SHARE EXCHANGE AGREEMENT by and among Island Scallops Ltd a British Columbia Company on the one hand; and Granscal Sea Farms Ltd, a Kanish Bay Company and all of the Shareholders of Granscal Sea Farms Ltd. on the other hand As at July 1,2008
by
and among
Island
Scallops Ltd
a
British Columbia Company
on the one hand;
and
Granscal
Sea Farms Ltd,
a
▇▇▇▇▇▇ Bay Company
and
all of
the Shareholders
of
Granscal Sea Farms Ltd.
on
the other hand
As at
July 1,2008
This
Share Exchange Agreement, dated as of July 1, 2008 (this "Agreement"), is made
and entered into by and among Granscal Sea Farms Ltd., a ▇▇▇▇▇▇ Bay Company
("Granscal") and the shareholders of Granscal, listed on Schedule I attached
(each, a. "Granscal Shareholder," collectively, the "Granscal Shareholders"), on
the one hand; and Island Scallops Ltd., a British Columbia company ("ISL") on
the other hand.
RECITALS
WHEREAS,
the Board of Directors of ISL has adopted resolutions approving ISL's
acquisition o shares of Granscal (the "Acquisition") upon the terms and
conditions hereinafter set forth in this Agreement;
WHEREAS,
the Granscal Shareholders own, an amount of shares of common stock of Granscal,
constituting 100% of the issued and outstanding capital stock of Granscal (the
"Granscal Shares"), and the Granscal Shareholders desire to sell their Granscal
Shares pursuant to the terms and conditions of this Agreement;
NOW,
THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE
1
THE
ACQUISITION
1.1 The Acquisition: Upon
the terms and subject to the conditions hereof, at the Closing (as hereinafter
defined) the Granscal Shareholders will sell, convey, assign, transfer and
deliver to ISL one or more stock certificates representing the Granscal Shares,
and ISL will, in consideration for the Granscal Shares:
(a) transfer
to the Granscal Shareholders, one or more stock certificates representing
400,000 shares in the capital of Edgewater Foods International (the EDWT
Shares”.);
(b) pay
to the Granscal Shareholders the sum of $30,000.00, in equal monthly payments in
the amount of $5,000.00 each, commencing the last day of September 30, 2008 and
continuing on the same date of each and every consecutive month until fully
paid. This obligation shall be secured by a Promissory Note of lSL in the form
attached as Schedule “A”;
(c) pay
to the Granscal Shareholders a sum equal to a 50% share of the gross revenue
earned on account of the sale of its 2004, 2005 and 2006 brood year inventory
currently in the water (to be paid out as and when received by
ISL).
1.2 Closing. The closing
of the Acquisition (the "Closing") shall be deemed to take place as of July 1,
2008, or on such other date as may be mutually agreed upon by the parties. Such
date is referred to herein as the "Closing
Date." Notwithstanding the Closing Date, the delivery of stock certificates
representing the Granscal Shares and the EDWT Shares to the parties entitled
hereunder will take place on or before November 30, 2008 With the exception of
any stock certificates which must be in their original form, any copy, fax,
e-mail or other reliable reproduction of the writing or transmission required by
this Agreement or any signature required thereon may be used in lieu of an
original
writing or transmission or signature for any and all purposes for which the
original could be used, provided that-such copy, fax, e-mail or other
reproduction is a complete reproduction of the entire original writing or
transmission or original signature, and the originals are promptly delivered
thereafter.
1.3 Taking of Necessary Action;
Further Action. If at any time after the Closing, any further action is
necessary or desirable to carry out the purposes of this Agreement, Granscal,
the Granscal Shareholders, and/or ISL will take all such lawful and necessary
action.
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF GRANSCAL
Granscal
hereby represents and warrants to ISL as follows:
2.1 Organization.
Granscal has been duly incorporated, is validly existing as a company in ▇▇▇▇▇▇
Bay and is in good standing under the laws of its jurisdiction of incorporation,
and has the requisite power to carry on its business as now
conducted.
