EDWT Exhibit 10.2  5-29-08



EXCHANGE AGREEMENT

This Exchange Agreement (this “Agreement”) is dated as of
May 29, 2008, by and among Edgewater Foods International, Inc., a Nevada
corporation (the “Company”), and each of the holders of certain warrants
issued by the Company whose signatures appear on the signature page attached
hereto (individually, a “Holder” and collectively, the
“Holders”).

Recitals:

WHEREAS, each Holder currently holds the specific classes and
number of warrants (the “Warrants”) to purchase shares of the Company’s
common stock, par value $.001 per share (the “Common Stock”), as set
forth on Exhibit A attached hereto (including, without limitation, series
J Warrants (the “Series J Warrants”) to purchase shares of Common Stock),
that were issued by the Company to such Holder pursuant to various preferred
stock financings of the Company consummated in 2006 and 2007 (the “Preferred
Stock Financings”).  Capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the financing documents
entered into by the parties pursuant to the Preferred Stock Financings.

WHEREAS, subject to the terms and conditions set forth herein, the
Company and the Holders desire to cancel and terminate the outstanding Series J
Warrants in full and exchange the remaining Warrants for shares of the Company’s
newly issued Series D convertible preferred stock, par value $0.001 per share
and stated value $40.00 per share (the “Series D Preferred Stock”), at
the exchange rate set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby agreed and acknowledged, the parties hereto
hereby agree as follows:

AGREEMENT:

0.

Cancellation of Series J Warrants; Exchange of Remaining
Warrants for Series D Preferred Stock.

( )

In consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Holders and the Company agree to: (i) the cancellation of the Series J
Warrants entitling the Holders to purchase an aggregate of 747,870 shares of
Common Stock; and (ii) the exchange of the Holders’ remaining Warrants to
purchase an aggregate of 24,941,605 shares of Common Stock that are listed on
Exhibit A for newly issued shares of Series D Preferred Stock of the
Company in an amount equal to either: 

(A)

0.0112 of one share of Series D Preferred Stock for each share of
Common Stock underlying the remaining Warrants,  in the event such Holder
purchases a minimum of $400,000 of shares of the Company’s Series D Preferred
Stock pursuant to that certain Series D Convertible Preferred Stock Purchase
Agreement dated on or about the date hereof (the “Series D Purchase
Agreement”), or 

(B)

0.009 of one share of Series D Preferred Stock for each share of
Common Stock underlying the remaining Warrants in the event such Holder does not
purchase 













a minimum of $400,000 of shares of Series D Preferred Stock
pursuant to the Series D Purchase Agreement.  Each of the exchange rate and
the number of shares of Series D Preferred Stock each Holder shall receive
pursuant to the terms hereof is set forth on Exhibit A attached
hereto.

( )

The closing under this Agreement (the “Closing”) shall take
place at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of
the Americas, New York, NY  10036 upon the satisfaction of each of the
conditions set forth in Sections 4 and 5 hereof (the “Closing Date”).  At the Closing, the
Company shall issue to the Holders the shares of Series D Preferred Stock and
the Holders shall deliver to the Company for cancellation the Series J Warrants
and the remaining Warrants.

( )

The designation, rights, preferences and other terms and
provisions of the Series D Preferred Stock are set forth in the Certificate of
Designation of the Relative Rights and Preferences of the Series D Convertible
Preferred Stock attached hereto as Exhibit B (the “Series D Preferred
Certificate of Designation”).

( )

The shares of Series D Preferred Stock issuable upon the
exchange of the remaining Warrants and the shares of Common Stock issuable upon
conversion of the Series D Preferred Stock are sometimes collectively referred
to herein as the “Securities”.

0.

Representations, Warranties and Covenants of the
Holders.  Each Holder hereby makes the following representations
and warranties to the Company, and covenants for the benefit of the Company:

( )

Such Holder is a corporation, limited liability company or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization.  

( )

This Agreement has been duly authorized, validly executed and
delivered by such Holder and is a valid and binding agreement and obligation of
such Holder enforceable against such Holder in accordance with its terms,
subject to limitations on enforcement by general principles of equity and by
bankruptcy or other laws affecting the enforcement of creditors’ rights
generally, and such Holder has full power and authority to execute and deliver
the Agreement and the other agreements and documents contemplated hereby and to
perform its obligations hereunder and thereunder.

