Document:

Unassociated Document

    FORM
OF REGISTRATION RIGHTS AGREEMENT

     

    dated as
of
[               ],
2010

     

    among

     

    PREFERRED
APARTMENT COMMUNITIES, INC.

     

    and

     

    THE
SHAREHOLDERS PARTY HERETO

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    TABLE
OF CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	 
      	 
      	
                                        PAGE

                                      
	
                                        ARTICLE
      1 DEFINITIONS

                                      	
                                         
      

                                      
	 	 
	 
      	
                                        Definitions.

                                      	
                                        1

                                      
	 
      	
                                        Other
      Definitional and Interpretative Provisions.

                                      	
                                        4

                                      
	 	 	 
	
                                        ARTICLE
      2 REGISTRATION RIGHTS

                                      	 
      
	 	 
	
                                        Section
      2.01.

                                      	
                                        Piggyback
      Registration.

                                      	
                                        5

                                      
	 
      	
                                        Registration
      Procedures.

                                      	
                                        6

                                      
	 
      	
                                        Participation
      In Public Offering.

                                      	
                                        9

                                      
	 
      	
                                        Rule
      144 Sales; Cooperation By The Company.

                                      	
                                        9

                                      
	 
      	
                                        Termination.

                                      	
                                        10

                                      
	 	 	 
	
                                        ARTICLE
      3 INDEMNIFICATION AND CONTRIBUTION

                                      	 
      
	 	 
	 
      	
                                        Indemnification
      by the Company.

                                      	
                                        10

                                      
	 
      	
                                        Indemnification
      by Participating Shareholders.

                                      	
                                        11

                                      
	 
      	
                                        Conduct of Indemnification
      Proceedings.

                                      	
                                        11

                                      
	 
      	
                                        Contribution.

                                      	
                                        12

                                      
	 
      	
                                        Other
      Indemnification.

                                      	
                                        13

                                      
	 	 	 
	
                                        ARTICLE
      4 MISCELLANEOUS

                                      	 
      
	 	 
	
                                        Section
      4.01.

                                      	
                                        Binding
      Effect; Assignability

                                      	
                                        13

                                      
	 
      	
                                        Notices.

                                      	
                                        14

                                      
	 
      	
                                        Waiver;
      Amendment; Termination.

                                      	
                                        14

                                      
	 
      	
                                        Governing
      Law.

                                      	
                                        15

                                      
	 
      	
                                        Jurisdiction.

                                      	
                                        15

                                      
	 
      	
                                        WAIVER
      OF JURY TRIAL.

                                      	
                                        15

                                      
	 
      	
                                        Specific
      Enforcement.

                                      	
                                        15

                                      
	 
      	
                                        Counterparts;
      Effectiveness.

                                      	
                                        15

                                      
	 
      	
                                        Entire
      Agreement.

                                      	
                                        16

                                      
	 
      	
                                        Severability.

                                      	
                                        16

                                      
	 
      	
                                        Independent
      Nature of Shareholders’ Obligations and Rights.

                                      	
                                        16

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

     

     

    
      Exhibit
A                      Joinder
Agreement

       

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    REGISTRATION
RIGHTS AGREEMENT

     

    THIS
REGISTRATION RIGHTS AGREEMENT dated as of
[                      ],
2010 (this “Agreement”),
among Preferred Apartment Communities, Inc., a Maryland corporation (the “Company”), and the Shareholder
or Shareholders party hereto or bound hereby, including any Permitted
Transferees (collectively, the “Shareholders”).

     

    In
consideration of the mutual promises made herein and other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties hereto agree as follows:

     

    ARTICLE
1

    Definitions

     

    Section
1.01.    Definitions.

     

      i)
The following terms, as used herein, have the following meanings:

     

    “Affiliate” means, with respect
to any Person, any other Person directly or indirectly controlling, controlled
by or under common control with such Person, provided that no
securityholder of the Company shall be deemed an Affiliate of any other
securityholder solely by reason of any investment in the Company.  For
the purpose of this definition, the term “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common control with”),
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.

     

    “Board” means the board of
directors of the Company.

     

    “Business Day” means any day
except a Saturday, Sunday or other day on which commercial banks in New York
City are authorized by law to close.

     

    “Common Shares” means shares of
Class A Common Stock, par value $0.01 per share, of the Company and any stock
into which such Common Shares may thereafter be converted or
changed.

     

    “Company Securities” means the
Common Shares and, for purposes of the definitions of “Permitted Transferees”
and “Transfer”, also shall mean any other securities of the Company or Preferred
Apartment Communities Operating Partnership, L.P. that are convertible or
exercisable into or exchangeable for Common Shares.

     

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

     

    “FINRA” means the Financial
Industry Regulatory Authority (formerly, the National Association of Securities
Dealers, Inc.) and any successor thereto.

     

    
      
        
        

      

      
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    “First Public Offering” means
the Company’s initial Public Offering.

     

    “Permitted Transferee” means in
the case of any Shareholder, a Person to whom Registrable Securities are
Transferred by such Shareholder; provided, however, that (i) such Transfer
does not violate any agreements between such Shareholder and the Company or any
of the Company’s subsidiaries, (ii) such Transfer is not made in a registered
offering or pursuant to Rule 144, and (iii) such transferee shall only be a
Permitted Transferee if and to the extent the transferor designates the
transferee as a Permitted Transferee entitled to rights hereunder pursuant to Section
4.01(b)

     

    “Person” means an individual,
corporation, limited liability company, partnership, association, trust or other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.

     

    “Public Offering” means an
underwritten public offering of Registrable Securities of the Company pursuant
to an effective registration statement under the Securities Act, other than
pursuant to a registration statement on Form S-4 or Form S-8 or any similar or
successor form.

     

    “Registering Shareholder” means
a Shareholder whose Registrable Securities are to be registered by the
Company.

     

    “Registrable Securities” means,
at any time, any Company Securities and any other securities issued or issuable
by the Company or any of its successors or assigns in respect of any such
Company Securities by way of conversion, exchange, exercise, dividend, split,
reverse split, combination, recapitalization, reclassification, merger,
amalgamation, consolidation, sale of assets, other reorganization or
otherwise.

     

    “Registration Expenses” means
any and all expenses incident to the Company’s performance of, or compliance
with, obligations under Section 2.01,
including all (i) registration and filing fees, and all other fees and expenses
payable in connection with the listing of securities on any securities exchange
or automated interdealer quotation system, (ii) fees and expenses of compliance
with any securities or “blue sky” laws (including reasonable fees and
disbursements of counsel in connection with “blue sky” qualifications of the
securities registered), (iii) expenses in connection with the preparation,
printing, mailing and delivery of any registration statements, prospectuses and
other documents in connection therewith and any amendments or supplements
thereto, (iv) security engraving and printing expenses, (v) internal expenses of
the Company (including all salaries and expenses of its officers and employees
performing legal or accounting duties), (vi) reasonable fees and disbursements
of counsel for the Company and customary fees and expenses for independent
certified public accountants retained by the Company (including the expenses
relating to any comfort letters or costs associated with the delivery by
independent certified public accountants of any comfort letters requested
pursuant to Section 2.02(h)),
(vii) reasonable fees and expenses of any special experts retained by the
Company in connection with such registration, (viii) reasonable fees,
out-of-pocket costs and expenses of one counsel for all the Shareholders
participating in the offering (not to exceed $25,000) selected by the
Shareholders holding the majority of the Registrable Securities to be sold for
the account of all Shareholders in the offering, (ix) fees and expenses in
connection with any review by FINRA of the underwriting arrangements or other
terms of the offering, and all fees and expenses of any “qualified independent
underwriter,” including the fees and expenses of any counsel thereto, (x) fees
and disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding any underwriting fees, discounts and commissions
attributable to the sale of Registrable Securities, (xi) costs of printing and
producing any agreements among underwriters, underwriting agreements, any “blue
sky” or legal investment memoranda and any selling agreements and other
documents in connection with the offering, sale or delivery of the Registrable
Securities, (xii) transfer agents’ and registrars’ fees and expenses and the
fees and expenses of any other agent or trustee appointed in connection with
such offering, (xiii) expenses relating to any analyst or investor presentations
undertaken in connection with the registration, marketing or selling of the
Registrable Securities, and (xiv) all out-of pocket costs and expenses incurred
by the Company or its appropriate officers in connection with their compliance
with Section
2.02(m).  Except as set forth in clause (viii) above,
Registration Expenses shall not include any out-of-pocket expenses of the
Shareholders (or the agents who manage their accounts).

     

    
      
        
        

      

      
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    “Rule 144” means Rule 144 (or
any successor or similar provisions) under the Securities Act.

     

    “SEC” means the Securities and
Exchange Commission.

     

    “Securities Act” means the
Securities Act of 1933, as amended.

     

    “Shareholder” means at any
time, any Person (other than the Company) who shall then be a party to or bound
by this Agreement, so long as such Person shall “beneficially own” (as such term
is defined in Rule 13d-3 of the Exchange Act) any Company
Securities.

     

    “Transfer” means, with respect
to any Company Securities, (i) when used as a verb, to sell, assign, dispose of,
exchange, pledge, encumber, hypothecate or otherwise transfer such Company
Securities or any participation or interest therein, whether directly or
indirectly, or agree or commit to do any of the foregoing, and (ii) when used as
a noun, a direct or indirect sale, assignment, disposition, exchange, pledge,
encumbrance, hypothecation, or other transfer of such Company Securities or any
participation or interest therein or any agreement or commitment to do any of
the foregoing.

     

    (b)           Each
of the following terms is defined in the Section set forth opposite such
term:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                  Term

                	
                  Section

                
	
                  Agreement

                	
                  Preamble

                
	
                  Company

                	
                  Preamble

                
	
                  Damages

                	
                  3.01

                
	
                  Indemnified
      Party

                	
                  3.03

                
	
                  Indemnifying
      Party

                	
                  3.03

                
	
                  Inspectors

                	
                  2.02(g)

                
	
                  Joinder
      Agreement

                	
                  4.01(b)

                
	
                  Maximum
      Offering Size

                	
                  2.01(b)

                
	
                  Notice

                	
                  4.02

                
	
                  Piggyback
      Registration

                	
                  2.02(a)

                
	
                  Records

                	
                  2.02(g)

                
	
                  Rule
      144A

                	
                  2.04(b)

                
	
                  Shareholders

                	
                  Preamble

                

        

      

    

     

    Section
1.02.    Other Definitional and
Interpretative Provisions.  The
words “hereof”, “herein” and “hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.  References to Articles, Sections or Exhibits
are to Articles, Sections and Exhibits of this Agreement unless otherwise
specified.  All Exhibits annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein.  Any capitalized term used in any Exhibit but not otherwise
defined therein shall have the meaning as defined in this
Agreement.  Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular.  Whenever the
words “include”, “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation”, whether or not
they are in fact followed by those words or words of like
import.  “Writing”, “written” and comparable terms refer to printing,
typing and other means of reproducing words (including electronic media) in a
visible form.  References to any agreement or contract are to that
agreement or contract as amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.  References to any
Person include the successors and permitted assigns of that
Person.  References from or through any date mean, unless otherwise
specified, from and including or through and including,
respectively.

