--------------------------------------------------------------------------------

LETTER OF INTENT

THIS LETTER OF INTENT, hereinafter referred to as the “LOI”, is entered into,
dated and made effective this 19th day of March, 2007,

BETWEEN: AEGIS INDUSTRIES, INC. (a Nevada corporation)

(“AEGIS”)

AND: Z5 TECHNOLOGIES LLC (a Connecticut limited liability company)

(“Z5”)

WHEREAS AEGIS believes that Z5 has significant valuable intellectual property
assets, valuable products and significant expertise in its industry;

AND WHEREAS Aegis intends to organize a third-party loan to Z5 of US$500,000 to
Z5 to fund due diligence on Z5’s financial affairs and working capital and
wishes to complete a merger or other form of acquisition, such as share purchase
and exchange agreement, with Z5 to secure further financing and raise the public
and business profile of both Aegis and Z5.

AND WHEREAS the parties wish to enter into a letter of intent which states that,
upon completion of due diligence, the parties intend that AEGIS and Z5 will
negotiate a formal, definitive merger and share purchase and exchange agreement
or other transaction structure whereby AEGIS would directly or indirectly
purchase all of the issued and outstanding shares of Z5 and the principals of Z5
would acquire an equity interest in AEGIS.

NOW, THEREFORE, in consideration of $10.00 and other good and valuable
consideration, the parties agree as follows:

1.

The parties hereto agree that they will act together towards ensuring that AEGIS
and Z5 enter into, on or before April 1, 2007, a definitive agreement (the
“Definitive Agreement”) containing substantially the same terms and provisions
as this LOI.

    2.

The Definitive Agreement shall provide for the contribution, by AEGIS, of twenty
(20) million shares of common stock of AEGIS (the “Vend In Shares”), $500,000 in
cash, to be paid on the third month anniversary of the Definitive Agreement and
a note agreement worth $4,500,000 (the “Note”) in exchange for Class A
membership interest in a newly formed Delaware limited liability company (“Newco
LLC”) and the contribution by the members of Z5 of all of the membership
interests in Z5 in exchange for Class B exchangeable membership interests in
Newco LLC. The rights and restrictions of the Class A and Class B shares will be
set out fully in the Definitive Agreement.

--------------------------------------------------------------------------------

3.

The Definitive Agreement shall provide that the Closing shall occur as promptly
as practicable, but in all events on or before April 30, 2007 unless otherwise
agreed by the parties thereto. Upon Closing of the Definitive Agreement, AEGIS
will appoint as its Chairman and CEO Brendan Reilly, who will also be appointed
as President of Newco LLC. Paul Evancoe will remain as President of AEGIS and
will, in the event that AEGIS’ acquisition of Aegis Industries, Inc., a Delaware
corporation (“Aegis-Delaware”) is completed, be appointed as President of the
Aegis-Delaware division of AEGIS.

      4.

Upon Closing of the Definitive Agreement, AEGIS will agree that it will effect
the appointment to its Board of Directors two (2) persons chosen by Z5
(collectively, the “New Directors”) one of whom will be Brendan Reilly as
Chairman, and agrees that it will appoint a third person in consultation and
upon mutual agreement with Z5. Paul Evancoe will remain as a director of AEGIS
and AEGIS shall appoint one additional nominee. The purpose of this clause is to
ensure that the Board of Directors is balanced between the old board of
directors and the New Directors, along with one independent director. The
shareholders of Z5 will, in the Definitive Agreement, agree that they will, for
a period of two (2) years from Closing, vote their shares of AEGIS in favor of
Paul Evancoe in any shareholder resolution to appoint directors (provided he is
still an employee of Aegis, capable of performing the duties of a Director and
agrees to stand for election) and will further provide that they not vote their
shares of AEGIS in any way which would remove him as a director (unless he
chooses to resign).

      5.