( )

Such Holder understands that the Securities are being offered and
sold to it in reliance on specific provisions of Federal and state securities
laws and that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
such Holder set forth herein for purposes of qualifying for exemptions from
registration under the Securities Act of 1933, as amended (the “Securities
Act”) and applicable state securities laws.  Such Holder understands
that no United States federal or state agency or any government or governmental
agency has passed upon or made any recommendation or endorsement of the
Securities.

( )

Such Holder is an “accredited investor” (as defined in Rule 501 of
Regulation D), and such Holder has such experience in business and financial
matters that it is 





2









capable of evaluating the merits and risks of an investment in the
Securities.  Such Holder is not required to be registered as a
broker-dealer under Section 15 of the Securities Exchange Act of 1934, as
amended, and such Holder is not a broker-dealer.  Such Holder acknowledges
that an investment in the Securities is speculative and involves a high degree
of risk.  

( )

Such Holder is acquiring the Securities solely for its own account
and not with a view to or for sale in connection with distribution.  Such
Holder does not have a present intention to sell any of the Securities, nor a
present arrangement (whether or not legally binding) or intention to effect any
distribution of any of the Securities to or through any person or entity;
provided, however, that by making the representations herein, such
Holder does not agree to hold the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in
accordance with Federal and state securities laws applicable to such
disposition.  Such Holder acknowledges that it (i) has such knowledge and
experience in financial and business matters such that such Holder is capable of
evaluating the merits and risks of such Holder's investment in the Company, (ii)
is able to bear the financial risks associated with an investment in the
Securities and (iii) has been given full access to such records of the Company
and its subsidiaries and to the officers of the Company and the subsidiaries as
it has deemed necessary or appropriate to conduct its due diligence
investigation.

( )

The offer and sale of the Securities is intended to be exempt from
registration under the Securities Act, by virtue of Sections 3(a)(9) and 4(2)
thereof.  Such Holder understands that the Securities purchased hereunder
have not been, and may never be, registered under the Securities Act and that
none of the Securities can be sold or transferred unless they are first
registered under the Securities Act and such state and other securities laws as
may be applicable or the Company receives an opinion of counsel reasonably
acceptable to the Company that an exemption from registration under the
Securities Act is available (and then the Securities may be sold or transferred
only in compliance with such exemption and all applicable state and other
securities laws).  Such Holder acknowledges that it is familiar with Rule
144 of the rules and regulations of the Commission, as amended, promulgated
pursuant to the Securities Act ("Rule 144"), and that such Holder has
been advised that Rule 144 permits resales only under certain circumstances.
 Such Holder understands that to the extent that Rule 144 is not available,
such Holder will be unable to sell any Securities without either registration
under the Securities Act or the existence of another exemption from such
registration requirement.

( )

Such Holder has not employed any broker or finder or incurred any
liability for any brokerage or investment banking fees, commissions, finders’
structuring fees, financial advisory fees or other similar fees in connection
with any of the transactions contemplated by this Agreement.

( )

Such Holder acknowledges that the Securities were not offered to
such Holder by means of any form of general or public solicitation or general
advertising, or publicly disseminated advertisements or sales literature,
including (i) any advertisement, article, notice or other communication
published in any newspaper, magazine, or similar media, or broadcast over
television or radio, or (ii) any seminar or meeting to which such Holder was
invited by any of the foregoing means of communications.  Such Holder, in






3









making the decision to purchase the Securities, has relied upon
independent investigation made by it and the representations, warranties and
agreements set forth in this Agreement and the other transaction documents and
has not relied on any information or representations made by third parties.

0.

Representations, Warranties and Covenants of the
Company.  The Company represents and warrants to each of the
Holders, and covenants for the benefit of each Holder, as follows:

( )

The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Nevada, with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as currently conducted, and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure to register or qualify
would not have a Material Adverse Effect.  For purposes of this Agreement,
“Material Adverse Effect” shall mean (i) any event affecting the
business, results of operations, prospects, assets or financial condition of the
Company or its subsidiaries that is material and adverse to the Company and its
consolidated subsidiaries, when taken as a whole, and/or (ii) any condition,
circumstance, or situation that would prohibit or otherwise materially interfere
with the ability of the Company from entering into and performing any of its
obligations under this Agreement in any material respect.

