Document:

UNIVERSITY OF CALIFORNIA, SANTA BARBARA

	

 

BERKELEY  •  DAVIS  •  IRVINE  •  LOS ANGELES  •   MERCED  •  RIVERSIDE  •  SAN DIEGO  •  SAN FRANCISCO   SANTA BARBARA  •  SANTA CRUZ 

	
office of technology & industry alliances

	
SANTA BARBARA,

	 	

CALIFORNIA  93106-2055

	  	
Fax:     (805) 893-5236

May 11, 2010

	
VIA EMAIL

	
CONFIDENTIAL

LETTER OF INTENT

Appeal Capital Corp.

c/o Meetesh Patel

430 Park Avenue, Suite 702

New York, New York 10022

RE:           UC Case Nos.  2008-318 & 2008-538

Dear Mr. Patel:

In accordance with our discussions, I am pleased to confirm that The Regents of the University of California (“The Regents”) will negotiate exclusively with Appeal Capital Corp. (“Appeal Capital”) during the Term for an exclusive option or license to The Regents’ rights in the inventions identified in the table below (“Inventions”).

	
UC Case

Number

	 	
Title

	 	
Application Number

	 	
Filing Date

	 	 	 	 	 	 	 
	
[****]

	 	
[****]

	 	
[****]

	 	
[****]

	 	 	 	 	 	 	 
	
[****]

	 	
[****]

	 	
[****]

	 	
[****]

	 	 	 	 	 	 	 
	
[****]

	 	
[****]

	 	
[****]

	 	
[****]

This offer to negotiate expires ten (10) days from the date at the top of this letter if not fully executed and returned prior to that time.  This Letter of Intent is effective as of May 11, 2010 and any promises or obligations contained herein will expire on May 10, 2011 (the “Term”).  The Term may be extended for one additional period of one (1) year upon the payment to The Regents of an extension fee of Ten Thousand Dollars ($10,000) prior to the end of the Term.

This Letter of Intent comprises a promise by The Regents not to offer the Inventions to others during the Term (and any extensions thereof) and a promise to negotiate in good faith for an option or license agreement.  If an option or license agreement has not been executed by the end of the Term, or any extension thereof, The Regents will thereafter be free to seek other prospective licensees for the Inventions.  This Letter of Intent does not in any way constitute a license in itself.

Part of the negotiation contemplated for an option or license will be the mutual discussion of a suitable business plan for the development and marketing of the Inventions prepared by Appeal Capital and presented in writing to this office prior to the end of the Term.

As consideration for the promises contained in this Letter of Intent, Appeal Capital shall pay to The Regents the following:

 

  

  

  

 

Appeal Capital

May 11, 2010

 

	
  

	
-

	
All patent costs related to the Inventions incurred by The Regents during the Term (including any extensions); and

	
  

	
-

	
A one-time non-creditable, non-refundable fee of $[****].

 

A check in the amount of $[****] for the partial payment of the one-time fee should be enclosed when this Letter of Intent is returned to The Regents for final execution.  The check should be made out to The Regents of the University of California. The other payment of $[****]is due within 45 days from the execution of this Letter of Intent.

Patent costs incurred during the Term will be invoiced to Appeal Capital and will be due thirty (30) days after the date of The Regents' invoice.  In the event that patent costs, fees or other payments are not received by The Regents when due, Appeal Capital will pay to The Regents interest charges at a rate of ten percent (10%) per annum calculated from the date payment was due until actually received by The Regents.  Nonpayment by Appeal Capital of any of the invoices will, at The Regents’ discretion, automatically terminate this Letter of Intent (after receipt of notice from The Regents and passage of a ten (10) day cure period).  The obligation to pay fees and patent costs hereunder will survive termination or expiration of this Letter of Intent.  If an option or license agreement replaces this Letter of Intent, that agreement will extend the commitment of full patent cost reimbursement by Appeal Capital for as long as the new agreement remains in effect.  Payment may be made by wire transfer to an account designated by The Regents.  Appeal Capital will cover the cost of any associated wire transfer fees.

Appeal Capital may request in writing to be copied on the patent prosecution by The Regents’ patent attorney during the Term and to provide input and comments on the scope and the thrust of the patent claims being sought, as well as on the prior art being considered.  This right is limited to providing comments only and in no way is meant to include giving instructions to The Regents’ patent counsel.  Appeal Capital agrees to keep all patent prosecution documents strictly confidential.

Appeal Capital will pay to The Regents the estimated cost of any requested patent filings, including national phase applications, in advance of The Regents’ authorizing patent counsel to file such applications.