The Definitive Agreement will provide that closing of the transactions
contemplated in the Definitive Agreement (the “Closing”) will be conditional
upon the following:

      (a)

Z5 shall operate its business only in the ordinary course and will not sell,
distribute, license or encumber any of the Assets;

      (b)

the receipt of any certificates, opinions and/or documents related to the
Assets, as AEGIS may reasonably request, including documents relating to any
tests performed or studies completed, provided these tests or studies are not
subject to non-disclosure covenants by Z5 in connection with any third-party
customer agreements, and the status of any patent applications;

      (c)

the receipt of all consents, approvals, authorizations and orders required of or
for the completion of any document required hereunder;

      (d)

satisfactory completion of due diligence, to be conducted by Richardson Patel or
such other firm as AEGIS chooses to use, at the absolute and sole discretion of
AEGIS, concerning the business, affairs, financial affairs and Assets of Z5;

      (e)

satisfactory completion of due diligence, at the absolute and sole discretion of
Z5, concerning the business, affairs, financial affairs and assets of AEGIS;

2

--------------------------------------------------------------------------------

(f)

the existence of no outstanding mergers, acquisitions, financial commitments,
obligations, liabilities, etc. other than those contemplated in this transaction
or incurred in the ordinary course of business;

      (g)

other than those disclosed herein in Section 19, there are no legal actions
against AEGIS or directors, officers and/or shareholders of AEGIS nor does AEGIS
know of any intended legal actions against it or any of its directors and AEGIS
is not engaged in any legal actions against other parties, and is current in all
filings with securities, tax and regulatory authorities;

      (h)

the reservation for issuance of a total of 12,000,000 shares of common stock of
AEGIS which will be reserved for providing incentive stock options and equity
compensation to employees and directors of AEGIS; and

      (i)

entering into the Note agreement as both AEGIS and Z5 may agree, which provide
that Newco LLC receive, for the benefit of Z5 members, a total of $5,000,000 (on
a quarterly basis over two years being $500,000 per quarter for 10 quarters),
which obligation will be secured by the assets of AEGIS and will otherwise be in
a form to be determined by Z5 such that Z5’s shareholders have the ability to
minimize their tax liability as a result of the transaction. The payment
obligation will accelerate in the event (i) Brendan Reilly’s positions as
Chairman and CEO is terminated by AEGIS other than for cause, or (ii) there
occurs a change of control of AEGIS (as defined in the Definitive Agreement).

      6.

AEGIS will, in the Definitive Agreement, represent and warrant to Z5 that:

      (a)

it is a public corporation incorporated and is in good standing with all
regulatory agencies and its shares will be traded on the OTC Bulletin Board;

      (b)

there are no legal actions against AEGIS or its directors or officers and the
company knows of no intended legal actions against the company and is not
engaged in any legal actions against other parties;

      (c)

its business and financial condition are as set forth in its filings with the
SEC on the EDGAR database and is the filings are current as of the date hereof;

      (d)

there are no outstanding mergers, acquisitions, financial commitments,
obligations, liabilities, etc. other than those contemplated in this transaction
and publicly disclosed concerning Aegis Industries, Inc. (a Delaware
corporation);

      (e)

other than those disclosed herein in Section 19, there are no legal actions
against the company or directors, officers and/or shareholders of the company
nor does AEGIS know of any intended legal actions against it or any of its
directors and AEGIS is not engaged in any legal actions against other parties,
and is current in all filings with tax and regulatory authorities; and

3

--------------------------------------------------------------------------------

(f)

there have been no other issuances of shares of its capital stock, or
instruments exercisable for, convertible into or otherwise entitling the holder
to acquire shares of its capital stock, other than in connection with the
Closing or financing of the transactions to be contemplated in the Definitive
Agreement (and then only on the terms contemplated by the Definitive Agreement).

      (g)

the capitalization of AEGIS immediately before issuance to Z5 will include no
more than 60,600,000 shares of common stock on a fully diluted basis (including
15,000,000 issued to former stockholders of Aegis-Delaware), and no shares of
preferred stock.

      (h)

The Definitive Agreement with provide that AEGIS will make all reasonable
efforts to provide Z5 with registration rights and piggy back rights providing
for the sale, by the shareholders of Z5, of that number of shares, multiplied by
the prevailing market price of the shares of AEGIS, which is equal in value to
any tax liabilities, if any, associated with completion of the acquisition of Z5
by AEGIS. Z5 acknowledges that AEGIS cannot guarantee the registration for
resale of the AEGIS shares which will be held by the Z5 shareholders as a result
of the acquisition of Z5 by AEGIS.

      7.

