-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G/Hh8WUupy7jo4LSDU57/kXPG+CHQI5pIMRsPnpGCkDwJj4t8HIKE+MlD6Y7U56u zQ735BLRw3J7rDFXV+cFSw== 0000914062-07-000012.txt : 20070117 0000914062-07-000012.hdr.sgml : 20070117 20070117165921 ACCESSION NUMBER: 0000914062-07-000012 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20061116 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070117 DATE AS OF CHANGE: 20070117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELECTRIC AQUAGENICS UNLIMITED INC CENTRAL INDEX KEY: 0001170816 STANDARD INDUSTRIAL CLASSIFICATION: SPECIALTY CLEANING, POLISHING AND SANITATION PREPARATIONS [2842] IRS NUMBER: 870654478 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-51807 FILM NUMBER: 07535602 BUSINESS ADDRESS: STREET 1: 1464 WEST 40 SOUTH STE 200 CITY: LINDON STATE: UT ZIP: 84042-1629 BUSINESS PHONE: 801-443-1029 MAIL ADDRESS: STREET 1: 1464 WEST 40 SOUTH STE 200 CITY: LINDON STATE: UT ZIP: 84042-1629 8-K 1 eau8k111606.txt FORM 8-K - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------- FORM 8-K -------------------------------- CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): November 16, 2006 ------------------------- Electric Aquagenics Unlimited, Inc. (Exact name of registrant as specified in its charter) -------------------------
- ---------------------------------------- -------------------------------------- -------------------------------------- Delaware 000-51807 87-0654478 - ---------------------------------------- -------------------------------------- -------------------------------------- (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) - ---------------------------------------- -------------------------------------- --------------------------------------
1464 West 40 South, Suite 200, Lindon, Utah 84042 (Address of principal executive office) (zip code) Registrant's telephone number, including area code: (801) 443-1031 N/A (Former name or former address, if changed since last report) ------------------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Section 1 - Registrant's Business and Operations Item 1.01 Entry into a Material Definitive Agreement Amended and Restated License Agreement. On January 10, 2007, Electric Aquagenics Unlimited, Inc. (the "Company") entered into an Amended and Restated License Agreement (the "Amended License Agreement") with Zerorez Franchising Systems, Inc., a Nevada corporation ("Zerorez"). Zerorez is an affiliated entity having similar shareholders and who was founded by the same individuals who founded the Company. John Hopkins, William Warwick and Jay Potter are shareholders of Zerorez. Mr. Hopkins is also a board member and franchisee of Zerorez. A copy of the Amended License Agreement is filed herewith as Exhibit 10.1. The Company has had a license agreement with Zerorez since March, 2001, as disclosed in the Company's previous reports as filed with the SEC. As revised, the Amended License Agreement provides a licensing arrangement whereby Zerorez and its franchisees may use the Company's equipment and technology to produce electrolyzed fluids for use in carpet cleaning and related applications, at rates that are set forth in the agreement. The Amended License Agreement has a term of five years with automatic renewal clauses for three additional five-year terms. Generally, neither party may terminate the agreement unless there is a breach by, or consent from, the other party. Stock Purchase Agreement. The information included in Item 3.02 below is incorporated by reference into this Item 1.01. A copy of the Stock Purchase Agreement is filed herewith as Exhibit 10.2. Amendment to Warrant Agreements and Debenture. On January 10, 2007, Water Science LLC signed a letter agreeing to waive the anti-dilution provisions of its Warrant Agreements date September 16, 2005 and May 1, 2006 and its Debenture dated September 16, 2005, in connection with the issuance of the inducement stock option to Wade Bradley, the recently hired Chief executive Officer of the Company. A copy of the Waiver Letter is filed herewith as Exhibit 10.3. Section 3 - Securities and Trading Markets Item 3.02 Unregistered Sales of Equity Securities. Stock Purchase from Company by Peter by Ullrich On January 10, 2007, the Company entered into a Stock Purchase Agreement with Peter F. Ullrich, a shareholder of the Company, whereby Mr. Ullrich agreed to purchase a total of 2,307,692 newly issued shares of $0.0001 par value common stock of the Company for a purchase price of $1.30 per share in a private transaction, for total consideration of $2,999,999.60. The purchase of the stock was closed concurrently with the signing of the agreement. The issuance of the shares was exempt from registration with the Securities and Exchange Commission under Section 4(2) of the Act and Rule 506 of Regulation D promulgated thereunder, in that Mr. Ullrich is an accredited investor and the issuance occurred without general solicitation. 2 Section 5 - Corporate Governance and Management Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. (d) Appointment of Director. On November 16, 2006, the Board of Directors of the Company appointed Wade R. Bradley, the Company President and Chief Executive Officer, as a member of the Board of Directors. Mr. Bradley continues to serve as an executive of the Company pursuant to his Employment Agreement dated October 24, 2006, and other employment arrangements as described in Item 5.02 to the Company's Form 8-K filed on October 30, 2006, which is incorporated herein by this reference. Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. (a) Certificate of Amendment for Name Change. On January 17, 2007, the Company filed a Certificate of Amendment to its Certificate of Incorporation to effect the change of its corporate name to "EAU Technologies, Inc.," effective as of January 17, 2007. This amendment was approved by the stockholders at a special meeting in 2006. A copy of the Certificate of Amendment is filed herewith as Exhibit 3.3 Section 8 - Other Events. Item 8.01 Other Events. Board Meeting. On January 12, 2007, the Board of Directors of the Company met and discussed the pending proposal to change the Company's domicile to Nevada. This proposed change was approved at the special stockholder meeting in March 2006. However, based in part upon advice of management and legal counsel to the Company, the Board has determined that the proposed change in domicile was not in the best interest of the Company. Consequently, the Board voted to abandon the proposal, and the Company will remain a Delaware corporation. In addition, the Board's proposal to amend the Certificate of Incorporation and the Bylaws has been abandoned and the Board plans to address any proposed amendments at the 2007 meeting of stockholders. Additional Stock Purchases by Peter Ullrich. On January 16, 2007, Peter Ullrich purchased a total of 565,000 additional shares of Company common stock, in a private sale at a price of $.90 per share, from Joseph Stapley, an officer the Company, and EOWORP, LLC, a company controlled by Gaylord Karren, James Stone, and John Hopkins. 