2.2 Capitalization. The
authorized capital stock of Granscal consists of 1000 common shares, of 'which,
100 shares have been issued..All of
the issued and outstanding shares of capital stock of Granscal, as of the
Closing, are duly authorized, validly issued, fully paid, non-assessable and
free of preemptive rights. There are no voting trusts or any other agreements or
understandings with respect to the voting of Granscal's capital stock. There are
no agreements purporting to restrict the transfer of the Granscal Shares, nor
any other voting agreements, voting trusts or other arrangements restricting or
affecting the voting of the Granscal Shares.
2.3 Certain Corporate
Matters. Granscal is duly qualified to do business as a corporation and
is in good standing in each jurisdiction in which the ownership of its
properties, the employment of its personnel or the conduct of its business
requires it to be so qualified, except where the failure to be so qualified
would not have a material adverse effect on Granscal's financial condition,
results of operations or business. Granscal has full corporate power and
authority and all authorizations, licenses and permits necessary to carry on the
business in which it is engaged and to own and use the properties awned and used
by it.
2.4 Authority Relative to this
Agreement Granscal has the requisite power and authority to enter into
this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement by Granscal and the consummation by
Granscal of the transactions contemplated hereby have been duly authorized by
Granscal and the Granscal Shareholders and no other actions on the part of
Granscal are necessary to authorize this Agreement or the transactions
contemplated' ;'thereby.
This Agreement has been duly and validly executed and delivered by Granscal and
constitutes a valid and binding agreement of Granscal, enforceable against
Granscal in accordance with its terms, except as such enforcement may be limited
by bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
2.5 Consents and Approvals; No
Violations. Except for applicable requirements of applicable
British Columbia securities laws and licensing authorities, no filing with, and
no permit, authorization, consent or approval of, any third party, public body
or authority is necessary for the consummation by Granscal of' the transactions
contemplated by this Agreement Neither the execution and delivery of this
Agreement by Granscal nor the consummation by Granscal of the transactions
contemplated hereby, nor compliance by Granscal with any of the provisions
hereof will (a) conflict with-or result in any breach of any provisions of the
Articles of Granscal, (b) result in a violation or breach of or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which Granscal or any
Subsidiary (as hereinafter defined) is a party or by which they any of their
respective properties or assets may be bound or (c) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Granscal or any
Subsidiary, or any of their respective properties or assets, except in the case
of clauses (b) and (c) for violations, breaches or defaults which are not in the
aggregate material to ISL or any Subsidiary taken as a whole. For purposes of
this Agreement the term "material" shall mean $10,000 or greater.
2.6 Books and Records.
The books and records of Granscal delivered to the Granscal Shareholders prior
to the Closing fully and fairly reflect the transactions to which Granscal is a
party or by which they or their properties are bound and the financial
statements for the periods ending June 30, 2008, fairly and
accurately present the financial position of Granscal, and, except for routine
adjustments which may result from an audit of such financial statements, do not
contain any material misstatements or omissions.
2.7 Intellectual
Property. Granscal has no knowledge of any claim that, or inquiry as to
whether, any product, activity or operation of Granscal infringes upon or
involves, or has resulted in the infringement of, any trademarks, trade-names,
service marks, patents, copyrights or other proprietary rights of any other
person, corporation or other entity; and no proceedings have been instituted,;
are pending or are threatened.
2.8 Litigation. Granscal
is not subject to any judgment or order of any court or quasi-judicial or
administrative agency of any jurisdiction, domestic or foreign, nor is there any
charge, complaint, lawsuit or governmental investigation pending against
Granscal, Granscal is not a plaintiff in any action, domestic or foreign,
judicial or administrative. There are no existing actions, suits, proceedings
against or investigations of Granscal, and Granscal knows of no basis for such
actions, suits, proceedings or investigations. There are no unsatisfied
judgments, orders, decrees or stipulations affecting Granscal or to which
Granscal is a party.
2.9 Legal ▇▇▇▇▇▇▇▇▇▇.▇▇
the best knowledge of Granscal, after due investigation, no claim has been filed
against Granscal alleging a violation of any applicable laws and regulations of
foreign, federal, state and local governments and all agencies thereof Granscal
holds all of the material permits, licenses, certificates or other
authorizations of foreign, federal, state or local governmental agencies
required for the conduct of their respective businesses as presently
conducted.
.2.10 Disclosure.The
representations and warranties and statements of fact made by Granscal in this
Agreement are, as applicable, accurate, correct and complete, and will remain so
at the time of Closing, and do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained herein not false or
misleading.
