seaway8k060108ex10a.htm


    
      

      

    

    Exhibit
10-A

     

     

     

     

     

    AMENDED
AND RESTATED

    MERGER
AGREEMENT

     

     

    by
and among

     

    North
Country Hospitality, Inc.,

     

    Christopher
Swartz,

     

    and

     

    Seaway
Valley Capital Corporation

     

     

     

     

    Dated
as of June 1, 2008

     

     

     

     

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

     

    AMENDED
AND RESTATED MERGER AGREEMENT

     

     

    Amended and Restated
Merger Agreement (the “Agreement”)
dated as of June 1, 2008 by and among Seaway Valley Capital Corporation, a
corporation formed under the laws of the State of Delaware (“SVCC”), North
Country Hospitality Inc., a
corporation formed under the laws of the State of Nevada (“North
Country”) and Christopher Swartz, an individual residing in Watertown,
New York (“Principal
Shareholder”).   Each
of SVCC North Country and the Principal Shareholder is referred to herein
individually as a “Party,” and
all are referred to collectively as the “Parties.”

     

    PREAMBLE

     

    WHEREAS,
North Country is the sole member of Harbor Acquisition, LLC, a Florida limited
liability company (“Harbor
Acquisition”), which owns and operates certain restaurants, hotels and
other real and personal property assets;

     

    WHEREAS, on
April 1, 2008 SVCC and North Country entered into a Merger Agreement
contemplating the merger of Harbor Acquisition into North Country Operating
Corp., a Delaware corporation that is a wholly-owned subsidiary of SVCC (the
“Merger
Sub”);

     

    WHEREAS, the
parties wish to amend and restate the Merger Agreement on the terms set forth
herein; and

     

    WHEREAS, in
the merger of Harbor Acquisition into the Merger Sub (the “Merger”), all
of the membership interest in Harbor Acquisition shall be cancelled and
converted into the right to receive shares of Series D Convertible Preferred
Stock of SVCC having a liquidation preference of Five Million, Two Hundred and
Fifty Thousand Dollars ($5,250,000) (the “Merger
Shares”);

     

    NOW,
THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties contained herein, the Parties, intending to be
legally bound, hereby agree as follows:

     

    CERTAIN
DEFINITIONS

     

    As used
in this Agreement, the following terms shall have the meanings set forth
below:

     

    “Applicable
Law” means any domestic or foreign law, statute, regulation, rule or
ordinance applicable to the businesses of the Parties or the
Merger.

     

    “DGCL” means
Delaware General Corporation Law.

     

    “FLLCA” means
the Florida Limited Liability Company Act.

     

    “Knowledge”
means, in the case of SVCC or North Country, a particular fact or other matter
of which its Chief Executive Officer or Chief Financial Officer is actually
aware or which a prudent individual serving in such capacity could be expected
to discover or otherwise become aware of in the course of conducting a
reasonable review or investigation of the corporation and its business and
affairs.  

     

    “Lien” means,
with respect to any property or asset, any mortgage, lien, pledge, charge,
security interest, claim, encumbrance, royalty interest, any other adverse claim
of any kind in respect of such property or asset.

     

    
      
        
           


        

        
          1

          
            

          

        

        
           


        

      

    

     

    “Material Adverse
Effect” with respect to any entity or group of entities means any event,
change or effect that has or would have a materially adverse effect on the
financial condition, business or results of operations of such entity or group
of entities, taken as a whole.

     

    “Person” means
any individual, corporation, limited liability company, partnership, trust or
unincorporated organization or a government or any agency or political
subdivision thereof.

     

    “Surviving
Entity” shall mean Merger Sub as the surviving entity in the Merger as
provided in Section 1.05.

     

    “Tax” (and,
with correlative meaning, “Taxes” and
“Taxable”)
means:

     

    (i) any
income, alternative or add-on minimum tax, gross receipts tax, sales tax, use
tax, ad valorem tax, transfer tax, franchise tax, profits tax, license tax,
withholding tax, payroll tax, employment tax, excise tax, severance tax, stamp
tax, occupation tax, property tax, environmental or windfall profit tax, custom,
duty or other tax, impost, levy, governmental fee or other like assessment or
charge of any kind whatsoever together with any interest or any penalty,
addition to tax or additional amount imposed with respect thereto by any
governmental or Tax authority responsible for the imposition of any such tax
(domestic or foreign), and

     

    (ii) any
liability for the payment of any amounts of the type described in clause (i)
above as a result of being a member of an affiliated, consolidated, combined or
unitary group for any Taxable period, and

     

    (iii) any
liability for the payment of any amounts of the type described in clauses (i) or
(ii) above as a result of any express or implied obligation to indemnify any
other person.

     

    “Tax Return”
means any return, declaration, form, claim for refund or information return or
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.

     

    ARTICLE
I

    THE
MERGER

     

    SECTION
1.01                      ORGANIZATION
OF SUBSIDIARIES

     

    (a)  Merger
Sub.  Prior to the Closing Date, SVCC has organized North
Country Operating Corp. (“Merger Sub”) as a Delaware
corporation.  SVCC shall be the sole shareholder of Merger
Sub.  Merger Sub shall not engage in any business nor acquire any
assets or liabilities prior to the Closing Date.

     

    (b)    Assignment
and Assumption Agreement.  Prior to the Closing Date, North
Country and Harbor Acquisition have (i) entered into an Assignment and
Assumption Agreement in the form annexed hereto as Appendix A, and (ii) shall
effect the transfers of assets called for in the Assignment and Assumption
Agreement.

     

    SECTION
1.02                      MERGER
SHARES

     

    SVCC has
filed with the Secretary of State a Certificate of Designation of Series D
Convertible Preferred Stock, in the form annexed hereto as Appendix
B.  The Certificate of Designations authorizes the issuance of
1,050,000 shares of Series D Preferred Shares, each of which shall have a
liquidation preference of Five Dollars ($5.00), and shall entitle the holder to
convert the Series D shares into SVCC Common Stock with a market value (as
defined in the Certificate of Designations, equal to $5.00.  The
shares of Series D Convertible Preferred Stock are herein identified as the
“Merger
Shares.”

     

    
      
        
           


        

        
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    SECTION
1.03                      STRUCTURE
OF MERGER

     

    Upon the
terms and subject to the conditions set forth in this Agreement and in
accordance with Applicable Law, at the Effective Time (as hereinafter defined),
all of the membership interest in Harbor Acquisition (as hereinafter defined)
shall be cancelled and converted into the right to receive the Merger
Shares.  In connection therewith, the following terms shall
apply:

     

    (a)           Exchange
Agent.   Robert Brantl, Esq., counsel to SVCC, shall act as the
exchange agent (the “Exchange
Agent”) solely for the purpose of exchanging the membership interest in
Harbor Acquisition for the Merger Shares.   At or prior to the
Closing, SVCC shall deliver to the Exchange Agent the Merger
Shares.

     

    (b)           Conversion
of Securities.

     

    (i)           Conversion
of Membership Interest.  At the Effective Time, by virtue of the
Merger and without any action on the part of SVCC, North Country or the Merger
Sub, or the holders of any of their respective securities:

     

    (A)           All
of the membership interest in Harbor Acquisitions immediately prior to the
Effective Time shall be converted into and represent the right to receive, and
shall be exchangeable for, the Merger Shares.

     

    (B)           The
membership interest in Harbor Acquisition shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and the
holder of a membership interest in Harbor Acquisitions shall cease to have any
rights with respect thereto, except the right to receive the Merger Shares to be
issued pursuant to Section 1.03(b)(i)(A).

     

    (ii)           Conversion
of Merger Sub Stock.  At the Effective Time, by virtue of the Merger
and without any action on the part of North Country, SVCC, the Merger Sub, or
the holders of any of their respective securities, each share of capital stock
of Merger Sub outstanding immediately prior to the Effective Time shall be
converted into one share of the common stock of the Surviving Entity and the
shares of common stock of the Surviving Entity so issued in such conversion
shall constitute the only outstanding shares of capital stock of the Surviving
Entity, and the Surviving Entity shall be a wholly owned subsidiary of
SVCC.

     

    SECTION
1.04                      CLOSING.

     

    The
closing of the Merger (the “Closing”)
will take place at the offices of SVCC simultaneous with the execution of this
amended and restated agreement, subject to the satisfaction or waiver of the
conditions precedent set forth in Article V (the “Closing
Date”).

     

    SECTION
1.05                      MERGER;
EFFECTIVE TIME.

     

    At the
Effective Time and subject to and upon the terms and conditions of this
Agreement, Harbor Acquisition shall, and North Country shall cause Harbor
Acquisition to, merge with and into Merger Sub in accordance with the provisions
of the DGCL and the FLLCA, the separate corporate existence of Harbor
Acquisition shall cease and Merger Sub shall continue as the Surviving
Entity.  The Effective Time shall occur upon the filing with the
Secretary of State of the State of Delaware a Certificate of Merger, executed in
accordance with the provisions of the DGCL (the “Effective
Time”).  The date on which the Effective Time occurs is
referred to as the “Effective
Date.”  Provided that this Agreement has not been terminated
pursuant to Article VI, the Parties will cause the Certificate of Merger to be
filed in Delaware as soon as practicable after the Closing.

     

    
      
        
           


        

        
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    SECTION
1.06                      EFFECT
OF THE MERGER.

     

    The
Merger shall have the effect set forth in Title 8, Section 259 of the
DGCL.  Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties, rights, privileges, powers
and franchises of Harbor Acquisition and Merger Sub shall vest in the Surviving
Entity, and all debts, liabilities and duties of Harbor Acquisition shall become
the debts, liabilities and duties of the Surviving Entity.

     

    
      	
              SECTION
      1.07

            	
              CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS
      AND
      OFFICERS.

            


    

     

    Pursuant
to the Merger:

     

    (a)           The
Certificate of Incorporation and Bylaws of the Merger Sub as in effect
immediately prior to the Effective Time shall remain the Certificate of
Incorporation and Bylaws of the Surviving Entity immediately following the
Merger, and the name of the Surviving Entity shall be changed to North Country
Hospitality Corp.

     

    (b)           The
directors and officers of Harbor Acquisition immediately prior to the Merger
shall be the directors and officers of the Surviving Entity subsequent to the
Merger.  Those officers and directors will be:

     

    
      	
              Thomas
      Scozzafava

            	
              -

            	
              Director

            
	
              Christopher
      Swartz

            	
              -

            	
              Director,
      Chief Executive Officer

            
	
              Gary
      Baker

            	
              -

            	
              Chief
      Operating Officer

            
	
              Dan
      Patterson

            	
              -

            	
              Secretary

            


    

     

    
      	
               SECTION
      1.08

            	
              FULL
      SATISFACTION OF RIGHTS

            


    

     

    All
Merger Shares for which the membership interest in Harbor Acquisition shall have
been exchanged pursuant to this Article I shall be deemed to have been issued in
full satisfaction of all rights pertaining to the membership interest in Harbor
Acquisition.  North Country hereby waives all appraisal rights that it
may have by reason of the Merger.

     

    ARTICLE
II

    REPRESENTATIONS
AND WARRANTIES OF SVCC

     

    SVCC and
Thomas Scozzafava hereby represent and warrant, jointly and severally, to North
Country, as of the date of this Agreement, as of the Closing Date and as of the
Effective Time, as follows:

     

    SECTION
2.01                      ORGANIZATION,
STANDING AND POWER.