Z5 will, in the Definitive Agreement, represent and warrant to AEGIS that:

      (a)

it is a Connecticut limited liability company and is in good standing with all
regulatory agencies;

      (b)

there are no legal actions against the company or directors of the company nor
does Z5 know of any intended legal actions against it or any of its directors
and Z5 is not engaged in any legal actions against other parties, and is current
in all filings with tax and regulatory authorities;

      (c)

its business and financial condition remain materially unchanged from any due
diligence or financial statement documentation provided to Aegis prior to
Closing;

      (d)

it owns 100% beneficial right, title and interest in and to intellectual
property and other assets (the “Assets”) which will be disclosed in a schedule
to the Definitive Agreement, subject to any liens, charges, securitizations, UCC
filings or debts disclosed in the schedule or financial statements of Z5
provided to AEGIS prior to Closing;

      (e)

there have been no other issuances of shares of its capital stock, or
instruments exercisable for, convertible into or otherwise entitling the holder
to acquire shares of its capital stock, other than in connection with the
Closing or financing of the transactions to be contemplated in the Definitive
Agreement (and then only on the terms contemplated by the Definitive Agreement);

4

--------------------------------------------------------------------------------

  (f)

the capitalization of Z5 immediately before closing will include no more than
_______________________shares of its common stock on a fully diluted basis;

        (g)

there are no outstanding mergers, acquisitions, financial commitments,
obligations, liabilities, etc. other than those contemplated in this
transaction.

8.

The Definitive Agreement shall provide that each and every obligation of AEGIS
to be performed hereunder shall be subject to the satisfaction prior thereto of
the following conditions:

  a)

the representations and warranties made by Z5 in this LOI and the Definitive
Agreement or given on its behalf hereunder shall be substantially accurate in
all material respects on and as of the closing date with the same effect as
though such representations and warranties had been made or given on and as of
the closing date;

        b)

Z5 shall have performed and complied with all obligations and covenants required
by the Definitive Agreement to be performed or complied with by it prior to or
at Closing;

        c)

AEGIS shall have been furnished that information on the business and affairs of
Z5 which it deems, in its sole and absolute discretion, to be necessary for it
to meet its continuous disclosure obligations under the Securities Exchange Act
of 1934 upon Closing;

        d)

as of Closing there shall not have occurred any material adverse change to Z5,
financially or otherwise, which materially impairs the ability of AEGIS to
conduct its business;

        e)

the completion, by Z5, of audited consolidated financial statements required to
be filed following the Closing by AEGIS as a reporting issuer under the
Securities Exchange Act of 1934;

        f)

Z5 shall have provided audited financial statements and a statement from its
intellectual property lawyers as to the state of its patent and other
intellectual property applications.

        g)

the opinion of counsel to AEGIS that the Closing will not result in AEGIS
breaching any applicable securities law, rules and regulations;

        h)

the completion, by Z5, of settlement of all related party funded debts in excess
of $250,000, resulting in Z5 having not more than $250,000 in related party
funded debt on Closing; and

        i)

Newco LLC receiving the Vend In Shares will enter, upon Closing, into an escrow
agreement whereby, in the event that Newco LLC does not achieve $1,250,000
EBITDA in the twelve (12) months following Closing, a total of 4,000,000 of the
Vend In Shares will be returned to the treasury of AEGIS by Newco LLC.

9.

The Definitive Agreement shall provide that each and every obligation of Z5 to

5

--------------------------------------------------------------------------------

be performed on Closing shall be subject to the satisfaction prior thereto of
the following conditions:

  (a)

the representations and warranties made by AEGIS in this LOI and the Definitive
Agreement (including those regarding Aegis-Delaware) or given on its behalf
hereunder shall be substantially accurate in all material respects on and as of
the closing date with the same effect as though such representations and
warranties had been made or given on and as of the closing date;

        (b)

AEGIS shall have performed and complied with all obligations and covenants
required by the Definitive Agreement to be performed or complied with by it
prior to or at Closing;

        (c)

a total of 20,000,000 shares of AEGIS, shall be issued to the members of Z5,
said issuances or transfers to be made in a manner which will provide for a tax
free exchange transaction;

        (d)

AEGIS shall have secured bridge loan or equity or other financing of $500,000
from a third party who shall have made a bridge loan under mutually agreed to
terms (the “Bridge Loan”) on or prior to March 26, 2007 to Z5 of $500,000 which
will be evidenced by a convertible promissory note (the “Note”) secured by the
assets of Z5 (subject to subordination if Z5 borrows under a working capital
line from an institutional investor) and convertible to newly issued shares of
AEGIS at $0.50 of Note principal per share; and

        (e)

as of Closing there shall not have occurred any material adverse change to
AEGIS, financially or otherwise, which materially impairs the ability to conduct
its business;

        (f)

An Opinion Letter from AEGIS’ counsel regarding customary matters, including
without limitation AEGIS’ capitalization and the valid issuance of the Vend In
Shares.

