submitted.

     

    (i)  Sellers
      shall execute and deliver any and all aircraft registration assignments or
      instruments of transfers as may be necessary to transfer clean and marketable
      title in the Purchased Assets to Purchasers (in the United States and elsewhere
      in the world), subject only to Secured Daniel’s Note.

     

    (j)  Each
      Seller shall execute and deliver a bill of sale with respect to the Purchased
      Assets transferred by them.

     

    (k)  AeroGroup
      shall execute and deliver the Patent Assignments substantially in the form
      as
      set forth on Exhibit
      8(l).

     

    (l)  AeroGroup
      shall execute and deliver the copyright or other assignments necessary to
      transfer any other Intellectual Property.

     

    (m)  The
      execution deliveries of all Closing documents required to be made by both the
      Sellers and by the holders of Assumed Liabilities shall have been made to all
      respective parties. 

     

    9.  Termination
      of the Agreement.

     

    This
      Agreement may be terminated at any time prior to the Closing:

     

    (a)  by
      unanimous consent of the Parent and AeroGroup;

     

    (b)  by
      AeroGroup if any of the conditions specified in Section 7 hereof has not been
      met in all material respects or waived by AeroGroup;

     

    (c)  by
      the
      Parent if any of the conditions specified in Section 8 hereof has not been
      met
      in all material respects or waived by Parent;

     

    (d)  by
      either
      the Parent or AeroGroup, if the Closing shall not have occurred as of the
      Termination Date. 

     

    (e)  In
      the
      event that all of the above referenced conditions are not satisfied prior to
      the
      Termination Date (as may be extended by the parties), the Interim Management
      shall resign from their respective positions and re-elect Mr. Sinclair as
      Director, and the transactions contemplated hereby shall be terminated by the
      parties without recourse. 

     

    
      
        
        

      

      
        -
          13
          -

        
          

        

      

      
        
        

      

    

     

    10.  Closing
      Documents.

     

    (a)  Sellers
      agree to deliver to Purchasers on the Closing Date appropriate assignments
      and
      bills of sale with respect to the Purchased Assets being sold hereunder,
      together with the documents required to be delivered by Sellers pursuant to
      Section 8 hereof. 

     

    (b)  Purchasers
      agree to deliver to Sellers on the Closing Date the documents required to be
      delivered by Purchasers pursuant to Section 7 hereof.

     

    (c)  Each
      party covenants that any conditions to Closing that are not satisfied by such
      party shall be satisfied at or immediately after discovery of non-compliance
      and
      shall not be deemed waived by the other party hereto. 

     

    11.  Costs.

     

    Each
      party covenants and agrees that it shall be responsible for and bear its
      respective costs and expenses in connection with, or arising out of, the
      negotiation or consummation of this Agreement and the transactions contemplated
      hereby. Sellers shall be responsible for any sales, use or transfer taxes
      applicable to the transactions provided for herein.

     

    12.  Indemnification.
      

     

    (a)  Indemnification
      by Sellers.
      Sellers
      agree to indemnify Purchasers against and hold them harmless from, any and
      all
      losses (other then loss from the mere depreciation in value of the Common Stock
      or other securities), liabilities, costs, damages, claims and expenses
      (including, without limitation, attorneys fees and expenses incurred by a
      Purchaser in any action or proceeding between Purchasers and Sellers or between
      a Purchaser and any third party or otherwise) ("Damages")
      which
      such Purchaser may sustain at any time by reason of (i) noncompliance with
      any
      applicable bulk sales or transfer law, (ii) any liability or contract of, or
      claim against, a Seller, whether contingent or absolute, direct or indirect,
      known or unknown, matured or unmatured (including but not limited to liabilities
      for taxes), (iii) any liability or claim arising in any way from any service
      rendered, or action taken by, or relating to the operations of, a Seller prior
      to the Closing Date, (iv) any liability or claim under any environmental laws
      relating to any event, action or failure to act which occurred prior to the
      Closing Date, or (v) the breach or inaccuracy of or failure to comply with,
      or
      the existence of any facts resulting in the inaccuracy of, any of the
      warranties, representations, conditions, covenants or agreements of a Seller
      contained in this Agreement or in any agreement or document delivered pursuant
      hereto or in connection herewith, or arising out of the consummation of the
      transactions contemplated hereby. 

     

    (b)  Indemnification
      by Purchaser.
      Purchasers agree to indemnify and hold Sellers harmless from and against any
      and
      all Damages which a Seller may sustain at any time by reason of (i) any
      liability or claim arising in any way from any service rendered, or action
      taken
      by, or relating to the operations of, a Purchaser after the Closing Date, (ii)
      any liability or claim under any environmental laws relating to any event,
      action or failure to act which occurs after the Closing Date, or (iii) the
      breach, failure to fully repay and satisfy, default in or failure to comply
      with
      the terms of, the Assumed Liabilities or any breach of any warranties,
      representations, conditions, covenants or agreements of a Purchaser contained
      in
      this Agreement, any Agreement of Assumption or in any other agreement,
      certificate or document delivered pursuant to or in connection with this
      Agreement or arising out of the Closing of the transactions contemplated
      hereby.

     

    
      
        
        

      

      
        -
          14
          -

        
          

        

      

      
        
        

      

    

     

    (c)  Procedures
      for Indemnification.
      In the
      event that any claim is asserted against any party hereto, or any party hereto
      is made a party defendant in any action or proceeding, and such claim, action
      or
      proceeding involves a matter which is the subject of this indemnification,
      then
      such party (an "Indemnified
      Party")
      shall
      give written notice to the other party hereto (the "Indemnifying
      Party")
      of
      such claim, action or proceeding, and such Indemnifying Party shall have the
      right to join in the defense of said claim, action or proceeding at such
      Indemnifying Party's own cost and expense and, if the Indemnifying Party agrees
      in writing to be bound by and to promptly pay the full amount of any final
      judgment from which no further appeal may be taken and if the Indemnified Party
      is reasonably assured of the Indemnifying Party's ability to satisfy such
      agreement, then at the option of the Indemnifying Party, such Indemnifying
      Party
      may take over the defense of such claim, action or proceeding, except that,
      in
      such case, the Indemnified Party shall have the right to join in the defense
      of
      said claim, action or proceeding at its own cost and expense; provided, however,
      that no such action or proceeding shall be settled or compromised without the
      prior written consent of the Indemnifying Party, which consent shall not be
      unreasonably withheld or delayed.

     

    13.  Miscellaneous
      Provisions.

     

    (a)  Notices. All
      notices, requests, demands or other communications which may be or are required
      or permitted to be served or given hereunder (in this Section collectively
      called “Notices”)
      shall
      be in writing and shall be hand delivered, sent by registered or certified
      mail,
      return receipt requested, postage prepaid, or by a nationally recognized
      overnight delivery service, or via facsimile, to the parties hereto at the
      address or facsimile number listed below (provided that, for a facsimile, a
      copy
      is also sent promptly by U.S. mail, certified mail or overnight delivery
      service):

     

    If
      to
      Purchasers, to: 

     

    Tactical
      Air Defense Services, Inc.

    1550
      Ostler Court

    North
      Vancouver, B.C.

    Canada
      V7E - 2P1

    Attention:
      Derick Sinclair

    Telephone:
      (604)924-8000

    
      
        
        

      

      
        -
          15
          -

        
          

        

      

      
        
        

      

    

    

    with
      a
      copy to:  

     

    Hodgson
      Russ LLP

    60
      E.
      42nd Street, 37th
      Floor

    New
      York,
      NY 10165

    Attention:
      Jeffrey A. Rinde, Esq. 

    Telephone:
      (212) 661-3535

    Facsimile:
      (212) 972-1677

    

    If
      to
      Sellers, to:

     

    AeroGroup
      Incorporated

    5501
      Airport Drive

    Denison,
      Texas 75020

    c/o
      Mark
      T. Daniels

    Telephone:
      (903) 786-5300

    Facsimile:
      (903) 786-5302

    

    with
      a
      copy to: 

     

    Hodgson
      Russ LLP

    60
      E.
      42nd Street, 37th
      Floor

    New
      York,
      NY 10165

    Attention:
      Jeffrey A. Rinde, Esq. 

    Telephone:
      (212) 661-3535

    Facsimile:
      (212) 972-1677

    

    Either
      party may, by Notice given as aforesaid, change its address for all subsequent
      Notices. Notices shall be deemed given on the date delivered.

     

    (b)  No
      Modification.
      This
      Agreement may not be modified, altered or rescinded, or any rights hereunder
      waived, except by written agreement signed by the parties hereto, or signed
      by
      the party charged with the waiver in the case of a waiver.

     

    (c)  Binding
      Agreement.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and assigns. There are no third party
      beneficiaries to this Agreement.

     

    (d)  Assignment.
      Neither
      this Agreement nor any of the rights, interests or obligations hereunder shall
      be assigned by any of the parties hereto without the prior written consent
      of
      the other parties, except that the Sellers or the Purchasers may, upon notice
      to
      the other party, assign its rights (but if so must also delegate its duties)
      to
      any of their affiliates or to any successor in interest; provided that no
      assignment shall relieve the assigning party of liability for its obligations
      hereunder.

     

    
      
        
        

      

      
        -
          16
          -

        
          

        

      

      
        
        

      

    

     

    (e)  Broker
      Fees; Expenses.
      Each
      party shall be responsible for any commissions, fees or other amounts payable
      to
      a broker, finder, agent or other person or entity engaged by such party which
      are due and payable as a result of this Agreement and/or the transactions
      contemplated hereby. Each party shall further be responsible for its own costs
      and expenses incurred in connection with this Agreement and the transactions
      contemplated hereby.

     

    (f)  Survival.
      Time is
      of the essence for all provisions hereof. All representations, warranties and
      covenants shall survive Closing hereunder.

     

    (g)  Further
      Assurances.
      At any
      time and from time to time after the Closing, upon reasonable request of the
      other, each party shall do, execute, acknowledge and deliver such further acts,
      assignments, transfers, conveyances and assurances as may be reasonably required
      for the more complete consummation of the transactions contemplated
      herein.

     

    (h)  Governing
      Law.
      This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of New York, without regard to conflicts of laws principles
      that would cause any other state’s laws to apply.

     

    (i)  Headings
      and Captions.
      The
      captions set forth in this Agreement are solely for the convenience of the
      parties hereto and shall not control or affect the meaning or construction
      of
      this Agreement.

     

    (j)  Severability.
      If any
      term or provision of this Agreement is found by a court of competent
      jurisdiction to be unenforceable, in whole or in part, the rest and remainder
      of
      such provision and this Agreement shall be and remain enforceable to the fullest
      extent permitted by law.

     

    (k)  Confidentiality;
      Publicity.
      Except
      as may be required by law, rule or regulation or as otherwise permitted or
      expressly contemplated herein, neither party nor its agents or representatives
      shall disclose to any third party the terms of, or negotiations relating to,
      this Agreement without the prior written consent of the other.

     

    (l)  Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which taken together shall constitute one and
      the
      same instrument. Confirmation of execution by electronic transmission of a
      facsimile signature page shall be binding upon any party so
      confirming.

     

    (m)  Entire
      Agreement.
      This
      Agreement, along with the Schedules and Exhibits hereto, sets forth all of
      the
      terms, agreements and representations among the parties hereto with respect
      to
      the subject matter hereof, and supersedes all prior and contemporaneous
      agreements and understandings.

    

    REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

     

    
      
        
        

      

      
        -
          17
          -

        
          

        

      

      
        
        

      

    

    

    COUNTERPART
      SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT, DATED AS OF JULY 14,
      2006

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto, intending to be bound hereby, have caused this Asset Purchase
      Agreement to be executed the day and year first above written.

     

    
      
        	 	
                SELLERS:

              
	 	 
	 	
                AEROGROUP
                  INCORPORATED

              
	 	 
	 	
                By:
                  /s/ Mark T. Daniels

              
	 	
                Name:
                  Mark T. Daniels

              
	 	
                Title:
                  President

              
	 	 
	 	
                GENESIS
                  ACQUISITION, INC.

              
	 	 
	 	
                
                  
                    By:
                      /s/ Mark T. Daniels

                  

                

              
	 	
                Name:
                  Mark T. Daniels

              
	 	
                Title:
                  President

              
	 	 
	 	
                RESOURCE
                  FINANCIAL HOLDINGS ACQUISITION, INC.

              
	 	 
	 	
                
                  
                    By:
                      /s/ Mark T. Daniels

                  

                

              
	 	
                Name:
                  Mark T. Daniels

              
	 	
                Title:
                  President

              
	 	 
	 	
                ONESOURCE
                  ACQUISITION, INC.

              
	 	 
	 	
                
                  
                    By:
                      /s/ Mark T. Daniels

                  

                

              
	 	
                Name:
                  Mark T. Daniels

              
	 	
                Title:
                  President

              

      

      
         

        
          
          

        

        
          -
            18
            -

          
            

          

        

        
          
          

        

      

COUNTERPART
      SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT, DATED AS OF JULY 14,
      2006.

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto, intending to be bound hereby, have caused this Asset Purchase
      Agreement to be executed the day and year first above written.

     

    
      
        	 	
                PURCHASERS:

              
	 	 
	 	
                TACTICAL
                  AIR DEFENSE SERVICES, INC. 

              
	 	 
	 	
                
                  By:
                    /s/ Derick Sinclair

                

              
	 	
                Name:
                  Derick Sinclair

              
	 	
                Title:
                  President

              
	 	 
	 	
                GENESIS
                  AVIATION ACQUISITION INC.

              
	 	 
	 	
                
                  
                    By:
                      /s/ Derick Sinclair

                  

                

              
	 	
                Name:
                  Derick Sinclair

              
	 	
                Title:
                  President

              
	 	 
	 	
                RESOURCE
                  FINANCIAL AVIATION HOLDINGS INC.

              
	 	 
	 	
                
                  
                    By:
                      /s/ Derick Sinclair

                  

                

              
	 	
                Name:
                  Derick Sinclair

              
	 	
                Title:
                  President

              
	 	 
	 	
                ONESOURCE
                  AVIATION ACQUISITION
                  INC. 

              
	 	 
	 	
                
                  
                    By:
                      /s/ Derick Sinclair

                  

                

              
	 	
                Name:
                  Derick Sinclair

              
	 	
                Title:
                  President

              

      

      
         

        
          
          

        

        
          -
            19
            -

          
            

          

        

        
          
          

        

      

LIST
      OF SCHEDULES AND EXHIBITS

    
      	
              Schedules

            	 	 
	 	 	 
	
              Schedule
                (a)

            	
               

            	
              Purchased
                Assets

            
	 	 	 
	 	
              Schedule
                (a)(i)

            	
              Contracts

            
	 	 	 
	 	
              Schedule
                1(a)(ii)

            	
              Patents
                and other Intellectual Property sold to Parent

            
	 	 	 
	 	
              Schedule
                1(a)(ix)

            	
              Furnishings,
                Equipment and Other Assets

            
	 	 	 
	 	
              Schedule
                1(a)(x)

            	
              Aircraft
                Assets owned by Genesis Acquisition, Inc.

            
	 	
               

            	
              Aircraft
                Assets owned by OneSource Acquisition, Inc.

            
	 	 	 
	 	
              Schedule
                1(a)(xi)

            	
              Flight
                Simulators - Assets owned by Resource Financial
                Holdings

            
	 	
               

            	
              Acquisition,
                Inc.

            
	 	 	 
	 	
              Schedule
                1(a)(xiii)

            	
              Leases

            
	 	 	 
	 	 	 
	
              Schedule
                1(d)

            	
               

            	
              Assumed
                Liabilities

            
	 	 	 
	 	
              Schedule
                1(d)(iii)

            	
              Investor
                Notes 

            
	 	 	 
	 	
              Schedule
                     1(d)(iv)

            	
              Investor
                Warrants

            
	 	 	 
	 	
              Schedule
                1(d)(v)

            	
              Employee
                Debt

            
	 	 	 
	
              Exiibits

            	 	 
	 	 	 
	 	
              Exhibit
                7(d)

            	
              Form
                of Agreement of Assumption

            
	 	 	 
	 	
              Exhibit
                7(e)

            	
              Form
                of Security Agreement Relating to Secured Daniels Note

            
	 	 	 
	 	
              Exhibit
                7(e)-I

            	
              Form
                of Subsidiary Security Agreement Relating to Secured Daniels
                Note

            
	 	 	 
	 	
              Exhibit
                7(f)

            	
              Form
                of Guaranty

            
	 	 	 
	 	
              Exhibit
                8(l)

            	
              Form
                of Patent Assignment

            

    

    
       

      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      SCHEDULE
        1(a)(i)

      

      Assumed
        Contracts

      

      1. Justification
        Review Document For Other Than Full and Open Competition and Justification
        and
        Approval for Other Than Full and Open Competition and related contract and
        procurement rights, as issued in favor of AeroGroup Incorporated, dated March
        7,
        2006, by U.S. Army RDECOM Acquisition Center, Aberdeen Division, relating
        to
        providing F-16 Aircraft, Certified Pilot and Aircrew Support and other services
        for Georgia Air National Guard. 

      

      2. Subcontract
        Agreement, dated as of August 15, 2003, between Airborne Tactical Advantage
        Company, LLC and AeroGroup Incorporated, relating to provision of aircraft,
        equipment, technical assistance and maintenance services for work under Prime
        Contract N00019-02-D-3158, known as “CAS-MOS” contract with the U.S. Navy, Naval
        Air Systems Command. 

      

      3. Subcontract
        Agreement, dated as of May 20, 2003, between Advanced Information Engineering
        Services and AeroGroup Incorporated relating to Prime Contract Number
        F04611-02-D-0007, dated March 1, 1999. 

      

      4. Subcontract
        Agreement, dated June 21, 2004, between Lockheed Martin Aeronautics Company
        -
        Fort Worth (LM Aero) and AeroGroup Incorporated, relating to commercial contract
        number NC-061504-JS to provide safety chase, target and photo chase support
        in
        support of F-16 flight training.

      

      5. Assignment
        of Aircraft Dealer License issued by the FAA-Federal Aviation Administration,
        dated July 08, 2006, FAA Certificate Number D000838. 

      

      

        All
        other
        contracts, indemnities, warranties, purchase agreements, asset purchase
        agreements, bills of sale or assignment forms relating to any of the Aircraft,
        Flight Simulators, patents or copyrights that are part of the Purchased Assets.
        

      

      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      SCHEDULE
        1(a)(ii)

      

      Intellectual
        Property

      

      1. Patent
        Pending Application No. 60805870 relating to adaptation by civilians of F-16
        aircraft for military training. 

      

      2. Patent
        Pending Application No. 60805885 relating to adaptation by civilians of F-21
        Kfir aircraft for military training.

       

      3. Patent
        Pending Application No. 60805877 relating to adaptation by civilians of A-4
        Skyhawk aircraft for military training. 

      

      4. Patent
        Pending Application No. 60805888 relating to adaptation by civilians of MiG
        29
        aircraft for military training. 

      

      5. Copyright
        relating to Specialized F-16 Fighter Aircraft Training Course relating to
        flight
        control navigation panel training. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        1(a)(ix)

      

      Furnishings
        and Equipment

      

      All
        furnishings, equipment, computers, reference materials of AeroGroup.

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        1(a)(x)

      

      Aircraft

      

      Assets
        owned by OneSource Acquisition, Inc. 

      

      1. 1987
        MiG29UB, Serial No. 50903007409. 

      

      

      

      Assets
        Owned by Genesis Capital Services, LLC, being sold to 

      Genesis
        Acquisition, Inc. 

      

      

      1. 1986
        MiG
        29UB, Serial No. 8003001048, ID No. 1048.

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        1(a)(xi)

      

      Flight
        Simulators

      

      Assets
        owned by Resource Financial Holdings, Inc.

       

      
        	1.	 	Aircraft
                Simulator, Singer-Link Cessna, 	 	Serial No. 61190071.
	2.	 	Aircraft
                Simulator, Singer-Link Cessna,	 	Serial No. 61190072.
	3.	 	Aircraft Simulator, Singer-Link
                Cessna,  	 	Serial No. 61190073.
	4.	 	Aircraft Simulator, Singer-Link
                Cessna,  	 	Serial No.
                61190074.

      

       

      Above
        Simulators come with and include: 

      

      Singer
        - Link Flight
        Compartments (two). 

      Unit
        part
        no. 36378, dated August 1977. Link Part No. 98747.

      

      Singer
        - Link Cabinet Assembly
        (two)
        located on back of light compartments. 

      Unit
        part
        No. 36378. Link Part No. 98747 Assembly No. 7464450-10. 

      

      Singer
        - Link Platforms,
        (two)
        consisting of 2 halves, with guard railings, steps, feet, etc. 

      Motion
        Systems Platform, Part No. 36378, Assemly No. 2010900-02

      SPCL
        CHRST 6-DOF, 56” stroke. 

      

      Display
        Unit Assemblies
        (Four in
        total, two per simulator)

      McDonnel
        Douglas Electronics Co. , Model No. VITAL IV Part No. H06G1740-7-03.

      

      

      Hydraulic
        pumping units
        (two),
        Mfg. Parker Hanifin Co. w/300 Gal. Reservoir, two  electric
        motors, large accumulators, filter units, electrical control panel, pressure
        relief  valves
        and stainless piping. ID. 51040, Part No. 63870, 

      Asembly
        No. 1002523-01, Design Act Code identifier 36378. 

      20
        GPM
        pump @1000 PSI, Motor 1=75 HP. 

      ockpit
        -
        8GPM @ 1000 PSI, Motor 2 5 HP. 

      

      Hydraulic
        actuators
        Mfg.
        Parker Hanifin Co. (24 (6 per platform))

      Model
        No.
        C-TC-MT-2HS-2.50-C. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        1(a)(xiii)

      

      Leases

      

      1. Lease
        relating to hangers, facilities, tie-down and ramp space at Greyson County
        Airport, In Grayson, Texas, which premises are currently occupied by AeroGroup
        Incorporated and its subsidiaries. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
       

      SCHEDULE
        1(d)(iii)

      

      Assumed
        Investor Notes

      

      Indebtedness
        To 

      Sprout
        Investments, LLC

      

      12%
        Convertible Promissory Notes

      Notes
        With Principal and Interest Convertible at $.003 Per Share of AeroGroup
        Incorporated and Becoming Convertible into Common Stock of Tactical Air Defense
        Services, Inc. at $.15 Per Share

       

      
        
          	 	
                  Initial
                    Principal Amount   

                	
                  Issuance
                    Date

                
	 	
                  $866,199.24

                	
                  04/01/2003

                
	 	
                  50,000.00

                	
                  04/01/2003

                
	 	
                  50,000.00

                	
                  07/11/2003

                
	 	
                  55,000.00

                	
                  12/04/2003

                
	 	
                  5,000.00

                	
                  01/25/2004

                
	 	
                  225,000.00

                	
                  04/12/2004

                
	 	
                  20,000.00

                	
                  07/08/2004

                
	 	
                  4,300.00

                	
                  08/27/2004

                
	 	
                  4,300.00

                	
                  08/31/2004

                
	 	
                  25,000.00

                	
                  12/08/2004

                
	 	
                  5,800.00

                	
                  03/22/2005
                    

                
	 	
                  50,000.00

                	
                  06/01/2005

                
	 	
                  5,000.00

                	
                  01/25/2006

                
	
                  Total
                    (Rounded):

                	
                  $1,365,599.24

                	 

        

      

       

      Additional
        shares must be issued as damages as provided in the notes if shares are not
        registered. Interest calculations omitted. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Indebtedness
        To

      Gary
        Fears

      

      12%
        Convertible Promissory Notes

      Notes
        With Principal and Interest Convertible at $.003 Per Share of AeroGroup
        Incorporated, Becoming Convertible into Common Stock of Tactical Air Defense
        Services, Inc. at $.15 Per Share. 