     

    SVCC is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has corporate power and authority to conduct
its business as presently conducted by it and to enter into and perform this
Agreement and to carry out the transactions contemplated by this
Agreement.    Merger Sub will be a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, with corporate power and authority to carry out the transactions
contemplated by this Agreement.

     

    SECTION
2.02                      BUSINESS
OF MERGER SUB

     

    Prior to
and through the Effective Date, Merger Sub shall not conduct any operating
business, become a party to any agreements, or incur any liabilities or
obligations. None of the warranties made herein with respect to the authority of
SVCC to enter into this agreement and its compliance with the procedural
requirements attendant thereto will be untrue with respect to Merger Sub as of
the Closing Date.

     

    
      
        
           


        

        
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    SECTION
2.03                      CAPITALIZATION.

     

    (a)           There
are Two Billion, Five Hundred and Five Million (2,505,000,000) shares of capital
stock of SVCC authorized, consisting of Two Billion, Five Hundred Million
(2,500,000,000) shares of Common Stock,  par value $.0001 per share
(the “SVCC
Common Shares”) , One Hundred Thousand (100,000) shares of Series A
(non-convertible) Preferred Stock, par value $.0001 per share, One Hundred
Thousand (100,000) shares of Series B Convertible Preferred Stock, $.0001 per
share, par value $.0001, One Million, Six Hundred Thousand (1,600,000) shares of
Series C Convertible Preferred Stock, par value $.0001, One Million Fifty
Thousand (1,050,000) shares of Series D Convertible Preferred Stock, $.0001 per
share, par value $.0001, One Hundred Thousand (100,000) shares of Series E
Convertible Preferred Stock, $.0001 per share, par value $.0001, and Two
Million, Fifty Thousand (2,050,000) shares of Preferred Stock, par value $.0001
per share (“SVCC Preferred
Shares”).  As of the date of this Agreement, there are more
than one billion SVCC Common Shares, 100,000 Series E Preferred Shares, and
1,458,236 Series C Preferred Shares issued and outstanding.  The
Series E Preferred Shares are entitled to cast 80% of the votes at any meeting
of the SVCC shareholders.

     

    (b)           No
SVCC Common Shares or SVCC Preferred Shares have been reserved for issuance to
any Person, and there are no outstanding rights, warrants, options or agreements
for the purchase of SVCC Common or Preferred Shares except (i) as provided in
this Agreement, (ii) as provided for in the instruments in favor of YA Global
Investments, LP granting the right to convert certain debentures into shares of
common stock, (iii) as provided for in the instruments in favor of Golden Gate
Investors, Inc. granting the right to convert certain debentures into shares of
common stock, and (iv) as provided to the holders of the Series E and Series C
Preferred Stock.

     

    (c)           All
outstanding SVCC Common Shares are validly issued, fully paid, non-assessable,
not subject to pre-emptive rights and have been issued in compliance with all
state and federal securities laws or other Applicable Law.  The Merger
Shares issuable to North Country pursuant to the Merger will, when issued
pursuant to this Agreement, be duly and validly authorized and issued, fully
paid and non-assessable.

     

    SECTION
2.04                      AUTHORITY
FOR AGREEMENT.

     

    The
execution, delivery, and performance of this Agreement by SVCC have been duly
authorized by all necessary corporate and shareholder action, and this
Agreement, upon its execution by the Parties, will constitute the valid and
binding obligation of SVCC, enforceable against it in accordance with and
subject to its terms, except as enforceability may be affected by bankruptcy,
insolvency or other laws of general application affecting the enforcement of
creditors’ rights.  The execution and consummation of the transactions
contemplated by this Agreement and compliance with its provisions by SVCC and
Merger Sub  will not (a) violate any provision of Applicable Law, (b)
conflict with or result in any breach of any of the terms, conditions, or
provisions of, or constitute a default under, SVCC’s Certificate of
Incorporation or Bylaws, or under any operating agreement of any subsidiary, in
each case as amended, (c) conflict with, or result in a breach or violation or
loss of any benefit under, any indenture, franchise agreement, service
agreement, license agreement, lease, loan agreement or other agreement
instrument to which SVCC or any subsidiary is a party or by which any of
them  or any of their respective properties are bound or any decree,
judgment, order, statute, rule or regulation applicable to SVCC or any
subsidiary; (d) conflict with, or result in any violation of or default or loss
of any benefit under, any permit, concession, grant, franchise, law, rule or
regulation to which SVCC or any subsidiary is a party or to which any of its
property is subject; or (iv) result in the suspension, revocation, impairment,
forfeiture or nonrenewal of any material permit, license, authorization or
approval applicable to SVCC or any subsidiary, its business or operations or any
of its assets or properties.

     

    
      
        
           


        

        
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    SECTION
2.05                      FINANCIAL
CONDITION

     

    The
financial statements of SVCC and the additional information regarding the
financial condition of SVCC contained in the Annual Report on Form 10-KSB filed
by SVCC for the year ending on December 31, 2007 and the Quarterly Report filed
by SVCC for the quarter ended March 31, 2008 (collectively, the “SVCC
Filings”)  are true, correct and complete in all material
respects, are not misleading and do not omit to state any material fact which is
necessary to make the statements and information contained in the SVCC Filings
not misleading in any material respect.  The financial statements
included in the SVCC Filings were prepared in accordance with generally accepted
accounting principles and fairly reflect the financial condition of SVCC as of
the dates stated and the results of its operations for the periods
presented.

     

    SECTION
2.06                      ABSENCE OF CERTAIN
CHANGES OR EVENTS.

     

    Since
March 31, 2008, except as reported in Current Reports on Form 8-K filed with the
Securities and Exchange Commission, and except as contemplated by this
Agreement:

     

    (a)           there
has not been any Material Adverse Change in the business, operations,
properties, assets, or condition of SVCC; and

     

    (b)           SVCC
has not (i) amended its Certificate of Incorporation;  (ii) declared
or made, or agreed to declare or make, any payment of dividends or distributions
of any assets of any kind whatsoever to stockholders or purchased or redeemed,
or agreed to purchase or redeem, any outstanding capital stock; (iii) made any
material change in its method of management, operation, or accounting; (iv)
entered into any material transaction; or (v) made any accrual or arrangement
for payment of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee.

     

    (c)           Neither
SVCC nor any subsidiary has (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability (absolute
or contingent) except liabilities incurred in the ordinary course of business;
(ii) paid any material obligation or liability (absolute or contingent) other
than current liabilities reflected in or shown on the most recent SVCC balance
sheet, and current liabilities incurred since that date in the ordinary course
of business; (iii) sold, transferred or otherwise disposed of, or pledged,
mortgaged or encumbered in any way any of its assets or rights or any revenues
derived therefore, other than sales of products and services in the ordinary
course of business; (iv) canceled any material debts or claims;  (v)
made or permitted any material amendment or termination of any contract,
agreement, or license to which it is a party; (vi) adopted or amended any
employee benefit plan, compensation commitment, severance agreement or
employment contract (other than employment at-will arrangements that do not
require severance or termination payments) to which any director, officer or
employee of SVCC or any subsidiary is a party or a participant; (vii) accepted
the resignation of or terminated the employment of any director, officer or
employee of SVCC or any subsidiary; (viii) made any material change in any
accounting principle or method or election for federal income tax purposes used
by SVCC; (ix) acquired any assets or property or made any capital expenditures,
additions or improvements or commitments for the same, except those which do not
exceed $50,000 in the aggregate; or (x) agreed  to do any of the
foregoing.

     

    SECTION
2.07                           
       
      GOVERNMENTAL AND THIRD PARTY
CONSENTS

     

    No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party to
any agreement with SVCC or Merger Sub, is required by or with respect to SVCC or
Merger Sub in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, except for such
consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under (i) applicable securities
laws, or (ii) the DGCL.

     

    
      
        
           


        

        
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              SECTION
      2.08

            	
              LITIGATION

            


    

     

    There are
no legal actions, lawsuits, proceedings or investigations, administrative or
judicial, pending or, to SVCC’s Knowledge, threatened, against or affecting SVCC
or any subsidiary or against SVCC or any subsidiary’s Managers, Officers, or
Directors that arose out of their operation of such company’s
business.  Neither SVCC, any subsidiary,  nor any of SVCC’s
or any subsidiary’s Managers, Officers or Directors are subject to any order,
writ, judgment, injunction, decree, determination or award of any court,
arbitrator or administrative, governmental or regulatory authority or body which
would be likely to have a Material Adverse Effect on the business of SVCC or the
subsidiary.  There is no action, suit or proceeding by SVCC or any
subsidiary currently pending or that SVCC or any subsidiary intends to
initiate.

     

    
      	
              SECTION
      2.09

            	
              INTERESTED
      PARTY TRANSACTIONS

            


    

     

    Except as
set forth in Schedule 2.09 to be delivered after the Closing, SVCC is not
indebted to any officer or director of SVCC, and no such person is indebted to
SVCC.

     

    SECTION
2.10                     COMPLIANCE
WITH APPLICABLE LAWS.

     

    SVCC’s
and each subsidiary’s operations have been conducted in all material respects in
accordance with all applicable statutes, laws, rules and
regulations.  Neither SVCC nor any subsidiary is in violation of any
law, ordinance or regulation of any other jurisdiction, the violation of which
would be likely to have a Material Adverse Effect.

     

    
      	
              SECTION
      2.11

            	
              TAX
      RETURNS AND PAYMENT

            


    

     

    SVCC has
duly and timely filed all material Tax Returns required to be filed by it and
has duly and timely paid all Taxes shown thereon to be due.  There is
no material claim for Taxes that is a Lien against the property of SVCC other
than Liens for Taxes not yet due and payable, none of which is
material.  SVCC has not received written notification of any audit of
any Tax Return of SVCC being conducted or pending by a Tax authority, no
extension or waiver of the statute of limitations on the assessment of any Taxes
has been granted by SVCC which is currently in effect, and SVCC is not a party
to any agreement, contract or arrangement with any Tax authority or otherwise,
which may result in the payment of any material amount in excess of the amount
reflected on the above referenced SVCC financial statements.

     

    SECTION
2.12                      INTELLECTUAL
PROPERTY

     

    (a)           All
Patent Rights, Trademark Rights and copyright registrations or applications
therefor that are now or were at any time in the past registered, issued or
filed in the name of SVCC or any of its subsidiaries, alone or jointly with
others, or that were assigned to SVCC or any subsidiary (the "SVCC Registered
Intellectual Property”) are valid, enforceable and
subsisting.  All issuance, renewal, maintenance and other payments
that are or have become due with respect to the Registered Intellectual Property
have been timely paid.

     

    (b)           Each
of SVCC and its subsidiaries owns or has the right to use all Intellectual
Property that is used in its business as now conducted and as currently proposed
to be conducted.  No Person has any ownership interest, royalty
interest, security interest, license right or other interest in or to, or any
Lien against, any SVCC Owned Intellectual Property.

     

    (c)           To
SVCC's Knowledge, SVCC's and each subsidiary’s business as now conducted, or as
currently proposed to be conducted, does not infringe or violate, or constitute
a misappropriation of, any Intellectual Property rights of any
Person.  There are no complaints, claims and notices and threats
thereof alleging any such infringement, violation or
misappropriation.  No Person is infringing, violating or
misappropriating any SVCC Owned Intellectual Property.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (d)           Neither
SVCC nor any subsidiary has licensed, distributed or otherwise granted any
rights to any Person with respect to any Intellectual Property
Rights.

