Document:

FORM
      OF INVESTOR NOTE

    

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

    

    AERO
      GROUP INCORPORATED

    (a
      Utah corporation)

    

    Amended
      and Restated Convertible Promissory Note 

     

    Total
      Note: $________________

     

    Aero
      Group Incorporated,
      a Utah
      corporation (the “Corporation”),
      for
      value received, promises to pay (subject to the conversion provisions set forth
      herein) to the order of _________________________ (the “Holder”),
      on
      __________, 200__ [Three Years From Issuance] (the “Due
      Date”),
      upon
      presentation of this Convertible Promissory Note (the “Note”),
      _______________Thousand ($_________) Dollars (the “Principal
      Amount”).
      The
      Note is convertible into shares of common stock (the “Common
      Stock”)
      of the
      Corporation as provided below in Section 2. This Note was originally issued
      in
      accordance with the terms and conditions set forth in the Loan Agreement, of
      ___________________, by and between the Corporation and the Holder (the
“Loan
      Agreement”).

     

    The
      Corporation covenants, promises and agrees as follows:

    

    1.
      Interest.
      Subject
      to the Holder's right to convert, interest payable on this Note shall accrue
      at
      the annual rate of twelve percent (12%) and be payable in arrears commencing
      _____________, 200__ and quarterly thereafter, and on the Due Date, accelerated
      or otherwise, when the principal and remaining accrued but unpaid interest
      shall
      be due and payable, or sooner as described below.

    

    2.
      Conversion.
      

    

    2.1.
      Option
      to Convert.
      The
      Holder shall have the right, from and after the issuance of this Note and then
      at any time until this Note is fully paid, at his option, to convert, in whole
      or in part, subject to the terms and provisions hereof, the then outstanding
      balance of the Principal Amount of the Note, and at the Holder's election,
      the
      interest accrued on the Note, into shares of the Corporation’s common stock the
      number of shares to be determined by dividing the outstanding balance of the
      Principal Amount of the Note, together with any interest, to be converted by
      $0.003 (the “Conversion
      Price”),
      subject to adjustment as provided below in Section 7.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.2.
      Exercise
      of Conversion Right.
      The
      conversion right shall be exercised, if at all, by surrender of the Note to
      the
      Corporation, together with written notice of election executed by the Holder,
      which may be in the form which is included with this Note (hereinafter referred
      to as the “Conversion
      Notice”)
      to
      convert such Note or a specified portion thereof into the shares of common
      stock
      of the Corporation. Such notice shall be sent to the Corporation at the address
      set forth below in Section 11 hereof. 

    

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

    

    2.3.
      Reservation
      of Shares.
      The
      Corporation shall at all times reserve and keep available, free from preemptive
      rights, unissued or treasury shares, shares of Common Stock sufficient to effect
      the conversion of this Note; and, if at any time, the number of authorized
      but
      unissued shares of Common Stock shall not be sufficient to effect the conversion
      of all then outstanding principal of this Note, the Corporation will take such
      corporate action as may be necessary to increase its authorized but unissued
      shares of Common Stock to such number of shares as shall be sufficient for
      such
      purpose.

    

    2.4.
      Conversion
      Limitation.
      In no
      event shall the Holder be entitled to convert any portion of the Note in excess
      of that portion of the Note upon conversion of which the sum of (1) the number
      of shares of the Corporation’s common stock beneficially owned by the Holder and
      his affiliates (other than shares of Common Stock which may be deemed
      beneficially owned through the ownership of the unconverted portion of the
      Notes
      or the unexercised or unconverted portion of any other security of the
      Corporation) and (2) the number of shares of common stock issuable upon the
      conversion of the portion of the Note, would result in beneficial ownership
      by
      the Holder and his affiliates of more than 4.9% of the outstanding shares of
      the
      Corporation’s common stock. For purposes of the proviso to the immediately
      preceding sentence, beneficial ownership shall be determined in accordance
      with
      Section 13(d) of the Securities Exchange Act of 1934, as amended, and
      Regulations 13D-G thereunder, except as otherwise provided in clause (1) of
      such
      proviso. The Holder may waive the limitations set forth herein by written notice
      of not less than sixty (60) days to the Corporation. 

    

    3.
      Prepayment.
      The
      Corporation shall have the right to prepay this Note, in whole or in part,
      without penalty or a premium.

    

    4.
      Security.
      The
      Corporation’s obligations hereunder are secured by a Security Agreement, as more
      fully described in the Loan Agreement, by and between the Corporation and the
      Holder.

     

    
      
        
        

      

      
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    5.
      Default.

    

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

    

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

    

    (b)
      The
      occurrence of any Event of Default as such term is defined in the Loan
      Agreement. 

    

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

    

    6.
      Registration
      Rights.

     

    6.1
      Registration
      Rights Granted.
      The
      Company hereby grants the following registration rights to Holder.

     

    (i) On
      one
      occasion, for a period commencing one hundred and twenty-one (121) days after
      the date hereof, but not later than two (2) years after the date hereof
      (“Request
      Date”),
      upon
      a written request therefor, the Company shall prepare and file with the U.S.
      Securities and Exchange Commission (“SEC”) a registration statement under the
      Securities Act of 1933, as amended (the “33 Act”) registering the Common Stock
      issuable upon conversion of the Note (the “Registrable
      Securities”)
      which
      are the subject of such request for unrestricted public resale by the Holder
      thereof. For purposes of Sections 6.1(i) and 6.1(ii), Registrable Securities
      shall not include (A) Common Stock which is registered for resale in an
      effective registration statement, (B) included for registration in a pending
      registration statement, or (C) which has been issued without further transfer
      restrictions after a sale or transfer pursuant to Rule 144 under the 1933
      Act.

     

    (ii) If
      the
      Company at any time proposes to register any of its securities under the 1933
      Act for sale to the public, whether for its own account or for the account
      of
      other security holders or both, except with respect to registration statements
      on Forms S-4, S-8 or another form not available for registering the Registrable
      Securities for sale to the public, provided the Registrable Securities are
      not
      otherwise registered for resale by the Holder pursuant to an effective
      registration statement, each such time it will give at least fifteen (15) days'
      prior written notice to the record holder of the Registrable Securities of
      its
      intention so to do. Upon the written request of the Holder, received by the
      Company within ten (10) days after the giving of any such notice by the Company,
      to register any of the Registrable Securities not previously registered, the
      Company will cause such Registrable Securities as to which registration shall
      have been so requested to be included with the securities to be covered by
      the
      registration statement proposed to be filed by the Company, all to the extent
      required to permit the sale or other disposition of the Registrable Securities
      so registered by the Holder of such Registrable Securities (the “Seller”).
      In
      the event that any registration pursuant to this Section 6.1(ii) shall be,
      in
      whole or in part, an underwritten public offering of common stock of the
      Company, the number of shares of Registrable Securities to be included in such
      an underwriting may be reduced by the managing underwriter if and to the extent
      that the Company and the underwriter shall reasonably be of the opinion that
      such inclusion would adversely affect the marketing of the securities to be
      sold
      by the Company therein; provided, however, that the Company shall notify the
      Seller in writing of any such reduction. Notwithstanding the foregoing
      provisions, or Section 6.4 hereof, the Company may withdraw or delay or suffer
      a
      delay of any registration statement referred to in this Section 6.1(ii) without
      thereby incurring any liability to the Seller.

     

    
      
        
        

      

      
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    (iii) If,
      at
      the time any written request for registration is received by the Company
      pursuant to Section 6.1(i), the Company has determined to proceed with the
      actual preparation and filing of a registration statement under the 1933 Act
      in
      connection with the proposed offer and sale for cash of any of its securities
      for the Company's own account and the Company actually does file such other
      registration statement, such written request shall be deemed to have been given
      pursuant to Section 6.1(ii) rather than Section 6.1(i), and the rights of the
      Holder of Registrable Securities covered by such written request shall be
      governed by Section 6.1(ii).

