Filed by Automated Filing Services Inc. (604) 609-0244 - Aegis Industries, Inc. - Exhibit 10.1






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;



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		(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



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		(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);



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	 	(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



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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

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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 

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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 	 


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