     

    
      
        
        

      

      
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    ARTICLE
2

    Registration
Rights

     

    Section
2.01.    Piggyback
Registration.(a)           If
the Company proposes to register any Company Securities (whether for its own
account or for the account of other holders) under the Securities Act (other
than a registration on Form S-8 or S-4, or any successor or similar forms,
relating to Common Shares issuable upon exercise of employee stock options or in
connection with any employee benefit or similar plan of the Company or in
connection with a direct or indirect acquisition by the Company of another
Person), whether or not for sale for its own account or for the account of
another Person, the Company shall each such time give prompt written notice at
least 20 Business Days prior to the anticipated filing date of the registration
statement relating to such registration to each Shareholder, which written
notice shall set forth such Shareholder’s rights under this Section 2.01 and
shall offer such Shareholder the opportunity to include in such registration
statement the number of Registrable Securities of the same class or series as
those proposed to be registered as each such Shareholder may request (a “Piggyback Registration”),
subject to the provisions of Section
2.01(b).  Upon the request of any such Shareholder made
within ten Business Days after the receipt of written notice from the Company
(which request shall specify the number of Registrable Securities intended to be
registered by such Shareholder), the Company shall use all reasonable best
efforts to effect the registration under the Securities Act of all Registrable
Securities that the Company has been so requested to register by all such
Shareholders, to the extent required to permit the disposition of the
Registrable Securities so to be registered; provided, however, that if, at any
time after giving notice of its intention to register any Company Securities
pursuant to this Section 2.01 and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register such securities, the Company shall give written notice to all such
Shareholders and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration.  The
Company shall pay all Registration Expenses in connection with each Piggyback
Registration.

     

    (b)           If
a Piggyback Registration involves an underwritten Public Offering and the
managing underwriter advises the Company that, in its view, the number of Shares
that the Company and such Shareholders intend to include in such registration
exceeds the largest number of shares that can be sold without having an adverse
effect on such offering (the “Maximum Offering Size”), the Company shall include
in such registration, in the following priority, up to the Maximum Offering
Size:

     

    (i)           first, so much of the
Company Securities proposed to be registered for the account of the Company (or,
if such registration is pursuant to a demand by a Person that is not a
Shareholder, for the account of such other Person) as would not cause the
offering to exceed the Maximum Offering Size,

     

    
      
        
        

      

      
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    (ii)           second, all
Registrable Securities requested to be included in such registration by any
Shareholders pursuant to this Section 2.01
(allocated, if necessary for the offering not to exceed the Maximum Offering
Size, pro rata among such
Shareholders on the basis of the relative number of shares of Registrable
Securities so requested to be included in such registration by each),
and

     

    (iii)           third, any securities
proposed to be registered for the account of any other Persons with such
priorities among them as the Company shall determine.

     

    Section
2.02.    Registration
Procedures.  Whenever
Shareholders request that any Registrable Securities be registered pursuant to
Section 2.01,
subject to the provisions of such Section, the Company shall use all reasonable
best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and, in connection with any such request:

     

    (a)           The
Company shall as expeditiously as possible prepare and file with the SEC a
registration statement on any form for which the Company then qualifies or that
counsel for the Company shall deem appropriate and which form shall be available
for the sale of the Registrable Securities to be registered thereunder in
accordance with the intended method of distribution thereof, but no later than
(i) 90 days after its receipt of a request for a registration in the case of a
registration on any applicable long-form registration statement, or (ii) 45 days
after its receipt of a request for registration in the case of a registration on
any applicable short-form registration statement, and use all reasonable best
efforts to cause such filed registration statement to become and remain
effective for a period of not less than 180 days, except in the case of any
registration of Registrable Securities on a short-form registration statement
which are intended to be offered on a continuous or delayed basis, such 180-day
period shall be extended until all such Registrable Securities are sold,
provided that Rule 415, or any successor rule under the Securities Act, permits
an offering on a continuous or delayed basis.  Any such registration
statement shall be an automatically effective registration statement to the
extent permitted by the SEC’s rules and regulations.

     

    (b)           Prior
to filing a registration statement or prospectus or any amendment or supplement
thereto (other than any report filed pursuant to the Exchange Act that is
incorporated by reference therein), the Company shall  furnish to each
participating Shareholder and each underwriter, if any, of the Registrable
Securities covered by such registration statement copies of such registration
statement as proposed to be filed, and provide each such participating
Shareholder with a reasonable period of time to comment thereon, and thereafter
the Company shall furnish to such Shareholder and underwriter, if any, such
number of copies of such registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto and documents incorporated
by reference therein), the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424, Rule 430A, Rule 430B or Rule 430C under the
Securities Act and such other documents as such Shareholder or underwriter may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Shareholder.

     

    
      
        
        

      

      
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    (c)           After
the filing of the registration statement, the Company shall (i) cause the
related prospectus to be supplemented by any required prospectus supplement and,
as so supplemented, to be filed pursuant to Rule 424 under the Securities Act,
(ii) comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration statement
during the applicable period in accordance with the intended methods of
disposition by the Shareholders thereof set forth in such registration statement
or supplement to such prospectus, and (iii) promptly notify each Shareholder
holding Registrable Securities covered by such registration statement of any
stop order issued or threatened by the SEC or any state securities commission
and take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered.

     

    (d)           The
Company shall use all reasonable best efforts to (i) register or qualify the
Registrable Securities covered by such registration statement under such other
securities or “blue sky” laws of such jurisdictions in the United States as any
Registering Shareholder holding such Registrable Securities reasonably (in light
of such Shareholder’s intended plan of distribution) requests and (ii) cause
such Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Shareholder to
consummate the disposition of the Registrable Securities owned by such
Shareholder; provided,
however, that the
Company shall not be required to (A) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 2.02(d),
(B) subject itself to taxation in any such jurisdiction, or (C) consent to
general service of process in any such jurisdiction.

     

    (e)           The
Company shall immediately notify each Shareholder holding such Registrable
Securities covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
occurrence of an event requiring the preparation of a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and promptly prepare
and make available to each such Shareholder and file with the SEC any such
supplement or amendment.

     

    (f)           In
connection with any Public Offering, the Company shall enter into customary
agreements (including an underwriting agreement in customary form) and take such
all other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities in any such Public Offering, and
cooperate with each Registering Shareholder and the underwriters, if any, of
such Registrable Securities and their respective counsel in connection with any
filings required to be made with FINRA;

     

    
      
        
        

      

      
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    (g)           Upon
execution of confidentiality agreements in form and substance reasonably
satisfactory to the Company, the Company shall make available for inspection by
any Shareholder and any underwriter participating in any disposition pursuant to
a registration statement being filed by the Company pursuant to this Section 2.02 and
any attorney, accountant or other professional retained by any such Shareholder
or underwriter (collectively, the “Inspectors”), all financial
and other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”) as shall be
reasonably necessary or desirable to enable any of the Inspectors to exercise
its due diligence responsibility, and cause the Company’s officers, directors
and employees to supply all information reasonably requested by any Inspectors
in connection with such registration statement.  Records that the
Company determines, in good faith, to be confidential and that it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in such registration statement or (ii) the release of such Records
is ordered pursuant to a subpoena or other order from a court of competent
jurisdiction.  Each Shareholder further agrees that, upon learning
that disclosure of such Records is sought in a court of competent jurisdiction,
it shall give notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of the Records deemed
confidential.

     

    (h)           The
Company shall use reasonable best efforts to furnish to each Registering
Shareholder and to each such underwriter, if any, a signed counterpart,
addressed to such Shareholder or underwriter, of (i) an opinion or opinions of
counsel to the Company, and (ii) a comfort letter or comfort letters from the
Company’s independent public accountants, each in customary form and covering
such matters of the kind customarily covered by opinions or comfort letters, as
the case may be, as the Shareholders holding the majority of the Registrable
Securities to be sold for the account of all Shareholders in the offering or the
managing underwriter therefor reasonably requests.

     

    (i)           The
Company shall otherwise use all reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement or such other
document covering a period of 12 months, beginning within three months
after the effective date of the registration statement, which earnings statement
satisfies the requirements of Rule 158 under the Securities Act.

     

    (j)           The
Company may require each Shareholder promptly to furnish in writing to the
Company such information regarding the distribution of the Registrable
Securities as the Company may from time to time reasonably request and such
other information as may be legally required in connection with such
registration.

     

    
      
        
        

      

      
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    (k)           Each
Shareholder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 2.02(e),
such Shareholder shall forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Shareholder’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2.02(e),
and, if so directed by the Company, such Shareholder shall deliver to the
Company all copies, other than any permanent file copies then in such
Shareholder’s possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice.  If the
Company shall give such notice, the Company shall extend the period during which
such registration statement shall be maintained effective (including the period
referred to in Section 2.02(a))
by the number of days during the period from and including the date of the
giving of notice pursuant to Section 2.02(e)
to the date when the Company shall make available to such Shareholder a
prospectus supplemented or amended to conform with the requirements of Section
2.02(e).

     

    (l)           The
Company shall use all reasonable best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange or quotation
system on which the Common Shares are then listed or traded.

     

    (m)           The
Company shall have appropriate senior executive officers of the Company
(i) prepare and make presentations at any “road shows” and before analysts,
and (ii) otherwise use their reasonable efforts to cooperate as reasonably
requested by the underwriters in the offering, marketing or selling of the
Registrable Securities.

     

    Section
2.03.    Participation In Public
Offering.  No
Shareholder may participate in any Public Offering hereunder unless such
Shareholder (a) agrees to sell such Shareholder’s Registrable Securities on the
basis provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements, and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and the provisions of this Agreement in respect of registration
rights.

     

    Section
2.04.    Rule 144 Sales; Cooperation By The
Company.  If
any Shareholder shall transfer any Registrable Securities pursuant to Rule 144
or Rule 144A, the Company shall cooperate, to the extent commercially
reasonable, with such Shareholder and shall provide to such Shareholder such
information as such Shareholder shall reasonably request.  Without
limiting the foregoing, the Company shall:

     

    (a)           at
any time after any of the Company’s shares of capital stock are registered under
the Securities Act or the Exchange Act:  (i) make and keep available
public information, as those terms are contemplated by Rule 144;
(ii) timely file with the SEC all reports and other documents required to
be filed under the Securities Act and the Exchange Act; and (iii) furnish to
each Shareholder forthwith upon request a written statement by the Company as to
its compliance with the reporting requirements of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other information as such Shareholder may reasonably request
in order to avail itself of any rule or regulation of the SEC allowing such
Shareholder to sell any Registrable Securities without registration;
and

     

    
      
        
        

      

      
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    (b)           each
Shareholder of Registrable Securities and each prospective Shareholder of
Registrable Securities who may consider acquiring Registrable Securities in
reliance upon Rule 144A under the Securities Act (or any successor or
similar rule then in force) (“Rule 144A”) shall have
the right to request from the Company, and the Company will provide upon such
request, such information regarding the Company and its business, assets and
properties, if any, as is at the time required to be made available by the
Company under Rule 144A so as to enable such Shareholder to transfer Registrable
Securities to such prospective Shareholder in reliance upon Rule
144A.

     

    Section
2.05.    Termination.  The
registration rights set forth in ARTICLE 2 shall
not be available (i) as to any Shareholder that beneficially owns less than 5%
of the Company’s outstanding securities if, in the written opinion of counsel to
the Company, all of the Registrable Securities then owned by such Shareholder
could be sold in any 90-day period pursuant to Rule 144, or (ii) as to any
Shareholder, if all of the Registrable Securities held by such Shareholder have
been sold in a registration pursuant to the Securities Act or an exemption
therefrom.  Notwithstanding the foregoing, Sections 3 and 4 shall survive any
termination of this Agreement.