     

    (iv) The
      Company shall file with the Commission a Form S-3 registration statement (the
      “Registration
      Statement”)
      (or
      such other form that it is eligible to use) in order to register the Registrable
      Securities for resale and distribution under the 1933 Act not later
      than)
      sixty
      (60) days after the date hereof (the “Filing
      Date”),
      and
      cause to be declared effective not
      later
      than one hundred and twenty (120) days
      after the date hereof (the “Effective

      Date”).
      The
      Company will register not less than a number of shares of common stock in the
      aforedescribed registration statement that is equal to 150%
      of
      the shares of Common Stock issuable upon conversion of the Note. The Registrable
      Securities shall be reserved and set aside exclusively for the benefit of
      Holder, and not issued, employed or reserved for anyone other than Holder.
      The
      Registration Statement will immediately be amended or additional registration
      statements will be immediately filed by the Company as necessary to register
      additional shares of Common Stock to allow the public resale of all Common
      Stock
      included in and issuable by virtue of the Registrable Securities.

     

    6.2. Registration
      Procedures.
      If and
      whenever the Company is required by the provisions of Section 6.1(i), 6.1(ii),
      or (iv) to effect the registration of any Registrable Securities under the
      1933
      Act, the Company will, as expeditiously as possible: 

     

    (a) subject
      to the timelines provided in this Agreement, prepare and file with the SEC
      a
      registration statement required by Section 6, with respect to such securities
      and use its best efforts to cause such registration statement to become and
      remain effective for the period of the distribution contemplated thereby
      (determined as herein provided), promptly provide to the Holder of the
      Registrable Securities copies of all filings and SEC letters of comment (but
      not
      any information that is material, non-public information unless such information
      is also promptly publicly disclosed) and notify Holder (by telecopier and by
      e-mail addresses provided by Holder) on or before 6 pm ET on the same business
      day that the Company receives notice that (i) the SEC has no comments or no
      further comments on the registration statement, and (ii) the registration
      statement has been declared effective (failure to timely provide notice as
      required by this Section 6.2(a) shall be a material breach of the Company’s
      obligation and an Event of Default as defined in the Note
      and
      a Non-Registration Event as defined in Section 6.4 of this Note); 

     

    
      
        
        

      

      
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    (b) prepare
      and file with the SEC such amendments and supplements to such registration
      statement and the prospectus used in connection therewith as may be necessary
      to
      keep such registration statement effective until such registration statement
      has
      been effective for a period of two (2) years, and comply with the provisions
      of
      the 1933 Act with respect to the disposition of all of the Registrable
      Securities covered by such registration statement in accordance with the
      Sellers’ intended method of disposition set forth in such registration statement
      for such period;

     

    (c) furnish
      to the Seller, at the Company’s expense, such number of copies of the
      registration statement and the prospectus included therein (including each
      preliminary prospectus) as such persons reasonably may request in order to
      facilitate the public sale or disposition of the Common Stock covered by such
      registration statement; 

     

    (d) use
      its
commercially
      reasonable best
      efforts to register or qualify the Registrable Securities covered by such
      registration statement under the securities or “blue sky” laws of such
      jurisdictions as the Seller shall request in writing, provided, however, that
      the Company shall not for any such purpose be required to qualify generally
      to
      transact business as a foreign corporation in any jurisdiction where it is
      not
      so qualified or to consent to general service of process in any such
      jurisdiction; 

     

    (e) if
      applicable, list the Registrable Securities covered by such registration
      statement with any securities exchange on which the Common Stock of the Company
      is then listed; 

     

    (f) immediately
      notify the Seller when a prospectus relating thereto is required to be delivered
      under the 1933 Act, of the happening of any event of which the Company has
      knowledge as a result of which the prospectus contained in such registration
      statement, as then in effect, includes an untrue statement of a material fact
      or
      omits to state a material fact required to be stated therein or necessary to
      make the statements therein not misleading in light of the circumstances then
      existing; and

     

    (g) provided
      same would not be in violation of the provision of Regulation FD under the
      1934
      Act, make available for inspection by the Seller, and any attorney, accountant
      or other agent retained by the Seller or underwriter, all publicly available,
      non-confidential financial and other records, pertinent corporate documents
      and
      properties of the Company, and cause the Company's officers, directors and
      employees to supply all publicly available, non-confidential information
      reasonably requested by the Seller, attorney, accountant or agent in connection
      with such registration statement. 

     

    6.3. Provision
      of Documents.
      In
      connection with each registration described in this Section 6, Seller will
      furnish to the Company in writing such information and representation letters
      with respect to itself and the proposed distribution by it as reasonably shall
      be necessary in order to assure compliance with federal and applicable state
      securities laws. 

     

    
      
        
        

      

      
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    6.4. Non-Registration
      Events.
      The
      Company and the Seller agree that the Seller will suffer damages if the
      Registration Statement is not filed by the Filing Date and not declared
      effective by the SEC by the Effective Date, and any registration statement
      required under Section 6.1(i) or 6.1(ii) is not filed within 60 days after
      written request and declared effective by the SEC within 120 days after such
      request, and maintained in the manner and within the time periods contemplated
      by Section 6 hereof, and it would not be feasible to ascertain the extent of
      such damages with precision. Accordingly, if (A) the Registration Statement
      is
      not filed on or before the Filing Date, (B) is not declared effective on or
      before the Effective Date, (C) the Registration Statement is not declared
      effective within three (3) business days after receipt by the Company or its
      attorneys of a written or oral communication from the SEC that the Registration
      Statement will not be reviewed or that the SEC has no further comments, (D)
      if
      the registration statement described in Sections 6.1(i) or 6.1(ii) is not filed
      within 60 days after such written request, or is not declared effective within
      120 days after such written request, or (E) any registration statement described
      in Sections 6.1(i), 6.1(ii) or 6.1(iv) is filed and declared effective but
      shall
      thereafter cease to be effective (without being succeeded within fifteen (15)
      business days by an effective replacement or amended registration statement)
      for
      a period of time which shall exceed 30 days in the aggregate per year (defined
      as a period of 365 days commencing on the date the Registration Statement is
      declared effective) or more than 20 consecutive days (each such event referred
      to in clauses A through E of this Section 6.4 is referred to herein as a
      "Non-Registration Event"), then the Company shall deliver to the Holder, as
      Liquidated Damages, an amount equal to two percent (2%) for each thirty (30)
      days (or part thereof) thereafter, of the Principal Amount of the Note acquired
      by such the holder hereunder. The Company must pay the Liquidated Damages in
      cash or an amount equal to one hundred and fifty percent (150%) of such
      Liquidated Damages if paid in additional shares of registered unlegended
      free-trading shares of Common Stock. Such Common Stock shall be valued at a
      per
      share value equal to the average of the five (5) lowest closing bid prices
      of
      the Common Stock as reported by Bloomberg L.P. for the twenty (20) trading
      days
      preceding the first day of each forty-five (45) day or shorter period for which
      Liquidated Damages are payable. The Liquidated Damages must be paid within
      ten
      (10) days after the end of each forty-five (45) day period or shorter part
      thereof for which Liquidated Damages are payable. In the event a Registration
      Statement is filed by the Filing Date but is withdrawn prior to being declared
      effective by the SEC, then such Registration Statement will be deemed to have
      not been filed. All oral or written and accounting comments received from the
      SEC relating to the Registration Statement must be responded to within ten
      (10)
      business days. Failure to timely respond to SEC comments is a Non-Registration
      Event for which Liquidated Damages shall accrue and be payable by the Company
      to
      the holders of Registrable Securities at the same rate set forth above.
      Notwithstanding the foregoing, the Company shall not be liable to the Holder
      under this Section 6.4 for any events or delays occurring as a consequence
      of
      the acts or omissions of the Holder contrary to the obligations undertaken
      by
      Holder in this Note. Liquidated Damages will not accrue nor be payable pursuant
      to this Section 6.4 nor will a Non-Registration Event be deemed to have occurred
      for times during which Registrable Securities are transferable by the holder
      of
      Registrable Securities pursuant to Rule 144(k) under the 1933 Act.