2.11 Due
Diligence. ISL has had the opportunity to perform all due
diligence investigations of Granscal and its business as ISL has deemed
necessary or appropriate and to ask all questions of the officers and directors
of Granscal that Granscal wished to ask, and ISL has received satisfactory
answers to all of its questions regarding Granscal. ISL has had
access to all documents and information about Granscal and has reviewed
sufficient information to allow it to make the satisfactory evaluation on the
merits and risks of the transactions contemplated by this
Agreement. Notwithstanding the foregoing, nothing herein shall
derogate from or otherwise modify the representations and warranties of Granscal
set forth in this Agreement, on which each of the ISL have relied in making an
exchange of EDWT Shares of the Company for the shares of Granscal Common
Stock.
2.12. Outstanding
Obligations. There are no outstanding obligations of Granscal
to repurchase, redeem or otherwise acquire any of their respective shares, and
no party has the right to acquire any shares of Granscal except for the
shareholders identified in Schedule 1.1(a), and only to the extent set forth
such Schedule.
2.13. Liabilities. Except
as indicated in the financial statements and the $35,000 Granscal indebtedness
to Bank of Montreal which ISL has agreed to pay out after closing ,and those
incurred in the ordinary business hereto, neither Granscal nor any of its
Subsidiaries has incurred any external liabilities, obligations, claims or
losses (whether liquidated or unliquidated, secured or unsecured, absolute,
accrued, contingent or otherwise) which, individually or in the aggregate, are
not reasonably likely to have a Material Adverse Effect.
2.14
Property. Granscal
and each Subsidiary has the right to use all of its personal property
reflected in the Financial Statements, free and clear of any mortgages, pledges,
charges, liens, security interests or other encumbrances, except to the extent
that such mortgages, pledges, charges, liens, security interests or other
encumbrances, individually or in the aggregate, do not cause a Material Adverse
Effect. Additionally, all leases, offshore tenure rights and/or
similar rights held by Granscal and/or each of its Subsidiaries are valid and
subsisting and in full force and effect.
2.15 Regulations. The
business of Granscal has been and is presently being conducted in accordance
with all applicable governmental laws, rules, regulations and ordinances.
Granscal and each of its Subsidiaries have all permits, licenses, consents and
the authorizations and approvals in its country required in the governmental
regulations necessary for the conduct of its business as now being conducted by
it.
2.16 Environmental
Compliance. romromGranscal Shareholders knowledge, Granscal and each
of its Subsidiaries are in material compliance with applicable environmental
requirements in the operation of their respective business, except to the extent
that any non-compliance, individually or in the aggregate, does not cause a
Material Adverse Effect.
2.
17 Adverse
Interest. No current officer, director, affiliate or person
known to Granscal to be the record or beneficial owner in excess of 5% of
Granscal common stock, or any person known to be an associate of any of the
foregoing is a party adverse to Granscal or has a material interest adverse to
Granscal in any material pending legal proceeding.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE GRANSCAL SHAREHOLDERS
The
Granscal Shareholders hereby jointly and severally represent and warrant to ISL
as follows:
3.1 Ownership of Granscal
Shares. Each Granscal Shareholder owns, beneficially and of
record, good and marketable title to the Granscal Shares set forth opposite such
Granscal Shareholder’s name in Column I on Schedule 1.1(a) attached hereto, free
and clear of all security interests, liens, adverse claims, encumbrances,
equities, proxies, options or shareholders’ agreements. Each Granscal
Shareholder represents that such person has no right or claims whatsoever to any
shares of Granscal capital stock, other than shares listed across such Granscal
Shareholder on Schedule 1.1(a) and does not have any options, warrants or any
other instruments entitling such Granscal Shareholder to exercise to purchase or
convert into shares of Granscal capital stock. The Granscal
Shareholders have full right, power and authority to sell, transfer and deliver
the Granscal Shares, and at the Closing, will convey to ISL good and marketable
title to the Granscal Shares, free and clear of any security interests, liens,
adverse claims, encumbrances, equities, proxies, options, shareholders’
agreements or restrictions.
3.2 Authority Relative to this
Agreement. This Agreement has been duly and validly executed
and delivered by each Granscal Shareholder and constitutes a valid and binding
agreement of each Granscal Shareholder, enforceable against each Granscal
Shareholder in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors’ rights generally or by general principles of
equity.