Appeal Capital may request that The Regents file national phase applications based on the PCT application covering the Invention in the territories of its choice, where available. The deadline to file for national phase entry is August 25, 2010. Appeal Capital must notify The Regents of its decision at least two (2) months in advance of the deadline to file. Appeal Capital will be responsible for the patent costs related to the countries selected by Appeal Capital.  The Regents reserve the right to file in any countries not selected by Appeal Capital.

If the foregoing terms are acceptable to you, please sign this Letter of Intent and a duplicate original in the spaces provided below and return them to this office.  I will then have both originals signed on behalf of The Regents and return one fully signed original to you.  This Letter of Intent may be signed in counterparts.  Facsimile and electronically scanned signatures shall have the same effect as original signatures.

	  	
Sincerely,

	  	  
	  	
Franco Caporale

	  	
Licensing Officer

 

  

2 of 3

  

Appeal Capital

May 11, 2010

AGREED: 

	
APPEAL CAPITAL CORP.

	  	
THE REGENTS OF THE

	  	  	
UNIVERSITY OF CALIFORNIA

	  	  	  
	
By:

	
    

	  	
By:

	
   

	
(Signature)

	  	
(Signature)

	  	  	  
	
Name:

	
    

	  	
Name:

	
Sherylle Mills Englander

	  	  	  
	
Title:

	
    

	  	
Title:

	
Director, Office of

	  	  	  	
Technology & Industry Alliances

	  	  	  
	
Date:

	
    

	  	
Date: 

	  

 

  

3 of 3Restated Asset Purchase Agreement dated as of October 20, 2010, by and between AcquaeBlu Corp. a Delaware corporation, having its principal place of business located at 430 Park Avenue, Suite 702, New York, New York 10022 (herein called “Buyer”) and Appeal Capital Corp., a New York corporation, having its principal place of business located at 430 Park Avenue, Suite 702, New York, New York 10022 (herein called “Seller”).

Whereas, the Seller is party to a Letter of Intent dated May 11, 2010 (re: UC Case Nos. [****]) with the Regents of the University of California (the “Regents”) (the “Original LOI”) as amended by Agreement dated May 11, 2010 (re UC Cases No. 2010-30-0586 pursuant to which the Regents have agreed to negotiate exclusively with Seller during the term of the LOI for an exclusive option or license to the Regents’ rights in the inventions (the “Inventions”) identified in the Original LOI.

Whereas, the Original LOI was amended by Agreement dated May 11, 2010 (the “Amendatory Agreement”) so as to add to the Inventions covered under the Agreement UC Case No. [****]); the Original LOI as amended by the Amendatory Agreement is herein as the “LOI.”

Whereas, Buyer desires to purchase from Seller and Seller desires to sell to Buyer all of Sellers right title and interest in, under and to the LOI (“Sellers LOI Interest”), and certain other specified assets on the terms set forth below.

Whereas, the parties hereto previously executed an Asset Purchase Agreement of even date herewith, which agreement has not been consummated and which is superseded in its entirety by this Restated Asset Purchase Agreement.

Now, Therefore, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Assignor hereby agrees as follows:

ARTICLE 1.

PURCHASE AND SALE OF ASSETS.

1.01.           Assets Being Purchased. Seller shall sell to Buyer and Buyer shall purchase from Seller on the terms specified in this Agreement, (i) Seller’s LOI Interest and (ii) the following domain names: AcquaeBlu and AcquaeBlu Corp. (hereinafter called the “Assets”). In connection with the sale of the Assets, and at the Closing (as hereinafter defined), the Seller shall execute and deliver to and in favor of the Buyer, an Assignment and Bill of Sale and such other instruments as may be required in order to transfer of record all right, title and interest of the Assets to the Buyer except as otherwise herein expressly provided. Notwithstanding the foregoing, Buyer hereby instructs Seller to, and Seller shall, assign the Seller’s LOI Interest to Nascent Water Technologies, Inc., Buyer’s wholly-owned subsidiary.

1.02.           Purchase Price. The Purchase Price for the Assets is $12,000 payable by delivery at of buyer’s Promissory Note attached hereto as Exhibit A.

1.03.           Closing. The sale and purchase described in this Agreement shall be consummated on or before December 31, 2010 (“Closing” or “Closing Date”), or such other date as shall be mutually agreed by the parties, at the offices of Sierchio & Company, located at 430 Park Avenue, Suite 702, New York, New York 10022.

ARTICLE 2.

REPRESENTATIONS AND WARRANTIES BY SELLER.

2.01.           Title to Assets. To the best of its knowledge, Seller has good and marketable title to Purchased Assets covered by this Agreement. Seller's title to the Purchased Assets is free and clear of any liens, encumbrances, or other defects.

