Document:

SECURITY
      AGREEMENT

     

    THIS
      SECURITY AGREEMENT (this “Agreement”)
      is
      entered into as of September 16, 2005 and is made by and among Electric
      Aquagenics Unlimited, Inc., a Delaware corporation (“Aquagenics”),
      Aquagen International, Inc., a Nevada corporation (“Aquagen
      International”
      and
      together with Aquagenics, the “Grantors”)
      and
      Water Source, LLC, a Florida limited liability company (“Secured
      Party”).

     

    RECITALS

     

    WHEREAS,
      Aquagenics has executed in favor of Secured Party a Senior Secured Convertible
      Promissory Note dated as of even date herewith (the “Note”),
      pursuant to which Aquagenics borrowed an aggregate of $3,000,000 (the
“Loan”)
      from
      Secured Party, subject to the terms and conditions thereof; 

     

    WHEREAS,
      each of
      the Grantors has determined that (i) its execution, delivery and performance
      of
      this Agreement directly and indirectly benefit, and are within the corporate
      purses and in the best interests of the Grantors; and (ii) the granting of
      this
      security interest to the Secured Party will strengthen the Grantors and other
      members of the group; and

     

    WHEREAS,
      it is a
      condition to the obligation of Secured Party under the Note that the Grantors
      enter into this Agreement to grant to Secured Party a security interest in
      all
      of the Grantors’ personal property now owned or hereafter acquired.

     

    NOW,
      THEREFORE, in
      consideration of the premises and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, and in order to induce
      Secured Party to make the Loan under the Note, each of the parties hereto hereby
      agrees as follows:

     

    AGREEMENT

     

    ARTICLE
      I 

    SECURITY
      INTEREST

     

    1.1 Defined
      Terms.
      All
      terms used in this Agreement and the recitals hereto which are defined in the
      Note or in Article 9 of the UCC (as such term is defined below) and which are
      not otherwise defined herein shall have the same meaning herein as set forth
      therein; provided that terms used herein which are defined in the UCC as in
      effect in the State of Delaware as of the date hereof shall continue to have
      the
      same meaning notwithstanding any replacement or amendment of such statute except
      as Secured Party may otherwise determine in its sole discretion. In this
      Agreement the computation of periods of time from a specified date to a later
      specified date, the word “from” means “from and including” and the words “to”
      and “until” each mean “to but excluding.” Except as otherwise explicitly
      specified to the contrary or unless the context clearly requires otherwise
      (a)
      the capitalized term “Section” refers to sections of this Agreement; (b)
      references to a particular Section include all subsections thereof; (c) the
      word
“including” shall be construed as “including without limitation”; and (d)
      references to a particular Person include such Person’s successors and assigns
      to the extent not prohibited by this Agreement:

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (a) “Account
      Debtor”
      shall
      mean any “account debtor,” as such term is defined in Section 9-102(3) of the
      UCC.

     

    (b) “Accounts”
      shall
      mean any “accounts,” as such term is defined in Section 9-102(2) of the
      UCC, and, in any event, shall include, without limitation, all accounts
      receivable, book debts and other forms of obligations, now owned or hereafter
      received or acquired by or belonging or owing to the Grantors (including,
      without limitation, under any trade names, styles or divisions thereof) arising
      out of Inventory sold by the Grantors and all of the Grantors’ rights in, to and
      under all purchase orders or receipts now owned or hereafter acquired by it
      for
      Inventory, and all of the Grantors’ rights to any goods represented by any of
      the foregoing (including, without limitation, unpaid seller’s rights of
      rescission, replevin, reclamation and stoppage in transit and rights to
      returned, reclaimed or repossessed goods), and all moneys due or to become
      due
      to the Grantors under all contracts for the sale of Inventory by the Grantors
      (whether or not yet earned by performance on the part of the Grantors), now
      in
      existence or hereafter occurring, including, without limitation, the right
      to
      receive the proceeds of said purchase orders and contracts, and all collateral
      security and guarantees of any kind given by any Person with respect to any
      of
      the foregoing.

     

    (c) “Collateral”
      shall
      have the meaning assigned to such term in Section 1.2 of this
      Agreement.

     

    (d) “Copyrights”
      shall
      mean all right title and interest of the Grantors, in and to all copyrights,
      whether domestic or foreign or registered or unregistered, as well as all
      Licenses, the right to sue for past, present and future infringements of any
      thereof, all rights corresponding thereto throughout the world, all extensions
      and renewals of any thereof and all proceeds of the foregoing, including
      licenses, royalties, income, payments, claims, damages and proceeds of
      suit.

     

    (e) “Copyright
      License”
      shall
      mean any written agreement of the Grantors in which the Grantors now have or
      hereafter acquire any rights granting any right to use any work covered by
      any
      Copyright or Copyright registration.

     

    (f) “Equipment”
      shall
      mean any “equipment,” as such term is defined in Section 9-102(33) of the UCC,
      now owned or hereafter acquired manufactured, developed, marketed, sold,
      transferred, commercialized or distributed by the Grantors wherever located,
      and, in any event, shall include, without limitation, all machinery, equipment,
      molds, furnishings, fixtures, motor vehicles and computers and other electronic
      data-processing and other office equipment now owned or hereafter acquired
      manufactured, developed, marketed, sold, transferred, commercialized or
      distributed by the Grantors and wherever located, and any and all additions,
      substitutions and replacements of any of the foregoing, wherever located,
      together with all attachments, components, parts, equipment and accessories
      installed thereon or affixed thereto.

     

    (g) “Event
      of Default”
      shall
      have the meaning assigned to such term in Article V of this
      Agreement.

     

    
      
         

      

      
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    (h) “General
      Intangibles”
      shall
      mean any “general intangibles,” as such term is defined in Section 9-102(42) of
      the UCC, now owned or hereafter acquired by the Grantors, to or under any
      Account, Inventory, causes of action, franchises, tax refund claims, customer
      lists, Trademarks, Patents, rights in intellectual property, Licenses, permits,
      copyrights, trade secrets, proprietary or confidential information, inventions
      and discoveries (whether patented or patentable or not) and technical
      information, procedures, designs, knowledge, know-how, software, data bases,
      business records data, skill, expertise, experience, processes, models,
      drawings, materials and records, goodwill, all claims under guarantees, security
      interests or other security held by or granted to the Grantors to secure payment
      of the Accounts by an account debtor obligated thereon, all rights of
      indemnification and all other intangible property of any kind and
      nature.

     

    (i) “Inventory”
      shall
      mean any “inventory,” as such term is defined in Section 9-102(48) of the UCC,
      now owned or hereafter acquired manufactured, developed, marketed, sold,
      transferred, commercialized or distributed by the Grantors or other inventory
      now owned or hereafter acquired by the Grantors wherever located, and which
      include such products held for sale by the Grantors, or lease or are furnished
      or are to be furnished under a contact of service, or the processing, packaging,
      delivery or shipping of the same.

     

    (j) “License”
      shall
      mean any Patent License, Trademark License, Copyright License or other license
      as to which a security interest has been granted hereunder.

     

    (k) “License
      Agreement”
      means
      the Licence Agreement dated June 18, 2002 by and between the University of
      Georgia Research Foundation, Inc. and Aquagenics.

     

    (l) “License
      and Distribution Agreement”
      means
      the License and Distribution Agreement dated as of even date herewith by and
      between Aquagenics and Secured Party. 

     

    (m) “Patent
      License”
      shall
      mean any written agreement of the Grantors in which the Grantors now have or
      hereafter acquire any rights to make, use, sell and/or practice any invention
      or
      discovery that is the subject matter of a Patent.

     

    (n) “Patent”
      or
“Patents”
      shall
      mean all right, title and interest of the Grantors, to and under (i) all letters
      patent of the United States or any other country and all applications for
      letters patent of the United States or any other country, (ii) all reissues,
      continuations, continuations-in-part, divisions, reexaminations or extensions
      of
      any of the foregoing and (iii) all inventions disclosed in and claimed in the
      Patents and any and all trade secrets and know how related thereto.

     

    (o) “Person”
      shall
      mean an individual, partnership, corporation, limited liability company, joint
      venture, trust, unincorporated organization, or a government or agency or
      political subdivision thereof.

     

    (p) “Proceeds”
      shall
      mean “proceeds,” as such term is defined in Section 9-102(64) of the UCC,
      and, in any event, shall include, without limitation, (i) any and all proceeds
      from the sale, transfer or disposition by the Grantors of the Inventory, or
      any
      insurance indemnity, warranty or guaranty payable to the Grantors from time
      to
      time with respect to any of the Collateral, (ii) any and all payments
      (in
      any form whatsoever) made or due and payable to the Grantors from time to time
      in connection with any requisition, confiscation, condemnation, seizure or
      forfeiture of all or any part of the Collateral by any governmental body,
      authority, bureau or agency (or any person acting under color of governmental
      authority), (iii) any claim of the Grantors against third parties (a) for past,
      present or future infringement of any Copyright or Copyright License, (b) for
      past, present or future infringement of any Patent or Patent License or (c)
      for
      past, present or future infringement or dilution of any Trademark or Trademark
      License or for injury to the goodwill associated with any Trademark, Trademark
      registration or Trademark licensed under any Trademark License, (iv) any and
      all
      other amounts from time to time paid or payable under or in connection with
      any
      of the Collateral and (v) the following types of property acquired with cash
      proceeds: Accounts, Documents, General Intangibles, Equipment and
      Inventory.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (q) “Subscription
      Agreement”
      shall
      mean the Subscription Agreement dated as of even date herewith by and between
      Aquagenics and Secured Party. 

     

    (r) “Trademark
      License”
      shall
      mean any written agreement of the Grantors in which the Grantors now have or
      hereafter acquire any rights to use any Trademark or Trademark
      registration.