     

    (e)           With
respect to SVCC Licensed Intellectual Property, the licenses or agreements
granting SVCC or any subsidiary the right to use such Intellectual Property are
in full force and effect on the date hereof and valid and enforceable by the
licensee in accordance with their respective terms.

     

    (f)           For
purposes of this Agreement, the following terms shall have the following
meanings:

     

    "Intellectual
Property" means the following subsisting throughout the world: (1)
patents, patent applications, and registrations thereof (the "Patent
Rights"); (2) registered or common law trademarks and service marks,
trade dress, Internet domain names, logos, trade names and corporate names and
all registrations and applications for registration of the foregoing (the "Trademark
Rights"), and all goodwill in the foregoing; (3) copyrights, data and
database rights and registrations and applications for registration thereof; (4)
mask works and registrations and applications for registration thereof; (5)
inventions, designs, trade secrets and confidential business information,
whether patentable or nonpatentable and whether or not reduced to practice, and
know-how;  (6) other proprietary rights relating to any of the
foregoing (including remedies against infringement thereof and rights of
protection of interest therein under the laws of all jurisdictions);
and  (7) copies and tangible embodiments thereof.

     

    "SVCC Intellectual
Property" shall mean SVCC or subsidiary Owned Intellectual Property and
SVCC or subsidiary Licensed Intellectual Property.

     

    "SVCC Licensed
Intellectual Property" shall mean all Intellectual Property that is
licensed to SVCC or any subsidiary by third parties.

     

    "SVCC Owned
Intellectual Property" shall mean all Intellectual Property owned or
purported to be owned by SVCC or any subsidiary, in whole or in
part.

     

    SECTION
2.13                      EMPLOYEES AND
EMPLOYEE MATTERS.

     

    Each of
SVCC and its subsidiaries has complied with all federal, state and local laws
relating to the hiring of employees, consultants and advisors and the employment
of labor, including provisions thereof relating to wages, hours, equal
opportunity, collective bargaining and the payment of social security and other
taxes.  There are no collective bargaining agreements or other labor
union or guild contracts governing the relationship between SVCC or any
subsidiary and any of its employees.  Neither SVCC nor any subsidiary is
delinquent in payments to any of its employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed by
them to date or amounts required to be reimbursed to such employees or upon any
termination of the employment of any such employees.  Neither SVCC nor
any subsidiary has breached or otherwise failed to comply with any provision of
any collective bargaining agreement or other labor union contract applicable to
any of its employees.  No consent of any union (or any similar group
or organization) is required in connection with the consummation of the
transactions contemplated hereby.

     

    Schedule
2.13, which will be delivered after the Closing, sets forth a list of the names
of all of SVCC's and each subsidiary’s officers, directors and employees and the
position and compensation of each such person.

     

     

    
      
        
        

      

      
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    SECTION
2.14                      TITLE
TO PROPERTY AND ASSETS.

     

     Schedule
2.14, which will be delivered after the Closing, will contain a list of the real
property owned by SVCC or any of its subsidiaries, including street address and
block and lot.  Except as set forth on Schedule 2.14, SVCC and each
Subsidiary has good and marketable title to all of its property and assets and
owns such property and assets free and clear of any Liens, except for Liens
reflected in the Financial Statements and, with respect to real property owned
by SVCC or any subsidiary, except for encumbrances, defects, restrictions and
reservations of record.  With respect to the property and assets it
leases, SVCC or the subsidiary which is a party to each such lease is in
compliance with such lease and holds a valid leasehold interest free and clear
of any Lien.

     

    SECTION
2.15                      ENVIRONMENTAL AND
SAFETY LAWS.

     

    (a)
Neither SVCC nor any subsidiary (each a “Company
Owner”) has generated, used, transported, treated, stored, released or
disposed of, and has not suffered or permitted anyone else to generate, use,
transport, treat, store, release or dispose of any Hazardous Substance (as
defined below) in violation of any Environmental Laws (as defined below); (b)
there has not been any generation, use, transportation, treatment, storage,
release or disposal of any Hazardous Substance resulting from the conduct of the
Company Owner or the use of any property or facility by the Company Owner or, to
SVCC's Knowledge, any nearby or adjacent properties or facilities, that has
created or could reasonably be expected to create any liability on the part of
the Company Owner under the Environmental Laws or that would require reporting
to or notification by the Company Owner to any local, state or federal
governmental authority; and (c) any Hazardous Substance handled or dealt with in
any way in connection with the business of any Company Owner, whether before or
during such Company ownership, has been and is being handled or dealt with in
all respects in compliance with the Environmental Laws in effect at the time
such activities were being conducted.  "Environmental
Laws" shall mean all laws, rules, regulations, statutes, ordinances,
decrees or orders of any local, state or federal governmental authority relating
to (i) the control of any potential pollutant or protection of the air, water or
land, (ii) solid, gaseous or liquid waste generation, handling, treatment,
storage, disposal or transportation and (iii) exposure to Hazardous Substances
and includes, without limitation, final and binding requirements related to the
foregoing imposed by (A) the terms and conditions of any license, permit,
approval or other authorization by any local, state or federal governmental
authority and (B) applicable judicial, administrative or other regulatory
decrees, judgments and orders of any local, state or federal governmental
authority.    "Hazardous
Substances" shall mean any toxic or hazardous materials or substances,
solid wastes, including asbestos, buried contaminants, chemicals, flammable or
explosive materials, radioactive materials, petroleum wastes and spills or
releases of petroleum products and any other chemical, pollutant, contaminant,
substance or waste that is regulated by any local, state or federal governmental
authority under any Environmental Law.

     

    SECTION
2.16                      SECURITY
LISTING

     

    SVCC is a
fully compliant reporting company under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), and all SVCC public filings required under the Exchange Act have
been made.  The common stock of SVCC is listed for quotation on the
OTC Bulletin Board.  To the Knowledge of SVCC, SVCC has not been
threatened and is not subject to removal of its common stock from the OTC
Bulletin Board.

     

    SECTION
2.17                   
  FINDERS’ FEES

     

    SVCC has
not incurred, nor will it incur, directly or indirectly, any liability for
brokers’ or finders’ fees or agents’ commissions or investment bankers’ fees or
any similar charges in connection with this Agreement or any transaction
contemplated hereby.

     

    
      
        
        

      

      
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    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES OF NORTH COUNTRY

     

    North
Country and the Principal Shareholder hereby represent and warrant, jointly and
severally, to SVCC, as of the date of this Agreement and as of the Effective
Time (except as otherwise indicated), as follows:

     

    SECTION
3.01                      ORGANIZATION,
STANDING AND POWER.

     

    North
Country is a publicly held corporation duly incorporated, validly existing and
in good standing under the laws of the State of Nevada, and has full corporate
power and authority to conduct its business as presently conducted by it and to
enter into and perform this Agreement and to carry out the transactions
contemplated by this Agreement.    North Country is duly
qualified to transact business and is in good standing in the State of New York
and in each other jurisdiction in which the failure to so qualify could have a
Material Adverse Effect.

     

    SECTION
3.02                      SUBSIDIARIES.

     

     Schedule
3.02, attached hereto, sets forth the legal names and jurisdictions of existence
of all Persons (collectively, the “Subsidiaries”
or each individually a “Subsidiary”)
in which North Country owns of record or beneficially, directly or
indirectly, (i) any shares of capital stock, securities convertible into
capital stock or any other equity interest or debt security of any corporation
or (ii) any equity interest or debt security in any partnership, limited
liability company, joint venture or other non-corporate Person or which North
Country controls, directly or indirectly.  Each of the Subsidiaries is
duly formed, validly existing and in good standing under the laws of the state
of its existence, and has full corporate or other power and authority to conduct
its business as presently conducted.  Each Subsidiary is duly
qualified to transact business and is in good standing in each other
jurisdiction in which the failure to so qualify could have a Material Adverse
Effect.   North Country is the registered and beneficial owner of
that percentage of the capital stock or other equity interest of each Subsidiary
stated on Schedule 3.02; and North Country owns such stock or other equity
interest free and clear of all Liens and restrictions
whatsoever.   No Person has any right to acquire capital stock or
other equity interests of any Subsidiary, whether by tender of consideration or
otherwise.

     

    SECTION
3.03                      AUTHORITY
FOR AGREEMENT.

     

    The
execution, delivery and performance of this Agreement by North Country have been
duly authorized by all necessary corporate action, and this Agreement
constitutes the valid and binding obligation of North Country, enforceable
against North Country in accordance with its terms, except as enforceability may
be affected by bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights.  The execution and
consummation of the transactions contemplated by this Agreement and compliance
with its provisions by North Country will not (a) violate any provision of
Applicable Law, (b) conflict with or result in any breach of any of the terms,
conditions, or provisions of, or constitute a default under, North Country’s
Certificate of Incorporation or Bylaws, or under any operating agreement of any
Subsidiary, in each case as amended, (c) conflict with, or result in a breach or
violation or loss of any benefit under, any indenture, franchise agreement,
service agreement, license agreement, lease, loan agreement or other agreement
instrument to which North Country or any Subsidiary is a party or by which any
of them  or any of their respective properties are bound or any
decree, judgment, order, statute, rule or regulation applicable to North Country
or any Subsidiary; (d) conflict with, or result in any violation of or default
or loss of any benefit under, any permit, concession, grant, franchise, law,
rule or regulation to which North Country or any Subsidiary is a party or to
which any of its property is subject; or (iv) result in the suspension,
revocation, impairment, forfeiture or nonrenewal of any material permit,
license, authorization or approval applicable to North Country or any
Subsidiary, its business or operations or any of its assets or
properties.

     

    
      
        
        

      

      
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    SECTION
3.04                      GOVERNMENTAL
OR THIRD PARTY CONSENT

     

    No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including any manager
or member of any limited liability company, any franchisor or lessor, or any
other  party to any agreement with North Country or with any
Subsidiary, is required by or with respect to North Country or such Subsidiary
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, except for such consents,
waivers, approvals, orders, authorizations, registrations, declarations and
filings as may be required under (i) applicable securities laws, (ii) the DGCL,
or (iii) the FLLCA.

     

    SECTION
3.05                      FINANCIAL
STATEMENTS

     

    North
Country has delivered to SVCC (a) its audited balance sheet as at
October 31, 2006 and its audited statement of income and cash flows for the
twelve months ending October 31, 2006, and (b) its audited balance
sheet as at October 31, 2007 and its audited consolidated statement of income
and cash flows for the twelve-month period ended on October 31, 2007
(collectively, the "Financial
Statements").  The Financial Statements are complete and
correct and have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis throughout the
periods indicated and with each other except that the unaudited Financial
Statements do not reflect all normal year-end adjustments.

     

    SECTION
3.06.                     CORPORATE
RECORDS.

     

    All of the books and records of North Country and each
of the Subsidiaries including, without limitation, its or such Subsidiary’s
books of account, corporate records, minute book, stock certificate books and
other records are up-to-date, complete and reflect accurately and fairly the
conduct of its business in all material respects since its date of incorporation
or formation.  All reports, returns and statements currently required
to be filed by either North Country or any Subsidiary with any government agency
with respect to the business and operations of North Country or such Subsidiary
have been filed or valid extensions have been obtained in accordance with normal
procedures and all governmental reporting requirements have been complied
with.  North Country has delivered to SVCC true, correct and complete
copies of the Operating Agreement of each Subsidiary that is a limited liability
company (each, an “LLC Operating
Agreement”), and each such LLC Operating Agreement is legal, valid and
binding and  in full force and effect.

