Document:

ex107.htm

    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.

    

    Tactical
Air Defense Services, Inc.

    (a
Nevada corporation)

     

    Convertible
Promissory Note

     

    Issue
Date: April 1, 2010

     

    Total
Note: US $37,500

    

    WHEREAS,
Tactical Air Defense Services, Inc., a Nevada corporation (the “Corporation”),
entered into an engagement agreement with The Bingham Law Group, APC (the “Holder”) to provide
certain legal services to the Borrower (the “Engagement
Agreement”). The Corporation and the Borrower may hereinafter be referred
to individually as a “Party” and
collectively as the “Parties”;

    

    WHEREAS,
as of the Issue Date herein, the outstanding invoices due and owing for the
services provided pursuant to the Engagement Agreement total US $37,500 (“Outstanding
Invoice”)’;

    

    NOW,
THEREFORE, in consideration of the mutual covenants and other agreements
contained herein and in consideration of the full and complete settlement of the
Outstanding Invoice, and for good and valuable consideration, receipt of which
is hereby acknowledged, the Corporation promises to pay (subject to the
conversion provisions set forth herein) to the order of the Holder or its
assignee, on April 1, 2013 (the “Due Date”), upon presentation of this
Convertible Promissory Note (the “Note”), Thirty Seven Thousand Five Hundred
Dollars ($37,500 and 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.

     
 

    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 on the Due
Date, accelerated or otherwise, when the Principal Amount 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 such number of
shares of Common Stock as equals the dollar amount being converted divided by
the Conversion Price.  The term “Conversion Price” shall be and mean
$.00125, which Conversion Price shall have full-ratchet anti-dilution protection
in connection with any Common Stock sold or issued by the Corporation prior to
the date of conversion of the Note.

    

    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 Common Stock.

    

    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 Common Stock issuable upon such conversion shall be
treated for all purposes as the record Holder or Holders of such Common Stock on
such date.

    

    2.3.           Maximum
Conversion.  The Holder shall not be entitled to convert an amount
of the Note which would result in beneficial ownership by the Holder, in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder, of more than 4.99% of the outstanding
shares of Common Stock of the Corporation at any time. The Holder shall
have the sole responsibility to determine whether the restriction contained
herein shall limit any conversion hereunder.

    

    2.4.           Reservation of
Shares. The Corporation shall have the obligation at all times to reserve
and keep available, free from preemptive rights, unissued or treasury shares of
Common Stock sufficient to effect the conversion of this Note.

    

    3.           Prepayment.   The
Corporation shall have the right to prepay this Note, in whole or in part,
without penalty or a premium, upon thirty (30) days written notice to the
Holder.

    

    4.           Investment Representations
of Holder.  The Holder hereby makes the following
representations and warranties to the Corporation as its successor interest,
each of which shall apply with respect to the acquisition of this
Note.

    

    4.1           Restricted
Securities.

    

    4.1.1           Holder has been advised that the Note
and Common Stock 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, and 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.

     

    4.2           Preexisting
Relationship.  The Holder has a preexisting personal or
business relationship with the Company, one or more of its officers, directors,
or controlling persons.

     

    

    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 (an “Event of
Default”):

    

    (a)           The
non-payment by the Corporation when due of the Principal Amount 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.

    

    5.3.           If
and for as long as an Event of Default has occurred and is continuing then the
annual rate of interest shall increase to eighteen percent (18%) until such time
as the Principle Amount and remaining accrued but unpaid interest has been
paid.

    

    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 facsimile and/or 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);

     

    (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.

     

    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 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.

     

    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.

     

    (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.

     

    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 does 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 of
Common Stock is 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 therefore 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.

    

    (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.

    

    7.           Anti-Dilution
Adjustments. The Conversion Price shall be subject to adjustment as
follows, from the Issue Date of the Note and then until the Note is fully
paid:

    

    (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.

    

    (c)           In
case the Corporation shall, at any time subsequent to the Issue Date of the
Note, sell or issue in any new issuance of Common Stock, either directly or
indirectly, at a price lower than the Conversion Price, then the Conversion
Price shall immediately become and mean the lowest price at which any such
shares of Common Stock were sold or issued, either directly or indirectly; provided, however, such
Conversion Price reset feature (i.e. “ratchet clause”) shall not apply to the
conversion of any instrument issued prior to the Issue Date of the
Note.

    

    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 Florida, and by the issuance and execution of this Note
the Corporation irrevocably consents to the jurisdiction of each such
court.

    

    10.           Transfer/Assignability.  This
Note shall be binding upon the Corporation and its successors, and shall inure
to the benefit of the Holder and its successors and assigns. The Note and any
shares of Common Stock converted therefrom, and all of the terms and conditions
described herein, are assignable and may be transferred, sold, or pledged by the
Holder at its sole discretion.

    

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

    

    12.           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.

    

    

    IN
WITNESS WHEREOF, the Corporation has caused this Note to be duly executed as of
the first day of April, 2010.