     

    (s) “Trademark”
      or
“Trademarks”
      shall
      mean all right, title and interests of the Grantors in, to and under (i) all
      trademarks, trade names, corporate names, business names, trade styles, Internet
      domain names, service marks, logos, other source or business identifiers, prints
      and labels on which any of the foregoing have appeared or appear, designs and
      general intangibles of like nature, now existing or hereafter adopted or
      acquired, including all common law rights and all registrations and recordings
      thereof, and all applications in connection therewith, including, without
      limitation, registrations, recordings and applications in the United States
      Patent and Trademark Office or in any similar office or agency of any State
      of
      the United States or any other country or any political subdivision thereof,
      (ii) all extensions or renewals thereof and (iii) the goodwill symbolized by
      any
      of the foregoing.

     

    (t) “Trade
      Secrets”
      shall
      mean all right, title and interest of the Grantors in, to and under all common
      law and statutory trade secrets and all other confidential or proprietary or
      useful information and all know-how, whether or not such Trade Secret has been
      reduced to a writing or other tangible form, including all documents and things
      embodying, incorporating or referring in any way to such Trade Secret, all
      Trade
      Secret licenses and including the right to sue for and to enjoin and to collect
      damages for the actual or threatened misappropriation of any Trade Secret and
      for the breach or enforcement of any such Trade Secret license.

     

    (u) “UCC”
      shall
      mean the Uniform Commercial Code as the same may, from time to time, be in
      effect in the State of Delaware; provided, however, in the event that, by reason
      of mandatory provisions of law, any or all of the attachment, perfection or
      priority of Secured Party’s security interest in any Collateral is governed by
      the Uniform Commercial Code as in effect in a jurisdiction other than the State
      of Delaware, the term “UCC” shall mean the Uniform Commercial Code as in effect
      in such other jurisdiction for purposes of the provisions hereof relating to
      such attachment, perfection or priority and for purposes of definitions related
      to such provisions.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    1.2 Collateral.
      To
      secure the prompt and complete payment to Secured Party of all indebtedness
      and
      liabilities evidenced by the Note and the prompt and complete performance and
      observance of all obligations of the Grantors to Secured Party, due or to become
      due, direct or indirect, absolute or contingent, joint or several, howsoever
      created, arising or evidenced, now existing under, or hereafter at any time
      created pursuant to the Note and this Agreement (the “Secured
      Obligations”),
      the
      Grantors hereby grant, assign, convey, mortgage, pledge, hypothecate and
      transfer to Secured Party a security interest in and lien on all of their
      rights, title and interest in, to and under all personal property of the
      Grantors as follows, whether now owned or owing to, or hereafter acquired by
      or
      arising in favor of, the Grantors and regardless of where located (the
“Collateral”):

     

    
      	 	
              i)

            	
              all
                Accounts;

            

    

     

    
      	 	
              ii)

            	
              all
                Chattel Paper (whether tangible or
                electronic);

            

    

     

    
      	 	
              iii)

            	
              all
                Copyrights and any Copyright
                License;

            

    

     

    
      	 	
              iv)

            	
              all
                Commercial Tort Claims;

            

    

     

    
      	 	
              v)

            	
              all
                Deposit Accounts;

            

    

     

    
      	 	
              vi)

            	
              all
                Documents;

            

    

     

    
      	 	
              vii)

            	
              all
                Equipment;

            

    

     

    
      	 	
              viii)

            	
              all
                Fixtures;

            

    

     

    
      	 	
              ix)

            	
              all
                General Intangibles;

            

    

     

    
      	 	
              x)

            	
              all
                Goods;

            

    

     

    
      	 	
              xi)

            	
              all
                Instruments;

            

    

     

    
      	 	
              xii)

            	
              all
                Inventory;

            

    

     

    
      	 	
              xiii)

            	
              all
                Letter-of-Credit Rights (whether or not the Letter of Credit is evidenced
                in writing);

            

    

     

    
      	 	
              xiv)

            	
              all
                Patents and any Patent License;

            

    

     

    
      	 	
              xv)

            	
              all
                Trademarks and any Trademark
                License;

            

    

     

    
      	 	
              xvi)

            	
              all
                Licenses;

            

    

     

    
      	 	
              xvii)

            	
              all
                Supporting Obligations and any other contract rights or rights to
                the
                payment of money;

            

    

     

    
      	 	
              xviii)

            	
              all
                Trade Secrets;

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	 	
              xix)

            	
              all
                other tangible and intangible personal property of the Grantors (whether
                or not subject to the UCC);

            

    

     

    
      	 	
              xx)

            	
              all
                bank and other accounts and all cash and all investments therein,
                all
                proceeds, products, offspring, accessions, rents, profits, income,
                benefits, substitutions and replacements of and to any of the property
                of
                the Grantors described in the preceding clauses of this Section 1.2
                (including proceeds of insurance thereon and all causes of action,
                claims
                and warranties now held by the Grantors in respect of any of the
                items
                listed above), and all books, correspondence, files and other Records,
                including all tapes, desk, cards, Software, data and computer programs
                in
                the possession or under the control of the Grantors or any other
                Person
                from time to time acting for the Grantors that at any time evidence
                or
                contain information relating to any of the property described in
                the
                preceding clauses of this Section 1.2 or are otherwise necessary
                or
                helpful in the collection or realization thereof;
                and

            

    

     

    
      	 	
              xxi)

            	
              all
                Proceeds, including Cash Proceeds and Noncash Proceeds, and products
                of
                any and all of the Collateral; in each case howsoever the Grantors’
                interest therein may arise or appear (whether by ownership, security
                interest, claim or otherwise). 

            

    

     

    ARTICLE
      II 

    REPRESENTATIONS
      AND COVENANTS OF GRANTORS

     

    The
      Grantors hereby represent warrants and covenants that:

     

    2.1 Representations
      and Warranties.

     

    (a) Incorporation;
      Authorization.
      Each of
      the Grantors is a corporation duly incorporated, validly existing and in good
      standing under the laws of its state of incorporation with corporate power
      and
      authority to conduct its business as now being conducted, and to own or use
      its
      properties or assets that it purports to own or use. The execution, delivery
      and
      performance by the Grantors of this Agreement (as amended, modified or
      supplemented, from time to time) has been duly authorized by all necessary
      action and do not and will not (a) require any additional consent or approval
      of
      the stockholders or partners of any entity, or the consent of any governmental
      entity or others, (b) violate any provision of any charter, bylaws, law,
      governmental regulation, court decree, indenture, contract, agreement or
      instrument to which the Grantors is a party or by which the Grantors is bound,
      or (c) result in the imposition or creation of any lien or encumbrance upon
      or
      with respect to any assets or properties owned by the Grantors. This Agreement
      is a legal, valid and binding obligation of the Grantors, enforceable in
      accordance with its terms, except as limited by applicable bankruptcy,
      insolvency, reorganization, moratorium, and other laws of general application
      affecting enforcement of creditors’ rights generally, and as limited by laws
      relating to the availability of specific performance, injunctive relief or
      other
      equitable remedies.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (b) Title
      to Collateral.
      The
      Grantors have good and marketable title to all of the Collateral owned by it
      and
      a valid license with respect to Collateral licensed by it, and none of the
      Collateral is subject to any liens, except for the security interests created
      under this Agreement and Permitted Liens. 

     

    (c) No
      Financing Statements.
      No
      effective security agreement, financing statement, equivalent security or lien
      instrument or continuation statement covering all or any part of the Collateral
      is on file or of record in any public office, except such as may have been
      filed
      in favor of Secured Party pursuant to this Agreement.

     

    (d) Validity
      of Security Interest.
      This
      Agreement is effective to create a valid and continuing security interest in
      and, upon the filing of the appropriate financing statements or mortgages,
      a
      perfected security interest in favor of Secured Party in the Collateral with
      respect to which a security interest may be perfected by filing pursuant to
      the
      UCC.

     

    (e) Locations
      of Business.
      The
      Grantors’ chief executive office, principal place of business, corporate
      offices, and premises where Collateral is stored or located (except for those
      items of Inventory that are being moved from time to time in the ordinary course
      of business), and the locations of all of their books and records concerning
      the
      Collateral are located at 1464 W. 40 St. Suite #200, Lindon, Utah,
      84042.

    

    2.2 Covenants.

     

    (a) Disposition
      or Encumbrance of Collateral.
      The
      Grantors will not encumber, sell or otherwise transfer or dispose of the
      Collateral other than purchase money liens (but only to the extent of the assets
      secured by thereby) (the “Permitted
      Liens”)
      or the
      sale of Inventory in the ordinary course of business, without the prior written
      consent of Secured Party.

     

    (b) Maintenance
      of Equipment and Inventory; Location.
      The
      Grantors will maintain the Equipment and Inventory or cause the Equipment and
      Inventory to be maintained in good condition and repair in all respects,
      reasonable wear and tear excepted. At the time of attachment and perfection
      of
      the security interest granted pursuant hereto and thereafter, all Inventory
      and
      Equipment will be located and will be maintained only at the Grantors’ principal
      executive offices or as otherwise authorized by the Security Party in writing.
      Other than in the ordinary course of business of the Grantors, such Collateral
      will not be removed from such location unless, prior to any such removal,
      Secured Party has given its written consent, and the Grantors have delivered
      to
      Secured Party acknowledgment copies of financing statements filed where
      appropriate to continue the perfection of Secured Party’s security interest in
      the Collateral prior to all other interests. The security interest of Secured
      Party attaches to all of the Collateral wherever located and the Grantors’
      failure to inform Secured Party of the location of any item or items of
      Collateral shall not impair Secured Party’s security interest
      therein.