3 Section 9 - Financial Statements and Exhibits. Item 9.01 Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired. Not applicable (b) Pro Forma Financial Information. Not applicable (c) Shell Company Transactions. Not Applicable (d) Exhibits. Exhibit Number Description - -------------------------------------------------------------------------------- 3.3 Certificate of Amendment to Certificate of Incorporation 10.1 Amended and Restated License Agreement dated as of January 10, 2007 by and between Electric Aquagenics Unlimited, Inc. and Zerorez Franchising Systems, Inc. 10.2 Stock Purchase Agreement dated as of January 10, 2007 by and between Electric Aquagenics Unlimited, Inc. and Peter Ullrich 10.3 Waiver Letter signed January 10, 2007 by Peter Ullrich 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Electric Aquagenics Unlimited, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: January 17, 2007 ELECTRIC AQUAGENICS UNLIMITED, INC. By: /s/ Wade R. Bradley ---------------------------------------- Wade R. Bradley President and Chief Executive Officer 5 EXHIBIT INDEX Exhibit Number Description - -------------------------------------------------------------------------------- 3.3 Certificate of Amendment to Certificate of Incorporation 10.1 Amended and Restated License Agreement dated as of January 10, 2007 by and between Electric Aquagenics Unlimited, Inc. and Zerorez Franchising Systems, Inc. 10.2 Stock Purchase Agreement dated as of January 10, 2007 by and between Electric Aquagenics Unlimited, Inc. and Peter Ullrich 10.3 Waiver Letter signed January 10, 2007 by Peter Ullrich 6 EX-3.3 2 eau8k111606ex33.txt CERTIFICATE OF AMENDMENT EXHIBIT 3.3 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF ELECTRIC AQUAGENICS UNLIMITED, INC. Electric Aquagenics Unlimited, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware does hereby certify: FIRST: That, at a meeting of the Board of Directors of Electric Aquagenics Unlimited, Inc., resolutions were adopted setting forth a proposed amendment to the Certificate of Incorporation for said corporation, declaring said amendment to be advisable and instructing the officers of the company to present said amendment to the stockholders of said corporation for their consideration at the next Annual Meeting of Stockholders. The resolution setting forth the proposed amendment is as follows: RESOLVED, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof entitled "ARTICLE I - NAME" so that, as amended, said Article shall be and read in its entirety as follows: "ARTICLE I - NAME The name of this Corporation is EAU Technologies, Inc." SECOND: That thereafter, pursuant to resolution of its Board of Directors, an annual meeting of the stockholders of said corporation was duly called and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statue were voted in favor of the amendment. THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said corporation has caused this certificate to be signed this 17 day of January, 2007. By: /s/ Wade Bradley -------------------------------------- Authorized Officer Title: Chief Executive Officer Name: Wade Bradley EX-10.1 3 eau8k111606ex101.txt AMENDED AND RESTATED LICENSE AGMT. EXHIBIT 10.1 AMENDED AND RESTATED LICENSE AGREEMENT - -------------------------------------------------------------------------------- This Amended and Restated License Agreement (this "AGREEMENT") is entered into effective as of January 1, 2007 by and between Electric Aquagenics Unlimited, Inc, a Delaware corporation (a/k/a EAU Technologies, Inc., and hereinafter referred to as "LICENSOR" or "EAU") and Zerorez Franchising Systems, Inc., a Nevada corporation (f/k/a H20 AquaCare Franchising Systems, Inc., and hereinafter referred to as "LICENSEE" or "ZEROREZ"), and amends, restates and supersedes any and all prior oral and/or written agreements between Licensor and Licensee pertaining to the subject matter hereof. Licensor and Licensee may be referred to herein sometimes as the "PARTIES," collectively and the "PARTY," individually. R E C I T A L S A. WHEREAS, Licensor is engaged in the design, development, manufacture and sale of patented and proprietary primacide commercial generators (the "PRIMACIDE GENERATORS") that produce both an alkaline water that can be used for cleaning purposes ("PRIMACIDE B FLUID") and a hypochlorous acid fluid that can be used for disinfecting purposes ("PRIMACIDE A FLUID"), for use in various industries, including the carpet and living surface cleaning industry; B. WHEREAS, Licensee provides carpet and living surface cleaning services, through its company-owned locations and through franchised outlets (referred to herein as "ZEROREZ FRANCHISEES") throughout the United States and Canada ("FRANCHISE Services"); C WHEREAS, pursuant to a "Uniform Offering Circular" and "Franchise Agreement" that each Zerorez Franchisee executes (collectively the "FRANCHISE AGREEMENTS"), Zerorez licenses to each Zerorez Franchisee the use of Zerorez's trademarks and technology and the use of trademarks and technology licensed from EAU (the "ZEROREZ PROPRIETARY TECHNOLOGY") to allow the Zerorez Franchisees to provide the Franchise Services to their customers; D. WHEREAS, the Parties have entered into various agreements (referred to herein collectively as the "ORIGINAL AGREEMENTS") whereby Licensor granted to Licensee a license to allow Zerorez and the Zerorez Franchisees to acquire Primacide Generators from Licensor and to use the Primacide B Fluid solely for use in the Franchise Services (collectively, the "ORIGINAL LICENSE"); E. WHEREAS, in order to assure a supply of Primacide Generators and Primacide B Fluid, Zerorez desires to commit to acquire all of its requirements, and to require Zerorez Franchisees to acquire all their requirements, for Primacide Generators and Primacide B Fluids from Licensor, and Licensor desires to commit to supply to Zerorez and Zerorez Franchisees all of their requirements for such Primacide Generators and Primacide B Fluids on the terms and conditions set forth in this Agreement and the Equipment Purchase Agreement; F. WHEREAS, this Agreement shall supersede, amend, restate and replace the Original Agreements and the license and rights granted hereunder (the "LICENSE") shall supersede, amend, restate and replace the Original License; and G. WHEREAS, in connection with the License granted hereby, Licensor and Licensee have agreed to enter into "Technology License Agreements," and escrow agreements with ZFA, Inc., a California non profit corporation ("ZFA") comprised of Zerorez Franchisees and established to protect the rights and interests of the Zerorez Franchisees in the event Licensor and/or Licensee for any reason fails to, or cannot, supply the Primacide Generators, the Primacide B Fluid, the 1 Zerorez Proprietary Technology, or the EAU Technology to the Zerorez Franchisees (collectively referred to herein as the "TECHNOLOGY LICENSE AGREEMENTS"); NOW, THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration described herein, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: SECTION I DEFINITIONS 1.1 "AGREEMENT" means this Agreement and all exhibits, schedules, certificates, lists, documentation and financial records, attached hereto or made a part hereof, including any addenda or amendments thereto. 1.2 "CIP SYSTEM" means a clean-in-place cleaning system in a commercial building or facility which uses a Primacide Generator to create Primacide B Fluid or Primacide A Fluid to be used exclusively on or within the building or facility where such fluids are being produced. 1.3 "EAU TECHNOLOGY" means patent, trademark, trade secret, copyright, mask work and other intellectual property rights, other than trademark or service mark rights, owned by Licensor, or licensed by Licensor with the right to grant sublicenses thereof and/or to utilize such rights related to Licensor's Primacide Generators and Primacide B Fluid in providing Franchise Services. 1.4 "EQUIPMENT PURCHASE AGREEMENT" shall mean the Master Equipment Purchase Agreement in the form of Exhibit "A", attached hereto and incorporated herein by reference, pursuant to which EAU agrees to sell to and Zerorez Franchisees (with respect to franchised outlets) and Zerorez (with respect to company-owned locations) agree to purchase from EAU the Primacide Generators for use in providing the Franchise Services. 