LETTER OF INTENT
Re: Acquisition of the common stock of Advanced Interactive, Inc., by Fresh
Breath Industries, Inc.
Fresh Breath Industries, Inc., a Nevada corporation, with offices located
Suite 210, 195 West 2nd Ave, Vancouver, BC V5Y1B8 hereinafter referred to
as FBI and Advanced Interactive, Inc., a Nevada corporation, with offices
located at Suite 2101, 1177 West Hastings, Vancouver, BC V6E2K3,
hereinafter referred to as AII are the parties to this Letter of Intent.
FBI fully reporting public corporation trading on the OTC Bulletin Board
under FBID. AII is the privately held Nevada corporation. The contemplated
business combination will cause a change in the control of FBI and based on
the change in control the transaction will have to be approved by a Special
Meeting of the Shareholders. Said meeting will be called in compliance with
federal regulations. The contemplated acquisition will also have to be
approved by the directors and a majority of the common stockholders of AII.
It is further intended that the parties shall describe and execute all
necessary documents and cooperate with each other to the fullest extent
possible toward the objective of consummation of the acquisition of AII by
FBI on the earliest possible date.
Management of both companies hereby commit to refer the acquisition plan
herein outlined to their board of directors and shareholders with a
recommendation for approval. Matters relating to the acquisition are as follows:
I. Timing
On or before thirty days from the date or the signing of a final approved
acquisition agreement, FBI will acquire 100% of the capital stock of AII in
exchange for common stock of FBI.
II. Exchange
FBI will issue 16,000,000 shares on a post split basis of its $.001 par
value common stock for 100% of the common stock outstanding in AII.
III. Conditions Precedent to Closing
A. FBI will reverse split on a _____ for one basis its present outstanding
11,748,000 shares of common stock.
B. The corporate name will be changed to Advanced Interactive, Inc., by
amending the Articles of Incorporation.
IV. Representation and Warranties
A. FBI will represent to AII and AII will represent to FBI that neither party
or any of its principal officers or directors present or proposed is the
subject of any sanctions imposed by any federal or state securities agency
except as may otherwise be disclosed in writing and become a part of a
disclosure to the shareholders of the parties of this agreement.
B. AII and FBI will represent in writing to each other that neither party is
currently involved in or threatened by litigation of which it is aware, or
if such does occur, that such will be disclosed.
C. Both parties of this Letter of Intent agree to cooperate with each other in
providing documentation as the other request for use in preparation of
their respective statements and the post-consolidation statement.
D. The parties shall each comply with the laws, rules, and regulations of
every appropriate jurisdiction as they apply without regard to the proposed
Acquisition including, without limitation, everything incident thereto.
E. FBI shall warrant, as a condition precedent to any final agreement,
that they have or shall have received director approval to the
business agreement contemplated.
F. Both corporations will provide certificates of good standing from
their respective states of domicile.
G. Neither Company shall make any press releases or talk to the media
without mutual approval.
V. Name
The parties acknowledge and agree that FBI will undertake a corporate name
change as soon as possible after the closing.
VI. Directors
AII will have the right to appoint not less than two nor more than five
directorships.
VII. Information on Capital and Stock
A. At closing FBI will have a net worth as of June 30, 2000 of $________
+/- and ____________ shares outstanding.
B. At closing AII will have a net worth of $_______ +/- and __________
shares outstanding.
C. Net worth may vary +/- 10%.
VIII. Business Combination
The acquisition will comply with Internal Revenue Code, Rule 368 (a) (1)
(b) (stock for stock) 1986, as amended. AII shareholders must own at least 80%
of the outstanding common stock.
IX. Fees
Investment banking and finder fees of ____% will be charged to the business
combination on the total outstanding shares and will bear an investment legend.
X. Counterpart
This letter may be signed in counterpart.
XI. Final Agreement
This Letter of Intent is not the final agreement (Acquisition Agreement)
between the Parties but does represent the terms and conditions which the
Parties understand will be incorporated into such an Agreement. The Acquisition
Agreement shall also contain all customary and usual warranties and indemnities.
No commitment by either party of this Letter of Intent will be binding in
the event of a material discrepancy between the actual operation of financial
condition and its represented condition as disclosed in the course of the
execution of the Agreement and Plan of Reorganization.
WHEREAS, the foregoing Letter of Intent represents the present
understanding of the Parties, each shall so designate by the signature of their
authorized representatives on the date and place provided herein.
Dated this day of______________, 2000
Advanced Interactive, Inc. Fresh Breath Industries, Inc.
President President
_________________ ____________________
Secretary Secretary