      

      
        	 	
                Initial
                  Principal Amount

              	
                Issuance
                  Date

              
	 	
                62,500.00

              	
                05/31/2002

              
	 	
                125,000.00

              	
                05/31/2002

              
	 	
                25,000.00

              	
                06/05/2002

              
	 	
                32,500.00

              	
                06/12/2002

              
	 	
                5,000.00

              	
                06/12/2002

              
	 	
                50,000.00

              	
                04/05/2003
                  

              
	 	
                50,000.00

              	
                04/13/2004

              
	 	
                25,000.00

              	
                10/22/2004

              
	 	
                55,140.00

              	
                11/04/2004

              
	 	
                35,000.00

              	
                11/16/2004

              
	 	
                38,525.00

              	
                12/23/2004

              
	 	
                25,000.00

              	
                01/19/2005

              
	 	
                45,000.00

              	
                02/09/2005

              
	 	
                14,668.77

              	
                03/01/2005

              
	 	
                17,000.00

              	
                03/01/2005

              
	 	
                40,000.00

              	
                03/11/2005

              
	 	
                97,500.00

              	
                11/11/2005

              
	 	
                20,000.00

              	
                04/29/2005

              
	 	
                50,000.00

              	
                05/06/2005

              
	 	
                110,000.00
                  

              	
                05/13/2005

              
	 	
                50,000.00

              	
                06/03/2005

              
	 	
                25,000.00

              	
                06/09/2005

              
	 	
                2,500.00

              	
                06/13/2005

              
	 	
                32,000.00

              	
                08/03/2005

              
	 	
                9,000.00

              	
                08/15/2005

              
	 	
                425.00

              	
                08/16/2005

              
	 	
                3,991.00

              	
                08/29/2005

              
	 	
                1,815.00

              	
                09/09/2005

              
	 	
                6,130.00

              	
                09/27/2005

              
	 	
                5,364.85

              	
                10/12/2005

              
	 	
                15,000.00

              	
                10/27/2005

              
	 	
                5,000.00

              	
                11/15/2005

              
	 	
                5,000.00

              	
                11/18/2005

              
	 	
                4,000.00

              	
                11/23/2005

              
	 	
                10,000.00

              	
                1/12/2006

              
	 	
                100,000.00
                  

              	
                2/08/2006

              
	 	
                6,000.00

              	
                2/10/2006

              
	 	
                5,000.00

              	
                2/17/2006

              
	 	
                5,000.00

              	
                2/17/2006

              
	 	
                16,000.00

              	
                2/21/2006

              
	 	
                5,000.00

              	
                2/27/2006

              
	 	
                20,000.00

              	
                3/01/2006

              
	 	
                13,597.00

              	
                3/09/2006

              
	 	
                1,463.00

              	
                3/09/2006

              
	 	
                13,000.00

              	
                3/15/20/06

              
	
                Total
                  (Rounded): 

              	
                1,283,119.62

              	 

      

       

      Additional
        shares must be issued as damages as provided in the notes if shares are not
        registered. Interest calculations omitted. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Other
        Investors

       

      Convertible
        Notes Being Assumed

       

      
        	
                 

                 

                Name

              	
                 

                 

                Initial
                  Debt

              	
                 

                Interest

                Rate

              	
                 

                 

                Date(s)

              	
                Debt
                  Conversion Price (AeroGroup)

              	
                Debt
                  Conversion Price

                (TADS)

              
	
                Mark
                  T. Daniels

              	
                $366,602.04

              	
                12%

              	
                4/1/03
                  through 11/12/05

              	
                $.003
                  

              	
                $.15

              
	
                Ronald
                  Topper

              	
                $160,000.00

              	
                12%

              	
                12/05

              	
                $.003

              	
                $.15

              
	
                Dil
                  Air, Inc.

              	
                $25,000.00

              	
                12%

              	 	
                $.50

              	
                $.50

              
	
                Davenport
                  Group, LLC

              	
                $442,780.00

              	
                12%

              	
                04/06

              	
                $.45

              	
                $.45

              
	
                Total

              	
                994,382.04

              	 	 	 	 

      

      

      Interest
        calculations omitted. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        1(d)(iv)

      

      Investor
        Warrants

       

      Sprout
        Investments, LLC

      Warrants
        Exercisable at $.003 Per Share of AeroGroup Incorporated and Being Assumed
        at
        50:1 Ratio (i.e. $.15 Per Share of Tactical Air Defense Services,
        Inc.)

      

      

      
        	 	
                Issuance
                  Date

              	
                Warrant

                Shares

                (AeroGroup)

              	
                Warrant

                Shares

                (TADS)

              
	 	
                4/01/2003

              	
                288,733,080

              	
                5,774,662

              
	 	
                04/01/2003

              	
                16,666,666

              	
                333,333

              
	 	
                07/11/2003

              	
                16,666,666

              	
                333,333

              
	 	
                12/04/2003

              	
                18,333,333

              	
                366,667

              
	 	
                01/25/2004

              	
                1,666,666

              	
                33,333

              
	 	
                04/12/2004

              	
                75,000,000

              	
                1,500,000

              
	 	
                07/08/2004

              	
                6,666,666

              	
                133,333

              
	 	
                08/27/2004

              	
                1,433,333

              	
                28,667

              
	 	
                08/31/2004

              	
                1,433,333

              	
                28,667

              
	 	
                12/08/2004

              	
                8,333,333

              	
                166,667

              
	 	
                03/22/2005

              	
                1,9333,333

              	
                386,667

              
	 	
                06/01/2005

              	
                16,666,667

              	
                333,333

              
	 	
                01/25/2006

              	
                1,666,666

              	
                33,333

              
	
                Total

              	 	
                472,599,742

              	
                9,451,995

              

      

       

      Additional
        shares must be issued as damages if shares are not registered. Anti dilution
        provisions apply. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Warrants
        issued to Gary Fears

      

      Warrants
        Exercisable at $.003 Per Share of AeroGroup Incorporated and Being Assumed
        at
        50:1 Ratio (i.e. $.15 Per Share of Tactical Air Defense Services,
        Inc.)

      

      
        	 	
                 

                Issuance
                  Date

              	
                Warrant
                  

                Shares
                  

                (AeroGroup)

              	
                Warrant

                Shares
                  

                TADS

              
	 	
                05/31/2002

              	
                20,833,333

              	
                416,667

              
	 	
                05/31/2002

              	
                41,666,666

              	
                833,333

              
	 	
                06/05/2002

              	
                8,333,333

              	
                166,667

              
	 	
                06/12/2002

              	
                10,833,333

              	
                216,667

              
	 	
                06/12/2002

              	
                1,666,666

              	
                33,333

              
	 	
                04/05/2003
                  

              	
                16,666,666

              	
                333,333

              
	 	
                04/13/2004

              	
                16,666,666

              	
                333,333

              
	 	
                10/22/2004

              	
                8,333,333

              	
                166,667

              
	 	
                11/04/2004

              	
                18,379,999

              	
                367,600

              
	 	
                11/16/2004

              	
                11,666,666

              	
                233,333

              
	 	
                12/23/2004

              	
                12,841,666

              	
                256,833

              
	 	
                01/19/2005

              	
                8,333,333

              	
                166,667

              
	 	
                02/09/2005

              	
                14,999,999

              	
                300,000

              
	 	
                03/01/2005

              	
                4,889,589

              	
                97,792

              
	 	
                03/01/2005

              	
                5,666,666

              	
                113,333

              
	 	
                03/11/2005

              	
                13,333,333

              	
                266,667

              
	 	
                11/11/2005

              	
                32,500,000

              	
                650,000

              
	 	
                04/29/2005

              	
                6,666,666

              	
                133,333

              
	 	
                05/06/2005

              	
                16,666,666

              	
                333,333

              
	 	
                05/13/2005

              	
                36,666,666

              	
                733,333

              
	 	
                06/03/2005

              	
                16,666,666

              	
                333,333

              
	 	
                06/09/2005

              	
                8,333,333

              	
                166,667

              
	 	
                06/13/2005

              	
                833,333

              	
                16,667

              
	 	
                08/03/2005

              	
                10,666,666

              	
                213,333

              
	 	
                08/15/2005

              	
                3,000,000

              	
                60,000

              
	 	
                08/16/2005

              	
                141,666

              	
                2,833

              
	 	
                08/29/2005

              	
                1,330,333

              	
                26,607

              
	 	
                09/09/2005

              	
                605,000

              	
                12,100

              
	 	
                09/27/2005

              	
                2,043,333

              	
                40,867

              
	 	
                10/12/2005

              	
                1,788,283

              	
                35,766

              
	 	
                10/27/2005

              	
                5,000,000

              	
                100,000

              
	 	
                11/15/2005

              	
                1,666,666

              	
                33,333

              
	 	
                11/18/2005

              	
                1,666,666

              	
                33,333

              
	 	
                11/23/2005

              	
                1,333,333

              	
                26,667

              
	 	
                1/12/2006

              	
                3,333,333

              	
                66,667

              
	 	
                2/08/2006

              	
                33,333,333
                  

              	
                666,667

              
	 	
                2/10/2006

              	
                2,000,000

              	
                40,000

              
	 	
                2/17/2006

              	
                1,666,666
                  

              	
                33,333

              
	 	
                2/17/2006

              	
                1,666,666

              	
                33,333

              
	 	
                2/21/2006

              	
                5,333,333

              	
                106,667

              
	 	
                2/27/2006

              	
                1,666,666

              	
                33,333

              
	 	
                3/01/2006

              	
                6,666,666

              	
                133,333

              
	 	
                3/09/2006

              	
                4,532,333

              	
                90,647

              
	 	
                3/09/2006

              	
                487,666

              	
                9,753

              
	 	
                3/15/20/06

              	
                4,333,333

              	
                86,667

              
	
                Total
                  (Rounded): 

              	 	
                427,706,519

              	
                8,554,130

              

      

      

      Additional
        shares must be issued as damages if shares are not registered. Anti dilution
        provisions apply. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Other
        Investor Warrants Being Assumed

      

      
        	
                 

                Name

              	
                 

                Date(s)

              	
                No.
                  Warrants

                AeroGroup/Exercise
                  Price*

              	
                No.
                  Warrants TADS/Exercise Price**

              
	
                Mark
                  T. Daniels

              	
                4/1/03
                  through 11/12/05

              	
                122,200,680/
                  $.003

              	
                2,444,014/
                  $.15 ***

              
	
                Ronald
                  Topper

              	
                12/05

              	
                53,333,333/
                  $.003 

              	
                1,066,667/
                  $.15     

              
	
                Dil
                  Air, Inc.

              	 	
                50,000/
                  $.50

              	
                50,000/
                  $.50

              
	
                Total

              	 	
                175,584,013            

              	
                3,560,681              

              

      

       

      * Indicates
        number of shares of AeroGroup Common Stock for which such Warrants are
        exercisable and exercise prices. 

      

      ** Indicates
        number of shares of Common Stock of Tactical Air Defense Services, Inc. for
        which such warrants shall become exercisable and exercise prices. 

      

      *** Additional
        shares must be issued as damages if shares are not registered. Anti
        dilution provisions apply. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        1(d)(v)

      

      Convertible
        Employee Wage Debt

      

      1. Pursuant
        to Consulting Agreement, entered into between Sprout Investments, LLC and
        AeroGroup Incorporated (“AeroGroup”) in September 2003, AeroGroup was to issue a
        total of $30,000,000 (10,000,000 per year) shares to Sprout for investment
        consulting services. No shares have been issued pursuant to this agreement
        yet.
        Said obligation to issue shares will be assumed at a 50 to one ratio by the
        Parent for a total of 600,000 shares of Common Stock of Tactical Air Defense
        Services, Inc. (“TADS”).

      

      2. $250,000
        is owed to Chris Beck as back pay, pursuant to a note and a settlement agreement
        with AeroGroup, principal and interest on which shall become convertible
        into
        shares of Common Stock of TADS at a rate of $.50 per share. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
EXHIBIT
      7(d)

    

    FORM
      OF AGREEMENT OF ASSUMPTION

    

    This
      AGREEMENT OF ASSUMPTION is entered into as of this ___ day of August, 2006
      by
      and among Tactical Air Defense Services, Inc., a Nevada corporation with a
      place
      of business at _____________________________ (the “Borrower”)
      and
      the lenders or warrant holders executing below (each, a “Lender”).
      

    

    RECITALS

    

    WHEREAS,
      the
      Borrower has purchased substantially all of the assets of AeroGroup
      Incorporated, a Utah corporation (the “Original
      Borrower”)
      and,
      as a condition to the closing of said transaction, Borrower has agreed to assume
      certain obligations of the Original Borrower;

    

    WHEREAS,
      the
      Original Borrower issued to each Lender pursuant to one or more promissory
      notes, loan agreements, settlement agreements, consulting agreements, warrants
      to purchase common stock, of AeroGroup Incorporated (collectively, the
“Assumed
      Obligations”),
      which
      Assumed Securities were convertible into or exercisable for, shares of the
      Original Borrower;

    

    WHEREAS,
      Borrower
      wishes to assume all of the indebtedness, liabilities and obligations to Lenders
      under the Assumed Obligations and each Lender is willing to permit such
      assumption on and subject to the terms and provisions set forth herein;

    

    NOW,
      THEREFORE,
      for
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, and in consideration of the mutual covenants and agreements herein
      set forth, the parties hereto agree as follows:

    

    1.
      Assumption
      of Obligations.
      

    

    (a) The
      Borrower hereby assumes and agrees to be liable for and pay and perform all
      of
      the indebtedness, liabilities and obligations of the Original Borrower to
      Lenders relating to all indebtedness, liabilities and obligations arising under
      the Assumed Securities as amended hereby and each of the agreements, instruments
      and documents executed pursuant thereto or in connection therewith (hereinafter
      collectively referred to as the “Obligations”)
      in
      such amounts as set forth on Schedule
      A
      hereto,
      and to timely and satisfactorily perform all of the covenants, conditions,
      obligations, provisions and agreements of the Original Borrower contained in
      the
      Assumed Obligations and in all of the agreements, instruments and documents
      provided for therein or executed and delivered in connection therewith. All
      of
      the Assumed Obligations shall, automatically and without further action on
      the
      part of any party, become convertible into shares of Common Stock, par value
      $.001 per share of the Borrower (the “Common
      Stock”),
      at
      the conversion rate as set forth on Schedule
      A
      hereto.
      In addition, all of the warrants shall, automatically and without any further
      action on the part of any party, become exercisable at the exercise prices
      and
      for such number of shares of Common Stock as set forth on Schedule
      A
      hereto.
      The Lenders hereby forever and irrevocably consent to the assumption of
      liabilities by the Borrower and to the full, absolute and irrevocable release
      and discharge of Original Borrower from all obligations, liabilities, claims
      or
      damages under the Loan Documents. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) The
      Borrower shall : 

    

    (i)
      pay
      the indebtedness evidenced by the Assumed Obligations at the times, in the
      manner and in all other respects as therein provided or as it may hereafter
      be
      modified between the Borrower and the holder thereof, 

    

    (ii)
      perform each of the covenants, conditions, provisions and agreements of the
      Assumed Obligations to be performed by the Borrower thereunder, at the time,
      in
      the manner and in all other respects as provided for therein, 

    

    (iii)
      be
      bound by each and every term, covenant, condition, and provision of the Assumed
      Obligations as though each such agreement, instrument and document had
      originally been made, executed and delivered by the Borrower, except that the
      conversion rate shall be as set forth on Schedule
      A attached
      hereto, and 

    

    (iv)
      pay
      and perform all of the Obligations in accordance with their respective
      terms.

    

    2.
      Amendments.
      

    

    (a)
      The
      notes, warrants, contracts, instruments or agreements reflecting the Assumed
      Obligations are hereby amended as follows:

    

    (i) The
      name
      of the maker or issuer thereon shall be changed from “AeroGroup Incorporated, a
      Utah corporation” or similar terms, to “Tactical Air Defense Services, Inc., a
      Nevada corporation.” 

    

    (ii) The
      references to common stock in any of documents relating to the   Assumed
      Obligations shall henceforth refer to Common Stock of the Borrower.  In
      addition, references to the conversion price at which the Assumed Obligations
       is
      convertible and the exercise price at which the warrants are exercisable (or
      the
 numbers
      of shares which may otherwise be issued) shall be  changed
      to the  conversion
      or exercise price set forth on Schedule
      A
      hereto,
      and the number of  shares
      issuable under any agreement or warrant shall also be as set forth on
 Schedule
      A hereto. 

    

    (ii) The
      notice provisions of all documents or instruments comprising the  Assumed
      Obligations are hereby amended by changing the addresses for notices
 that
      would otherwise be sent to AeroGroup Incorporated to be as follows:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “(a)
      If
      to the Corporation, to:

    

    Tactical
      Air Defense Services, Inc. 

    5001
      Airport Drive

    Denison,
      TX 75025 

    Attention:
      Chief Executive Officer

    Telephone:
      903-786-5302

    

    (b)
      Except as expressly amended hereby, the instruments reflecting the Assumed
      Obligations shall remain in full force and effect in accordance with their
      respective terms.

    

    [(c)
      The
      first sentence of Paragraph 6.1(i) relating to registration rights shall be
      amended  to
      read
“On one occasion, for a period commencing one hundred and twenty one (121)
 days
      after the date of assumption of this Note by Tactical Air Defense Services,
      Inc., but  not
      later
      than two (2) years after the date hereof........” ]

    

    3.
      Further
      Assurances.
      At any
      time and from time to time, upon the request of the Lender, the Borrower and
      the
      Guarantors shall execute, deliver and acknowledge or cause to be executed,
      delivered and acknowledged, such further documents and instruments and do such
      other acts and things as the Lender may reasonably request in order to fully
      effect the purposes of this Agreement and any other agreements, notes, warrants,
      instruments and documents evidencing the Assumed Obligations or otherwise
      delivered pursuant hereto or thereto.

     

    4.
      Waiver
      of Default Relating to Registration Rights.
      The
      Lenders hereby irrevocable and forever waive and release Borrower and Original
      Borrower from, any and all defaults, default remedies, damages, enforcement
      costs, additional shares, funds or other remedies relating to the failure of
      the
      Original Borrower or Borrower to register any of the shares of common stock
      issuable under the Assumed Obligations or any other securities owned by Lender,
      in accordance with the Assumed Obligations existing prior to the date
      hereof.

    

    5.
      Entire
      Agreement.
      This
      instrument constitutes the entire agreement between the parties hereto relating
      to the subject matter hereof and there are no agreements, undertakings,
      warranties or representations between the parties except as set forth herein.
      This Agreement will inure to the benefit of and be binding upon the parties
      hereto and their respective successors and permitted assigns. This Agreement
      may
      not be amended or modified, in any respect, except by an instrument in writing
      signed by each of the parties hereto.

    

    6.
      Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York, other than its choice of law rules.

     

    7.
      Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original and all of which taken together shall be deemed to
      be
      one and the same instrument.

    

    8.
      Construction.
      The
      headings used in this Agreement are for convenience only and shall not be deemed
      to constitute a part hereof.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    9.
      Conditions. It is a commitment to this Agreement that the closing of the
      acquisition by Borrower of substantially all of assets of Original Borrower
      and
      its subsidiaries shall have occurred. 

     

     

    [balance
      of this page intentionally left blank - signature page
      follows]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the undersigned have executed this Agreement the day and year
      first above written.

     

    
      	 	 	 	TACTICAL AIR DEFENSE SERVICES,
              INC.
	 	 	 	 
	 	 	 	 
	 	 	
              By:

            	 
	
              
Witness	 	 	
              
Name:
              Mark T. Daniels
	 	 	 	Title:
              President

    

     

    
      	 	 	 	[ Name of Lender
              ]
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
              
Witness	 	 	
              
Name:
	 	 	 	Title:

    

     

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    SCHEDULE
      A

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      EXHIBIT
        7(e)

       

      SECURITY
        AGREEMENT

       

      THIS
        SECURITY AGREEMENT,
        dated
        as of the ____ day of July, 2006 (the “Agreement”),
        is
        entered into by and among Mark Daniels (the “Secured
        Party”),
        and
        Tactical Air Defense Services, Inc., a Nevada corporation (the “Obligor”).
        All
        capitalized terms not otherwise defined herein, shall have the meanings set
        forth in the Asset Purchase Agreement (as hereinafter defined). 

       

      W
        I T N E
        S S E T H:

       

      WHEREAS,
        concurrently herewith, the Obligor and its Subsidiaries entered into an Asset
        Purchase Agreement with AeroGroup Incorporated, a Utah corporation (“Sellers”)
        (the “Asset
        Purchase Agreement”),
        pursuant to which, the Obligor agreed to assume all of the obligations of
        Sellers under the Secured Promissory Notes issued to the Secured Party, in
        the
        aggregate principal amount of $1,100,000 (the “Promissory
        Note”);
        and

       

      WHEREAS,
        in
        order to induce Sellers to enter into the Asset Purchase Agreement the Obligor
        and the Subsidiary Purchasers have agreed to execute and deliver to the Secured
        Party this Agreement for the benefit of the Secured Party and to grant him
        a
        security interest in certain property of the Obligor, to secure the prompt
        payment, performance and discharge in full of all of the obligations of the
        Obligor under the Promissory Note.

       

      NOW,
        THEREFORE,
        in
        consideration of the agreements herein contained and for other good and valuable
        consideration, the receipt and sufficiency of which is hereby acknowledged,
        the
        parties hereto hereby agree as follows:

       

      1.  Certain
        Definitions.
        As used
        in this Agreement, the following terms shall have the meanings set forth
        in this
        Section 1. Terms used but not otherwise defined in this Agreement that are
        defined in Article 9 of the UCC (such as “general
        intangibles”
and
        “proceeds”)
        shall
        have the respective meanings given such terms in Article 9 of the UCC.

       

      (a)  “Collateral”
means
        the collateral in which the Secured Party is granted a security interest
        by this
        Agreement and which shall include the following, whether presently owned
        or
        existing or hereafter acquired or coming into existence, and all additions
        and
        accessions thereto and all substitutions and replacements thereof, and all
        proceeds, products and accounts thereof, including, without limitation, all
        proceeds from the sale or transfer of the Collateral and of insurance covering
        the same and of any tort claims in connection therewith:

       

      (i)  all
        Goods
        of the Obligor, including, without limitations, all machinery, equipment,
        computers, motor vehicles, aircraft, aircraft parts, avionics, trucks, tanks,
        boats, ships, appliances, furniture, special and general tools, fixtures,
        test
        and quality control devices and other equipment of every kind and nature
        and
        wherever situated, together with all documents of title and documents
        representing the same, all additions and accessions thereto, replacements
        therefor, all parts therefor, and all substitutes for any of the foregoing
        and
        all other items used and useful in connection with the Obligor’s businesses and
        all improvements thereto (collectively, the “Equipment”);
        and

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (ii)  All
        Inventory of the Obligor; and

       

      (iii)  All
        of
        the Obligor’s contract rights and general intangibles, including, without
        limitation, all partnership interests, stock or other securities, licenses,
        distribution and other agreements, computer software development rights,
        leases,
        franchises, customer lists, quality control procedures, grants and rights,
        goodwill, trademarks, service marks, trade styles, trade names, patents,
        patent
        applications, copyrights, deposit accounts, and income tax refunds
        (collectively, the “General
        Intangibles”);
        and

       

      (iv)  All
        Receivables of the Obligor including all insurance proceeds, and rights to
        refunds or indemnification whatsoever owing, together with all instruments,
        all
        documents of title representing any of the foregoing, all rights in any
        merchandising, goods, equipment, motor vehicles and trucks which any of the
        same
        may represent, and all right, title, security and guaranties with respect
        to
        each Receivable, including any right of stoppage in transit; and

       

      (v)  All
        of
        the Obligor’s documents, instruments and chattel paper, files, records, books of
        account, business papers, computer programs and the products and proceeds
        of all
        of the foregoing Collateral set forth in clauses (i)-(iv) above.

       

      (b)  “Obligations”
means
        all of the Obligor’s obligations under the Promissory Note, in each case,
        whether now or hereafter existing, voluntary or involuntary, direct or indirect,
        absolute or contingent, liquidated or unliquidated, whether or not jointly
        owed
        with others, and whether or not from time to time decreased or extinguished
        and
        later decreased, created or incurred, and all or any portion of such obligations
        or liabilities that are paid, to the extent all or any part of such payment
        is
        avoided or recovered directly or indirectly from the Secured Party as a
        preference, fraudulent transfer or otherwise as such obligations may be amended,
        supplemented, converted, extended or modified from time to time.

       

      (c)  “UCC”
means
        the Uniform Commercial Code, as currently in effect in the State of New York;
        provided,
        however,
        that in
        the event, by reason of mandatory provisions of law, any or all of the
        attachment, perfection or priority of the Secured Party’s security interest in
        any Collateral is governed by the Uniform Commercial Code as in effect in
        a
        jurisdiction other than the State of New York, the term “UCC” shall mean the
        Uniform Commercial Code as in effect in such other jurisdiction for purposes
        of
        the provisions hereof relating to such attachment, perfection of priority
        and
        for purposes of definitions related to such provisions. 

       

      2.  Grant
        of Security Interest.
        

       

      (a) As
        an
        inducement for the Secured Party to enter into the Asset Purchase Agreement
        and
        to cause Sellers to enter into the Asset Purchase Agreement, and to secure
        the
        complete and timely payment, performance and discharge in full, as the case
        may
        be, of all of the Obligations, except for Permitted Liens (as hereinafter
        defined), the Obligor hereby, unconditionally and irrevocably, pledge, grant
        and
        hypothecate to the Secured Party, a continuing security interest in, a
        continuing lien upon, an unqualified right to possession and disposition
        of and
        a right of set-off against, in each case to the fullest extent permitted
        by law,
        all of the Obligor’s right, title and interest of whatsoever kind and nature in
        and to the Collateral (the “Security
        Interest”).