1.5 "FRANCHISE" shall mean the franchise rights granted to a Zerorez Franchisee by Licensee. 1.6 "FRANCHISE AGREEMENTS" shall mean, collectively, the Zerorez Franchise Offering Circular and Franchise Agreements that outline and describe all of the terms and conditions between and among Zerorez as franchisor and the Zerorez Franchisees as franchisees. 1.7 "FRANCHISE SERVICES" shall mean and be limited to the use of Primacide B Fluid in conjunction with the Zerorez Proprietary Technology in the cleaning of carpets, furniture and rugs as described and contemplated as within U.S. Department of Labor, Occupational Safety & Health Administration, SIC Code 7217 Carpet & Upholstery Cleaning, and U.S. Census Bureau 2002 NAICS Definition 561740 Carpet & Upholstery Cleaning Services; the cleaning of stone, hardwood, concrete, tile, walls, linoleum and other flooring and countertop materials; and the cleaning of upholstery and soft fabric textiles. The term Franchise Services specifically excludes Restoration Services (as hereinafter defined), except to the extent any such services are incidental to any of the above described cleaning services. The Franchise Services may be offered by Zerorez and Zerorez Franchisees to residential and commercial customers throughout the United States and Canada, excluding commercial facilities with a CIP System, including, but not limited to, commercial buildings and facilities such as airports, hospitals, food or beverage processing facilities, grocery stores, department stores, etc. 1.8 "IMPROVEMENTS" means improvements, modifications, adaptations, revisions, enhancements, additions, or changes to any of the EAU Technology which is the subject of the License granted to Zerorez pursuant to this Agreement or to ZFA pursuant to the Technology License Agreements. 2 1.9 "LICENSE" means the license and rights granted to Licensee by Licensor under this Agreement to purchase and use, and to have the Zerorez Franchisees purchase and use, the Primacide Generators, the Primacide B Fluid and the EAU Technology applicable to such Primacide Generators and Primacide B Fluid for Franchise Services in the United States and in Canada during the Term of this Agreement. 1.10 "PRIMACIDE GENERATORS" means equipment or generators that produce Primacide B Fluid and Primacide A Fluid using EAU Technology. The term "Primacide Generators" does not include, and specifically excludes, all Primacide C Generators developed or owned by Licensor. 1.11 "PATENTS" shall mean any and all patents related to the Primacide Generators and the carpet cleaning system owned by Licensor applicable to the Franchise Services. Specifically, "Patents" includes, but is not limited to, Licensor's Patent Number 6,638,364. The term "Patents" does not include, and specifically excludes, all patents related to Primacide C Generators. 1.12 "RESTORATION SERVICES" shall mean, but not be limited to, the cleaning and remediation of both residential and commercial buildings or facilities after a man-made or natural disaster, including, but not limited to, water removal and dehumidification, fire, smoke and soot remediation and restoration, mold mitigation and remediation, removal and replacement of damaged building materials, cleaning of all surfaces affected by such types of disasters, all of which would be typically performed by licensed contractors. 1.13 "TECHNOLOGY LICENSE AGREEMENTS" shall mean those Technology License Agreements between and among Licensee, Licensor and ZFA for the benefit of the Zerorez Franchisees described in Recital G hereinabove. 1.14 "TERM" shall mean the License term described in this Agreement, including any mutually agreeable extensions or renewals thereof. 1.15 "ZEROREZ FRANCHISEE" shall mean any existing or future owner of a Zerorez Franchise under a Franchise Agreement or any person or entity whose Franchise Agreement was terminated for any reason, other than as a result of default by the Franchisee, but who continues to use a Primacide Generator, Primacide B Fluid or any EAU Technology. The term "Zerorez Franchisee" shall include (except for purposes of Section 8.2 of this Agreement) business entities affiliated with Zerorez which provide Franchise Services, whose primary business is carpet cleaning in the United States or Canada using Zerorez's name and working specifically within the scope of the Zerorez Franchise business model. 1.16 "ZEROREZ PROPRIETARY TECHNOLOGY" means patent, trademark, trade secret, copyright, mask work and other intellectual property rights, other than trademark or service mark rights, owned by Zerorez or licensed by Zerorez with the right to grant sublicenses thereof and/or to utilize such rights to provide the Zerorez goods and services to Zerorez Franchisees, such as cleaning techniques, designs and specifications for cleaning equipment, trucks and supplies, operating manuals, methods of operation, lists of third party suppliers and other business plans and procedures. SECTION II LICENSE GRANTED 2.1 GRANT OF LICENSE. During the Term of this Agreement, and any extensions and renewals thereof, Licensor hereby grants to Licensee, subject to the terms and conditions of this Agreement, the right to purchase and use, and to allow the Zerorez Franchisees to purchase and use, Primacide Generators and Primacide B Fluid, and to use the EAU Technology for providing Franchise Services in the United States and Canada. Each Primacide Generator covered by this Agreement shall be used by Zerorez or a Zerorez Franchisee only as part of a truck mounted cleaning system or in a stationary location for the purpose of generating 3 Primacide B Fluid to perform and complete the Franchise Services. Primacide Generators shall not be used by Zerorez or Zerorez Franchisees in any other manner or for any other purpose. Any Improvements, whether designed or invented by Licensor, Licensee or any Zerorez Franchisee, shall belong to Licensor during and after the Term of this Agreement but will immediately be deemed to be a part of the EAU Technology licensed pursuant to this Agreement and/or the Technology License Agreements. Licensee shall execute, and shall require Zerorez Franchisees to execute, such documents or instruments necessary and appropriate to transfer, convey and assign to Licensor all rights, title and interest in and to any such Improvements. 2.2 LICENSOR'S TRADEMARKS. During the Term of this Agreement, and any extensions and renewals thereof, Licensor hereby grants to Licensee, subject to the terms and conditions of this Agreement, the right to use, and to allow Zerorez Franchisees to use, those trademarks, service marks and/or patents of Licensor as are set forth on Schedule 2.2 attached hereto ("LICENSOR TRADEMARKS"). Licensee shall affix on all such trademarks, service marks and patents such registration designations listed on Schedule 2.2 and such other reasonable marks as Licensor shall from time to time request, by written notice to Licensee, to clearly indicate such marks or patents are owned and/or registered by Licensor. 2.3 USE RESTRICTIONS. The License granted to Licensee under this Agreement or to ZFA under the Technology License Agreement does not include or grant to Licensee or to any Zerorez Franchisee the following: (a) The right to sell Primacide A Fluid; (b) The right to sell Primacide B Fluid except incidental to the performance of Franchise Services; (c) The right to use any equipment or generator, other than Licensor's Primacide Generator, to produce Primacide B Fluid; or (d) The right to sell, transfer, loan, lease or sub-lease Licensor's Primacide Generators to any third party without Licensor's prior written consent. 