     

    ARTICLE
3

    Indemnification
and Contribution

     

    Section
3.01.    Indemnification by the
Company.  With
respect to each registration effected pursuant to Article 2 hereof, the
Company agrees to indemnify and hold harmless, to the fullest extent permitted
by law, (i) each of the Registering Shareholders in such registration and each
of its officers, directors, limited or general partners and members
thereof,  and (ii) each of their respective Affiliates, officers,
directors, members, partners, shareholders, employees, advisors, and agents and
each Person who controls (within the meaning of the Securities Act or the
Exchange Act) such Persons, against any and all losses, claims, damages,
liabilities, fines, penalties, judgments, suits, costs and expenses (including
reasonable expenses of investigation and reasonable attorneys’ fees and
expenses) (collectively, “Damages”) caused by or
relating to any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus (including any exhibits,
financial information and material incorporated by reference therein) relating
to the Registrable Securities (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus or free-writing prospectus (as defined in Rule 405 under the
Securities Act), or caused by or relating to any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such Damages are caused
by or related to any such untrue statement or omission or alleged untrue
statement or omission so made based upon information furnished in writing to the
Company by such Shareholder or on such Shareholder’s behalf expressly for use
therein.  The Company also agrees to indemnify any underwriters of the
Registrable Securities, their officers and directors and each Person who
controls such underwriters within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act on substantially the same basis as that of
the indemnification of the Shareholders provided in this Section
3.01.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Section
3.02.    Indemnification by Participating
Shareholders.  Each
Shareholder holding Registrable Securities included in any registration
statement agrees, severally but not jointly, to indemnify and hold harmless, to
the fullest extent permitted by law, the Company, its officers, directors and
agents and each Person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, to the same
extent as the indemnity from the Company to such Shareholder provided in Section 3.01, but
only with respect to information furnished in writing by such Shareholder or on
such Shareholder’s behalf expressly for use in any registration statement or
prospectus (including any exhibits, financial information and material
incorporated by reference therein) relating to the Registrable Securities, or
any amendment or supplement thereto, or any preliminary prospectus or
free-writing prospectus.  Each such Shareholder also agrees to
indemnify and hold harmless underwriters of the Registrable Securities, their
officers and directors and each Person who controls such underwriters within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on
substantially the same basis as that of the indemnification of the Company
provided in this Section
3.02.  As a condition to including Registrable Securities
in any registration statement filed in accordance with ARTICLE 2, the
Company may require that it shall have received an undertaking reasonably
satisfactory to it from any underwriter to indemnify and hold it harmless to the
extent customarily provided by underwriters with respect to similar
securities.  No Shareholder shall be liable under this Section 3.02 for
any Damages in excess of the net proceeds realized by such Shareholder in the
sale of Registrable Securities of such Shareholder to which such Damages
relate.

     

    Section
3.03.    Conduct of Indemnification
Proceedings.  If
any proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
this ARTICLE 3, such
Person (an “Indemnified
Party”) shall promptly notify the Person against whom such indemnity may
be sought (the “Indemnifying
Party”) in writing and the Indemnifying Party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Party, and shall assume the payment of all fees and expenses, provided that the failure of
any Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent that the
Indemnifying Party is materially prejudiced by such failure to
notify.  In any such proceeding, any Indemnified Party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Party unless (a) the Indemnifying Party
and the Indemnified Party shall have mutually agreed to the retention of such
counsel, (b) in the reasonable judgment of such Indemnified Party representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them, including one or more defenses or
counterclaims that are different from or in addition to those available to the
Indemnifying Party, or (c) the Indemnifying Party shall have failed to assume
the defense within 30 days of notice pursuant to this Section
3.03.  It is understood that, in connection with any
proceeding or related proceedings in the same jurisdiction, the Indemnifying
Party shall not be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred.  In the case of any such separate
firm for the Indemnified Parties, such firm shall be designated in writing by
the Indemnified Parties.  The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.  Without the prior written
consent of the Indemnified Party, no Indemnifying Party shall effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement (A) includes
an unconditional release of such Indemnified Party from all liability arising
out of such proceeding, and (B) does not include any injunctive or other
equitable or non-monetary relief applicable to or affecting such Indemnified
Person.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Section
3.04.    Contribution.  If
the indemnification provided for in this ARTICLE 3 is
unavailable to the Indemnified Parties in respect of any Damages, then each
Indemnifying Party, in lieu of indemnifying the Indemnified Parties, shall
contribute to the amount paid or payable by such Indemnified Party, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Damages as well as any other relevant equitable
considerations.  The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission.  The amount paid or payable by a party as a result of any
Damages shall be deemed to include, subject to the limitations set forth in this
Agreement, any reasonable attorneys’ or other reasonable fees or expenses
incurred by such party in connection with any proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this ARTICLE 3 was
available to such party in accordance with its terms.

     

    The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 3.04 were
determined by pro rata allocation or by
any other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 3.04, no
Shareholder shall be required to contribute, in the aggregate, any amount in
excess of the amount by which the proceeds actually received by such Shareholder
from the sale of the Registrable Securities subject to the proceeding exceeds
the amount of any damages that such Shareholder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission, except in the case of fraud by such Shareholder.  Each
Shareholder’s obligation to contribute pursuant to this Section 3.04 is
several in the proportion that the proceeds of the offering received by such
Shareholder bears to the total proceeds of the offering received by all such
Shareholders and not joint.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.  The indemnity and
contribution agreements contained in this ARTICLE 3 are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

     

    Section
3.05.    Other
Indemnification.  Indemnification
similar to that provided in this ARTICLE 3 (with
appropriate modifications) shall be given by the Company and each Shareholder
participating therein with respect to any required registration or other
qualification of securities under any foreign, federal or state law or
regulation or governmental authority other than the Securities Act.

     

    ARTICLE
4

    Miscellaneous

     

    Section
4.01.    Binding Effect;
Assignability

     

    (a)           This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, successors, legal representatives and permitted
assigns.  Any Shareholder that ceases to own beneficially any Company
Securities shall cease to be bound by the terms hereof (other than (i) the
provisions of ARTICLE 3
applicable to such Shareholder with respect to any offering of Registrable
Securities completed before the date such Shareholder ceased to own any Company
Securities, and (ii) this ARTICLE
4).

     

    (b)           Neither
this Agreement nor any right, remedy, obligation or liability arising hereunder
or by reason hereof shall be assignable by any party hereto pursuant to any
Transfer of Registrable Securities or otherwise, except that each Shareholder
may assign rights hereunder to any Permitted Transferee of such
Shareholder.  Any such Permitted Transferee shall (unless already
bound hereby) execute and deliver to the Company an agreement to be bound by
this Agreement in the form of Exhibit A hereto (a
“Joinder Agreement”) and
shall thenceforth be a Shareholder.

     

    (c)           Nothing
in this Agreement, expressed or implied, is intended to confer on any Person
other than the parties hereto, and their respective heirs, successors, legal
representatives and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Section
4.02.    Notices.

     

      All
notices, demands, approvals, consents and other communications provided for or
permitted hereunder (each a “Notice”) shall be in writing
and shall be sent by (a) registered or certified first-class mail (return
receipt requested), (b) courier service, (c) personal delivery, or (d)
telecopier (provided that, in the case of this clause (d), such Notice also is
sent concurrently by another means specified above) as follows:

     

    if to the
Company to:

     

    Preferred
Apartment Communities, Inc.

    3625
Cumberland Boulevard, Suite 400

    Atlanta,
GA 30339

    Phone:
(770) 818-4100

    Facsimile:
(770) 818-4105

    Attention:  Leonard
A. Silverstein, Esq.

     

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

     

    Proskauer
Rose LLP

    1585
Broadway

    New York,
NY 10036

    Facsimile:  (212)
969-2900

    
      Attention: 
Peter M.
Fass, Esq.

      
        James P.
Gerkis, Esq.

      

    

    if to any
Shareholder, at the address for such Shareholder listed on the signature pages
below or otherwise provided to the Company as set forth below.

     

    Each
Notice shall be deemed to have been duly given and effective upon actual receipt
(or refusal of receipt).  Any party may by Notice to the other parties
given in accordance with this Section 4.02
designate another address or person for receipt of Notices
hereunder.  If the address of a party has changed, then such party
promptly shall by Notice to the other parties given in accordance with this Section 4.02
designate a new address for receipt of Notices hereunder.  For the
avoidance of doubt, if a Notice given in accordance with this Section 4.02 to a
party is returned to the sender as being refused or undeliverable (or having a
similar status), then such Notice to such party shall be deemed to have been
duly given and effective on the date that such Notice was originally
sent.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Any
Person that becomes a Shareholder after the date hereof shall provide its
address and fax number to the Company.

     

    Section
4.03.    Waiver; Amendment;
Termination.

     

      No
provision of this Agreement may be waived except by an instrument in writing
executed by the party against whom the waiver is to be effective.  No
provision of this Agreement may be amended or otherwise modified except (i)
prior to the First Public Offering, by an instrument in writing executed by all
the parties hereto, and (ii) after the First Public Offering, by an
instrument in writing executed by the Company and the holders of at least 75% of
the Registrable Securities held by the parties hereto at the time of such
proposed amendment or modification.

     

    Section
4.04.    Governing Law.

     

      This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York, without regard to the conflicts of laws rules
of such state.

     

    Section
4.05.    Jurisdiction.

     

      The
parties hereby agree that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby shall be brought in any state
or federal court in The City of New York, Borough of Manhattan, so long as one
of such courts shall have subject matter jurisdiction over such suit, action or
proceeding, and that any cause of action arising out of this Agreement shall be
deemed to have arisen from a transaction of business in the State of New York,
and each of the parties hereby irrevocably consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient form.  Process in any such suit, action or proceeding may
be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court.  Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 4.02
shall be deemed effective service of process on such party.

     

    Section
4.06.    WAIVER OF JURY
TRIAL.

     

      EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

     

    Section
4.07.    Specific
Enforcement.

     

      Each
party hereto acknowledges that the remedies at law of the other parties for a
breach or threatened breach of this Agreement would be inadequate and, in
recognition of this fact, any party to this Agreement, without posting any bond
or furnishing other security, and in addition to all other remedies that may be
available, shall be entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy that may then be available.

     

    Section
4.08.    Counterparts;
Effectiveness.

     

      This
Agreement may be executed (including by facsimile transmission) with counterpart
signature pages or in any number of counterparts, each of which shall be deemed
to be an original, and all of which shall, taken together, be considered one and
the same agreement, it being understood that each party need not sign the same
counterpart.  This Agreement shall become effective when each party
hereto shall have executed and delivered this Agreement.  Until and
unless each party has executed and delivered this Agreement, this Agreement
shall have no effect and no party shall have any right or obligation hereunder
(whether by virtue of any other oral or written agreement or other
communication).

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Section
4.09.    Entire
Agreement.

     

      This
Agreement constitutes the entire agreement and understanding among the parties
hereto and supersedes all prior and contemporaneous agreements and
understandings, both oral and written, among the parties hereto with respect to
the subject matter hereof.

     

    Section
4.10.    Severability.