     

    (c) Protection
      of Collateral.
      All
      expenses of protecting, storing, warehousing, insuring, handling and shipping
      the Collateral, all costs of keeping the Collateral free of any liens prohibited
      by this Agreement and of removing the same if they should arise, and any and
      all
      excise, property, sales and use taxes imposed by any state, federal or local
      authority on any of the Collateral or in respect of the sale thereof, shall
      be
      borne and paid by the Grantors. In the event that the Grantors fail to promptly
      pay such expenses when due, Secured Party may at its option, but shall not
      be
      required to, pay such expenses, whereupon Secured Party shall be entitled to
      reimbursement thereof.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (d) Insurance.
      The
      Grantors shall, and shall cause each of their subsidiaries to, procure and
      maintain, as to its properties and business, insurance issued by responsible
      insurance companies against damage and loss by theft, fire, collision (in the
      case of motor vehicles), public and product liability, larceny, embezzlement,
      other criminal misappropriation and such other casualties and contingencies,
      and
      in such amounts, as are usually carried by comparable companies similarly
      situated, of similar size, scope and financial condition or as may be requested
      by Secured Party.
      The
      Grantors will add Secured Party as an additional insured and as a notice party
      to any such policies and shall use their best efforts to cause the issuer of
      such policies to provide Secured Party with ten (10) days’ notice before such
      policies are terminated (for failure to pay premiums or otherwise) or assigned
      or before any change is made in the beneficiary thereof. 
      The
      Grantors shall deliver evidence of such insurance and the policies of insurance
      or copies thereof to Secured Party upon request. Secured Party may, but shall
      not be obligated to, purchase such insurance on behalf of the Grantors at the
      Grantors’ expense, if the Grantors fails to keep such insurance in fall force
      and effect.

     

    (e) Compliance
      with Law.
      The
      Grantors will not use the Collateral, or permit the Collateral to be used,
      for
      any unlawful purpose or in violation of any federal, state or municipal
      law.

     

    (f) Notice
      of Default.
      Immediately upon becoming aware of the existence of any Event of Default or
      the
      existence of circumstances which, through the passage of time, is likely to
      become an Event of Default, the Grantors will give written notice to Secured
      Party that such circumstances or such Event of Default exist, stating the nature
      thereof, the period of existence thereof, and what action the Grantors propose
      to take with respect thereto.

     

    (g) Additional
      Documentation.
      The
      Grantors will execute, from time to time, such financing statements,
      assignments, and other documents covering the Collateral and relating to the
      Secured Obligations, including Proceeds, as Secured Party may request in order
      to create, evidence, perfect, maintain or continue its security interest in
      the
      Collateral as a first priority interest as to all other interests (including
      additional Collateral acquired by the Grantors after the date hereof), and
      the
      Grantors will pay the cost of filing the same or reimburse Secured Party for
      filing costs in all public offices in which Secured Party may deem filing to
      be
      appropriate as well as the costs of any lien searches which Secured Party may
      request. Upon the occurrence and during the continuance of an Event of Default,
      the Grantors shall provide Secured Party with originals of all documentary
      evidence, including but not limited to negotiable warehouse receipts and
      negotiable bills of lading, as applicable, reflecting the Grantors’ ownership of
      or interest in any of the Collateral sufficient to secure and perfect Secured
      Party’s security interest therein, and the acknowledgment and agreement of any
      person holding Inventory or other assets of the Grantors of Secured Party’s
      security interest in such assets.

     

    (h) Notices.
      As soon
      as possible, but in no event later than five business days after obtaining
      knowledge thereof, the Grantors shall give written notice to Secured Party
      of:

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (i) The
      commencement of any litigation relating to the Grantors;

     

    (ii) The
      commencement of any arbitration or governmental proceeding or investigation
      which has been instituted or is threatened against the Grantors or their
      property; and

     

    (iii) Any
      actual or threatened Event of Default under this Agreement, the Subscription
      Agreement, the License and Distribution Agreement, the License Agreement or
      the
      Note, or the occurrence of circumstances reasonably likely to create an Event
      of
      Default (provided, however, that such notice shall in no event be construed
      as
      delaying the occurrence of any Event of Default or changing the rights and
      remedies of Secured Party with respect thereto).

     

    (i) Maintain
      Property.
      The
      Grantors shall maintain and keep their assets, property and equipment in good
      repair, working order and condition in all respects (reasonable wear and tear
      excepted) and from time to time make or cause to be made all needed renewals,
      replacements and repairs.

     

    (j) Prompt
      Performance.
      The
      Grantors shall promptly perform in all respects each and every term and
      condition of this Agreement and of each document delivered in connection
      herewith, time being of the essence.

     

    (k) Maintenance
      of Records.
      The
      Grantors shall keep and maintain, at their principal executive offices or at
      such other location as authorized by Secured Party in writing, at their own
      cost
      and expense, satisfactory and complete records of the Collateral, including
      a
      record of any and all payments received and any and all credits granted with
      respect to the Collateral and all other dealings with the Collateral. The
      Grantors shall mark their general ledger books pertaining to the Collateral
      to
      evidence this Agreement and the security interests granted hereby.

     

    (l) Indemnification.
      In any
      suit, proceeding or action brought by Secured Party relating to any Collateral
      for any sum owing thereunder or to enforce any provision of any Collateral,
      the
      Grantors will save, indemnify and hold Secured Party harmless from and against
      each and every expense (including attorneys’ fees and expenses), loss or damage
      suffered by reason of any defense, setoff, counterclaim, recoupment or reduction
      of liability whatsoever of the obligor thereunder, arising out of a breach
      by
      the Grantors of any obligation thereunder or arising out of any other agreement,
      indebtedness or liability at any time owing to, or in favor of, such obligor
      or
      its successors from the Grantors, except to the extent such expense, loss,
      or
      damage is attributable solely to the gross negligence or willful misconduct
      of
      Secured Party as finally determined by a court of competent jurisdiction. All
      such obligations of the Grantors shall be and remain enforceable against and
      only against the Grantors and shall not be enforceable against Secured
      Party.

     

    (m) Compliance
      with Terms of Accounts, etc.
      In all
      material respects, the Grantors will perform and comply with all obligations
      in
      respect of their Accounts and all agreements to which it is a party or by which
      it is bound relating to the Collateral.

     

    (n) Limitation
      on Liens on Collateral.
      The
      Grantors will not create, permit or suffer to exist, and will defend the
      Collateral against, and take such other action as is necessary to remove, any
      security interest, lien or other form of encumbrance on or against the
      Collateral except the security interests provided for hereunder, and will defend
      the right, title and interest of Secured Party in and to any of the Grantors’
      rights under the Collateral against the claims and demands of all Persons
      whomsoever.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (o) Survival
      of Provisions.
      All
      representations, covenants and warranties contained in this Article II shall
      survive the delivery of the Note and any investigation at any time made by
      or on
      behalf of Secured Party shall not diminish its right to rely
      thereon.

     

    ARTICLE
      III 

    COLLECTION
      OF RECEIVABLES

     

    Except
      as
      otherwise provided in this Article III, the Grantors shall continue to collect,
      at their own expense, all amounts due or to become due to the Grantors under
      the
      Accounts. In connection with such collections, the Grantors may take (and,
      at
      Secured Party’s direction, shall take) such action as the Grantors or Secured
      Party may deem necessary or advisable to enforce collection of the Accounts;
      provided, however, that Secured Party shall have the right, after the occurrence
      and during the continuation of an Event of Default, upon written notice to
      the
      Grantors of its intention to do so, to notify such Account Debtors of the
      assignment of the Accounts to Secured Party and to direct such Account Debtors
      to make payment of all amounts due or to become due to the Grantors thereunder
      directly to Secured Party. Upon such notification and at the expense of the
      Grantors, Secured Party shall have the right to enforce collection of such
      Accounts and to adjust, settle, or compromise the amount of payment thereof
      in
      the same manner and to the same extent as the Grantors might have
      done.

     

    ARTICLE
      IV 

    ASSIGNMENT
      OF INSURANCE

     

    The
      Grantors hereby assign to Secured Party, as additional security for payment
      of
      the Secured Obligations, any and all monies due or to become due under, and
      any
      and all of the Grantors’ other rights with respect to, any and all policies of
      insurance covering the Collateral, and the Grantors hereby direct the issuer
      of
      any such policy to pay any such monies directly to Secured Party; provided,
      however, that prior to the occurrence and continuation of an Event of Default,
      the Grantors shall have the right to use the proceeds received from such
      policies of insurance to repair or repurchase any destroyed or damaged
      Collateral. After the occurrence and during the continuance of an Event of
      Default, Secured Party may (but need not) in its own name or in the Grantors’
      names execute and deliver proofs of claim, receive such monies, endorse checks
      and the instruments representing such monies and settle or litigate any claim
      against the issuer of any such policy.

     

    ARTICLE
      V 

    EVENTS
      OF DEFAULT

     

    The
      term
“Event
      of Default”
      shall
      mean any of the following:

     

    5.1 Cross
      Defaults.
      The
      occurrence of any default in the due payment or performance of any of the
      obligations or covenants contained in the Subscription Agreement, the License
      and Distribution Agreement, the License Agreement or the Note.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    5.2 Breach
      of
      Covenants.
      The
      Grantors shall default in the due performance or observance of any of the
      obligations or covenants contained in this Agreement.

     

    5.3 Misrepresentation.
      Any
      material representation or warranty set forth in this Agreement shall have
      been
      untrue in any material respect when made.

     

    ARTICLE
      VI 

    RIGHTS
      AND REMEDIES ON DEFAULT

     

    Upon
      the
      occurrence of an Event of Default, and at any time thereafter until such Event
      of Default is cured to the satisfaction of Secured Party, and in addition to
      the
      rights granted to Secured Party under Articles II, III and IV hereof, Secured
      Party may exercise any one or more of the following rights and remedies, at
      the
      same or different times (the right to take such actions shall be cumulative
      and
      may be exercised successively or concurrently):

     

    6.1 Management
      Control.
      Secured
      Party or its designee may take any or all of the following actions:

     

    (a) In
      the
      name of the Grantors or otherwise, demand, collect, receive and receipt for,
      compound, compromise, settle and give acquaintance for and prosecute and
      discontinue any suits or proceedings in respect of any assets or interest of
      the
      Grantors, including any or all of the Collateral.