2.4 EXCLUSIVITY. The License granted under this Agreement shall be an exclusive license during the term hereof for businesses providing Franchise Services, but whose primary business is carpet cleaning in the United States and Canada. Licensor will not, during the term hereof, grant to others the right to use Primacide Generators, Primacide B Fluid or EAU Technology in the United States or Canada involving Franchise Services, provided Licensee is not in default of any material term of this Agreement or the Equipment Purchase Agreement. Licensor reserves all rights in and to the EAU Technology and all uses thereof, including the right to grant others all uses thereof, not licensed to Licensee under this Agreement or to ZFA under the Technology License Agreements, specifically including, but not limited to, the following: (a) The use of Primacide Generators, Primacide B Fluid or Primacide A Fluid in CIP Systems worldwide to clean carpet and living surfaces in commercial buildings or facilities including, but not limited to, commercial facilities such as airports, hospitals, food or beverage processing facilities, grocery stores and department stores, which facilities house CIP Systems and which CIP Systems in such facilities do not include the Zerorez carpet and living surface cleaning system, i.e., a wand that disburses the Primacide B Fluid and vacuums the same in a single process as employed by Zerorez and the Zerorez Franchisees. (b) The use of Primacide Generators, Primacide B Fluid or Primacide A Fluid for Restoration Services worldwide, including carpet cleaning that is incidental to such Restoration Services. 4 2.5 REQUIREMENTS OBLIGATION. Licensee shall purchase and shall require the Zerorez Franchisees to purchase all of their respective requirements for Primacide Generators from Licensor during the Term hereof pursuant to the terms and conditions of the Equipment Purchase Agreement. Zerorez, and Zerorez Franchisees pursuant to the terms of the Franchise Agreements, shall be required to use only the Primacide Generators to perform the Franchise Services. Notwithstanding the foregoing, Zerorez and the Zerorez Franchisees shall be entitled to purchase Primacide Generators and Primacide B Fluid from ZFA, Licensee and/or their permitted contractors upon Licensor's breach of its obligations to supply Primacide Generators required by Zerorez Franchisees for any reason, as set forth in the Technology License Agreements between ZFA and Licensor and in Section 2.6 below. 2.6 MANUFACTURING AND SALE RIGHTS OF LICENSEE. In the event Licensor and/or its successors and assigns cease operations, or otherwise discontinues supplying Primacide Generators and/or Primacide B Fluid to Licensee or Zerorez Franchisees for any reason other than a default or breach of this Agreement by Licensee, Licensee shall then have a non-exclusive license to use, and have Licensee's employees and permitted contractors use, the EAU Technology to produce and sell the Primacide Generators and Primacide B Fluid to Zerorez Franchisees. With respect to such non-exclusive license, Licensor and Licensee will have rights and obligations reasonably equivalent to those of Licensor and ZFA under Sections 3 through 10 of their Technology License Agreement. The non-exclusive license provided for in this Section 2.6 will apply only upon Licensor's inability or unwillingness to provide Primacide Generators to Licensee or to Zerorez Franchisees and Licensee is not in default of any material term of this Agreement or the Equipment Purchase Agreement. 2.7 RIGHTS OF FRANCHISEES. Regardless of any breach of this Agreement by Licensee, each Zerorez Franchisee, so long as it remains a Zerorez Franchisee, shall have a non-exclusive right, which will continue after any termination under Section III below, to purchase Primacide Generators and/or Primacide B Fluid from Licensor upon the purchase, warranty and other terms set forth in this Agreement and to use Primacide Generators, the Primacide B Fluid generated by Primacide Generators and the EAU Technology in connection with the performance of Franchise Services in the United States and CANADA. SECTION III TERM AND TERMINATION 3.1 TERM. This Agreement is effective as of January 1, 2007 and unless sooner terminated will continue in force until December 31, 2011 (the "TERM"). If this Agreement is terminated for any reason whatsoever, whether by expiration of its Term or otherwise, all future and continuing rights and obligations hereunder will terminate, except: (a) The Parties obligation to maintain the confidentiality of Confidential Materials; (b) Any claim or cause of action as of the date of termination will survive and remain in full force and effect until such rights and obligations are fully discharged or the applicable statute of limitations has expired; and (c) All rights and obligations of the Parties under Section VI relating to indemnification, Section VII relating to infringement, Section VIII relating to miscellaneous provisions and this Section III shall survive the termination of this Agreement. 3.2 AUTOMATIC EXTENSIONS. The Term of this Agreement shall be automatically extended for three (3) succeeding terms of five (5) years each, absent a premature termination pursuant to Section 3.3 below. 3.3 PREMATURE TERMINATION. This Agreement may be terminated prior to the expiration of its Term, or any extension or renewal thereof, as follows: 5 (a) If either Party fails to meet any material obligation or duty hereunder or is in default hereunder, the non-defaulting Party shall have the right to terminate this Agreement upon giving sixty (60) days written "Notice of Intent to Terminate," specifying such failure, breach, or default to the defaulting Party. If the defaulting Party fails to make any payment in arrears, or otherwise fails to cure the breach or default within such sixty (60) day period, then the non-defaulting Party may send a written "Notice Of Termination" to the defaulting Party, whereupon this Agreement shall terminate thirty (30) days after the date of such Notice of Termination. (b) Either Party may terminate this Agreement upon thirty (30) days written notice in the event that any warranty, covenant, or representation made by the other Party under this Agreement or any other materials provided by the other Party, or any related agreement executed in connection with this Agreement is determined by a court of competent jurisdiction to have been willfully false in any material respect when made or furnished. Such a representation shall be considered "willful" if it is made by either Party not in good faith and without a reasonable belief that the representation was true. 3.4 EFFECT OF TERMINATION; LICENSEE'S CONTINUED RIGHTS IN THE EVENT OF LICENSOR DEFAULT OR BANKRUPTCY. Nothing herein shall be construed to release either Party of any obligation which matured prior to the effective date of a termination of this Agreement or which may continue beyond such termination. Licensor acknowledges and agrees that this Agreement and all rights and licenses granted under or pursuant to this Agreement by Licensor to Licensee are, and shall otherwise be deemed to be licenses to rights to intellectual property. Licensor agrees that Licensee, as a licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under applicable bankruptcy, insolvency or other similar law, including specifically but without limitation, Section 365(n) of the U.S. Bankruptcy Code, as amended. Licensor further agrees that, in the event of a Licensor default, or a dissolution or other discontinuance of Licensor's business operations or existence, or the commencement of a voluntary or involuntary proceeding against Licensor seeking