REEL STAFF, INC.
0000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
July 3, 2002
Flight Safety Technologies, Inc. Dunhill Venture Partners Corp
00 Xxxxxxxx Xxxxxx 15th Floor - HSBC Building
Mystic, Connecticut 06355 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
AND TO:
Xxxxxx Xxxxxx and Xxxxx Xxxx
c/o Flight Safety Technologies Inc.
Re: Amendments to Share Exchange Agreement
------------------------------------------
We refer to our Share Exchange Agreement dated for reference
June 24, 2002 (the "Agreement"), pursuant to which we have agreed to issue
8,505,857 of our common shares as consideration for the exchange of all of the
outstanding shares in the capital of Flight Safety Technologies Inc., subject to
the terms and conditions required therein All initially capitalized terms used
herein will have the respective meanings assigned thereto in the Agreement.
This will confirm our agreement as follows:
1. This letter is intended to be a binding agreement between the parties
subject to the terms and conditions hereof;
2. Section 1.2(l) is hereby deleted in its entirety.
3. Section 7.4 of the Agreement is hereby deleted in its entirety and
replaced with the following:
"7.4. On or before and as a condition of the Closing, Pubco will
complete a financing by way of a private placement (the "Private
Placement") for gross proceeds of $1,700,000, consisting of 850,000
units at $2.00 per unit (each a "Unit"), with each Unit consisting of
one common share in the capital of Pubco and one share purchase warrant
(a "Warrant"), with Warrant entitling the holder thereof to acquire one
further common share for a period of two years from the Closing Date at
a price of $2.00 per common share, as further described on the term
sheet attached hereto as Schedule "K".
4. Section 7.5 of the Agreement is hereby deleted in its entirety and
replaced with the following:
"7.5 A further term of this Agreement is that Company and
Dunhill agree to enter into an Corporate Relationship
Agreement containing mutually acceptable terms and conditions
including, without limitation, reciprocal indemnification
provisions."
5. Paragraph (a) of Section 10.1 of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(a) the Agreement has been executed and the purchase of
the Vendors' Shares has been approved by Vendors
holding at least eighty percent (80%) of the Vendors'
Shares on or before the Closing Date;"
6. Paragraph (b) of Section 15.2 of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(b) the Company is unable to obtain approval of eighty
percent (80%) of the Vendors' Shares on or before the
Closing Date; or"
7. Item 10 of Schedule "D" of the Agreement is hereby deleted in its
entirety.
8. Schedule "E" of the Agreement is hereby amended as follows:
"DKS Capital 84,540.....
Total Common Stock Warrants 780,809"
9. Subparagraph (nn)(iv) of Schedule "G" of the Agreement is hereby
deleted in its entirety and replaced with the following:
"(iv) as a condition of the Share Exchange, Pubco will issue
approximately eight hundred and fifty thousand (850,000) of
its shares in a private placement to new investors in order to
raise funding for the Company and such group of new investors
will own approximately 5.67% of the issued and outstanding
shares of Pubco subsequent to the Share Exchange,"
10. Schedule "K" of the Agreement is hereby deleted in its entirety and
replaced with the Schedule "K" attached hereto.
11. Schedule "L" of the Agreement is hereby deleted in its entirety.
If you agree to the above terms, kindly sign two copies of
this letter signifying your approval and acceptance and return one fully
executed letter to the writer at your earliest convenience.
Yours truly,
REEL STAFF, INC.
Per:
/s/ Xxxxx XxXxxxxxx
-------------------------------------
Authorized Signatory
The undersigned hereby agree to the foregoing terms and conditions of this
agreement as of the date first above written.
DUNHILL Venture Partners Corp.
Per: /s/ Xxxxxx Xxxxxxxxx
-------------------------------------
Authorized Signatory
FLIGHT SAFETY TECHNOLOGIES INC.