3.3 Restricted
Securities. Each Granscal Shareholder is acquiring the EDWT Shares for
his/her own account (and not for the account of others) for investment and not
with a view to the distribution therefor. Each Granscal Shareholder
acknowledges that the EDWT Shares will not be registered pursuant to the
Securities Act of 1933, as amended (the “Securities Act”) or any applicable
state securities laws, that the EDWT Shares will be characterized as “restricted
securities” under federal securities laws, and that under such laws and
applicable regulations the EDWT Shares cannot be sold or otherwise disposed of
without registration under the Securities Act or an exemption
therefrom. In this regard, each Granscal Shareholder is familiar with
Rule 144 promulgated under the Securities Act, as currently in effect, and
understands the resale limitations imposed thereby and by the Securities Act;
and, each Granscal Shareholder agrees not to sell or otherwise dispose of
his/her EDWT Shares without such registration or an exemption
therefrom.
3.4 Accredited
Investor. Each Granscal Shareholder is an “Accredited
Investor” as that term is defined in Rule 501 of Regulation D promulgated under
the Securities Act. Each Granscal Shareholder is able to bear the
economic risk of acquiring the EDWT Shares pursuant to the terms of this
Agreement, including a complete loss of such Granscal Shareholder’s investment
in the EDWT Shares.
3.5 Legend. Each Granscal
Shareholder acknowledges that the certificate(s) representing such shareholder’s
pro rata portion of the EDWT Shares shall each conspicuously set forth on the
face or back thereof a legend in substantially the following form:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
3.6 Independent Nature of
Shareholders. Each Granscal Shareholder is acquiring the
Granscal Shares for his/her own account (and not for the account of others) for
investment and not with a view to the distribution therefore.
3.7 Address. The
communication address of the Granscal Shareholders is as listed on the signature
pages hereto.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF ISL
ISL
hereby represents and warrants to Granscal and Granscal Shareholders as
follows:
4.1 Organization. ISL has
been duly incorporated, is validly existing as a company in British Columbia and
is in good standing under the laws of its jurisdiction of incorporation, and has
the requisite power to carry on its business as now conducted.
4.2 Certain Corporate
Matters. ISL is duly qualified to do business as a corporation and is in
good standing in each jurisdiction in which the ownership of its properties, the
employment of its personnel or the conduct of its business requires it to be so
qualified, except where the failure to be so qualified would not have a material
adverse effect on ISL’s financial condition, results of operations or business.
ISL has full corporate power and authority and all authorizations, licenses and
permits necessary to carry on the business in which it is engaged and to own and
use the properties owned and used by it.
4.3 Authority Relative to this
Agreement. ISL has the requisite power and authority to enter
into this Agreement and to carry out its obligations hereunder. The
execution, delivery and performance of this Agreement by ISL and the
consummation by ISL of the transactions contemplated hereby have been duly
authorized by ISL and no other actions on the part of ISL are necessary to
authorize this agreement or the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by ISL and constitutes a valid
and binding agreement of ISL, enforceable against ISL in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors’ rights generally or
by general principles of equity.
4.4 Consents and Approvals; No
Violations. Except for applicable requirements of British
Columbia securities laws, no filing with, and no permit, authorization, consent
or approval of, any third party, public body or authority is necessary for the
consummation by ISL of the transactions contemplated by this
Agreement. Neither the execution and delivery of this Agreement by
ISL nor the consummation by ISL of the transactions contemplated hereby, nor
compliance by ISL with any of the provisions hereof, will (a) conflict with or
result in any breach of any provisions of the charter or Bylaws of ISL, (b)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, contract, agreement or other
instrument or obligation to which ISL or any Subsidiary (as hereinafter
defined) is a party or by which they any of their respective
properties or assets may be bound or (c) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Granscal or any Subsidiary, or
any of their respective properties or assets, except in the case of clauses (b)
and (c) for violations, breaches or defaults which are not in the aggregate
material to ISL or any Subsidiary taken as a whole. For purposes of
this Agreement the term “material” shall mean $10,000 or greater.