liquidation, rehabilitation, reorganization, conservatorship or other relief with respect to it or its assets under any bankruptcy, insolvency or other similar law, Licensee, in addition to its right to terminate this Agreement, shall also have the right, at its election, to retain all of its rights under this Agreement. In such event, Licensee shall further have the right to either require Licensor to assign to Licensee any or all manufacturing, supply, license or other agreements with third parties to which Licensor is a party relating to the EAU Technology and/or the Primacide Generators and Primacide B Fluid (as well as all related product regulatory approvals, permits and licenses to the extent legally transferable or to enter into its own agreements with such third parties and obtain its own regulatory approvals, permits and licenses). Licensee and ZFA shall also be entitled to all of their other remedies under the Technology License Agreements in such event. SECTION IV TERMS AND CONDITIONS OF LICENSE 4.1 USE CONDITIONS. Licensee shall conduct its business relative to Primacide Generators and the Primacide B Fluid, and Licensee shall require the Zerorez Franchisees to conduct their respective businesses relative to Primacide Generators and the Primacide B Fluid, so as to maintain and increase the goodwill and reputation of Licensor, and shall conform to all laws, rulings, regulations and codes of ethics that are applicable to Licensee, its employees, representatives and /or agents and Zerorez Franchisees and their employees, representative and/or agents. Licensee shall use its commercially reasonable best efforts to require each Zerorez Franchisee to abide by and timely perform all of its duties and obligations under the Equipment Purchase Agreement. Additionally, Licensee shall, and Licensee shall require the Zerorez Franchises, to use the EAU Technology in conformance with all requirements of the Franchise Agreements, and to abide by and maintain such quality control policies as Licensor may, from time to time, reasonably deem necessary relative to the use of the EAU Technology, including for example, but not limited to, the following: 6 (a) the use of each Primacide Generator for the operation of not more than five (5) truck mounted cleaning systems; (b) such packaging requirements as may be necessary to protect the Licensor Trademarks; (c) safety standards, practices and procedures as Licensor may deem reasonable and necessary, including procedures for disposal of waste water; and (d) any other quality controls deemed reasonably necessary by Licensor to protect the EAU Technology, Licensor Trademarks and goodwill of Licensor. 4.2 ORDERING PROCESS. Licensee and Zerorez Franchisees shall place orders with Licensor for Primacide Generators in writing, in accordance with the terms and conditions of the Equipment Purchase Agreement. 4.3 PURCHASE PRICE AND TERMS. The purchase price to be paid by Zerorez and Zerorez Franchisees to Licensor for the Primacide Generators and the related payment terms shall be as set forth in the Equipment Purchase Agreement. SECTION V CONFIDENTIALITY, NON-COMPETITION 5.1 CONFIDENTIAL INFORMATION. The Parties agree that this Agreement and all of the terms contained herein shall not be disclosed to any third party, excluding the Zerorez Franchisees, ZFA and its agents, association members and managers or any other party that is involved in the management and execution of the Technology License Agreements, without the prior written consent of the other Party, except to the extent required to be disclosed by law. Furthermore, each of the Parties agrees to keep confidential all of the other Party's confidential information, and strategies related to the its business, sales and marketing materials, distribution methods, manufacturing information, trade secrets and all technical information relating to the EAU Technology (the "CONFIDENTIAL MATERIALS"). The Parties hereto agree and stipulate that as between them the Confidential Materials are important, material and confidential and materially affect the effective and successful conduct of Licensor's business. SECTION VI INDEMNIFICATION, ASSUMPTION OF THIS AGREEMENT 6.1 MUTUAL INDEMNIFICATION. Each Party agrees to indemnify, hold harmless and defend the other Party and its respective officers, directors, employees, representatives, consultants and agents from and against any all third party's (including governmental and/or regulatory bodies or agencies) claims, demands, liabilities, lawsuits, judgments and any other action, arising out of, related to or associated with the such Party's actions, inactions, representations and conduct in connection with or related to this Agreement. 6.2 ASSUMPTION. Should Licensor, at any time during the Term of this Agreement or any extension thereof, sell all or substantially all of its assets to a third party ("THIRD PARTY COMPANY"), then Licensor shall use its commercially reasonable best efforts to cause the Third Party Company acquiring all or substantially all of the Company's assets, to assume this Agreement and affirm its validity, enforceability and legality for the then remaining Term and any extension(s) thereof, without any change, modification, interruption or alteration to this Agreement and the terms and conditions contained herein. Should the Third Party Company not assume this Agreement with all of its terms and conditions, then the terms and conditions of the Technology License 7 Agreements shall apply and govern the rights and obligations of Licensee, ZFA and the Zerorez Franchisees. 6.3 DISCLAIMER OF LIABILITY. Except as expressly set forth in this Agreement (or resulting from any breach by Licensor under this Agreement), Licensor shall have no liability to Licensee, the Zerorez Franchisees or any other third party individual or entity, based upon any injury, loss or damage of any kind or nature, sustained by or any damage assessed against, or any other liability incurred or imposed upon Licensee, a Zerorez Franchisee or any other third party, arising out of, connected with or resulting from Licensee's or any Zerorez Franchisee's use of the Primacide Generators, Primacide B Fluid or any other EAU Technology or equipment provided by Licensor pursuant to this Agreement, the Equipment Purchase Agreement or the Technology License Agreements (a "Claim"). Licensee shall indemnify, hold harmless and defend Licensor and its officers, directors, employees, representatives, consultants and agents from and against any losses, costs, expenses, liabilities, or damages of any kind or nature, including attorney fees and costs, incurred or imposed upon Licensor arising out of, connected with or resulting from any such Claim, except to the extent the liability for such Claim has been determined by a court of competent jurisdiction to have been caused by the willful misconduct or gross negligence of Licensor or a breach of this Agreement by Licensor. 6.4 NO ASSIGNMENT BY LICENSEE. Licensee may not assign any of its rights or delegate any of its duties under this Agreement without the prior written consent of Licensor, which consent may not be unreasonably withheld or delayed. Despite such consent, no assignment by Licensee shall release the Licensee of any of its obligations to be performed under this Agreement. Any attempted assignment or delegation in violation of this provision shall be void, of no force and effect and shall entitle Licensor to terminate this Agreement. As used in this provision, "assignment" and "delegation" shall mean any sale, gift, pledge, hypothecation, encumbrance, or other transfer of all or any portion of the rights, obligations or liabilities in or arising from this Agreement to any person or entity, whether by operation of law or otherwise, and regardless of the legal form of the transaction in which the attempted assignment occurs. 