    

    

    Tactical
Air Defense Services, Inc.

    

    

    
_______________________________________________

    Alexis
Korybut, Director and Chief Executive Officer

    

    
 

     

    _______________________________________________

    Michael
Cariello, Director 

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
 

    

    CONVERSION
NOTICE

     

    Tactical
Air Defense Services, Inc.

    

    The
undersigned holder (the “Holder”) of a Convertible
Promissory Note in the principal amount of $_____________ (the “Note”), issued on
_____________, to ____________________________, hereby elects to convert a
principle amount of $_____________, and accrued interest of $_____________,
which in the aggregate is an amount equal to $_____________, of said Note, at a
conversion price of $______ per common share, into _____________ shares of
common stock of 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.

    

    

     

    Date:                 

     

     

    Name:                 

     

     

    Signature:                                                                           

     

     

    Address                 :_________________________                                                           

     

     

    _________________________                                                           

     

    

     

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    

     

    ASSIGNMENT
OF CONVERTIBLE PROMISSORY NOTE ISSUED TO

    ________________________________
BY TACTICAL AIR DEFENSE SERVICES, INC.

    

    

    For good and favorable consideration,
the undersigned, ________________________________,  (“Assignor”),
transfers and assigns to _______________________________, (“Assignee”), and
Assignee hereby acquires from Assignor, $____________ of Principal Amount of
Assignor’s right, title, and interest in a certain Convertible Promissory Note
(the “Note”) issued by Tactical Air Defense Services, Inc., a Nevada corporation
(“TADS”), which Note has a face amount of $______________, and an Issue Date of
______________, 20___.  For the avoidance of doubt, the portion of the
Note being assigned is equal to $___________ of the Principal Amount of the Note
and shall include the right to any associated accrued interest.

    

    By execution hereof below and
acceptance of the assignment of the portion of the Note being assigned herein,
you hereby agree to and consent to the terms of the Note, and further agree to
execute all documents or instruments and take all actions reasonable necessary
or requested from time to time by TADS relating to the Note, whether the same
are in connection with the assumption of the Note by TADS and registration of
underlying securities or otherwise.

    

    Assignor further represents and
warrants the following:

    

    
      	
              1)  

            	
              That
      this assignment either does not require any approvals by the obligor or
      that the requisite approvals have been obtained;
  and

            

    

    

    
      	
              2)  

            	
              That
      the Assignor has not assigned, converted, or encumbered the
      $_______________ of Principal Amount or associated accrued interest of the
      Note herein assigned to Assignee.

            

    

    

    

    The
undersigned have executed this Assignment on
this                                                                                                                          
day
of                 ,
20.

    

    

    

    

    

    
      	 
      

    

    (“Assignor”)ex108.htm

    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.

    

    Tactical
Air Defense Services, Inc.

    (a
Nevada corporation)

    

    Convertible
Promissory Note

    

    Issue
Date: May 19, 2010

    

    Total
Note: US $150,000.00

    

    Tactical
Air Defense, a Nevada corporation (the “Corporation”), for value received,
promises to pay (subject to the conversion provisions set forth herein) to the
order of The Gary Fears Trust (the “Holder”) or its assignee, on May 19, 2013
(the “Due Date”), upon presentation of this Convertible Promissory Note (the
“Note”), $150,000.00 (“Principal Amount”) together with any accrued and unpaid
interest.  The Note is convertible into shares of common stock (the
“Common Stock”) of the Corporation.

     

    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 on the Due
Date, accelerated or otherwise, when the Principal Amount 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 such number of
shares of Common Stock as equals the dollar amount being converted divided by
the Conversion Price.  The term “Conversion Price” shall be and mean
$.0025, which Conversion Price shall have full-ratchet anti-dilution protection
in connection with any Common Stock sold or issued by the Corporation prior to
the date of conversion of the Note.

    

    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 Common Stock.

    

    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 Common Stock issuable upon such conversion shall be
treated for all purposes as the record Holder or Holders of such Common Stock on
such date.

    

    2.3.           Maximum
Conversion.  The Holder shall not be entitled to convert an amount
of the Note which would result in beneficial ownership by the Holder, in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder, of more than 4.99% of the outstanding
shares of Common Stock of the Corporation at any time. The Holder shall
have the sole responsibility to determine whether the restriction contained
herein shall limit any conversion hereunder.

    

    2.4.           Reservation of
Shares. The Corporation shall have the obligation at all times to reserve
and keep available, free from preemptive rights, unissued or treasury shares of
Common Stock sufficient to effect the conversion of this Note.

    

    3.           Prepayment.   The
Corporation shall have the right to prepay this Note, in whole or in part,
without penalty or a premium, upon thirty (30) days written notice to the
Holder.

    

    4.           Investment Representations
of Holder.  The Holder hereby makes the following
representations and warranties to the Corporation as its successor interest,
each of which shall apply with respect to the acquisition of this
Note.