     

      If
any provision of this Agreement, or the application thereof, is for any reason
declared by any court or other judicial or administrative body of competent
jurisdiction to be invalid or unenforceable, the remainder of this Agreement
shall remain in full force and effect.

     

    Section
4.11.    Independent Nature of Shareholders’
Obligations and Rights.

     

      The
obligations of each Shareholder hereunder are several and not joint with the
obligations of any other Shareholder hereunder, and no Shareholder shall be
responsible in any way for the performance of the obligations of any other
Shareholder hereunder.  Nothing contained herein or in any other
agreement or document delivered at any closing, and no action taken by any
Shareholder pursuant hereto or thereto, shall be deemed to constitute the
Shareholders as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Shareholders are in any way acting
in concert with respect to such obligations or the transactions contemplated by
this Agreement.  Each Shareholder shall be entitled to protect and
enforce its rights, including the rights arising out of this Agreement, and it
shall not be necessary for any other Shareholder to be joined as an additional
party in any proceeding for such purpose.

     

    [Signature
pages follow.]

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        
          
            
              
                
                  
                    	 	
                            Company:

                             

                            PREFERRED
      APARTMENT COMMUNITIES, INC.

                          	 
	 	 	 	 
	
                             

                          	
                            By:
      

                          	 	 
	 	 	

                            John
      A. Williams

                          	 
	 	 	

                            President
      and Chief Executive Officer

                          	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	

                            Address for
      Notices:

                            
                              3625
      Cumberland Boulevard, Suite 400

                              Atlanta,
      GA 30339

                              Facsimile:  (770)
      818-4105

                              Attention:  Leonard
      A. Silverstein, Esq.

                            

                          	 
	 	 	 	 
	 	 	

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

                             

                            Proskauer
      Rose LLP

                            1585
      Broadway

                            New
      York, NY 10036

                            
                              Attention: 
      Peter
      M. Fass, Esq.

                              
                                James
      P. Gerkis, Esq.

                              

                            

                          	 

                  

                

              

            

          

        

      

    

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 	
                                  

                                    Stockholder:

                                  

                                   

                                  

                                    WILLIAMS
      OPPORTUNITY FUND, LLC

                                  

                                	 
	 	 	 	 
	
                                   

                                	
                                  By:
      

                                	Williams Opportunity Fund Manager, LLC, Its Manager
	 	 	 	 
	 	 	

                                  By:  Williams
      Realty Advisors, LLC,

                                
	 	 	

                                  Its
      Manager

                                
	 	 	 	 
	 	 	
                                   By:

                                	 
	 	 	 	

                                  John
      A. Williams

                                
	 	 	 	

                                  Chief
      Executive Officer

                                
	 	 	 	 
	 	

                                  Address for
      Notices:

                                  
                                    3625
      Cumberland Boulevard, Suite 400

                                    Atlanta,
      GA 30339

                                    Facsimile:  (770)
      818-4105

                                    Attention:  Leonard
      A. Silverstein, Esq.

                                  

                                
	 	 	 	 

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
A

     

    JOINDER TO REGISTRATION
RIGHTS AGREEMENT

     

    This
Joinder Agreement (this “Joinder Agreement”) is made as
of the date written below by the undersigned (the “Joining Party”) in accordance
with the Registration Rights Agreement dated as of
[           ], 2010 (as
the same may be amended from time to time, the “Registration Rights
Agreement”), among Preferred Apartment Communities, Inc. and the
Shareholders party thereto.  Capitalized terms used, but not defined,
herein shall have the respective meanings ascribed to such terms in the
Registration Rights Agreement.

     

    The
Joining Party hereby acknowledges, agrees and confirms that, by its execution of
this Joinder Agreement, the Joining Party shall be deemed to be a party to the
Registration Rights Agreement as of the date hereof as a “Permitted Transferee” of a
Shareholder thereto, and shall have all the rights and obligations of a “Shareholder” thereunder as if
it had executed the Registration Rights Agreement.  The Joining Party
hereby ratifies, as of the date hereof, and agrees to be bound by, all the
terms, provisions and conditions contained in the Registration Rights Agreement
(including, without limitation, Section 4.01 thereof).

     

    IN
WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of the
date written below.

     

    Date:
___________ ___, ______

     

    
      
        
          
            
              
                
                  	 	

                          

                            [NAME
      OF JOINING PARTY]

                          

                        	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 
	 	 	 	 
	 	

                          Address for
      Notices:

                        	 
	 	 	 
	 	

                          [_______________]

                        	 

                

              

            

          

        

      

    

     

     

     

    21STOCK
PURCHASE AGREEMENT

     

    BY
AND AMONG

     

    VILHELM
GUDMUNDSSON

     

    ROBERT
GUDFINNSSON

     

    CORPOSA,
S.A. DE C.V.

     

    HOLSHYRNA
ehf

     

    BAJA
AQUA-FARMS, S.A. DE C.V.

     

    OCEANIC
ENTERPRISES INC.

     

    AND

     

    LIONS
GATE LIGHTING CORP.

     

    EFFECTIVE
AS OF

     

    July
20, 2010

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    STOCK
PURCHASE AGREEMENT

    TABLE
OF CONTENTS

     

    
      
        
          
            
              
                	
                        EXHIBITS

                      	 
      
	 
      	 
      
	
                        Option
      Agreement

                      	 
      
	 
      	 
      
	
                        DISCLOSURE
      SCHEDULES

                      	 
      
	 
      	 
      
	
                        Section
      3.3 Ownership of Shares

                      	
                        9

                      
	 
      	 
      
	
                        Section
      3.4 Litigation

                      	
                        9

                      
	 
      	 
      
	
                        Section
      3.10 Organizational Matters

                      	
                        10

                      
	 
      	 
      
	
                        Section
      3.11 Capitalization

                      	
                        10

                      
	 
      	 
      
	
                        Section
      3.12 Subsidiaries

                      	
                        11

                      
	 
      	 
      
	
                        Section
      3.15 Financial Statements; Absence of Undisclosed Liabilities;
      Indebtedness

                      	
                        11

                      
	 
      	 
      
	
                        Section
      3.16 Tax matters

                      	
                        11

                      
	 
      	 
      
	
                        Section
      3.17 Absence of Certain Changes

                      	
                        12

                      
	 
      	 
      
	
                        Section
      3.18 Assets

                      	
                        13

                      
	 
      	 
      
	
                        Section
      3.19 Bank Accounts

                      	
                        14

                      
	 
      	 
      
	
                        Section
      3.21 Licenses and Permits

                      	
                        15

                      
	 
      	 
      
	
                        Section
      3.22 Material Contracts

                      	
                        15

                      
	 
      	 
      
	
                        Section
      3.23 (d) List of names, positions and current salary of directors,
      officers and employees of the Company

                      	
                        16

                      
	 
      	 
      
	
                        Section
      3.24 Employee benefit plan

                      	
                        16

                      
	 
      	 
      
	
                        Section
      3.25 Environmental Matters

                      	
                        16

                      
	 
      	 
      
	
                        Section
      3.26 List of Proprietary Rights

                      	
                        17

                      
	 
      	 
      
	
                        Section
      3.28 Inventories

                      	
                        17

                      
	 
      	 
      
	
                        Section
      3.29 Insurances

                      	
                        17

                      
	 
      	 
      
	
                        Section
      3.31 Accounts receivable

                      	
                        18

                      
	 
      	 
      
	
                        Section
      3.32 Certain interests

                      	
                        18

                      
	 
      	 
      
	
                        Section
      6.3 List of Consents and Approvals (buyers’ obligations)

                      	
                        21

                      
	 
      	 
      
	
                        Section
      7.4 List of Consents and Approvals (sellers’ obligations)

                      	
                        22

                      

              

            

          

        

      

    

    

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    STOCK
PURCHASE AGREEMENT

     

     

    THIS
STOCK PURCHASE AGREEMENT (the “Agreement”)
is effective as of July 20, 2010, by and among Corposa, S.A. de C.V., a Mexican
corporation (“Corposa”),
Marpesca, S.A. de C.V., a Mexican corporation (“Marpesca”),
Holshyrna ehf, an Icelandic corporation (“Holshyrna,” and
together with Corposa, the “Shareholders”),
Vilhelm Mar Gudmundsson (“Gudmundsson”),
Robert Gudfinnsson (“Gudfinnsson” and
together with Gudmundsson, the “Directors”),
Baja Aqua Farms, S.A. de C.V., a Mexican corporation (the “Company”),
Oceanic Enterprises, Inc., a California Corporation (“Oceanic”),
and Lions Gate Lighting Corp., a Nevada corporation (the “Buyer”).  The
Shareholders, the Company, Oceanic and the Directors are herein sometimes
collectively referred to as the “Selling
Parties.”

     

    RECITALS

     

    
      	
               
      

            	
              A.

            	
              The
      total issued and outstanding capital stock of the Company consists of
      191,301,125 common shares without par value, as
  follows:

            

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Shareholder

                              	 	
                                Shares Series “A”

                                Fixed

                                Capital Stock

                              	 	 	
                                Shares Series “B”

                                Variable

                                Capital Stock

                              	 	 	
                                Shares Series “C”

                                Variable

                                Capital Stock

                              	 	 	
                                Total Shares

                              	 
	
                                Corposa,
      S.A. de C.V.

                              	 	 	-0-	 	 	 	594,338	 	 	 	133,131,887	 	 	 	133,726,225	 
	
                                Holshyrna
      ehf

                              	 	 	3,199	 	 	 	254,966	 	 	 	57,312,559	 	 	 	57,570,724	 
	
                                Marpesca,
      S.A. de C.V.

                              	 	 	1	 	 	 	1	 	 	 	224	 	 	 	226	 
	
                                Robert
      Brian Van Riter

                              	 	 	200	 	 	 	16	 	 	 	3,734	 	 	 	3,950	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                Total

                              	 	 	3,400	 	 	 	849,321	 	 	 	190,448,404	 	 	 	191,301,125	 

                      

                    

                  

                

              

            

          

        

      

    

     

    
      	
               
      

            	
              B.

            	
              The
      capital stock of the company has a value of $420,841,916.00 Pesos
      comprised as follows: (i) $170,000.00 Pesos corresponds to the fixed
      portion of the capital stock, and (ii) $420,671,916.00 Pesos corresponds
      to the variable portion of the capital stock of the
    Company.

            

    

     

    
      	
               
      

            	
              C.

            	
              Corposa
      is the sole registered and beneficial owner of 594,338 Series “B”
      shares and 133,131,887 Series “C” shares without par value of the issued
      and outstanding variable portion of the capital stock of the
      Company.

            

    

     

    
      	
               
      

            	
              D.

            	
              Holshyrna
      is the sole registered and beneficial owner of 3,199 Series “A” shares,
      254,966 Series “B” shares and 57,312,559 Series “C” shares without
      par value of the issued and outstanding fixed portion of the capital stock
      of the Company.

            

    

     

    
      	
               
      

            	
              E.

            	
              Marpesca
      is the sole registered and beneficial owner of 1 Series “A” share without
      par value of the issued and outstanding fixed portion of the capital stock
      of the Company and 225 Series “B” and Series “C” shares without par value
      of the outstanding variable portion of the capital stock of the
      Company.

            

    

     

    
      	
               
      

            	
              F.

            	
              The
      shares owned by Corposa, Marpesca and Holshyrna collectively represent
      99.99% of the issued and outstanding shares of common stock of the Company
      (the “Common
      Stock”).