     

    (b) Take
      any
      action which Secured Party may deem necessary or desirable in order to manage
      and realize on the Collateral, including, without limitation, the power to
      perform any contract, and to endorse in the name of the Grantors any checks,
      drafts, notes, or other instruments or documents received in payment or on
      account of the Collateral.

     

    (c) Enter
      upon and into and take possession of all or such part or parts of the assets
      and
      properties of the Grantors as may be necessary or appropriate in the judgment
      of
      Secured Party, to permit or enable Secured Party to store, lease, sell or
      otherwise dispose of or collect all or any part of the Collateral, and use
      and
      operate such properties for such purposes and for such length of time as Secured
      Party may deem necessary or appropriate for such purposes.

     

    (d) The
      Grantors shall, and shall cause their officers, personnel and agents to,
      cooperate fully with Secured Party and provide Secured Party with all
      information, support and assistance requested by Secured Party to facilitate
      the
      foregoing, including full and complete access to their properties, books and
      records.

     

    (e) Exercise
      any and all other rights and remedies available to it by law, in equity or
      by
      agreement, including rights and remedies under the UCC or any other applicable
      law, or under the Subscription Agreement, the License and Distribution Agreement
      or the Note or any other agreements in existence between the
      parties.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    6.2 Exercise
      of Self-Help Remedies.
      Without
      limiting the generality of the foregoing, the Grantors expressly agree that,
      upon any Event of Default, Secured Party, without demand of performance or
      other
      demand, advertisement or notice of any kind (except the notice specified below
      of time and place of public or private sale) to or upon the Grantors or any
      other Person (all and each of which demands, advertisements and notices are
      hereby expressly waived to the maximum extent permitted by the UCC and other
      applicable law), may forthwith enter upon the premises of the Grantors where
      any
      Collateral is located through self help, without judicial process, without
      first
obtaining
      a final judgment or giving the Grantors or any other Person notice and
      opportunity for a hearing on Secured Party’s claim or action, and may collect,
      receive, assemble, process, appropriate and realize upon the Collateral, or
      any
      part thereof, and may forthwith sell, lease, assign, give an option or options
      to purchase, or sell or otherwise dispose of and deliver such Collateral (or
      contract to do so), or any part thereof, in one or more parcels at a public
      or
      private sale or sales, at any exchange at such prices as it may deem acceptable,
      for cash or on credit or for future delivery without assumption of any credit
      risk. Secured Party shall have the right upon any such public sale or sales
      and,
      to the extent permitted by law, upon any such private sale or sales, to purchase
      the whole or any part of such Collateral so sold, free of any right or equity
      of
      redemption, which equity of redemption the Grantors hereby release. Such sales
      may be adjourned and continued from time to time with or without notice. Secured
      Party shall have the right to conduct such sales on the Grantors’ premises or
      elsewhere and shall have the right to use such premises without charge for
      such
      time or times as Secured Party deems necessary or advisable. The Grantors
      further agree, at Secured Party’s request, to assemble the Collateral and make
      it available to Secured Party at places which Secured Party shall select,
      whether at the Grantors’ premises or elsewhere. Until Secured Party is able to
      effect a sale, lease, or other disposition of Collateral, Secured Party shall
      have the right to hold or use Collateral, or any part thereof, to the extent
      that it deems appropriate for the purpose of preserving Collateral or its value
      or for any other purpose deemed appropriate by Secured Party. Secured Party
      shall have no obligation to the Grantors to maintain or preserve the rights
      of
      the Grantors as against third parties with respect to Collateral while
      Collateral is in the possession of Secured Party. Secured Party may, if it
      so
      elects, seek the appointment of a receiver or keeper to take possession of
      Collateral and to enforce any of Secured Party’s remedies with respect to such
      appointment without prior notice or hearing as to such appointment. Secured
      Party shall apply the net proceeds of any such collection, recovery, receipt,
      appropriation, realization or sale to the obligations underlying the Note,
      and
      only after so paying over such net proceeds, and after the payment by Secured
      Party of any other amount required by any provision of law or otherwise owing
      pursuant to the Subscription Agreement, the License and Distribution Agreement,
      the Note or this Agreement, shall Secured Party account for and pay the surplus,
      if any, to the Grantors. To the maximum extent permitted by applicable law,
      the
      Grantors hereby waive all claims, damages, and demands against Secured Party
      arising out of the repossession, retention or sale of the Collateral except
      such
      as arise solely out of the gross negligence or willful misconduct of Secured
      Party as finally determined by a court of competent jurisdiction. the Grantors
      hereby agrees that ten (10) days’ prior written notice by Secured Party of the
      time and place of any public sale or of the time after which a private sale
      may
      take place is reasonable notification of such matters. The Grantors shall remain
      liable for any deficiency if the proceeds of any sale or disposition of the
      Collateral are insufficient to pay all Secured Obligations, including any
      attorneys’ fees and other expenses incurred by Secured Party to collect such
      deficiency.

     

    6.3 Acceleration
      of Obligations.
      Upon
      the occurrence of any of the Events of Default, in addition to the
      aforementioned remedies, Secured Party may declare any and all Secured
      Obligations to be immediately due and payable, and the same shall thereupon
      become immediately due and payable without further notice, demand, presentment
      or protest, all of which are expressly waived by the Grantors.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    6.4 Power
      of
      Attorney.
      After
      the occurrence and during the continuance of an Event of Default, the Grantors
      hereby appoint Secured Party or any other person whom Secured Party may from
      time to time designate, as its attorney with power, to endorse its name on
      any
      checks, notes, acceptances, drafts, or other forms of payment or security that
      may come into Secured Party’s possession, to sign its name on any invoice,
      billing memorandum, bill of lading or warehouse receipt relating to any
      Collateral, on drafts against clients or customers, on schedules and
      confirmatory assignments of Accounts or other Collateral, on notices of
      assignment, financing statements under the UCC and other public records, on
      verifications of Accounts and on notices to clients and customers, to notify
      the
      post office authorities to change the address for delivery of the Grantors’ mail
      to an address designated by Secured Party to receive and open all mail addressed
      to the Grantors, to send requests for verification of Collateral to customers
      and to do all things necessary to carry out the intent of this Security
      Agreement. The Grantors hereby ratify and approve all acts of the attorney
      taken
      within the scope of the authority granted hereunder. Neither Secured Party
      nor
      the attorney will be liable for any acts of commission or omission or for any
      error in judgment or mistake of fact or law. This power, being coupled with
      an
      interest, is irrevocable so long as any Secured Obligation remains unpaid.
      The
      Grantors waive presentment and protest of all instruments and notice thereof,
      notice of default and dishonor and all other notices to which it may otherwise
      be entitled.

     

    ARTICLE
      VII 

    MISCELLANEOUS

     

    7.1 Limited
      Liability.
      It is
      understood that Secured Party does not in any way assume any of the Grantors’
      obligations under any of the Collateral or any liability with respect to the
      operation of the Grantors’ business. The Grantors hereby agrees to indemnify
      Secured Party against all liability arising in connection with or on account
      of
      the foregoing.

     

    7.2 No
      Waiver.
      Secured
      Party shall not be deemed to have waived any of its rights hereunder or under
      any other agreements, instrument or paper signed by the Grantors unless such
      waiver is in writing and signed by Secured Party. No delay or omission on the
      part of Secured Party in exercising any right shall operate as a waiver of
      such
      right or any other right. A waiver on any one occasion shall not be construed
      as
      a bar to or waiver of any right or remedy on any future occasion.

     

    7.3 Remedies
      Cumulative.
      All
      rights and remedies of Secured Party shall be cumulative and may be exercised
      singularly or concurrently, at its option, and the exercise or enforcement
      of
      any one such right or remedy shall not bar or be a condition to the exercise
      or
      enforcement of any other.

     

    7.4 Governing
      Law.
      This
      Agreement shall be governed by, and construed and enforced in accordance with,
      the internal laws of the State of Delaware without giving effect to the
      conflicts of laws principles thereof and, except as otherwise provided herein,
      shall be binding upon the heirs, personal representatives, executors,
      administrators, successors and assigns of the parties.

     

    7.5 Expenses.
      The
      Grantors shall pay or reimburse Secured Party for all of its legal, accounting
      and other costs and expenses of enforcing any of its rights hereunder
      (including, without limitation, reasonable attorney’s fees and related expenses
      incurred in connection with any appeal of a lower court’s order or judgment) in
      the event any suit or other legal proceeding is brought for such enforcement,
      upon final judgment on the merits in favor of Secured Party.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    7.6 Amendment
      and Waiver.
      Neither
      this Agreement nor any provision hereof may be amended, modified, waived,
      discharged, or terminated orally, but only by an instrument in writing signed
      by
      the party against whom enforcement of the amendment, modification, waiver,
      discharge or termination is sought.

     

    7.7 Severability.
      Whenever possible, each provision of this Agreement shall be interpreted in
      such
      a manner as to be effective and valid under applicable law. If, however, any
      provision of this Agreement shall be determined by a court of competent
      jurisdiction to be invalid or unenforceable, such provisions shall be
      ineffective to the extent of such invalidity or unenforceability, without
      invalidating the remainder of such provision or the remaining provisions of
      this
      Agreement, unless the remaining provisions do not reflect the intent of the
      parties in entering into this Agreement.

     

    7.8 Headings.
      The
      headings of sections of this Agreement have been inserted for reference only
      and
      shall not be a part of this Agreement.