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      (b) In
        the
        event that the Obligor materially breaches any of the terms and provisions
        of
        this Security Agreement, or should any Event of Default (as that term is
        defined
        herein) occur, the respective positions of each Secured Party with respect
        to
        the Collateral shall be in accordance with its respective participations
        therein.

       

      3.  Representations,
        Warranties, Covenants and Agreements of the Obligor.
        The
        Obligor represents and warrant to, and covenant and agrees with, the Secured
        Party as follows: 

       

      (a)  The
        Obligor has the requisite corporate power and authority to enter into this
        Agreement and otherwise to carry out its obligations hereunder. The execution,
        delivery and performance by the Obligor of this Agreement and the filings
        contemplated herein have been duly authorized by all necessary action on
        the
        part of the Obligor and no further action is required by the Obligor. This
        Agreement constitutes a legal, valid and binding obligation of the Obligor
        enforceable in accordance with its terms, except as enforceability may be
        limited by bankruptcy, insolvency, reorganization, moratorium or similar
        laws
        affecting the enforcement of creditor’s rights generally.

       

      (b)  The
        Obligor represents and warrants that it has no place of business or offices
        where their respective books of account and records are kept (other than
        temporarily at the offices of its attorneys or accountants), except as set
        forth
        on Schedule
        A
        attached
        hereto;

       

      (c)  Except
        as
        to those liens existing as of the date hereof that were disclosed to the
        Secured
        Party by the Obligor and are set forth on the attached Schedule
        B
        (the
“Permitted
        Liens”),
        the
        Obligor is the sole owner of the Collateral (except for non-exclusive licenses
        granted by the Obligor in the ordinary course of business), free and clear
        of
        any liens, security interests, encumbrances, rights or claims, and are fully
        authorized to grant the Security Interest in and to pledge the Collateral.
        Except as to the Permitted Liens, there is not on file in any governmental
        or
        regulatory authority, agency or recording office an effective financing
        statement, security agreement, license or transfer or any notice of any of
        the
        foregoing (other than those that have been filed in favor of the Secured
        Party
        pursuant to this Agreement) covering or affecting any of the Collateral.
        Except
        as to the Permitted Liens, so long as this Agreement shall be in effect,
        the
        Obligor shall not execute and shall not knowingly permit to be on file in
        any
        such office or agency any such financing statement or other document or
        instrument (except to the extent filed or recorded in favor of the Secured
        Party
        pursuant to the terms of this Agreement).

       

      (d)  No
        part
        of the Collateral has been judged invalid or unenforceable. No written claim
        has
        been received that any Collateral or the Obligor’s use of any Collateral
        violates the rights of any third party. There has been no adverse decision
        to
        the Obligor’s claim of ownership rights in or exclusive rights to use the
        Collateral in any jurisdiction or to the Obligor’s right to keep and maintain
        such Collateral in full force and effect, and there is no proceeding involving
        said rights pending or, to the best knowledge of the Obligor, threatened
        before
        any court, judicial body, administrative or regulatory agency, arbitrator
        or
        other governmental authority. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (e)  The
        Obligor shall at all times maintain their books of account and records relating
        to the Collateral at its principal place of business and may not relocate
        such
        books of account and records unless it delivers to the Secured Party at least
        thirty (30) days prior to such relocation (i) written notice of such relocation
        and the new location thereof (which must be within the United States) and
        (ii) evidence that appropriate financing statements and other necessary
        documents have been filed and recorded and other steps have been taken to
        perfect the Security Interest to create in favor of the Secured Party valid,
        perfected and continuing liens in the Collateral. 

       

      (f)  This
        Agreement creates in favor of the Secured Party a valid security interest
        in the
        Collateral securing the payment and performance of the Obligations and, upon
        making the filings described in the immediately following sentence, a perfected
        security interest in such Collateral. Except for the filing of financing
        statements on Form-1 under the UCC with the jurisdictions indicated on
Schedule
        C,
        attached hereto, no authorization or approval of or filing with or notice
        to any
        governmental authority or regulatory body is required either (i) for the
        grant
        by the Obligor of, or the effectiveness of, the Security Interest granted
        hereby
        or for the execution, delivery and performance of this Agreement by the Obligor,
        or (ii) for the perfection of or exercise by the Secured Party of their rights
        and remedies hereunder.

       

      (g)  The
        Obligor hereby irrevocably authorize the Secured Party at any time and from
        time
        to time to file in any Uniform Commercial Code jurisdiction any initial
        financing statements and amendments thereto that (i) indicate the Collateral
        regardless of whether any particular asset comprised in the Collateral falls
        within the scope of Article 9 of the Uniform Commercial Code of the State
        of New
        York as amended from time to time (“NYUCC”),
        or
        any other Uniform Commercial Code jurisdiction; and (ii) contain any other
        information required by part 5 of Article 9 of the NYUCC for the sufficiency
        or
        filing office acceptance of any financing statement or amendment, including
        whether the Obligor is an organization, the type of organization and any
        organization identification number issued to the Obligor. The Obligor agrees
        to
        furnish any such information to the Secured Parties promptly upon request.
        The
        Obligor also ratifies its authorization for the Secured Party to have filed
        in
        any Uniform Commercial Code jurisdiction any like initial financing statements
        or amendments thereto if filed prior to the date hereof with respect to the
        Collateral.

       

      (h)  The
        execution, delivery and performance of this Agreement does not conflict with
        or
        cause a breach or default, or an event that with or without the passage of
        time
        or notice, shall constitute a breach or default, under any agreement to which
        Obligor is a party or by which Obligor is bound. No consent (including, without
        limitation, from stockholders or creditors of the Obligor) is required for
        the
        Obligor to enter into and perform its obligations hereunder.

       

      (i)  The
        Obligor shall at all times maintain the liens and Security Interest provided
        for
        hereunder as valid and perfected liens and security interests in the Collateral
        in favor of the Secured Party until this Agreement and the Security Interest
        hereunder shall be terminated pursuant to Section 11. The Obligor hereby
        agrees
        to defend the same against any and all persons. The Obligor shall safeguard
        and
        protect all Collateral for the account of the Secured Party. At the request
        of
        the Secured Party, the Obligor will pay the cost of filing one or more financing
        statements pursuant to the UCC (or any other applicable statute) in form
        reasonably satisfactory to the Secured Party in all public offices wherever
        filing is, or is deemed by the Secured Party to be, necessary or desirable
        to
        effect the rights and obligations provided for herein. Without limiting the
        generality of the foregoing, the Obligor shall pay all fees, taxes and other
        amounts necessary to maintain the Collateral and the Security Interest
        hereunder, and the Obligor shall obtain and furnish to the Secured Party
        from
        time to time, upon demand, such releases and/or subordinations of claims
        and
        liens which may be required to maintain the priority of the Security Interest
        hereunder. 

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (j)  So
        long
        as the Obligor shall have any obligations under the Promissory Note, the
        Obligor
        shall not, without the Secured Party’s written consent, transfer, pledge,
        hypothecate, encumber, license (except for non-exclusive licenses granted
        by the
        Obligor in the ordinary course of business), sell (except for sales of inventory
        in the ordinary course of business) or otherwise dispose of any of the
        Collateral. 

       

      (k)  The
        Obligor shall keep and preserve their Equipment, Inventory and other tangible
        Collateral in good condition, repair and order and shall not operate or locate
        any such Collateral (or cause to be operated or located) in any area excluded
        from insurance coverage.

       

      (l)  The
        Obligor shall, within ten (10) days of obtaining knowledge thereof, advise
        the
        Secured Party promptly, in sufficient detail, of any substantial change in
        the
        Collateral, and of the occurrence of any event which would have a material
        adverse effect on the value of the Collateral or on the Secured Party’s security
        interest therein.

       

      (m)  The
        Obligor shall promptly execute and deliver to the Secured Party such further
        deeds, mortgages, assignments, security agreements, financing statements
        or
        other instruments, documents, certificates and assurances and take such further
        action as the Secured Party may from time to time request and may in its
        sole
        discretion deem necessary to perfect, protect or enforce its security interest
        in the Collateral.

       

      (n)  The
        Obligor shall permit the Secured Party and their representatives and agents
        to
        inspect the Collateral at any time, and to make copies of records pertaining
        to
        the Collateral as may be requested by the Secured Party from time to
        time.

       

      (o)  The
        Obligor will take all steps reasonably necessary to diligently pursue and
        seek
        to preserve, enforce and collect any rights, claims, causes of action and
        accounts receivable in respect of the Collateral.

       

      (p)  The
        Obligor shall promptly notify the Secured Party in sufficient detail upon
        becoming aware of any attachment, garnishment, execution or other legal process
        levied against any Collateral and of any other information received by the
        Obligor that may materially affect the value of the Collateral, the Security
        Interest or the rights and remedies of the Secured Party hereunder.

       

      (q)  All
        information heretofore, herein or hereafter supplied to the Secured Party
        by or
        on behalf of the Obligor with respect to the Collateral is accurate and complete
        in all material respects as of the date furnished.

       

      4.  Defaults.
        The
        following events shall be “Events
        of Default”:

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (a)  A
        breach
        by Obligor or any of the Purchasers of their material obligations under any
        of
        the Promissory Note, the Asset Purchase Agreement, the Guaranty and failure
        to
        cure such breach for ten (10) days after receipt by such Obligor of notice
        of
        such breach from the Secured Party;

       

      (b)  Any
        representation or warranty of the Obligor or in this Agreement and/or or
        any
        Purchaser in (i) the Asset Purchase Agreement, or (ii) any other agreement,
        guaranty or other document relating to the Asset Purchase Agreement to which
        such Purchaser is a party, shall prove to have been incorrect in any material
        respect when made; and

       

      (c)  The
        material failure by an Obligor to observe or perform any of its material
        obligations hereunder for ten (10) days after receipt by such Obligor of
        notice
        of such failure from the Secured Party.

       

      5.  Duty
        To Hold In Trust.
        Upon
        the occurrence of any Event of Default and at any time thereafter, the Obligor
        shall, upon receipt by it of any revenue, income or other sums subject to
        the
        Security Interest, whether payable pursuant to the Promissory Note, or
        otherwise, or of any check, draft, debenture, trade acceptance or other
        instrument evidencing an obligation to pay any such sum, hold the same in
        trust
        for the Secured Party and shall forthwith endorse and transfer any such sums
        or
        instruments, or both, to the Secured Party for application to the satisfaction
        of the Obligation.

       

      6.  Rights
        and Remedies Upon Default.
        Upon
        occurrence of any Event of Default and at any time thereafter, the Secured
        Party
        shall have the right to exercise all of the remedies conferred hereunder
        and
        under the Promissory Notes, and the Secured Party shall have all the rights
        and
        remedies of a secured party under the UCC and/or any other applicable law
        (including the Uniform Commercial Code of any jurisdiction in which any
        Collateral is then located). Without limitation, the Secured Party shall
        have
        the following rights and powers:

       

      (a)  The
        Secured Party shall have the right to take possession of the Collateral and,
        for
        that purpose, enter, with the aid and assistance of any person, any premises
        where the Collateral, or any part thereof, is or may be placed and remove
        the
        same, and the Obligor shall assemble the Collateral and make it available
        to the
        Secured Party at places which the Secured Party shall reasonably select,
        whether
        at the Obligor’s premises or elsewhere, and make available to the Secured Party,
        without rent, all of the Obligor’s respective premises and facilities for the
        purpose of the Secured Party taking possession of, removing or putting the
        Collateral in saleable or disposable form.

       

      (b)  The
        Secured Party shall have the right to operate the business of the Obligor
        using
        the Collateral and shall have the right to assign, sell, lease or otherwise
        dispose of and deliver all or any part of the Collateral, at public or private
        sale or otherwise, either with or without special conditions or stipulations,
        for cash or on credit or for future delivery, in such parcel or parcels and
        at
        such time or times and at such place or places, and upon such terms and
        conditions as the Secured Party may deem commercially reasonable, all without
        (except as shall be required by applicable statute and cannot be waived)
        advertisement or demand upon or notice to the Obligor or right of redemption
        of
        the Obligor, which are hereby expressly waived. Upon each such sale, lease,
        assignment or other transfer of Collateral, the Secured Party may, unless
        prohibited by applicable law which cannot be waived, purchase all or any
        part of
        the Collateral being sold, free from and discharged of all trusts, claims,
        right
        of redemption and equities of the Obligor, which are hereby waived and
        released.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      7.  Applications
        of Proceeds.
        The
        proceeds of any such sale, lease or other disposition of the Collateral
        hereunder shall be applied first, to the expenses of retaking, holding, storing,
        processing and preparing for sale, selling, and the like (including, without
        limitation, any taxes, fees and other costs incurred in connection therewith)
        of
        the Collateral, to the reasonable attorneys' fees and expenses incurred by
        the
        Secured Party in enforcing their rights hereunder and in connection with
        collecting, storing and disposing of the Collateral, and then to satisfaction
        of
        the Obligations, and to the payment of any other amounts required by applicable
        law, after which the Secured Party shall pay to the Obligor any surplus
        proceeds. If, upon the sale, license or other disposition of the Collateral,
        the
        proceeds thereof are insufficient to pay all amounts to which the Secured
        Party
        are legally entitled, the Obligor will be liable for the deficiency, together
        with interest thereon, at the rate of 18% per annum (the “Default
        Rate”),
        and
        the reasonable fees of any attorneys employed by the Secured Party to collect
        such deficiency. To the extent permitted by applicable law, the Obligor waives
        all claims, damages and demands against the Secured Party arising out of
        the
        repossession, removal, retention or sale of the Collateral, unless due to
        the
        gross negligence or willful misconduct of the Secured Party.

       

      All
        ordinary costs and expenses incurred by any Secured Party in collection of
        the
        Obligations shall be borne exclusively by the Obligor including, without
        limitation, any costs, expenses, fees or disbursements incurred by outside
        agencies or attorneys retained by the Secured Party to effect collections
        of the
        Obligations or any Collateral securing the Obligations. The provisions of
        this
        paragraph shall not apply to any suits, actions, proceedings or claims of
        the
        nature referred to herein or otherwise which are based upon or related to
        the
        repayment of, or the taking of security for, any loans and/or advances made
        by
        Secured Party to the Obligor that do not arise under the Promissory Note,
        and
        the party making such loans and/or advances shall be exclusively responsible
        for
        such suits, actions, proceedings or claims and the payment of all such expenses
        in connection therewith.

       

      8.  Costs
        and Expenses.
        The
        Obligor agrees to pay all reasonable out-of-pocket fees, costs and expenses
        incurred in connection with any filing required hereunder, including without
        limitation, any financing statements, continuation statements, partial releases
        and/or termination statements related thereto or any expenses of any searches
        reasonably required by the Secured Party. The Obligor shall also pay all
        other
        claims and charges which in the reasonable opinion of the Secured Party might
        prejudice, imperil or otherwise affect the Collateral or the Security Interest
        therein. The Obligor will also, upon demand, pay to the Secured Party the
        amount
        of any and all reasonable expenses, including the reasonable fees and expenses
        of its counsel and of any experts and agents, which the Secured Party may
        incur
        in connection with (i) the enforcement of this Agreement, (ii) the custody
        or
        preservation of, or the sale of, collection from, or other realization upon,
        any
        of the Collateral, or (iii) the exercise or enforcement of any of the rights
        of
        the Secured Party under the Promissory Note. Until so paid, any fees payable
        hereunder shall be added to the principal amount of the Promissory Note,
        and
        shall bear interest at the Default Rate.

       

      9.  Responsibility
        for Collateral.
        The
        Obligor assume all liabilities and responsibility in connection with all
        Collateral, and the obligations of the Obligor hereunder or under the Promissory
        Note shall in no way be affected or diminished by reason of the loss,
        destruction, damage or theft of any of the Collateral or its unavailability
        for
        any reason. 

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      10.  Security
        Interest Absolute.
        All
        rights of the Secured Party and all Obligations of the Obligor hereunder,
        shall
        be absolute and unconditional, irrespective of: (a) any lack of validity
        or
        enforceability of this Agreement, the Promissory Note, or any agreement entered
        into in connection with the foregoing, or any portion hereof or thereof;
        (b) any
        change in the time, manner or place of payment or performance of, or in any
        other term of, all or any of the Obligations, or any other amendment or waiver
        of or any consent to any departure from the Promissory Notes, or any other
        agreement entered into in connection with the foregoing; (c) any exchange,
        release or nonperfection of any of the Collateral, or any release or amendment
        or waiver of or consent to departure from any other collateral for, or any
        guaranty, or any other security, for all or any of the Obligations; (d) any
        action by the Secured Party to obtain, adjust, settle and cancel in its sole
        discretion any insurance claims or matters made or arising in connection
        with
        the Collateral; or (e) any other circumstance which might otherwise constitute
        any legal or equitable defense available to the Obligor, or a discharge of
        all
        or any part of the Security Interest granted hereby. Until the Obligations
        shall
        have been paid and performed in full, the rights of the Secured Parties shall
        continue even if the Obligations are barred for any reason, including, without
        limitation, the running of the statute of limitations or bankruptcy. The
        Obligor
        expressly waives presentment, protest, notice of protest, demand, notice
        of
        nonpayment and demand for performance. In the event that at any time any
        transfer of any Collateral or any payment received by the Secured Party
        hereunder shall be deemed by final order of a court of competent jurisdiction
        to
        have been a voidable preference or fraudulent conveyance under the bankruptcy
        or
        insolvency laws of the United States, or shall be deemed to be otherwise
        due to
        any party other than the Secured Party, then, in any such event, the Obligor’s
        obligations hereunder shall survive cancellation of this Agreement, and shall
        not be discharged or satisfied by any prior payment thereof and/or cancellation
        of this Agreement, but shall remain a valid and binding obligation enforceable
        in accordance with the terms and provisions hereof. The Obligor waives all
        right
        to require the Secured Party to proceed against any other person or to apply
        any
        Collateral which the Secured Party may hold at any time, or to marshal assets,
        or to pursue any other remedy. The Obligor waives any defense arising by
        reason
        of the application of the statute of limitations to any obligation secured
        hereby.

       

      11.  Term
        of Agreement.
        This
        Agreement and the Security Interest shall terminate on the earlier of: (i)
        the
        repayment of all amounts due the Secured Party under the Promissory Note.
        Upon
        such termination, the Secured Party, at the request and at the expense of
        the
        Obligor, will join in executing any termination statement with respect to
        any
        financing statement executed and filed pursuant to this Agreement. 

       

      12.  Power
        of Attorney; Further Assurances.
        

       

      (a)  The
        Obligor authorizes the Secured Party, and does hereby make, constitute and
        appoint him and his respective agents, heirs or assigns with full power of
        substitution, as the Obligor’s true and lawful attorney-in-fact, with power, in
        its own name or in the name of the Obligor, to, after the occurrence and
        during
        the continuance of an Event of Default, (i) endorse any debentures, checks,
        drafts, money orders, or other instruments of payment (including payments
        payable under or in respect of any policy of insurance) in respect of the
        Collateral that may come into possession of the Secured Party; (ii) to sign
        and
        endorse any UCC financing statement or any invoice, freight or express bill,
        bill of lading, storage or warehouse receipts, drafts against debtors,
        assignments, verifications and notices in connection with accounts, and other
        documents relating to the Collateral; (iii) to pay or discharge taxes, liens,
        security interests or other encumbrances at any time levied or placed on
        or
        threatened against the Collateral; (iv) to demand, collect, receipt for,
        compromise, settle and sue for monies due in respect of the Collateral; and
        (v)
        generally, to do, at the option of the Secured Party, and at the Obligor’s
        expense, at any time, or from time to time, all acts and things which the
        Secured Party deems necessary to protect, preserve and realize upon the
        Collateral and the Security Interest granted therein in order to effect the
        intent of this Agreement and the Promissory Note, all as fully and effectually
        as the Obligor might or could do; and the Obligor hereby ratifies all that
        said
        attorney shall lawfully do or cause to be done by virtue hereof. This power
        of
        attorney is coupled with an interest and shall be irrevocable for the term
        of
        this Agreement and thereafter as long as any of the Obligations shall be
        outstanding.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (b)  On
        a
        continuing basis, the Obligor will make, execute, acknowledge, deliver, file
        and
        record, as the case may be, in the proper filing and recording places in
        any
        jurisdiction, including, without limitation, the jurisdictions indicated
        on
Schedule
        C,
        attached hereto, and with the Federal Aviation Administration, all such
        instruments, and take all such action as may reasonably be deemed necessary
        or
        advisable, or as reasonably requested by the Secured Party, to perfect the
        Security Interest granted hereunder and otherwise to carry out the intent
        and
        purposes of this Agreement, or for assuring and confirming to the Secured
        Party
        the grant or perfection of a security interest in all the
        Collateral.

       

      (c)  The
        Obligor hereby irrevocably appoints the Secured Party as the Obligor’s
        attorney-in-fact, with full authority in the place and stead of the Obligor
        and
        in the name of the Obligor, from time to time at the discretion of the Secured
        Party, to take any action and to execute any instrument which the Secured
        Party
        may deem necessary or advisable to accomplish the purposes of this Agreement,
        including the filing, in its sole discretion, of one or more financing or
        continuation statements and amendments thereto, relative to any of the
        Collateral without the signature of the Obligor where permitted by
        law.

       

      13.  Notices.
        All
        notices, requests, demands and other communications hereunder shall be in
        writing, with copies to all the other parties hereto, and shall be deemed
        to
        have been duly given when (i) if delivered by hand, upon receipt, (ii) if
        sent
        by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
        nationally recognized overnight delivery service (receipt requested), the
        next
        business day or (iv) if mailed by first-class registered or certified mail,
        return receipt requested, postage prepaid, four days after posting in the
        U.S.
        mails, in each case if delivered to the following addresses:

       

      If
        to the
        Obligor, to: 

      

      c/o
        Tactical Air Defense Services, Inc.

      5001
        Airport Drive 

      Denison,
        Texas 75025

      Attention:
        Mark T. Daniels

      Telephone:
        (903) 786-5300 

      Facsimile:
        (903) 786-5302

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      with
        a
        copy to:  

      

      Hodgson
        Russ LLP

      60
        E.
        42nd Street, 37th
        Floor

      New
        York,
        NY 10165

      Attention:
        Jeffrey A. Rinde, Esq. 

      Telephone:
        (212) 661-3535

      Facsimile:
        (212) 972-1677

       

      If
        to
        Secured Party, to:  

      

      Mark
        T.
        Daniels

      4521
        PGA
        Blvd.

      Palm
        Beach Gardens, FL 33418    

      Telephone:
        (561) 745-9422

      Facsimile:
        (561) 745-5594

       

      with
        a
        copy to:   

      

      Hodgson
        Russ LLP

      60
        E.
        42nd Street, 37th
        Floor

      New
        York,
        NY 10165

      Attention:
        Jeffrey A. Rinde, Esq. 

      Telephone:
        (212) 661-3535

      Facsimile:
        (212) 972-1677

       

      14.  Other
        Security.
        To the
        extent that the Obligations are now or hereafter secured by property other
        than
        the Collateral or by the guarantee, endorsement or property of any other
        person,
        firm, corporation or other entity, then the Secured Parties shall have the
        right, in their sole discretion, to pursue, relinquish, subordinate, modify
        or
        take any other action with respect thereto, without in any way modifying
        or
        affecting any of the Secured Party’s rights and remedies hereunder.

       

      15.  Miscellaneous.
        

       

      (a)  No
        course
        of dealing between the Obligor and the Secured Party, nor any failure to
        exercise, nor any delay in exercising, on the part of the Secured Parties,
        any
        right, power or privilege hereunder or under the Promissory Note shall operate
        as a waiver thereof; nor shall any single or partial exercise of any right,
        power or privilege hereunder or thereunder preclude any other or further
        exercise thereof or the exercise of any other right, power or
        privilege.

       

      (b)  All
        of
        the rights and remedies of the Secured Party with respect to the Collateral,
        whether established hereby or by the Promissory Note, or by any other
        agreements, instruments or documents or by law shall be cumulative and may
        be
        exercised singly or concurrently.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      (c)  This
        Agreement constitutes the entire agreement of the parties with respect to
        the
        subject matter hereof and is intended to supersede all prior negotiations,
        understandings and agreements with respect thereto. Except as specifically
        set
        forth in this Agreement, no provision of this Agreement may be modified or
        amended except by a written agreement specifically referring to this Agreement
        and signed by the parties hereto.