     

    SECTION
3.07                      ABSENCE OF CERTAIN
CHANGES OR EVENTS.

     

    Since
October 31, 2007, except as set forth in Schedule 3.07, which will be delivered
after the Closing, and except as contemplated by this Agreement:

     

    (a)           there
has not been any Material Adverse Change in the business, operations,
properties, assets, or condition of North Country or any
Subsidiary;

     

    (b)           North
Country has not amended its Certificate of Incorporation, and neither North
Country nor any Subsidiary has  (i) declared or made, or agreed to
declare or make, any payment of dividends or distributions of any assets of any
kind whatsoever to stockholders (other than the payment of upstream dividends to
North Country) or purchased or redeemed, or agreed to purchase or redeem, any
outstanding capital stock; (iii) made any material change in its method of
management, operation, or accounting; (iv) entered into any material
transaction; or (v) made any accrual or arrangement for payment of bonuses or
special compensation of any kind or any severance or termination pay to any
present or former officer or employee;

     

    
      
        
          
             


          

          
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      (c)        Neither
North Country nor any Subsidiary has (i) borrowed or agreed to borrow any funds
or incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary course of
business; (ii) paid any material obligation or liability (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent North Country balance sheet, and current liabilities incurred since that
date in the ordinary course of business; (iii) sold, transferred or otherwise
disposed of, or pledged, mortgaged or encumbered in any way any of its assets or
rights or any revenues derived therefore, other than sales of products and
services in the ordinary course of business; (iv) canceled any material debts or
claims;  (v) made or permitted any material amendment or termination
of any contract, agreement, or license to which it is a party; (vi) adopted or
amended any employee benefit plan, compensation commitment, severance agreement
or employment contract (other than employment at-will arrangements that do not
require severance or termination payments) to which any director, officer or
employee of North Country or any Subsidiary is a party or a participant; (vii)
accepted the resignation of or terminated the employment of any director,
officer or employee of North Country or any Subsidiary; (viii) made any material
change in any accounting principle or method or election for federal income tax
purposes used by North Country; (ix) acquired any assets or property or made any
capital expenditures, additions or improvements or commitments for the same,
except those which do not exceed $50,000 in the aggregate; or (x)
agreed  to do any of the foregoing.

    

     

    SECTION
3.08                      TAXES.

     

    Except
where provided in Section 3.09 below, North Country and each Subsidiary has
filed all Tax Returns that it is required to file with all governmental
agencies, wherever situate, and has paid or accrued for payment all Taxes as
shown on such returns except for Taxes being contested in good
faith.  There is no material claim for Taxes that is a Lien against
the property of North Country or any Subsidiary other than Liens for Taxes not
yet due and payable.  All Taxes due and owing by either North Country
or any Subsidiary have been paid.  Except as set forth on Schedule
3.08, which will be delivered after the Closing, neither North Country nor any
Subsidiary is the beneficiary of any extension of time within which to file any
tax return.  North Country and each Subsidiary has withheld and paid
all taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
other third party.

     

    SECTION
3.09                      PENDING
ACTIONS.

     

    Except
three distinct situations discussed between the two principals, there are no
legal actions, lawsuits, proceedings or investigations, administrative or
judicial, pending or, to North Country’s Knowledge, threatened, against or
affecting North Country or any Subsidiary or against North Country or any
Subsidiary’s Managers, Officers, or Directors that arose out of their operation
of such company’s business.  Neither North Country, any
Subsidiary,  nor any of North Country’s or any Subsidiary’s Managers,
Officers or Directors are subject to any order, writ, judgment, injunction,
decree, determination or award of any court, arbitrator or administrative,
governmental or regulatory authority or body which would be likely to have a
Material Adverse Effect on the business of North Country or the Subsidiary.
 There is no action, suit or proceeding by North Country or any Subsidiary
currently pending or that North Country or any Subsidiary intends to
initiate.

     

    SECTION
3.10.                     COMPLIANCE WITH
LAWS.

     

    North
Country’s and each Subsidiary’s operations have been conducted in all material
respects in accordance with all applicable statutes, laws, rules and
regulations.  Neither North Country nor any Subsidiary is in violation
of any law, ordinance or regulation of any other jurisdiction, the violation of
which would be likely to have a Material Adverse Effect.

     

    
      
        
          
             


          

          
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    SECTION
3.11                                           INTELLECTUAL
PROPERTY

     

    (a)           Schedule
3.11, which will be delivered after the Closing, will set forth all Patent
Rights, Trademark Rights (including names for beer and ale, even if not
registered as trademarks) and copyright registrations or applications therefor
that are now or were at any time in the past registered, issued or filed in the
name of North Country or any Subsidiary, alone or jointly with others, or that
were assigned to North Country or any Subsidiary (the "Registered
Intellectual Property"), enumerating specifically the applicable filing
or registration number, date of filing or issuance, name of all inventors,
applicant(s), registrant(s) and/or assignee(s), as applicable, and status of any
required issuance, renewal, maintenance or other payments.  All
Registered Intellectual Property is valid, enforceable and
subsisting.  All issuance, renewal, maintenance and other payments
that are or have become due with respect to the Registered Intellectual Property
have been timely paid.

     

    (b)           Each
of North Country and the Subsidiaries owns or has the right to use all
Intellectual Property that is used in its business as now conducted and as
currently proposed to be conducted.  No Person has any ownership
interest, royalty interest, security interest, license right or other interest
in or to, or any Lien against, any Company Owned Intellectual
Property.  Schedule 3.11 will identify the location of each formula
for beer or ale currently or within the past five (5) years used by any of the
North Country subsidiaries.  Each such formula is owned by North
Country or one of its subsidiaries, free of Liens.

     

    (c)           To
North Country's Knowledge, North Country's and each Subsidiary’s business as now
conducted, or as currently proposed to be conducted, does not infringe or
violate, or constitute a misappropriation of, any Intellectual Property rights
of any Person.  Schedule 3.11 will set forth all complaints, claims
and notices and threats thereof alleging any such infringement, violation or
misappropriation; and North Country has provided to SVCC complete and accurate
copies of all written documentation relating to any such complaint, claim,
notice or threat.  No Person is infringing, violating or
misappropriating any Company Owned Intellectual Property.

     

    (d)           Schedule
3.11 will set forth each license or other agreement pursuant to which North
Country or any Subsidiary has licensed, distributed or otherwise granted any
rights to any Person with respect to any Intellectual Property and each
agreement pursuant to which North Country or any Subsidiary has transferred or
assigned ownership of any Intellectual Property.

     

    (e)           Schedule
3.11 sets forth each item of Company Licensed Intellectual Property and the
license or agreement pursuant to which North Country or any Subsidiary uses or
has access to it (excluding off the shelf software programs licensed by North
Country or any Subsidiary pursuant to "shrink wrap" licenses).  With
respect to Company Licensed Intellectual Property, the licenses or agreements
granting North Country or any Subsidiary the right to use such Intellectual
Property are in full force and effect on the date hereof and valid and
enforceable by the licensee in accordance with their respective
terms.

     

    (f)           Except
as otherwise noted on Schedule 3.11, the Company Owned Intellectual Property
includes the exclusive right to grant franchises in each and every one of the
business enterprises conducted by North Country and its
Subsidiaries.

     

    
      
        
          
             


          

          
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    (g)           For
purposes of this Agreement, the following terms shall have the following
meanings:

     

    "Intellectual
Property" means the following subsisting throughout the world: (1)
patents, patent applications, and registrations thereof (the "Patent
Rights"); (2) registered or common law trademarks and service marks,
trade dress, Internet domain names, logos, trade names and corporate names and
all registrations and applications for registration of the foregoing (the "Trademark
Rights"), and all goodwill in the foregoing; (3) copyrights, data and
database rights and registrations and applications for registration thereof; (4)
mask works and registrations and applications for registration thereof; (5)
inventions, designs, trade secrets and confidential business information,
whether patentable or nonpatentable and whether or not reduced to practice, and
know-how;  (6) other proprietary rights relating to any of the
foregoing (including remedies against infringement thereof and rights of
protection of interest therein under the laws of all jurisdictions);
and  (7) copies and tangible embodiments thereof.

     

    "Company
Intellectual Property" shall mean North Country or Subsidiary Owned
Intellectual Property and North Country or Subsidiary Licensed Intellectual
Property.

     

    "Company Licensed
Intellectual Property" shall mean all Intellectual Property that is
licensed to North Country or any Subsidiary by third
parties.

     

    "Company Owned
Intellectual Property" shall mean all Intellectual Property owned or
purported to be owned by North Country or any Subsidiary, in whole or in
part.

     

    SECTION
3.12                      EMPLOYEES AND
EMPLOYEE MATTERS.

     

    Each of
North Country and the Subsidiaries has complied with all federal, state and
local laws relating to the hiring of employees, consultants and advisors and the
employment of labor, including provisions thereof relating to wages, hours,
equal opportunity, collective bargaining and the payment of social security and
other taxes.  There are no collective bargaining agreements or other
labor union or guild contracts governing the relationship between North Country
or any Subsidiary and any of its employees.  Neither North Country nor any
Subsidiary is delinquent in payments to any of its employees for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed by them to date or amounts required to be reimbursed to such employees
or upon any termination of the employment of any such employees, except for
reimbursements due to employees, none of which are more than thirty days past
due.  Neither North Country nor any Subsidiary has breached or
otherwise failed to comply with any provision of any collective bargaining
agreement or other labor union contract applicable to any of its
employees.  No consent of any union (or any similar group or
organization) is required in connection with the consummation of the
transactions contemplated hereby.

     

    Schedule
3.12, which will be delivered after the Closing, will set forth a list of the
names of all of North Country's and each Subsidiary’s officers, directors and
employees and the position and compensation of each such person.

     

    Schedule
3.12 will set forth a true, correct and complete list of all employment,
severance, non-competition, deferred compensation and similar arrangements
between each of North Country and the Subsidiaries and their respective
officers, employees and consultants and all such arrangements with former
officers, employees and consultants pursuant to which North Country or any
Subsidiary is obligated to make any payments or provide any
benefits.

     

    Schedule
3.12 will set forth a true, correct and complete list of all "employee benefit
plans" (as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended) and any other plan, program, arrangement or agreement
with respect to which North Country or any Subsidiary is obligated to provides
bonuses, incentive compensation, vacation pay, severance pay, insurance or any
other perquisite or benefit to officers, employees or consultants of North
Country or any Subsidiary.

     

    North
Country does not have knowledge that any officer, or that any group of
employees, intends to terminate his, her or their employment with North Country
or any Subsidiary, nor does North Country or any Subsidiary have a present
intention to terminate the employment of any officer or group of
employees.

     

    
      
        
          
             


          

          
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      SECTION
3.13                                           AGREEMENTS.

    

     

    Except
for this Agreement and except as set forth on Schedule 3.13, which will be
delivered after the Closing:

     

    (a)          There
are no agreements, understandings or proposed transactions between North Country
or any Subsidiary and any of their respective officers, directors, stockholders,
employees, members, managers, or Affiliates (as defined below), or any Affiliate
or Family Member (as defined below) thereof, other than oral agreements
cancellable at will with North Country's or the Subsidiary’s officers, managers
and employees (A) for payment of salary for services rendered and (B) for
reimbursement of reasonable expenses incurred on behalf of the
company.  "Affiliate"
means, with respect to North Country or any Subsidiary or other specified
Person, any Person directly or indirectly controlling, controlled by or under
direct or indirect common control with North Country or such Subsidiary or other
specified Person and shall also include, in the case of a specified Person who
is an individual, any Family Member of such Person.  "Family
Member" means,
with respect to any individual, such individual's parents, spouse, and
descendants (whether natural or adopted) and any trust or other vehicle formed
for the benefit of any one or more of them.