     

    
      
        
        

      

      
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    6.5. Expenses.
      All
      expenses incurred by the Company in complying with Section 6, including, without
      limitation, all registration and filing fees, printing expenses, fees and
      disbursements of counsel and independent public accountants for the Company,
      fees and expenses (including reasonable counsel fees) incurred in connection
      with complying with state securities or “blue sky” laws, fees of the National
      Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents
      and registrars, costs of insurance and fee of one counsel for Seller are called
      “Registration
      Expenses.”
All
      underwriting discounts and selling commissions applicable to the sale of
      Registrable Securities, including any fees and disbursements of one counsel
      to
      the Seller, are called "Selling
      Expenses."
      The
      Company will pay all Registration Expenses in connection with the registration
      statement under Section 6. Selling Expenses in connection with each registration
      statement under Section 6 shall be borne by the Seller.

     

    6.6. Indemnification
      and Contribution.

     

    (a) In
      the
      event of a registration of any Registrable Securities under the 1933 Act
      pursuant to Section 6, the Company will, to the extent permitted by law,
      indemnify and hold harmless the Seller, and, as applicable, each officer of
      the
      Seller, each director of the Seller, each underwriter of such Registrable
      Securities thereunder and each other person, if any, who controls such Seller
      or
      underwriter within the meaning of the 1933 Act, against any losses, claims,
      damages or liabilities, joint or several, to which the Seller, or such
      underwriter or controlling person may become subject under the 1933 Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any untrue statement or alleged
      untrue statement of any material fact contained in any registration statement
      under which such Registrable Securities was registered under the 1933 Act
      pursuant to Section 6, any preliminary prospectus or final prospectus contained
      therein, or any amendment or supplement thereof, or arise out of or are based
      upon the omission or alleged omission to state therein a material fact required
      to be stated therein or necessary to make the statements therein not misleading
      in light of the circumstances when made, and will subject to the provisions
      of
      Section 6.6(c) reimburse the Seller, each such underwriter and each such
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action; provided, however, that the Company shall not be liable
      to
      the Seller to the extent that any such damages arise out of or are based upon
      an
      untrue statement or omission made in any preliminary prospectus if (i) the
      Seller failed to send or deliver a copy of the final prospectus delivered by
      the
      Company to the Seller with or prior to the delivery of written confirmation
      of
      the sale by the Seller to the person asserting the claim from which such damages
      arise, (ii) the final prospectus would have corrected such untrue statement
      or
      alleged untrue statement or such omission or alleged omission, or (iii) to
      the
      extent that any such loss, claim, damage or liability arises out of or is based
      upon an untrue statement or alleged untrue statement or omission or alleged
      omission so made in conformity with information furnished by the Seller, or
      any
      such controlling person in writing specifically for use in such registration
      statement or prospectus. 

     

    (b) In
      the
      event of a registration of any of the Registrable Securities under the 1933
      Act
      pursuant to Section 6, Seller will, to the extent permitted by law, indemnify
      and hold harmless the Company, and each person, if any, who controls the Company
      within the meaning of the 1933 Act, each officer of the Company who signs the
      registration statement, each director of the Company, each underwriter and
      each
      person who controls any underwriter within the meaning of the 1933 Act, against
      all losses, claims, damages or liabilities, joint or several, to which the
      Company or such officer, director, underwriter or controlling person may become
      subject under the 1933 Act or otherwise, insofar as such losses, claims, damages
      or liabilities (or actions in respect thereof) arise out of or are based upon
      any untrue statement or alleged untrue statement of any material fact contained
      in the registration statement under which such Registrable Securities were
      registered under the 1933 Act pursuant to Section 6, any preliminary prospectus
      or final prospectus contained therein, or any amendment or supplement thereof,
      or arise out of or are based upon the omission or alleged omission to state
      therein a material fact required to be stated therein or necessary to make
      the
      statements therein not misleading, and will reimburse the Company and each
      such
      officer, director, underwriter and controlling person for any legal or other
      expenses reasonably incurred by them in connection with investigating or
      defending any such loss, claim, damage, liability or action, provided, however,
      that the Seller will be liable hereunder in any such case if and only to the
      extent that any such loss, claim, damage or liability arises out of or is based
      upon an untrue statement or alleged untrue statement or omission or alleged
      omission made in reliance upon and in conformity with information pertaining
      to
      Seller, as such, furnished in writing to the Company by Seller specifically
      for
      use in such registration statement or prospectus, and provided, further,
      however, that the liability of the Seller hereunder shall be limited to the
      net
      proceeds actually received by the Seller from the sale of Registrable Securities
      covered by such registration statement.

     

    
      
        
        

      

      
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    (c) Promptly
      after receipt by an indemnified party hereunder of notice of the commencement
      of
      any action, such indemnified party shall, if a claim in respect thereof is
      to be
      made against the indemnifying party hereunder, notify the indemnifying party
      in
      writing thereof, but the omission so to notify the indemnifying party shall
      not
      relieve it from any liability which it may have to such indemnified party other
      than under this Section 6.6(c) and shall only relieve it from any liability
      which it may have to such indemnified party under this Section 6.6(c), except
      and only if and to the extent the indemnifying party is prejudiced by such
      omission. In case any such action shall be brought against any indemnified
      party
      and it shall notify the indemnifying party of the commencement thereof, the
      indemnifying party shall be entitled to participate in and, to the extent it
      shall wish, to assume and undertake the defense thereof with counsel
      satisfactory to such indemnified party, and, after notice from the indemnifying
      party to such indemnified party of its election so to assume and undertake
      the
      defense thereof, the indemnifying party shall not be liable to such indemnified
      party under this Section 6.6(c) for any legal expenses subsequently incurred
      by
      such indemnified party in connection with the defense thereof other than
      reasonable costs of investigation and of liaison with counsel so selected,
      provided, however, that, if the defendants in any such action include both
      the
      indemnified party and the indemnifying party and the indemnified party shall
      have reasonably concluded that there may be reasonable defenses available to
      it
      which are different from or additional to those available to the indemnifying
      party or if the interests of the indemnified party reasonably may be deemed
      to
      conflict with the interests of the indemnifying party, the indemnified parties,
      as a group, shall have the right to select one separate counsel and to assume
      such legal defenses and otherwise to participate in the defense of such action,
      with the reasonable expenses and fees of such separate counsel and other
      expenses related to such participation to be reimbursed by the indemnifying
      party as incurred.

     

    
      
        
        

      

      
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    (d) In
      order
      to provide for just and equitable contribution in the event of joint liability
      under the 1933 Act in any case in which either (i) Seller, or any controlling
      person of Seller, makes a claim for indemnification pursuant to this Section
      6.6
      but it is judicially determined (by the entry of a final judgment or decree
      by a
      court of competent jurisdiction and the expiration of time to appeal or the
      denial of the last right of appeal) that such indemnification may not be
      enforced in such case notwithstanding the fact that this Section 6.6 provides
      for indemnification in such case, or (ii) contribution under the 1933 Act may
      be
      required on the part of the Seller or controlling person of the Seller in
      circumstances for which indemnification is not provided under this Section
      6.6;
      then, and in each such case, the Company and the Seller will contribute to
      the
      aggregate losses, claims, damages or liabilities to which they may be subject
      (after contribution from others) in such proportion so that the Seller is
      responsible only for the portion represented by the percentage that the public
      offering price of its securities offered by the registration statement bears
      to
      the public offering price of all securities offered by such registration
      statement, provided, however, that, in any such case, (y) the Seller will not
      be
      required to contribute any amount in excess of the public offering price of
      all
      such securities sold by it pursuant to such registration statement; and (z)
      no
      person or entity guilty of fraudulent misrepresentation (within the meaning
      of
      Section 6(f) of the 1933 Act) will be entitled to contribution from any person
      or entity who was not guilty of such fraudulent misrepresentation.