       

      (d)  In
        the
        event that any provision of this Agreement is held to be invalid, prohibited
        or
        unenforceable in any jurisdiction for any reason, unless such provision is
        narrowed by judicial construction, this Agreement shall, as to such
        jurisdiction, be construed as if such invalid, prohibited or unenforceable
        provision had been more narrowly drawn so as not to be invalid, prohibited
        or
        unenforceable. If, notwithstanding the foregoing, any provision of this
        Agreement is held to be invalid, prohibited or unenforceable in any
        jurisdiction, such provision, as to such jurisdiction, shall be ineffective
        to
        the extent of such invalidity, prohibition or unenforceability without
        invalidating the remaining portion of such provision or the other provisions
        of
        this Agreement and without affecting the validity or enforceability of such
        provision or the other provisions of this Agreement in any other
        jurisdiction.

       

      (e)  No
        waiver
        of any breach or default or any right under this Agreement shall be considered
        valid unless in writing and signed by the party giving such waiver, and no
        such
        waiver shall be deemed a waiver of any subsequent breach or default or right,
        whether of the same or similar nature or otherwise.

       

      (f)  This
        Agreement shall be binding upon and inure to the benefit of each party hereto
        and its successors and assigns.

       

      (g)  Each
        party shall take such further action and execute and deliver such further
        documents as may be necessary or appropriate in order to carry out the
        provisions and purposes of this Agreement.

       

      (h)  This
        Agreement shall be construed in accordance with the laws of the State of
        New
        York, except to the extent the validity, perfection or enforcement of a security
        interest hereunder in respect of any particular Collateral which are governed
        by
        a jurisdiction other than the State of New York in which case such law shall
        govern. Each of the parties hereto irrevocably submit to the exclusive
        jurisdiction of any New York State or United States federal court sitting
        in New
        York county over any action or proceeding arising out of or relating to this
        Agreement, and the parties hereto hereby irrevocably agree that all claims
        in
        respect of such action or proceeding may be heard and determined in such
        New
        York State or Federal court. The parties hereto agree that a final judgment
        in
        any such action or proceeding shall be conclusive and may be enforced in
        other
        jurisdictions by suit on the judgment or in any other manner provided by
        law.
        The parties hereto further waive any objection to venue in the State of New
        York
        and any objection to an action or proceeding in the State of New York on
        the
        basis of forum non conveniens.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      (i)  EACH
        PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRAIL
        OF ANY
        CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE
        SCOPE
        OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY
        BE
        FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS AGREEMENT,
        INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
        CLAIMS
        AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
        THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A
        BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER
        IN
        ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON
        THIS
        WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
        REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
        SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS RIGHTS TO A JURY TRIAL
        FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
        NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
        ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
        RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT
        OF A
        LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
        THE
        COURT. 

       

      (j)  This
        Agreement may be executed in any number of counterparts, each of which when
        so
        executed shall be deemed to be an original and, all of which taken together
        shall constitute one and the same Agreement. In the event that any signature
        is
        delivered by facsimile transmission, such signature shall create a valid
        binding
        obligation of the party executing (or on whose behalf such signature is
        executed) the same with the same force and effect as if such facsimile signature
        were the original thereof.

       

      

       

      [THE
        REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]

       

       

       

       

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      COUNTERPART
        SIGNATURE PAGE TO SECURITY AGREEMENT, DATED AS OF JULY __,
        2006.

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto, intending to be bound hereby, have caused this Security
        Agreement to be executed the day and year first above written.

       

      
        	 	 	 
	 	OBLIGOR:
	 	 
	 	TACTICAL AIR DEFENSE SERVICES,
                INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name:
	 	Title:

      
        	 	 	 
	 	SECURED
                PARTY: 
	 
 	 
 	 
 
	 	 	 
	 	
                
Mark
                T. Daniels

      

      

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      

      SCHEDULE
        A

      

      Principal
        Offices

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        B

      

      Permitted
        Liens

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        C

      

      Jurisdictions

      

      Utah

      Texas

      Ukraine

      British
        Columbia

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

EXHIBIT
      7(e)-I

    
       

      FORM
        OF SUBSIDIARY SECURITY AGREEMENT 

       

      THIS
        SECURITY AGREEMENT,
        dated
        as of the ____ day of July, 2006 (the “Agreement”),
        is
        entered into by and among Mark Daniels (the “Secured
        Party”),
        and [
        ], a Nevada corporation (the “Obligor”).
        All
        capitalized terms not otherwise defined herein, shall have the meanings set
        forth in the Asset Purchase Agreement (as hereinafter defined). 

       

      W
        I T N E
        S S E T H:

       

      WHEREAS,
        concurrently on the date hereof, Tactical Air Defense Services, Inc., a Nevada
        corporation, (“Parent”),
        its
        subsidiaries (including Obligor, the “Subsidiaries”),
        entered into an Asset Purchase Agreement (the “Asset
        Purchase Agreement”)
        with
        AeroGroup Incorporated and its Subsidiaries (collectively, the “Sellers”),
        pursuant to which, among other things, the Purchasers agreed to assume a
        Secured
        Promissory Note issued to Secured Party in the aggregate the principal amount
        of
        $1,100,000 (the “Promissory
        Note”)
        which
        Promissory Note is guaranteed as to payment by Obligor; and

       

      WHEREAS,
        in
        order to induce the Sellers to enter into the Asset Purchase Agreement the
        Obligor and the Subsidiaries have agreed to execute and deliver to the Secured
        Party this Agreement for the benefit of the Secured Party and to grant him
        a
        security interest in certain property of the Obligor, to secure the prompt
        payment, performance and discharge in full of all of the obligations of the
        Obligor under the Promissory Note.

       

      NOW,
        THEREFORE,
        in
        consideration of the agreements herein contained and for other good and valuable
        consideration, the receipt a sufficiency of which is hereby acknowledged,
        the
        parties hereto hereby agree as follows:

       

      1.  Certain
        Definitions.
        As used
        in this Agreement, the following terms shall have the meanings set forth
        in this
        Section 1. Terms used but not otherwise defined in this Agreement that are
        defined in Article 9 of the UCC (such as “general
        intangibles”
and
        “proceeds”)
        shall
        have the respective meanings given such terms in Article 9 of the UCC.

       

      (a)  “Collateral”
means
        the collateral in which the Secured Party is granted a security interest
        by this
        Agreement and which shall include the following, whether presently owned
        or
        existing or hereafter acquired or coming into existence, and all additions
        and
        accessions thereto and all substitutions and replacements thereof, and all
        proceeds, products and accounts thereof, including, without limitation, all
        proceeds from the sale or transfer of the Collateral and of insurance covering
        the same and of any tort claims in connection therewith:

       

      (i)  all
        Goods
        of the Obligor, including, without limitations, all machinery, equipment,
        computers, motor vehicles, aircraft, aircraft parts, avionics, trucks, tanks,
        boats, ships, appliances, furniture, special and general tools, fixtures,
        test
        and quality control devices and other equipment of every kind and nature
        and
        wherever situated, together with all documents of title and documents
        representing the same, all additions and accessions thereto, replacements
        therefor, all parts therefor, and all substitutes for any of the foregoing
        and
        all other items used and useful in connection with the Obligor’s businesses and
        all improvements thereto (collectively, the “Equipment”);
        and

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (ii)  All
        Inventory of the Obligor; and

       

      (iii)  All
        of
        the Obligor’s contract rights and general intangibles, including, without
        limitation, all partnership interests, stock or other securities, licenses,
        distribution and other agreements, computer software development rights,
        leases,
        franchises, customer lists, quality control procedures, grants and rights,
        goodwill, trademarks, service marks, trade styles, trade names, patents,
        patent
        applications, copyrights, deposit accounts, and income tax refunds
        (collectively, the “General
        Intangibles”);
        and

       

      (iv)  All
        Receivables of the Obligor including all insurance proceeds, and rights to
        refunds or indemnification whatsoever owing, together with all instruments,
        all
        documents of title representing any of the foregoing, all rights in any
        merchandising, goods, equipment, motor vehicles and trucks which any of the
        same
        may represent, and all right, title, security and guaranties with respect
        to
        each Receivable, including any right of stoppage in transit; and

       

      (v)  All
        of
        the Obligor’s documents, instruments and chattel paper, files, records, books of
        account, business papers, computer programs and the products and proceeds
        of all
        of the foregoing Collateral set forth in clauses (i)-(iv) above.

       

      (b)  “Obligations”
means
        all of the Obligor’s obligations under the Promissory Note, in each case,
        whether now or hereafter existing, voluntary or involuntary, direct or indirect,
        absolute or contingent, liquidated or unliquidated, whether or not jointly
        owed
        with others, and whether or not from time to time decreased or extinguished
        and
        later decreased, created or incurred, and all or any portion of such obligations
        or liabilities that are paid, to the extent all or any part of such payment
        is
        avoided or recovered directly or indirectly from the Secured Party as a
        preference, fraudulent transfer or otherwise as such obligations may be amended,
        supplemented, converted, extended or modified from time to time.

       

      (c)  “UCC”
means
        the Uniform Commercial Code, as currently in effect in the State of New York;
        provided,
        however,
        that in
        the event, by reason of mandatory provisions of law, any or all of the
        attachment, perfection or priority of the Secured Party’s security interest in
        any Collateral is governed by the Uniform Commercial Code as in effect in
        a
        jurisdiction other than the State of New York, the term “UCC” shall mean the
        Uniform Commercial Code as in effect in such other jurisdiction for purposes
        of
        the provisions hereof relating to such attachment, perfection of priority
        and
        for purposes of definitions related to such provisions. 

       

      2.  Grant
        of Security Interest.
        

       

      (a) As
        an
        inducement for the Secured Party to enter into the Asset Purchase Agreement
        and
        to cause Sellers to enter into the Asset Purchase Agreement, and to secure
        the
        complete and timely payment, performance and discharge in full, as the case
        may
        be, of all of the Obligations, except for Permitted Liens (as hereinafter
        defined), the Obligor hereby, unconditionally and irrevocably, pledge, grant
        and
        hypothecate to the Secured Party, a continuing security interest in, a
        continuing lien upon, an unqualified right to possession and disposition
        of and
        a right of set-off against, in each case to the fullest extent permitted
        by law,
        all of the Obligor’s right, title and interest of whatsoever kind and nature in
        and to the Collateral (the “Security
        Interest”).

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      (b) In
        the
        event that the Obligor materially breaches any of the terms and provisions
        of
        this Security Agreement, or should any Event of Default (as that term is
        defined
        herein) occur, the respective positions of each Secured Party with respect
        to
        the Collateral shall be in accordance with its respective participations
        therein.

       

      3.  Representations,
        Warranties, Covenants and Agreements of the Obligor.
        The
        Obligor represents and warrant to, and covenant and agrees with, the Secured
        Party as follows: 

       

      (a)  The
        Obligor has the requisite corporate power and authority to enter into this
        Agreement and otherwise to carry out its obligations hereunder. The execution,
        delivery and performance by the Obligor of this Agreement and the filings
        contemplated herein have been duly authorized by all necessary action on
        the
        part of the Obligor and no further action is required by the Obligor. This
        Agreement constitutes a legal, valid and binding obligation of the Obligor
        enforceable in accordance with its terms, except as enforceability may be
        limited by bankruptcy, insolvency, reorganization, moratorium or similar
        laws
        affecting the enforcement of creditor’s rights generally.

       

      (b)  The
        Obligor represents and warrants that it has no place of business or offices
        where their respective books of account and records are kept (other than
        temporarily at the offices of its attorneys or accountants), except as set
        forth
        on Schedule
        A
        attached
        hereto;

       

      (c)  Except
        as
        to those liens existing as of the date hereof that were disclosed to the
        Secured
        Party by the Obligor and are set forth on the attached Schedule
        B
        (the
“Permitted
        Liens”),
        the
        Obligor is the sole owner of the Collateral (except for non-exclusive licenses
        granted by the Obligor in the ordinary course of business), free and clear
        of
        any liens, security interests, encumbrances, rights or claims, and are fully
        authorized to grant the Security Interest in and to pledge the Collateral.
        Except as to the Permitted Liens, there is not on file in any governmental
        or
        regulatory authority, agency or recording office an effective financing
        statement, security agreement, license or transfer or any notice of any of
        the
        foregoing (other than those that have been filed in favor of the Secured
        Party
        pursuant to this Agreement) covering or affecting any of the Collateral.
        Except
        as to the Permitted Liens, so long as this Agreement shall be in effect,
        the
        Obligor shall not execute and shall not knowingly permit to be on file in
        any
        such office or agency any such financing statement or other document or
        instrument (except to the extent filed or recorded in favor of the Secured
        Party
        pursuant to the terms of this Agreement).

       

      (d)  No
        part
        of the Collateral has been judged invalid or unenforceable. No written claim
        has
        been received that any Collateral or the Obligor’s use of any Collateral
        violates the rights of any third party. There has been no adverse decision
        to
        the Obligor’s claim of ownership rights in or exclusive rights to use the
        Collateral in any jurisdiction or to the Obligor’s right to keep and maintain
        such Collateral in full force and effect, and there is no proceeding involving
        said rights pending or, to the best knowledge of the Obligor, threatened
        before
        any court, judicial body, administrative or regulatory agency, arbitrator
        or
        other governmental authority. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (e)  The
        Obligor shall at all times maintain their books of account and records relating
        to the Collateral at its principal place of business and may not relocate
        such
        books of account and records unless it delivers to the Secured Party at least
        thirty (30) days prior to such relocation (i) written notice of such relocation
        and the new location thereof (which must be within the United States) and
        (ii) evidence that appropriate financing statements and other necessary
        documents have been filed and recorded and other steps have been taken to
        perfect the Security Interest to create in favor of the Secured Party valid,
        perfected and continuing liens in the Collateral. 

       

      (f)  This
        Agreement creates in favor of the Secured Party a valid security interest
        in the
        Collateral securing the payment and performance of the Obligations and, upon
        making the filings described in the immediately following sentence, a perfected
        security interest in such Collateral. Except for the filing of financing
        statements on Form-1 under the UCC with the jurisdictions indicated on
Schedule
        C,
        attached hereto, no authorization or approval of or filing with or notice
        to any
        governmental authority or regulatory body is required either (i) for the
        grant
        by the Obligor of, or the effectiveness of, the Security Interest granted
        hereby
        or for the execution, delivery and performance of this Agreement by the Obligor,
        or (ii) for the perfection of or exercise by the Secured Party of their rights
        and remedies hereunder.

       

      (g)  The
        Obligor hereby irrevocably authorize the Secured Party at any time and from
        time
        to time to file in any Uniform Commercial Code jurisdiction any initial
        financing statements and amendments thereto that (i) indicate the Collateral
        regardless of whether any particular asset comprised in the Collateral falls
        within the scope of Article 9 of the Uniform Commercial Code of the State
        of New
        York as amended from time to time (“NYUCC”),
        or
        any other Uniform Commercial Code jurisdiction; and (ii) contain any other
        information required by part 5 of Article 9 of the NYUCC for the sufficiency
        or
        filing office acceptance of any financing statement or amendment, including
        whether the Obligor is an organization, the type of organization and any
        organization identification number issued to the Obligor. The Obligor agrees
        to
        furnish any such information to the Secured Parties promptly upon request.
        The
        Obligor also ratifies its authorization for the Secured Party to have filed
        in
        any Uniform Commercial Code jurisdiction any like initial financing statements
        or amendments thereto if filed prior to the date hereof with respect to the
        Collateral.

       

      (h)  The
        execution, delivery and performance of this Agreement does not conflict with
        or
        cause a breach or default, or an event that with or without the passage of
        time
        or notice, shall constitute a breach or default, under any agreement to which
        Obligor is a party or by which Obligor is bound. No consent (including, without
        limitation, from stockholders or creditors of the Obligor) is required for
        the
        Obligor to enter into and perform its obligations hereunder.

       

      (i)  The
        Obligor shall at all times maintain the liens and Security Interest provided
        for
        hereunder as valid and perfected liens and security interests in the Collateral
        in favor of the Secured Party until this Agreement and the Security Interest
        hereunder shall be terminated pursuant to Section 11. The Obligor hereby
        agrees
        to defend the same against any and all persons. The Obligor shall safeguard
        and
        protect all Collateral for the account of the Secured Party. At the request
        of
        the Secured Party, the Obligor will pay the cost of filing one or more financing
        statements pursuant to the UCC (or any other applicable statute) in form
        reasonably satisfactory to the Secured Party in all public offices wherever
        filing is, or is deemed by the Secured Party to be, necessary or desirable
        to
        effect the rights and obligations provided for herein. Without limiting the
        generality of the foregoing, the Obligor shall pay all fees, taxes and other
        amounts necessary to maintain the Collateral and the Security Interest
        hereunder, and the Obligor shall obtain and furnish to the Secured Party
        from
        time to time, upon demand, such releases and/or subordinations of claims
        and
        liens which may be required to maintain the priority of the Security Interest
        hereunder. 

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (j)  So
        long
        as the Obligor shall have any obligations under the Promissory Note, the
        Obligor
        shall not, without the Secured Party’s written consent, transfer, pledge,
        hypothecate, encumber, license (except for non-exclusive licenses granted
        by the
        Obligor in the ordinary course of business), sell (except for sales of inventory
        in the ordinary course of business) or otherwise dispose of any of the
        Collateral. 

       

      (k)  The
        Obligor shall keep and preserve their Equipment, Inventory and other tangible
        Collateral in good condition, repair and order and shall not operate or locate
        any such Collateral (or cause to be operated or located) in any area excluded
        from insurance coverage.

       

      (l)  The
        Obligor shall, within ten (10) days of obtaining knowledge thereof, advise
        the
        Secured Party promptly, in sufficient detail, of any substantial change in
        the
        Collateral, and of the occurrence of any event which would have a material
        adverse effect on the value of the Collateral or on the Secured Party’s security
        interest therein.

       

      (m)  The
        Obligor shall promptly execute and deliver to the Secured Party such further
        deeds, mortgages, assignments, security agreements, financing statements
        or
        other instruments, documents, certificates and assurances and take such further
        action as the Secured Party may from time to time request and may in its
        sole
        discretion deem necessary to perfect, protect or enforce its security interest
        in the Collateral.

       

      (n)  The
        Obligor shall permit the Secured Party and their representatives and agents
        to
        inspect the Collateral at any time, and to make copies of records pertaining
        to
        the Collateral as may be requested by the Secured Party from time to
        time.

       

      (o)  The
        Obligor will take all steps reasonably necessary to diligently pursue and
        seek
        to preserve, enforce and collect any rights, claims, causes of action and
        accounts receivable in respect of the Collateral.

       

      (p)  The
        Obligor shall promptly notify the Secured Party in sufficient detail upon
        becoming aware of any attachment, garnishment, execution or other legal process
        levied against any Collateral and of any other information received by the
        Obligor that may materially affect the value of the Collateral, the Security
        Interest or the rights and remedies of the Secured Party hereunder.

       

      (q)  All
        information heretofore, herein or hereafter supplied to the Secured Party
        by or
        on behalf of the Obligor with respect to the Collateral is accurate and complete
        in all material respects as of the date furnished.

       

      4.  Defaults.
        The
        following events shall be “Events
        of Default”:

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (a)  A
        breach
        by Obligor or any of the Purchasers of their material obligations under any
        of
        the Promissory Note, the Asset Purchase Agreement, the Guaranty and failure
        to
        cure such breach for ten (10) days after receipt by such Obligor of notice
        of
        such breach from the Secured Party;

       

      (b)  Any
        representation or warranty of the Obligor or in this Agreement and/or or
        any
        Purchaser in (i) the Asset Purchase Agreement, or (ii) any other agreement,
        guaranty or other document relating to the Asset Purchase Agreement to which
        such Purchaser is a party, shall prove to have been incorrect in any material
        respect when made; and

       

      (c)  The
        material failure by an Obligor to observe or perform any of its material
        obligations hereunder for ten (10) days after receipt by such Obligor of
        notice
        of such failure from the Secured Party.

       

      5.  Duty
        To Hold In Trust.
        Upon
        the occurrence of any Event of Default and at any time thereafter, the Obligor
        shall, upon receipt by it of any revenue, income or other sums subject to
        the
        Security Interest, whether payable pursuant to the Promissory Note, or
        otherwise, or of any check, draft, debenture, trade acceptance or other
        instrument evidencing an obligation to pay any such sum, hold the same in
        trust
        for the Secured Party and shall forthwith endorse and transfer any such sums
        or
        instruments, or both, to the Secured Party for application to the satisfaction
        of the Obligation.

       

      6.  Rights
        and Remedies Upon Default.
        Upon
        occurrence of any Event of Default and at any time thereafter, the Secured
        Party
        shall have the right to exercise all of the remedies conferred hereunder
        and
        under the Promissory Notes, and the Secured Party shall have all the rights
        and
        remedies of a secured party under the UCC and/or any other applicable law
        (including the Uniform Commercial Code of any jurisdiction in which any
        Collateral is then located). Without limitation, the Secured Party shall
        have
        the following rights and powers:

       

      (a)  The
        Secured Party shall have the right to take possession of the Collateral and,
        for
        that purpose, enter, with the aid and assistance of any person, any premises
        where the Collateral, or any part thereof, is or may be placed and remove
        the
        same, and the Obligor shall assemble the Collateral and make it available
        to the
        Secured Party at places which the Secured Party shall reasonably select,
        whether
        at the Obligor’s premises or elsewhere, and make available to the Secured Party,
        without rent, all of the Obligor’s respective premises and facilities for the
        purpose of the Secured Party taking possession of, removing or putting the
        Collateral in saleable or disposable form.

       

      (b)  The
        Secured Party shall have the right to operate the business of the Obligor
        using
        the Collateral and shall have the right to assign, sell, lease or otherwise
        dispose of and deliver all or any part of the Collateral, at public or private
        sale or otherwise, either with or without special conditions or stipulations,
        for cash or on credit or for future delivery, in such parcel or parcels and
        at
        such time or times and at such place or places, and upon such terms and
        conditions as the Secured Party may deem commercially reasonable, all without
        (except as shall be required by applicable statute and cannot be waived)
        advertisement or demand upon or notice to the Obligor or right of redemption
        of
        the Obligor, which are hereby expressly waived. Upon each such sale, lease,
        assignment or other transfer of Collateral, the Secured Party may, unless
        prohibited by applicable law which cannot be waived, purchase all or any
        part of
        the Collateral being sold, free from and discharged of all trusts, claims,
        right
        of redemption and equities of the Obligor, which are hereby waived and
        released.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      7.  Applications
        of Proceeds.
        The
        proceeds of any such sale, lease or other disposition of the Collateral
        hereunder shall be applied first, to the expenses of retaking, holding, storing,
        processing and preparing for sale, selling, and the like (including, without
        limitation, any taxes, fees and other costs incurred in connection therewith)
        of
        the Collateral, to the reasonable attorneys' fees and expenses incurred by
        the
        Secured Party in enforcing their rights hereunder and in connection with
        collecting, storing and disposing of the Collateral, and then to satisfaction
        of
        the Obligations, and to the payment of any other amounts required by applicable
        law, after which the Secured Party shall pay to the Obligor any surplus
        proceeds. If, upon the sale, license or other disposition of the Collateral,
        the
        proceeds thereof are insufficient to pay all amounts to which the Secured
        Party
        are legally entitled, the Obligor will be liable for the deficiency, together
        with interest thereon, at the rate of 18% per annum (the “Default
        Rate”),
        and
        the reasonable fees of any attorneys employed by the Secured Party to collect
        such deficiency. To the extent permitted by applicable law, the Obligor waives
        all claims, damages and demands against the Secured Party arising out of
        the
        repossession, removal, retention or sale of the Collateral, unless due to
        the
        gross negligence or willful misconduct of the Secured Party.

       

      All
        ordinary costs and expenses incurred by any Secured Party in collection of
        the
        Obligations shall be borne exclusively by the Obligor including, without
        limitation, any costs, expenses, fees or disbursements incurred by outside
        agencies or attorneys retained by the Secured Party to effect collections
        of the
        Obligations or any Collateral securing the Obligations. The provisions of
        this
        paragraph shall not apply to any suits, actions, proceedings or claims of
        the
        nature referred to herein or otherwise which are based upon or related to
        the
        repayment of, or the taking of security for, any loans and/or advances made
        by
        Secured Party to the Obligor that do not arise under the Promissory Note,
        and
        the party making such loans and/or advances shall be exclusively responsible
        for
        such suits, actions, proceedings or claims and the payment of all such expenses
        in connection therewith.