            

    

     

    
      	
               
      

            	
              G.

            	
              Holshyrna
      owns 10,000 shares of common stock, representing 100% of the issued and
      outstanding capital stock of
Oceanic.

            

    

     

    
      	
               
      

            	
              H.

            	
              Buyer
      desires to acquire initially shares of the Company and Oceanic
      representing 33% of the issued and outstanding capital stock of the
      Company and Oceanic,
respectively.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              I.

            	
              Buyer
      desires to have the option and the Company is willing to grant to the
      Buyer the option to purchase an additional 67% of the shares in the
      Company.

            

    

     

    
      	
               
      

            	
              J.

            	
              Buyer
      desires to have the option and Holshyrna is willing to grant to the Buyer
      the option to purchase all remaining issued and outstanding shares of
      Oceanic.

            

    

     

    NOW
THEREFORE, in consideration of the Recitals and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:

     

    ARTICLE
I

    DEFINITIONS

     

    1.1 Defined Terms. As
used in this Agreement, the terms below shall have the following
meanings.

     

    “Affiliate”
of any Person shall mean another Person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, such first Person.

     

    “Agreement”
shall mean this Stock Purchase Agreement, as the same shall be amended and/or
restated from time to time in accordance with its terms.

     

    “Ancillary
Purchase Agreement” means the purchase
agreement entered
into between Buyer and the Selling Parties relating to the purchase and sale of
shares of the Company not covered by this Agreement or the Option
Agreement.

     

    “Audited Financial
Statements” shall mean the audited consolidated balance sheets of the
Company and its Subsidiaries as of December 31, 2008 and 2009 and the
related statements of income and cash flow for the years then ended, prepared in
accordance with GAAP.

     

    “Business”
shall mean the catching, farming and trading of Pacific Bluefin Tuna and all
activities related thereto.

     

    “Business
Day” shall mean any day other than Saturday, Sunday or any day on which
the NYSE is authorized to be closed.

     

    “Buyer Indemnified
Party” shall have the meaning specified in Section 8.2(a) of this
Agreement.

     

     “Closing”
shall mean the execution and delivery of this Agreement, together with the other
Transaction Documents, which shall be effective as of the Closing
Date.

     

    “Company
Shares” shall mean 296,367 Series “B” common shares subscribed to by
Buyer and to be issued by the Company no later than the Issuance Date,
representing 33% of the then issued and outstanding capital stock of the
Company, in accordance with a duly authorized increase in the capital stock of
the Company.

     

    “Contracts”
means, in respect of any Person, all loan agreements, indentures, letters of
credit (including related letter of credit applications and reimbursement
obligations), mortgages, security agreements, pledge agreements, deeds of trust,
bonds, notes, guarantees, surety obligations, warranties, licenses, franchises,
permits, powers of attorney, purchase orders, leases, employment agreements,
confidentiality agreements, intellectual property assignment agreements, and
other agreements, contracts, instruments, obligations, commitments, arrangements
and understandings, whether written or oral, to which such Person is a party or
by which such Person or any of its properties or assets is bound or affected, in
each case as amended, supplemented, restated, waived or otherwise modified and
including all exhibits, schedules or other attachments thereto.

     

    “Copyrights”
shall mean copyrights in both published and unpublished works, including without
limitation all compilations, databases and computer programs, manuals and other
documentation and all copyright registrations and applications.

     

    “Disclosure
Schedule” shall mean the Disclosure Schedule, dated the date of this
Agreement, delivered by Shareholder to Buyer contemporaneously with the
execution and delivery of this Agreement.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    “Dollar”
means legal the currency of the United States of America.

     

    “Encumbrance”
shall mean any mortgage, pledge, Lien, conditional sale agreement, security
title or other encumbrance.

     

    “Environmental
Laws” shall mean all Laws relating to public health and safety and
pollution or protection of the environment, including Laws relating to the
presence, use, manufacturing, refining, production, emissions, discharges,
generation, handling, transportation, treatment, recycling, transfer, storage,
disposal, distribution, importing, labeling, testing, processing, Release or
threatened Release, control, or other action or failure to act involving cleanup
of any Hazardous Substances into the environment.

     

    “External Permit
Holders”, means Marpesca, and Rancho Marino Guadalupe, S.A. de C.V., each
a Mexican corporation holding fishing permit number 10203078384, CA-025/94 and
CA/DGOPA-09/2002, respectively, and which are currently used and exploited by
the Company with the consent of such corporations as set forth in Section 3.21
of the Disclosure Schedule.

     

    “Financial
Statements” shall mean collectively (i) the Audited Financial Statements,
and (ii) the Interim Financial Statements.

     

    “GAAP”
shall mean generally accepted accounting principles consistently applied in the
United States and Mexico.

     

    “Governmental
Authority” shall mean any government or political subdivision, whether
federal, state, local or foreign, or any agency or instrumentality of any such
government or political subdivision, or any federal, state, local or foreign
court or arbitrator.

     

    “Hazardous
Substances” shall mean any substance, pollutant, contaminant, material,
or waste, or combination thereof, whether solid, liquid, or gaseous in nature,
defined or subject to regulation, investigation, control, or remediation under
Environmental Laws.

     

    “Indebtedness”
shall mean, as to any Person, without duplication, (a) all obligations of
such Person for borrowed money (including, without limitation, reimbursement and
all other obligations with respect to surety bonds, letters of credit and
banker’s acceptances, whether or not matured, and any inter-company debt
obligations), (b) all obligations of such Person to pay the deferred
purchase price of property or services, (c) all interest rate and currency
swaps, caps, collars and similar agreements or hedging devices under which
payments are obligated to be made by such Person, whether periodically or upon
the happening of a contingency, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations of such Person
under leases which have been or should be, in accordance with GAAP, recorded as
capital leases, and (f) any guarantees made by such Person of any
Indebtedness of any other Person described in clauses (a) through
(e).

     

    “Interim Financial
Statements” means the consolidated balance sheets and Income
Statements of the Company and its Subsidiaries as of March 31, 2010, prepared in
accordance with GAAP, except that such financial statements shall not be
accompanied by footnotes.

     

    “Issuance
Date” means the date the Company Shares are issued to the Buyer which
shall be no later than August 30, 2010.

     

    “Knowledge”
shall mean the knowledge that a Person will be deemed to have of a particular
fact or other matter if such Person is actually aware of such fact or other
matter.  References to “the Company’s knowledge” or words to that
effect shall mean the Knowledge of any representatives of the Directors or
Shareholders representatives.

     

    “Law” shall
mean any federal, national, supranational, state, provincial, local or similar
statute, law, ordinance, regulation, rule, code, or order.

     

    “Leased Real
Property” shall have the meaning specified in Section 3.18(c) of
this Agreement.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    “Lease” or
“Leases”
shall have the meaning specified in Section 3.18(c) of this
Agreement.

     

    “Lien”
shall mean any mortgage, pledge, hypothecation, lien (statutory or otherwise
including judgment and mechanics’ liens), preference, security interest,
security agreement, easement, restriction or other similar
encumbrance.

     

    “Losses”
shall mean damages, liabilities, deficiencies, claims, actions, demands,
judgments, interest, losses, costs or expenses of whatever kind, including
reasonable attorneys’ fees.

     

    “Marks”
shall mean all trade names, logos, slogans, Internet domain names, registered
and unregistered trademarks and service marks and related registrations and
applications for registration.

     

    “Marpesca”
shall mean Marpesca, S.A. de C.V., the Company’s 49% subsidiary.

     

    “Material Adverse
Effect” shall mean for purposes of this Agreement, with respect to the
Selling Parties, any breach of a representation or warranty hereunder or a
covenant to be performed by the Selling Parties, the effect of which may be to
(a) impede or impair the operation of the Business in the ordinary course
consistent with past practices or (b) cause the Company and/or any Subsidiary to
pay or become liable to pay more than $10,000.00 Dollars to remedy any single
such event, violation, breach, default or termination (as the case may be) or
more than $100,000.00 Dollars in the aggregate for all such events, violations,
breaches, or defaults or terminations (as the case may be).

     

    “Material
Contracts” shall have the meaning specified in Section 3.22(a) of
this Agreement.

     

    “Mexico”
shall mean the United Mexican States.

     

    “Option”
means the option to purchase an additional 67% of the shares in the Company and
Oceanic, thereby making Buyer the sole shareholder of the Company; it being
understood that a third unrelated party holds and upon completion of the
transaction contemplated hereunder will continue to hold 200 Series “A” Common
Stock shares, 16 Series “B” shares of Common Stock and 3,734 Series “C” shares
of Common Stock of the Company, representing in the aggregate 0.016% of the
issued and capital stock of the Company.

     

    “Option
Agreement” shall mean the agreement in the form of Exhibit A, granting
Buyer the Option, which agreement shall include the right to have the shares to
be issued thereunder to be registered under the United States Securities Act of
1933, as amended.

     

    “Option Payment
Assignment” means
the assignment to Corposa by the Company of its right to receive LGLC
Common Stock (as such term is defined in the Option Agreement) as consideration
for the exercise of the Option.

     

    “Patents”
shall mean all patents and patent applications.

     

    “Permitted
Encumbrances” shall mean (a) Encumbrances for utilities, current
Taxes or assessments or other governmental charges not yet due and payable,
(b) mechanics’, carriers’, workers’, repairers’, materialmen’s,
warehousemen’s, lessor’s, landlord’s and other similar liens arising or incurred
in the ordinary course of business, (c) statutory Encumbrances arising in
the ordinary course of business, and (d) the ownership interests of the
lessor or licensor of leased assets or licensed Intellectual Property Assets,
the terms of the lease agreement or license and Encumbrances on the ownership
interests of the lessor or licensor in such leased assets or licensed
Intellectual Property Assets.

     

    “Permits”
shall mean concessions, licenses, permits, approvals, certificates, notices,
waivers, franchises, registrations, filings, accreditations, NOM (Norma Official Mexicana)
certifications, authorizations and consents required by any Governmental
Authority or Law, or otherwise made available by or under any Governmental
Authority of the countries in which the Company carries out all or part of its
Business, or pursuant to any Law.

     

     “Person”
shall mean a natural person, corporation, limited liability company, trust,
partnership, government entity, agency, labor union, or branch or department
thereof, or any other legal entity.

     

    “Pesos”
shall mean the legal currency in Mexico.

     

    “Powers of
Attorney” means the powers of attorney and other forms of authorization
issued by the shareholders of the Company or the Company to authorize
individuals to act on behalf of the Company.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    “Purchased
Shares” shall mean collectively the shares purchased by the Buyer
pursuant to this Agreement and the Option Agreement.

     

    “Released
Party” means the Company, Oceanic, their Subsidiaries and each of their
individual, joint or mutual, past, present and future representatives,
Affiliates, stockholders, officers, directors, controlling persons,
subsidiaries, successors and assigns.

     

    “Selling
Party Indemnified
Party” shall have the meaning specified in Section 8.3 of this
Agreement.

     

    “Subsidiaries”
shall mean Marpesca, S.A. de C.V.