     

    6.7. Delivery
      of Unlegended Shares.

     

    (a) The
      Common Stock shall not contain any legend, provided (i) a registration statement
      (including the Registration Statement) covering the resale of such security
      is
      effective under the Securities Act, or (ii) following any sale of such Common
      Stock pursuant to Rule 144, or (iii) if such Common Stock are eligible for
      sale
      under Rule 144(k), or (iv) if such legend is not required under applicable
      requirements of the Securities Act (including judicial interpretations and
      pronouncements issued by the Staff of the Commission). A holder of Common Stock
      may, by notice to the Company, require the Company to reissue any Common Stock
      previously issued, so that new Common Stock do not contain any legends. Within
      three (3) business days (such third (3rd)
      business day being the “Unlegended
      Shares Delivery Date”)
      after
      the business day on which the Company has received such holder’s request to
      remove legends, the Company shall deliver, and shall cause legal counsel
      selected by the Company to deliver to its transfer agent (with copies to Holder)
      an appropriate instruction and opinion of such counsel, directing the delivery
      of shares of Common Stock without any legends, reissuable
      pursuant to any effective and current Registration Statement described in
      Section 6 of this Agreement or pursuant to Rule 144 under the 1933 Act (the
      “Unlegended
      Shares”);
      and
      the Company shall cause the transmission of the certificates representing the
      Unlegended Shares together with a legended certificate representing the balance
      of the submitted certificate, if any, to the Holder at the address specified
      in
      the notice of sale, via express courier, by electronic transfer or otherwise
      on
      or before the Unlegended Shares Delivery Date. Transfer fees shall be the
      responsibility of the Seller.

     

    (b) In
      lieu
      of delivering physical certificates representing the Unlegended Shares, if
      the
      Company’s transfer agent is participating in the Depository Trust Company
      (“DTC”)
      Fast
      Automated Securities Transfer program, upon request of a Holder, so long as
      the
      certificates therefor do not bear a legend and the Holder is not obligated
      to
      return such certificate for the placement of a legend thereon, the Company
      shall
      cause its transfer agent to electronically transmit the Unlegended Shares by
      crediting the account of Holder’s prime Broker with DTC through its Deposit
      Withdrawal Agent Commission system. Such delivery must be made on or before
      the
      Unlegended Shares Delivery Date.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    7.
      Anti-Dilution
      Adjustments.
      The
      Conversion Price shall be subject to adjustment as follows:

    

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

    

    (b)
      In
      case of a consolidation or merger of the Corporation with or into another
      corporation (other than a merger or consolidation in which the Corporation
      is
      the continuing corporation and which does not result in a reclassification
      of
      outstanding shares of common stock of the class issuable upon the conversion
      of
      this Note and pursuant to which the security holders of the Corporation are
      not
      entitled to receive securities of another issuer), or in case of any sale or
      conveyance to another corporation of the property of the Corporation as an
      entirety or substantially as an entirety, the Corporation or such successor
      or
      purchasing corporation, as the case may be, shall execute an instrument
      providing that the Holder of this Note shall have the right thereafter to
      convert this Note into the kind and amount of shares of stock and other
      securities and property receivable upon such reclassification, consolidation,
      merger, sale, or conveyance by the Holder of the number of shares of Common
      Stock of the Corporation into which this Note might have been converted
      immediately prior to such reclassification, consolidation, merger, sale, or
      conveyance. Such interest shall provide for adjustments which shall be as nearly
      equivalent as may be practicable to the adjustments provided for herein. The
      foregoing provisions of this Note shall similarly apply to successive
      reclassification of shares of Common Stock and to successive consolidations,
      mergers, sales, or conveyances.

    

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

    

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

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

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

    

    10.
      Transfer/Negotiability.
      This
      Note shall be transferred on the books of the Corporation only by the registered
      Holder hereof or by his attorney duly authorized in writing or by delivery
      to
      the Corporation of a duly executed assignment. The foregoing notwithstanding,
      the Corporation shall not transfer this Note nor any of the shares of Common
      Stock issuable upon conversion hereunder except pursuant to registration under
      the Act or an available exemption from the registration requirements of the
      Act.
      Neither the Corporation nor its Transfer Agent, if any, shall be obligated
      to
      effect any such transfer unless it shall have received an opinion of counsel
      to
      the Holder reasonably satisfactory to the Corporation and its Transfer Agent,
      if
      any, stating that such removal of the legend complies with the provisions of
      the
      Act. The Corporation shall be entitled to treat any Holder of record of the
      Note
      as the Holder in fact thereof and shall not be bound to recognize any equitable
      or other claim to or interest in this Note in the name of any other person,
      whether or not it shall have express or other notice thereof, save as expressly
      provided by the laws of New York. 

    

    11.
      Notices.
      All
      notices and communications under this Note shall be in writing and shall be
      either delivered in person or accompanied by a signed receipt therefor or mailed
      first--class United States certified mail, return receipt requested, postage
      prepaid, and addressed as follows:

    

    
      	 	
              If
                to the Corporation, to:

            
	 	 
	 	
              Aero
                Group Incorporated

            
	 	
              ____________________

            
	 	
              ____________________

            
	 	
              Tel:
                ________________

            
	 	
              Fax:
                ________________

            
	 	 
	 	
              with
                copies to:

            
	 	 
	 	
              Bondy
                & Schloss LLP

            
	 	
              60
                East 42nd Street

            
	 	
              New
                York, New York 10165

            
	 	
              Tel:
                (212) 661-3535

            
	 	
              Fax:
                (212) 972-1677

            
	 	
              Attn:
                Jeffrey A. Rinde, Esq. 

            
	 	 
	 	
              If
                to Holder:

            
	 	 
	 	
              _______________________

            
	 	
              _______________________

            
	 	
              _______________________

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	 	
              Tel:
                __________________

            
	 	
              Fax:
                __________________

            
	 	 
	 	
              with
                copies to:

            
	 	
               

            
	 	
              _______________________

            
	 	
              _______________________

            
	 	
              _______________________

            
	 	
              Tel:
                __________________

            
	 	
              Fax:
                __________________

            

    

    

    12.
      Governing
      Law.
      This
      Note shall be governed by and construed and enforced in accordance with the
      laws
      of the State of New York, or, where applicable, the laws of the United States,
      without regard to conflicts of law.

    

    13.
      Binding
      upon Successors.
      All
      covenants and agreements herein contained by or on behalf of the Corporation
      shall bind its successors and assigns and shall inure to the benefit of the
      Holder and his successors and assigns; Corporation may not assign this Agreement
      or any rights or duties hereunder without Holder’s prior written consent and any
      prohibited assignment shall be absolutely void. Holder reserves the right to
      sell, assign, transfer, negotiate, or grant participation in all or any part
      of,
      or any interest in Holder’s rights and benefits hereunder; provided, that Holder
      shall, for informational purposes but not as a requirement, notify the
      Corporation of the identity of all other assignees or participants who have
      acquired an ownership interest in the Note, and upon conversion, in the equity
      of the Corporation as a result thereof. In connection with any such assignment
      or participation, Holder may disclose all documents and information which Holder
      now or hereafter may have relating to Corporation's business.

    

    IN
      WITNESS WHEREOF, the Corporation has caused this Note to be duly executed as
      of
      the ____ day of _______, 200_.

     

    
      	 	
              AERO
                GROUP INCORPORATED

            
	
               

            	 
	 	 
	
               

            	
              By:_______________________

            
	
               

            	
              Name:_____________________

            
	 	
              Title:____________________

            

    

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    CONVERSION
      NOTICE

    

    AERO
      GROUP INCORPORATED

    

    The
      undersigned holder (the “Holder”)
      of a
      Convertible Promissory Note in the principal amount of $____________________
      (the “Note”),
      hereby elects to convert $____________of said Note into _____________ shares
      of
      common stock of Aero Group Incorporated in accordance with the terms of the
      Note. Holder hereby directs that any such shares be issued in the name of and
      delivered to the Holder or if so specified, to the person or entity named below.
      

