ex105.htm


    May 20,
2010

    


    Tactical
Air Support, Inc.

    Attn: Mr.
Rolland C. Thompson, President

    14505
Mount Anderson

    Reno, NV
89506

    


    


    Re:          Letter of Intent Re: Merger
of Tactical Air Support, Inc.

    


    


    Dear Mr.
Thompson:

    


    This
letter of intent (the “LOI”) sets forth the
understanding of the mutual intentions of the below parties regarding the
proposed transaction between: (i) Tactical Air Defense Services, Inc., a Nevada
corporation (“TADF”) and (ii)
Tactical Air Support, Inc., a Nevada corporation, and all of its subsidiaries
(“TAS”) (TADF
and TAS may be referred to hereinafter individually as a “Party” and
collectively as the “Parties”). Each Party
understands and acknowledges that this LOI will be subject to more definitive
agreements as further described below.

    


    1.           Transaction
Architecture.    TAS shall transfer to TADF all
shares of TAS’s common stock and preferred stock, which shall represent 100% of
the equity interest of TAS (the “TAS Equity”), such
that TAS shall become a wholly owned subsidiary of TADF. In exchange, the
existing shareholders of TAS (the “TAS Shareholders”)
shall be issued shares of TADF’s common stock such that the TAS Shareholders
shall own approximately 45.75% of the issued and outstanding shares of TADF’s
common stock as of the moment the transaction closes (the “TAS Shares”). (The
above exchange shall be referred to herein as the “Transaction”).
Following the closing of the Transaction, the post-Transaction entity shall
assume the name “Tactical Air Support, Inc.” The Transaction may be structured
as a tax-free share exchange agreement or other similar agreement.

    


    2.           Transaction
Closing.  The Parties shall use their commercially best efforts
to close the Transaction (the “Closing”) within 120
days of execution by both Parties of this LOI, although the Closing may take
place prior to 120 days from execution of this LOI upon written agreement by
both Parties, and may be extended beyond 120 days from execution of this LOI
upon written agreement by both Parties.

    


    3.           Appointment of
Management.   Following the Closing of the Transaction,
TADF’s management and Board of Directors shall be as follows:

    


    Rolland C.
Thompson                                                      Chief
Executive Officer and Director

    Alexis
Korybut                                           Chief
Financial Officer and Director

    Gen. Ronald R.
Fogleman                                           Director

    


    Such
appointments shall be subject to further employment agreements between TADF and
the above named parties, with such final agreements to be included in the
Definitive Agreements described below.

    


    4.           Existing TAS
Liabilities.   As of the date of this LOI, TAS currently
maintains a convertible promissory note in the principal amount of approximately
$1,750,000 (the “Note”) and additional
other outstanding short-term debts, accrued salaries and other liabilities. Such
liabilities shall be assumed by TADF following Closing of the Transaction. Upon
Closing of the Transaction, TADF shall pay down and fully extinguish all
principal and interest remaining under the Note as of such Closing date. In the
event any shares are issued in connection with the above described purchase of
the Note, such shares shall be deemed to have been issued following Closing of
the Transaction and the issuance of such shares shall not be included in nor
accounted for when calculating the 45.75% of the issued and outstanding shares
of TADF’s common stock due and payable to the TAS Shareholders.

    


    5.           Existing TADF
Liabilities. TADF agrees that the existing holders of TADF convertible
debentures shall, upon Closing of the Transaction:

    


    
      	
              -  

            	
              amend
      the annual interest rate of all existing convertible debentures to eight
      (8%) percent; and

            


    

    
      	
              -  

            	
              agree
      to forbear such holder’s rights in connection with enforcing cash payment
      of any interest and/or principle in connection with any convertible
      debenture at the sole discretion of a majority of the Board of Directors
      of the TADF.

            


    

    


    6.           Existing Legal
Liabilities.   During the Due Diligence Period (as defined
below) each Party shall have disclosed all legal claims and liabilities to the
other Party and prior to the Closing of the Transaction, such legal claims and
liabilities shall have been resolved to the satisfaction of the opposing Party.
Upon completion of the Due Diligence Period and prior to Closing, TADF shall
issue into escrow a number of shares of TADF common stock and/or an amount of
cash as reasonably mutually agreed between the Parties prior to Closing, as a
contingency for any unknown and unresolved litigation, judgments, claims and
actual or reasonably potential claims against TADF. Upon Closing, TAS shall
place into escrow a number of the TAS Shares and/or an amount of cash, as
reasonably mutually agreed between the Parties prior to Closing, as a
contingency for any unknown and unresolved litigation, judgments, claims and
actual or reasonably potential claims against TAS.

    


    7.           Lock Up and Leak Out
Agreements.   Upon Closing of the Transaction, all TAS and
TADF post-Transaction shareholders owning shares of common stock of the
post-Transaction entity in excess of three percent (3%) of the then issued and
outstanding shares of common stock shall execute lock up and leak out
agreements, with such final agreements to be negotiated and included in the
Definitive Agreements described below.