     

    “Tax” or
“Taxes”
shall mean any federal, state, local or foreign income, gross receipts, capital
gains, franchise, alternative or add-on minimum, estimated, sales, use, goods
and services, ad valorem, transfer, registration, value added, excise, natural
resources, severance, stamp, occupation, premium, windfall profit,
environmental, customs, duties, real property, special assessment, personal
property, capital stock, social security, unemployment, employment, disability,
payroll, license, employee or other withholding, contributions or other tax, of
any kind whatsoever, including any interest, update (actualization) penalties or
additions to tax or additional amounts in respect of the foregoing, as well as
any social security, housing, and retirement quotas or contributions including,
without limitation, the National Workers Housing Fund (Instituto del Fondo Nacional de la
Vivienda para los Trabajadores), the IMSS, and retirement savings fund
(Sistema de Ahorro para el
Retiro) contributions, compulsory profit sharing with employees (Participacion de los Trabajadores en
las Utilidades), imposed by any governmental entity (national, local,
municipal or otherwise) or political subdivision in Mexico and in any other
country in which the Company carries out its Business or with respect to which
the Company might be subject to Taxes.

     

    “Tax
Returns” shall mean returns, declarations, reports, claims for refund,
information returns or other documents (including any related or supporting
schedules, statements or information) filed or required to be filed with respect
to Taxes.

     

    “Third Party
Claim” shall mean a legal proceeding, action, claim or demand instituted
by any third person or Governmental Authority.

     

    “Third Party
Rights” shall have the meaning specified in Section 3.26(b)(iii) of
this Agreement.

     

    “Trade
Secrets” shall mean rights under applicable U.S. state trade secret laws
as are applicable to know-how and confidential information.

     

    “Transaction
Documents” means this Agreement, the Option Agreement, the Ancillary
Purchase Agreements, the Option Payment Assignment and any other documents
required by the parties hereto to perform their obligations
hereunder.

     

    ARTICLE
II

    PURCHASE
AND SALE; CLOSING; PURCHASE PRICE

    

    2.1           Recapitalization of
Company;
Waiver.

    

    (a)  On
the Issuance Date the Company shall issue to the Buyer the Company Shares
thereby making the Buyer the owner of 33% of the issued and outstanding share
capital of the Company.  Following such issuance, the total issued and
outstanding capital stock of the Company will consist of 898,080 common shares
without par value, as follows:

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  
                    	
                            Shareholder

                          	 	
                            Shares Series “A”

                            Fixed

                            Capital Stock

                          	 	 	
                            Shares Series “B”

                            Variable

                            Capital Stock

                          	 	 	
                            Shares Series “C”

                            Variable

                            Capital Stock

                          	 	 	
                            Total 

                            Shares

                          	 
	
                            Corposa,
      S.A. de C.V.

                          	 	 	-0-	 	 	 	594,338	 	 	 	-0-	 	 	 	594,338	 
	
                            Holshyrna
      ehf

                          	 	 	3,199	 	 	 	-0-	 	 	 	-0-	 	 	 	3,199	 
	
                            Marpesca,
      S.A. de C.V.

                          	 	 	1	 	 	 	1	 	 	 	224	 	 	 	226	 
	
                            Lions
      Gate Lighting

                          	 	 	-0-	 	 	 	296,367	 	 	 	-0-	 	 	 	296,367	 
	
                            Robert
      Brian Van Riter

                          	 	 	200	 	 	 	16	 	 	 	3,734	 	 	 	3,950	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Total

                          	 	 	3,400	 	 	 	890,722	 	 	 	3,958	 	 	 	898,080	 

                  

                

              

            

          

        

      

    

    

    (b)  Each
Shareholder hereby irrevocably and absolutely waives any right of first refusal
or any other right it may have to subscribe to the Company Shares pursuant to
the Bylaws of the Company or pursuant to any other agreement or
instrument.

    

    2.2           Purchase and Sale of
Oceanic
Shares.  As a material inducement to the Buyer to enter into
this Agreement, at the Closing, and upon all of the terms and subject to all of
the conditions of this Agreement, Holshyrna agrees to sell to Buyer 3,300 shares
of Oceanic stock (the “Oceanic
Shares,” together with the Company Shares, the “Purchased
Shares”), and Buyer agrees to purchase and accept from Holshyrna, the
Oceanic Shares.

    

    2.3           The Closing. The
Closing shall take place on the date of execution of this Agreement, or at such
other date as may be agreed upon by the Parties hereto (the “Closing
Date”).

    

    2.4           Purchase Price
Consideration.  The total amount of consideration to be paid by
the Buyer to the Company in the aggregate for the Company Shares and to
Holshyrna for the Oceanic Shares shall be an amount of Eight Million Dollars
($8,000,000), which shall be credited or payable as follows:

    

    
      	
               
      

            	
              (a)

            	
              The
      Buyer and certain affiliated parties (the “Advancing Parties”) have
      previously advanced an aggregate of Five Million Three Hundred Thousand
      Dollars ($5,300,000) (the “Advanced Funds”) to the
      Company.  On the Closing Date, the Buyer will wire to the
      Company an amount of Three Hundred Seventy Thousand Dollars ($370,000) as
      a “Capital Contribution” and the Buyer will cause the Advancing Parties to
      convert the Advanced Funds into a “Capital Contribution” in payment
      partial payment of the Company
Shares;

            

    

    

    
      	
               
      

            	
              (b)

            	
              On
      the Closing Date the Buyer will pay Three Hundred Thirty Thousand
      ($330,000) to Holshyrna by wire transfer in payment of the Oceanic Shares;
      and

            

    

    

    
      	
               
      

            	
              (c)

            	
              On
      July 31, 2010, the Buyer will pay Two Million Dollars ($2,000,000) by wire
      transfer as a “Capital Contribution” to complete the payment of the
      Company Shares.

            

    

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES OF THE SELLING PARTIES

     

    The
Selling Parties, jointly and severally, make the following representations and
warranties to the Buyer all of which will be true and correct as of the Closing
Date.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    3.1 Power

     

    (a) Each
Selling Party possesses all requisite capacity under applicable law in order to
execute, deliver and perform fully the terms of this Agreement and the other
documents and instruments to be executed and delivered by or on behalf of the
Selling Party pursuant to this Agreement and to carry out the transactions
contemplated hereby and thereby and to perform his or its obligations hereunder
and thereunder.

     

    (b)
Neither the execution and delivery by any Selling Party of this Agreement and
the other agreements, documents and instruments contemplated hereby, nor the
consummation by any Selling Party of the transactions contemplated hereby and
thereby in accordance with the terms hereof and thereof, and compliance by any
Selling Party with any of the provisions hereof or thereof, do not and will not
(i) violate, or conflict with, or result in a breach of any provision of,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or give rise to a right of termination,
cancellation or acceleration of or loss of any material benefit under any of the
terms, conditions or provisions of any Contract to which any Selling Party is a
party, or by which such Selling Party or any of its properties is bound, except,
in each case, as would not have a Material Adverse Effect on the ability of such
Selling Party to perform its obligations under this Agreement, or result in the
creation of any Encumbrance in or upon any of the Purchased Shares.

     

    3.2 Issuance of Company
Shares. The Company Shares are duly authorized and, when issued and
paid for in accordance with the provisions hereof, will be duly and validly
issued, fully paid and nonassessable, free and clear of all liens imposed by the
Company.

     

    3.3 Ownership of Shares. Corposa,
Marpesca and Holshyrna own of record that number of the shares of Common Stock
set forth on Section 3.3 of the Disclosure Schedule as being owned by
Corposa, Marpesca and Holshyrna. Each Selling Party has full power, right and
authority to transfer to Buyer the shares subject to the Ancillary Purchase
Agreement.  Except for this Agreement, there are no other options,
warrants, equity securities, calls, rights, commitments or agreements of any
character to which either Shareholder is a party or by which either Shareholder
is bound obligating it to issue, exchange, transfer, deliver or sell, or cause
to be issued, exchanged, transferred, delivered or sold, additional shares of
capital stock or other equity interests of the Company or its Subsidiary. There
are no irrevocable proxies, voting trusts and no agreements or understandings to
which either Shareholder is a party with respect to the voting of any of the
Return Shares or which restrict the transfer of any such shares or
securities.

     

    3.4 Litigation. 
Except as set forth on Section 3.4 of the Disclosure Schedule, no Selling Party
is involved or a party (either as plaintiff or defendant) in any litigation,
suit, legal action, arbitration, or other legal or administrative proceeding or
investigation before any Governmental Authority pending nor, (a) is any
litigation, suit, legal action, arbitration, or other legal or administrative
proceeding or investigation before any Governmental Authority pending or
(b) to the Selling Parties’ Knowledge, has any litigation, suit, legal
action, arbitration, or other legal or administrative proceeding or
investigation before any Governmental Authority been threatened in writing
against any Selling Party which (i) affects the Company or Oceanic, any of
their Subsidiaries or their respective businesses, properties or assets,
(ii) questions the validity of this Agreement or any other documents or
instruments to be executed and delivered by any Selling Party pursuant hereto,
or the right of any Selling Party to enter into this Agreement or any such other
documents or instruments, or to consummate the transactions contemplated hereby
or thereby, or (iii) if adversely determined, would be likely to have a
Material Adverse Effect on the ability of any Selling Party to perform their
respective obligations under this Agreement or any such other documents or
instruments.  To the Selling Parties’ Knowledge, there is no fact or facts
existing which would be reasonably expected to result in, nor is there any basis
for, any such action, suit, arbitration, or other proceeding or
investigation.  No Selling Party is a party to or subject to any
order, writ, injunction, decree, judgment or other restriction of any
Governmental Authority which would be reasonably likely to prevent or materially
delay any Selling Party ability to enter into this Agreement or any other
documents or instruments to be executed and delivered pursuant hereto or
consummate the transactions contemplated hereby or thereby.

     

    3.5 Enforceability. This
Agreement constitutes, and when executed and delivered, the other documents and
instruments required to be executed and delivered by the Selling Parties
pursuant hereto will constitute, the valid and binding agreements of the Selling
Parties enforceable against any Selling Party in accordance with their
respective terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other Laws affecting creditors’ rights generally, and by
general equitable principles.

     

    3.6 No Violation. The
execution, delivery and performance of this Agreement by the Selling Parties and
all of the documents required hereby by the Selling Parties do not violate or
conflict with any contract or agreement binding on any Selling Party, or to the
Selling Parties’ Knowledge, any Law.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    3.7 No Acquisitions.
Except for this Agreement, none of the Selling Parties are party to or bound by
any Contract with respect to a purchase, sale or share exchange regarding the
Purchased Shares.

     

    3.8 Brokerage. No
Selling Party has employed any other broker or finder or incurred any liability
for any brokerage fees, commissions or finders’ fees in connection with the
transactions contemplated by this Agreement.

     

    3.9 Third Party Consents.
No material approval, authorization, notice, consent or other action by or
filing with any Person is required for any Selling Parties’ execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby.

     

    3.10 Organizational
Matters.

     

    (a) Each
of the Company and Oceanic and each of their respective Subsidiaries are
companies validly existing and in good standing (or its equivalent) under the
Laws of its jurisdiction of incorporation as set forth on Section 3.10 of
the Disclosure Schedule. The Company and each Subsidiary are qualified to
conduct business as a foreign corporation, and each is in good standing (or its
equivalent), in each jurisdiction where the character of the properties owned or
leased by it, or the nature of its respective business, makes such qualification
necessary except where the failure to do so would not have a Material Adverse
Effect.

     

    (b) Each
of the Company and Oceanic and each of their respective Subsidiaries has all
requisite corporate power and authority to own, operate and lease its properties
and to carry on the business conducted by it as and where such is now being
conducted.

