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PROMISSORY NOTE

Promissory Note

PROMISSORY NOTE | Document Parties: CYBER DEFENSE SYSTEMS INC You are currently viewing:
This Promissory Note involves

CYBER DEFENSE SYSTEMS INC

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Title: PROMISSORY NOTE
Governing Law: Oklahoma     Date: 6/6/2005

PROMISSORY NOTE, Parties: cyber defense systems inc
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                                 PROMISSORY NOTE

 

                                                                 Tulsa, Oklahoma

$1,000,000.00                                                        May 24, 2005

 

      FOR VALUE RECEIVED, Techsphere Systems International, LLC, a Georgia

limited liability company ("Borrower"), promises to pay to the order of Cyber

Defense Systems, Inc., a Florida corporation, or order ("Lender"), in lawful

money of the United States of America, in the manner and at the times provided

herein, at Lender's office at 10901 Roosevelt Blvd, Suite 100D, St. Petersburg,

Florida 33716, or such other place as may be designated in writing by notice to

Borrower from Lender or any subsequent holder of this Note, by 5 pm Central

Standard Time on the Maturity Date the principal sum of One Million and No/100

Dollars ($1,000,000.00), plus such additional sum as may be provided in Section

1 of that certain Agreement between Borrower and Lender of even date as

evidenced by an amendment attached hereto, with interest on the unpaid principal

balance from the date of this note (the "Note") until paid, at a rate equal to

the sum of the Prime Rate plus one and one-half percent (1.5%) per annum;

provided, however, upon the occurrence of an Event of Default, then, at the

option of Lender, and without notice to Borrower, interest shall, commencing as

of the date of such default, be computed and payable on the then unpaid balance

of the principal and accrued interest at a rate equal to the sum of the Prime

Rate plus ten percent (10%) per annum, until paid in full. This Note supersedes

and replaces that certain promissory note in the amount of $1,000,000.00, dated

May 20, 2004, made by Borrower in favor of Lender.

 

      1. Definitions. In addition to the terms defined elsewhere in this Note,

for purposes of this Note, the following terms shall have the meanings ascribed

to them:

 

            1.1 "Event of Default" shall mean any of the following events:

 

                  (a) Borrower shall fail to make a payment due on the Note and

      such nonpayment shall continue for a period of five (5) days;

 

                  (b) Borrower shall: (i) apply for or consent to the

      appointment of a receiver, trustee or liquidator of itself, or of all or a

      substantial part of its assets; (ii) except for the notes due

      Hadden/McClure/Fontaine and the remainder of the License Fee due 21st

      Century Airships, Inc. as described in the Agreement between Borrower and

      Lender dated May 20, 2005 (the "Agreement"), admit in writing its

      inability to pay its debts as they fall due; (iii) make a general

      assignment for the benefit of creditors; (iv) be adjudicated a bankrupt or

      insolvent; or (v) file a voluntary petition in bankruptcy or file a

      petition or answer seeking reorganization or an arrangement with creditors

      or seeking to take advantage of any insolvency law, or admit (by answer,

      default or otherwise) the material allegations of a petition filed against

      it in any bankruptcy, reorganization, arrangement or insolvency

      proceeding, or take or omit to take any action for the purpose or with the

      result of effecting any of the foregoing;

 

<PAGE>

 

                  (c) A garnishment, attachment, levy or execution shall be

      issued against any of the material property or assets of Borrower, and 60

      days shall elapse without the proceeding or action being dismissed or

      nullified;

 

                  (d) An involuntary proceeding shall be filed against the

      Borrower seeking reorganization, arrangement, composition, readjustment,

      liquidation, dissolution or similar relief under any statute, law or

      regulation, and 60 days after such filing shall elapse without the

      proceeding being dismissed;

 

                  (e) An order by a court shall be entered appointing a

      receiver, custodian or trustee, other than as provided in Section 1.1(b),

      for all or a substantial part of the Borrower's property, without the

      Borrower's consent or acquiescence, and 60 days after such entry shall

      elapse without the appointment being vacated or stayed, or 60 days after

      the expiration of any stay shall elapse without the appointment being

      vacated;

 

                  (f) Any representation or warranty made by Borrower in the

      Security Agreement shall prove to be untrue or inaccurate in any material

      respect as of the date on which such representation or warranty was or is

      made;

 

                  (g) Borrower shall fail to perform, observe or comply with any

      covenant or agreement contained in the Security Agreement (other than

      failure to make any payment due under the Note), and such failure is not

      remedied or waived within 20 days after it receives notice of such failure

      commenced;

 

                  (h) The Borrower shall hereafter default in any payment due

      under the Agreement to License between Borrower and 21st Century Airships,

      Inc., dated January 16, 2004;

 

                   (i) The Borrower shall cease doing business for fifteen (15)

      consecutive days, dissolve or file a Certificate of Dissolution with the

      Secretary of State; or

 

                  (j) Other than the Merger into Lender described in the

       Agreement of even date, there shall be any consolidation, merger,

      conveyance or transfer that results, directly or indirectly, in a change

      of control of Borrower. Change of control with respect to Borrower means

      the acquisition by any Person, or two or more Persons acting in concert,

      of beneficial ownership (within the meaning of Rule 13d-3 of the SEC under

      the Securities Exchange Act of 1934) of stock representing, together with

      shares prev


 
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