6.5 ASSIGNMENT BY LICENSOR. The Licensor may assign all or part of its rights under this Agreement and may delegate all or part of its duties under this Agreement provided that any assignee assumes this Agreement and expressly affirms in writing its validity, enforceability and legality for the then remaining Term and any extension or renewal thereof, without any change, modification, interruption, or alteration to this Agreement and the terms and conditions contained herein. SECTION VII INFRINGEMENT 7.1. INFRINGEMENT. In the event that either Party shall learn of a material infringement of any patent or misappropriation of any technology comprising the Primacide Generator, the EAU Technology, the Zerorez Proprietary Technology or any other related technology under this Agreement, that Party shall immediately call the other Party's attention thereto in writing and shall provide such other Party with reasonable evidence of such infringement or misappropriation. The Parties shall cooperate with each other, and shall use their commercially reasonable best efforts, to terminate such infringement or misappropriation without litigation. If the efforts of the Parties are not successful in abating the infringement or misappropriation within thirty (30) days after the infringement or misappropriation comes to the attention of Licensor, Licensor may in its sole discretion, and at its sole expense, take such further actions, including (without limitation) bringing a legal action, as it deems necessary and appropriate to enforce its rights and prevent unauthorized or illegal infringement or misappropriation that is or would be adverse to Licensee or Zerorez Franchisees. Licensor shall be entitled to any monetary recovery from such an action. 7.2 LICENSEE RIGHTS. If Licensor elects not to prosecute any such infringement or misappropriation, Licensee shall have the right to prosecute the same in its own name, and at its sole expense. Each non-prosecuting Party agrees 8 to cooperate with and assist the other in a reasonable manner in any such proceeding. This cooperation and assistance shall include (without limitation), if necessary in order for such prosecution to occur, agreeing to be joined in the prosecution as a nominal party and/or assigning to the prosecuting Party rights necessary to prosecute the matter. Any recovery from any of the foregoing proceedings shall belong to the Party bringing and paying for the proceeding, provided that, if a joint prosecution is undertaken by the Parties, the expenses and recovery, if any, shall be shared equally or as the Parties agree between themselves. Notwithstanding the foregoing, should Licensee elect to prosecute an infringement claim against a third party hereunder, and Licensor fails to provide its cooperation and assistance, Licensor shall reimburse Licensee for its reasonable attorneys' fees and costs of any such action should a court of competent jurisdiction find in favor of Licensee with respect to such trademark and/or patent infringement litigation. 7.3 COOPERATION. Each Party agrees to cooperate fully with the other in litigation proceedings instituted hereunder and, upon request of the Party bringing suit, the other Party shall make available to the Party bringing suit all relevant records, papers, information, samples, specimens, and the like which may be relevant and in its possession. The Party bringing the suit (or if brought jointly, Licensor) shall have the right to control such litigation. In the event a court of competent jurisdiction from which no appeal has or can be taken determines that one or more patents covering the Primacide Generator or any related EAU Technology is invalid or unenforceable, Licensee may terminate this Agreement. Licensor shall not, however, be required to refund any payments theretofore paid Licensor by Licensee or Zerorez Franchisees. SECTION VIII MISCELLANEOUS PROVISIONS The following miscellaneous provisions are an integral part of this Agreement. 8.1 BINDING OBLIGATION. This Agreement shall inure to the benefit of and constitute a binding obligation upon the contracting parties, their respective heirs, legal representatives and permitted assigns. 8.2 MODIFICATIONS. This Agreement may not be modified or amended except by an instrument in writing signed by the Parties hereto. Notwithstanding the foregoing, this Agreement may not be modified or amended in such a manner as to have a substantial negative effect on the Zerorez Franchisees without the prior written consent of (a) more than fifty percent (50%) of the Zerorez Franchisees at that time; and (b) Zerorez Franchisees whose Franchises together have accounted for more than fifty percent (50%) of the gross revenues of all Franchises for the immediately preceding twelve (12) complete calendar months ending at least 30 days prior to such amendment. 8.3 THIRD PARTY BENEFICIARIES. Zerorez Franchisees shall be third party beneficiaries of this Agreement and are entitled to enforce their rights as set forth in this Agreement. 8.4 HEADINGS. The headings used in this Agreement are inserted for reference purposes only and shall not be deemed to limit or affect in any way, the meaning or interpretation of any of the terms or provisions of this Agreement. 8.5 SEVERABILITY. The provisions of this Agreement are severable, and should any provision hereof be void, voidable, unenforceable, or invalid, such a void shall not affect any other portion or provision of this Agreement. 8.6 WAIVER. Any waiver by any Party hereto of any breach of this Agreement of any kind or character whatsoever by the other Party, whether such waiver is direct or implied, shall not be construed as a continuing waiver or consent to any subsequent breach of this Agreement on the part of the other Party. 9 8.7 APPLICABLE LAW. This Agreement shall be interpreted, construed, and enforced according to the laws of the State of Georgia. 8.8 ATTORNEYS' FEES. In the event any action or proceeding is brought by any Party under this Agreement, the prevailing Party shall be entitled to recover attorneys' fees and costs in such an amount as a court may adjudge reasonable. 8.9 MEDIATION. If any dispute arises under this Agreement, the Parties shall negotiate in good faith to settle such dispute. If the Parties cannot resolve such dispute themselves, then either Party may submit the dispute to non-binding mediation by a mediator approved by both Parties. The Parties shall both cooperate with the mediator. 8.10 VENUE AND JURISDICTION. In the event of any legal action or proceeding for the interpretation or enforcement of this Agreement, each of the Parties agrees to submit to the exclusive jurisdiction of the state court sitting in the Superior Court of the State of Georgia, Fifth Judicial District, Atlanta Judicial Circuit in any such proceeding, and agrees that all claims in any such proceeding may be heard and determined in such court. Each Party also agrees not to bring any action or proceeding in any other court. Each of the Parties consents to venue in such jurisdiction, waives any defense of inconvenient forum to the maintenance of any proceeding so brought and waives any bond, surety or other security that might be required of any other Party with respect thereto. 8.11 ENTIRE AGREEMENT. This Agreement together with the Equipment Purchase Agreement represents the entire agreement between and among the Parties and supersedes any and all prior oral and/or written agreements between them with respect to the subject matter of this Agreement and the Equipment Purchase Agreement, provided that the Parties' obligations relating to any Primacide Generators previously sold under the Original License shall continue in effect. 