4.5 The
EDWT Shares are free and clear of all security interests, liens, adverse claims,
encumbrances, equities, proxies, options or shareholders’ agreements, and at the
Closing, ISL will convey to the Granscal shareholders good and marketable title
to the EDWT Shares, free and clear of any security interests, liens, adverse
claims, encumbrances, equities, proxies, options, shareholders’ agreements or
restrictions.
ARTICLE
5
INDEMNIFICATION
5.1 Granscal Shareholders
Indemnification. For a period of one year after the Closing,
the Granscal Shareholders (each an “Indemnifying Party”) jointly and severally
agree to indemnify ISL and each of the officers, agents and directors of ISL
against any loss, liability, claim, damage or expense (including, but not
limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever) (each an “Indemnified Party”) to which it
or they may become subject arising out of or based on either (i) any breach of
or inaccuracy in any of the representations and warranties or covenants or
conditions made by Granscal and/or the Granscal Shareholders in this Agreement;
or (ii) any and all liabilities arising out of or in connection with: (A) any of
the assets of Granscal or any Subsidiary prior to the Closing; or (B) the
operations of Granscal prior to the Closing (the “Granscal Shareholders
Indemnification”), except to the extent that such breach or liability does not
result in a Material Adverse Effect.
5.2 ISL
Indemnification. For a period of one year after the Closing,
ISL and each of the officers, agents and directors of ISL (each an “Indemnifying
Party”) jointly and severally agree to indemnify the Granscal Shareholders (each
an “Indemnified Party”) against any loss, liability, claim, damage or expense
(including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever) to which it or they may become
subject arising out of or based on either (i) any breach of or inaccuracy in any
of the representations and warranties or covenants or conditions made by ISL and
each of the officers, agents and directors of ISL in this Agreement; (the “ISL
Indemnification”), except to the extent that such breach or liability does not
result in a Material Adverse Effect.
5.2 Indemnification
Procedures. If any action shall be brought against any
Indemnified Party in respect of which indemnity may be sought pursuant to this
Agreement, such Indemnified Party shall promptly notify the Indemnifying Party
in writing, and the Indemnifying Party shall have the right to assume the
defense thereof with counsel of its own choosing. Any Indemnified
Party shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party except to the extent that the
employment thereof has been specifically authorized by the Indemnifying Party in
writing, the Indemnifying Party has failed after a reasonable period of time to
assume such defense and to employ counsel or in such action there is, in the
reasonable opinion of such separate counsel, a material conflict on any material
issue between the position of the Indemnifying Party and the position of such
Indemnified Party. The Indemnifying Party will not be liable to any
Indemnified Party under this Article 5 for any settlement by an Indemnified
Party effected without the Indemnifying Party’s prior written consent, which
shall not be unreasonably withheld or delayed; or to the extent, but only to the
extent that a loss, claim, damage or liability is attributable to any
Indemnified Party’s indemnification pursuant to this Article 4.
ARTICLE
6
COVENANTS
AND AGREEMENTS OF THE PARTIES
EFFECTIVE
PRIOR TO CLOSING
6.1 Corporate Examinations and
Investigations. Prior to the Closing, each party shall be
entitled, through its employees and representatives, to make such investigations
and examinations of the books, records and financial condition of Granscal and
EDWT (and any Subsidiary) as each party may request. In order that
each party may have the full opportunity to do so, Granscal and ISL, the
Granscal Shareholders and the ISL shareholders shall furnish each party and its
representatives during such period with all such information concerning the
affairs of Granscal or ISL or any Subsidiary as each party or its
representatives may reasonably request and cause Granscal or ISL and their
respective officers, employees, consultants, agents, accountants and attorneys
to cooperate fully with each party’s representatives in connection with such
review and examination and to make full disclosure of all information and
documents requested by each party and/or its representatives. Any
such investigations and examinations shall be conducted at reasonable times and
under reasonable circumstances, it being agreed that any examination of original
documents will be at each party’s premises, with copies thereof to be provided
to each party and/or its representatives upon request.
6.2 Cooperation;
Consents. Prior to the Closing, each party shall cooperate
with the other parties to the end that the parties shall (i) in a timely manner
make all necessary filings with, and conduct negotiations with, all authorities
and other persons the consent or approval of which, or the license or permit
from which is required for the consummation of the Acquisition and (ii) provide
to each other party such information as the other party may reasonably request
in order to enable it to prepare such filings and to conduct such
negotiations.