    

    Dated:
      ____________________

    

    

    Name:____________________       

    

    Signature:_________________

    

    Address:

    _________________________

    _________________________

    
      _________________________

       

      
        
          
          

        

        
          14Unassociated Document

    FORM
      OF ADDITIONAL NOTE

    

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

    

    AEROGROUP
      INCORPORATED

    (a
      Utah corporation)

    

    Convertible
      Promissory Note 

    

    Issue
      Date: October __, 2006

    

    Total
      Note: $_________________ 

     

    AeroGroup
      Incorporated,
      a Utah
      corporation (the “Corporation”),
      for
      value received, promises to pay (subject to the conversion provisions set forth
      herein) to the order of Sprout
      Investments, LLC.
      (the
“Holder”),
      on
      October ______, 2009 (the “Due
      Date”),
      upon
      presentation of this Convertible Promissory Note (the “Note”),
      [Insert
      Principal Amount]
      Dollars
      (the “Principal
      Amount”)
      together with any accrued and unpaid interest. The Note is convertible into
      shares of common stock (the “Common
      Stock”)
      of the
      Corporation. All references herein to the “Corporation” or “Common Stock” of the
      Corporation, shall be deemed to refer to AeroGroup Incorporated prior to the
      prospective sale of assets to or similar business combination with Tactical
      Air
      Defense Services, Inc. (“Tactical”)
      or any
      other successor corporation and shall be deemed to refer to Tactical and the
      Common Stock of Tactical, respectively, thereafter (the “Business
      Combination”).
      

     

    The
      Corporation covenants, promises and agrees as follows:

    

    1.
      Interest.
      Subject
      to the Holder's right to convert, interest payable on this Note shall accrue
      at
      the annual rate of twelve percent (12%) and be payable in arrears commencing
      April
      1st,
      2007
      and
      quarterly thereafter, and on the Due Date, accelerated or otherwise, when the
      principal and remaining accrued but unpaid interest shall be due and payable,
      or
      sooner as described below.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
 

    2.
      Conversion.
      

    

    2.1.
      Option
      to Convert.
      The
      Holder shall have the right, from and after the issuance of this Note and then
      at any time until this Note is fully paid, at his option, to convert, in whole
      or in part, subject to the terms and provisions hereof, the then outstanding
      balance of the Principal Amount of the Note, and at the Holder's election,
      the
      interest accrued on the Note, into such number of shares as equals the dollar
      amount being converted divided by the Conversion Price. The term “Conversion
      Price”
shall
      be adjusted from time to time at the date of the Conversion Notice is delivered,
      and shall be and mean $1.00 which price shall remain constant at $1.00 per
      share
      of Tactical after the Business Combination. For the avoidance of doubt, the
      issuance of this Note has been made with the contemplation that it shall become
      convertible into shares of Common Stock of Tactical and the Conversion Price
      shall not be revised to reflect any common stock exchange ratio relating to
      the
      Business Combination. 

    

    2.2.
      Exercise
      of Conversion Right.
      The
      conversion right shall be exercised, if at all, by surrender of the Note to
      the
      Corporation, together with written notice of election executed by the Holder,
      which may be in the form which is included with this Note (hereinafter referred
      to as the “Conversion
      Notice”)
      to
      convert such Note or a specified portion thereof into the shares of common
      stock
      of the Corporation. Such notice shall be sent to the Corporation at the address
      set forth below in Section 10 hereof. 

    

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

    

    2.3.
      Reservation
      of Shares.
      The
      Corporation shall at all times reserve and keep available, free from preemptive
      rights, unissued or treasury shares, shares of Common Stock sufficient to effect
      the conversion of this Note; and, if at any time, the number of authorized
      but
      unissued shares of Common Stock shall not be sufficient to effect the conversion
      of all then outstanding principal of this Note, the Corporation will take such
      corporate action as may be necessary to increase its authorized but unissued
      shares of Common Stock to such number of shares as shall be sufficient for
      such
      purpose.

    

    2.4.
      Conversion
      Limitation.
      In no
      event shall the Holder be entitled to convert any portion of the Note in excess
      of that portion of the Note upon conversion of which the sum of (1) the number
      of shares of the Corporation’s common stock beneficially owned by the Holder and
      his affiliates (other than shares of Common Stock which may be deemed
      beneficially owned through the ownership of the unconverted portion of the
      Notes
      or the unexercised or unconverted portion of any other security of the
      Corporation) and (2) the number of shares of common stock issuable upon the
      conversion of the portion of the Note, would result in beneficial ownership
      by
      the Holder and his affiliates of more than 4.9% of the outstanding shares of
      the
      Corporation’s common stock. For purposes of the proviso to the immediately
      preceding sentence, beneficial ownership shall be determined in accordance
      with
      Section 13(d) of the Securities Exchange Act of 1934, as amended, and
      Regulations 13D-G thereunder, except as otherwise provided in clause (1) of
      such
      proviso. The Holder may waive the limitations set forth herein by written notice
      of not less than sixty (60) days to the Corporation. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3.
      Prepayment.
      The
      Corporation shall have the right to prepay this Note, in whole or in part,
      without penalty or a premium.

    

    4.
      Investment
      Representations of Holder.
      The
      Holder hereby makes the following representations and warranties to the
      Corporation and Tactical as its successor interest, each oif which shall apply
      with respect to both the acquisition of this Note and the common stock purchase
      warrants issued in connection therewith. 

    

    4.1 Holder
      is
      either an Accredited Investor, as such term is defined in Rule 501 of Regulation
      D of the Securities Act. 

    

    4.2 Holder
      has thoroughly reviewed this Note and th Warrant and all of the SEC filings
      of
      Tactical and AeroGroup (with the understanding that AeroGroup is not current
      with such filings). Holder has been given full and complete access to the
      Corporation and Tactical and to all materials relating to the business, finances
      and operations of the Corporation and Tactical and the prospective Business
      Combination which have been requested by Holder. 

    

    4.3 Holder
      has been afforded the opportunity to ask questions of, and has inquired with,
      the officers of the Corporation and Tactical regarding its business prospects
      and the Notes, Warrants and underlying shares, all as Holder or its qualified
      representative have found necessary to make an informed investment decision
      to
      purchase the Notes and Warrants or to convert the Notes or exercise the
      warrants. Neither such inquiries nor any other due diligence investigation
      conducted by Holder or any of its advisors or representatives shall modify,
      amend or affect purchaser’s right to rely on the Corporation’s representations
      and warranties contained herein. The Holder understands that an investment
      in
      the Notes and Warrants or conversion and exercise of the same, involves a
      significant degree of risk.
      Finally, Holder has made his/its/her investment decision herein based on the
      merits of Tactical and the Business Combination. 

    

    4.4 Restricted
      Securities.

    

    4.4.1 Holder
      has been advised that the Notes, warrants and shares underlying any of the
      foregoing (collectively, the “Securities”),
      have
      not been registered under the Securities Act or any other applicable
      securities laws and that Securities
      are being offered and sold pursuant to Section 4(2) of the Securities Act and/or
      Rule
      506
      of Regulation D thereunder, or under Regulation S, and that the Company’s
      reliance upon Section 4(2) and/or Rule 506 of Regulation D and/or on Regulation
      S, is predicated in part on Holders representations as contained
      herein.
      Holder
      acknowledges that the Securities will be issued as “restricted securities” as
      defined by Rule 144 promulgated pursuant to the Securities Act. None of the
      Securities may be resold in the absence of an effective registration thereof
      under the Securities Act and applicable state securities laws unless, in the
      opinion of the Corporation’s counsel, an applicable exemption from registration
      is available.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    4.4.2 Holder
      is
      acquiring the Securities for Holder’s own account, and not as nominee or agent,
      for investment purposes only and not with a view to, or for sale in connection
      with, a distribution, as that term is used in Section 2(11) of the Securities
      Act, in a manner which would require registration under the Securities Act
      or
      any state securities laws.

    

    4.4.3 Holder
      understands and acknowledges that the Securities will bear substantially the
      following legend:

     

    THE
      SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE
      SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
      FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREOF UNDER THE
      SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF ANY STATE HAVING
      JURISDICTION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH
      REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.

     

    4.5 Purchaser
      Sophistication and Ability to Bear Risk of Loss.
      Holder
      is able to protect its interests in connection with the acquisition of
      the Notes
      and
      Warrants (and conversion or exercise thereof) and can bear the economic risk
      of
      investment in such securities without producing a material adverse change in
      such Holder’s financial condition. Holder, either alone or with its
      representative(s), otherwise has such knowledge and experience in financial
      or
      business matters that Holder is capable of evaluating the merits and risks
      of
      the investment in the
      Securities.