8.12 RECITALS. The Recitals set forth at the beginning of this Agreement of any matters or facts shall be deemed to be representations and warranties of the truthfulness thereof and shall be deemed a part of this Agreement. 8.13 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The Parties authorize each other to detach and combine original signature pages and consolidate them into a single identical original. Any one of such completely executed counterparts shall be sufficient proof of this Agreement. 8.14 FURTHER ASSURANCES. The Parties to this Agreement shall promptly execute and deliver any and all additional documents, instruments, notices, and other assurances, and shall do any and all other acts and things, reasonably necessary to carry out and effectuate the terms of this Agreement. Each Party agrees that such Party will not do or fail to do anything, directly or indirectly, that will interfere with or adversely affect any of the rights provided for herein or that would interfere with the performance of this Agreement by the other Party. 8.15 GENERAL INTERPRETATION. The terms of this Agreement have been negotiated by the Parties hereto and the language used in this Agreement shall be deemed to be the language chosen by the Parties hereto to express their mutual intent. This Agreement shall be construed without regard to any presumption or rule requiring construction against the Party causing such instrument or any portion thereof to be drafted, or in favor of the Party receiving a particular benefit under the Agreement. No rule of strict construction will be applied against any Party. 10 8.16 SPECIFIC PERFORMANCE. The Parties agree that irreparable damage will result if this Agreement is not performed in accordance with its terms, and the Parties agree that any damages available at law for a breach of this Agreement would not be an adequate remedy. Therefore, the provisions hereof and the obligations of the Parties hereunder shall be enforceable by a decree of specific performance, and appropriate injunctive relief may be applied for and granted in connection therewith. Such remedies and all other remedies provided for in this Agreement shall, however, be cumulative and not exclusive and shall be in addition to any other remedies that a Party may have under this Agreement, at law or in equity. IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the day and year first above written. Licensor: ELECTRIC AQUAGENICS UNLIMITED, INC. By: /s/ Wade Bradley ------------------------------------ Wade Bradley Its: President & CEO Licensee: ZEROREZ FRANCHISING SYSTEMS, INC. By: /s/ James K. Stone ------------------------------------ James K. Stone Its: CEO 11 SCHEDULE 2.2 LIST OF TRADEMARKS, SERVICE MARKS AND PATENTS Trademarks: Empowered Water(TM) Empowering Water(TM) Primacide(TM) Primacide B(TM) Service Marks None Patents Patent # 6,638,364, effective October 28, 2003, describing Licensor's carpet cleaning system to clean and disinfect carpets, fabrics and hard surfaces. 12 EX-10.2 4 eau8k111606ex102.txt STOCK PURCHASE AGREEMENT EXHIBIT 10.2 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into as of January 10, 2007, by and among Electric Aquagenics Unlimited, Inc., a Delaware corporation whose address is 1464 West 40 South, Suite 200, Linden, Utah 84042 (the "Company"), and Peter F. Ullrich, whose address is 1800 NW 89th Place, Miami, FL 33172 (the "Purchaser"). R E C I T A L S WHEREAS, the Company is offering for sale 2,307,692 shares of its restricted common stock at the price of $1.30 per share (the "Shares") to Purchaser, an accredited investor as that term is defined in Regulation D, promulgated under the 1933 Act by the Securities and Exchange Commission; and WHEREAS, the Company desires to sell and Purchaser desires to acquire the Shares in a private transaction at the price and subject to the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the terms, conditions and other agreements set forth herein, the parties hereto agree as follows: SECTION 1. SALE AND PURCHASE 1.1 Sale and Purchase of Shares. Subject to the terms and conditions of this Agreement, the Company agrees to sell and issue to Purchaser, and Purchaser agrees to purchase from the Company, the Shares. 1.2 Purchase Price. The purchase price for the Shares shall be $2,999,999.60, or $1.30 per share (the "Purchase Price"). The Purchase Price shall be paid in cash at the Closing. SECTION 2. CLOSINGS The closing of the transactions contemplated by this Agreement (the "Closings") will occur simultaneously with the execution of this Agreement by both parties hereto. At the Closing, the Company shall deliver to Purchaser a certificate representing the Shares being sold by Company pursuant to this Agreement, and Purchaser shall pay to Company, by wire transfer of funds or by check, the full Purchase Price. SECTION 3. REPRESENTATIONS AND WARRANTIES OF COMPANY The authorized capital stock of EAU consists of 50,000,000 shares of $0.0001 par value common stock, of which, as of June 30, 2006, a total of 10,972,825 common shares had been issued and were outstanding. Company represents and warrants to Purchaser that it may properly issue the Shares and will transfer to Purchaser at each of the Closing, good and valid title to all of such Shares free and clear of any liens, pledges, security interests, adverse claims, equities, options, proxies, charges, encumbrances or restrictions other 1 than the restrictions set forth in the Company's Articles of Incorporation. The Company further represents and warrants that it has full power and authority to enter into this Agreement and to perform its obligations hereunder, and that the execution, delivery and performance of this Agreement by it has been duly authorized by all necessary action on its part. The Company further represents and warrants that, assuming that this Agreement is a valid and binding obligation of each of the other parties hereto, this Agreement is a valid and binding obligation of Company. SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER Purchaser represents and warrants to the Company as follows: 4.1 Non-Distributive Intent. The Shares being issued to Purchaser pursuant to this Agreement are being purchased for Purchaser's own account and are not being acquired by Purchaser with a view to the public distribution of them. Purchaser acknowledges that the Shares will be "restricted stock" under federal and state securities laws. Purchaser is not an underwriter, as such term is defined under the Securities Act. 4.2 Access of Information. Purchaser acknowledges that he is a shareholder of the Company, and that he possesses all the information he needs to determine whether to purchase the Shares. Purchaser is not relying on any representation of Company as to the value, business, or prospects of the Company in determining whether to purchase the Shares, and the Company expressly disclaims any such representation. 4.3 Sophistication and Knowledge. Purchaser has sufficient experience in financial and business matters to be capable of utilizing such information to evaluate the merits and risks of Purchaser's investment, and to make an informed decision relating thereto, and he has sufficient experience in financial and business matters that he is capable of utilizing such information to evaluate the merits and risks of the investment, and to make an informed decision relating thereto. 4.4 Evaluation of Risks. Purchaser has evaluated the risks of this investment in the Company and has determined that the investment is suitable for Purchaser. Purchaser has adequate financial resources for an investment of this character, and at this time he could bear a complete loss of his investment. 