6.3 Conduct of
Business. Subject to the provisions hereof, from the date
hereof through the Closing, each party hereto shall (i) conduct its business in
the ordinary course and in such a manner so that the representations and
warranties contained herein shall continue to be true and correct in all
material respects as of the Closing as if made at and as of the Closing and (ii)
not enter into any material transactions or incur any material liability not
required or specifically contemplated hereby, without first obtaining the
written consent of the other party. Without the prior written consent
of the other party, except as required or specifically contemplated hereby, each
party shall not undertake or fail to undertake any action if such action or
failure would render any of said warranties and representations untrue in any
material respect as of the Closing.
6.4 Litigation. From
the date hereof through the Closing, each party hereto shall promptly notify the
representative of the other parties of any lawsuits, claims, proceedings or
investigations which after the date hereof are threatened or commenced against
such party or any of its affiliates or any officer, director, employee,
consultant, agent or shareholder thereof, in their capacities as such, which, if
decided adversely, could reasonably be expected to have a material adverse
effect upon the condition (financial or otherwise), assets, liabilities,
business, operations or prospects of such party or any of its
subsidiaries.
6.5 Notice of
Default. From the date hereof through the Closing, each party
hereto shall give to the representative of the other parties prompt written
notice of the occurrence or existence of any event, condition or circumstance
occurring which would constitute a violation or breach of this Agreement by such
party or which would render inaccurate in any material respect any of such
party’s representations or warranties herein.
6.6 Confidentiality;
Access to Information: Any
confidentiality agreement or letter of intent previously executed by the parties
shall be superseded in its entirety by the provisions of this
Agreement. Each party agrees to
maintain
in confidence any non-public information received from the other party, and to
use such non-public information only for purposes of consummating the
transactions contemplated by this Agreement. Such confidentiality
obligations will not apply to (i) information which was known to the one party
or their respective agents prior to receipt from the other party; (ii)
information which is or becomes generally known; (iii) information acquired by a
party or their respective agents from a third party who was not bound to an
obligation of confidentiality; and (iv) disclosure required by
law. In the event this Agreement is terminated as provided in
Article 8 hereof, each party will return or cause to be returned to the other
all documents and other material obtained from the other in connection with the
Transaction contemplated hereby.
6.7 Public
Disclosure. Except to the extent previously disclosed or to
the extent the parties believe that they are required by applicable law or
regulation to make disclosure, prior to Closing, no party shall issue any
statement or communication to the public regarding the transaction contemplated
herein without the consent of the other party, which consent shall not be
unreasonably withheld. To the extent a party hereto believes it is
required by law or regulation to make disclosure regarding the Transaction, it
shall, if possible, immediately notify the other party prior to such
disclosure.
ARTICLE
7
CONDITIONS
TO CLOSING
7.1 Conditions to Obligations of
Granscal and the Granscal Shareholders. The obligations of
Granscal and the Granscal Shareholders under this Agreement shall be subject to
each of the following conditions:
(a) Closing
Deliveries. At the Closing, ISL shall have delivered or caused
to be delivered to Granscal and the Granscal Shareholders the
following:
(i)
resolutions duly adopted by the Board of Directors of ISL authorizing and
approving the Acquisition and the execution, delivery and performance of this
Agreement;
(ii)
stock certificates representing the EDWT Shares to be delivered pursuant to this
Agreement;
(iii)
resolutions of the Board of Directors of EDWT authorizing and approving the
transfer of the EDWT share pursuant hereto, together with such other EDWT
documents, filings or other requirements to vest title to theEDWT shares
validly, legally, and absolutely in the Granscal shareholders, free of any
claim, charge, violation, further expense or liability of any kind.
(iv) this
Agreement duly executed by ISL;
(v) the
promissory note of ISL for $30,000
(vi) a
release of the personal guarantee of ▇▇▇ ▇▇▇▇▇▇▇▇ of the Granscal indebtedness
to the Bank of Montreal
(viii) such
other documents as Granscal reasonably request in connection with the
transactions contemplated hereby;
(b) Representations and
Warranties to be True. The representations and
warranties of ISL herein contained shall be true in all material respects at the
Closing with the same effect as though made at such time. ISL shall
have performed in all material respects all obligations and complied in all
material respects with all covenants and conditions required by this Agreement
to be performed or complied with by them at or prior to the
Closing.