     

    4.6 Preexisting
      Relationship.
      Each
      Purchaser has a preexisting personal or business relationship with the Company,
      one or more of its officers, directors, or controlling persons, or the Placement
      Agent (as defined herein).

     

    5.
      Default.

    

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

    

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

    

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

    

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

     

    
      
        
        

      

      
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    5.3.
      If
      and for as long as an Event of Default has occurred and is continuing then
      the
      Conversion Price shall be reduced to the lesser of (a) $1.00 per share or (b)
      the price that is equal to 50% of the average closing bid price of the
      Corporation’s Common Stock for the five (5) trading day period immediately
      preceding the date of the Conversion Notice; provided, however, that in on
      event
      shall the Conversion Price be less than $.15 per share.

    

    6.
      Registration
      Rights.

     

    6.1
      Registration
      Rights Granted.
      If
      the
      Corporation at any time proposes to register any of its securities under the
      1933 Act for sale to the public, whether for its own account or for the account
      of other security holders or both, except with respect to registration
      statements on Forms S-4, S-8 or another form not available for registering
      the
      Registrable Securities for sale to the public, provided the Registrable
      Securities are not otherwise registered for resale by the Holder pursuant to
      an
      effective registration statement, each such time it will give at least fifteen
      (15) days' prior written notice to the record holder of the Registrable
      Securities of its intention so to do. Upon the written request of the Holder,
      received by the Corporation within ten (10) days after the giving of any such
      notice by the Corporation, to register any of the Registrable Securities not
      previously registered, the Corporation will cause such Registrable Securities
      as
      to which registration shall have been so requested to be included with the
      securities to be covered by the registration statement proposed to be filed
      by
      the Corporation, all to the extent required to permit the sale or other
      disposition of the Registrable Securities so registered by the holder of such
      Registrable Securities (the “Seller”).
      In
      the event that any registration pursuant to this Section 6.1 shall be, in whole
      or in part, an underwritten public offering of common stock of the Corporation,
      the number of shares of Registrable Securities to be included in such an
      underwriting may be reduced by the managing underwriter if and to the extent
      that the Corporation and the underwriter shall reasonably be of the opinion
      that
      such inclusion would adversely affect the marketing of the securities to be
      sold
      by the Corporation therein; provided, however, that the Corporation shall notify
      the Seller in writing of any such reduction. Notwithstanding the foregoing
      provisions, or Section 6.4 hereof, the Corporation may withdraw or delay or
      suffer a delay of any registration statement referred to in this Section 6.1
      without thereby incurring any liability to the Seller.

     

      6.2. Registration
      Procedures.
      If and
      whenever the Corporation is required by the provisions of Section 6.1 to effect
      the registration of any Registrable Securities under the 1933 Act, the
      Corporation will, as expeditiously as possible: 

     

    (a) subject
      to the timelines provided in this Agreement, prepare and file with the SEC
      a
      registration statement required by Section 6, with respect to such securities
      and use its best efforts to cause such registration statement to become and
      remain effective for the period of the distribution contemplated thereby
      (determined as herein provided), promptly provide to the Holder of the
      Registrable Securities copies of all filings and SEC letters of comment (but
      not
      any information that is material, non-public information unless such information
      is also promptly publicly disclosed) and notify Holder (by telecopier and by
      e-mail addresses provided by Holder) on or before 6 pm ET on the same business
      day that the Corporation receives notice that (i) the SEC has no comments or
      no
      further comments on the registration statement, and (ii) the registration
      statement has been declared effective (failure to timely provide notice as
      required by this Section 6.2(a) shall be a material breach of the Corporation’s
      obligation and an Event of Default as defined in the Note
      and
      a Non-Registration Event as defined in Section 6.4 of this Note); 

     

    
      
        
        

      

      
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    (b) prepare
      and file with the SEC such amendments and supplements to such registration
      statement and the prospectus used in connection therewith as may be necessary
      to
      keep such registration statement effective until such registration statement
      has
      been effective for a period of two (2) years, and comply with the provisions
      of
      the 1933 Act with respect to the disposition of all of the Registrable
      Securities covered by such registration statement in accordance with the
      Sellers’ intended method of disposition set forth in such registration statement
      for such period;

     

    (c) furnish
      to the Seller, at the Corporation’s expense, such number of copies of the
      registration statement and the prospectus included therein (including each
      preliminary prospectus) as such persons reasonably may request in order to
      facilitate the public sale or disposition of the Common Stock covered by such
      registration statement; 

     

    (d) use
      its
commercially
      reasonable best
      efforts to register or qualify the Registrable Securities covered by such
      registration statement under the securities or “blue sky” laws of such
      jurisdictions as the Seller shall request in writing, provided, however, that
      the Corporation shall not for any such purpose be required to qualify generally
      to transact business as a foreign corporation in any jurisdiction where it
      is
      not so qualified or to consent to general service of process in any such
      jurisdiction; 

     

    (e) if
      applicable, list the Registrable Securities covered by such registration
      statement with any securities exchange on which the Common Stock of the
      Corporation is then listed; 

     

    (f) immediately
      notify the Seller when a prospectus relating thereto is required to be delivered
      under the 1933 Act, of the happening of any event of which the Corporation
      has
      knowledge as a result of which the prospectus contained in such registration
      statement, as then in effect, includes an untrue statement of a material fact
      or
      omits to state a material fact required to be stated therein or necessary to
      make the statements therein not misleading in light of the circumstances then
      existing; and

     

    (g) provided
      same would not be in violation of the provision of Regulation FD under the
      1934
      Act, make available for inspection by the Seller, and any attorney, accountant
      or other agent retained by the Seller or underwriter, all publicly available,
      non-confidential financial and other records, pertinent corporate documents
      and
      properties of the Corporation, and cause the Corporation's officers, directors
      and employees to supply all publicly available, non-confidential information
      reasonably requested by the Seller, attorney, accountant or agent in connection
      with such registration statement. 

     

    
      
        
        

      

      
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    6.3. Provision
      of Documents.
      In
      connection with each registration described in this Section 6, Seller will
      furnish to the Corporation in writing such information and representation
      letters with respect to itself and the proposed distribution by it as reasonably
      shall be necessary in order to assure compliance with federal and applicable
      state securities laws. 

     

    6.4. Non-Registration
      Events.
      The
      Corporation and the Seller agree that the Seller will suffer damages if the
      Registrable Securities are not included after written request therefore, in
      any
      registration statement described in Section 6.1 and maintained in the manner
      and
      within the time periods contemplated by Section 6 hereof, and it would not
      be
      feasible to ascertain the extent of such damages with precision. Accordingly,
      if
      and to the extent that the Registrable Securities are not included in any
      registration statement described in Section 6.1 (such an event referred to
      as a
      "Non-Registration Event"), then the Corporation shall deliver to the Holder,
      as
      Liquidated Damages, an amount equal to one percent (1%) for each thirty (30)
      days (or part thereof) thereafter, of that portion of the Principal Amount
      which
      cannot be converted into Registrable Securities that are, at the time of
      conversion, fully registered for resale under an effective Registration
      Statement. The Corporation must pay the Liquidated Damages in cash or an amount
      equal to one hundred and fifty percent (150%) of that portion of the Liquidated
      Damages if paid in additional shares of registered unlegended free-trading
      shares of Common Stock. Such Common Stock shall be valued at a per share value
      equal to the average of the five (5) lowest closing bid prices of the Common
      Stock as reported by Bloomberg L.P. for the twenty (20) trading days preceding
      the first day of each forty-five (45) day or shorter period for which Liquidated
      Damages are payable. The Liquidated Damages must be paid within ten (10) days
      after the end of each forty-five (45) day period or shorter part thereof for
      which Liquidated Damages are payable. In the event a Registration Statement
      is
      filed by the Filing Date but is withdrawn prior to being declared effective
      by
      the SEC, then such Registration Statement will be deemed to have not been filed.
      All oral or written and accounting comments received from the SEC relating
      to
      the Registration Statement must be responded to within ten (10) business days.
      Failure to timely respond to SEC comments is a Non-Registration Event for which
      Liquidated Damages shall accrue and be payable by the Corporation to the holders
      of Registrable Securities at the same rate set forth above. Notwithstanding
      the
      foregoing, the Corporation shall not be liable to the Holder under this Section
      6.4 for any events or delays occurring as a consequence of the acts or omissions
      of the Holder contrary to the obligations undertaken by Holder in this Note.
      Liquidated Damages will not accrue nor be payable pursuant to this Section
      6.4
      nor will a Non-Registration Event be deemed to have occurred for times during
      which Registrable Securities are transferable by the holder of Registrable
      Securities pursuant to Rule 144(k) under the 1933 Act.