     

    7.9 Addresses.
      Any
      notices, requests, demands and other communications required or permitted to
      be
      given hereunder must be in writing and, except as otherwise specified in
      writing, will be deemed to have been duly given when personally delivered,
      telexed or facsimile transmitted (with receipt confirmed, and a copy also sent
      by United States mail, first class, postage pre-paid), or three (3) days after
      deposit in the United States mail, by certified mail, postage prepaid, return
      receipt requested. The address of the Grantors and Secured Party, unless
      subsequently changed in accordance with the provisions of this Agreement, is
      as
      follows:

     

    
      	To the
              Grantors:	1464
              W. 40 St. Suite #200
              Lindon,
                Utah, 84042-1629

              Attention:
                Gaylord Karren, President

              Facsimile:
                801-443-1029

            
	 	 
	To Secured
              Party: 	Water Science, LLC
              1800
                N.W. 89th Place

              Miami,
                FL 33172

              Attention:
                Peter Ullrich

              Email:
                peteru@esmaraldainc.com

            
	 	 
	 	
              With
                a copy (which shall not constitute notice) to:

               

              Greenberg
                Traurig, P.A.

              1221
                Brickell Avenue

              Miami,
                Florida 33131

              Attention:
                Joseph Fleming

              Facsimile:
                (305) 579-0717

            

    

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    Any
      party
      may change its address for the purposes of this Agreement by giving notice
      of
      such change of address to the other parties in the manner herein provided for
      giving notice.

     

    7.10 Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the successors
      and
      assigns of the Grantors and Secured Party.

     

    7.11 Waiver
      of
      Ju1y Trial.
      To the
      fullest extent permitted by Law, each of the parties hereto hereby knowingly,
      voluntarily and intentionally waives its respective rights to a jury trial
      of
      any claim or cause of action based upon or arising out of this Agreement or
      in
      any of the agreements mentioned herein or any dealings between them relating
      to
      the subject matter of this Agreement. Each party hereto (a) certifies that
      none
      of its respective representatives, agents or attorneys has represented,
      expressly or otherwise, that such party would not, in the event of litigation,
      seek to enforce the foregoing waivers and (b) acknowledges that it has been
      induced to enter into this Agreement by, among other things, the mutual waivers
      and certifications herein.

     

    [The
      remainder of this page is intentionally left blank]

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the parties have caused the execution of this Agreement by
      their duly authorized representatives as of the day and the year first above
      written.

     

    
      	 	 	 
	 	ELECTRIC
              AQUAGENICS, INC. 
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name: 

            
	 	
              Title:

            

    

     

    
      	 	 	 
	 	
              AQUAGEN
                INTERNATIONAL, INC. 

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name: 

            
	 	
              Title:

            

    

     

    
      	 	 	 
	 	WATER
              SCIENCE, LLC
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:
                Peter Ullrich 

            
	 	
              Title:
                Sole Member 

            

    

     

    
      
         

      

        16EXCLUSIVE
      LICENSE AND DISTRIBUTION AGREEMENT

     

    THIS
      EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT (the “Agreement”) is entered into
      this 16 day of September, 2005 (the “Effective Date”) by and between Electric
      Aquagenics Unlimited, Inc., a Delaware corporation having its principal offices
      located at 1464 West 40 South, Lindon, UT 84042 (“Licensor”), and Water Science,
      LLC, a limited liability company having its principal offices located at 1800
      N.W. 89th
      Place,
      Miami, Florida 33172 (the “Licensee”).

     

    RECITALS

     

    Licensor
      is the owner or exclusive licensee of all intellectual property and other
      rights, title and interest in and to certain technology that changes the
      molecular composition of tap water to produce low-cost, non-toxic electrolyzed
      oxidative fluids used for cleaning, disinfection, remediation and hydration
      (collectively, the “Technology”), including the products utilizing or embodying
      the Technology listed on Schedule
      A
      and any
      other products developed in the future utilizing or embodying the Technology
      (collectively, the “Products”), and is the owner of all rights, title and
      interest in and to the trademarks as used in connection with the Products
      including those listed on Schedule B
      (collectively, the “Trademarks”).

     

    Licensee
      desires to obtain an exclusive license from Licensor to exploit the Technology,
      to make, use, distribute and sell the Products and to use the Trademark in
      connection therewith and Licensor desires to grant such license to Licensee
      on
      the terms and conditions set forth herein.

     

    NOW,
      THEREFORE, in consideration for the mutual covenants and promises contained
      in
      this Agreement and other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties agree as
      follows:

     

    
      	
              1.

            	
              GRANT
                OF EXCLUSIVE RIGHTS;
                CONSIDERATION

            

    

     

    (a) Exclusive
      Technology and Product License.
      Subject
      to the other terms and conditions set forth in this Agreement, Licensor hereby
      grants to Licensee the exclusive right and license to commercialize and exploit
      the Technology (including any and all future modifications, enhancements,
      improvements or other developments with respect thereto developed, licensed
      or
      otherwise acquired by Licensor) as Licensee deems appropriate and to manufacture
      or have manufactured, use, distribute, license and sell the Products and to
      offer related services, as well as sublicense others to do the same, including
      under the claims of any patents owned or licensed by Licensor, in the
      territories listed on Schedule
      C
      (collectively, the “Territories” or the “Territory”).

     

    (b) Exclusive
      Trademark License.
      Subject
      to the other terms and conditions set forth in this Agreement, Licensor hereby
      grants to Licensee the exclusive right and license to use the Trademark in
      connection with the promotion, marketing and sale of the Products in the
      Territories.

     

    (c) Exclusive
      Product Distribution Rights.
      Subject
      to the other terms and conditions set forth in this Agreement, Licensor hereby
      appoints Licensee, and Licensee accepts such appointment, as Licensor’s
      exclusive distributor in the Territories with respect to the Products that
      are
      manufactured or caused to be manufactured by Licensor. Licensor agrees that
      it
      shall only manufacture or cause to be manufactured the Products for sale and
      further distribution by Licensee in the Territories. Licensee shall have the
      right to engage subcontractors to manufacture and/or distribute part or all
      of
      the Products, provided that such subcontractors comply with all applicable
      terms
      under this Agreement with respect to activities they may undertake relating
      to
      the Products in the Territories. Licensee shall be responsible for all
      warehousing, distribution, order processing and fulfillment, billing and
      collection activities with respect to sales of the Products by Licensee in
      the
      Territories. 

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (d) Product
      Orders.
      All
      purchase orders submitted by Licensee and accepted by Licensor for the Products
      are and shall be subject to this Agreement and shall be deemed to incorporate
      the terms and conditions of this Agreement, whether or not so specified in
      such
      purchase orders. Licensor’s acceptances of orders shall be evidenced by Licensor
      signing and returning the acknowledgment copy of the order within three (3)
      days
      after receipt of the order, together with a pro-forma invoice for the Products
      covered by that order. All orders shall contain the information necessary for
      Licensor to fulfill the order, which information shall include the
      following:

     

    
      	
            	(i)	
              A
                reference to this Agreement and Licensee’s purchase order
                number;

            

    

     

    
      	
            	(ii)	
              A
                description and quantity of each of the Products
                required;

            

    

     

    
      
        
          	
                	(iii)	
                  The
                    address to which Products are to be directed and the address
                    to which
                    Licensor’s invoice is to be sent;
                    and

                

        

      

    

     

    
      	
            	(iv)	
              The
                requested delivery date.

            

    

     

    (c) Product
      Returns.
      Licensor shall accept any returns of or replace any of the Products under the
      following conditions:

     

    
      	
            	(i)	
              Licensee
                shall inspect all of the Products as soon as it is practicable after
                shipment thereof and shall notify Licensor in writing, within thirty
                (30)
                days of inspection thereof, if any such Products do not conform to
                the
                applicable specifications. Licensee shall give written notice to
                Licensor
                of hidden non-conformities, which cannot be ascertained upon an initial
                examination, within twenty (20) days from the discovery of such hidden
                non-conformities; and

            

    

     

    
      
        
          	
                	(ii)	
                  Any
                    defect in any of the Products to be returned shall have resulted
                    from the
                    manufacture or packaging of the Products prior to shipment
                    thereof.

                

        

      

    

     

    Licensor
      shall issue a credit to Licensee for the purchase price paid by Licensee for
      the
      Products found to be defective or replace any Products found to be defective
      with the same quantity of products in good and salable condition, shipping
      such
      replacement Products to Licensee’s designated shipping destination at Licensor’s
      expense; provided that Licensor reserves the right to require Licensee, at
      Licensor’s expense, to return to Licensor all or part of the Products found to
      be defective or sell it for salvage, destroy it, or otherwise dispose of it
      pursuant to Licensor’s instructions.

     

    (d) Product
      Training and Promotional Assistance.
      Licensor shall provide Licensee with all necessary information concerning
      Product function and use and will conduct training sessions as well as provide
      promotional and advertising material to be used in the Territory for use by
      Licensee. Licensor shall keep Licensee informed of marketing and promotional
      efforts regarding the Products undertaken by Licensor, and shall collaborate
      with Licensee in the marketing of the Products within the
      Territory.