7.2 Conditions to Obligations of
ISL. The obligations of ISL and the under this Agreement shall be subject
to each of the following conditions:
(a) Closing
Deliveries. On the Closing Date, Granscal and/or
the Granscal Shareholders shall have delivered to ISL the
following:
(i) this
Agreement duly executed by Granscal and the Granscal Shareholders;
(ii)
resolutions duly adopted by the Board of Directors of Granscal authorizing and
approving the execution, delivery and performance of this
Agreement;
(iii)
stock certificates representing the Granscal Shares to be delivered pursuant to
this Agreement duly endorsed or accompanied by duly executed stock
powers;
(iv) a
certificate of good standing for Granscal from its respective jurisdictions of
incorporation, dated not earlier than five days prior to the Closing
Date;
(v) such
other documents as ISL may reasonably request in connection with the
transactions contemplated hereby; and,
(b) Representations and
Warranties to be True. The representations and
warranties of Granscal and the Granscal Shareholders herein contained shall be
true in all material respects at the Closing with the same effect as though made
at such time. Granscal and the Granscal Shareholders shall have
performed in all material respects all obligations and complied in all material
respects with all covenants and conditions required by this Agreement to be
performed or complied with by them at or prior to the Closing.
c) Assets and
Liabilities. At the Closing, neither Granscal nor any
Subsidiary shall have any liabilities, contingent or otherwise, or any tax
obligations or any material changes to its business or financial condition, or
any material assets.
(d) Due
Diligence. At the Closing, ISL shall have completed a due
diligence review of Granscal, and such due diligence review shall be acceptable
and satisfactory to ISL in its complete discretion.
(e) Business Records;
Resignation Letter. Granscal shall have delivered to ISL’s
counsel all of its books and records (including without limitation, charter
documents, corporate records, stock records, electronic files containing any
financial information and records, and all other documents associated used in or
associated with Granscal) and the resignation letters of all of its directors
and officers.
(f) No Adverse
Effect. The business and operations of Granscal will not have
suffered any Material Adverse Effect.
(g) Termination of
Arrangements. All contingent obligations of Granscal shall be
terminated, including without limitation, any lease and line of credit
arrangement, unless otherwise agreed to in writing by ISL at the
Closing.
ARTICLE
8
TERMINATION
8.1 This
Agreement may be terminated at any time prior to the Closing:
(a) by
mutual written agreement of ISL and Granscal;
(b) by
either ISL or Granscal if the Transaction shall not have been consummated for
any reason by December 1, 2008, provided, however, that the right to terminate
this Agreement under this Section 7.1(b) shall not be available to any party
whose action or failure to act has been a principal cause of or resulted in the
failure of the Transaction to occur on or before such date and such action or
failure to act constitutes a breach of this Agreement;
(c) by
either ISL or Granscal if a governmental entity shall have issued an order,
decree or ruling or taken any other action, in any case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Transaction,
which order, decree, ruling or other action is final and
non-appealable;
(d) by
ISL, upon a material breach of any representation, warranty, covenant or
agreement on the part of Granscal or the Granscal Shareholders set forth in this
Agreement, or if any representation or warranty of Granscal or the Granscal
Shareholders shall have become materially untrue, in either case such that the
conditions set forth in Section 7.2 would not be satisfied as of the time of
such breach or as of the time such representation or warranty shall have become
untrue, provided, that if such inaccuracy in Granscal or the Granscal
Shareholder’s representations and warranties or breach by Granscal or the
Granscal Shareholders is curable by Granscal or the Granscal Shareholders, then
ISL may not terminate this Agreement under this Section 8.1(d) unless Granscal
does not cure such breach within thirty (30) days after delivery of written
notice from ISL to Granscal of such breach, provided Granscal continues to
exercise commercially reasonable efforts to cure such breach (it being
understood that Granscal may not terminate this Agreement pursuant to this
Section 8.1(d) if it shall have materially breached this Agreement or if such
breach by Granscal is cured during such thirty (30)-day period); or
8.2 Notice of Termination;
Effect of Termination. Any termination of this Agreement under
Section 8.1 above will be effective immediately upon (or, if the termination is
pursuant to Section 8.1(d) and the proviso therein is applicable, thirty (30)
days after) the delivery of written notice of the terminating party to the other
parties hereto. In the event of the termination of this Agreement as
provided in Section 8.2, this Agreement shall be of no further force or effect
and the Transaction shall be abandoned, except as set forth in this Section 8.2,
Section 8.3 and Article9 (General Provisions), each of which shall survive the
termination of this Agreement.