 

  

  

  

2.02.           Authority to Sell. Seller has complied with all of the requirements of any applicable law of the State of New York relative to the sale of assets described in this Agreement and that prior to Closing, all of the consents, approvals and notices that may be required by law or by agreements to which Seller may be a party will be obtained and given, respectively.

2.03.           Defaults and Violations. Seller is not in default or material violation of any contracts, agreements, leases, or other instruments or obligations relating to the Purchased Assets to be sold and transferred to Buyer pursuant to this Agreement, and this Agreement and the purchase and sale to be consummated pursuant to this Agreement will not create or cause a default or material violation of any contract, agreement, lease or other instrument to which Seller may be a party. All contracts and agreements, and other obligations of Seller related to the Assets are attached hereto as Exhibits A-1 through A-3.

2.05.           Taxes.  All Federal, state and local tax returns and payments relating to the Purchased Assets that have become due from Seller to the date of this Agreement have been timely filed.

2.06.           Litigation.  There is now no litigation pending against it of which it or its officers are aware that will, might, or could affect consummation of the purchase and sale described in this Agreement or transfer of title of any of the Purchased Assets in good and marketable condition to Buyer and Seller is not aware of any threatened litigation which may affect the consummation of the purchase and sale described in this Agreement.

2.08           Intellectual Property.  To the best of Seller's knowledge, none of the Purchased Assets to be purchased hereunder including, but not limited to, the software code, trademarks and tradenames enumerated on Schedule 1.01(a), violate or infringe any patents, trademark, service mark, copyrights, trade secrets or other intellectual property rights of any third person.

ARTICLE 3.

REPRESENTATIONS AND WARRANTIES BY BUYER.

3.01.           Consents, Approvals and Notices. Buyer has complied with all of the requirements of any applicable law of the State of Delaware, its state of organization, relative to its purchase of the Purchased Assets described in this Agreement and that prior to Closing, all of the consents, approvals and notices that may be required by law or by agreements to which Buyer may be a party will be obtained and given, respectively.

3.02.           Litigation.  There is now no litigation pending against it of which it or its officers are aware that will, might, or could affect consummation of the purchase and sale described in this Agreement and Buyer is not aware of any threatened litigation which may affect the consummation of the purchase and sale described in this Agreement.

3.03.           Due Organization. Buyer is a corporation duly organized and existing under the General Corporation Law of the State of Delaware and that its power as a corporation has never been and is not now suspended.

3.04.           Authority to Buy. This Agreement has been approved by Buyer's Board of Directors and that Buyer has full power and authority to both execute and perform this contract.

ARTICLE 4.

OPERATION OF ASSETS.

4.01.           Seller to Continue Business. Seller shall continue to operate its business as it is currently being operated until the Closing. Any and all risk of loss or damages to the Assets during such period from any and all causes shall be borne by the Seller.

 

  

  

  

 

ARTICLE 5.

CONDITIONS TO BUYER'S PERFORMANCE.

Absent a waiver in writing, all obligations of the Buyer under this Agreement are subject to satisfaction of the following conditions on or before the Closing Date:

5.01.           Performance by Seller. Seller shall have performed, satisfied and complied with all covenants, agreements, and conditions required by this Agreement to be performed or complied with by them, or any of them, on or before the Closing Date.

5.02.           Representations and Warranties True as of the Closing Date. Except as otherwise permitted by this Agreement, all representations and warranties by Seller in this Agreement shall be true on and as of the Closing Date as though made at that time.

5.03.           Third Party Consents. All consents and approvals required to be given by third parties shall have been obtained and Buyer shall have been furnished with appropriate evidence reasonably satisfactory to it and its counsel of the granting of such consents and approvals.

5.04.           No Material Adverse Change. During the period from the date of the most recent financial statement to the Closing Date the Seller has not sustained any material loss or damage to its assets, whether or not insured, that materially affect its ability to conduct a material part of its business.

5.05.           Absence of Litigation. No action, suit, or proceeding before any court or any governmental body or authority, pertaining to the transaction contemplated by this Agreement, or to its consummation, shall have been instituted or threatened against the Seller on or before the Closing Date.

5.06.           Corporate Approvals. The board of directors of Seller and to the extent required, the shareholders of Seller, shall have duly authorized and approved the execution and delivery of this Agreement and all corporate action necessary or proper to fulfill Seller's obligations hereunder on or before the Closing Date.

ARTICLE 6.

CONDITIONS OF SELLER'S PERFORMANCE.

Absent a waiver in writing, all obligations of Seller hereunder are subject to the satisfaction of the following conditions on or before the Closing Date:

6.01.           Representations and Warranties True as of the Closing Date.  All representations and warranties of Buyer contained in this Agreement shall be true on and as of the Closing Date as though such representations and warranties were made on and as of that date.