     

    (b)          There
are no agreements, understandings, instruments, contracts, proposed
transactions, judgments, orders, writs or decrees (whether oral or written) to
which North Country or any Subsidiary (each, a “Company Party”)
is a party or by which it or any of its assets is bound that may involve
(A) obligations (contingent or otherwise) of, or payments by or to, the Company
Party in excess of $20,000 (B) the issuance of equity securities of the Company
Party or the Company Party’s  incurrence of indebtedness or the pledge
or grant of any security interest or encumbrance on the Company Party’s assets,
(C) restrictions on the development, provision or distribution of the Company
Party’s products or services, (D) the manufacturing, production, assembling,
marketing, development, testing or distribution of the Company Party’s products
or services or supplying the Company Party with any products or services
necessary for the development or manufacture of its products, (E) any
employment, severance or consulting agreement, employee benefit, bonus, pension,
profit-sharing, stock option, stock purchase or similar plan or arrangement, (F)
the grant or purchase of a franchise, (G) the disposition of a material portion
of the Company Party’s assets or the acquisition of the business or securities
or other ownership interests of another Person, (H) any agreement under which
the Company Party is restricted from carrying on any line of business or
carrying on any business in any geographic location, (I) any fees or payments to
any Person (including any broker, investment bank or other finder) relating to
any financing (public or private) or the sale of the enterprise value of the
Company Party  (through merger, consolidation, asset transfer, equity
transfer, license or otherwise), (J) any lease of real property, (K) the
operation of any franchise, or (L) any other agreement that is material to the
business, operations, prospects, assets or condition (financial or otherwise) of
the Company Party (the "Company
Contracts").

     

    (c)          Schedule
3.13 will contain a complete list of all Company Contracts.  With
respect to each Company Contract: (A) such Company Contract is legal, valid,
binding, enforceable and in full force and effect against the Company Party; (B)
such Company Contract will continue to be legal, valid, binding, enforceable and
in full force and effect (in each case, as against the Company Party and, to the
Knowledge of North Country, each other party thereto) in accordance with its
terms; (C) neither the Company Party nor, to the Knowledge of North Country, any
other party thereto, is in breach or default in any material respect, and no
event has occurred that with notice or lapse of time would constitute a material
breach or default on the part of the Company Party or, to the knowledge of North
Country, any other party thereto, or permit termination, modification or
acceleration, under such Company Contract; (D) neither the Company Party nor, to
the knowledge of North Country, any other party thereto has repudiated any
provision of such Company Contract; and (E) a true and correct copy of such
Company Contract has been provided to SVCC.  There are no negotiations
pending or in progress to revise any material term of any Company
Contract.

     

    
      
        
          
             


          

          
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    SECTION
3.14                                           PERMITS
AND LICENSES

     

     Schedule
3.14, which will be delivered after the Closing, will contain a complete list of
all liquor licenses used in connection with the business of North Country or any
of its Subsidiaries.  Each liquor license is held free of liens and
encumbrances, except as disclosed on Schedule 3.14.  North Country and
each Subsidiary has all franchises, permits and licenses necessary for the
conduct of its business as now being conducted by it (including, without
limitation, owning and leasing its property and assets). Neither North Country
nor any Subsidiary is in default under any of such franchises, permits,
licenses, or other similar authority and none of such franchises, permits,
licenses, or other similar authority limit the full operation of North Country's
or such Subsidiary’s business as presently conducted and to be
conducted.

     

    SECTION
3.15                                           TITLE
TO PROPERTY AND ASSETS.

     

     Schedule
3.15 contains a list of the real property owned by North Country or any of its
Subsidiaries, including street address and block and lot.  Except as
set forth on Schedule 3.15, North Country and each Subsidiary has good and
marketable title to all of its property and assets and owns such property and
assets free and clear of any Liens, except for Liens reflected in the Financial
Statements and, with respect to real property owned by North Country or any
Subsidiary, except for encumbrances, defects, restrictions and reservations of
record.  With respect to the property and assets it leases, North
Country or the Subsidiary which is a party to each such lease is in compliance
with such lease and holds a valid leasehold interest free and clear of any
Lien.

     

    SECTION
3.16                                           ENVIRONMENTAL AND
SAFETY LAWS.

     

    (a)
Neither North Country nor any Subsidiary (each a “Company
Owner”) has generated, used, transported, treated, stored, released or
disposed of, and has not suffered or permitted anyone else to generate, use,
transport, treat, store, release or dispose of any Hazardous Substance (as
defined below) in violation of any Environmental Laws (as defined below); (b)
there has not been any generation, use, transportation, treatment, storage,
release or disposal of any Hazardous Substance resulting from the conduct of the
Company Owner or the use of any property or facility by the Company Owner or, to
North Country's Knowledge, any nearby or adjacent properties or facilities, that
has created or could reasonably be expected to create any liability on the part
of the Company Owner under the Environmental Laws or that would require
reporting to or notification by the Company Owner to any local, state or federal
governmental authority; and (c) any Hazardous Substance handled or dealt with in
any way in connection with the business of any Company Owner, whether before or
during such Company ownership, has been and is being handled or dealt with in
all respects in compliance with the Environmental Laws in effect at the time
such activities were being conducted.  "Environmental
Laws" shall mean all laws, rules, regulations, statutes, ordinances,
decrees or orders of any local, state or federal governmental authority relating
to (i) the control of any potential pollutant or protection of the air, water or
land, (ii) solid, gaseous or liquid waste generation, handling, treatment,
storage, disposal or transportation and (iii) exposure to Hazardous Substances
and includes, without limitation, final and binding requirements related to the
foregoing imposed by (A) the terms and conditions of any license, permit,
approval or other authorization by any local, state or federal governmental
authority and (B) applicable judicial, administrative or other regulatory
decrees, judgments and orders of any local, state or federal governmental
authority.    "Hazardous
Substances" shall mean any toxic or hazardous materials or substances,
solid wastes, including asbestos, buried contaminants, chemicals, flammable or
explosive materials, radioactive materials, petroleum wastes and spills or
releases of petroleum products and any other chemical, pollutant, contaminant,
substance or waste that is regulated by any local, state or federal governmental
authority under any Environmental Law.

     

    
      
        
           


        

        
          16

          
            

          

        

        
           


        

      

    

     

    SECTION
3.17                      INSURANCE.

     

    Schedule
3.17, which will be delivered after the Closing, will set forth a list of all
policies or binders of fire, casualty, liability, product liability, clinical
trial, worker's compensation, vehicular or other insurance held by North Country
or any Subsidiary (specifying for each such insurance policy the insurer, the
policy number or covering note number with respect to binders, and each pending
claim thereunder and setting forth the aggregate amounts paid out under each
such policy through the date hereof).  All such binders are in full
force and effect.   Neither North Country nor any Subsidiary is
in default with respect to any provision contained in any such policy or binder
and neither has failed to give any notice or present any claim of which it has
notice under any such policy or binder in a timely fashion.  Neither
North Country nor any Subsidiary has received or given a notice of cancellation
or nonrenewal with respect to any such policy or binder.  None of the
applications for such policies or binders contain any material inaccuracy, and
all premiums for such policies and binders have been paid when
due.  There is no state of facts or the occurrence of any event that
is reasonably likely to form the basis for any claim against it in an amount
exceeding $20,000 not fully covered by such insurance policies, and neither
North Country nor any Subsidiary has received written notice from any of its
insurance carriers that any existing insurance coverage will not be available
after the Closing on substantially the same terms as now in effect.

     

    SECTION
3.18                      SUPPLIERS.

     

    No
customer or supplier that was significant to North Country or any Subsidiary
during calendar year 2007 has terminated, materially reduced or threatened to
terminate or materially reduce its purchases from, or provision of products or
services to, North Country or the Subsidiary, as the case may
be.  Each of the material components, products and services used in
and necessary for the conduct of North Country's and each Subsidiary’s business
as now conducted and presently proposed to be conducted is either (a) subject to
a legally binding and enforceable agreement with the supplier of such material
component, product or service or (b) could be obtained through one or more
alternate suppliers without material disruption to the business of North Country
or the Subsidiary.

     

    SECTION
3.19                      DEBTS

     

    Schedule
3.19 hereto sets forth (a) the aggregate liabilities of North Country and its
subsidiaries as of the end of the most recent month, and (b) with respect to any
creditor to whom more than $50,000 is owed, the identity of the creditor, the
amount of liability, and a description of any written instrument governing the
liability.

     

    SECTION
3.20                      BANKING

     

    Schedule
3.20, which will be delivered after the Closing, will identify each bank account
maintained by North Country or any of its subsidiaries, and states the cash
balance as of a recent date.

     

    SECTION
3.21                     
FINDERS’ FEES

     

    North
Country has not incurred, nor will it incur, directly or indirectly, any
liability for brokers’ or finders’ fees or agents’ commissions or investment
bankers’ fees or any similar charges in connection with this Agreement or any
transaction contemplated hereby.

     

    
      
        
           


        

        
          17

          
            

          

        

        
           


        

      

    

     

    ARTICLE
IV

    CERTAIN
COVENANTS AND AGREEMENTS

     

    
      	
              SECTION
      4.01

            	
              CONDUCT
      OF BUSINESS

            


    

     

    Each of
North Country and SVCC, for itself and on behalf of each of its subsidiaries,
covenants and agrees that, during the period from the date of this Agreement
until the Closing Date, it and each subsidiary shall, except as otherwise
disclosed in this Agreement and other than as contemplated by this Agreement or
for the purposes of effecting the Closing pursuant to this Agreement, conduct
its business as presently operated and solely in the ordinary course, and
consistent with such operation, and, in connection therewith, without the
written consent of the other Party:

     

    
      	
            	
              (a)

            	
              shall
      not amend its Certificate of Incorporation or
  Bylaws;

            


    

     

    
      	
            	
              (b)

            	
              shall
      not pay or agree to pay to any employee, officer or director compensation
      that is in excess of the current compensation level of such employee,
      officer or director other than salary increases or payments made in the
      ordinary course of business or as otherwise provided in any contracts or
      agreements with any such employees;

            


    

     

    
      	
            	
              (c)

            	
              shall
      not merge or consolidate with any other entity or acquire or agree to
      acquire any other entity;

            


    

     

    
      	
            	
              (d)

            	
              shall
      not sell, transfer, or otherwise dispose of any assets required for the
      operations of its or any Subsidiary’s business, except in the ordinary
      course of business consistent with past
  practices;

            


    

     

    
      	
            	
              (e)

            	
              shall
      not create, incur, assume, or guarantee any indebtedness for money
      borrowed except in the ordinary course of business, or create or suffer to
      exist any Lien on any of  its material
  assets;

            


    

     

    
      	
            	
              (f)

            	
              shall
      not make any material capital expenditure or series of capital
      expenditures except in the ordinary course of
  business;

            


    

     

    
      	
            	
              (g)

            	
              shall
      not grant any severance or termination pay to any director, manager,
      officer or any other employee.