8.3 Expenses. If
this Transaction does not close or is terminated, each party to this Agreement
will pay its respective costs and expenses in connection with the negotiation,
preparation and the Closing of this Agreement.
ARTICLE
9
GENERAL
PROVISIONS
9.1 Notices. All notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if delivered personally, sent by overnight courier or
mailed by registered or certified mail (postage prepaid and return receipt
requested) to the party to whom the same is so delivered, sent or mailed at
addresses set forth on the signature page hereof (or at such other address for a
party as shall be specified by like notice).
9.2 Interpretation. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
References to Sections and Articles refer to sections and articles of this
Agreement unless otherwise stated.
9.3 Severability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated and the parties shall negotiate in good faith to modify this
Agreement to preserve each party’s anticipated benefits under this
Agreement.
9.4 Miscellaneous. This
Agreement (together with all other documents and instruments referred to
herein): (a) constitutes the entire agreement and supersedes all other prior
agreements and undertakings, both written and oral, among the parties with
respect to the subject matter hereof; (b) except as expressly set forth herein,
is not intended to confer upon any other person any rights or remedies hereunder
and (c) shall not be assigned by operation of law or otherwise, except as may be
mutually agreed upon by the parties hereto.
9.5 Separate
Counsel. Each party hereby expressly acknowledges that it has
been advised to seek its own separate legal counsel for advice with respect to
this Agreement, and that no counsel to any party hereto has acted or is acting
as counsel to any other party hereto in connection with this
Agreement.
9.6 Governing Law. This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the British Columbia, Canada.
9.7 Counterparts and Facsimile
Signatures. This Agreement may be executed in two or more counterparts,
which together shall constitute a single agreement. This Agreement
and any documents relating to it may be executed and transmitted to any other
party by facsimile, which facsimile shall be deemed to be, and utilized in all
respects as, an original, wet-inked document.
9.8 Amendment. This
Agreement may be amended, modified or supplemented only by an instrument in
writing executed by Granscal, ISL, and the holders of a majority of outstanding
voting stock of Granscal.
9.9 Parties In Interest: No
Third Party Beneficiaries. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective heirs, legal representatives, successors and assigns of the
parties hereto. This Agreement shall not be deemed to confer upon any person not
a party hereto any rights or remedies hereunder.
9.10 Waiver. No waiver by
any party of any default or breach by another party of any representation,
warranty, covenant or condition contained in this Agreement shall be deemed to
be a waiver of any subsequent default or breach by such party of the same or any
other representation, warranty, covenant or condition. No act, delay, omission
or course of dealing on the part of any party in exercising any right, power or
remedy under this Agreement or at law or in equity shall operate as a waiver
thereof or otherwise prejudice any of such party’s rights, powers and remedies.
All remedies, whether at law or in equity, shall be cumulative and the election
of any one or more shall not constitute a waiver of the right to pursue other
available remedies.
9.11 Expenses. At
or prior to the Closing, the parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
[SIGNATURES
FOLLOW]
IN WITNESS WHEREOF, the
parties have executed this Share Exchange Agreement as of the date first written
above.
Granscal
Sea Farms Ltd.,
a ▇▇▇▇▇▇
Bay company
By: __________________________
Name: ▇▇▇
▇▇▇▇▇▇▇▇
Title: CEO
Island
Scallops Ltd..
A British
Columbia company
By: __________________________
Name: ▇▇▇
▇▇▇▇▇▇▇▇
Title: CEO
[SIGNATURE
PAGES OF GRANSCAL SHAREHOLDERGRANSCAL SHAREHOLDERS,
FOLLOW]
[SIGNATURE
PAGE OF ISLSHAREHOLDERS]
GRANSCAL
SHAREHOLDERGRANSCAL SHAREHOLDERS:
|
Shareholder
Name (First Name and Last Name)
|
Shareholder
Address:
|
Shareholder
Signatures:
|
|
▇▇▇
▇▇▇▇▇▇▇▇
|