    


    8.           Transaction Closing
Financing.   Prior to Closing of the Transaction and as a
condition precedent, the Parties shall negotiate third party post-Transaction
financing of a minimum of US$500,000, which amount shall be held in an escrow
account and released to the post-Transaction entity upon closing of the
Transaction. In the event any shares are issued in connection with the above
described financing, such shares shall be issued following Closing of the
Transaction and the issuance of such shares shall not be included in nor
accounted for when calculating the 45.75% of the issued and outstanding shares
of TADF’s common stock due and payable to the TAS Shareholders.

    


    9.           Definitive
Agreements.    Following further negotiations, the
Parties shall commence preparation of definitive legal agreements that will
affect the Transaction and other commitments contemplated herein (the “Definitive
Agreements”). The Definitive Agreements will contain the general
provisions outlined herein in addition to the usual and customary
representations and warranties, covenants, conditions, and indemnifications for
transaction of this kind, including, without limitations: environmental, tax and
securities filings, and corporate filings and the accuracies of all of the
same.

    


    10.           Due
Diligence.      For a period of sixty (60)
days following execution of this LOI (the “Due Diligence
Period”), the Parties must comply with all reasonable requests to review
relevant information concerning themselves and business entities they are
affiliated with, insofar as such requests are reasonably related to the
completion of the Transaction. Upon the execution of this LOI by all Parties and
subsequent request to or by a Party, the Parties shall mutually exchange the
following:

    


    
      	
              -  

            	
              All
      Financial Statements;

            


    

    
      	
              -  

            	
              History
      of financings and related
documents;

            


    

    
      	
              -  

            	
              All
      employment contracts and consulting
agreements;

            


    

    
      	
              -  

            	
              A
      list of all officers, key employees, directors, and advisors, with related
      bios;

            


    

    
      	
              -  

            	
              A
      list and description of all assets;

            


    

    
      	
              -  

            	
              A
      list of all known liabilities and
claims;

            


    

    
      	
              -  

            	
              A
      list, description, and status of all client contracts, past and
      current;

            


    

    
      	
              -  

            	
              A
      list of all licenses and
certifications;

            


    

    
      	
              -  

            	
              Certificate
      of Incorporation (with any amendments
thereto);

            


    

    
      	
              -  

            	
              All
      board minutes;

            


    

    
      	
              -  

            	
              Bylaws
      (with any amendments thereto); and

            


    

    
      	
              -  

            	
              Current
      shareholder list.

            


    

    


    11.           Transaction Document
Expenses.  Each Party shall be solely responsible for all fees
and expenses of the Parties agents, advisors, attorneys and accountants with
respect to the negotiation of this LOI, the negotiation and drafting of the
Definitive Agreements and, if Definitive Agreements are executed, the Closing of
the Transaction.

    


    12.           No
Shop.      Until the Closing of the
Transaction or termination of negotiations related to such Transaction, TAS may
not enter into any transaction or agreement related to the sale or transfer of
the TAS Equity or any of its assets or otherwise encumber or enter into an
agreement that would encumber any of the foregoing or enter into any agreement
outside of the ordinary course of business or that would otherwise hinder the
Parties rights or intentions under this LOI.

    


    13.           Confidentiality,
Non-Disclosure and Subsequent Public
Announcement.    The Parties agree to not release any
public information regarding or in connection with this LOI and the Transaction
in order to protect each Party’s confidential and proprietary information
related to each company and the Transaction. Following the execution of the LOI,
TADF shall release a Form 8-K with the SEC and related press release regarding
the Transaction providing and disclosing the terms of this LOI. With the
exception of the Form 8-K and press release described in this section, the
Parties agree not to issue any further press releases or make any further public
announcement regarding the Transaction without prior written mutual consent of
all Parties, except where a public announcement is otherwise required by
law.

    


    14.           Acknowledgments and
Assent.  The Parties acknowledge that they were advised to
consult with an independent attorney prior to signing this LOI and that they
have in fact consulted with counsel of their own choosing prior to executing
this LOI. The Parties agree that they have read this LOI and understand the
content herein, and freely and voluntarily assent to all of the terms
herein.

    


    We trust
that these terms accurately reflect our understanding. If there are any
questions or comments regarding the same, please feel to contact me at your
convenience. Otherwise kindly execute this LOI acknowledging your agreement to
the terms outlined above.

    


    Dated May
20, 2010

    


    Agreed
and accepted by:

    


    
      	
              Tactical
      Air Defense Services, Inc.

              a
      Nevada corporation

               

               

               

              _________________________________

              By:
      Alexis Korybut

              Its:
      Chief Executive Officer

            	
              Tactical
      Air Support, Inc.

              a
      Nevada corporation

               

               

               

              _________________________________

              By:
      Rolland C. Thompson

              Its:
      President