            


    

     

    
      	
            	
              (h)

            	
              shall
      not declare or pay any dividends on or make any distribution of any kind
      with respect to its Shares or to any membership interest in any Subsidiary
      which is a limited liability company, except for distributions to the
      parent company; and

            


    

     

    
      	
            	
              (i)

            	
              shall
      use commercially reasonable efforts to comply with and not be in default
      or violation under any known law, regulation, decree or order applicable
      to its business, operations or assets where such violation would have a
      Material Adverse Effect.

            


    

     

    SECTION
4.02                                           COVENANTS
OF THE PARTIES

     

    (a)           Tax-free
Reorganization.  The Parties intend that the Merger qualify as a
Tax-free “reorganization” under Sections 368(a) of the Code, as amended, and the
Parties will take the position for all purposes that the Merger shall qualify as
reorganization under such Section.  In addition, the Parties covenant
and agree that they will not engage in any action, or fail to take any action,
which action or failure to take action would reasonably be expected to cause the
Merger to fail to qualify as a Tax-free “reorganization” under Section 368(a) of
the Code, whether or not otherwise permitted by the provisions of this
Agreement;

     

    
      
        
           


        

        
          18

          
            

          

        

        
           


        

      

    

     

    (b)           Announcement.  Neither
North Country nor SVCC shall issue any press release or otherwise make any
public statement with respect to this Agreement or the transactions contemplated
hereby without the prior consent of the other Party (which consent shall not be
unreasonably withheld), except as may be required by applicable law or
securities regulation.  Upon execution of this Agreement, SVCC shall
issue a press release, after approval thereof by North Country, and file a
Current Report on Form 8-K reporting the execution of the
Agreement.

     

    (c)           Notification
of Certain Matters.  North Country shall give prompt written notice to
SVCC, and SVCC shall give prompt written notice to North Country,
of:

     

    (i)           The
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be reasonably likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the Effective Time; and

     

    (ii)           Any
material failure of North Country or the Principal Shareholder, on the one hand,
or SVCC, on the other hand, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder.

     

    (d)           Reasonable
Best Efforts.  Before Closing, upon the terms and subject to the
conditions of this Agreement, the Parties agree to use their respective
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable (subject to
applicable laws) to consummate and make effective the Merger and other
transactions contemplated by this Agreement as promptly as practicable
including, but not limited to:

     

    (i)           The
preparation and filing of all forms, registrations and notices required to be
filed to consummate the Merger, including without limitation, any approvals,
consents, orders, exemptions or waivers by any third party or governmental
entity; and

    


    (ii)           The
satisfaction of the Party's conditions precedent to Closing.

     

    (e)           Access
to Information

     

    (i)           Inspection
by North Country.  SVCC will, if requested, make available for
inspection by North Country, during normal business hours and in a manner so as
not to interfere with normal business operations, all of SVCC’s records
(including tax records), books of account, premises, contracts and all other
documents in SVCC’s possession or control that are reasonably requested by North
Country to inspect and examine the business and affairs of SVCC.  SVCC
will cause its managerial employees and regular independent accountants to be
available upon reasonable advance notice to answer questions of North Country
concerning the business and affairs of SVCC.  North Country will treat
and hold as confidential any information it receives from SVCC in the course of
the reviews contemplated by this Section 4.03(f).  No examination by
North Country will, however, constitute a waiver or relinquishment by North
Country of its rights to rely on SVCC’s covenants, representations and
warranties made herein or pursuant hereto.

     

    (ii)           Inspection
by SVCC.  North Country will, if requested, make available for
inspection by SVCC, during normal business hours and in a manner so as not to
interfere with normal business operations, all of North Country’s records
(including tax records), books of account, premises, contracts and all other
documents in North Country’s possession or control that are reasonably requested
by SVCC to inspect and examine the business and affairs of North Country and the
Subsidiaries.  North Country will cause its managerial employees and
regular independent accountants to be available upon reasonable advance notice
to answer questions of SVCC concerning the business and affairs of North Country
and the Subsidiaries.  SVCC will treat and hold as confidential any
information it receives from North Country in the course of the reviews
contemplated by this Section 4.03(f).  No examination by SVCC will,
however, constitute a waiver or relinquishment by SVCC of its rights to rely on
North Country’s covenants, representations and warranties made herein or
pursuant hereto.

     

    
      
        
           


        

        
          19

          
            

          

        

        
           


        

      

    

     

    ARTICLE
V

    CONDITIONS
PRECEDENT

     

    SECTION
5.01                                    
      CONDITIONS PRECEDENT TO THE PARTIES'
OBLIGATIONS.

     

    The
obligations of the Parties as provided herein shall be subject to each of the
following conditions precedent, unless waived in writing by both SVCC and North
Country:

     

    (a)           Consents,
Approvals.  The Parties shall have obtained all necessary consents and
approvals of their respective boards of directors, and all consents, approvals
and authorizations required under their respective charter documents, and all
material consents, including any material consents and waivers by the Parties’
respective lenders and other third parties, if necessary, to the consummation of
the transactions contemplated by this Agreement.

     

    (b)           Shareholder
Approval.  This Agreement and the transactions contemplated hereby
shall have been approved by the shareholders of North Country in accordance with
the applicable provisions of the Nevada Revised Statutes and its
bylaws.

     

    (c)           Absence
of Certain Litigation.  No action or proceeding shall be threatened or
pending before any governmental entity or authority which, in the reasonable
opinion of counsel for the Parties, is likely to result in a restraint,
prohibition or the obtaining of damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated
hereby.

     

    (d)           Appraisal
Rights.  North Country shall have afforded appraisal rights to its
shareholders, and it shall not have occurred that the holders of more than three
percent of the outstanding shares of North Country common stock shall have
exercised appraisal rights in connection with the transactions contemplated by
this Agreement.

     

    (e)           Employment
Agreement.  SVCC and the Principal Shareholder shall have entered into
an employment agreement in the form annexed hereto as Appendix C.

     

    
      	
              SECTION
      5.02

            	
              CONDITIONS
      PRECEDENT TO THE OBLIGATIONS OF
SVCC

            


    

     

    The
obligations of SVCC on the Closing Date as provided herein shall be subject to
the satisfaction, on or prior to the Closing Date, of the following conditions
precedent, unless waived in writing by SVCC:

     

    (a)           Consents
and Approvals.  North Country shall have obtained all material
consents, including, without limitation, any material consents and waivers by
North Country's lenders, lessors, franchisors, co-owners of membership interests
in Subsidiaries, and other third parties, if necessary, to the consummation of
the transactions contemplated by this Agreement.

     

    (b)           Assignment
and Assumption Agreement.  The Assignment and Assumption Agreement
shall be in full force and effect.  All of the transfers of assets
contemplated by the Assignment and Assumption Agreement shall have been
completed, and North Country shall have delivered to SVCC documentary evidence
satisfactory to SVCC that Harbor Acquisition has acquired full title to all of
the assets of North Country owned on this date or hereafter acquired, except
such as shall have been disposed of after this date in the ordinary course of
business.

     

    
      
        
          
             


          

          
            20

            
              

            

          

          
             


          

        

      

    

     

    (c)           Representations
and Warranties.  The representations and warranties by North Country
in Article III herein shall be true and accurate in all material respects on and
as of the Closing Date with the same force and effect as though such
representations and warranties had been made at and as of the Closing Date,
except to the extent that any changes therein are specifically contemplated by
this Agreement.  The Chief Executive Officer of North Country shall
have delivered a signed certification to SVCC, dated as of the Closing Date,
attesting to the foregoing statement.

     

    (d)           Performance.  North
Country shall have performed and complied in all material respects with all
agreements to be performed or complied with by it pursuant to this Agreement at
or prior to the Closing.

     

    (e)           Financial
Statements.  North Country shall have delivered to SVCC the financial
statements necessary for inclusion in the Current Report on Form 8-K required to
be filed by SVCC to report the Merger, including financial statements of North
Country for the year ended December 31, 2007 with an audit report provided by an
independent accountant registered with the PCAOB.

     

    (f)           Proceedings
and Documents.  All corporate, company and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to SVCC and its counsel, and SVCC and its
counsel shall have received all such counterpart originals (or certified or
other copies) of such documents as they may reasonably request.

     

    (g)           Certificate
of Good Standing.  North Country shall have delivered to SVCC a
certificate as to the good standing of North Country certified by the Secretary
of State of the State of Nevada, and a certificate as to the good standing of
each Subsidiary, including Harbor Acquisition, in its jurisdiction of existence,
each on or within fourteen (14) business days prior to the Closing
Date.

     

    (h)           Material
Changes.  Except as contemplated by this Agreement, since the date
hereof, neither North Country nor any Subsidiary shall have suffered a Material
Adverse Effect, and, without limiting the generality of the foregoing, there
shall be no pending litigation to which North Country or any Subsidiary is a
party which is reasonably likely to have a Material Adverse Effect on North
Country or such Subsidiary.

     

    (i)           Name
Change.  On the Closing Date, North Country shall file with the
Secretary of State of Nevada articles of amendment of its articles of
incorporation changing its corporate name to one which is substantially
dissimilar to North Country Hospitality.

     

    
      	
              SECTION
      5.03

            	
              CONDITIONS
      PRECEDENT TO THE OBLIGATIONS OF NORTH
COUNTRY

            


    

     

    The
obligations of North Country on the Closing Date as provided herein shall be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions precedent, unless waived in writing by North Country:

     

    (a)           Consents
and Approvals.  Each of SVCC and the Merger Sub shall have obtained
all material consents, including any material consents and waivers of its
respective lenders and other third parties, if necessary, to the consummation of
the transactions contemplated by this Agreement.

     

    (b)           Representations
and Warranties.  The representations and warranties by SVCC in Article
II herein shall be true and accurate in all material respects on and as of the
Closing Date with the same force and effect as though such representations and
warranties had been made at and as of the Closing Date, except to the extent
that any changes therein are specifically contemplated by this
Agreement.  The Chief Executive Officer of SVCC shall have delivered a
signed certification to North Country, dated as of the Closing Date, attesting
to the foregoing statement.

    
       

      
        
          
             


          

          
            21

            
              

            

          

          
             


          

        



    

    (c)           Performance.  SVCC
and Merger Sub shall have performed and complied in all material respects with
all agreements to be performed or complied with by it pursuant to this Agreement
prior to or at the Closing.

     

    (d)           Proceedings
and Documents.  All corporate, company and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to North Country and its counsel, and North
Country and its counsel shall have received all such counterpart originals (or
certified or other copies) of such documents as they may reasonably
request.

     

    (e)           Certificates
of Good Standing.  SVCC shall have delivered to North
Country  a certificate as to its good standing in the State of
Delaware and as to the good standing of Merger Sub in the State of Delaware, in
each case certified by the Secretary of State not more than fourteen (14)
business days prior to the Closing Date.

     

    (f)           Material
Changes.  Except as contemplated by this Agreement, since the date
hereof, neither SVCC nor the Merger Sub shall have suffered a Material Adverse
Effect and, without limiting the generality of the foregoing, there shall be no
pending litigation to which SVCC or the Merger Sub is a party which is
reasonably likely to have a Material Adverse Effect on SVCC or the Merger
Sub.

     

    (g)           Status
of SVCC.  At the Effective Time of the Merger, SVCC shall be a fully
compliant reporting public company under the Exchange Act, and shall be current
in all of its reports required to be filed under the Exchange Act.

     

    (h)           SVCC
Indemnity.  SVCC shall have executed an undertaking, in form
satisfactory to counsel for North Country, in which SVCC will agree to indemnify
North Country and the Principal Shareholder against all loss or liability
arising from debts claims, obligations, losses or liabilities  assumed
by Harbor Acquisition in the Assignment and Assumption Agreement (excluding,
however, liabilities not disclosed to SVCC prior to the Closing Date in breach
of any representation in this Agreement).

