Document:

Edgewater Foods International, Inc. Exhibit 10.12 1/17/2007

ESCROW AGREEMENT

THIS ESCROW AGREEMENT (this “Agreement”) is made as of January 16, 2007, by and among Edgewater Foods International, Inc., a Nevada corporation (the “Company”), Vision Opportunity Master Fund, Ltd. (“Vision”) and the other purchasers signatory hereto (collectively with Vision, the “Purchasers”), and Kramer Levin Naftalis & Frankel LLP, with an address at 1177 Avenue of the Americas, New York, New York 10036 (the “Escrow Agent”).  Capitalized terms used but not defined herein shall have the meanings set forth in the Purchase Agreement (as defined below).

W I T N E S S E T H:

WHEREAS, the Purchasers will be purchasing from the Company shares of Series B convertible preferred stock (the “Preferred Shares”), convertible into shares of the Company’s common stock, par value $0.001 per share, pursuant to a Series B Convertible Preferred Stock Purchase Agreement dated as of the date hereof by and among the Company and the Purchasers (the “Purchase Agreement”); 

WHEREAS, the Company and the Purchasers have requested that the Escrow Agent hold the subscription amounts with respect to the purchase of the Preferred Shares in escrow until the Escrow Agent has received all closing documents and deliveries required under Article IV of the Purchase Agreement with respect to the Closing; and

NOW, THEREFORE, in consideration of the covenants and mutual promises contained herein and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I

TERMS OF THE ESCROW

1.1.

  The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the funds for the purchase of the Preferred Shares  as contemplated by the Purchase Agreement.

1.2.

Upon the Escrow Agent’s receipt of the aggregate subscription amounts into its master escrow account, together with copies of counterpart signature pages of the Transaction Documents from each Purchaser and the Company and all other closing documents and deliveries required under Article IV of the Purchase Agreement, it shall advise the Company and Vision, or their designated attorney or agent, of the amount of funds it has received into its master escrow account.

1.3.

Wire transfers to the Escrow Agent shall be made as follows:

Bank:

  

 

  

  

ABA No.:

  

Account Name: 

Account No.:

  

Reference:

1.4.

The Company and Vision, promptly after being advised by the Escrow Agent that it has received the subscription amounts for the Closing, copies of counterpart signature pages of the Transaction Documents from each Purchaser and the Company and all other closing documents and deliveries required under Article IV of the Purchase Agreement, shall deliver to the Escrow Agent a Release Notice, in the form attached hereto as Exhibit A (the “Release Notice”).

1.5.

Once the Escrow Agent receives the Release Notice executed by the Company and Vision, the Escrow Agent shall wire the subscription proceeds per the written instructions of the Company and Vision, net of fees, expenses and any other disbursements as set forth in the Release Notice.

1.6.

Wire transfers to the Company shall be made pursuant to written instructions from the Company provided to the Escrow Agent.

1.7.

Upon the written request from a Purchaser to the Escrow Agent, the Escrow Agent shall promptly return the subscription proceeds to each Purchaser pursuant to written wire instructions to be delivered by such Purchaser to the Escrow Agent.

ARTICLE II

MISCELLANEOUS

2.1.

  No waiver or any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained.  No extension of time for performance of any obligation or act shall be deemed an extension of the time for performance of any other obligation or act.

2.2.

All notices or other communications required or permitted hereunder shall be in writing, and shall be sent as set forth in the Purchase Agreement.

2.3.

This Escrow Agreement shall be binding upon and shall inure to the benefit of the permitted successors and permitted assigns of the parties hereto.

2.4.

This Escrow Agreement is the final expression of, and contains the entire agreement between, the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto.  This Escrow Agreement may not be modified, changed, 

supplemented or terminated, nor may any obligations hereunder be waived, except by written instrument signed by the parties to be charged or by its agent duly authorized in writing or as otherwise expressly permitted herein.

2.5.

