April 28, 2008
Via
Telecopier
Mr. Myron A. Goldstein
Chairman
American International Ventures, Inc.
4058 Histead Way
Evergreen, Colorado 80439
RE: Confidential Binding Letter Of Intent
Dear Mr. Goldstein:
The purpose of this Letter of Intent
(“Letter”) is to set forth certain understandings and
commitments between American International Ventures, Inc., a
publicly held Delaware corporation trading as “AIVN.OB”
(“AIVN”), and Navigational Sciences, Inc., a privately
held Delaware corporation (“NavSci”), with respect to a
proposed transaction in which AIVN, or its successor, will acquire
NavSci by a merger of a newly formed subsidiary of AIVN
(“Acquisition Sub”) into NavSci in a tax-free
reorganization (referred to in this Letter as the
“Acquisition”). For purposes of this Letter, NavSci and
AIVN may be collectively referred to as “Parties” and
individually as a “Party.”
This Letter sets forth essential terms for the
Acquisition based on each Party’s present understanding of
the current condition of the assets and business operations of the
other Party. In particular, AIVN understands that NavSci controls
certain unique intellectual property originated at Oak Ridge
National Laboratories (“ORNL”) and owns or controls
equipment and other assets consisting of its facility in
Charleston, South Carolina. AIVN also understands its rights in
this Letter are not assignable to any other person. NavSci
understands that AIVN (and its subsidiaries, if any) are not
subject to material environmental liabilities. Each party
understands that the other Party (and its subsidiaries, if any)
will not dispose of any material assets prior to the closing of the
Acquisition.
The terms of this Letter will be binding on the Parties
subject only to the conditions set forth herein.
PART ONE: ESSENTIAL TERMS OF ACQUISITION
1.
ACQUISITION. AIVN will acquire NavSci by way
of a merger of Acquisition Subsidiary into NavSci in a tax-free
reorganization. As a result of the reorganization, NavSci will
become a wholly owned subsidiary of AIVN and NavSci stockholders
will receive unregistered AIVN common stock in the transaction. The
name of NavSci company after the transaction may be changed to
“Wireless Physics, Inc.”
2.
PREPARATION OF DEFINITIVE AGREEMENTS. The Parties
will negotiate in good faith one or more definitive agreements
(collectively, the “Definitive Agreements”) that will
govern the Acquisition. The Definitive Agreements will contain the
essential terms set forth in Paragraphs 1-8 of this Letter and will
contain customary representations, warranties, covenants,
indemnities and other agreements of the Parties, including but not
limited to: (1) representations and warranties related to (i) each
Party’s power and authority to enter into the Definitive
Agreements and perform its obligations thereunder; (ii) ownership
and title to the assets of each Party; (iii) due organization, good
standing, the absence of violation of other agreements and laws,
and the accuracy of financial information of each Party; and (iv)
the absence of material environmental liabilities of each Party;
(2) indemnities from each Party in favor of the other for
environmental liability caused prior to the date of closing; (3)
indemnities from each Party in favor of the other against all
claims and liabilities with respect to breach of such Party’s
representations and warranties; and (4) a share escrow in support
of each Party’s indemnification obligations under which AIVN
will issue additional shares to former NavSci stockholders that
will have the effect of reducing the ownership of former AIVN
stockholders by up to 2% (from 10% to 8%) and NavSci stockholders
will return AIVN shares received in the Acquisition that would have
the effect of increase the ownership of former AIVN stockholders by
2% (from 10% to 12%), in each case as compared to the AIVN shares
to be issued under Paragraph 7.
3.
CONDITIONS PRECEDENT TO THE CLOSING OF PROPOSED
ACQUISITION. The Definitive Agreements shall include customary
conditions precedent generally applicable to a transaction of the
nature and size contemplated by this Letter, each of which must be
satisfied prior to the consummation of the transactions
contemplated thereby. In general, the closing of the proposed
acquisition and the obligations of each Party under the Definitive
Agreements will be subject to the satisfaction of the conditions
precedent, which shall include but not be limited to:
(a) Satisfactory Results of Due
Diligence. The satisfactory completion of due diligence by
the Parties (as provided in Paragraph 9) which includes but is
not limited to (1) showing that the assets of Parties and any
actual or contingent liabilities against those assets, and the
prospective business operations of the Parties are substantially
the same as currently understood by each Party as of the date of
this Letter; and (2) not showing material environmental
liabilities of any Party.
(b) Compliance. Satisfactory
determination that the acquisition and prospective business
operations by AIVN of NavSci’s business will comply with
applicable laws and regulations, including antitrust and
competition laws, material to the conduct of the operating
company after the Acquisition.
(c) Consents and Approvals. The approval
and consent of the Definitive Agreements by the Boards and
stockholders of Acquisition Sub and NavSci and the receipt of
consents and approvals, including the expiration or termination
of all required waiting periods, from all governmental entities
and other persons that are necessary for the Acquisition
(including the approval and/or consent of UT Battalle and ORNL,
if required) and for the conduct of NavSci after the
Acquisition.
(d) Technology . Specifically,
UT-Battelle, LLC and ORNL must consent to the Acquisition, if
required, under the Acquisition of the Exclusive/Nonexclusive
Patent License Agreement, dated April 28, 2006, between
UT-Battelle and NavSci, as amended, and the Cooperative Research
and Development Agreement, No. ORNL01-0622, dated December 13,
2001, between ORNL and NavSci, as amended (“Technology
Agreements”), for the continued validity of such
agreements after the Acquisition. The burden of acquiring this
letter shall belong to NavSci, but AIVN will assist as
requested.
(e) Compliance with Technology
Agreements. NavSci must be in compliance with the terms and
conditions of the Technology Agreements (including those
provisions regarding payments of royalties or other fees payable
by NavSci, as licensee, to the licensors) and such agreements
must be binding and in full and effect.
(f) Absence of Material Litigation or Adverse
Change . There shall be no pending or threatened material
claims or litigation or administrative proceedings involving
NavSci or AIVN, and no material adverse change in the business
or pros