Per: /s/ Xxxxxx Xxxxxx
-------------------------------------
Authorized Signatory
EXECUTED by Xxxxxx Xxxxxx in the presence of: )
)
)
Signature )
)
---------------------------------------------- /s/ XXXXXX XXXXXX
Print Name ) -----------------------
) XXXXXX XXXXXX
----------------------------------------------
Address )
)
----------------------------------------------
)
)
Occupation )
)
EXECUTED by Xxxxx Xxxx in the presence of: )
)
)
Signature )
)
---------------------------------------------- /s/ XXXXX XXXX
Print Name ) ----------------------
) XXXXX XXXX
----------------------------------------------
Address )
)
----------------------------------------------
)
)
Occupation )
SCHEDULE K
Reel Staff, Inc.
Term Sheet - May, 2002
Issuer: Reel Staff, Inc. ("Reel Staff " or the "Company"), a
corporation existing under the laws of the State of
Nevada.
Offering Size: Up to US$1,700,000 (one million, seven hundred
thousand US dollars).
Type of Security: Up to 850,000 (eight hundred and fifty thousand)
Units, each Unit consisting of one Common Share and
one Warrant to acquire another Common Share.
Price per Unit: US$2.00 (two dollars).
Use of Proceeds: Upto US$200,000 to be used for transactional expenses
relating to the exchange to include not by way of
limitation filing of the Registration Statement (as
defined herein). The remainder to be used for working
capital.
Warrant: Each Warrant will entitle the holder to acquire one
Common Share on or before two years from the Closing
at US$2.00 per Common Share, subject to adjustment.
Subscribers: "Offshore Investors" as defined by Regulation S or
"Accredited Investors" as defined under Rule 501(a)
of Regulation D of the Securities Exchange Commission
promulgated under the Securities Act of 1933.
Closings: July, 2002, or such other date as the parties
mutually agree.
Anti-Dilution: The Subscribers shall be granted a bonus warrant (the
"Bonus Warrant") to acquire additional Common Shares
in accordance with the formula below, at a price of
US$0.001 per additional Common Share for a period of
one year following Closing, if at any time the
Company shall issue or sell any additional Common
Shares to a third party other than the Subscriber in
exchange for consideration in an amount per
additional Common Share which is less than US$2.00
per additional Common Share.
The number of additional Common Shares which the
Bonus Warrant holder will be entitled to acquire upon
any such issuance shall be determined by multiplying
the Unit Price by a fraction:
(i) the numerator of which shall be equal to the
total number Common Shares originally
acquired by the Subscriber,
(ii) the denominator of which shall be equal to
the price per Common Share for the additional
Common Shares, and
(iii) then subtracting the total number of
Shareholder's Shares originally acquired from
the foregoing.
No Bonus Warrant shall be granted upon the issuance
of any additional Common Shares which are issued
pursuant to the exercise of any currently outstanding
warrants or other subscription or purchase rights, or
pursuant to the exercise of any conversion or
exchange rights or pursuant to the granting or
exercise of any incentive based stock options issued
by the Company to any employees consultants or
strategic partners.
Registration: The Company agrees to file a registration statement
on Form SB-2 (the "Registration Statement")
registering the Units, being comprised of the Common
Shares and the Common Shares underlying the Warrants,
within one hundred and fifty (150) days of the
Closing Date. The Company will cause the registration
statement to become effective within five (5) days of
SEC clearance to request acceleration of
effectiveness. In addition to the Units being
registered following the Share Exchange pursuant to
this schedule, Company shall include in said
registration twenty-five percent (25%) of all
Exchange Shares (the "Registered Exchange Shares")
issued by Pubco in exchange for Preferred Shares of
Company and such shares in all respects shall be
treated as the same as the Units being registered
with the SEC pursuant to this schedule.
Non-Registration Bonus: In the event the Company is unable to register the
Units within the required time, the Company will
issue as a penalty an additional 10% of the Units
purchased by the Subscriber.