     

    (i)           Board
Representation.  SVCC shall have delivered to North Country
certification of a resolution of the SVCC Board of Directors electing
Christopher Swartz to serve as a member of the SVCC Board of Directors,
effective on the Closing.

     

     

    ARTICLE
VI

    CONFIDENTIALITY

     

    SECTION
6.01                      CONFIDENTIALITY

     

    SVCC, on
the one hand, and North Country, on the other hand, will keep confidential all
information and documents obtained from the other, including but not limited to
any information or documents provided pursuant to Section 4.02(f) hereof (except
for any information disclosed to the public pursuant to a press release
authorized by the Parties); and in the event the Closing does not occur or this
Agreement is terminated for any reason, will promptly return such documents and
all copies of such documents and all notes and other evidence thereof, including
material stored on a computer, and will not use such information for its own
advantage, except to the extent that (i) the information must be disclosed by
law, (ii) the information becomes publicly available by reason other than
disclosure by the Party subject to the confidentiality obligation, (iii) the
information is independently developed without use of or reference to the other
Party’s confidential information, (iv) the information is obtained from another
source not obligated to keep such information confidential, or (v) the
information is already publicly known or known to the receiving Party when
disclosed as demonstrated by written documentation in the possession of such
Party at such time.

     

    
      
        
           


        

        
          22

          
            

          

        

        
           


        

      

    

     

    ARTICLE
VII

    INDEMNIFICATION

     

    SECTION
7.01                      INDEMNIFICATION
BY SVCC

     

    SVCC
shall indemnify, defend and hold harmless each of North Country, each
Subsidiary, and any affiliate of North Country, and each person who is now, or
has been at any time prior to the date hereof or who becomes prior to the
Closing, a shareholder, officer, director, member, or manager of North Country,
any subsidiary or affiliate thereof or an employee of North Country, any
subsidiary or affiliate thereof and their respective heirs, legal
representatives, successors and assigns (the “North Country
Indemnified Parties”) against all losses, claims, damages, costs,
expenses (including reasonable attorneys’ fees), liabilities or judgments or
amounts that are paid in settlement of or in connection with any threatened or
actual third party claim, action, suit, proceeding or investigation based in
whole or in part on or arising in whole or in part out of (i)
any  breach of this Agreement by SVCC or any subsidiary or affiliate
thereof, including but not limited to failure of any representation or warranty
to be true and correct at or before the Closing,  (ii) any willful or
grossly negligent act, omission or conduct of any officer, director or agent of
SVCC or any subsidiary or affiliate thereof prior to the Closing, whether
asserted or claimed prior to, at or after, the Closing, or any liability assumed
by Harbor Acquisition in the Assignment and Assumption Agreement (excluding,
however, liabilities not disclosed to SVCC prior to the Closing Date in breach
of any representation in this Agreement).  Any North Country
Indemnified Party wishing to claim indemnification under this Section 7.01, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify SVCC in writing, but the failure to so notify shall not relieve SVCC from
any liability that it may have under this Section 7.01, except to the extent
that such failure would materially prejudice SVCC.  The remedies set
forth in this Section 7.01 shall be limited by the provisions of Section
6.02(b), when applicable.

     

    
      	
              SECTION
      7.02

            	
              INDEMNIFICATION
      BY NORTH COUNTRY

            


    

     

    North
Country and the Principal Shareholder shall, jointly and severally, indemnify,
defend and hold harmless each of SVCC, any subsidiary or affiliate thereof and
each person who is now, or has been at any time prior to the date hereof or who
becomes prior to the Closing, a shareholder, officer, director or partner of
SVCC, any subsidiary or affiliate thereof or an employee of SVCC, any subsidiary
or affiliate thereof and their respective heirs, legal representatives,
successors and assigns (the “SVCC Indemnified
Parties”) against all losses, claims, damages, costs, expenses (including
reasonable attorneys’ fees), liabilities or judgments or amounts that are paid
in settlement of or in connection with any threatened or actual third party
claim, action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of (i) any material breach of this Agreement by
North Country, any Subsidiary or affiliate of North Country, or by the Principal
Shareholder, including but not limited to failure of any representation or
warranty to be true and correct at or before the Closing, or (ii) any willful or
negligent act, omission or conduct of any officer, director, manager or agent of
North Country or any Subsidiary or affiliate of North Country prior to the
Closing, whether asserted or claimed prior to, at or after, the
Closing.  Any SVCC Indemnified Party wishing to claim indemnification
under this Section 7.02, upon learning of any such claim, action, suit,
proceeding or investigation, shall notify North Country in writing, but the
failure to so notify shall not relieve North Country from any liability that it
may have under this Section 7.02, except to the extent that such failure would
materially prejudice North Country.  The remedies set forth in this
Section 7.02 shall be limited by the provisions of Section 6.02(b), when
applicable.

     

    SECTION
7.03                      LIMITATION
ON ACTIONS

     

    Notwithstanding
the undertakings by the Parties in this Article VII and the representations and
warrantines of the Parties in this Agreement, no Party shall be entitled to
commence any legal proceeding against another Party for indemnification or
otherwise for damages, unless and until the aggregate claim by the Party
reasonably exceeds One Hundred Thousand Dollars ($100,000), at which time the
Party may take legal action for all damages and indemnifiable
amounts.

     

    
      
        
           


        

        
          23

          
            

          

        

        
           


        

      

    

     

     

    ARTICLE
VIII

    MISCELLANEOUS

     

    SECTION
8.01                      EXPENSES

     

    Except as
contemplated by this Agreement, all costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated by
this Agreement shall be paid by the Party incurring such expenses.

     

    SECTION
8.02                      APPLICABLE
LAW

     

    Except to
the extent that the laws of the State of Delaware mandatorily apply to the
transactions contemplated hereby, this Agreement shall be governed by the laws
of the State of New York, without giving effect to the principles of conflicts
of laws thereof, as applied to agreements entered into and to be performed in
such state.

     

    SECTION
8.03                      NOTICES.

     

    All
notices and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given or made as follows:

     

    (a)           If
sent by reputable overnight air courier (such as Federal Express), 2 business
days after being sent;

     

    (b)           If
sent by facsimile transmission, with a copy mailed on the same day in the manner
provided in clause (a) above, when transmitted and receipt is confirmed by the
fax machine; or

     

    
      	
               
      

            	
              (c)

            	
              If
      otherwise actually personally delivered, when
  delivered.

            


    

     

    All
notices and other communications under this Agreement shall be sent or delivered
as follows:

     

    If to
North Country, to:

     

    Christopher Swartz, President

    North
Country Hospitality, Inc.

    24685 NYS
Route 37

    Watertown, NY 13601

    Telephone:  315-778-8007

    Facsimile:   315-788-8954

     

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

     

    
      	
               
      

            	
              If
      to SVCC, to:

            


    

    Mr. Tom
Scozzafava, President

    Seaway
Valley Capital Corporation

    10-18
Park Street, 2nd
Floor

    Gouverneur, NY 13642

    
      	
               
      

            	
              Telephone:  (315)
      771-3034

            


    

    
      	
               
      

            	
              Facsimile:    (315)
      287-7529

            


    

     

    
      
        
          
             


          

          
            24

            
              

            

          

          
             


          

        

      

    

     

    
      	
               
      

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

            


    

    
      	
               
      

            	
              Robert
      Brantl, Esq.

            


    

    
      	
               
      

            	
              52
      Mulligan Lane

            


    

    
      	
               
      

            	
              Irvington,
      NY 10533

            


    

    
      	
               
      

            	
              Telephone:  914-693-3026

            


    

    
      	
               
      

            	
              Facsimile:   914-693-1807

            


    

     

    Each
Party may change its address by written notice in accordance with this
Section.

     

     

    SECTION
8.04                      ENTIRE
AGREEMENT.

     

    This
Agreement (including the documents and instruments referred to in this
Agreement) contains the entire understanding of the Parties with respect to the
subject matter contained in this Agreement, and supersedes and cancels all prior
agreements, negotiations, correspondence, undertakings and communications of the
Parties, oral or written, respecting such subject matter including the Letter of
Intent made by North Country and SVCC dated December 3, 2007 and the Merger
Agreement dated April 1, 2008.

     

    SECTION
8.05                      ASSIGNMENT.

     

    Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned by any of the Parties (whether by operation of law
or otherwise) without the prior written consent of the other Parties; provided
that in no event may the right to indemnification provided by Article VIII
hereto be assigned by any of the Parties, with or without consent, except by
operation of law.  Subject to the immediately foregoing sentence of
this Section 9.05, this Agreement will be binding upon, inure to the benefit of
and be enforceable by, the Parties and their respective successors, assigns,
heirs and representatives.

     

    SECTION
8.06                      COUNTERPARTS.

     

    This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which shall be considered one and the same
agreement.

     

    SECTION
8.07                      NO
THIRD PARTY BENEFICIARIES.

     

    Except as
expressly provided by this Agreement, nothing herein is intended to confer upon
any person or entity not a Party to this Agreement any rights or remedies under
or by reason of this Agreement.

     

    SECTION
8.08                      RULES OF
CONSTRUCTION.

     

    The
Parties agree that they have been represented by counsel during the negotiation
and execution of this Agreement and, therefore, waive the application of any
law, regulation, holding or rule of construction providing that ambiguities in
an agreement or other document will be construed against the party drafting such
agreement or document.

     

    SECTION
8.09                      REPAYMENT
OF DEBT

     

    North
Country hereby assumes responsibility for repayment of the loan of $200,000 made
by SVCC to the Principal Shareholder, the proceeds of which were contributed to
North Country.  North Country covenants that it will repay the loan
from the net proceeds of any sale of the Merger Shares prior to any other use of
such funds.

     

    
      
        
          
             


          

          
            25

            
              

            

          

          
             


          

        



    

    IN WITNESS
WHEREOF, the Parties have duly executed this Agreement as of the date
first above written.

     

    SEAWAY
VALLEY CAPITAL CORPORATION

     

     

    
      	
              By:

            	
              /s/
      Thomas W. Scozzafava

            


    

    
      	
              Name:

            	
              Thomas
      W. Scozzafava

            


    

    
      	
              Title:

            	
              President
      and Chief Executive Officer

            


    

     

     

    
      
        	
                /s/ Thomas W. Scozzafava

              	
                /s/
      Christopher Swartz

              
	
                THOMAS W.
      SCOZZAFAVA, as to Article II only.

              	
                CHRISTOPHER
      SWARTZ, Principal
Shareholder

              


      

    

     

     

    NORTH
COUNTRY HOSPITALITY INC.

     

    
      	
               By:    

            	
              /s/
      Christopher Swartz

            


    

    
      	
               Name: 

            	
              Christopher
      Swartz

            


    

    
      	
              Title:

            	
              President
      and Chief Executive Officer

            


    

     

    
 

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    APPENDIX
A

     

    ASSIGNMENT
AND ASSUMPTION AGREEMENT

     

    This
Assignment and Assumption Agreement (this “Agreement) is made and entered into
on June 1, 2008 by and among the following parties (each, a “Party” and
collectively, the “Parties”):  North Country Hospitality, Inc., a
Nevada corporation (the “Company”), Harbor Acquisition, LLC, a Florida limited
liability company (the “Operating Corp.”), and Seaway Valley Capital
Corporation, a Delaware corporation (“SVCC”)

     

    WHEREAS, the
Company has entered into a Merger Agreement with SVCC (the “Merger Agreement”),
which requires it to transfer all of its assets and liabilities to a
wholly-owned subsidiary of the Company; and

     

    WHEREAS, the
Operating Corp. is a wholly owned subsidiary of the Company;
and

     

    WHEREAS, the
Company desires to transfer all of its assets to the Operating Corp. and to
cause the Operating Corp. to assume all liabilities and obligations of the
Company.

