Fortified Holdings Corp.
Via Facsimile (203) 549-0816
September 12, 2007
Z5 Technologies LLC
71 Wright
Street
Westport, Connecticut 06880
Attention: Brendan Reilly
Thomas Keenan Ventures, LLC
71 Wright
Street
Westport, Connecticut 06880
Attention: Brendan Reilly
Re:
Modification of Agreement and Plan of Merger dated May 31,
2007
Ladies and Gentlemen:
Reference is hereby made to the Agreement and
Plan of Merger (the “Merger Agreement”), dated May 31,
2007, by and among Aegis Industries, Inc., now known as Fortified
Holdings Corp., a Nevada corporation (“Holdings”),
Aegis Merger Corporation, a Delaware corporation and wholly owned
subsidiary of Holdings (“Merger Co.”) (each of Merger
Co. and Holdings, individually, a “Purchaser”, and,
collectively, the “Purchasers”), Z5 Technologies LLC, a
Connecticut limited liability company (the “Company”),
and Thomas Keenan Ventures, LLC, a Delaware limited liability
company (the “Seller”). All capitalized terms not
otherwise defined in this letter agreement (this “Letter
Agreement”) shall have the definitions ascribed to them in
the Merger Agreement.
In connection with the anticipated closing of
the transaction contemplated by the Merger Agreement, upon full
execution hereof, this Letter Agreement shall set forth certain
amendments to the Merger Agreement accepted and agreed to by the
undersigned parties hereto:
1. Article
II, Section 2.6, Subsections (b)(iii) and (b)(iv) of the Merger
Agreement shall hereby be deleted in their entirety and replaced as
follows:
“(iii) an
original stock certificate representing Five Million (5,000,000)
shares of Holdings Common Stock registered in the name of the
Seller;
(iv)
reserved;”
2. Article
III, Section 3.1, Subsections (ii) and (iii) of the Merger
Agreement shall hereby be deleted in their entirety and replaced as
follows:
“(ii) the
Membership Interests shall be cancelled and, by virtue of the
Merger and without any action on the part of the holder thereof,
cease to be outstanding and be automatically converted, at the
Effective Time, into the right to receive the Note and the
Holding Company Stock
immediately upon the Closing and the right to receive the Deferred
Consideration Stock at the times set forth in Section 4.2
(together, the “ Merger Consideration ”);
and
(iii)
the Rollover Options shall be cancelled and, by virtue of the
Merger and without any action on the part of the holders thereof,
cease to be outstanding and be automatically converted into the
right to receive, at the Effective Time, options to purchase an
aggregate of 5,000,000 shares of the common stock of Holdings
pursuant to the Equity Participation Plan in the respective amounts
and at the respective purchase prices per share set forth on
Schedule 6.3(a) .”
3. Article
IV, Section 4.1 of the Merger Agreement shall hereby be deleted in
its entirety and replaced as follows:
At the
Effective Time, upon surrender by Seller to Merger Co. of the
Membership Interest, and subject to the further terms and
conditions set forth herein, in consideration for Seller’s
delivery of the Membership Interest, Merger Co. shall pay to the
Seller for the Membership Interests so acquired from Seller, the
Merger Consideration.
4. Article
IV, Section 4.2 of the Merger Agreement shall hereby be deleted in
its entirety and replaced as follows:
“4.2
Deferred Consideration .
(a)
In addition to the consideration set forth in Section 4.1, Holdings
shall issue to the Seller additional shares of Holdings Common
Stock (collectively, the “ Deferred Consideration
Stock ”) in the following amounts and at the following
dates:
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(i) |
Five Million (5,000,000) shares shall be
released to Seller upon the earliest to occur of (i) the closing of
Holdings’ sale of equity or equity-linked securities, whether
in a single transaction or in multiple transactions, in which
Holdings receives gross proceeds of not less than $2,600,000, (ii)
immediately prior to the closing of any transaction (or series of
related transactions) constituting a “Change of
Control” of Holdings or of the Surviving Corporation, as such
term is defined in the Note, or (iii) January 15, 2008; and
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(ii) |
Five Million (5,000,000) shares shall be
released to Seller upon the earliest to occur of (i) the closing of
Holdings’ sale of equity or equity-linked securities, whether
in a single transaction or in multiple transactions, in which
Holdings receives gross proceeds of not less than $6,000,000
(inclusive of the amount set forth in Section 4.2(a)(i)), (ii)
immediately prior to the closing of any transaction (or series of
related transactions) constituting a “Change of Control of
Holdings or of the Surviving Corporation, as such term is defined
in the Note, or (iii) February 15, 2008.
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(b)
In determining the gross proceeds received by Holdings for purposes
of Section 4.2(a), there shall be taken into account only funds
that are actually first received by Holdings on or after the
Closing Date. For the avoidance of doubt, “gross
proceeds” shall not include the conversion of any debt (or
interest thereon) incurred prior to the Closing Date and converted
into equity or equity-linked securities thereafter.
(c)
For the avoidance of doubt, in the event that between the date
hereof and the issuance of all shares of Deferred Consideration
Stock, there shall occur any one or more of the following (i) any
forward or reverse stock split of the Holdings Common Stock, (ii)
any dividend payable in shares of Holdings capital stock, (iii) any
conversion, reclassification or exchange of the Holdings Common
Stock into a different security, whether of Holdings or of another
entity, (iv) any conversion or exchange of the Holdings Common
Stock into cash or other property, or (v) any similar event
affecting the Holdings Common Stock, then the Deferred
Consideration Stock shall be equitably adjusted, converted or
exchanged in the same manner as the other shares of common
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