       

      8.  Costs
        and Expenses.
        The
        Obligor agrees to pay all reasonable out-of-pocket fees, costs and expenses
        incurred in connection with any filing required hereunder, including without
        limitation, any financing statements, continuation statements, partial releases
        and/or termination statements related thereto or any expenses of any searches
        reasonably required by the Secured Party. The Obligor shall also pay all
        other
        claims and charges which in the reasonable opinion of the Secured Party might
        prejudice, imperil or otherwise affect the Collateral or the Security Interest
        therein. The Obligor will also, upon demand, pay to the Secured Party the
        amount
        of any and all reasonable expenses, including the reasonable fees and expenses
        of its counsel and of any experts and agents, which the Secured Party may
        incur
        in connection with (i) the enforcement of this Agreement, (ii) the custody
        or
        preservation of, or the sale of, collection from, or other realization upon,
        any
        of the Collateral, or (iii) the exercise or enforcement of any of the rights
        of
        the Secured Party under the Promissory Note. Until so paid, any fees payable
        hereunder shall be added to the principal amount of the Promissory Note,
        and
        shall bear interest at the Default Rate.

       

      9.  Responsibility
        for Collateral.
        The
        Obligor assume all liabilities and responsibility in connection with all
        Collateral, and the obligations of the Obligor hereunder or under the Promissory
        Note shall in no way be affected or diminished by reason of the loss,
        destruction, damage or theft of any of the Collateral or its unavailability
        for
        any reason. 

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      10.  Security
        Interest Absolute.
        All
        rights of the Secured Party and all Obligations of the Obligor hereunder,
        shall
        be absolute and unconditional, irrespective of: (a) any lack of validity
        or
        enforceability of this Agreement, the Promissory Note, or any agreement entered
        into in connection with the foregoing, or any portion hereof or thereof;
        (b) any
        change in the time, manner or place of payment or performance of, or in any
        other term of, all or any of the Obligations, or any other amendment or waiver
        of or any consent to any departure from the Promissory Notes, or any other
        agreement entered into in connection with the foregoing; (c) any exchange,
        release or nonperfection of any of the Collateral, or any release or amendment
        or waiver of or consent to departure from any other collateral for, or any
        guaranty, or any other security, for all or any of the Obligations; (d) any
        action by the Secured Party to obtain, adjust, settle and cancel in its sole
        discretion any insurance claims or matters made or arising in connection
        with
        the Collateral; or (e) any other circumstance which might otherwise constitute
        any legal or equitable defense available to the Obligor, or a discharge of
        all
        or any part of the Security Interest granted hereby. Until the Obligations
        shall
        have been paid and performed in full, the rights of the Secured Parties shall
        continue even if the Obligations are barred for any reason, including, without
        limitation, the running of the statute of limitations or bankruptcy. The
        Obligor
        expressly waives presentment, protest, notice of protest, demand, notice
        of
        nonpayment and demand for performance. In the event that at any time any
        transfer of any Collateral or any payment received by the Secured Party
        hereunder shall be deemed by final order of a court of competent jurisdiction
        to
        have been a voidable preference or fraudulent conveyance under the bankruptcy
        or
        insolvency laws of the United States, or shall be deemed to be otherwise
        due to
        any party other than the Secured Party, then, in any such event, the Obligor’s
        obligations hereunder shall survive cancellation of this Agreement, and shall
        not be discharged or satisfied by any prior payment thereof and/or cancellation
        of this Agreement, but shall remain a valid and binding obligation enforceable
        in accordance with the terms and provisions hereof. The Obligor waives all
        right
        to require the Secured Party to proceed against any other person or to apply
        any
        Collateral which the Secured Party may hold at any time, or to marshal assets,
        or to pursue any other remedy. The Obligor waives any defense arising by
        reason
        of the application of the statute of limitations to any obligation secured
        hereby.

       

      11.  Term
        of Agreement.
        This
        Agreement and the Security Interest shall terminate on the earlier of: (i)
        the
        repayment of all amounts due the Secured Party under the Promissory Note.
        Upon
        such termination, the Secured Party, at the request and at the expense of
        the
        Obligor, will join in executing any termination statement with respect to
        any
        financing statement executed and filed pursuant to this Agreement. 

       

      12.  Power
        of Attorney; Further Assurances.
        

       

      (a)  The
        Obligor authorizes the Secured Party, and does hereby make, constitute and
        appoint him and his respective agents, heirs or assigns with full power of
        substitution, as the Obligor’s true and lawful attorney-in-fact, with power, in
        its own name or in the name of the Obligor, to, after the occurrence and
        during
        the continuance of an Event of Default, (i) endorse any debentures, checks,
        drafts, money orders, or other instruments of payment (including payments
        payable under or in respect of any policy of insurance) in respect of the
        Collateral that may come into possession of the Secured Party; (ii) to sign
        and
        endorse any UCC financing statement or any invoice, freight or express bill,
        bill of lading, storage or warehouse receipts, drafts against debtors,
        assignments, verifications and notices in connection with accounts, and other
        documents relating to the Collateral; (iii) to pay or discharge taxes, liens,
        security interests or other encumbrances at any time levied or placed on
        or
        threatened against the Collateral; (iv) to demand, collect, receipt for,
        compromise, settle and sue for monies due in respect of the Collateral; and
        (v)
        generally, to do, at the option of the Secured Party, and at the Obligor’s
        expense, at any time, or from time to time, all acts and things which the
        Secured Party deems necessary to protect, preserve and realize upon the
        Collateral and the Security Interest granted therein in order to effect the
        intent of this Agreement and the Promissory Note, all as fully and effectually
        as the Obligor might or could do; and the Obligor hereby ratifies all that
        said
        attorney shall lawfully do or cause to be done by virtue hereof. This power
        of
        attorney is coupled with an interest and shall be irrevocable for the term
        of
        this Agreement and thereafter as long as any of the Obligations shall be
        outstanding.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (b)  On
        a
        continuing basis, the Obligor will make, execute, acknowledge, deliver, file
        and
        record, as the case may be, in the proper filing and recording places in
        any
        jurisdiction, including, without limitation, the jurisdictions indicated
        on
Schedule
        C,
        attached hereto, and with the Federal Aviation Administration, all such
        instruments, and take all such action as may reasonably be deemed necessary
        or
        advisable, or as reasonably requested by the Secured Party, to perfect the
        Security Interest granted hereunder and otherwise to carry out the intent
        and
        purposes of this Agreement, or for assuring and confirming to the Secured
        Party
        the grant or perfection of a security interest in all the
        Collateral.

       

      (c)  The
        Obligor hereby irrevocably appoints the Secured Party as the Obligor’s
        attorney-in-fact, with full authority in the place and stead of the Obligor
        and
        in the name of the Obligor, from time to time at the discretion of the Secured
        Party, to take any action and to execute any instrument which the Secured
        Party
        may deem necessary or advisable to accomplish the purposes of this Agreement,
        including the filing, in its sole discretion, of one or more financing or
        continuation statements and amendments thereto, relative to any of the
        Collateral without the signature of the Obligor where permitted by
        law.

       

      13.  Notices.
        All
        notices, requests, demands and other communications hereunder shall be in
        writing, with copies to all the other parties hereto, and shall be deemed
        to
        have been duly given when (i) if delivered by hand, upon receipt, (ii) if
        sent
        by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
        nationally recognized overnight delivery service (receipt requested), the
        next
        business day or (iv) if mailed by first-class registered or certified mail,
        return receipt requested, postage prepaid, four days after posting in the
        U.S.
        mails, in each case if delivered to the following addresses:

       

      If
        to the
        Obligor, to: 

      c/o
        Tactical Air Defense Services, Inc.

      5001
        Airport Drive 

      Denison,
        Texas 75025

      Attention:
        Mark T. Daniels

      Telephone:
        (903) 786-5300 

      Facsimile:
        (903) 786-5302

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      with
        a
        copy to:  

      Hodgson
        Russ LLP

      60
        E.
        42nd Street, 37th
        Floor

      New
        York,
        NY 10165

      Attention:
        Jeffrey A. Rinde, Esq. 

      Telephone:
        (212) 661-3535

      Facsimile:
        (212) 972-1677

       

      If
        to
        Secured Party, to:  

      

      Mark
        T.
        Daniels

      4521
        PGA
        Blvd. 

      Palm
        Beach Gardens, Florida 33418

      Tel:
        (561) 745-9422

      Facsimile:
        (561) 745-5594 

       

      with
        a
        copy to:   

      Hodgson
        Russ LLP

      60
        E.
        42nd Street, 37th
        Floor

      New
        York,
        NY 10165

      Attention:
        Jeffrey A. Rinde, Esq. 

      Telephone:
        (212) 661-3535

      Facsimile:
        (212) 972-1677

       

      14.  Other
        Security.
        To the
        extent that the Obligations are now or hereafter secured by property other
        than
        the Collateral or by the guarantee, endorsement or property of any other
        person,
        firm, corporation or other entity, then the Secured Parties shall have the
        right, in their sole discretion, to pursue, relinquish, subordinate, modify
        or
        take any other action with respect thereto, without in any way modifying
        or
        affecting any of the Secured Party’s rights and remedies hereunder.

       

      15.  Miscellaneous.
        

       

      (a)  No
        course
        of dealing between the Obligor and the Secured Party, nor any failure to
        exercise, nor any delay in exercising, on the part of the Secured Parties,
        any
        right, power or privilege hereunder or under the Promissory Note shall operate
        as a waiver thereof; nor shall any single or partial exercise of any right,
        power or privilege hereunder or thereunder preclude any other or further
        exercise thereof or the exercise of any other right, power or
        privilege.

       

      (b)  All
        of
        the rights and remedies of the Secured Party with respect to the Collateral,
        whether established hereby or by the Promissory Note, or by any other
        agreements, instruments or documents or by law shall be cumulative and may
        be
        exercised singly or concurrently.

       

      (c)  This
        Agreement constitutes the entire agreement of the parties with respect to
        the
        subject matter hereof and is intended to supersede all prior negotiations,
        understandings and agreements with respect thereto. Except as specifically
        set
        forth in this Agreement, no provision of this Agreement may be modified or
        amended except by a written agreement specifically referring to this Agreement
        and signed by the parties hereto.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      (d)  In
        the
        event that any provision of this Agreement is held to be invalid, prohibited
        or
        unenforceable in any jurisdiction for any reason, unless such provision is
        narrowed by judicial construction, this Agreement shall, as to such
        jurisdiction, be construed as if such invalid, prohibited or unenforceable
        provision had been more narrowly drawn so as not to be invalid, prohibited
        or
        unenforceable. If, notwithstanding the foregoing, any provision of this
        Agreement is held to be invalid, prohibited or unenforceable in any
        jurisdiction, such provision, as to such jurisdiction, shall be ineffective
        to
        the extent of such invalidity, prohibition or unenforceability without
        invalidating the remaining portion of such provision or the other provisions
        of
        this Agreement and without affecting the validity or enforceability of such
        provision or the other provisions of this Agreement in any other
        jurisdiction.

       

      (e)  No
        waiver
        of any breach or default or any right under this Agreement shall be considered
        valid unless in writing and signed by the party giving such waiver, and no
        such
        waiver shall be deemed a waiver of any subsequent breach or default or right,
        whether of the same or similar nature or otherwise.

       

      (f)  This
        Agreement shall be binding upon and inure to the benefit of each party hereto
        and its successors and assigns.

       

      (g)  Each
        party shall take such further action and execute and deliver such further
        documents as may be necessary or appropriate in order to carry out the
        provisions and purposes of this Agreement.

       

      (h)  This
        Agreement shall be construed in accordance with the laws of the State of
        New
        York, except to the extent the validity, perfection or enforcement of a security
        interest hereunder in respect of any particular Collateral which are governed
        by
        a jurisdiction other than the State of New York in which case such law shall
        govern. Each of the parties hereto irrevocably submit to the exclusive
        jurisdiction of any New York State or United States federal court sitting
        in New
        York county over any action or proceeding arising out of or relating to this
        Agreement, and the parties hereto hereby irrevocably agree that all claims
        in
        respect of such action or proceeding may be heard and determined in such
        New
        York State or Federal court. The parties hereto agree that a final judgment
        in
        any such action or proceeding shall be conclusive and may be enforced in
        other
        jurisdictions by suit on the judgment or in any other manner provided by
        law.
        The parties hereto further waive any objection to venue in the State of New
        York
        and any objection to an action or proceeding in the State of New York on
        the
        basis of forum non conveniens.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      (i)  EACH
        PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRAIL
        OF ANY
        CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE
        SCOPE
        OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY
        BE
        FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS AGREEMENT,
        INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
        CLAIMS
        AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
        THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A
        BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER
        IN
        ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON
        THIS
        WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
        REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
        SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS RIGHTS TO A JURY TRIAL
        FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
        NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
        ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
        RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT
        OF A
        LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
        THE
        COURT. 

       

      (j)  This
        Agreement may be executed in any number of counterparts, each of which when
        so
        executed shall be deemed to be an original and, all of which taken together
        shall constitute one and the same Agreement. In the event that any signature
        is
        delivered by facsimile transmission, such signature shall create a valid
        binding
        obligation of the party executing (or on whose behalf such signature is
        executed) the same with the same force and effect as if such facsimile signature
        were the original thereof.

       

      

       

      [THE
        REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]

       

       

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      COUNTERPART
        SIGNATURE PAGE TO SECURITY AGREEMENT, DATED AS OF JULY __,
        2006.

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto, intending to be bound hereby, have caused this Security
        Agreement to be executed the day and year first above written.

       

      
        	 	 	 
	 	OBLIGOR:
	 	 
	 	[____________________________________]
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name:
	 	Title:

      

       

      
        	 	 	 
	 	SECURED
                PARTY: 
	 
 	 
 	 
 
	 	  	 
	 	
                
Mark
                T. Daniels

      

      

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      

      

      SCHEDULE
        A

      

      Principal
        Offices

       

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        B

      

      Permitted
        Liens

      

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        C

      

      Jurisdictions

      

      Utah

      Texas

      Ukraine

      British
        Columbia

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        

          EXHIBIT
            7(f)

          

          FORM
            OF GUARANTY

          

          THIS
            GUARANTY,
            dated
            as of July ___, 2006 (the "Guaranty"),
            is
            made by [_______________________], a Nevada corporation (the "Guarantor"),
            in
            favor of Mark Daniels (the “Secured
            Party”).
            

          

          RECITALS

          

          A. Concurrently
            herewith, Tactical Air Defense Services, Inc. (“Purchaser
            Parent”),
            the
            Guarantor, Genesis aviation Acquisition, Inc., OneSource Aviation Acquisition
            Inc., and Resource Financial Aviation Holdings, Inc. (together with Guarantor,
            the “Subsidiaries”)
            and
            AeroGroup Incorporated (“AeroGroup”)
            and
            its wholly-owned subsidiaries, Genesis Acquisition, Inc., Resource Financial
            Holding Acquisition, Inc. and OneSource Acquisition, Inc. (the “LLC
            Sellers”
and,
            together with AeroGroup, the “Sellers”)
            entered into a Asset Purchase Agreement (the “Asset
            Purchase Agreement”),
            pursuant to which the Purchaser Parent has assumed the obligations of
            the
            Sellers pursuant to that certain Secured Party a Promissory Note (the
            “Note”),
            in
            the original aggregate principal amount of $1,100,000, issued to Secured
            Party
            (as defined in the Asset Purchase Agreement) (all capitalized terms not
            otherwise defined herein shall have the respective meanings assigned
            to them in
            the Asset Purchase Agreement); and

          

          B. It
            is a
            condition precedent to the Closing of the acquisition contemplated by
            the Asset
            Purchase Agreement, that the Purchaser Parent shall have assumed all
            of the
            obligations under such Note and that the Guarantor and the other Subsidiaries
            shall have each executed a guaranty in favor of the Secured Party, guaranteeing
            payment of the Note; and 

          

          C. The
            Guarantor has duly authorized the execution, delivery and performance
            of this
            Guaranty; and

          

          D. The
            Guarantor will derive substantial benefits from the acquisition of the
            Purchased
            Assets by the Sellers, which assets were acquired in part by Sellers
            from
            proceeds loaned by Secured Party as evidenced by the Note.

          

          NOW,
            THEREFORE,
            for good
            and valuable consideration, the receipt of which is hereby acknowledged,
            and in
            order to induce the Secured Party to accept the assumption of the Note
            as
            partial payment for the Purchased Assets under the Asset Purchase Agreement,
            Guarantor agrees, unconditionally and absolutely, for the benefit of
            the Secured
            Party, as follows:

          

          1. DEFINITIONS

          

          (a)  As
            used
            in this Agreement, the following terms shall have the following
            meanings:

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          

          (i) “Transaction
            Documents"
            shall
            mean the Note, the Asset Purchase Agreement, the Security Agreement,
            any bills
            of sale, any release or assumption agreement, and any other documents
            executed
            and delivered by any of the Purchasers in connection with the Note or
            Asset
            Purchase Agreement.

          

          (ii) "Parent’s
            Obligations"
            shall
            mean all obligations of the Purchaser Parent under the Note and those
            obligations of the Subsidiaries arising under any other documents executed
            and
            delivered by the Purchasers in connection with the Notes.

          

          (iii) "Guarantor
            Documents"
            shall
            mean this Guaranty, and any other documents executed and delivered by
            any
            guarantor in connection with any of the Parent’s Obligations. 

          

          (iv) "U.C.C."
            shall
            mean the Uniform Commercial Code as in effect in the State of New
            York.

          

          (b)  Unless
            otherwise defined herein or the context otherwise requires, terms for
            which
            meanings are provided in the U.C.C. are used in this Guaranty, including
            its
            preamble and recitals, with such meanings.

          

          2. GUARANTY
            PROVISIONS

          

          (a) Guaranty.
             Guarantor
            hereby absolutely, unconditionally and irrevocably (i) guarantees the
            full and
            punctual payment when due, whether at stated maturity, by required prepayment,
            declaration, acceleration, demand or otherwise, of all of the Parent’s
            Obligations, whether for principal, interest, fees, expenses or otherwise
            (including all such amounts which would become due but for the operation
            of the
            automatic stay under Section 362(a) of the United States Bankruptcy Code,
            11
            U.S.C. 362(a), and the operation of Sections 502(b) and 506(b) of the
            United
            States Bankruptcy Code, 11 U.S.C. 502 (b) and 506(b)), and (ii) indemnifies
            and
            holds harmless the Secured Party for any and all costs and expenses (including
            reasonable attorneys' fees and expenses) incurred by the Secured Party
            in
            enforcing any rights under this Guaranty; provided,
            however,
            that
            Guarantor shall be liable under this Guaranty only for the maximum amount
            of
            such liability that can be hereby incurred against such Guarantor without
            rendering this Guaranty, as it relates to the Guarantor or to any other
            Guarantor, voidable under applicable law relating to fraudulent conveyance
            or
            fraudulent transfer, and not for any greater amount. This Guaranty constitutes
            a
            guaranty of payment when due and not of collection, and the Guarantor
            specifically agrees that it shall not be necessary or required that the
            Secured
            Party exercise any right, assert any claim or demand or enforce any remedy
            whatsoever against the Purchaser Parent or any other Subsidiary or any
            other
            Person before or as a condition to the obligations of the Guarantor
            hereunder.

          

          (b)  Guaranty
            Absolute, etc.
            This
            Guaranty shall in all respects be a continuing, absolute, unconditional
            and
            irrevocable guaranty of payment, and shall remain in full force and effect
            until
            all the Parent’s Obligations have been paid in full and all obligations of the
            Guarantor hereunder shall have been paid in full. Guarantor unconditionally
            and
            absolutely guarantees that the Parent’s Obligations will be paid strictly in
            accordance with the terms of the Note under which it arises, regardless
            of any
            law, regulation or order now or hereafter in effect in any jurisdiction
            affecting any of such terms or the rights of the Secured Party with respect
            thereto. The liability of the Guarantor under this Guaranty shall be
            absolute,
            unconditional and irrevocable as to each Guarantor irrespective of:

           

          
            
              
              

            

            
              2

              
                

              

            

            
              
              

            

          

          

          (i) any
            lack
            of validity, legality or enforceability of the Note;

           

          (ii) the
            failure of the Secured Party: (A) to assert any claim or demand or to
            enforce
            any right or remedy against the Purchaser Parent or any other Subsidiary,
            or any
            other person or entity (including any other guarantor) under the provisions
            of
            the Note, or (B) to exercise any right or remedy against any other guarantor
            of,
            or collateral securing, any of the Parent’s Obligations;

          

          (iii) any
            change in the time, manner or place of payment of, or in any other term
            of, all
            or any of the Parent’s Obligations, or any other extension, compromise or
            renewal of any of the Parent’s Obligations;

          

          (iv) any
            reduction, limitation, impairment or termination of the Parent’s Obligations for
            any reason, including any claim of waiver, release, surrender, alteration
            or
            compromise, and shall not be subject to (and the Guarantor hereby waives
            any
            right to or claim of) any defense or setoff, counterclaim, recoupment
            or
            termination whatsoever by reason of the invalidity, illegality, nongenuineness,
            irregularity, compromise or unenforceability of, or any other event or
            occurrence affecting, the Parent’s Obligations or otherwise;

          

          (v) any
            amendment to, rescission, waiver, or other modification of, or any consent
            to
            departure from, any of the terms of the Note;

          

          (vi) any
            addition, exchange, release, surrender or non-perfection of any collateral,
            or
            any amendment to or waiver or release or addition of, or consent to departure
            from, any other guaranty, held by the Secured Party securing any of the
            Parent’s
            Obligations; or

          

          (vii) any
            other
            circumstance which might otherwise constitute a defense available to,
            or a legal
            or equitable discharge of, any of the Purchasers, any surety or any
            guarantor.

          

          (c)
             No
            Transfer of Assets; No Change in Corporate Status.
            The
            Guarantor agrees that from the date of this Guaranty and until final
            payment in
            full of the Parent’s Obligations, except in the ordinary course of business, or
            if the Secured Party shall otherwise consent in writing, the Guarantor
            will not
            transfer any assets, the aggregate fair market value of which exceeds
            $50,000.
            The Guarantor shall not issue any securities (or derivative securities)
            or
            rights to acquire securities or indebtedness to any other party or guaranty
            and
            indebtedness of any party and shall not enter into any agreement obligating
            it
            to do any of the foregoing. The Guarantor shall not transfer any of their
            assets
            for so long as the Note is not repaid other than in the ordinary course
            of
            business. The Guarantor shall not merge with or enter into any kind of
            reorganization or combination with, any other entity. 

           

          
            
              
              

            

            
              3

              
                

              

            

            
              
              

            

          

          

          (d)  Reinstatement,
            etc.
            Guarantor agrees that this Guaranty shall continue to be effective or
            be
            reinstated, as the case may be, if at any time any payment (in whole
            or in part)
            of any of the Parent’s Obligations is rescinded or must otherwise be restored by
            the Secured Party, upon the insolvency, bankruptcy or reorganization
            of the
            Purchaser Parent, the Guarantor, any Subsidiary or otherwise, all as
            though such
            payment had not been made.

          

          (e)
             Waiver,
            etc.
            The
            Guarantor hereby waives promptness, diligence, notice of acceptance and
            any
            other notice with respect to any of the Parent’s Obligations and this Guaranty
            and any requirement that the Secured Party protect, secure, perfect or
            insure
            any security interest, or any property subject thereto, or exhaust any
            right or
            take any action against the Purchasers or any other Person (including
            any other
            guarantor) or entity or any, collateral securing the Parent’s Obligations, as
            the case may be.

          

          (f)
             Waiver
            of Subrogation.
            The
            Guarantor hereby irrevocably waives any claim or other rights which he
            may now
            or hereafter acquire against the Purchase Parent or Seller that arise
            from the
            existence, payment, performance or enforcement of any Guarantor's obligations
            under this Guaranty or any other Transaction Documents, including any
            right of
            subrogation, reimbursement, exoneration, or indemnification, any right
            to
            participate in any claim or remedy of the Secured Party against the Purchaser
            Parent or any other Subsidiary or any collateral which the Secured Party
            now has
            or hereafter acquires, whether or not such claim, remedy or right arises
            in
            equity, or under contract, statute or common law, including the right
            to take or
            receive from the Purchasers, directly or indirectly, in cash or other
            property
            or by set-off or in any manner, payment or security on account of such
            claim or
            other rights. If any amount shall be paid to the Guarantor in violation
            of the
            preceding sentence, such amount shall be deemed to have been paid to
            the
            Guarantor for the benefit of, and held in trust for, the Secured Party
            and shall
            forthwith be paid to the Secured Party to be credited and applied upon
            the
            Parent’s Obligations, whether matured or unmatured. The Guarantor acknowledges
            that it will receive direct and indirect benefits from the financing
            arrangements contemplated by the Note and from the Sold Assets acquired
            by the
            Purchasers as a result of the issuance thereof and that the waiver set
            forth in
            this Section 2(f) is knowingly made in contemplation of such
            benefits.

          

          (g)
             Successors,
            Transferees and Assigns. 