Whenever required by the context of this Escrow Agreement, the singular shall include the plural and masculine shall include the feminine.  This Escrow Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same.  Unless otherwise indicated, all references to Articles are to this Escrow Agreement.

2.6.

The parties hereto expressly agree that this Escrow Agreement shall be governed by, interpreted under and construed and enforced in accordance with the laws of the State of New York, without regard to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.  Any action to enforce, arising out of, or relating in any way to, any provisions of this Escrow Agreement shall only be brought in a state or Federal court sitting in New York City, Borough of Manhattan.

2.7.

The Escrow Agent’s duties hereunder may be altered, amended, modified or revoked only by a writing signed by the Company, each Purchaser and the Escrow Agent.

2.8.

The Escrow Agent shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by the Escrow Agent to be genuine and to have been signed or presented by the proper party or parties.  The Escrow Agent shall not be personally liable for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while acting in good faith and in the absence of gross negligence, fraud and willful misconduct, and any act done or omitted by the Escrow Agent pursuant to the advice of the Escrow Agent’s attorneys-at-law shall be conclusive evidence of such good faith, in the absence of gross negligence, fraud and willful misconduct.

2.9.

The Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court.  In case the Escrow Agent obeys or complies with any such order, judgment or decree, the Escrow Agent shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

2.10.

The Escrow Agent shall not be liable in any respect on account of the identity, authorization or rights of the parties executing or delivering or purporting to execute or deliver the Purchase Agreement or any documents or papers deposited or called for thereunder in the absence of gross negligence, fraud and willful misconduct.

2.11.

The Escrow Agent shall be entitled to employ such legal counsel and other experts as the Escrow Agent may deem necessary properly to advise the Escrow Agent in connection with the Escrow Agent’s duties hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor which shall be paid by the Escrow 

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Agreement unless otherwise provided for in Section 2.14.  The Escrow Agent has acted as legal counsel for Vision and may continue to act as legal counsel for Vision from time to time, notwithstanding its duties as the Escrow Agent hereunder.  The Company and the Purchasers consent to the Escrow Agent in such capacity as legal counsel for Vision and waives any claim that such representation represents a conflict of interest on the part of the Escrow Agent.  The Company and the Purchasers understand that the Escrow Agent is relying explicitly on the foregoing provision in entering into this Escrow Agreement.

2.12.

The Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the Escrow Agent shall resign by giving written notice to the Company and the Purchasers.  In the event of any such resignation, the Purchasers and the Company shall appoint a successor Escrow Agent and the Escrow Agent shall deliver to such successor Escrow Agent any escrow funds and other documents held by the Escrow Agent.

2.13.

If the Escrow Agent reasonably requires other or further instruments in connection with this Escrow Agreement or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

2.14.

It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the documents or the escrow funds held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed in the Escrow Agent’s sole discretion (1) to retain in the Escrow Agent’s possession without liability to anyone all or any part of said documents or the escrow funds until such disputes shall have been settled either by mutual written agreement of the parties concerned by a final order, decree or judgment or a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but the Escrow Agent shall be under no duty whatsoever to institute or defend any such proceedings or (2) to deliver the escrow funds and any other property and documents held by the Escrow Agent hereunder to a state or Federal court having competent subject matter jurisdiction and located in the City of New York, Borough of Manhattan, in accordance with the applicable procedure therefor.

2.15.

The Company and each Purchaser agree jointly and severally to indemnify and hold harmless the Escrow Agent and its partners, employees, agents and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to the duties or performance of the Escrow Agent hereunder or the transactions contemplated hereby or by the Purchase Agreement other than any such claim, liability, cost or expense to the extent the same shall have been determined by final, unappealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, fraud or willful misconduct of the Escrow Agent.

[SIGNATURE PAGE FOLLOWS]

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[SIGNATURE PAGE TO ESCROW AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this 16th day of January, 2007.

	Edgewater Foods International, Inc. 