10. Neither AEGIS, on the one hand, nor Z5, on the other, will make any
disclosure or public announcements of the proposed transactions, the Definitive
Agreement or the terms thereof without the prior approval of the other, which
shall not be unreasonably withheld.

11. Each party agrees and acknowledges that such party and its directors,
officers, employees, agents and representatives will disclose business
information and information about the proposed transaction in the course of
securing financings for AEGIS and Z5 and that both parties and their
representatives may be required to disclose that information under the
continuous disclosure requirements of the Securities Exchange Act of 1934.

12. The parties hereby agree that neither will solicit any third party for the
licensing, lease, transfer or sale of any or all their respective Assets, or
solicit opportunities for either party to enter into any discussions with any
third party for the licensing, lease, transfer or sale of any or all of its
respective Assets, for the term of the Definitive

6

--------------------------------------------------------------------------------

Agreement. This section shall not be read to prohibit the parties from
conducting such discussions which are in the ordinary course of business but is
intended to be read as protecting each of the parties from the other entering
into negotiations which would conflict with the transactions contemplated by
this LOI and by the Definitive Agreement.

13. The Definitive Agreement will specify that, in the event that Closing does
not occur on or before April 30, 2007, then the Bridge Loan will become due and
payable but AEGIS agrees not to demand payment for a period of six (6) months
after the execution hereof.

14. This LOI shall be construed in accordance with, and governed by, the laws of
the State of Nevada, and each party separately and unconditionally subjects to
the jurisdiction of any court of competent authority in the State of Nevada, and
the rules and regulations thereof, for all purposes related to this agreement
and/or their respective performance hereunder.

15. This LOI sets forth the entire understanding of the parties with respect to
the subject matter hereof and may be modified only by a written document signed
by all parties. The Definitive Agreement will also provide that it can be
modified only by a written document signed by all parties.

16. The parties shall, upon Closing, prepare, execute and file any and all
documents necessary to comply with all applicable federal and state securities
laws, rules and regulations in any jurisdiction where they are required to do
so.

17. AEGIS agrees that it will, prior to Closing, to enter into an engagement
letter (the “Engagement Letter”) with Knight Capital Markets to engage in a
private placement financing of AEGIS for the purpose of providing funding to the
Newco LLC which will exist within it after Closing. The financing will be on
commercially reasonable terms with commercially reasonable compensation to
Knight Capital Markets for its role. The Engagement Letter will provide that
Knight Capital Markets will, on a best efforts basis, raise an expected amount
of $12 million to $15 million with a cap of $60 million.

18. AEGIS acknowledges that Z5 has disclosed that it is currently involved in no
lawsuits.

19. Z5 acknowledges that AEGIS has disclosed that it is currently involved in no
lawsuits. Z5 further acknowledges that AEGIS is obligated, under the terms of a
Letter of Intent between AEGIS and Aegis Industries, Inc. (the “Other
Division”), a Delaware company, to fund the Other Division in the amount of a
minimum of $5 million dollars over the 18 months.

20. If this LOI accurately sets forth the terms and conditions under which you
are willing to enter into the transactions contemplated hereby, please so
indicate by signing and returning a copy of this letter to AEGIS, by fax, not
later than 5:00 p.m. Pacific Standard Time, on March 21, 2007 failing which, any
offer contained herein will be

7

--------------------------------------------------------------------------------

considered invalid. Once executed, this LOI shall remain in full force and
effect until April 30, 2007 unless otherwise agreed to in writing by the
parties.

21. If any term or provision hereof shall be held illegal or invalid, this LOI
shall be construed and enforced as if such illegal or invalid term or provision
had not been contained herein.

22. All references to currency in this LOI are references to the lawful currency
of the United States of America.

DATED EFFECTIVE THIS 18TH DAY OF MARCH, 2007

/s/ “Paul Evancoe”   Paul Evancoe, Director and President     AEGIS INDUSTRIES
INC.  

The above terms are hereby read, understood, acknowledged and accepted this 19th
day of March, 2007.

/s/ “Brendan Reilly”   Brendan Reilly, President     Z5 TECHNOLOGIES LLC  

8

--------------------------------------------------------------------------------