     

    (c) True
and complete copies of the Articles of Incorporation and Bylaws of the Company,
Oceanic and their respective Subsidiaries have been made available to the Buyer.
 The minute books of the Company contain complete and accurate records of
all material corporate action taken by the Board of Directors and stockholders
of the Company.

     

    (d) The
officers and directors of the Company, Oceanic and each Subsidiary are set forth
in Section 3.10 of the Disclosure Schedule.

     

    (e) Except
as set forth in section 3.10 of the Disclosure Schedule there have not been any
liabilities, assets or obligations incurred or acquired (as applicable) by these
entities other than as reflected on the Financial Statements or a part of
ordinary course of business.

     

    3.11
Capitalization.

     

    (a) The
authorized capital stock of the Company and of Oceanic is set forth on Section
3.11 of the Disclosure Schedule.  The purchased Shares represent 33% of the
issued and outstanding shares of the capital stock of the Company and of
Oceanic, respectively.  Except of set forth on section 3.12 of the
disclosure schedules, all of the issued and outstanding capital stock of each
Subsidiary is owned by the Company.  All of the outstanding shares of the
capital stock of the Company, Oceanic and each of their respective Subsidiaries
have been duly authorized and validly issued, and are fully paid and
nonassessable.  No shares of capital stock of, or other ownership interest
in, the Company, Oceanic or their respective Subsidiaries are reserved for
issuance and, except for this Agreement, there are no outstanding options,
warrants, rights, subscriptions, claims of any character, agreements or
understandings relating to the capital stock of the Company, Oceanic and/or its
Subsidiary pursuant to which the Company, Oceanic and/or any of their respective
Subsidiaries is or may become obligated to issue or exchange any shares of its
capital stock.

     

     (b) There
are no outstanding contractual obligations of the Company or Oceanic to
repurchase, redeem or otherwise acquire any shares of capital stock, other
equity interests or any other securities of the Company or Oceanic.

     

    (c) The
stock register of each of the Company and Oceanic accurately records:
(i) the name and address of each Person owning shares of stock of the
Company and Oceanic and (ii) the certificate number of each certificate
evidencing shares of capital stock issued by Company, the number of shares
evidenced by each such certificate, the class of such shares, the date of
issuance thereof and, in the case of cancellation, the date of
cancellation.

    
      
         

      

      
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    (d) Upon
consummation of the transactions contemplated by this Agreement and the issuance
of the Company Stock in the name of Buyer, and the transfer of the Oceanic Stock
to Buyer, respectively, Buyer will own the Purchased Shares free and clear of
all Encumbrances.

     

    3.12 Subsidiary. The
Company’s and Oceanic’s Subsidiaries are listed in Section 3.12 of the
Disclosure Schedule and includes the name of the Subsidiary and type of
entity.  Except as set forth on Section 3.12 of the Disclosure
Schedule, the Company owns directly or indirectly all of the outstanding shares
of capital stock or other equity interests of each of the
Subsidiaries.  Neither the Company nor any Subsidiary owns, directly
or indirectly, of record or beneficially, any capital stock, equity, or other
ownership interest in any other Person or any right (contingent or otherwise) to
acquire the same.  Neither the Company nor any Subsidiary is a member of
(nor is any part of the Business conducted through) any partnership nor is the
Company nor any Subsidiary a participant in any joint venture or similar
arrangement.

     

    3.13
No
Violation.  Except as set forth in section 3.13 of the Disclosure
Schedule, the execution and delivery of this Agreement by any of the Selling
Parties and the consummation by them of the transactions contemplated hereby
will not cause a material breach, violation of or default under any provision of
(a) the Articles of Incorporation or Bylaws of the Company and/or any
Subsidiary; (b) any Material Contract to which the Company and/or any
Subsidiary is a party or by which the Company and/or any Subsidiary is bound; or
(c) any Law.

     

    3.14
No Conflicts; Third
Party Consents. Except as set forth in section 3.14 of the
Disclosure Schedule The execution and delivery by the Selling Parties of this
Agreement and the documents and instruments to be executed and delivered
pursuant hereto by the Selling Parties, and the consummation by the Selling
Parties of the transactions contemplated hereby in accordance with the terms
hereof and thereof, do not and will not (a) violate, conflict with or
result in a default (with or without the giving of notice, lapse of time or
both) under, or give rise to a right of termination, cancellation or
acceleration of or loss of any material benefit under, or result in the creation
of any Encumbrance (except for Permitted Encumbrances) in or upon any of the
properties or assets of the Company and/or any of its Subsidiaries under (i) any
Material Contract, permit, license, or authorization to which the Company and/or
any Subsidiary is a party or by which the Company’s or any Subsidiary’s assets
are bound, (ii) any provision of the Company’s Articles of Incorporation or
Bylaws; (b) violate or result in a violation of, or constitute a default
(whether after the giving of notice, lapse of time or both) under, any
applicable Law (c) require from the Company and/or its Subsidiary any notice to,
declaration or filing with, or consent or approval of any Governmental Authority
or other third party.

     

    3.15 Financial Statements;
Absence of Undisclosed Liabilities; Indebtedness.

     

    (a) Section
3.15 of the Disclosure Schedule contains complete and accurate copies of
the Financial Statements and the Interim Financials.  All of the
Financial Statements (i) have been prepared in accordance with the books
and records regularly maintained by the Company and its Subsidiaries;
(ii) fairly present in all material respects the assets, liabilities,
financial condition and results of operation of the Company and its
Subsidiaries; and (iii) were prepared in accordance with GAAP and,
consistently applied throughout the periods involved and fairly present the
financial position of the Company and the Subsidiaries as of the dates indicated
and the results of the Company’s and its Subsidiaries’ operations and cash flows
for the periods then ended.  Except for those listed on
Section 3.15 of the Disclosure Schedule, the Company has no outstanding
Indebtedness to the Selling Parties, and no Selling Party has any outstanding
Indebtedness to the Company, Oceanic or their respective
Subsidiaries.

     

              (b) The
books of account and other financial records of the Company and its
Subsidiaries: (i) reflect all items of income and expense and all assets and
liabilities required to be reflected therein in accordance with GAAP
consistently applied, and (ii) are complete and correct, and do not contain
or reflect any inaccuracies or discrepancies.

     

    (c)
Section 3.15 of the Disclosure Schedule sets forth a true, complete and
correct list of all Indebtedness owed by the Company or the Subsidiary to any
Person, which Indebtedness as of March 31, 2010 did not exceed $4,000,000
Dollars in interest bearing debt and $1,000,000 Dollars in non-interest bearing
debt.

     

    (d) Buyer
has conducted a due diligence of the Company and the Shareholders and Company
have provided to Buyer all information and documents to conduct such due
diligence.

     

    3.16 Tax
Matters.  Except as set forth on Section 3.16 of the
Disclosure Schedule:

    
      
         

      

      
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    (i) For
all periods open under the applicable statute of limitations, the Company,
Oceanic and each of their respective Subsidiaries have filed all Tax Returns
which are required to be filed by them and all such Tax Returns have been
prepared in compliance with all applicable Laws and are true, complete and
accurate in all respects;

     

    (ii) All
Taxes imposed for all periods open under the applicable statute of limitations
upon the Company, Oceanic and their respective Subsidiaries or upon any of their
assets, income or franchises, whether or not reflected in their respective Tax
Returns have been paid or withheld (or are being contested in good faith) or, if
not yet due and payable, the Company, Oceanic and each of their respective
Subsidiaries have made provisions for such Tax liability;

     

    (iii) There
are no outstanding Tax deficiencies, assessments, liens, or adjustments with
respect to the Company, Oceanic and their respective Subsidiaries, and no
consent has been given with respect to the Company, Oceanic and their respective
Subsidiaries to extend the time in which any Tax may be assessed or collected by
any taxing authority; and

     

    (iv) There
are no ongoing Tax audits by any taxing authority against the Company, Oceanic
and their respective Subsidiaries and no written claim or inquiry has been
received by the Company and/or its Subsidiaries from a taxing authority in a
jurisdiction where the Company, oceanic and their respective Subsidiaries do not
pay Taxes or file Tax returns to the effect that it is or may be subject to
Taxes assessed by such jurisdiction.

     

    (v)  The
Company has received a favorable opinion from outside tax counsel and advisors
in connection to the Tax audits and legal proceedings, which are included in
Section 3.16 of the Disclosure Schedule. A copy of the original legal opinion as
well as an English translation thereof are included in Section 3.16 of the
Disclosure Schedule.

     

    3.17
Absence of Certain
Changes

     

    (a)  Other
than pursuant to this Agreement or as described on Section 3.17 of the
Disclosure Schedule, since March 31, 2010 until the date hereof, the (a) Company
and each Subsidiary has operated only in the ordinary course of business
consistent with past practices and there has been no material change in the
condition, assets, or business of the Company and/or any Subsidiary, and,
(b) without limiting the generality of the foregoing, the Company and its
Subsidiary have not:

     

    (i) suffered
any theft, damage, destruction or casualty loss to any material asset or any
material portion of its assets (whether or not covered by insurance), or any
substantial destruction of its books and records, which has had a Material
Adverse Effect;

     

    (ii) incurred
any obligation or liability (except liabilities or obligations incurred in the
ordinary course of business consistent with past practices or reflected on
Schedule 3.17);

     

    (iii) discharged
or satisfied any Encumbrance, or paid any obligation or liability;

     

    (iv) mortgaged,
pledged, or subjected to Encumbrances (except for Permitted Encumbrances) any of
the Company’s or any Subsidiary’s properties or assets;

     

    (v) sold,
leased, assigned, transferred, licensed or otherwise disposed of any of the
Company’s or any Subsidiary’s properties or assets other than in the ordinary
course of business consistent with past practices as further set forth on
Schedule 3.17 of the Disclosure Schedule;

     

    (vi) waived
any right of material value;

     

    (vii) made
or granted any bonus or any wage, salary or compensation increase other than in
the ordinary course of business to any employee or independent contractor,
except as provided by any Contract, the terms of which have been disclosed in
Section 3.17 of the Disclosure Schedule, or made any bonus, percentage of
compensation or other like benefit accruing to or for the credit of any such
directors, officers, employees, consultants or agents of the Company and/or any
Subsidiary;

    
      
         

      

      
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    (viii) terminated
or received any notice of termination of any Material Contract, or any lease,
trademark, patent, patent application, copyright or trade name
protection;

     

    (ix) suffered
any taking or seizure of all or any part of the Company’s or any Subsidiary’s
properties or assets by condemnation or eminent domain;

     

    (x) experienced
any material change in its relations with its vendors, suppliers, lenders,
dealers, distributors, customers, employees, consultants or agents;

     

    (xi) acquired
any capital stock or other securities of any Person, or otherwise made any loan
or advance to or investment in any Person;

     

    (xii) made
any capital expenditures or capital additions exceeding $100,000 singly or in
the aggregate;

     

    (xiii) Except
as set forth on Section 3.17 of the Disclosure Schedule, instituted,
settled or agreed to settle any litigation, action or proceeding before any
Governmental Authority affecting the Company’s or any Subsidiary’s financial
condition, the Company’s or any Subsidiary’s property or the respective business
operations of the Company and/or any Subsidiary (as applicable) involving a
claim in excess of $100,000;

     

    (xiv) made
any purchase commitment in excess of normal, ordinary and usual requirements, or
made any material change in its selling, pricing, or personnel practices other
than in the ordinary course of business consistent with past
practices;

     

    (xv) made
any change in accounting principles or methods, or in the manner of keeping
books, accounts and records of the Company which is, or may be, inconsistent
with the principles or methodology by which the Financial Statements have been
prepared;

     

    (xvi) entered
into any Contract, except in the ordinary course of business consistent with
past practices;

     

    (xvii)
Except as set forth on Section 3.17 of the Disclosure Schedule, changed the
authorized capital stock of the Company, redeemed any capital stock of the
Company, issued, sold or otherwise disposed of any capital stock of the Company
or any option to acquire capital stock of the Company, or any securities
convertible into or exchangeable for capital stock of the Company, increased its
Indebtedness, or made any declaration or payment of any dividend or any other
distribution (whether in cash, stock or property) in respect of its capital
stock;

     

    (xvii) except
in the ordinary course of business such as Value Added Tax claims and filings,
made any election with respect to Tax, filed any amended Tax Return, enter into
any closing agreement, settled any Tax claim or assessment relating to the
Company, surrendered any right to claim a refund of Taxes, consented to any
extension or waiver of the limitation period applicable to any Tax claim or
assessment relating to the Company and/or any Subsidiary, or taken any other
similar action relating to the filing of any Tax Return or the payment of any
Tax, if such election, adoption, change, amendment, agreement, settlement,
surrender, consent or other action would have the effect of increasing the Tax
liability of the Company for any period ending after the Closing Date or
decreasing any Tax attribute of the Company existing on the Closing Date;
or

     

    (xviii) entered
into any Contract or made any commitment to do any of the foregoing
things.