By:__________________________________________

     Name: 

     Title:   

	

	ESCROW AGENT:

	 
	Kramer Levin Naftalis & Frankel LLP

	 
	

By:__________________________________________

     Name:

     Title:

	 

[PURCHASERS’ SIGNATURE PAGE FOLLOWS]

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[PURCHASER’S SIGNATURE PAGE TO ESCROW AGREEMENT]

Name of Investing Entity: __________________________

Signature of Authorized Signatory of Investing Entity: __________________________

Name of Authorized Signatory: _________________________

Title of Authorized Signatory: __________________________

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Exhibit A to

Escrow Agreement

RELEASE NOTICE

The UNDERSIGNED, pursuant to the Escrow Agreement dated as of January 16, 2007 among Edgewater Foods International, Inc. (the ”Company”), the Purchasers signatory thereto and Kramer Levin Naftalis & Frankel LLP, as Escrow Agent (the “Escrow Agreement”), hereby notify the Escrow Agent that each of the conditions precedent to the purchase and sale of the Preferred Shares have been satisfied or waived in accordance with Article IV of the Purchase Agreement.  The Company hereby confirms that all of its respective representations and warranties contained in the Purchase Agreement remain true and correct and authorize the release by the Escrow Agent of the funds to be released as described in the Escrow Agreement and as set forth below.  This Release Notice shall not be effective until executed by the Company and Vision.  

Capitalized terms used herein and not defined shall have the meaning ascribed to such terms in the Escrow Agreement.

This Release Notice may be signed in one or more counterparts, each of which shall be deemed an original.

Please release the $____________ that has been deposited in the escrow account pursuant to the Escrow Agreement according to the following instructions:

[to be completed]

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IN WITNESS WHEREOF, the undersigned have caused this Release Notice to be duly executed and delivered as of this 16th day of January, 2007.

	Edgewater Foods International, Inc. 

By:____________________________

      Name: 

      Title:   

	Vision Opportunity Master Fund, Ltd. 

By:__________________________________________

     Name:

     Title:

8Exhibit 10.1

    BUSINESS
      OPPORTUNITY AGREEMENT

     

    THIS
      BUSINESS OPPORTUNITY AGREEMENT (this “Agreement”)
      is
      entered into as of this 16th
      day of
      January, 2007, by and between Calibre Energy Inc., a Nevada corporation
      (“Calibre”),
      and
      Standard Drilling Inc., a Nevada corporation (“Standard”
and,
      together with Calibre, the “Parties”).

     

    R
      E C I T A L S

     

    WHEREAS,
      Calibre is primarily involved in the exploration and production business, and
      Standard is primarily involved in the energy drilling business; and

     

    WHEREAS,
      Standard from time to time receives or otherwise has the opportunity to pursue
      opportunities in the exploration and production business; and

     

    WHEREAS,
      Calibre from time to time receives or otherwise has the opportunity to pursue
      opportunities in the energy drilling business; and

     

    WHEREAS,
      the Parties have officers and directors in common; and

     

    WHEREAS,
      the Parties desire to clarify their separate interests in order, among other
      considerations, to permit their officers and directors in common to manage
      their
      respective businesses without concern that such interests overlap;
      and

     

    WHEREAS,
      Standard has entered into that certain transaction described on Exhibit A (the
      “Excepted
      Transactions”),
      pursuant to an opportunity presented to officers of Standard who have no
      relationship with Calibre; and

     

    WHEREAS,
      the Parties desire to clarify their interests in business opportunities, all
      as
      set forth below;

     

    A
      G R E E M E N T S

     

    NOW,
      THEREFORE, in consideration of the premises, covenants, conditions and
      agreements contained herein, and for other good and valuable consideration,
      the
      receipt and sufficiency of which are hereby acknowledged, the Parties hereby
      agree as follows:

     

    I.
      Scope of Business

    

