It is expected that investors in Airship Leasing Co. (ALC) shall contribute in excess of $15 million, an amount sufficient to allow ALC to purchase four non-remote (manned) mid-altitude airships from Techsphere Systems International.

Upon completion, full payment and delivery of each of the four airships, this agreement grants ALC a non-exclusive license to lease the airships to commercial end users for advertising and promotion of the lessee's products.

Cyber Defense Systems is an operating subsidiary of Proxity.

This agreement changes the current Marketing and Sales Agreement between Techsphere and Cyber dated May 1, 2004, which grants Cyber an exclusive right to market and sell Airships to government and military end users, and a non-exclusive right to market and sell Airships to commercial and telecommunication end users.

Under the May 2004 agreement the fees paid to Cyber were variable and subject to prorated reduction depending on the sales price of the airships.

The April 24, 2005 agreement allows for consideration given that the right to sell the four specified commercial airships under the proposed Joint Venture, while the commission payable to Cyber under the Marketing and Sales Agreement will be a flat rate of 6.5% of the purchase price for all sales to government and military end users.

Cyber will also receive a flat rate of 9% of all their commercial and telecommunication sales. (Refer to 8K filing for details.)

"This agreement gives Techsphere and Cyber Defense a new market and revenue source to pursue. The long lead time associated with government projects will ultimately be a long term support mechanism for both our companies. However, the global commercial market offers immediate opportunities and more timely revenues.

"These first four airships will allow us to complete the FAA process and refine our design and performance characteristics. We look forward to a long and profitable relationship with Cyber," states Mike Lawson, President of Techsphere Systems International.

Billy Robinson, CEO Cyber Defense Systems, notes, "This revised agreement takes the uncertainty out of all future sales and allows Cyber the opportunity to pursue the commercial market for additional revenue opportunities that were not available under the original agreement.

"Instead of the Goodyear Blimp we want our airships plying the skies. Cyber also plans to locate our maintenance and repair facilities in Oklahoma. This central location will provide access to airships operating on either coast."

Related Links
Cyber Defense Systems
Proxity
Techsphere Systems International
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