          

          (i) This
            Guaranty shall: (A) be binding upon the Guarantor and its successors,
            transferees and assigns; and (B) inure to the benefit of and be enforceable
            by
            the Secured Party, and his successors, transferees and assigns.

          

          (ii)
             Without
            limiting the generality of clause (i) of this Section 2(g), but subject
            to any
            contrary provision contained in the Note, the Secured Party may assign
            or
            otherwise transfer (in whole or in part) their rights in the Notes to
            any other
            Person, and such other Person shall thereupon become vested with all
            rights and
            benefits in respect thereof granted to such Person in exercising rights
            and
            remedies under the Note, or otherwise, subject, however, to any contrary
            provisions in such assignment or transfer.

           

          
            
              
              

            

            
              4

              
                

              

            

            
              
              

            

          

          

          (h)
             Termination.
            This
            Agreement shall terminate when there is no longer any amount outstanding
            on the
            Note. 

          

          3. MISCELLANEOUS
            PROVISIONS

          

          (a)
             Binding
            on Successors, Transferees and Assigns; Assignment.
            In
            addition to, and not in limitation of, Section 2(g), and subject to the
            Notes,
            this Guaranty shall be binding upon the Guarantor and its successors,
            transferees and assigns and shall inure to the benefit of and be enforceable
            by
            the Secured Parties, and its successors, transferees and assigns (to
            the full
            extent provided pursuant to Section 2(g)); provided,
            however,
            that
            the Guarantor may not assign any of its obligations hereunder without
            the prior
            written consent of the Secured Party.

          

          (b) Amendments,
            etc.
            No
            amendment to or waiver of any provision of this Guaranty, and no consent
            to any
            departure by the Guarantor herefrom, shall in any event be effective
            unless the
            same shall be in writing and signed by the Secured Party, and then such
            waiver
            or consent shall be effective only in the specific instance and for the
            specific
            purpose for which given.

          

          (c) Notices.
            Any
            notices required or permitted to be given under the terms hereof shall
            be sent
            by certified or registered mail (return receipt requested) or delivered
            personally or by courier (including a recognized overnight delivery service)
            or
            by facsimile and shall be effective five days after being placed in the
            mail, if
            mailed by regular United States mail, or upon receipt, if delivered personally
            or by courier (including a recognized overnight delivery service) or
            by
            facsimile, in each case addressed to a party. The addresses for such
            communications shall be:

          

          If
            to the
            Guarantor, to:

          

          C/o
            Tactical Air Defense Services, Inc.

          5001
            Airport Drive

          Denison,
            Texas 75025

          Tel:
            (903) 786-5300 

          Facsimile:
            (903) 786-5302 

          

          With
            copy
            to:

          

          Hodgson
            Russ LLP

          60
            E.
            42nd Street, 37th
            Floor

          New
            York,
            NY 10165

          Attention:
            Jeffrey A. Rinde, Esq.

          Telephone:
            (212) 661-3535

          Facsimile:
            (212) 972-1677

          

          
            
              
              

            

            
              5

              
                

              

            

            
              
              

            

          

           

          If
            to the
            Secured Party, to: 

          

          Mark
            T.
            Daniels

          4521
            PGA
            Blvd. 

          Palm
            Beach Gardens, Florida 33418

          Tel:
            (561) 745-9422

          Facsimile:
            (561) 745-5594  

           

          

          With
            copy
            to:

          

          Hodgson
            Russ LLP

          60
            E.
            42nd Street, 37th
            Floor

          New
            York,
            NY 10165

          Attention:
            Jeffrey A. Rinde, Esq.

          Telephone:
            (212) 661-3535

          Facsimile:
            (212) 972-1677

          

          (d)
             No
            Waiver; Remedies.
            In
            addition to, and not in limitation of, Section 2(b) and Section 2(e),
            no failure
            on the part of the Secured Party to exercise, and no delay in exercising,
            any
            right hereunder shall operate as a waiver thereof; nor shall any single
            or
            partial exercise of any right hereunder preclude any other or further
            exercise
            thereof or the exercise of any other right. The remedies herein provided
            are
            cumulative and not exclusive of any remedies provided by law.

          

          (e) Captions.
            Section
            captions used in this Guaranty are for convenience of reference only,
            and shall
            not affect the construction of this Guaranty.

          

          (f) Severabilitv.
            Wherever
            possible each provision of this Guaranty shall be interpreted in such
            manner as
            to be effective and valid under applicable law, but if any provision
            of this
            Guaranty shall be prohibited by or invalid under such law, such provision
            shall
            be ineffective to the extent of such prohibition or invalidity, without
            invalidating the remainder of such provision or the remaining provisions
            of this
            Guaranty.

          

          (g)
            Governing
            Law.
            THIS
            GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
            LAWS
            OF THE STATE OF NEW YORK FOR PURPOSES OF ANY ACTION OR PROCEEDING INVOLVING
            THIS
            GUARANTY, THE GUARANTOR HEREBY EXPRESSLY SUBMITS TO THE JURISDICTION
            OF ALL
            FEDERAL AND STATE COURTS LOCATED IN THE STATE OF NEW YORK AND CONSENTS
            THAT IT
            MAY BE SERVED WITH ANY PROCESS OR PAPER BY CERTIFIED MAIL, RETURN RECEIPT
            REQUESTED, POSTAGE PREPAID, ADDRESSED AS SET FORTH IN SECTION 3(C) OF
            THIS
            GUARANTY OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK,
            PROVIDED A REASONABLE TIME FOR APPEARANCE IS ALLOWED. THE FOREGOING SHALL
            NOT
            OPERATE IN ANY MANNER TO PROHIBIT THE SECURED PARTIES FROM BRINGING AN
            ACTION
            AGAINST THE GUARANTOR IN ANY JURISDICTION OTHER THAN THE STATE OF NEW
            YORK.

           

          
            
              
              

            

            
              6

              
                

              

            

            
              
              

            

          

          

          (h)
            Waiver
            of Jury Trial.
            THE
            GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
            RIGHTS IT
            MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
            OR
            ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY. THE GUARANTOR
            ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
            FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR
            THE
            SECURED PARTIES ENTERING INTO THE NOTES.

          

          [THE
            REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]

           

          
            
              
              

            

            
              7

              
                

              

            

            
              
              

            

          

          IN
            WITNESS WHEREOF,
            the
            Guarantor has caused this Guaranty to be duly executed and delivered
            as of the
            date first above written. 

           

          
            	 	
                    [_______________________________________]

                    

                    

                    By:       

                    Name:
                       

                    Title:
                      President

                  

          

           

           

          
            
              
              

            

            
              8

              
                

              

            

            
              
              

            

          

        

      

    

    
 

    Exhibit
      8(l)

     

    Form
      of Patent Assignment

     

    
      
        
        

      

      
        viEXHIBIT
        4.1

       

      CSI
        BUSINESS FINANCE, INC.

       

      2006
        STOCK INCENTIVE PLAN

       

      1. Establishment,
        Purpose and Types of Awards

       

      CSI
        Business Finance, Inc., a Florida corporation (the “Company”),
        hereby establishes the
        CSI BUSINESS FINANCE, INC. 2006 STOCK INCENTIVE PLAN (the
        “Plan”).
        The
        purpose of the Plan is to promote the long-term growth and profitability
        of the
        Company by (a) providing key people with incentives to improve shareholder
        value and to contribute to the growth and financial success of the Company,
        and (b) enabling the Company to attract, retain and reward the
        best-available persons. The Plan permits the granting of stock
        options (including incentive stock options qualifying under Code
        Section 422 and nonqualified stock options), stock appreciation rights,
        restricted or unrestricted share awards, phantom stock, deferred share units,
        performance awards, other stock-based awards, or any combination of the
        foregoing.

       

      2. Definitions

       

      Under
        this Plan, except where the context otherwise indicates, the following
        definitions apply:

       

      (a) “Affiliate”
        means
        any entity, whether now or hereafter existing, which controls, is controlled
        by,
        or is under common control with, the Company (including, but not limited
        to, joint ventures, limited liability companies, and partnerships). For this
        purpose, “control” shall mean ownership of fifty percent (50%) or more of
        the total combined voting power or value of all classes of stock or interests
        of
        the entity.

       

      (b) “Applicable
        Law”
        means
        the legal requirements relating to the administration of options and share-based
        plans under applicable U.S. federal and state laws, the Code, any applicable
        stock exchange or automated quotation system rules or regulations, and the
        applicable laws of any other country or jurisdiction where Awards are granted,
        as such laws, rules, regulations and requirements shall be in place from
        time to
        time.

       

      (c) “Award”
        means
        any stock option, stock appreciation right, stock award, phantom stock award,
        performance award or other stock-based award.

       

      (d) “Board”
        means
        the Board of Directors of the Company.

       

      (e) “Cause”
        for
        termination of a Participant’s Continuous Service either has the meaning set
        forth in any employment-related written agreement between the Participant
        and
        the Company, or means that the Participant is terminated from employment
        or
        other service with the Company or an Affiliate for any of the following reasons
        after receiving both a specific written notice of the conduct that the Board
        considers “Cause” and a reasonable opportunity to cure such conduct (if it
        is reasonably capable of being cured): (i) the Participant’s willful
        failure to substantially perform his or her duties and responsibilities to
        the
        Company or deliberate violation of a material Company policy; (ii) the
        Participant’s commission of any material act or acts of fraud, embezzlement,
        dishonesty or other willful misconduct; (iii) the Participant’s material
        unauthorized use or disclosure of any proprietary information or trade secrets
        of the Company or any other party to whom the Participant owes an obligation
        of
        nondisclosure as a result of his or her relationship with the Company;
        or (iv) Participant’s willful and material breach of any of his or her
        obligations under any written agreement or covenant with the Company. The
        Board
        shall in its discretion determine whether or not a Participant is being
        terminated for Cause. The foregoing definition does not in any way limit
        the
        Company’s ability to terminate a Participant’s employment or consulting
        relationship at any time, and the term “Company” will be interpreted herein to
        include any Affiliate or successor thereto, if appropriate.

       

      (f) “Change
        in Control”
        means: (i) the acquisition (other than from the Company) by any
        Person, as defined in this Section 2(f), of the beneficial
        ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
        Act of fifty percent (50%) or more of (A) the then outstanding shares
        of the securities of the Company; or (B) the combined voting power of the
        then outstanding securities of the Company entitled to vote generally in
        the
        election of Directors (the “Company
        Voting Stock”); (ii)
        the closing of a sale or other conveyance of all or substantially all of
        the
        assets of the Company; or (iii) the effective time of any merger, share
        exchange, consolidation, or other business combination of the Company if
        immediately after such transaction persons who hold a majority of the
        outstanding voting securities entitled to vote generally in the election
        of
        directors of the surviving entity (or the entity owning one hundred
        percent (100%) of such surviving entity) are not persons who, immediately
        prior to such transaction, held the Company Voting Stock. For purposes of
        this
        Section 2(f), a “Person”
means
        any individual, entity or group within the meaning of Section 13(d)(3) or
        14(d)(2) of the Exchange Act other than: employee benefit plans sponsored
        or
        maintained by the Company and corporations controlled by the
        Company.

       

      
        
          
          

        

        
          
            EXHIBIT
              4-1

          

          
            

          

        

        
          
          

        

      

      (g) “Code”
        means
        the Internal Revenue Code of 1986, as amended, and any regulations promulgated
        thereunder.

       

      (h) “Common
        Stock”
        means
        shares of common stock of the Company, par value $0.001 per Share.

       

      (i) “Consultant”
        means
        any person, including an advisor, who is engaged by the Company or any Affiliate
        to render services and is compensated for such services.

       

      (j) “Continuous
        Service”
        means
        the absence of any interruption or termination of a Participant’s service as an
        Employee, Director or Consultant. Continuous Service shall not be considered
        interrupted in the case of: (i) sick leave; (ii) military
        leave; (iii) any other leave of absence approved by the Committee, provided
        that such leave is for a period of not more than ninety (90) days, unless
        reemployment upon the expiration of such leave is guaranteed by contract
        or
        statute, or unless provided otherwise pursuant to Company policy adopted
        from
        time to time; (iv) changes in status from Director to advisory director or
        emeritus status; or (iv) in the case of transfers between locations of the
        Company or between the Company, its Affiliates or their respective successors.
        Changes in status between a Participant’s service as an Employee, Director and a
        Consultant will not constitute an interruption of Continuous
        Service.

       

      (k) “Deferred
        Share Units”
        means
        Awards pursuant to Section 10 of the Plan.

       

      (l) “Director”
        means a
        member of the Board, or a member of the board of directors of an
        Affiliate.

       

      (m) “Disabled”
        means a
        condition under which a Participant:

       

      (i) is
        unable
        to engage in any substantial gainful activity by reason of any medically
        determinable physical or mental impairment which can be expected to result
        in
        death or can be expected to last for a continuous period of not less than
        twelve (12) months, or

       

      (ii) is,
        by
        reason of any medically determinable physical or mental impairment which
        can be
        expected to result in death or can be expected to last for a continuous period
        of not less than twelve (12) months, received income replacement benefits
        for a period of not less than three (3) months under an accident or health
        plan covering Employees of the Company.

       

      (n) “Eligible
        Person”
        means
        any Consultant, Director or Employee.

       

      (o) “Employee”
        means
        any person whom the Company or any Affiliate classifies as an
        employee (including an officer) for employment tax purposes. The payment by
        the Company of a director’s fee to a Director shall not be sufficient to
        constitute “employment” of such Director by the Company.

       

      (p) “Exchange
        Act”
        means
        the Securities Exchange Act of 1934, as amended.

       

      (q) “Fair
        Market Value”
        means,
        with respect to a share of the Common Stock for any purpose on a particular
        date, the value determined by the Administrator in good faith. However, if
        the
        Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act
        and listed for trading on a national exchange or market, “Fair Market Value”
means, as applicable, (i) either the closing price or the average of the
        high and low sale price on the relevant date, as determined in the
        Administrator’s discretion, quoted on the American Stock
        Exchange; (ii) the last sale price on the relevant date quoted on the
        Nasdaq SmallCap Market; (iii) the closing high bid on the relevant date
        quoted on the Nasdaq OTC Bulletin Board Service or by the National Quotation
        Bureau, Inc. or a comparable service as determined in the Administrator’s
        discretion; or (iv) if the Common Stock is not quoted by any of the above,
        the average of the closing bid and asked prices on the relevant date furnished
        by a professional market maker for the Common Stock, or by such other source,
        selected by the Administrator. If no public trading of the Common Stock occurs
        on the relevant date, then Fair Market Value shall be determined as of the
        next
        preceding date on which trading of the Common Stock does occur. For all purposes
        under this Plan, the term “relevant date” as used in this Section 2(q)
        shall mean either the date as of which Fair Market Value is to be determined
        or
        the next preceding date on which public trading of the Common Stock occurs,
        as
        determined in the Administrator’s discretion.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-2

          

          
            

          

        

        
          
          

        

      

      (r) “Grant
        Agreement”
        means a
        written document memorializing the terms and conditions of an Award granted
        pursuant to the Plan and shall incorporate the terms of the Plan. The Committee
        shall determine the form or forms of documents to be used, and may change
        them
        from time to time for any reason.

       

      (s) “Grant
        Date”
        has the
        meaning set forth in Section 16 of the Plan.

       

      (t) “ISO”
        means an
        Option intended to qualify as an incentive stock option within the meaning
        of
        Section 422 of the Code, as designated in the applicable Award
        Agreement.

       

      (u) “Involuntary
        Termination”
        means
        termination of a Participant’s Continuous Service under the following
        circumstances occurring on or after a Change in Control: (i) termination
        without Cause by the Company or an Affiliate or successor thereto, as
        appropriate; or (ii) voluntary termination by the Participant within
        sixty (60) days following (A) a material reduction in the
        Participant’s job responsibilities, provided that neither a mere change in title
        alone nor reassignment to a substantially similar position shall constitute
        a
        material reduction in job responsibilities; (B) an involuntary relocation
        of the Participant’s work site to a facility or location more than
        fifty (50) miles from the Participant’s principal work site at the time of
        the Change in Control; or (C) a material reduction in Participant’s total
        compensation other than as part of an reduction by the same percentage amount
        in
        the compensation of all other similarly-situated Employees, Directors or
        Consultants.

       

      (v) “Nonqualified
        Option”
        means an
        Option not intended to qualify as an ISO, as designated in the applicable
        Award
        Agreement.

       

      (w) “Option”
        means
        any stock option granted pursuant to Section 7 of the Plan.

       

      (x) “Participant”
        means
        any holder of one or more Awards, or the Shares issuable or issued upon exercise
        of such Awards, under the Plan.

       

      (y) “Performance
        Awards”
        means
        Performance Units and Performance Compensation Awards granted pursuant to
        Section 13 of the Plan.

       

      (z) “Performance
        Compensation Awards”
        means
        Awards granted pursuant to Section 13(b) of the Plan.

       

      (aa) “Performance
        Unit”
        means
        Awards granted pursuant to Section 13(a) of the Plan which may be paid in
        cash, in Shares, or such combination of cash and Shares as the Committee
        in its
        sole discretion shall determine.

       

      (bb) “Person”
        means
        any natural person, association, trust, business trust, cooperative,
        corporation, general partnership, joint venture, joint-stock company, limited
        partnership, limited liability company, real estate investment trust, regulatory
        body, governmental agency or instrumentality, unincorporated organization
        or
        organizational entity.

       

      (cc) “Phantom
        Stock”
        means
        Awards pursuant to Section 11 of the Plan.

       

      (dd) “Reporting
        Person”
        means an
        officer, Director, or greater than ten percent (10%) shareholder of the
        Company within the meaning of Rule 16a-2 under the Exchange Act, who is required
        to file reports pursuant to Rule 16a-3 under the Exchange Act.

       

      (ee) “Restricted
        Shares”
        means
        Shares subject to restrictions imposed pursuant to Section 9 of the
        Plan.

       

      (ff) “Restricted
        Share Units”
        means
        Awards pursuant to Section 9 of the Plan.

       

      (gg) “Rule
        16b-3”
        means
        Rule 16b-3 promulgated under the Exchange Act, as amended from time to time,
        or
        any successor provision.

       

      (hh) “SAR”
        or
“Share
        Appreciation Right”
        means
        Awards granted pursuant to Section 8 of the Plan.

       

      (ii) “Share”
        means a
        share of Common Stock, as adjusted in accordance with Section 15 of the
        Plan.

       

      
        
          
            
            

          

          
            
              EXHIBIT
                4.1-3

            

            
              

            

          

          
            
            

          

        

      

      

      (jj) “Securities
        Act”
        means
        the Securities Act of 1933, as amended.

       

      (kk) “Ten
        Percent Holder”
        means a
        person who owns stock representing more than ten percent (10%) of the
        combined voting power of all classes of stock of the Company or any
        Affiliate.

       

      (ll) “Unrestricted
        Shares”
        means
        Shares awarded pursuant to Section 9 of the Plan.

       

      3. Administration

       

      (a) Administration
        of the Plan.
        The
        Plan shall be administered by the Board or by such committee or committees
        as
        may be appointed by the Board from time to time (the Board, committee or
        committees hereinafter referred to as the “Administrator”).

       

      (b) Powers
        of the Administrator.
        The
        Administrator shall have all the powers vested in it by the terms of the
        Plan,
        such powers to include authority, in its sole and absolute discretion, to
        grant
        Awards under the Plan, prescribe Grant Agreements evidencing such Awards
        and
        establish programs for granting Awards.

       

      The
        Administrator shall have full power and authority to take all other actions
        necessary to carry out the purpose and intent of the Plan, including, but
        not
        limited to, the authority to: (i) determine the eligible persons to whom,
        and the time or times at which Awards shall be granted; (ii) determine the
        types of Awards to be granted; (iii) determine the number of shares to be
        covered by or used for reference purposes for each Award; (iv) impose such
        terms, limitations, restrictions and conditions upon any such Award as the
        Administrator shall deem appropriate; (v) modify, amend, extend or renew
        outstanding Awards, or accept the surrender of outstanding Awards and substitute
        new Awards (provided however, that, except as provided in Section 7(d)
        of the Plan, any modification that would materially adversely affect any
        outstanding Award shall not be made without the consent of the
        holder); (vi) accelerate or otherwise change the time in which an Award may
        be exercised or becomes payable and to waive or accelerate the lapse, in
        whole
        or in part, of any restriction or condition with respect to such Award,
        including, but not limited to, any restriction or condition with respect
        to the
        vesting or exercisability of an Award following termination of any grantee’s
        employment or other relationship with the Company; and (vii) establish
        objectives and conditions, if any, for earning Awards and determining whether
        Awards will be paid after the end of a performance period.

       

      The
        Administrator shall have full power and authority, in its sole and absolute
        discretion, to administer and interpret the Plan and to adopt and interpret
        such
        rules, regulations, agreements, guidelines and instruments for the
        administration of the Plan and for the conduct of its business as the
        Administrator deems necessary or advisable.

       

      (c) Non-Uniform
        Determinations.
        The
        Administrator’s determinations under the Plan (including without
        limitation, determinations of the persons to receive Awards, the form, amount
        and timing of such Awards, the terms and provisions of such Awards and the
        Grant
        Agreements evidencing such Awards) need not be uniform and may be made by
        the
        Administrator selectively among persons who receive, or are eligible to receive,
        Awards under the Plan, whether or not such persons are similarly situated.
        The
        Administrator’s prior exercise of its discretionary authority shall not obligate
        it to exercise its authority in a like fashion thereafter.

       

      (d) Limited
        Liability.
        To the
        maximum extent permitted by law, no member of the Administrator shall be
        liable
        for any action taken or decision made in good faith relating to the Plan
        or any
        Award thereunder.

       

      (e) Indemnification.
        To the
        maximum extent permitted by law and by the Company’s charter and by-laws, the
        members of the Administrator shall be indemnified by the Company in respect
        of
        all their activities under the Plan.

       

      (f) Effect
        of Administrator’s Decision.
        The
        Administrator shall have the discretion to interpret or construe ambiguous,
        unclear, or implied (but omitted) terms in any fashion it deems to be
        appropriate in its sole discretion, and to make any findings of fact needed
        in
        the administration of the Plan or Grant Agreements. All actions taken and
        decisions and determinations made by the Administrator on all matters relating
        to the Plan pursuant to the powers vested in it hereunder shall be in the
        Administrator’s sole and absolute discretion and shall be conclusive and binding
        on all parties concerned, including the Company, its stockholders, any
        participants in the Plan and any other Employee, Consultant, or Director
        of the
        Company, and their respective successors in interest. The validity of any
        such
        interpretation, construction, decision or finding of fact shall not be given
        de
        novo review if challenged in court, by arbitration, or in any other forum,
        and
        shall be upheld unless clearly made in bad faith or materially affected by
        fraud.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-4

          

          
            

          

        

        
          
          

        

      

      4. Shares
        Available for the Plan; Maximum Awards

       

      (a) General.
        Subject
        to adjustments as provided in Section 15(b) of the Plan and subject to the
        discretion of the Administrator, the number of Awards that may be granted
        under
        the Plan in each calendar year during any part of which the Plan is in effect
        shall be such number of shares equivalent to fifteen percent (15%) of the
        fully diluted shares of Common Stock outstanding on January 2 of a given
        calendar year, without taking into account Awards outstanding under the Plan
        that are exercisable for or convertible into Common Stock or that are unvested
        stock Awards (“Outstanding
        Awards”),
        less
        the number of shares subject to Outstanding Awards at the close of business
        on
        that date. In no event shall the number of shares be less than Ten Million
        (10,000,000) shares of Common Stock. Notwithstanding the foregoing, in no
        event
        shall more than an aggregate of ten percent (10%) of the total shares of
        Common
        Stock within the plan be subject to ISO Awards during the term of the Plan.
        The
        Company shall reserve as of the end of each preceding calendar year a sufficient
        number of Shares to satisfy outstanding Awards under the Plan and the number
        of
        additional shares available for issuance in accordance with the formula stated
        above. If any Award, or portion of an Award, under the Plan expires or
        terminates unexercised, becomes unexercisable or is forfeited or otherwise
        terminated, surrendered or canceled as to any Shares, or if any Shares are
        surrendered to the Company in connection with any Award (whether or not
        such surrendered shares were acquired pursuant to any Award), or if any shares
        are withheld by the Company, the shares subject to such Award and the
        surrendered and withheld shares shall thereafter be available for further
        Awards
        under the Plan; provided, however, that any such shares that are surrendered
        to
        or withheld by the Company in connection with any Award or that are otherwise
        forfeited after issuance shall not be available for purchase pursuant to
        ISOs.
        For all Awards, the Shares of Common Stock issued pursuant to the Plan may
        be
        authorized but unissued Shares, Shares that the Company has reacquired or
        otherwise holds in treasury, or Shares held in a grantor or other trust that
        the
        Board approves.