    Calibre’s
      scope of business consists of the pursuit of business opportunities in the
      E&P Business. “E&P
      Business”
means
      the oil and gas exploration, exploitation, development and production business
      and includes without limitation (a) the ownership of oil and gas property
      interests (including working interests, mineral fee interests and royalty and
      overriding royalty interests), (b) the ownership and operation of real and
      personal property used or useful in connection with exploration for
      Hydrocarbons, development of Hydrocarbon reserves upon discovery thereof and
      production of Hydrocarbons from wells located on oil and gas properties and
      (c)
      debt of or equity interests in corporations, partnerships or other entities
      engaged in the exploration for Hydrocarbons, the development of Hydrocarbon
      reserves and the production and sale of Hydrocarbons from wells located on
      oil
      and gas properties in which the entity conducting the E&P Business owns an
      interest; but such term does not include the oilfield services business,
      including the oilfield drilling business. “Hydrocarbons”
means
      oil, gas or other liquid or gaseous hydrocarbons or other minerals produced
      from
      oil and gas wells.

     

    Standard’s
      scope of business consists of the pursuit of business opportunities in the
      oilfield services business, including the oilfield drilling business, together
      with the pursuit of the Excepted Transactions.

     

    II.
      Renunciation of Interests

    

    Calibre
      hereby renounces any interest or expectancy in any business opportunity in
      the
      oilfield services business, including the oilfield drilling business, and in
      the
      Excepted Transactions. In furtherance thereof, Calibre agrees not to acquire,
      invest in or operate any oilfield services business, including any oilfield
      drilling business, and to use its reasonable commercial efforts to advise
      Standard of such business opportunities presented to Calibre.

     

    Standard
      hereby renounces any interest or expectancy in the E&P Business (other than
      the Excepted Transactions). In furtherance thereof, Standard agrees not to
      acquire, invest in or operate any E&P Business, other than the Excepted
      Transactions, and to use its reasonable commercial efforts to advise Calibre
      of
      such business opportunities presented to Standard.

     

    III.
      Term

    

    This
      Agreement shall commence as of the date hereof and continue for a term (the
      “Term”)
      expiring on December 31, 2009, unless earlier terminated pursuant to this
      Section III. Either Party may terminate this Agreement upon thirty days (30)
      written notice, if there is a Change of Control (as hereafter defined) with
      respect to such Party. For purposes of this Agreement, a “Change of Control”
shall be deemed to have taken place upon the earliest occurrence of any of
      the
      following: (i) more than 50% of the outstanding voting securities of a Party
      are
      Beneficially Owned (as defined in Rule 13d-3 under the Securities Exchange
      Act
      of 1934, as amended) by any person or entity other than Calibre or Standard
      or
      their respective subsidiaries or affiliates (including any officer or director
      of Calibre or Standard or any person or entity affiliated with any such officer
      or director) (a “Non-Affiliate”),
      (ii)
      a Party is merged or consolidated with a Non-Affiliate and, as a result of
      such
      merger or consolidation, less than 50% of the outstanding voting securities
      of
      the surviving or resulting corporation or entity is Beneficially Owned in the
      aggregate by the persons or entities who were shareholders/equity owners of
      such
      Party immediately prior to such merger or consolidation; or (iii) a Party sells
      or otherwise transfers all or substantially all of its assets to a
      Non-Affiliate.

     

    IV.
      Miscellaneous

    

    No
      Relationship. No
      relationship of partnership or principal and agent shall exist or arise among
      the Parties hereto because of the execution of this agreement or the joint
      acquisition by them of properties and interests pursuant to this Agreement.
      No
      Party hereto shall have any right, power or authority to contract on behalf
      of
      any other Party hereto or to commit any party hereto to any obligation,
      liability or undertaking, except to the extent the Party to be obligated has
      expressly consented thereto (i) at a Prospect Meeting, or (ii) by instrument
      in
      writing.

     

    Limitation
      on Assignment. Without
      the prior written consent of the other Party, the rights and privileges of
      this
      Agreement may not be sold or otherwise transferred by any Party (other than
      any
      transfer to an affiliate of such Party), provided that no such assignment shall
      relieve any Party of its duties and obligations arising hereunder.