     

    NOW, THEREFORE,
it is agreed:

     

    ARTICLE
1:  TRANSFER AND
ASSIGNMENT OF ASSETS

     

    On the
terms and subject to the conditions herein expressed, the Company hereby sells,
conveys, transfers, assigns, sets over and delivers to Operating Corp., and
Operating Corp. assumes and accepts, all of the assets, rights and interests,
tangible and intangible, of every kind, nature and description, now owned,
possessed or operated by Company, wheresoever situate (collectively, the
“Assets”), including without limitation the following:

     

    1.1        
 Equity
Interests.  All of the equity interests in the name of, or
beneficially owned by, the Company, including, without limitation, (a) all
capital stock issued by any corporate subsidiary of the Company, (b) any
membership interest issued by any subsidiary of the Company that is a limited
liability company or similar entity, (c) any partnership interest in any
subsidiary of the Company that is a partnership or similar entity, and (d) any
investment securities owned by the Company;

     

    1.2         
Real
Property.  All real property owned or leased by the Company
(the “Premises”);.

     

    1.3         
Machinery
and Equipment.  All
machinery, equipment,
computers and computer hardware, office furniture and fixtures, and other fixed
or tangible assets;

     

    1.4      
   Inventories.  All
inventories, including without limitation merchandise, materials, component
parts, production and office supplies, stationery and other imprinted material,
promotional materials, and business records;

     

    1.5         
Licenses
and Permits.  All licenses, permits and authorizations used by
the Company to own and operate all of the Assets , to carry on its business and
to occupy the Premises for the purpose of conducing business
thereon;

    
       

      
        
          
             


          

          
            1

            
              

            

          

          
             


          

        

      

       

    

    1.6         
Intangible
Property.  All intangible assets of Company which are
transferable including, but not limited to, customer and supplier lists,
privileges, permits, licenses, software and software licenses, certificates,
commitments, goodwill, registered and unregistered patents, trademarks, service
marks and trade names, and applications for registration thereof
and  the goodwill associated therewith, franchise rights, and the
right to receive mail related to the Assets which is addressed to the
Company;

     

    1.7         
Cash
and Accounts Receivable.  All accounts receivable, deposit
accounts, cash and cash equivalents and securities owned by the
Company;

     

    1.8         
Contract
Rights.  All rights and benefits of or in favor of Company
resulting or arising from any contracts, franchise arrangements, purchase
orders, sales orders, forward commitments for goods or services, leases
(including security deposits held by the landlord pursuant to the lease of the
Premises), franchise or license agreements, beneficial interests in covenants
not to compete or confidentiality covenants, the rights of Company related to
any other agreements whatsoever which arise out of the operation of its
business; and

     

    1.9         
Claims.
Claims made in lawsuits and other proceedings filed by the Company, judgments
and settlements in the Company’s favor, rights to refunds, including rights to
and claims for federal and state income and franchise tax refunds and refunds of
other taxes paid based upon or measured by the income of the Business prior to
the Closing, and insurance policies and rights accrued
thereunder.

     

    ARTICLE
2:  ASSUMPTION OF
LIABILITIES

     

    2.1          Scope
of Liabilities Assumed.   Upon the Closing Date specified
in the Merger Agreement, SVCC shall assume, pay, perform or discharge any and
all debts, liabilities or obligations of any nature of Company, whether
contingent or fixed and whether known or unknown, arising from the ownership or
operation of the Assets and the occupation of the Premises which have accrued as
of the date hereof.

     

    ARTICLE
3:  COLLECTION OF
ACCOUNTS RECEIVABLE

     

    3.1       
  Right
to Collect. Following
the closing, Operating Corp. shall have the right to collect the accounts
receivables of the Company and to settle, compromise, sue for collection, or
take any action whatsoever with respect to the
receivables.   Company shall cooperate with Operating Corp. in
notifying customers as to any payment instructions or change of address that
Operating Corp. may wish to communicate to the customers.  In the
event Company receives payment of any receivable transferred to the Operating
Corp., it shall promptly endorse such payment and deliver it over to the
Operating Corp.

     

    ARTICLE
4:  THE
CLOSING

     

    4.1         
The
Closing.  The closing of the transactions contemplated in this
Agreement (“Closing”) shall take place simultaneously with the closing of the
transactions contemplated under the Merger Agreement.    The
effective time of closing is referred to herein as the “Time of
Closing.”

     

    4.2          
Deliveries
by Company.  At or prior to the Closing, the Company shall
deliver to Operating Corp., in addition to all other items specified elsewhere
in this Agreement, the following:

    
       

      
        
          
             


          

          
            2

            
              

            

          

          
             


          

        

      

    

     

    (a)Such
instruments of sale, conveyance, transfer, assignment, endorsement, direction or
authorization as will be required or as may be desirable to vest in Operating
Corp., its successors and assigns, all right, title and interest in and to the
Assets, subject to any and all mortgages, pledges, liens, encumbrances,
equities, charges, conditional sale or other title retention agreements,
assessments, covenants, restrictions, reservations, commitments, obligations, or
other burdens or encumbrances of any nature whatsoever that exist at the Time of
Closing;

     

    (b)All
of the files, documents, papers, agreements, books of account and records
pertaining to the Assets;

     

    (c)Actual
possession and operating control of the
Assets;  and

     

    (d)To
the extent required, the consents of third parties to the assignment and
transfer of any of the Assets.

     

     

    4.3         
Deliveries
by Operating Corp..  At Closing, the Operating Corp. shall
deliver to the Company, any  instruments, in addition to this
Agreement, as the Company deems necessary or desirable fully to secure the
assumption by the Operating Corp., its successors and assigns, of all
liabilities and obligations of the Company, as described Section 2.1
hereof.

     

    ARTICLE
5:  COVENANTS ON AND
SUBSEQUENT TO THE CLOSING DATE

     

    On and
after the Closing Date, Operating Corp. and the Company (as the case may be)
covenant as follows:

     

    5.1         
Lawsuits.  Without
limiting the generality of Section 2.01, following the Closing, the Operating
Corp. shall continue the defense of any and all lawsuits or other claims filed
or threatened against the Company.

     

    5.2         
Insurance
Policies.  Operating Corp. shall name the Company as an
additional insured on all insurance policies transferred by the Company or any
other insurance policies covering the period prior to the Time of
Closing.

     

    5.3         
Execution
of Further Documents.   Upon the request of either party,
the other party shall execute, acknowledge and deliver all such further acts,
deeds, bills of sale, assignments, assumptions, undertakings, transfers,
conveyances, title certificates, powers of attorney and assurances as may be
required , in the case of Operating Corp., to convey and transfer to, and vest
in, Operating Corp. all of Company’s right, title and interest in the Assets,
and in the case of the Company, to secure the assumption of the Company’s
obligations and liabilities arising as of the Time of
Closing.

     

    ARTICLE
6.    INDEMNIFICATION

     

    6.1         
Indemnification
by Company.  From and after the Closing, the Company shall
indemnify and save Operating Corp., its officers and directors, and their
respective successors, assigns, heirs and legal representatives (“Operating
Corp. Indemnitees”) harmless from and against any and all losses, claims,
damages, liabilities, costs, expenses or deficiencies including, without
limitation, actual attorneys’ fees and other costs and expenses incident to
proceedings or investigations or the defense or settlement of any claim incurred
by or asserted against any Operating Corp. Indemnitee due to or resulting
from a violation or default by Company with respect to any of Company’s
covenants, obligations or agreements hereunder or  any losses or
expenses incurred in connection with, or payments by Operating Corp. of, any
debts, obligations or liabilities of Company arising after the Time
of  Closing.

     

    
      
        
          
             


          

          
            3

            
              

            

          

          
             


          

        

      

    

     

    6.2         
Indemnification
by Operating Corp.  From and after the Closing, the Operating
Corp. shall indemnify and save Company, its officers and directors, and their
respective successors, assigns, heirs and legal representatives (“Company
Indemnitees”) harmless from and against any and all losses, claims, damages,
liabilities, costs, expenses or deficiencies including, without limitation,
actual attorneys’ fees and other costs and expenses incident to proceedings or
investigations or the defense or settlement of any claim, incurred by or
asserted against any Company Indemnitee due to or resulting from a violation or
default by Operating Corp. with respect to any of Operating Corp.’s covenants,
obligations or agreements hereunder and any losses or expenses incurred in
connection with, or payments by Company of the debts, liabilities and
obligations assumed by the Operating Corp. hereunder or the debts, liabilities
and obligations of, the Operating Corp. arising after the Time of
Closing.

     

     

    6.3         
Indemnification
Procedures.

     

    (a)The
party seeking indemnification (“Indemnified Party”) shall give the indemnifying
party (“Indemnifying Party”) notice (a “Claim Notice”) of its indemnification
claim which notice shall (i) be in writing, (ii) include the basis for the
indemnification, and (iii) include the amount Indemnified Party believes is the
amount to be indemnified, if reasonably possible.

     

    (b)
Indemnifying Party shall be deemed to accept Indemnified Party’s claim unless,
within twenty (20) business days after receipt of any Claim Notice, Indemnifying
Party delivers to Indemnified Party notice of non-acceptance of the
indemnification claim, which must (a) be in writing and (b) include the basis
for the disagreement.

     

    (c)
The parties shall attempt in good faith to resolve any issues concerning
liability and the amount of such claim and no legal action shall be commenced
with respect to any such issues until thirty (30) days after delivery of the
notice of non-acceptance pursuant to Section
6.3(b).  

     

    ARTICLE
7:  MISCELLANEOUS

     

    7.1        
 Benefit.  This
Agreement shall be binding upon, and inure to the benefit of, the Parties hereto
and their respective successors, assignees, heirs and legal
representatives.

     

    7.2         
Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

     

    7.3         
Amendment,
Modification and Waiver.    Any Party hereto may
waive in writing any term or condition contained in this Agreement and intended
to be for its benefit; provided, however, that no waiver by any Party, whether
by conduct or otherwise, in any one or more instances, shall be deemed or
construed as a further or continuing waiver of any such term or
condition.  Each amendment, modification, supplement or waiver shall
be in writing and signed by the Party or Parties to be
charged.

    
       

      
        
          
             


          

          
            4

            
              

            

          

          
             


          

        

      

    

     

    7.4         
Entire
Agreement.  This Agreement and the exhibits, schedules and
other documents expressly provided hereunder or delivered herewith represent the
entire understanding of the parties.

     

    Each
Party may change its address by written notice in accordance with this
Section.

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on
June 1, 2008.

     

    North
Country Hospitality, Inc.

     

     

     

    By:  _____________________________________                                                              

          
  Christopher Swartz, Chief Executive Officer

     

    Harbor
Acquisition, LLC

     

     

     

    By:  _____________________________________                                                              

             Christopher
Swartz, Manager

     

    Seaway
Valley Capital Corporation

     

     

     

    By:  _____________________________________                                                              

             Thomas
W. Scozzafava, Chief Executive Officer

    
5