( )

The Securities have been duly authorized by all necessary
corporate action and, when paid for or issued in accordance with the terms
hereof, the Securities shall be validly issued and outstanding, fully paid and
nonassessable, free and clear of all liens, encumbrances and rights of refusal
of any kind.  

( )

This Agreement has been duly authorized, validly executed and
delivered on behalf of the Company and is a valid and binding agreement and
obligation of the Company enforceable against the Company in accordance with its
terms, subject to limitations on enforcement by general principles of equity and
by bankruptcy or other laws affecting the enforcement of creditors’ rights
generally, and the Company has full power and authority to execute and deliver
the Agreement and the other agreements and documents contemplated hereby and to
perform its obligations hereunder and thereunder.

( )

The execution and delivery of the Agreement and the consummation
of the transactions contemplated by this Agreement by the Company, will not (i)
conflict with or result in a breach of or a default under any of the terms or
provisions of, (A) the Company’s articles of incorporation or by-laws, or (B) of
any material provision of any indenture, mortgage, deed of trust or other
material agreement or instrument to which the Company is a party or by which it
or any of its material properties or assets is bound, (ii) result in a violation
of any provision of any law, statute, rule, regulation, or any existing
applicable decree, judgment or order by any court, Federal or state regulatory
body, administrative agency, or other governmental body having jurisdiction over
the Company, or any of its material properties or assets or (iii) result in the
creation or imposition of any material lien, charge or encumbrance upon any
material property or assets of the Company or any of its subsidiaries 





4









pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of their
property or any of them is subject except in the case of clauses (i)(B), (ii) or
(iii) of this Section 3(d) for any such conflicts, breaches, or defaults or any
liens, charges, or encumbrances which would not have a Material Adverse
Effect.

( )

The delivery and issuance of the Securities in accordance with the
terms of and in reliance on the accuracy of each Holder’s representations and
warranties set forth in this Agreement will be exempt from the registration
requirements of the Securities Act.

( )

No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of the Company
is required in connection with the valid execution and delivery of this
Agreement or the offer, sale or issuance of the Securities or the consummation
of any other transaction contemplated by this Agreement (other than any filings
which may be required to be made by the Company with the Secretary of State of
Nevada or the Securities and Exchange Commission (the “Commission”) or
pursuant to any state or “blue sky” securities laws subsequent to the
Closing).

( )

There is no action, suit, claim, investigation or proceeding
pending or, to the knowledge of the Company, threatened against the Company
which questions the validity of this Agreement or the transactions contemplated
hereby or any action taken or to be taken pursuant thereto.  There is no
action, suit, claim, investigation or proceeding pending or, to the knowledge of
the Company, threatened, against or involving the Company or any subsidiary, or
any of their respective properties or assets which, if adversely determined, is
reasonably likely to result in a Material Adverse Effect. 

( )

The Company has complied and will comply with all applicable
federal and state securities laws in connection with the offer, issuance and
delivery of the Securities hereunder.  Neither the Company nor anyone
acting on its behalf, directly or indirectly, has or will sell, offer to sell or
solicit offers to buy any of the Securities, or similar securities to, or
solicit offers with respect thereto from, or enter into any preliminary
conversations or negotiations relating thereto with, any person, or has taken or
will take any action so as to bring the issuance and sale of any of the
Securities under the registration provisions of the Securities Act and
applicable state securities laws.  Neither the Company nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
any of the Securities.

( )

The Company has not employed any broker or finder or incurred any
liability for any brokerage or investment banking fees, commissions, finders’
structuring fees, financial advisory fees or other similar fees in connection
with any of the transactions contemplated by this Agreement, with the exception
of any such fees that may be paid to TriPoint Global Equities, LLC, or its
affiliates. 

0.

Conditions Precedent to the Obligation of the Company to
Issue the Series D Preferred Stock.  The obligation hereunder of
the Company to issue and deliver the Series D Preferred Stock to the Holders is
subject to the satisfaction or waiver, at or before the Closing 





5









Date, of each of the conditions set forth below.  These
conditions are for the Company’s sole benefit and may be waived by the Company
at any time in its sole discretion.

( )

Each Holder shall have executed and delivered this Agreement.