     

    Entire
      Agreement; Amendments.
      This
      Agreement and each Operating Agreement entered into by the Parties pursuant
      to
      Paragraph III above constitutes the entire understanding between the parties
      with respect to the subject matter hereof, and supersede all other agreements
      written or oral between the Parties with respect to such subject matter. This
      Agreement may not be changed, modified or amended except by a written agreement
      between the Parties. 

     

    Governing
      Law. The
      rights and obligations of the Partners with respect to this Agreement, and
      any
      arbitration proceeding pursuant hereto, shall be governed by the laws of the
      State of Texas.

     

    Arbitration.
      Any
      disputes arising out of or related to this Agreement shall be resolved through
      binding arbitration in accordance with the rules for commercial arbitration
      disputes for the American Arbitration Association for binding arbitration and
      such arbitration shall be conducted in Houston, Texas. Each of the Parties
      agrees that arbitration under this Section IX is the exclusive method for
      resolving any claim hereunder and that it will not commence an action or
      proceeding based on a claim hereunder, except to enforce the arbitrators’
decisions as provided in this Section IX, or to compel any other Party to
      participate in arbitration under this Section IX. If any claim has not been
      resolved by mutual agreement on or before the 15th
      day
      following the first notice of the claim to or from a disputing party, then
      the
      arbitration may be initiated by one party by providing to the other party a
      written notice of arbitration specifying the claim or claims to be arbitrated.
      The arbitration panel (the “Panel”)
      shall
      consist of three arbitrators who are qualified to hear the type of claim at
      issue. They may be selected by agreement of the Parties within thirty days
      of
      the notice initiating the arbitration procedure, or from the date of any order
      compelling such arbitration to proceed. The final hearing shall be conducted
      within 60 days of the selection of the entire Panel. If the Parties fail to
      agree upon the designation of any or all the Panel, then the Parties shall
      request the assistance of the AAA. The Panel shall make all of its decisions
      by
      majority vote. The decision of the Panel will be binding and non-appealable,
      except as permitted under the Federal Arbitration Act. Only actual damages
      may
      be awarded. It is expressly agreed that the Panel shall have no authority to
      award treble, exemplary or punitive damages of any type under any circumstances
      regardless of whether such damages may be available under the applicable
      law.

     

    Notice.
      All
      notices authorized or required to be given pursuant to this Agreement shall
      be
      in writing and may be delivered by hand, mailed by first class airmail, sent
      by
      telecommunication, or overnight delivery to the address set forth in this
      Agreement. The notice shall be deemed to have been given and received if
      delivered in person or by electronic message, on the day on which it was
      delivered, excluding Saturdays, Sundays and statutory holidays; or if mailed,
      on
      the day received, or if sent by telecommunication, on the first business day
      following the day it was dispatched. A Party may change its address for the
      receipt of notices at any time by giving written notice thereof to the other
      Party. 

    

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized officers as of the date first above
      written.

     

    Calibre
      Energy Inc., a Nevada corporation

    

    

    By:   

    Name: O.
      Oliver
      Pennington, III

    Title: VP
&
      CFO

    

    Address
      for Notice:

    1667
      K
      Street, N.W.

    Suite
      1230

    Washington,
      D.C. 20006

    Facsimile
      No.: (202) 955-9490

    Attn:
      O.
      Oliver Pennington, CFO

     

    Standard
      Drilling Inc., a Nevada corporation

    

    

    By:   

    Name: Robert
      T.
      Moffett

    Title: SVP
&
      General Counsel

    

    Address
      for Notice:

    1155
      Dairy Ashford

    Suite
      402

    Houston,
      TX 77079

    Facsimile
      No.: (281) 293-7770

    Attn:
      Robert T. Moffett, SVP & General Counsel

    Exhibit
      A

    Excepted
      Transactions

    

    Burnet
      Oil Company DeCleva Prospect

     

    Daniels
      Prospect

     

    Norton
      Unit Prospect

     

    Arkansas
      Leases in Arkoma Basin

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