EXHIBIT 3.1
                              ALTERNET SYSTEMS, INC.
                         #280 - 815 West Hastings Street
                          Vancouver, British Columbia
                              Tel: (604) 608-2540
                              Fax: (604) 608-8775

                                 August 15, 2002

Advanced Interactive Inc.
718 - 1350 East Flamingo Road
Las Vegas, Nevada 89119

Attention: Mr. Karim Lakhani

- -and-

Advanced Interactive Canada Inc.
2101 - 1177 West Hastings Street
Vancouver, BC V6# 2K3

Attention: Mr. Harry Davis

Dear Sir or Madam:

Re: License Agreement dated January 1, 2001, as amended (the "License
Agreement")

This letter is written to confirm as follows:

1.  The License Agreement between Advanced Interactive Inc. ("AII
Nevada") and Advanced Interactive Canada Inc. ("AII Canada") and
Alternet Systems, Inc. ("Alternet") is hereby amended such that
the existing section 5.1(d) of the License Agreement is deleted
and replaced with the following section 5.1(d):

"Commencing on January 15, 2001 (and ending on December 15,
2010) Alternet will make minimum payments to AII Nevada or AII
Canada of:

(a)   US$10,000 per month in 2001;
(b)   US$20,000 per month in 2002;
(c)   US$28,000 per month in 2003;
(d)   US$36,000 per month in 2004;
(e)   US$44,000 per month in 2005;
(f)   US$52,000 per month in 2006;
(g)   US$60,000 per month in 2007;
(h)   US$68,000 per month in 2008;
(i)   US$76,000 per month in 2009; and
(j)   US$84,000 per month in 2010.

Any payments made by Alternet which exceed the amount due
under (d) to (j) above will be accrued and applied to future
months' minimum payments.

Alternet shall have the right, in any given month:

(i)  to accrue (for the term of this Agreement) up to one-half
of the minimum payment owed in that month; and

(iii)  subject to the consent of AII Canada or AII Nevada, to pay
one-half of the amount owed in any given month by way of
issuance to AII Canada or AII Nevada of:

(A)  prior to Alternet trading publically, common shares at
a price of US$0.35 per share; or

(B)  on or after commencement of public trading of
Alternet, common shares at the weighted average market
price for the week prior to the monthly payment becoming due.

2.  Alternet shall make all reasonable efforts to register for
immediate resale (by way of filng of an SB2 Registration
Statement or S8 Registration Statement) any shares issued to AII
Canada or AII Nevada in settlement of outstanding monthly payments.

3.  In all other ways, the Agreement remains in full force and
effect as amended.

4.  AII Canada and AII Nevada hereby agree that Alternet may settle,
by way of issuance of common shares at US$0.35 per share, any
outstanding payments due to this amendment's date under section
5.1(d) of the Agreement.

5.  To simplify and clarify their agreement, AII Canada, AII Nevada
and Alternet shall, on or before September 15, 2002, complete a
new License Agreement which incorporates the terms of License
Agreement and all of its amendments.

     Upon execution hereof, this letter becomes an amendment to the
Agreement binding upon its terms.

Yours truly,
ALTERNET SYSTEMS, INC.

/s/ Patrick Fitzsimmons
Patrick Fitzsimmons, Director

The terms of this Agreement above are hereby read, understood,
acknowledged and accepted by the undersigned effective the 15th day
of August, 2002.

ADVANCED INTERACTIVE, INC.              ADVANCED INTERACTIVE CANADA INC.
By its Authorized Signatory             By its authorized signatory

/s/ Stan Loh                            /s/ Harry Davis
Stan Loh                                Harry Davis
Director                                C.E.O.