( )

The Series J Warrants and the remaining Warrants shall have been
delivered to the Company for cancellation.

( )

Each of the representations and warranties of each Holder in this
Agreement shall be true and correct in all material respects (except for those
representations and warranties that are qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) as of the date
when made and as of the Closing Date as though made at that time, except for
representations and warranties that are expressly made as of a particular date,
which shall be true and correct in all material respects (except for those
representations and warranties that are qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) as of such
date.

( )

The transactions contemplated by the Series D Purchase Agreement
shall have been consummated. 

0.

Conditions Precedent to the Obligation of the Holders to
Accept the Series D Preferred Stock. The obligation hereunder of the
Holders to accept the Series D Preferred Stock is subject to the satisfaction or
waiver, at or before the Closing Date, of each of the conditions set forth
below.  These conditions are for each Holder’s sole benefit and may be
waived by such Holder at any time in its sole discretion.

( )

The Company shall have executed and delivered this Agreement. 

( )

Each of the representations and warranties of the Company in this
Agreement shall be true and correct in all material respects (except for those
representations and warranties that are qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) as of the date
when made and as of the Closing Date as though made at that time, except for
representations and warranties that are expressly made as of a particular date,
which shall be true and correct in all material respects (except for those
representations and warranties that are qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) as of such
date.

( )

No statute, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement at or
prior to the Closing Date.

( )

No action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, shall be pending against or
affecting the Company, or any of its properties, which questions the validity of
the Agreement or the transactions contemplated thereby or any action taken or to
be taken pursuant thereto.  As of the Closing Date, no action, suit, claim
or proceeding before or by any court or governmental agency or body, domestic or
foreign, shall be pending against or affecting the Company, or any of its 





6









properties, which, if adversely determined, is reasonably likely
to result in a Material Adverse Effect.

( )

The certificates representing the shares of Series D Preferred
Stock shall have been duly executed and delivered to the Holders.

( )

The Series D Preferred Certificate of Designation shall have been
filed with the Nevada Secretary of State.

( )

The Company shall have delivered on the Closing Date to the
Holders (i) a certified copy of the resolutions of the board of directors of the
Company authorizing the transactions contemplated by this Agreement and (ii) a
certified copy of the Series D Preferred Certificate of Designation evidencing
its acceptance with the Nevada Secretary of State.

( )

At the Closing, the Holders shall have received an opinion of
counsel to the Company, dated the date of the Closing, in the form of Exhibit
C hereto.

( )

The Company shall have received executed written consents and
waivers from its security holders, if required, consenting to the transactions
contemplated by this Agreement and waiving any price protection such
securityholders may be entitled as a result of the issuance of the
Securities.

( )

The transactions contemplated by the Series D Purchase Agreement
shall have been consummated. 

( )

No Material Adverse Effect shall have occurred at or before the
Closing Date.

0.

Fees and Expenses.  Each party shall pay the
fees and expenses of its advisors, counsel, accountants and other experts, if
any, and all other expenses, incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement,
provided, however, that the Company shall pay all reasonable
attorneys’ fees and expenses (exclusive of disbursements and out-of-pocket
expenses) incurred by the Holders in connection with the preparation,
negotiation, execution and delivery of this Agreement and the Series D Preferred
Certificate of Designation.  

0.

Company Indemnification.  The Company hereby
agrees to indemnify and hold harmless the Holders and their respective officers,
directors, shareholders, employees, agents and attorneys against any and all
losses, claims, damages, liabilities and reasonable expenses (collectively
“Claims”) incurred by each such person in connection with defending or
investigating any such Claims, whether or not resulting in any liability to such
person, to which any such indemnified party may become subject, insofar as such
Claims arise out of or are based upon any breach of any representation or
warranty or agreement made by the Company in this Agreement or the Series D
Preferred Certificate of Designation.

0.

Governing Law; Consent to Jurisdiction.  This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of New York without giving effect to the rules governing the conflicts
of laws.  Each of the parties consents to the exclusive jurisdiction of






7









the Federal courts whose districts encompass any part of the
County of New York located in the City of New York in connection with any
dispute arising under this Agreement and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on forum non
conveniens, to the bringing of any such proceeding in such jurisdictions.
 Each party waives its right to a trial by jury.  Each party to this
Agreement irrevocably consents to the service of process in any such proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to such party at its address set forth herein.  Nothing herein
shall affect the right of any party to serve process in any other manner
permitted by law.