6.02.           Performance By Buyer. Buyer shall have performed and complied with all covenants and agreements and satisfied all conditions required by this Agreement to be performed by Buyer on or before the Closing Date.

6.03.           Corporate Approvals. The board of directors of Buyer, and to the extent required the shareholders of Buyer shall have duly authorized and approved the execution and delivery of this Agreement and all corporate action necessary or proper to fulfill Buyer's obligations hereunder on or before the Closing Date.

6.04.           Licensing Agreement.   On the Closing Date, the Seller and the Buyer shall enter into a licensing agreement substantially in the form of Exhibit C (the “Licensing Agreement”).

 

  

  

  

6.05.           No Material Adverse Change. During the period from the date of this Agreement to the Closing Date, the Buyer will not have sustained any material loss or damage to its assets, whether or not insured, that materially affect its ability to conduct a material part of its business.

6.06.           Absence of Litigation. No action, suit, or proceeding before any court or any governmental body or authority, pertaining to the transaction contemplated by this Agreement, or to its consummation, shall have been instituted or threatened against the Buyer on or before the Closing Date.

ARTICLE 7.

TERMINATION DEFAULT REMEDIES.

7.01.           Termination. If either Buyer or Seller materially defaults in the due and timely performance of any of its warranties, covenants or agreements or in the event of the failure to satisfy or fulfill any of the conditions, the non-defaulting party may on the Closing Date give notice of termination. The notice shall specify the default or defaults upon which the notice is based. The termination shall be effective five days after the Closing Date, unless the specified default or defaults have been cured on or before the effective date of the termination.

7.02.           Default; Remedies. Notwithstanding Section 9.01, in the event of a default, the non-defaulting party may seek specific performance of this Agreement against the defaulting party from a court of competent jurisdiction, or alternatively, such non-defaulting party may seek damages from the defaulting party.

7.03.           Litigation Costs. If any legal action or other proceeding is brought for the enforcement of this Agreement or to remedy its breach, the prevailing party in such action or proceeding shall be entitled to recover its actual attorney's fees and other costs incurred in the action or proceeding, in addition to such other relief to which it may be entitled.

ARTICLE 8.

MISCELLANEOUS.

8.01.           Entire Agreement. This instrument with its attachments constitutes the entire agreement between Buyer and Seller respecting the Assets or the sale of the Assets to Buyer by Seller, and any agreement or representation respecting the Assets or their sale by Seller to Buyer not expressly set forth in this instrument is null and void.

8.02.           Notices. Any and all notices or other communications required or permitted by this Agreement or by law to be served on or given to either party hereto, Buyer or Seller, by the other party hereto shall be, unless otherwise required by law, in writing and deemed duly served and given when personally delivered to the party to whom directed or any of its officers or, in lieu of such personal service, when deposited in the United States mail, first-class postage prepaid, addressed as follows:

if to Buyer, to:

AcquaeBlue Corp.

430 Park Avenue

Suite 702

New York, New York 10022

Att:  Mr. Meetesh Patel

If to Seller, to:

Appeal Capital Corp.

430 Park Avenue

Suite 702

New York, New York 10022

Att: Joseph Sierchio, Managing Director

 

  

  

  

8.03.           Assignment. Except as otherwise contemplated hereby, this Agreement may not be assigned by either party to any other person or corporation without the express written consent of the other party to this Agreement.

8.04.           Governing Law. This Agreement shall be governed and all rights and liabilities under it determined in accordance with the laws of the State of New York, without regard to the conflicts of laws principles thereof.

8.05.           Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be an original, but all of which shall constitute but one Agreement.

8.06.           Expenses. Each party shall pay all costs and expenses incurred by it in negotiating and preparing this Agreement and in closing and carrying out the transactions contemplated herein and hereby.

8.07.           Further Assurances. The parties agree that at any time and from time to time after the Closing Date, they will execute and deliver to any other party such further instruments or documents as may be reasonably required to give effect to the transactions contemplated hereunder.

IN WITNESS WHEREOF, the parties hereto have through their respective duly qualified and authorized officers, signed and delivered this agreement and agree to be bound by the terms hereof as of this 20th day of October, 2010.

	
Seller:

	  
	
Appeal Capital Corp.

	  
	
By:

	
   

	  
	
Name: Joseph Sierchio

	
Title: Managing Director

	
Buyer:

	  
	
AcquaeBlu Corp.

	  
	
By:

	
   

	  
	
Name: Meetesh Patel

	
Title: President and Chief Executive Officer

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