     

    6.5. Expenses.
      All
      expenses incurred by the Corporation in complying with Section 6, including,
      without limitation, all registration and filing fees, printing expenses, fees
      and disbursements of counsel and independent public accountants for the
      Corporation, fees and expenses (including reasonable counsel fees) incurred
      in
      connection with complying with state securities or “blue sky” laws, fees of the
      National Association of Securities Dealers, Inc., transfer taxes, fees of
      transfer agents and registrars, costs of insurance and fee of one counsel for
      Seller are called “Registration
      Expenses.”
All
      underwriting discounts and selling commissions applicable to the sale of
      Registrable Securities, including any fees and disbursements of one counsel
      to
      the Seller, are called "Selling
      Expenses."
      The
      Corporation will pay all Registration Expenses in connection with the
      registration statement under Section 6. Selling Expenses in connection with
      each
      registration statement under Section 6 shall be borne by the
      Seller.

     

    
      
        
        

      

      
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    6.6. Indemnification
      and Contribution.

     

    (a) In
      the
      event of a registration of any Registrable Securities under the 1933 Act
      pursuant to Section 6, the Corporation will, to the extent permitted by law,
      indemnify and hold harmless the Seller, and, as applicable, each officer of
      the
      Seller, each director of the Seller, each underwriter of such Registrable
      Securities thereunder and each other person, if any, who controls such Seller
      or
      underwriter within the meaning of the 1933 Act, against any losses, claims,
      damages or liabilities, joint or several, to which the Seller, or such
      underwriter or controlling person may become subject under the 1933 Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any untrue statement or alleged
      untrue statement of any material fact contained in any registration statement
      under which such Registrable Securities was registered under the 1933 Act
      pursuant to Section 6, any preliminary prospectus or final prospectus contained
      therein, or any amendment or supplement thereof, or arise out of or are based
      upon the omission or alleged omission to state therein a material fact required
      to be stated therein or necessary to make the statements therein not misleading
      in light of the circumstances when made, and will subject to the provisions
      of
      Section 6.6(c) reimburse the Seller, each such underwriter and each such
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action; provided, however, that the Corporation shall not be liable
      to the Seller to the extent that any such damages arise out of or are based
      upon
      an untrue statement or omission made in any preliminary prospectus if (i) the
      Seller failed to send or deliver a copy of the final prospectus delivered by
      the
      Corporation to the Seller with or prior to the delivery of written confirmation
      of the sale by the Seller to the person asserting the claim from which such
      damages arise, (ii) the final prospectus would have corrected such untrue
      statement or alleged untrue statement or such omission or alleged omission,
      or
      (iii) to the extent that any such loss, claim, damage or liability arises out
      of
      or is based upon an untrue statement or alleged untrue statement or omission
      or
      alleged omission so made in conformity with information furnished by the Seller,
      or any such controlling person in writing specifically for use in such
      registration statement or prospectus. 

     

    (b) In
      the
      event of a registration of any of the Registrable Securities under the 1933
      Act
      pursuant to Section 6, Seller will, to the extent permitted by law, indemnify
      and hold harmless the Corporation, and each person, if any, who controls the
      Corporation within the meaning of the 1933 Act, each officer of the Corporation
      who signs the registration statement, each director of the Corporation, each
      underwriter and each person who controls any underwriter within the meaning
      of
      the 1933 Act, against all losses, claims, damages or liabilities, joint or
      several, to which the Corporation or such officer, director, underwriter or
      controlling person may become subject under the 1933 Act or otherwise, insofar
      as such losses, claims, damages or liabilities (or actions in respect thereof)
      arise out of or are based upon any untrue statement or alleged untrue statement
      of any material fact contained in the registration statement under which such
      Registrable Securities were registered under the 1933 Act pursuant to Section
      6,
      any preliminary prospectus or final prospectus contained therein, or any
      amendment or supplement thereof, or arise out of or are based upon the omission
      or alleged omission to state therein a material fact required to be stated
      therein or necessary to make the statements therein not misleading, and will
      reimburse the Corporation and each such officer, director, underwriter and
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action, provided, however, that the Seller will be liable hereunder
      in any such case if and only to the extent that any such loss, claim, damage
      or
      liability arises out of or is based upon an untrue statement or alleged untrue
      statement or omission or alleged omission made in reliance upon and in
      conformity with information pertaining to Seller, as such, furnished in writing
      to the Corporation by Seller specifically for use in such registration statement
      or prospectus, and provided, further, however, that the liability of the Seller
      hereunder shall be limited to the net proceeds actually received by the Seller
      from the sale of Registrable Securities covered by such registration
      statement.

     

    
      
        
        

      

      
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    (c) Promptly
      after receipt by an indemnified party hereunder of notice of the commencement
      of
      any action, such indemnified party shall, if a claim in respect thereof is
      to be
      made against the indemnifying party hereunder, notify the indemnifying party
      in
      writing thereof, but the omission so to notify the indemnifying party shall
      not
      relieve it from any liability which it may have to such indemnified party other
      than under this Section 6.6(c) and shall only relieve it from any liability
      which it may have to such indemnified party under this Section 6.6(c), except
      and only if and to the extent the indemnifying party is prejudiced by such
      omission. In case any such action shall be brought against any indemnified
      party
      and it shall notify the indemnifying party of the commencement thereof, the
      indemnifying party shall be entitled to participate in and, to the extent it
      shall wish, to assume and undertake the defense thereof with counsel
      satisfactory to such indemnified party, and, after notice from the indemnifying
      party to such indemnified party of its election so to assume and undertake
      the
      defense thereof, the indemnifying party shall not be liable to such indemnified
      party under this Section 6.6(c) for any legal expenses subsequently incurred
      by
      such indemnified party in connection with the defense thereof other than
      reasonable costs of investigation and of liaison with counsel so selected,
      provided, however, that, if the defendants in any such action include both
      the
      indemnified party and the indemnifying party and the indemnified party shall
      have reasonably concluded that there may be reasonable defenses available to
      it
      which are different from or additional to those available to the indemnifying
      party or if the interests of the indemnified party reasonably may be deemed
      to
      conflict with the interests of the indemnifying party, the indemnified parties,
      as a group, shall have the right to select one separate counsel and to assume
      such legal defenses and otherwise to participate in the defense of such action,
      with the reasonable expenses and fees of such separate counsel and other
      expenses related to such participation to be reimbursed by the indemnifying
      party as incurred.

     

    (d) In
      order
      to provide for just and equitable contribution in the event of joint liability
      under the 1933 Act in any case in which either (i) Seller, or any controlling
      person of Seller, makes a claim for indemnification pursuant to this Section
      6.6
      but it is judicially determined (by the entry of a final judgment or decree
      by a
      court of competent jurisdiction and the expiration of time to appeal or the
      denial of the last right of appeal) that such indemnification may not be
      enforced in such case notwithstanding the fact that this Section 6.6 provides
      for indemnification in such case, or (ii) contribution under the 1933 Act may
      be
      required on the part of the Seller or controlling person of the Seller in
      circumstances for which indemnification is not provided under this Section
      6.6;
      then, and in each such case, the Corporation and the Seller will contribute
      to
      the aggregate losses, claims, damages or liabilities to which they may be
      subject (after contribution from others) in such proportion so that the Seller
      is responsible only for the portion represented by the percentage that the
      public offering price of its securities offered by the registration statement
      bears to the public offering price of all securities offered by such
      registration statement, provided, however, that, in any such case, (y) the
      Seller will not be required to contribute any amount in excess of the public
      offering price of all such securities sold by it pursuant to such registration
      statement; and (z) no person or entity guilty of fraudulent misrepresentation
      (within the meaning of Section 6(f) of the 1933 Act) will be entitled to
      contribution from any person or entity who was not guilty of such fraudulent
      misrepresentation.