     

    (e) Manufacturing
      Option; Escrow of Manufacturing Specifications and Related
      Information.
      In the
      event that Licensee desires to manufacture the Products or cause the Products
      to
      be manufactured by third parties for distribution within the Territory, Licensor
      shall cooperate with Licensee in doing so. Within thirty (30) days after the
      Effective Date, Licensor shall, deposit with an independent third party escrow
      agent mutually acceptable to Licensor and Licensee, a complete set of the
      specifications, processes, formulas, recipes, parameters, instructions and
      requirements, including all know-how, trade secrets and other information
      necessary to manufacture the Products currently manufactured by Licensor,
      (collectively, the “Deposit Materials”) and will supplement the Deposit
      Materials to include all such information with respect to Products developed
      and
      manufactured by Licensor in the future. The Deposit Materials shall be released
      to Licensee upon Licensee’s request in the event that Licensee decides to
      manufacture the Products or cause the Products to be manufactured by a third
      party. Licensor shall bear all expenses incurred in connection with establishing
      and maintaining such escrow while this Agreement is in effect.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (f) Order
      of Precedence.
      The
      terms and conditions of this Agreement shall take precedence over and govern
      in
      the event of conflict between the terms and conditions of this Agreement the
      terms and conditions of any other documents and forms of the parties, including,
      without limitation, Licensee’s quotation request and purchase order forms,
      Licensor’s quotation form, and any confirmation, acknowledgment or other similar
      document. Any provision or data in any order, any subordinate document such
      as
      shipping releases, or any other document originated by either party, or
      contained in any documents or forms attached to or referenced in any of the
      above documents, which modifies, supplements or conflicts with the terms of
      this
      Agreement shall not be binding unless agreed to in writing by the
      parties.

     

    (g) Purchase
      Prices.
      Licensee shall be charged and agrees to pay the rates set forth on Schedule
      D
      hereto,
      for its purchase of the Products. Such prices shall remain in effect for not
      less than twelve (1) months from the Effective Date. Thereafter, Licensor shall
      present any proposed changes to the rates no less than one hundred eighty (180)
      days prior to such rates becoming effective, unless the modification of such
      pricing is commercially mandated based upon a significant increase in the
      Products’ materials, parts and/or manufacturing labor costs, and Licensor
      provides Licensee ninety (90) days prior written notice of such modification,
      and the reasons therefor. If the parties are not able to reach an agreement
      within such period, Licensor shall be able to set such rates as it deems
      appropriate, with such rates taking effect thirty (30) days thereafter, in
      which
      event Licensee shall have the right to manufacture the Products itself or
      through others and/or terminate this Agreement immediately by providing written
      notice thereof to Licensor. The purchase prices shall be expressed in U.S.
      Dollars.

     

    (h) Taxes
      and Other Charges.
      In
      addition to the applicable purchase prices, Licensor shall separately invoice
      for, and Licensee shall pay, all sales, use, excise, value added, gross
      receipts, turnover and other taxes and charges imposed by law or required by
      any
      government to be paid or collected by Licensor in connection with the purchase,
      delivery, sale or use of the Products pursuant to this Agreement (other than
      taxes imposed on Licensor’s income). 

     

    (i) Payment
      Terms.
      All
      payments due to Licensor from Licensee under this Agreement shall be paid to
      the
      applicable Licensor by check or wire transfer. Invoices may be rendered by
      the
      Licensor at any time after the date of Delivery, as defined below. Payment
      shall
      be made in U.S. Dollars, no later than ninety (90) days following the date
      of
      Delivery. Each shipment shall constitute an independent transaction and Licensee
      shall pay the invoice for each such transaction strictly in accordance with
      these payment terms.

     

    (j) Delivery.
      Products will be considered delivered by Licensor for purposes of this Agreement
      when delivered to Licensee’s designated location or designated carrier FOB.
      Licensor shall: (a) contract for carriage of the Products to such destination
      and pay the freight, and (b) pay any loading costs to the extent they are not
      included in the freight. Licensee shall pay all other costs incurred in
      connection with shipment of the Products to the ultimate destination and
      unloading. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (k) Risk
      of Loss and Passage of Title.
      Risk of
      loss and title shall pass to Licensee at the time of delivery of the Products
      to
      Licensee’s designated location or carrier. 

     

    (l) Technical
      Information and Training Regarding the Technology and the Products.
      Within
      twenty (20) business days after the Effective Date of this Agreement, Licensor
      shall disclose to Licensee any and all technical information and know-how then
      within the knowledge or possession of Licensor which was not already disclosed
      to Licensee and which would be helpful to Licensee regarding the Technology
      and
      the manufacture, use or sale of the Products, and the parties shall formulate
      a
      training program and schedule for Licensor to provide training to Licensee’s
      personnel. Training, know-how and information transfer shall take place either
      at Licensee’s offices or telephonically. Licensor shall, throughout the term of
      this Agreement, cause its employees and any third parties who are employed
      or
      engaged to do research, development or other inventive work to disclose to
      Licensor all improvements, refinements and modifications to the Products and
      new
      Products developed by them utilizing or embodying the Technology and Licensor
      shall disclose same to Licensee and inform Licensee promptly of any new
      developments, all of which shall be covered by the licensed rights granted
      to
      Licensee hereunder.

     

    (m) Consideration.
      In
      consideration of the rights granted to Licensee hereunder and Licensor’s
      performance of its obligations hereunder, Licensee agrees to pay to Licensor
      a
      license fee of One Million Dollars (US$1,000,000), to be paid by Licensee in
      one
      lump sum payment upon execution and delivery of this Agreement. 

     

    (n) Royalty
      Payments.
      In
      addition to the License Fee payable pursuant to Section 1(m) hereof, Licenses
      shall pay to Licensor a royalty fee (the “Royalty Fee”) for every “net” Product
      sold in accordance with the following royalty fee payment schedule: a four
      percent (4%) Royalty Fee on all annual net sales up to $5,000,000; three percent
      (3%) Royalty Fee on all net sales from $5,000,001 to $10,000,000; and a two
      percent (2%) Royalty Fee on all net sales in excess of $10,000,0000. For
      purposes of this Agreement, “net” is defined as gross units of the Products
      sold, less returns, charge backs and any units associated with uncollectible
      monies.

     

    
      	
              2.

            	
              MUTUAL
                OBLIGATIONS

            

    

     

    (a) Quality
      Control.
      Each
      party agrees that it shall maintain a high standard of quality with respect
      to
      the use of the Trademark and with respect to the Products and packaging for
      the
      Products, as well as in all depictions, marketing and advertising of Products.
      

     

    (b) Regulatory
      Compliance.
      Licensee acknowledges that certain licenses and label and packaging approvals
      not previously obtained by Licensor may be required to be obtained with respect
      to the Products from appropriate government authorities in the Territory from
      time to time during the term of the Agreement. Licensor will obtain and maintain
      all such licenses and approvals at its own expense and will provide assistance
      to Licensee in obtaining whatever licenses and approvals Licensee may be
      required to obtain in order for Licensee to manufacture the Products or cause
      the Products to be manufactured by third parties. Licensor and Licensee will
      make available to each other information and assistance necessary to complete
      all applications and requests for approval.

     

    (c) Reporting
      of Negative Events.
      Each
      party has the overriding interest in protecting the reputation of the Products
      and the Trademark. Accordingly, if either party, at any time, has a reasonable
      basis to believe that any act or occurrence related to the Products or the
      Trademark presents or has presented any threat to public health or safety or
      otherwise are likely to draw negative attention from any governmental agency,
      consumer or environmental group, media or other organization or any individual
      (any of such occurrences being an “Event”), such party will immediately notify
      the other party of the facts giving rise to such belief or suspicion. In all
      such cases, the parties will closely coordinate with each other with respect
      to
      any actions they might take or permit and in respect to all public statements
      either party might make regarding the Event, and shall, after consultation
      with
      each other, follow all agreed plans with respect thereto.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (d) Maintenance
      of Product Complaint Records.
      Each
      party agrees to maintain all records relating to consumer complaints and
      litigation relating to the Products and shall make such records available to
      the
      other party for inspection upon the other party’s reasonable request. Such
      records (other than records relating to consumer complaints) shall be maintained
      for at least two (2) years after the matter to which they pertain is closed
      or
      for the period required by the retaining party’s document retention policy
      therefor, whichever is longer. Records relating to consumer complaints shall
      be
      maintained for at least one (1) year after the complaint is received or for
      the
      period required by the retaining party’s document retention policy therefor,
      whichever is longer. All records provided under this Section shall be considered
      to be confidential information subject to the provisions of Section 13(k)
      of this Agreement.

     

    
      	
              3.

            	
              REPRESENTATIONS,
                WARRANTIES AND COVENANTS OF
                LICENSOR

            

    

     

    (a) Representations
      and Warranties.
      Licensor represents and warrants to Licensee that: (i) it is the sole owner
      of
      all rights, title and interest, including all intellectual property rights
      in
      and to the Technology and the Products except for the portions thereof licensed
      from third parties as specified in Schedule
      A
      attached
      hereto; (ii) its entering into this Agreement does not require any third party
      consent or approval that has not already been obtained, except for the consent
      required by the License Agreement dated April 8, 2004 by and between Innovative
      Oyster Processing System and the Company, which consent will be obtained by
      the
      Company within sixty (60) days of the date hereof; (iii) it has sufficient
      right, power and authority to grant the rights and licenses to Licensee as
      set
      forth in this Agreement, (iv) that neither the Technology nor the Products
      infringe any third party intellectual property or other rights; and (v) that
      the
      Products sold by or through Licensor to Licensee shall be merchantable and
      fit
      for their intended purposes. Licensor has not made and will not make any
      commitments to others inconsistent with or in derogation of Licensee’s rights.

     

    (b) Maintenance
      of Exclusivity.
      Licensor represents and warrants to Licensee that it has not, and covenants
      to
      Licensee that during the term of this Agreement, it will not, grant any other
      license with respect to the Technology or for sale, use or manufacturing of
      the
      Products or for use of the Trademark in the Territories. 

     

    (c) Provision
      of Information, Know-How and Training.
      Licensor shall provide to Licensee all pertinent and necessary information
      in
      order for Licensee to apply for and obtain any required safety or other
      regulatory approvals to commercially market and sell the Products, as well
      as
      all know-how and training reasonably required for Licensee to use and market
      the
      Technology and the Products.