4.5 Suitability. Purchaser has (i) a net worth (or joint net worth with spouse) of at least $1,000,000, or (ii) an annual gross income during the previous two years, and reasonably expects to have gross income in the current year, of at least $200,000 (or $300,000 collectively with spouse), or (iii) otherwise meets the criteria for being an "Accredited Investor" as defined in Rule 501 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933, as amended (the "1933 Act"), or (iv) is the beneficiary of a fiduciary account, or, if the fiduciary of the account or other party is the donor of funds used by the fiduciary account to make this investment, then such donor, who meets the requirements of either (i), (ii) or (iii) above. 2 4.6 No Federal or State Registration. Purchaser understands that the Shares are not being registered under the 1933 Act, and that the certificates representing the Shares will bear a legend substantially as follows: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE ACT") OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE ("THE LAW"). SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NEITHER SAID SHARES NOR ANY INTEREST THEREIN MAY BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT AND QUALIFICATION UNDER THE LAW OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED AS TO SAID SALE OR OFFER." 4.7 Indemnification. Purchaser hereby agrees to indemnify and hold harmless the Company and the Company and all of their affiliates, attorneys, accountants, employees, officers, directors, shareholders and agents from any liability, claims, costs, damages, losses or expenses incurred or sustained by them as a result of Purchaser's representations and warranties herein being untrue or inaccurate, or because of a breach of this agreement by Purchaser. 4.8 Acknowledgment of Investment Risks. Purchaser hereby understands and acknowledges the risk factors relating to this investment, including but not limited to those described in the Information, and that the purchase of the Shares is highly speculative and subject to a high degree of risk. SECTION 5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES The representations and warranties of each party hereto will survive and will not be affected by the Closing. SECTION 6. MISCELLANEOUS 6.1 Further Assurances. Following the Closing, the Company will furnish to Purchaser other documents as Purchaser may reasonably request for the purpose of carrying out or evidencing the transactions contemplated hereby. 6.2 Attorneys' Fees and Costs. The prevailing party of any legal proceeding arising out of or resulting from this Agreement will be entitled to recover its costs and fees, including, but not limited to, reasonable attorneys' fees and post judgment costs, from the other party. 6.3 Choice of Law and Venue. This Agreement is made and entered into in the State of Georgia. It is the intention of the parties that this Agreement will be subject to and will be governed by and construed in accordance with the internal 3 laws of the State of Georgia without reference to its choice of law provisions; provided, however, that questions or corporate law shall be governed by the law of the state of the Company's incorporation. Any legal proceeding arising out of this Agreement will be brought only in a state of federal court of competent jurisdiction sitting in Fulton County, Georgia, and all parties hereto agree that venue will lie therein and agree to submit themselves to the personal jurisdiction of such court. 6.4 Successors and Assigns. This Agreement will be binding upon the parties hereto and their respective heirs, successors and assigns, if any, and will inure to the benefit of the parties hereto and their respective heirs, successors and assigns, if any. 6.5 Severability. In the event that any provision of this Agreement, or the application of such provision to any person or set of circumstances, will be determined to be invalid, unlawful or unenforceable to any extent at any time after the Closings, or either of them, the remainder of this Agreement, and the application of such provision to persons or circumstances other than those as to which it is determined to be invalid, unlawful or unenforceable, will not be affected and will continue to be enforceable to the fullest extent permitted by law. 6.6 Waiver. No failure or delay on the part of any party hereto in the exercise of any power, right or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such power, right or privilege preclude any other or further exercise thereof or of any other power, right or privilege. 6.7 Entire Agreement. This Agreement sets forth the entire understanding of the parties hereto and supersedes all prior agreements and understandings among the parties relating to the subject matter hereof. 6.8 Parties in Interest. None of the provisions of this Agreement or of any other document relating hereto is intended to provide any rights or remedies to any person (including, without limitation, any employees or creditors of the Company) other than the parties hereto and their respective heirs, successors and assigns, if any. 6.9 "Person." The term "person" as used herein will include any individual, corporation, general partnership, limited partnership, joint venture, association, trust, organization, business entity, government (or political subdivision thereof) or governmental agency. 6.10 Counterparts. This Agreement may be executed in several counterparts, each of which will constitute an original and all of which, when taken together, will constitute one agreement. (Signatures appear on following page) 4 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. COMPANY: ELECTRIC AQUAGENICS UNLIMITED, INC. By: /s/ Wade Bradley ---------------------------------- Wade Bradley Chief Executive Officer PURCHASER: By: /s/ Peter F. Ullrich ---------------------------------- Peter F. Ullrich -5- EX-10.3 5 eau8k111606ex103.txt WAIVER LETTER EXHIBIT 10.3 Water Science, LLC 1800 NW 89th Place Miami, Florida 33172 January 10, 2007 Electric Aquagenics Unlimited, Inc. 1464 West 40 South, Suite 200 Lindon, Utah 84042 Re: Limited Waiver of Section 2.4 of Warrant Agreement dated September 16, 2005, Section 2.4 of Warrant Agreement dated May 1, 2006, and Section 9 of Senior Secured Convertible Promissory Note dated September 16, 2005 Gentlemen: Reference is made to (a) the Warrant Agreement, dated as of September 16, 2005 by and between Water Science, LLC (the "Investor") and Electric Aquagenics Unlimited, Inc. (the "Company") (the "September 16, 2005 Warrant"), (b) the Warrant Agreement, dated as of May 1, 2006 by and between the Investor and the Company (the "May 1, 2006 Warrant"), and (c) the Senior Secured Convertible Promissory Note, dated as of September 16, 2005 by and between the Investor and the Company (the "Senior Secured Convertible Note"). The Company has proposed to sell and issue 2,307,692 shares of its $0.0001 par value common stock to Peter F. Ullrich ("Ullrich") for a purchase price of $1.30 per share. Investor hereby agrees that the sales and issuance of the shares of stock to Ullrich for $1.30 per share will not cause an adjustment in (a) the Conversion Price of $3.00 pursuant to Section 9 under the Senior Secured Convertible Note, (b) the Purchase Price pursuant to Section 2.4 of the September 16, 2005 Warrant Agreement, or (c) the Purchase Price pursuant to Section 2.4 of the May 1, 2006 Warrant Agreement. Very truly yours, WATER SCIENCE, LLC /s/ Peter F. Ullrich Peter F. Ullrich Manager -----END PRIVACY-ENHANCED MESSAGE-----