       

      (b) Specific
        Award Limitations.
        Subject
        to the provisions of Section 15 of the Plan, the maximum number of Shares
        that the Company may issue in a form other than Options and SARs is ten
        percent (10%) of the total shares within the plan. 

       

      (c) Individual
        Award Limits.
        Subject
        to adjustments as provided in Section 15(b) of the Plan, the maximum number
        of Shares of Common Stock subject to Awards of any combination that may be
        granted during any one (1) fiscal year of the Company to any one (1)
        individual under this Plan shall be determined from time to time at the sole
        discretion of the Administrator, including any such maximum number with respect
        to any individual during the first fiscal year that the individual is employed
        with the Company or an Affiliate. The Administrator may adjust any such
        limitations pursuant to Section 15(b) below. Any such per-individual limits
        shall not be adjusted to effect a restoration of Shares of Common Stock with
        respect to which the related Award is terminated, surrendered or
        canceled.

       

      5. Participation

       

      Participation
        in the Plan shall be open to all Employees, Consultants, advisors, sales
        representatives, officers and Directors of, and other individuals providing
        bona
        fide services to or for, the Company, or of any Affiliate of the Company,
        as may
        be selected by the Administrator from time to time. The Administrator may
        also
        grant Awards to individuals in connection with hiring, retention or otherwise,
        prior to the date the individual first performs services for the Company
        or an
        Affiliate provided that such Awards shall not become vested or exercisable
        prior
        to the date the individual first commences performance of such services.
        A
        Participant who has been granted an Award may be granted an additional Award
        or
        Awards if the Administrator shall so determine, if such person is otherwise
        an
        Eligible Person and if otherwise in accordance with the terms of the
        Plan.

       

      6. Awards

       

      (a) General.
        The
        Administrator, in its sole discretion, establishes the terms of all Awards
        granted under the Plan. Awards may be granted individually or in tandem with
        other types of Awards. All Awards are subject to the terms and conditions
        provided in the Grant Agreement. The Administrator may permit or require
        a
        recipient of an Award to defer such individual’s receipt of the payment of cash
        or the delivery of Common Stock that would otherwise be due to such individual
        by virtue of the exercise of, payment of, or lapse or waiver of restrictions
        respecting, any Award. If any such payment deferral is required or permitted,
        the Administrator shall, in its sole discretion, establish rules and procedures
        for such payment deferrals.

       

      (b) Replacement
        Awards.
        Subject
        to Applicable Laws (including any associated Shareholder approval
        requirements), the Administrator may, in its sole discretion and upon such
        terms
        as it deems appropriate, require as a condition of the grant of an Award
        to a
        Participant that the Participant surrender for cancellation some or all of
        the
        Awards that have previously been granted to the Participant under this Plan
        or
        otherwise. An Award that is conditioned upon such surrender may or may not
        be
        the same type of Award, may cover the same (or a lesser or greater) number
        of Shares as such surrendered Award, may have other terms that are determined
        without regard to the terms or conditions of such surrendered Award, and
        may
        contain any other terms that the Administrator deems appropriate. In the
        case of
        Options and SARs, these other terms may not involve an exercise price that
        is
        lower than the exercise price of the surrendered Option or SARs unless the
        Company’s shareholders approve the grant itself or the program under which the
        grant is made pursuant to the Plan.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-5

          

          
            

          

        

        
          
          

        

      

      7. Option
        Awards

       

      (a) Types;
        Documentation.
        The
        Administrator may in its discretion grant ISOs to any Employee and Nonqualified
        Options to any Eligible Person, and shall evidence any such grants in a Grant
        Agreement that is delivered to the Participant. Each Option shall be designated
        in the Grant Agreement as an ISO or a Nonqualified Option, and the same Grant
        Agreement may grant both types of Options, provided, however, that Awards
        of
        ISOs shall be limited to Employees of the Company or of any current or hereafter
        existing “parent corporation” or “subsidiary corporation”, as defined in Code
        Sections 424(e) and (f), respectively, of the Company. At the sole
        discretion of the Administrator, any Option may be exercisable, in whole
        or in
        part, immediately upon the grant thereof, or only after the occurrence of
        a
        specified event, or only in installments, which installments may vary. Options
        granted under the Plan may contain such terms and provisions not inconsistent
        with the Plan that the Administrator shall deem advisable in its sole and
        absolute discretion.

       

      (b) ISO
        $100,000 Limitation.
        To the
        extent that the aggregate Fair Market Value of Shares with respect to which
        Options designated as ISOs first become exercisable by a Participant in any
        calendar year (under this Plan and any other plan of the Company or any
        Affiliate) exceeds $100,000, such excess Options shall be treated as
        Nonqualified Options. For purposes of determining whether the $100,000 limit
        is
        exceeded, the Fair Market Value of the Shares subject to an ISO shall be
        determined as of the Grant Date. In reducing the number of Options treated
        as
        ISOs to meet the $100,000 limit, the most recently granted Options shall
        be
        reduced first. In the event that Section 422 of the Code is amended to
        alter the limitation set forth therein, the limitation of this Section 7(b)
        shall be automatically adjusted accordingly.

       

      (c) Term
        of Options.
        Each
        Grant Agreement shall specify a term at the end of which the Option
        automatically expires, subject to earlier termination provisions contained
        in
        Section 7(e) hereof; provided, that, the term of any Option may not exceed
        ten (10) years from the Grant Date. In the case of an ISO granted to an Employee
        who is a Ten Percent Holder on the Grant Date, the term of the ISO shall
        not
        exceed five (5) years from the Grant Date.

       

      (d) Exercise
        Price.
        The
        exercise price of an Option shall be determined by the Administrator in its
        discretion and shall be set forth in the Grant Agreement, subject to the
        following special rules:

       

      (i) ISOs.
        If an
        ISO is granted to an Employee who on the Grant Date is a Ten Percent Holder,
        the
        per Share exercise price shall not be less than one hundred ten
        percent (110%) of the Fair Market Value per Share on such Grant Date. If an
        ISO is granted to any other Employee, the per Share exercise price shall
        not be
        less than one hundred percent (100%) of the Fair Market Value per Share on
        the Grant Date.

       

      (ii) Nonqualified
        Options.
        The per
        Share exercise price for the Shares to be issued pursuant to the exercise
        of a
        Nonqualified Option shall not be less than one hundred percent (100%) of
        the Fair Market Value per Share on the Grant Date.

       

      (e) Termination
        of Continuous Service.
        The
        Administrator may establish and set forth in the applicable Grant Agreement
        the
        terms and conditions on which an Option shall remain exercisable, if at all,
        following termination of a Participant’s Continuous Service. The Administrator
        may waive or modify these provisions at any time. To the extent that a
        Participant is not entitled to exercise an Option at the date of his or her
        termination of Continuous Service, or if the Participant (or other person
        entitled to exercise the Option) does not exercise the Option to the extent
        so
        entitled within the time specified in the Grant Agreement or below (as
        applicable), the Option shall terminate and the Shares underlying the
        unexercised portion of the Option shall revert to the Plan and become available
        for future Awards. In no event may any Option be exercised after the expiration
        of the Option term as set forth in the Grant Agreement.

       

      The
        following provisions shall apply to the extent a Grant Agreement does not
        specify the terms and conditions upon which an Option shall terminate when
        there
        is a termination of a Participant’s Continuous Service:

       

      (i) Termination
        other than Upon Disability or Death or for Cause.
        In the
        event of termination of a Participant’s Continuous Service (other than as a
        result of Participant’s death, disability, retirement or termination for Cause),
        the Participant shall have the right to exercise an Option at any time within
        ninety (90) days following such termination to the extent the Participant
        was entitled to exercise such Option at the date of such
        termination.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-6

          

          
            

          

        

        
          
          

        

      

      (ii) Disability.
        In the
        event of termination of a Participant’s Continuous Service as a result of his or
        her being Disabled, the Participant shall have the right to exercise an Option
        at any time within one year following such termination to the extent the
        Participant was entitled to exercise such Option at the date of such
        termination.

       

      (iii) Retirement.
        In the
        event of termination of a Participant’s Continuous Service as a result of
        Participant’s retirement, the Participant shall have the right to exercise the
        Option at any time within one (1) year following such termination to the
        extent
        the Participant was entitled to exercise such Option at the date of such
        termination.

       

      (iv) Death.
        In the
        event of the death of a Participant during the period of Continuous Service
        since the Grant Date of an Option, or within thirty (30) days following
        termination of the Participant’s Continuous Service, the Option may be
        exercised, at any time within one (1) year following the date of the
        Participant’s death, by the Participant’s estate or by a person who acquired the
        right to exercise the Option by bequest or inheritance, but only to the extent
        the right to exercise the Option had vested at the date of death or, if earlier,
        the date the Participant’s Continuous Service terminated.

       

      (v) Cause.
        If the
        Administrator determines that a Participant’s Continuous Service terminated due
        to Cause, the Participant shall immediately forfeit the right to exercise
        any
        Option, and it shall be considered immediately null and void.

       

      (f) Reverse
        Vesting.
        The
        Administrator in its sole and absolute discretion may allow a Participant
        to
        exercise unvested Options, in which case the Shares then issued shall be
        Restricted Shares having analogous vesting restrictions to the unvested
        Options.

       

      (g) Buyout
        Provisions.
        The
        Administrator may at any time offer to buy out an Option, in exchange for
        a
        payment in cash or Shares, based on such terms and conditions as the
        Administrator shall establish and communicate to the Participant at the time
        that such offer is made. In addition, but subject to any shareholder approval
        requirement of applicable law, if the Fair Market Value for Shares subject
        to an
        Option is more than thirty three percent (33%) below their exercise price
        for more than thirty (30) consecutive business days, the Administrator may
        unilaterally terminate and cancel the Option either (i) by paying the
        Participant, in cash or Shares, an amount not less than the Black-Scholes
        value
        of the vested portion of the Option, or (ii) subject to the approval of the
        shareholders of the Company, by irrevocably committing to grant a new Option,
        on
        a designated date more than six (6) months after such termination and
        cancellation of such Option (but only if the Participant’s Continuous
        Service has not terminated prior to such designated date), on substantially
        the
        same terms as the cancelled Option, provided that the per Share exercise
        price
        for the new Option shall equal the per Share Fair Market Value of a Share
        on the
        date the new grant occurs.

       

      8. Stock
        Appreciation Rights

       

      (a) Stock
        Appreciation Rights.
        The
        Administrator may from time to time grant to eligible participants Awards
        of
        Stock Appreciation Rights (“SARs”).
        A SAR
        entitles the grantee to receive, subject to the provisions of the Plan and
        the
        Grant Agreement, a payment having an aggregate value equal to the product
        of (i) the excess of (A) the Fair Market Value on the exercise date of
        one (1) share of Common Stock over (B) the base price per Share specified
        in the Grant Agreement, times (ii) the number of shares specified by the
        SAR, or portion thereof, which is exercised. Payment by the Company of the
        amount receivable upon any exercise of a SAR may be made by the delivery
        of
        Common Stock or cash, or any combination of Common Stock and cash, as determined
        in the sole discretion of the Administrator. If upon settlement of the exercise
        of a SAR a grantee is to receive a portion of such payment in Shares of Common
        Stock, the number of shares shall be determined by dividing such portion
        by the
        Fair Market Value of a share of Common Stock on the exercise date. No fractional
        shares shall be used for such payment and the Administrator shall determine
        whether cash shall be given in lieu of such fractional shares or whether
        such
        fractional shares shall be eliminated.

       

      (b) Termination
        of Employment or Consulting Relationship.
        The
        Administrator shall establish and set forth in the applicable Grant Agreement
        the terms and conditions on which a SAR shall remain exercisable, if at all,
        following termination of a Participant’s Continuous Service. The provisions of
        Section 7(e) above shall apply to the extent a Grant Agreement does not
        specify the terms and conditions upon which a SAR shall terminate when there
        is
        a termination of a Participant’s Continuous Service.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-7

          

          
            

          

        

        
          
          

        

      

      (c) Buy-out.
        The
        Administrator has the same discretion to buy-out SARs as it has to take such
        actions pursuant to Section 7(g) above with respect to
        Options.

       

      9. Restricted
        Shares and Restricted Share Units; Unrestricted Shares

       

      (a) Grants.
        The
        Administrator may in its discretion grant restricted shares (“Restricted
        Shares”)
        to any
        Eligible Person and shall evidence such grant in a Grant Agreement that is
        delivered to the Participant and that sets forth the number of Restricted
        Shares, the purchase price for such Restricted Shares (if any), and the
        terms upon which the Restricted Shares may become vested. In addition, the
        Company may in its discretion grant the right to receive Shares after certain
        vesting requirements are met (“Restricted
        Share Units”)
        to any
        Eligible Person and shall evidence such grant in a Grant Agreement that is
        delivered to the Participant which sets forth the number of Shares (or
        formula, that may be based on future performance or conditions, for determining
        the number of Shares) that the Participant shall be entitled to receive upon
        vesting and the terms upon which the Shares subject to a Restricted Share
        Unit
        may become vested. The Administrator may condition any Award of Restricted
        Shares or Restricted Share Units to a Participant on receiving from the
        Participant such further assurances and documents as the Administrator may
        require to enforce the restrictions. In addition, the Committee may grant
        Awards
        hereunder in the form of unrestricted shares (“Unrestricted
        Shares”),
        which
        shall vest in full upon the date of grant or such other date as the Committee
        may determine or which the Committee may issue pursuant to any program under
        which one or more Eligible Persons (selected by the Committee in its
        discretion) elect to receive Unrestricted Shares in lieu of cash bonuses
        that
        would otherwise be paid.

       

      (b) Vesting
        and Forfeiture.
        The
        Administrator shall set forth in a Grant Agreement granting Restricted Shares
        or
        Restricted Share Units, the terms and conditions under which the Participant’s
        interest in the Restricted Shares or the Shares subject to Restricted Share
        Units will become vested and non-forfeitable. Except as set forth in the
        applicable Grant Agreement or the Administrator otherwise determines, upon
        termination of a Participant’s Continuous Service for any other reason, the
        Participant shall forfeit his or her Restricted Shares and Restricted Share
        Units; provided that if a Participant purchases the Restricted Shares and
        forfeits them for any reason, the Company shall return the purchase price
        to the
        Participant only if and to the extent set forth in a Grant Agreement.

       

      (c) Issuance
        of Restricted Shares Prior to Vesting.
        The
        Company shall issue stock certificates that evidence Restricted Shares pending
        the lapse of applicable restrictions, and that bear a legend making appropriate
        reference to such restrictions. Except as set forth in the applicable Grant
        Agreement or the Administrator otherwise determines, the Company or a third
        party that the Company designates shall hold such Restricted Shares and any
        dividends that accrue with respect to Restricted Shares pursuant to
        Section 9(e) below.

       

      (d) Issuance
        of Shares upon Vesting.
        As soon
        as practicable after vesting of a Participant’s Restricted Shares (or
        Shares underlying Restricted Share Units) and the Participant’s satisfaction of
        applicable tax withholding requirements, the Company shall release to the
        Participant, free from the vesting restrictions, one (1) Share for each
        vested Restricted Share (or issue one (1) Share free of the vesting
        restriction for each vested Restricted Share Unit), unless a Grant Agreement
        provides otherwise. No fractional shares shall be distributed but shall be
        rounded up to the next full share at the election of the Administrator.
        Notwithstanding the foregoing, if the Administrator determines that an issuance
        of Shares at the time of vesting is not a “permissible distribution event”
within the meaning of Section 409A of the Code, then the issuance of the
        Shares will be automatically deferred until the earliest date on which issuance
        of the Shares in unrestricted form will constitute a permissible distribution
        event pursuant to paragraphs (i), (ii), (iii), (v)
        or (iv) of Section 409A(a)(2)(A) of the Code. 

       

      (e) Dividends
        Payable on Vesting.
        Whenever Shares are released to a Participant or duly-authorized transferee
        pursuant to Section 9(d) above as a result of the vesting of Restricted
        Shares or the Shares underlying Restricted Share Units are issued to a
        Participant pursuant to Section 9(d) above, such Participant or
        duly-authorized transferee shall also be entitled to receive (unless
        otherwise provided in the Grant Agreement), with respect to each Share released
        or issued, an amount equal to any cash dividends (plus, in the discretion
        of the Administrator, simple interest at a rate as the Administrator may
        determine) and a number of Shares equal to any stock dividends, which were
        declared and paid to the holders of Shares between the Grant Date and the
        date
        such Share is released from the vesting restrictions in the case of Restricted
        Shares or issued in the case of Restricted Share Units.

       

      (f) Section 83(b)
        Elections.
        A
        Participant may make an election under Section 83(b) of the Code (the
“Section 83(b)
        Election”)
        with
        respect to Restricted Shares. If a Participant who has received Restricted
        Share
        Units provides the Administrator with written notice of his or her intention
        to
        make Section 83(b) Election with respect to the Shares subject to such
        Restricted Share Units, the Administrator may in its discretion convert the
        Participant’s Restricted Share Units into Restricted Shares, on a one-for-one
        basis, in full satisfaction of the Participant’s Restricted Share Unit Award.
        The Participant may then make a Section 83(b) Election with respect to
        those Restricted Shares.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-8

          

          
            

          

        

        
          
          

        

      

      Shares
        with respect to which a Participant makes a Section 83(b) Election shall
        not be eligible for deferral pursuant to Section 10 below.

       

      (g) Deferral
        Elections.
        At any
        time within the thirty (30) day period (or other shorter or longer period
        that the Administrator selects) in which a Participant who is a member of
        a
        select group of management or highly compensated employees (within the
        meaning of the Code) receives an Award of either Restricted Shares or Restricted
        Share Units, the Administrator may permit the Participant to irrevocably
        elect,
        on a form provided by and acceptable to the Administrator, to defer the receipt
        of all or a percentage of the Shares that would otherwise be transferred
        to the
        Participant upon the vesting of such Award. If the Participant makes this
        election, the Shares subject to the election, and any associated dividends
        and
        interest, shall be credited to an account established pursuant to
        Section 10 hereof on the date such Shares would otherwise have been
        released or issued to the Participant pursuant to Section 9(d)
        above.

       

      The
        Administrator may grant Awards hereunder in the form of unrestricted
        shares (“Unrestricted
        Shares”),
        which
        shall vest in full upon the date of grant or such other date as the
        Administrator may determine or which the Administrator may issue pursuant
        to any
        program under which one or more Eligible Persons (selected by the
        Administrator in its discretion) elect to receive Unrestricted Shares in
        lieu of
        cash bonuses that would otherwise be paid.

       

      10. Deferred
        Share Units

       

      (a) Elections
        to Defer.
        The
        Administrator may permit any Eligible Person who is a Director, Consultant
        or
        member of a select group of management or highly compensated
        employees (within the meaning of the Code) to irrevocably elect, on a form
        provided by and acceptable to the Administrator (the “Election
        Form”),
        to
        forego the receipt of cash or other compensation (including the Shares
        deliverable pursuant to any Award other than Restricted Shares for which
        a
        Section 83(b) Election has been made), and in lieu thereof to have the
        Company credit to an internal Plan account (the “Account”)
        a
        number of deferred share units (“Deferred
        Share Units”)
        having
        a Fair Market Value equal to the Shares and other compensation deferred.
        These
        credits will be made at the end of each calendar quarter (or other period
        that the Administrator establishes prospectively) during which compensation
        is
        deferred. Unless, within five (5) business days after the Company receives
        an
        Election Form, the Company sends the Participant a written notice explaining
        why
        it is invalid, each Election Form shall take effect on the first day of the
        next
        calendar year (or on the first day of the next calendar month in the case
        of an initial election by a Participant who is first eligible to defer
        hereunder) after its delivery to the Company, subject to Section 9(g)
        regarding deferral of Restricted Shares and Restricted Share Units and to
        Section 13(e) regarding deferral of Performance Awards. Notwithstanding the
        foregoing sentence: (i) Election Forms shall be ineffective with respect to
        any compensation that a Participant earns before the date on which the Company
        receives the Election Form, and (ii) the Administrator may unilaterally
        make awards in the form of Deferred Share Units, regardless of whether or
        not
        the Participant foregoes other compensation.

       

      (b) Vesting.
        Unless
        a Grant Agreement expressly provides otherwise, each Participant shall be
        one
        hundred percent (100%) vested at all times in any Shares subject to
        Deferred Share Units.

       

      (c) Issuances
        of Shares.
        The
        Company shall provide a Participant with one (1) Share for each Deferred
        Share Unit in five (5) substantially equal annual installments that are
        issued before the last day of each of the five (5) calendar years that end
        after the date on which the Participant’s Continuous Service terminates, unless
        -

       

      (i) the
        Participant has properly elected a different form of distribution, on a form
        approved by the Administrator, that permits the Participant to select any
        combination of a lump sum and annual installments that are completed within
        ten (10) years following termination of the Participant’s Continuous
        Service, and

       

      (ii) the
        Company received the Participant’s distribution election form at the time the
        Participant elects to defer the receipt of cash or other compensation pursuant
        to Section 10(a), provided that (subject to any prospective changes
        that the Administrator communicates in writing to a Participant), the
        Participant may change such election through any subsequent election
        that (i) is delivered to the Administrator at least one (1) year
        before the date on which distributions are otherwise scheduled to commence
        pursuant to the Participant’s election, and (ii) defers the commencement of
        distributions by at least five (5) years from the originally scheduled
        commencement date.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-9

          

          
            

          

        

        
          
          

        

      

      Fractional
        shares shall not be issued and shall be rounded up to the next full share
        at the
        election of the Administrator. 

       

      (d) Crediting
        of Dividends.
        Whenever Shares are issued to a Participant pursuant to Section 10(c)
        above, such Participant shall also be entitled to receive, with respect to
        each
        Share issued, a cash amount equal to any cash dividends (plus simple
        interest at a rate of five percent (5%) per annum, or such other reasonable
        rate as the Administrator may determine in a Grant Agreement), and a number
        of
        Shares equal to any stock dividends which were declared and paid to the holders
        of Shares between the Grant Date and the date such Share is issued.

       

      (e) Emergency
        Withdrawals.
        In the
        event a Participant suffers an unforeseeable emergency within the contemplation
        of this Section 10 and Section 409A of the Code, the Participant may
        apply to the Company for an immediate distribution of all or a portion of
        the
        Participant’s Deferred Share Units. The unforeseeable emergency must result from
        a sudden and unexpected illness or accident of the Participant, the
        Participant’s spouse, or a dependent (within the meaning of
        Section 152(a) of the Code) of the Participant, casualty loss of the
        Participant’s property, or other similar extraordinary and unforeseeable
        conditions beyond the control of the Participant. Examples of purposes which
        are
not
        considered unforeseeable emergencies include post-secondary school expenses
        or
        the desire to purchase a residence. In no event will a distribution be made
        to
        the extent the unforeseeable emergency could be relieved through reimbursement
        or compensation by insurance or otherwise, or by liquidation of the
        Participant’s nonessential assets to the extent such liquidation would not
        itself cause a severe financial hardship. The amount of any distribution
        hereunder shall be limited to the amount necessary to relieve the Participant’s
        unforeseeable emergency plus amounts necessary to pay taxes reasonably
        anticipated as a result of the distribution. The Administrator shall determine
        whether a Participant has a qualifying unforeseeable emergency and the amount
        which qualifies for distribution, if any. The Administrator may require evidence
        of the purpose and amount of the need, and may establish such application
        or
        other procedures as it deems appropriate.

       

      (f) Unsecured
        Rights to Deferred Compensation.
        A
        Participant’s right to Deferred Share Units shall at all times constitute an
        unsecured promise of the Company to pay benefits as they come due. The right
        of
        the Participant or the Participant’s duly-authorized transferee to receive
        benefits hereunder shall be solely an unsecured claim against the general
        assets
        of the Company. Neither the Participant nor the Participant’s duly-authorized
        transferee shall have any claim against or rights in any specific assets,
        shares, or other funds of the Company.

       

      11. Phantom
        Stock

       

      The
        Administrator may from time to time grant Awards to eligible participants
        denominate in stock-equivalent units (“Phantom
        Stock”)
        in
        such amounts and on such terms and conditions as it shall determine. Phantom
        Stock units granted to a participant shall be credited to a bookkeeping reserve
        account solely for accounting purposes and shall not require a segregation
        of
        any of the Company’s assets. An Award of Phantom Stock may be settled in Common
        Stock, in cash, or in a combination of Common Stock and cash, as determined
        in
        the sole discretion of the Administrator. Except as otherwise provided in
        the
        applicable Grant Agreement, the grantee shall not have the rights of a
        stockholder with respect to any Shares of Common Stock represented by a Phantom
        Stock unit solely as a result of the grant of a Phantom Stock unit to the
        grantee.