0.

Notices.  All notices and other communications
provided for or permitted hereunder shall be made in writing by hand delivery,
express overnight courier, registered first class mail, or telecopier (provided
that any notice sent by telecopier shall be confirmed by other means pursuant to
this Section 10), initially to the address set forth below, and thereafter at
such other address, notice of which is given in accordance with the provisions
of this Section.

( )

if to the Company:

	
	
Edgewater Foods
International, Inc. 

400
Professional Drive, Suite 310 

Gaithersburg,
Maryland 20879

Attention:
Michael Boswell

Tel. No.: (240)
864-0449

Fax No.:  (240) 864-0450

	
with
a copy to:

	
Hodgson Russ
LLP 
1540 Broadway, 24th Floor 
New York, New York
10036-4039

Attention:
 Stephen A. Weiss, Esq. 

Tel. No.:
 (646) 218-7606

Fax No.:
 (212) 751-0928



(a)

if to a Holder: 

  

To
the applicable address set forth on the signature page hereto





8













	
	



with a copy to:




Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Attention: Christopher S. Auguste, Esq.

Tel No.: (212) 715-9100

Fax No.: (212) 715-8000



All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; when receipt is
acknowledged, if telecopied; or when actually received or refused if sent by
other means.

1.

Entire Agreement.  This Agreement, together
with the Series D Purchase Agreement, constitutes the entire understanding and
agreement of the parties with respect to the subject matter hereof and
supersedes all prior and/or contemporaneous oral or written proposals or
agreements relating thereto all of which are merged herein.  This Agreement
may not be amended or any provision hereof waived in whole or in part, except by
a written amendment signed by both of the parties.

1.

Counterparts.  This Agreement may be executed
by facsimile signature and in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]





9









IN WITNESS WHEREOF, this Agreement was duly executed on the date
first written above.

	
	
EDGEWATER FOODS INTERNATIONAL, INC.

	
By:______________________________________
Name:
Title:

	
HOLDER:

VISION OPPORTUNITY MASTER FUND, LTD.




	
By:_____________________________________
Name:

Title:






Vision
Opportunity Master Fund, Ltd.

 

 

 

 

 

	
	



HOLDER:

	



By:_____________________________________
Name:

Title:







10









EXHIBIT A




 

 

Vision
Opportunity Master Fund, Ltd.:

Series J
Warrants: 747,870

Remaining
Warrants: 19,356,555

Shares of Series
D Preferred Stock to be issued in exchange for Remaining Warrants:
216,793

 

Other
Holders::

Series J
Warrants: 0

Remaining
Warrants: 5,585,050

Shares of Series
D Preferred Stock to be issued in exchange for Remaining Warrants: 
50,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

11









EXHIBIT B 




FORM
OF SERIES D PREFERRED CERTIFICATE OF DESIGNATION





12









EXHIBIT C 




FORM
OF OPINION 




1.

The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Nevada and has the requisite
corporate power to own, lease and operate its properties and assets, and to
carry on its business as presently conducted.  




2.

The Company has the requisite corporate power and authority to
enter into and perform its obligations under the Exchange Agreement and to issue
the Series D Preferred Stock and the Common Stock issuable upon conversion of
the Series D Preferred Stock.  The execution, delivery and performance of
each of the transaction documents contemplated by the Exchange Agreement by the
Company and the consummation by it of the transactions contemplated thereby have
been duly and validly authorized by all necessary corporate action and no
further consent or authorization of the Company or its Board of Directors or
stockholders is required.  




3.

The Series D Preferred Stock has been duly authorized and the
shares of Common Stock issuable upon conversion of the Series D Preferred Stock,
have been duly authorized and reserved for issuance, and, when delivered upon
conversion or against payment in full as provided in the Series D Preferred
Certificate of Designation, will be validly issued, fully paid and
nonassessable.




4.

The offer, issuance and sale of the Series D Preferred Stock and
the offer, issuance and sale of the shares of Common Stock issuable upon
conversion of the Series D Preferred Stock pursuant to the Exchange Agreement
and the Series D Preferred Certificate of Designation, are exempt from the
registration requirements of the Securities Act.



































13