     

    (d) Maintenance
      of Product Approvals and Intellectual Property Rights.
      Licensor shall pursue, undertake its best efforts to obtain and maintain all
      required approvals, license, permits and other regulatory registrations for
      the
      Products in the Territories as well as all patent and other intellectual
      property rights in and to the Products and all trademark rights in and to the
      Trademark and all of its registrations therefor, and Licensor will not abandon
      or permit the expiration of any registration, unless so directed by a court
      of
      law. Should Licensor determine that it is no longer desirable in the conduct
      of
      its business, or otherwise determines that it is unable to maintain said rights,
      Licensor shall notify Licensee in writing of such determination prior to
      abandoning same. Licensor agrees to take all reasonably necessary steps,
      including, without limitation, making of all necessary filings in the U.S.
      Patent and Trademark Office and in the trademark office of any country or in
      any
      court to maintain such rights. Licensor agrees to take corresponding steps
      with
      respect to each new application for patent protection of the Technology and/or
      the Products and/or application for registration of the Trademark. Any and
      all
      expenses incurred in connection with such activities shall be borne by
      Licensor.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (e) Marketing
      and Promotional Efforts; References to Licensee or Use of Licensee
      Name.
      Licensor shall coordinate its press, marketing and promotional efforts with
      respect to the Technology and the Products with Licensee and shall provide
      to
      Licensee a copy of all proposed press releases, advertisements and promotional
      materials for approval prior to publication or use. Licensor shall not use
      any
      disapproved materials. Licensor shall not refer to Licensee or use Licensee’s
      name or trademarks in any press release, product endorsement, marketing or
      other
      written materials, public filing or any other publication or statement without
      the prior written approval by Licensee.

     

    
      	
              4.

            	
              INFRINGEMENT
                BY THIRD PARTIES

            

    

     

    (a) Notification
      of Infringements.
      Should
      Licensor or Licensee become aware of any infringement or alleged infringement
      of
      any patents covering any portion of the Technology or the Products, or any
      other
      infringement or violation of the intellectual property rights (including moral
      rights) or trade secrets relating to the Technology or the Products, that party
      shall immediately notify the other party in writing of the name and address
      of
      alleged infringer, the alleged acts of infringement, and any available evidence
      of infringement.

     

    (b) Enforcement
      of Rights.
      Licensor shall have primary responsibility for enforcing any patent rights
      or
      other intellectual property rights (including moral rights), or trade secret
      rights relating to the Technology or the Products against any third parties
      and
      shall bring legal action against such third parties to enforce such rights.
      If
      Licensor fails to take action against any such third parties within thirty
      (30)
      days of such notification, Licensee may, at its option, bring legal action
      against such third parties in the name of Licensee and/or Licensor to enforce
      such rights. In the event that such litigation results in a damage award
      favoring the party bringing action to enforce any such rights, such a damage
      award shall be the property of the party that pursued such
      litigation.

     

    
      	
              5.

            	
              INDEMNIFICATION

            

    

     

    (a) Indemnification
      by Licensee.
      Licensee shall, at its expense, indemnify, defend and hold harmless Licensor,
      its employees, officers and agents (each, a "Licensor Indemnified Party" and
      collectively, the "Licensor Indemnified Parties") from and against any and
      all
      claims and causes of action of any nature made or lawsuits or other proceedings
      filed or otherwise instituted against any of the Licensor Indemnified Parties
      arising from or relating to any breach by Licensee of any of its
      representations, warranties or obligations hereunder. Licensee shall be
      responsible for and shall pay all costs and expenses related to such claims
      and
      lawsuits for which it shall indemnify the Licensor Indemnified Parties,
      including, but not limited to, the payment of all attorneys' fees and costs
      of
      litigation, defense and/or settlement of same.

     

    (b) Indemnification
      by Licensor.
      Licensor shall, at its expense, indemnify, defend and hold harmless Licensee,
      its employees, officers and agents (each, a “Licensee Indemnified Party” and
      collectively, the “Licensee Indemnified Parties”) from and against any and all
      claims and causes of action of any nature made or lawsuits or other proceedings
      filed or otherwise instituted against any of the Licensee Indemnified Parties
      arising from or relating to any breach by Licensor of any of its
      representations, warranties or obligations hereunder. Licensor shall be
      responsible for and shall pay all costs and expenses related to such claims
      and
      lawsuits for which it shall indemnify the Licensee Indemnified Parties,
      including, but not limited to, the payment of all attorney’s fees and costs of
      litigation, defense and/or settlement of same.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (c) Indemnification
      Procedures.
      In
      claiming any indemnification hereunder, the indemnified party shall promptly
      provide the indemnifying party with written notice of any claim that the
      indemnified party believes falls within the scope of the foregoing paragraph.
      The indemnified party may, at its own expense, assist in the defense if it
      so
      chooses, provided that the indemnifying party shall control such defense and
      all
      negotiations relative to the settlement of any such claim and further provided
      that any settlement intended to bind the indemnified party shall not be final
      without the indemnified party’s written consent, which shall not be unreasonably
      withheld. 

     

    
      	
              6.

            	
              TERM
                AND TERMINATION

            

    

     

    (a) Term.
      The
      term of this Agreement shall commence on the Effective Date and continue in
      effect perpetually unless sooner terminated as provided below (the “Term”).

     

    (b) Termination
      by Licensor.
      Licensor shall have the right to terminate this Agreement if Licensee materially
      defaults in performing any of its other obligations under this Agreement or
      if
      Licensee becomes insolvent or if a proceeding is commenced by or against
      Licensee seeking liquidation, rehabilitation, reorganization, conservatorship
      or
      other relief with respect to Licensee or its assets under any bankruptcy,
      insolvency or other similar law, or seeking the appointment of a trustee,
      receiver or other similar official with respect to Licensee and/or a substantial
      portion of its assets, and such material breach is not cured, or such proceeding
      is not dismissed, within sixty (60) days after Licensor has delivered to
      Licensee written notice of its intent to terminate the Agreement and specifying
      the reason for termination. 

     

    (c) Termination
      by Licensee.
      Licensee shall have the right to terminate this Agreement if Licensor materially
      defaults in performing any of its obligations hereunder, or if Licensor becomes
      insolvent or if a proceeding is commenced by or against Licensor seeking
      liquidation, rehabilitation, reorganization, conservatorship or other relief
      with respect to Licensor or its assets under any bankruptcy, insolvency or
      other
      similar law, or seeking the appointment of a trustee, receiver or other similar
      official with respect to Licensor and/or a substantial portion of its assets,
      and such material breach is not cured, or such proceeding is not dismissed,
      within sixty (60) days after Licensee has delivered written notice to Licensor
      of its intent to terminate this Agreement. Additionally, Licensee shall have
      the
      right to terminate this Agreement at any time for convenience by providing
      written notice thereof to Licensor not less than thirty (30) days prior to
      the
      effective date of such termination and specifying the reason for
      termination.

     

    (d) Post-Termination
      Obligations; Phase-out Period.
      Subsequent to the termination of this Agreement for any reason, Licensee may,
      for up to one hundred eighty (180) days after the effective date of such
      termination, continue to sell its inventory of the Products and continue using
      the Technology and the Trademarks in connection therewith.

     

    (e) Effect
      of
      Termination; Licensee’s Continued Rights in the Event of Licensor Default or
      Bankruptcy; Refund of License Fee.
      Nothing
      herein shall be construed to release either party of any obligation which
      matured prior to the effective date of such termination 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 362(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 Technology and/or
      the
      Products (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 shall also be entitled to release of the Deposit Materials
      from escrow in such event. Additionally, in the event that this Agreement is
      terminated by Licensee other than for convenience at any time within five (5)
      years after the Effective Date, Licensee shall be entitled to a refund of the
      license fee paid by Licensee to Licensor pursuant to this Agreement, pro-rated
      based on the ratio that the time elapsed as of such termination since the
      Effective Date bears to five (5) years.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	
              7.

            	
              TAXES,
                GOVERNMENTAL APPROVALS AND
                LIABILITY

            

    

     

    (a) Taxes.
      Licensee shall be solely responsible for the payment and discharge of any taxes,
      duties, or withholdings relating to any transaction of Licensee in connection
      with the manufacture, use, sale, licensing or other commercialization or
      exploitation of the Products. Licensor is solely responsible for any and all
      taxes, fees relating to its ownership of intellectual property rights in and
      to
      the Products, including but not limited to taxes on all amounts paid to Licensor
      hereunder.

     

    (b) Government
      Approvals.
      Licensee shall, at its own expense, be responsible for applying for and
      obtaining any approvals, authorizations, or validations relative to the
      manufacture and sale of the Products not previously obtained by Licensor under
      the appropriate Territory laws or otherwise, including authorization for the
      remittances hereunder from the appropriate governmental
      authorities.

     

    
      	
              8.

            	
              INDEPENDENCE
                OF THE PARTIES

            

    

     

    This
      Agreement creates no relationship of partnership, joint venture, employment,
      franchise, or agency between the parties. This Agreement shall not constitute
      the designation of either party as the representative or agent of the other,
      nor
      shall either party to this Agreement have the right or authority to make any
      promise, guarantee, warranty, or representation, or to assume, create, or incur
      any liability or other obligation of any kind, express or implied, against
      or in
      the name of, or on behalf of, the other party, without the other party’s prior
      written consent and approval. 

     

    
      	
              9.

            	
              SUBLICENSE
                AND ASSIGNMENT

            

    

     

    (a) Sublicensing.
      Licensor authorizes Licensee to grant sublicenses of the rights granted to
      it
      hereunder to its subdistributors, contractors and other third parties as
      reasonably necessary for Licensee to perform its obligations hereunder, upon
      Licensor’s prior written consent, which consent shall not be unreasonably
      withheld. 

     

    (b) Assignment.
      Any
      assignment of this Agreement by either party to a third party (except by
      Licensee to an affiliated entity or to a person or entity acquiring
      substantially all of Licensee’s assets or a controlling equity ownership
      interest in Licensee, which shall be permitted without the consent or approval
      of Licensor) shall
      be
      null and void unless consented to in advance in writing by the other party
      hereto, which consent shall not be withheld unreasonably.