    

    4.1           Restricted
Securities.

    

    4.1.1           Holder has been advised that the Note
and Common Stock 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, and 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.

     

    4.2           Preexisting
Relationship.  The Holder has a preexisting personal or
business relationship with the Company, one or more of its officers, directors,
or controlling persons.

     

    

    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 (an “Event of
Default”):

    

    (a)           The
non-payment by the Corporation when due of the Principal Amount 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.

    

    5.3.           If
and for as long as an Event of Default has occurred and is continuing then the
annual rate of interest shall increase to eighteen percent (18%) until such time
as the Principle Amount and remaining accrued but unpaid interest has been
paid.

    

    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 affect 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 facsimile and/or 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);

     

    (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.

     

    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 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.

     

    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.

     

    (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.

     

    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 does 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 of
Common Stock is 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 therefore 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.

    

    (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.

    

    7.           Anti-Dilution
Adjustments. The Conversion Price shall be subject to adjustment as
follows, from the Issue Date of the Note and then until the Note is fully
paid:

    

    (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.

    

    (c)           In
case the Corporation shall, at any time subsequent to the Issue Date of the
Note, sell or issue in any new issuance of Common Stock, either directly or
indirectly, at a price lower than the Conversion Price, then the Conversion
Price shall immediately become and mean the lowest price at which any such
shares of Common Stock were sold or issued, either directly or indirectly; provided, however, such
Conversion Price reset feature (i.e. “ratchet clause”) shall not apply to the
conversion of any instrument issued prior to the Issue Date of the
Note.

    

    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 Florida, and by the issuance and execution of this Note
the Corporation irrevocably consents to the jurisdiction of each such
court.

    

    10.           Transfer/Assignability.  This
Note shall be binding upon the Corporation and its successors, and shall inure
to the benefit of the Holder and its successors and assigns. The Note and any
shares of Common Stock converted therefrom, and all of the terms and conditions
described herein, are assignable and may be transferred, sold, or pledged by the
Holder at its sole discretion.

    

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

    

    12.           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.

    

    

    IN
WITNESS WHEREOF, the Corporation has caused this Note to be duly executed as of
May 19, 2010.

    

    

    Tactical
Air Defense Services, Inc.

    

    

    

    

    Alexis
Korybut, Director and Chief Executive Officer

    

    

    

    Michael
Cariello, Director 

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    

    

    CONVERSION
NOTICE

     

    Tactical
Air Defense Services, Inc.

    

    The
undersigned holder (the “Holder”) of a Convertible
Promissory Note in the principal amount of $_____________ (the “Note”), issued on
_____________, to ____________________________, hereby elects to convert a
principle amount of $_____________, and accrued interest of $_____________,
which in the aggregate is an amount equal to $_____________, of said Note, at a
conversion price of $______ per common share, into _____________ shares of
common stock of 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.

    

    

     

    Date:                 

     

     

    Name:                 

     

     

    Signature:                                                                           

     

     

    Address                 :_________________________                                                           

     

     

    _________________________                                                           

     

    
      	 
      

    

     

    ________________________                                                

     

     

    

     

     

    

     

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    
 

     

    ASSIGNMENT
OF CONVERTIBLE PROMISSORY NOTE ISSUED TO

    ________________________________
BY TACTICAL AIR DEFENSE SERVICES, INC.

    

    

    For good and favorable consideration,
the undersigned, ________________________________,  (“Assignor”),
transfers and assigns to _______________________________, (“Assignee”), and
Assignee hereby acquires from Assignor, $____________ of Principal Amount of
Assignor’s right, title, and interest in a certain Convertible Promissory Note
(the “Note”) issued by Tactical Air Defense Services, Inc., a Nevada corporation
(“TADS”), which Note has a face amount of $______________, and an Issue Date of
______________, 20___.  For the avoidance of doubt, the portion of the
Note being assigned is equal to $___________ of the Principal Amount of the Note
and shall include the right to any associated accrued interest.

    

    By execution hereof below and
acceptance of the assignment of the portion of the Note being assigned herein,
you hereby agree to and consent to the terms of the Note, and further agree to
execute all documents or instruments and take all actions reasonable necessary
or requested from time to time by TADS relating to the Note, whether the same
are in connection with the assumption of the Note by TADS and registration of
underlying securities or otherwise.

    

    Assignor further represents and
warrants the following:

    

    
      	
              1)  

            	
              That
      this assignment either does not require any approvals by the obligor or
      that the requisite approvals have been obtained;
  and

            

    

    

    
      	
              2)  

            	
              That
      the Assignor has not assigned, converted, or encumbered the
      $_______________ of Principal Amount or associated accrued interest of the
      Note herein assigned to Assignee.

            

    

    

    

    The
undersigned have executed this Assignment on
this                                                                                                                          
day
of                 ,
20.

    

    

    

    

    

    
      	 
      

    

    (“Assignor”)

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