     

    
      
        
        

      

      
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    6.7. Delivery
      of Unlegended Shares.

     

    (a) The
      Common Stock shall not contain any legend, provided (i) a registration statement
      (including the Registration Statement) covering the resale of such security
      is
      effective under the Securities Act, or (ii) following any sale of such Common
      Stock pursuant to Rule 144, or (iii) if such Common Stock are eligible for
      sale
      under Rule 144(k), or (iv) if such legend is not required under applicable
      requirements of the Securities Act (including judicial interpretations and
      pronouncements issued by the Staff of the Commission). A holder of Common Stock
      may, by notice to the Corporation, require the Corporation to reissue any Common
      Stock previously issued, so that new Common Stock do not contain any legends.
      Within five (5) business days (such fifth (5th) business day being the
“Unlegended
      Shares Delivery Date”)
      after
      the business day on which the Corporation has received such holder’s request to
      remove legends (along with receipt of any already existing legended securities
      held by holder of appropriate Conversion Notices necessary for issuance of
      shares, the Corporation shall deliver, and shall cause legal counsel selected
      by
      the Corporation to deliver to its transfer agent (with copies to Holder) an
      appropriate instruction and opinion of such counsel, directing the delivery
      of
      shares of Common Stock without any legends, reissuable
      pursuant to any effective and current Registration Statement described in
      Section 6 of this Agreement or pursuant to Rule 144 under the 1933 Act (the
      “Unlegended
      Shares”);
      and
      the Corporation shall cause the transmission of the certificates representing
      the Unlegended Shares together with a legended certificate representing the
      balance of the submitted certificate, if any, to the Holder at the address
      specified in the notice of sale, via express courier, by electronic transfer
      or
      otherwise on or before the Unlegended Shares Delivery Date. Transfer fees shall
      be the responsibility of the Seller. In the event that the shares are not
      registered or that unlegended shares are not able to be issued as a result
      of
      the non-availability of an exemption under the 1933 Act, the Holder hereby
      accepts issuance of restricted and appropriately legended shares. 

     

    (b) In
      lieu
      of delivering physical certificates representing the Unlegended Shares, if
      the
      Corporation’s transfer agent is participating in the Depository Trust Company
      (“DTC”)
      Fast
      Automated Securities Transfer program, upon request of a Holder, so long as
      the
      certificates therefor do not bear a legend and the Holder is not obligated
      to
      return such certificate for the placement of a legend thereon, the Corporation
      shall cause its transfer agent to electronically transmit the Unlegended Shares
      by crediting the account of Holder’s prime Broker with DTC through its Deposit
      Withdrawal Agent Commission system. Such delivery must be made on or before
      the
      Unlegended Shares Delivery Date.

     

    
      
        
        

      

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

     

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

     

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

     

    
      
        
        

      

      
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    7.
      Anti-Dilution
      Adjustments.
      The
      Conversion Price shall be subject to adjustment as follows:

    

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

    

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

    

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

    

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

    

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

    

    10.
      Transfer/Negotiability.
      This
      Note shall be transferred on the books of the Corporation only by the registered
      Holder hereof or by his attorney duly authorized in writing or by delivery
      to
      the Corporation of a duly executed assignment. The foregoing notwithstanding,
      the Corporation shall not transfer this Note nor any of the shares of Common
      Stock issuable upon conversion hereunder except pursuant to registration under
      the Act or an available exemption from the registration requirements of the
      Act.
      Neither the Corporation nor its Transfer Agent, if any, shall be obligated
      to
      effect any such transfer unless it shall have received an opinion of counsel
      to
      the Holder reasonably satisfactory to the Corporation and its Transfer Agent,
      if
      any, stating that such removal of the legend complies with the provisions of
      the
      Act. The Corporation shall be entitled to treat any Holder of record of the
      Note
      as the Holder in fact thereof and shall not be bound to recognize any equitable
      or other claim to or interest in this Note in the name of any other person,
      whether or not it shall have express or other notice thereof, save as expressly
      provided by the laws of New York. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
 

    11.
      Notices.
      All
      notices and communications under this Note shall be in writing and shall be
      either delivered in person or accompanied by a signed receipt therefor or mailed
      first--class United States certified mail, return receipt requested, postage
      prepaid, and addressed as follows:

    

    If
      to the
      Corporation, to:

    

    AeroGroup
      Incorporated

    5001
      Airport Drive

    Denison,
      Texas 75025 

    Tel:
      (818) 822-8890 

    

    with
      copies to:

    

    Hodgson
      Russ, LLP

    60
      East
      42nd Street

    New
      York,
      New York 10165

    Tel:
      (212) 661-3535

    Fax:
      (212) 972-1677

    Attn:
      Jeffrey Rinde, Esq. 

    

    If
      to
      Holder:

    

    Sprout
      Investments, LLC.

    555
      S
      Federal Highway 

    Suite
      200

    Boca
      Raton, FL 33432 

    Tel:
      561
      367-6031

    

    with
      copies to:

     

    Hodgson
      Russ, LLP

    60
      East
      42nd Street

    New
      York,
      New York 10165

    Tel:
      (212) 661-3535

    Fax:
      (212) 972-1677

    Attn:
      Jeffrey A. Rinde, Esq. 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    12.
      Governing
      Law.
      This
      Note shall be governed by and construed and enforced in accordance with the
      laws
      of the State of New York, or, where applicable, the laws of the United States,
      without regard to conflicts of law.

    

    13.
      Binding
      upon Successors.
      (a) All
      covenants and agreements herein contained by or on behalf of the Corporation
      shall bind its successors and assigns and shall inure to the benefit of the
      Holder and his successors and assigns; Corporation may not assign this Agreement
      or any rights or duties hereunder without Holder’s prior written consent and any
      prohibited assignment shall be absolutely void. Holder reserves the right to
      sell, assign, transfer, negotiate, or grant participation in all or any part
      of,
      or any interest in Holder’s rights and benefits hereunder; provided, that Holder
      shall, for informational purposes but not as a requirement, notify the
      Corporation of the identity of all other assignees or participants who have
      acquired an ownership interest in the Note, and upon conversion, in the equity
      of the Corporation as a result thereof. In connection with any such assignment
      or participation, Holder may disclose all documents and information which Holder
      now or hereafter may have relating to Corporation's business.

    

    (b)
      Holder hereby irrevocably consents to the Business Combination and to the
      assumption by Tactical of all of the obligations under this Note, including,
      without limitation, the obligations to pay the same and to issue Common Stock
      of
      Tactical upon conversion of this Note and to the release of AeroGroup from
      all
      of its obligations herein upon assumption by Tactical. Holder has reviewed
      all
      financial information and other information relating to Tactical, as is on
      file
      with the SEC, and has made its investment decision herein based on the merits
      of
      Tactical and the Business Combination.

    

    IN
      WITNESS WHEREOF, the Corporation has caused this Note to be duly executed as
      of
      the ___th
      of
      October, 2006.

    

     

    
      	 	 	AEROGROUP
              INCORPORATED

      	 	 	 

      	 	
               

            	
              By:________________________

            

    

    
      	 	
               

            	
              Name:_____________________

            

    

    
      	 	 	
              Title:______________________

            

    

    

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    CONVERSION
      NOTICE

    

    AEROGROUP
      INCORPORATED

    

    The
      undersigned holder (the “Holder”)
      of a
      Convertible Promissory Note in the principal amount of $____________________
      (the “Note”),
      hereby elects to convert U.S. $____________of said Note into _____________
      shares of common stock of AeroGroup Incorporated (or, if after the Business
      Combination (as described in the Note) thereof Tactical Air Defense Services,
      Inc.) in accordance with the terms of the Note. Holder hereby directs that
      any
      such shares be issued in the name of and delivered to the Holder or if so
      specified, to the person or entity named below. 

    

    Dated:
      _________________

    

    

     

    Name:___________________

    

    Signature:________________

    

    Address:

    _________________________

    _________________________

    _________________________

     

     

    
      
        
        

      

      
        15

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