     

    
      	
              10.

            	
              NOTICES

            

    

     

    Any
      notice or communication permitted or required under this Agreement shall be
      in
      writing and shall be delivered in person or by courier, or mailed by certified
      or registered mail, postage prepaid, return receipt requested, and addressed
      as
      set forth for the intended recipient in the first paragraph of this Agreement,
      attention: President, or to such other address as shall be given in accordance
      with this Section. If notice is given in person, by courier or facsimile, it
      shall be effective upon receipt; and if notice is given by mail, it shall be
      effective five (5) business days after deposit in the mail.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	
              11.

            	
              ARBITRATION;
                LITIGATION; GOVERNING LAW; JURISDICTION AND
                VENUE

            

    

     

    Except
      with respect to any claim by either party against the other party relating
      to
      this Agreement and seeking injunctive relief or specific performance, any
      dispute, controversy or claim arising out of or relating to this Agreement
      or
      the breach, termination or validity thereof, shall be finally settled in
      accordance with the commercial arbitration rules of the American Arbitration
      Association (the “AAA”)
      then
      in effect, by a panel of three (3) arbitrators. Each party shall have the right
      to appoint one (1) arbitrator from the list of arbitrators supplied to the
      parties by the AAA, and the two arbitrators so appointed shall appoint the
      third. The parties may alternately agree to a single arbitrator in lieu of
      a
      panel of three (3) arbitrators. The place of arbitration shall be Miami,
      Florida, U.S.A. and the parties agree to submit to personal jurisdiction
      exclusively in such venue for such arbitration and exclusively in the state
      courts located in such venue for any proceeding brought by either party seeking
      injunctive relief or specific performance. The internal procedural and
      substantive laws of Florida shall govern this Agreement and all questions of
      arbitral procedure, arbitral review, scope of arbitral authority, and arbitral
      enforcement as well as in any other legal proceedings brought by either party
      involving this Agreement. The parties agree that the award of the arbitrators
      shall be the sole and exclusive remedy between them regarding any claims,
      counterclaims, issues or accountings presented or pled to the arbitrators,
      that
      the award shall be made and shall be promptly payable in U.S. dollars without
      deduction or offset, and that any costs, fees or taxes incurred to enforcing
      the
      award shall, to the maximum extent permitted by law, be charged against the
      party resisting such enforcement. The award shall include interest accruing
      from
      the date of damages incurred for breach or other violation of this Agreement,
      and from the date of the award until paid in full, at a rate to be fixed by
      the
      arbitrators. The prevailing party in any proceeding relating to this Agreement
      shall be entitled to payment of its attorney’s fees and costs by the
      nonprevailing party.

     

    
      	
              12.

            	
              IDENTIFICATION
                OF TECHNOLOGY AND PRODUCTS

            

    

     

    (a) Marking.
      Licensee agrees to mark, as appropriate, the following with appropriate
      copyright notices, trademark notices, patent pending notices and/or patent
      numbers in conformity with applicable law: 

     

    
      	 	
              1.

            	
              all
                units of the Products made or sold by or for Licensee and/or its
                sublicensees;

            

    

     

    
      	 	
              2.

            	
              all
                packaging of the Products, and

            

    

     

    
      	 	
              3.

            	
              all
                brochures, manuals, and documents describing the
                Products.

            

    

     

    (b) License
      Disclosure.
      Unless
      otherwise directed by Licensor, Licensee shall state in a manner acceptable
      to
      Licensor and approved by Licensor, in a prominent position on all materials
      and
      things specified in sub-Section 12(a)
      above,
      that
      the Products are manufactured and/or distributed by Licensee under license
      from
      Licensor.

     

    
      	
              13.

            	
              GENERAL
                PROVISIONS

            

    

     

    (a) Entire
      Agreement.
      The
      parties hereto have read this Agreement and agree to be bound by all its terms.
      The parties further agree that this Agreement constitutes the full, complete
      and
      exclusive statement of the Agreement between them and supersedes all proposals,
      oral or written, and all other communications between them relating to the
      subject matter of this Agreement.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (b) Modifications.
      No
      agreement changing, modifying, amending, extending, superseding, discharging,
      or
      terminating this Agreement or any provisions hereof shall be valid unless it
      is
      in writing and is dated and signed by duly authorized representatives of each
      party.

     

    (c) Severability.
      Should
      any term or provision of this Agreement be finally determined by an arbitration
      panel to be void, invalid, unenforceable or contrary to law or equity, the
      offending term or provision shall be modified and limited (or if strictly
      necessary, deleted) only to the extent required to conform to the requirements
      of law and the remainder of this Agreement (or, as the case may be, the
      application of such provisions to other circumstances) shall not be affected
      thereby but rather shall be enforced to the greatest extent permitted by
      law.

     

    (d) Waiver.
      Failure
      of any of the parties hereto to enforce any of the provisions of this Agreement
      or any rights with respect thereto or to exercise any election provided for
      therein, shall in no way be considered a waiver of such provisions, rights,
      or
      election or in any way to affect the validity of this Agreement. No term or
      provision hereof shall be deemed waived and no breach excused, unless such
      waiver or consent shall be in writing and signed by the party claimed to have
      waived or consented. Any consent by any party to, or waiver of, a breach by
      the
      other, whether express or implied, shall not constitute a consent or waiver
      of,
      or excuse for any other, different or subsequent breach. All remedies herein
      conferred upon any party shall be cumulative and no one shall be exclusive
      of
      any other remedy conferred herein by law or equity.

     

    (e) Time
      is
      of the Essence.
      Time is
      of the essence in the performance of each and every obligation and covenant
      imposed by this Agreement.

     

    (f) Binding
      Agreement.
      This
      Agreement shall be binding not only upon the parties hereto, but also upon
      and
      without limitations thereto, their assignees, successors, divisions,
      subsidiaries, officers, directors, employees, and sublicensees.

     

    (g) Force
      Majeure.
      Neither
      Licensor nor Licensee shall be responsible for any failure to fulfill its
      obligations due to causes beyond its reasonable control, including without
      limitation, acts or omissions of government or military authority, acts of
      God,
      acts of terrorism, materials shortages, transportation delays, fires, floods,
      labor disturbances, riots, wars, or inability to obtain any export or import
      license or other approval of authorization of any government
      authority.

     

    (h) Expenses.
      Except
      as provided elsewhere in this Agreement, all of the legal, accounting, and
      other
      miscellaneous expenses incurred in connection with this Agreement and the
      performance of the various provisions of this Agreement shall be paid by the
      party who incurred the expense.

     

    (i) Survival.
      All
      covenants, agreements, representations, warranties and provisions of this
      Agreement which by their nature survive the termination of this Agreement shall
      so survive after the effective date of termination of this
      Agreement.

     

    (j) Disclaimer
      of Warranties; Limitation of Liability.
      EXCEPT
      FOR THE WARRANTIES EXPRESSLY PROVIDED HEREIN, NEITHER PARTY HERETO MAKES ANY
      WARRANTIES AND DISCLAIMS ANY IMPLIED WARRANTIES OF ANY KIND, INCLUDING, BUT
      NOT
      LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
      PURPOSE OR AGAINST INFRINGEMENT WITH REGARD TO THE PRODUCTS OR THE PERFORMANCE
      OF ITS OBLIGATIONS HEREUNDER. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
      WITH RESPECT TO ANY PUNITIVE, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT
      DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS ARISING OUT OF THE
      PERFORMANCE OF NONPERFORMANCE OF THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN
      ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (k) Confidentiality.
      The
      terms of this Agreement as well as any information disclosed by either party
      to
      the other pursuant to this Agreement, except as set forth below, shall be
      considered confidential to the disclosing party and shall not be disclosed
      or
      used by the receiving party other than as expressly authorized herein without
      the prior written consent of the disclosing party, which consent may be withheld
      by the disclosing party in its sole and absolute discretion. The foregoing
      obligation of confidentiality shall not apply to information which (a) was
      publicly available at the time of the disclosure to the receiving party;
      (b) subsequently becomes publicly available through no fault of the
      receiving party; (c) is rightfully acquired by the receiving party, subsequent
      to disclosure by the other party from a third party who is not in breach of
      a
      confidential relationship with regard to such information; (d) is independently
      developed by the receiving party solely through the efforts of individuals
      who
      did not have access to the confidential information, as evidenced by the
      receiving party’s written records; or (e) is required to be made public by court
      order, law or regulation, provided that the disclosing party is notified as
      soon
      as practicable prior to such compelled disclosure in order to contest
      same.

     

    (l) Construction;
      Counterparts.
      The
      headings used in this Agreement are for reference purposes only and shall not
      be
      considered a part of this Agreement. This Agreement may be executed in
      counterparts, each of which shall be deemed to be an original and all of which
      shall constitute one and the same agreement.

     

    [THE
      REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.

     

    SIGNATURE
      PAGE FOLLOWS.]

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto, by and through their respective undersigned duly authorized
      representatives, have caused this Agreement to be executed as of the Effective
      Date.

     

    
      	 	 	 
	 	
              LICENSOR:

               

              Electric Aquagenics Unlimited, Inc., a Delaware
                corporation

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

            
	 	
              Title:

            

    

     

    
      	 	 	 
	 	
              LICENSEE:

               

              Water Science, LLC

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
              Peter Ullrich
	 	Title:
              Sole Member 

    

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    SCHEDULE
      A

    

    TECHNOLOGY/PRODUCTS

     

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    SCHEDULE
      B

    

    TRADEMARKS

    

    The
      Company’s Trademarks are as follows:

    

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

     

    SCHEDULE
      C

    

    TERRITORIES

     

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    

    

    SCHEDULE
      D

    

    PRODUCT
      PRICES

     

    
      
         

      

        D-1

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