       

      12. Other
        Stock-Based Awards

       

      The
        Administrator may from time to time grant other stock-based awards to eligible
        participants in such amounts, on such terms and conditions, and for such
        consideration, including no consideration or such minimum consideration as
        may
        be required by law, as it shall determine. Other stock-based awards may be
        denominated in cash, in Common Stock or other securities, in stock-equivalent
        units, in stock appreciation units, in securities or debentures convertible
        into
        Common Stock, or in any combination of the foregoing and may be paid in Common
        Stock or other securities, in cash, or in a combination of Common Stock or
        other
        securities and cash, all as determined in the sole discretion of the
        Administrator.

       

      13. Performance
        Awards

       

      (a) Performance
        Units.
        Subject
        to the limitations set forth in paragraph (c) hereof, the Administrator may
        in its discretion grant Performance Units to any Eligible Person and shall
        evidence such grant in a Grant Agreement that is delivered to the Participant
        which sets forth the terms and conditions of the Award. A Performance Unit
        is an
        Award which is based on the achievement of specific goals with respect to
        the
        Company or any Affiliate or individual performance of the Participant, or
        a
        combination thereof, over a specified period of time.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-10

          

          
            

          

        

        
          
          

        

      

      (b) Performance
        Compensation Awards.
        Subject
        to the limitations set forth in paragraph (c) hereof, the Administrator
        may, at the time of grant of a Performance Unit, designate such Award as
        a
“Performance
        Compensation Award”
in
        order that such Award constitutes “qualified performance-based compensation”
under Code Section 162(m), in which event the Administrator shall have the
        power to grant such Performance Compensation Award upon terms and conditions
        that qualify it as “qualified performance-based compensation” within the meaning
        of Code Section 162(m). With respect to each such Performance Compensation
        Award, the Administrator shall establish, in writing within the time required
        under Code Section 162(m), a “Performance
        Period”,
        “Performance
        Measure(s)”,
        and
“Performance
        Formula(e)” (each
        such term being hereinafter defined). Once established for a Performance
        Period,
        the Performance Measure(s) and Performance Formula(e) shall not be amended
        or
        otherwise modified to the extent such amendment or modification would cause
        the
        compensation payable pursuant to the Award to fail to constitute qualified
        performance-based compensation under Code Section 162(m).

       

      A
        Participant shall be eligible to receive payment in respect of a Performance
        Compensation Award only to the extent that the Performance Measure(s) for
        such
        Award is achieved and the Performance Formula(e) as applied against such
        Performance Measure(s) determines that all or some portion of such Participant’s
        Award has been earned for the Performance Period. As soon as practicable
        after
        the close of each Performance Period, the Administrator shall review and
        certify
        in writing whether, and to what extent, the Performance Measure(s) for the
        Performance Period have been achieved and, if so, determine and certify in
        writing the amount of the Performance Compensation Award to be paid to the
        Participant and, in so doing, may use negative discretion to decrease, but
        not
        increase, the amount of the Award otherwise payable to the Participant based
        upon such performance.

       

      (c) Limitations
        on Awards.
        The
        maximum Performance Unit Award and the maximum Performance Compensation Award
        that any one (1) Participant may receive for any one (1) Performance
        Period shall be determined from time to time by the Administrator. The
        Administrator shall have the discretion to provide in any Grant Agreement
        that
        any amounts earned in excess of any such limitations will either be credited
        as
        Deferred Share Units, or as deferred cash compensation under a separate plan
        of
        the Company (provided in the latter case that such deferred compensation
        either bears a reasonable rate of interest or has a value based on one (1)
        or more predetermined actual investments). Any amounts for which payment
        to the
        Participant is deferred pursuant to the preceding sentence shall be paid
        to the
        Participant in a future year or years not earlier than, and only to the extent
        that, the Participant is either not receiving compensation in excess of any
        such
        limits for a Performance Period, or is not subject to the restrictions set
        forth
        under Section 162(b) of the Code.

       

      (d) Definitions.
        

       

      (i) “Performance
        Formula”
means,
        for a Performance Period, one (1) or more objective formulas or standards
        established by the Administrator for purposes of determining whether or the
        extent to which an Award has been earned based on the level of performance
        attained or to be attained with respect to one or more Performance Measure(s).
        Performance Formulae may vary from Performance Period to Performance Period
        and
        from Participant to Participant and may be established on a stand-alone basis,
        in tandem or in the alternative.

       

      (ii) “Performance
        Measure”
means
        one (1) or more of the following selected by the Administrator to measure
        Company, Affiliate, and/or business unit performance for a Performance Period,
        whether in absolute or relative terms (including, without limitation, terms
        relative to a peer group or index): basic, diluted, or adjusted earnings
        per
        share; sales or revenue; earnings before interest, taxes, and other
        adjustments (in total or on a per share basis); basic or adjusted net
        income; returns on equity, assets, capital, revenue or similar measure; economic
        value added; working capital; total shareholder return; and product development,
        product market share, research, licensing, litigation, human resources,
        information services, mergers, acquisitions, sales of assets of Affiliates
        or
        business units. Each such measure shall be, to the extent applicable, determined
        in accordance with generally accepted accounting principles as consistently
        applied by the Company (or such other standard applied by the
        Administrator) and, if so determined by the Administrator, and in the case
        of a
        Performance Compensation Award, to the extent permitted under Code
        Section 162(m), adjusted to omit the effects of extraordinary items, gain
        or loss on the disposal of a business segment, unusual or infrequently occurring
        events and transactions and cumulative effects of changes in accounting
        principles.

       

      Performance
        Measures may vary from Performance Period to Performance Period and from
        Participant to Participant, and may be established on a stand-alone basis,
        in
        tandem or in the alternative.

       

      (iii) “Performance
        Period”
means
        one (1) or more periods of time (of not less than one (1) fiscal
        year of the Company), as the Administrator may designate, over which the
        attainment of one (1) or more Performance Measure(s) will be measured for
        the purpose of determining a Participant’s rights in respect of an
        Award.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-11

          

          
            

          

        

        
          
          

        

      

      (e) Deferral
        Elections.
        At any
        time prior to the date that is at least six (6) months before the close of
        a Performance Period (or shorter or longer period that the Administrator
        selects) with respect to an Award of either Performance Units or Performance
        Compensation, the Administrator may permit a Participant who is a member
        of a
        select group of management or highly compensated employees (within the
        meaning of the Code) to irrevocably elect, on a form provided by and acceptable
        to the Administrator, to defer the receipt of all or a percentage of the
        cash or
        Shares that would otherwise be transferred to the Participant upon the vesting
        of such Award. If the Participant makes this election, the cash or Shares
        subject to the election, and any associated interest and dividends, shall
        be
        credited to an account established pursuant to Section 10 hereof on the
        date such cash or Shares would otherwise have been released or issued to
        the
        Participant pursuant to Section 13(a) or Section 13(b)
        above.

       

      14. Taxes

       

      (a) General.
        As a
        condition to the issuance or distribution of Shares pursuant to the Plan,
        the
        Participant (or in the case of the Participant’s death, the person who
        succeeds to the Participant’s rights) shall make such arrangements as the
        Company may require for the satisfaction of any applicable federal, state,
        local
        or foreign withholding tax obligations that may arise in connection with
        the
        Award and the issuance of Shares. The Company shall not be required to issue
        any
        Shares until such obligations are satisfied. If the Administrator allows
        the
        withholding or surrender of Shares to satisfy a Participant’s tax withholding
        obligations, the Administrator shall not allow Shares to be withheld in an
        amount that exceeds the minimum statutory withholding rates for federal and
        state tax purposes, including payroll taxes.

       

      (b) Default
        Rule for Employees.
        In the
        absence of any other arrangement, an Employee shall be deemed to have directed
        the Company to withhold or collect from his or her cash compensation an amount
        sufficient to satisfy such tax obligations from the next payroll payment
        otherwise payable after the date of the exercise of an Award.

       

      (c) Special
        Rules.
        In the
        case of a Participant other than an Employee (or in the case of an Employee
        where the next payroll payment is not sufficient to satisfy such tax
        obligations, with respect to any remaining tax obligations), in the absence
        of
        any other arrangement and to the extent permitted under Applicable Law, the
        Participant shall be deemed to have elected to have the Company withhold
        from
        the Shares or cash to be issued pursuant to an Award that number of Shares
        having a Fair Market Value determined as of the applicable Tax Date (as
        defined below) or cash equal to the amount required to be withheld. For purposes
        of this Section 14, the Fair Market Value of the Shares to be withheld
        shall be determined on the date that the amount of tax to be withheld is
        to be
        determined under the Applicable Law (the “Tax
        Date”).

       

      (d) Surrender
        of Shares.
        If
        permitted by the Administrator, in its discretion, a Participant may satisfy
        the
        minimum applicable tax withholding and employment tax obligations associated
        with an Award by surrendering Shares to the Company (including Shares that
        would otherwise be issued pursuant to the Award) that have a Fair Market
        Value
        determined as of the applicable Tax Date equal to the amount required to
        be
        withheld. In the case of Shares previously acquired from the Company that
        are
        surrendered under this Section 14, such Shares must have been owned by the
        Participant for more than six months on the date of surrender (or such
        longer period of time the Company may in its discretion require).

       

      (e) Income
        Taxes and Deferred Compensation.
        Participants are solely responsible and liable for the satisfaction of all
        taxes
        and penalties that may arise in connection with Awards (including any taxes
        arising under Section 409A of the Code), and the Company shall not have any
        obligation to indemnify or otherwise hold any Participant harmless from any
        or
        all of such taxes. The Administrator shall have the discretion to organize
        any
        deferral program, to require deferral election forms, and to grant or to
        unilaterally modify any Award in a manner that (i) conforms with the
        requirements of Section 409A of the Code with respect to compensation that
        is deferred and that vests after December 31, 2004, (ii) that voids any
        Participant election to the extent it would violate Section 409A of the
        Code, and (iii) for any distribution election that would violate
        Section 409A of the Code, to make distributions pursuant to the Award at
        the earliest to occur of a distribution event that is allowable under
        Section 409A of the Code or any distribution event that is both allowable
        under Section 409A of the Code and is elected by the Participant, subject
        to any valid second election to defer, provided that the Administrator permits
        second elections to defer in accordance with Section 409A(a)(4)(C). The
        Administrator shall have the sole discretion to interpret the requirements
        of
        the Code, including Section 409A, for purposes of the Plan and all
        Awards.

       

      (f) Loans.
        The
        Company or its Affiliate may make or guarantee loans to grantees to assist
        grantees in exercising Awards and satisfying any withholding tax
        obligations.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-12

          

          
            

          

        

        
          
          

        

      

      15. Transfers,
        Adjustments and Change in Control Transactions

       

      (a) Transferability.
        Except
        as otherwise determined by the Administrator, and in any event in the case
        of an
        ISO or a Stock Appreciation Right granted with respect to an ISO, no Award
        granted under the Plan shall be transferable by a grantee otherwise than
        by will
        or the laws of descent and distribution. Unless otherwise determined by the
        Administrator in accord with the provisions of the immediately preceding
        sentence, an Award may be exercised during the lifetime of the grantee, only
        by
        the grantee or, during the period the grantee is under a legal disability,
        by
        the grantee’s guardian or legal representative.

       

      (b) Adjustments
        for Corporate Transactions and Other Events.
        

       

      (i) Stock
        Dividend, Stock Split and Reverse Stock Split.
        In the
        event of a stock dividend of, or stock split or reverse stock split affecting,
        the Common Stock, (A) the maximum number of shares of such Common Stock as
        to which Awards may be granted under this Plan and the maximum number of
        shares
        with respect to which Awards may be granted during any one (1) fiscal year
        of the Company to any individual, as provided in Section 4 of the Plan,
        and (B) the number of shares covered by and the exercise price and other
        terms of outstanding Awards, shall, without further action of the Board,
        be
        adjusted to reflect such event unless the Board determines, at the time it
        approves such stock dividend, stock split or reverse stock split, that no
        such
        adjustment shall be made. The Administrator may make adjustments, in its
        discretion, to address the treatment of fractional shares and fractional
        cents
        that arise with respect to outstanding Awards as a result of the stock dividend,
        stock split or reverse stock split.

       

      (ii) Non-Change
        in Control Transactions.
        Except
        with respect to the transactions set forth in Section 15(b)(i), in the
        event of any change affecting the Common Stock, the Company or its
        capitalization, by reason of a spin-off, split-up, dividend, recapitalization,
        merger, consolidation or share exchange, other than any such change that
        is part
        of a transaction resulting in a Change in Control of the Company, the
        Administrator, in its discretion and without the consent of the holders of
        the
        Awards, shall make (A) appropriate adjustments to the maximum number and
        kind of shares reserved for issuance or with respect to which Awards may
        be
        granted under the Plan, in the aggregate and with respect to any individual
        during any one fiscal year of the Company, as provided in Section 4 of the
        Plan; and (B) any adjustments in outstanding Awards, including but not
        limited to modifying the number, kind and price of securities subject to
        Awards.

       

      (iii) Change
        in Control Transactions.
        In the
        event of any transaction resulting in a Change in Control of the Company,
        outstanding Options and SARs under this Plan will terminate upon the effective
        time of such Change in Control unless provision is made in connection with
        the
        transaction for the continuation or assumption of such Awards by, or for
        the
        substitution of the equivalent awards of, the surviving or successor entity
        or a
        parent thereof. In the event of such termination, the holders of Options
        and
        SARs under the Plan will be permitted, for a period of at least twenty (20)
        days prior to the effective time of the Change in Control, to exercise all
        portions of such Awards that are then exercisable or which become exercisable
        upon or prior to the effective time of the Change in Control; provided, however,
        that any such exercise of any portion of such an Award which becomes exercisable
        as a result of such Change in Control shall be deemed to occur immediately
        prior
        to the effective time of such Change in Control.

       

      (iv) Pooling
        of Interests Transactions.
        In
        connection with any business combination authorized by the Board, the
        Administrator, in its sole discretion and without the consent of the holders
        of
        the Awards, may make any modifications to any Awards, including but not limited
        to cancellation, forfeiture, surrender or other termination of the Awards,
        in
        whole or in part, regardless of the vested status of the Award, but solely
        to
        the extent necessary to facilitate the compliance of such transaction with
        requirements for treatment as a pooling of interests transaction for accounting
        purposes under generally accepted accounting principles.

       

      (v) Unusual
        or Nonrecurring Events.
        The
        Administrator is authorized to make, in its discretion and without the consent
        of holders of Awards, adjustments in the terms and conditions of, and the
        criteria included in, Awards in recognition of unusual or nonrecurring events
        affecting the Company, or the financial statements of the Company or any
        Affiliate, or of changes in applicable laws, regulations, or accounting
        principles, whenever the Administrator determines that such adjustments are
        appropriate in order to prevent dilution or enlargement of the benefits or
        potential benefits intended to be made available under the Plan.

       

      (c) Substitution
        of Awards in Mergers and Acquisitions.
        Awards
        may be granted under the Plan from time to time in substitution for awards
        held
        by employees, officers, consultants or directors of entities who become or
        are
        about to become employees, officers, consultants or directors of the Company
        or
        an Affiliate as the result of a merger or consolidation of the employing
        entity
        with the Company or an Affiliate, or the acquisition by the Company or an
        Affiliate of the assets or stock of the employing entity. The terms and
        conditions of any substitute Awards so granted may vary from the terms and
        conditions set forth herein to the extent that the Administrator deems
        appropriate at the time of grant to conform the substitute Awards to the
        provisions of the awards for which they are substituted.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-13

          

          
            

          

        

        
          
          

        

      

      16. Time
        of Granting of Awards

       

      The
        date
        of grant (“Grant
        Date”)
        of an
        Award shall be the date on which the Administrator makes the determination
        granting such Award or such other date as is determined by the Administrator,
        provided that in the case of an ISO, the Grant Date shall be the later of
        the
        date on which the Administrator makes the determination granting such ISO
        or the
        date of commencement of the Participant’s employment relationship with the
        Company.

       

      17. Modification
        of Awards and Substitution of Options

       

      (a) Modification,
        Extension and Renewal of Awards.
        Within
        the limitations of the Plan, the Administrator may modify an Award to accelerate
        the rate at which an Option or SAR may be exercised (including without
        limitation permitting an Option or SAR to be exercised in full without regard
        to
        the installment or vesting provisions of the applicable Grant Agreement or
        whether the Option or SAR is at the time exercisable, to the extent it has
        not
        previously been exercised), to accelerate the vesting of any Award, to extend
        or
        renew outstanding Awards, or to accept the cancellation of outstanding Awards
        to
        the extent not previously exercised either for the granting of new Awards
        or for
        other consideration in substitution or replacement thereof. Notwithstanding
        the
        foregoing provision, no modification of an outstanding Award shall materially
        and adversely affect such Participant’s rights thereunder, unless either the
        Participant provides written consent or there is an express Plan provision
        permitting the Administrator to act unilaterally to make the
        modification.

       

      (b) Substitution
        of Options.
        Notwithstanding any inconsistent provisions or limits under the Plan, in
        the
        event the Company or an Affiliate acquires (whether by purchase, merger or
        otherwise) all or substantially all of outstanding capital stock or assets
        of
        another corporation or in the event of any reorganization or other transaction
        qualifying under Section 424 of the Code, the Administrator may, in
        accordance with the provisions of that Section, substitute Options for options
        under the plan of the acquired company provided (i) the excess of the
        aggregate fair market value of the shares subject to an option immediately
        after
        the substitution over the aggregate option price of such shares is not more
        than
        the similar excess immediately before such substitution and (ii) the new
        option does not give persons additional benefits, including any extension
        of the
        exercise period.

       

      18. Term
        of Plan

       

      The
        Plan
        shall continue in effect for a term of ten (10) years from its effective
        date as determined under Section 22 below, unless the Plan is sooner
        terminated under Section 19 below.

       

      19. Amendment
        and Termination of the Plan

       

      (a) Authority
        to Amend or Terminate.
        Subject
        to Applicable Laws, the Board may from time to time amend, alter, suspend,
        discontinue or terminate the Plan.

       

      (b) Effect
        of Amendment or Termination.
        No
        amendment, suspension, or termination of the Plan shall materially and adversely
        affect Awards already granted unless either it relates to an adjustment pursuant
        to Section 15 above, or it is otherwise mutually agreed between the
        Participant and the Administrator, which agreement must be in writing and
        signed
        by the Participant and the Company. Notwithstanding the foregoing, the
        Administrator may amend the Plan to eliminate provisions which are no longer
        necessary as a result of changes in tax or securities laws or regulations,
        or in
        the interpretation thereof.

       

      20. Conditions
        Upon Issuance of Shares

       

      Notwithstanding
        any other provision of the Plan or any agreement entered into by the Company
        pursuant to the Plan, the Company shall not be obligated, and shall have
        no
        liability for failure, to issue or deliver any Shares under the Plan unless
        such
        issuance or delivery would comply with Applicable Law, with such compliance
        determined by the Company in consultation with its legal counsel.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-14

          

          
            

          

        

        
          
          

        

      

      21. Reservation
        of Shares

       

      The
        Company, during the term of this Plan, will at all times reserve and keep
        available such number of Shares as shall be sufficient to satisfy the
        requirements of the Plan.

       

      22. Effective
        Date

       

      (a) Effective
        Date; Termination Date.
        This
        Plan shall become effective on the date of its approval by the Board; provided
        that this Plan shall be submitted to the Company’s shareholders for approval,
        and if not approved by the shareholders in accordance with Applicable
        Laws (as determined by the Administrator in its discretion) within
        one (1) year from the date of approval by the Board, this Plan and any
        Awards shall be null, void and of no force and effect. Awards granted under
        this
        Plan before approval of this Plan by the shareholders shall be granted subject
        to such approval. No Award shall be granted under the Plan after the close
        of
        business on the day immediately preceding the tenth (10th)
        anniversary of the effective date of the Plan, or if earlier, the
        tenth (10th)
        anniversary of the date this Plan is approved by the shareholders. Subject
        to
        other applicable provisions of the Plan, all Awards made under the Plan prior
        to
        such termination of the Plan shall remain in effect until such Awards have
        been
        satisfied or terminated in accordance with the Plan and the terms of such
        Awards.

       

      23. Governing
        Law

       

      The
        validity, construction and effect of the Plan, of Grant Agreements entered
        into
        pursuant to the Plan, and of any rules, regulations, determinations or decisions
        made by the Administrator relating to the Plan or such Grant Agreements,
        and the
        rights of any and all persons having or claiming to have any interest therein
        or
        thereunder, shall be determined exclusively in accordance with applicable
        federal laws and the laws of the State of Florida, without regard to its
        conflict of laws principles.

       

      24. Other
        Applicable Laws And Regulations

       

      (a) U.S.
        Securities Laws.
        This
        Plan, the grant of Awards, and the exercise of Options and SARs under this
        Plan,
        and the obligation of the Company to sell or deliver any of its
        securities (including, without limitation, Options, Restricted Shares,
        Restricted Share Units, Deferred Share Units and Shares) under this Plan
        shall
        be subject to all Applicable Law. In the event that the Shares are not
        registered under the Securities Act, or any applicable state securities laws
        prior to the delivery of such Shares, the Company may require, as a condition
        to
        the issuance thereof, that the persons to whom Shares are to be issued represent
        and warrant in writing to the Company that such Shares are being acquired
        by him
        or her for investment for his or her own account and not with a view to,
        for
        resale in connection with, or with an intent of participating directly or
        indirectly in, any distribution of such Shares within the meaning of the
        Securities Act, and a legend to that effect may be placed on the certificates
        representing the Shares.

       

      (b) Other
        Jurisdictions.
        To
        facilitate the making of any grant of an Award under this Plan, the
        Administrator may provide for such special terms for Awards to Participants
        who
        are foreign nationals or who are employed by the Company or any Affiliate
        outside of the United States of America as the Administrator may consider
        necessary or appropriate to accommodate differences in local law, tax policy
        or
        custom. The Company may adopt rules and procedures relating to the operation
        and
        administration of this Plan to accommodate the specific requirements of local
        laws and procedures of particular countries. Without limiting the foregoing,
        the
        Company is specifically authorized to adopt rules and procedures regarding
        the
        conversion of local currency, taxes, withholding procedures and handling
        of
        stock certificates which vary with the customs and requirements of particular
        countries. The Company may adopt sub-plans and establish escrow accounts
        and
        trusts as may be appropriate or applicable to particular locations and
        countries.

       

      25. No
        Shareholder Rights

       

      Neither
        a
        Participant nor any transferee of a Participant shall have any rights as
        a
        shareholder of the Company with respect to any Shares underlying any Award
        until
        the date of issuance of a share certificate to a Participant or a transferee
        of
        a Participant for such Shares in accordance with the Company’s governing
        instruments and Applicable Law. Prior to the issuance of Shares pursuant
        to an
        Award, a Participant shall not have the right to vote or to receive dividends
        or
        any other rights as a shareholder with respect to the Shares underlying the
        Award, notwithstanding its exercise in the case of Options and SARs. No
        adjustment will be made for a dividend or other right that is determined
        based
        on a record date prior to the date the stock certificate is issued, except
        as
        otherwise specifically provided for in this Plan.

       

      
        
          
          

        

        
          
            EXHIBIT
              4.1-15

          

          
            

          

        

        
          
          

        

      

      26. No
        Employment Rights

       

      Nothing
        in the Plan or in any Grant Agreement thereunder shall confer any right on
        an
        individual to continue in the service of the Company or shall interfere in
        any
        way with the right of the Company to terminate such service at any time with
        or
        without cause or notice and whether or not such termination results in (i)
        the failure of any Award to vest; (ii) the forfeiture of any unvested or
        vested portion of any Award; and/or (iii) any other adverse effect on the
        individual’s interests under the Plan.

       

      27. No
        Trust or Fund Created

       

      Neither
        the Plan nor any Award shall create or be construed to create a trust or
        separate fund of any kind or a fiduciary relationship between the Company
        and a
        grantee or any other person. To the extent that any grantee or other person
        acquires a right to receive payments from the Company pursuant to an Award,
        such
        right shall be no greater than the right of any unsecured general creditor
        of
        the Company.

       

      28. Compliance
        with Section 409A of The Code

       

      The
        Company intends that all Options granted under the Plan not be considered
        to
        provide for the deferral of compensation under Section 409A of the Code and
        that any other Award that does provide for such deferral of compensation
        shall
        comply with the requirements of Section 409A of the Code and, accordingly,
        this Plan shall be so administered and construed.  Further, the Company may
        modify the Plan and any Award to the extent necessary to fulfill this
        intent.

       

      *
        * * *
        *

      
        
          
          

        

        
          
            EXHIBIT
              4.1-16

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