     

    3.18 Assets.

     

    (a) Each
of the Company, Oceanic and their respective Subsidiaries have good and
marketable title to all of its assets, rights and properties free and clear of
all Liens except (i) those listed on Section 3.18 of the Disclosure
Schedule; (ii) Liens for taxes, charges or assessments not yet due or which
are being contested in good faith by appropriate proceedings;
(iii) statutory and contractual Liens granted to any landlord, lessor,
licensor, materialman, mechanic, carrier, or repairer and similar Liens granted
in the ordinary course of business; (iv) Liens reflected in the Financial
Statements; (v) zoning, entitlement, building and other land use and
similar Laws and any agreements entered into with respect to the same;
(vi) easements, covenants, rights of way, conditions, restrictions and
other similar matters of record; and (vii) other defects in title, if any,
that do not materially affect the operations of the Business.

    
      
         

      

      
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    (b) Section 3.18
of the Disclosure Schedule contains a complete and accurate list of all the Real
Property.  Except as listed on Section 3.18 of the Disclosure
Schedule, neither the Company nor any Subsidiary has received, in the last two
years, any written notice of any (i) order requiring repair, alteration, or
correction of any existing condition affecting any Real Property or the systems
or improvements thereat, or (ii) structural, mechanical, or other defects
of material significance affecting any Real Property or the systems or
improvements thereat. Neither the whole nor any portion of the Real Property has
been condemned, requisitioned or otherwise taken by any public authority, no
written notice of such condemnation, requisition or taking has been served upon
the Company or any Subsidiary in the past two years and, to the Selling Parties’
Knowledge, no such condemnation, requisition or taking is threatened or
contemplated. All water, sewer, gas, electric and telephone utilities are
available to the Real Property in a manner that adequately serves the Business
as currently conducted.

     

    (c) Section 3.18
of the Disclosure Schedule sets forth a list of all real property leased by the
Company and Oceanic (the “Leased Real
Property”). All leases relating to Leased Real Property are identified on
Section 3.18 of the Disclosure Schedule (each a “Lease” and
collectively, the “Leases”)
by the premises covered thereby, the date of lease and all amendments and
supplements thereto, the name of the landlord thereunder, and the term of the
lease, including the expiration date thereof.  The Leased Real
Property and improvements thereon may lawfully be used in connection with the
Business.  The Leased Real Property and improvements are in compliance
with all applicable laws, rules, regulations and ordinances of all Governmental
Authorities including, but not limited to, zoning, building, health, safety and
environmental laws; and neither the Company or Oceanic nor any Subsidiary has
received any notices of violations with respect thereto. With respect to each
Lease listed on Section 3.18 of the Disclosure Schedule, except as provided
for to the contrary on Section 3.18 of the Disclosure
Schedule:

     

    (i) the
Company and Oceanic each has a valid and enforceable leasehold interest in each
Leased Real Property free and clear of any Encumbrances other than Permitted
Encumbrances;

     

    (ii) each
of said Leases has been duly authorized and executed by the Company or Oceanic,
as the case may be, is in full force and effect and has not been modified or
amended except as identified on Section 3.18 of the Disclosure
Schedule;

     

    (iii) each
of said Leases affords the Company and Oceanic, as the case may be, peaceful and
undisturbed possession of the Leased Real Property covered thereby;
and

     

    (iv) neither
the Company or Oceanic nor any Subsidiary is in breach or default under any of
said Leases, and no event of default or event, occurrence, condition or act
(including the transactions contemplated by this Agreement) on the part of the
Company or Oceanic, or, to the Company or to the Selling Parties’
Knowledge on the part of the lessor thereunder, has occurred which, with or
without notice or lapse of time or the happening of any further event or
condition, would constitute such a breach or default or permit termination,
modification or acceleration under said Lease or render the lessee liable to
incur any expenditure under such Lease.

     

    (d) Except
as set forth in Section 3.18 of the Disclosure Schedule, all of the
tangible personal property owned by the Company or Oceanic is in possession of
the Company or Oceanic, as the case may be, except goods in transit sold in the
ordinary course of business.

     

    3.19 Bank Accounts.
Section 3.19 of the Disclosure Schedule sets forth the names and locations
of all banks, trust companies, savings and loan associations and other financial
institutions at which the Company, Oceanic and each Subsidiary maintains a safe
deposit box, lock box or checking, savings, custodial or other account of any
nature, and the type and authorized signatories of each such
account.

     

    3.20
[reserved]

     

    3.21 Compliance With
Laws.

     

    (a) Laws. The Company,
Oceanic and each of their respective Subsidiaries are in compliance with all
applicable Laws except where non-compliance would not have a Material Adverse
Effect.  Neither the Company or Oceanic nor any Subsidiary has received, in
the past two years, any written notice of violation or alleged violation of, any
Laws, which remains unresolved.

    
      
         

      

      
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    (b) Licenses and Permits.
Section 3.21 of the Disclosure Schedule contains a complete listing of all
material Permits currently held by the Company, Oceanic, and each Subsidiary, as
well as the Permits held by the External Permit Holders. Such Permits constitute
the Permits required for the conduct of the Business as presently conducted,
except where the failure to hold a Permit would not have a Material Adverse
Effect.  All such Permits, including without limitation, the fishing
permits owned by the External Permit Holders, are in full force and effect and
the Company, Oceanic, each Subsidiary and each External Permit Holder are in
material compliance with the Permits held by it. The Company is and at all times
has been, in compliance with all of the terms and requirements of each Permit
identified or required to be identified on such Disclosure
Schedule.  No event has occurred or circumstance exists that may (with
or without notice or lapse of time) (i) constitute or result directly or
indirectly in a violation of or a failure to comply with any term or requirement
of any Permit listed or required to be listed on such Disclosure Schedule, or
(ii) result directly or indirectly in the revocation, withdrawal,
suspension, cancellation, or termination of, or any modification to, any Permit
listed or required to be listed on such Disclosure Schedule.

     

    3.22 Material
Contracts

     

    (a) Except
as set forth on Section 3.22 of the Disclosure Schedule, or part of day to
day Business of the Company, neither the Company or Oceanic nor any Subsidiary
is a party to, nor are any of the Company’s, Oceanic’s or any Subsidiary’s
assets bound by, any executory agreements, purchase orders (other than purchase
commitments for raw materials and supplies in the ordinary course of business),
bailment agreements, equipment leases, commitments, contracts, employment
agreements, warranties, guarantees, understandings or other agreement (such
agreements, together with any Leases, collectively the “Material
Contracts”):

     

     (i) which
involve or may involve a payment, or delivery of assets or services, in excess
of $50,000.00 Dollars per year;

     

    (ii) which
are of a duration in excess of twelve (12) months from the date of
execution thereof;

     

    (iii) to
which any direct or indirect stockholder, officer, director or employee of the
Company and/or its Subsidiary or any member of such Person’s immediate family,
or any business entity in which such Person is a partner, investor, officer or
director is a party in any capacity;

     

    (iv) with
another Person materially limiting or restricting the ability of the Company
and/or any Subsidiary to enter into or engage in any market or line of
business;

     

    (v) which
relate to the incurrence, assumption, surety or guarantee of any
Indebtedness;

     

    (vi) which
relates to the sale of any of the assets of the Company and/or any Subsidiary
other than in the ordinary course of business consistent with past practices or
for the grant to any person of any preferential rights to purchase any of its
assets; or

     

    (vii) which
creates or evidence an Encumbrance upon any of the Company’s or any Subsidiary’s
assets or properties.

     

    (b) True,
correct and complete copies of each of the Material Contracts (including all
amendments thereto) have been delivered, or made available to Buyer.  Each
of the Contracts set forth on Section 3.22 of the Disclosure Schedule is in
full force and effect, is the legal, valid and binding obligation of the
Company, Oceanic and/or any Subsidiary, enforceable against them in accordance
with its terms, except as such enforceability may be limited by general
enforceability exceptions, is between the Company and the counterparty named on
Section 3.22 of the Disclosure Schedule, has not been amended or modified
except as set forth on Section 3.22 of the Disclosure Schedule, and
constitutes the entire agreement between the parties thereto with respect to the
subject matter thereof.  Neither the Company or Oceanic nor any Subsidiary
is and no other party to any of the Material Contracts is in default thereunder,
nor is there any fact or circumstance with respect to any of the Material
Contracts which upon notice or lapse of time could give rise to a default
thereunder.

     

    3.23 Employee
Matters.

     

    (a) Except
as otherwise would not be reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect, the Company, Oceanic and each Subsidiary
are in compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and
hours.

    
      
         

      

      
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    (b) Except
as set forth on Section 3.4 of the Disclosure Schedule, there is no labor
dispute, strike, work stoppage, slow-down or lockout, or, to the Selling
Parties’ Knowledge, any threat thereof, by or with respect to any employee of
the Company, Oceanic or any Subsidiary.

     

     (d) Section 3.23
of the Disclosure Schedule is a true and complete list of the names, positions
and current salary rates of all present directors, officers and employees of the
Company, Oceanic and each Subsidiary.  To the Selling Parties’
Knowledge, no officer or “Key
Employee” (which means, as used herein, any employee whose current annual
compensation is $40,000.00 Dollars (or equivalent thereof) or more), of the
Company and/or any Subsidiary intends to terminate his or her employment with
the Company and/or any Subsidiary, nor does the Company and/or any Subsidiary
have any present intention to terminate the employment of any officer or such
Key Employee.

     

    3.24 Employee Benefit
Plans.

     

    (a) Except
as set forth in Section 3.24 of the Disclosure Schedule, neither the
Company nor Oceanic sponsors, maintains or contributes to or have any obligation
to sponsor, maintain or contribute to, or have any direct or indirect liability,
whether contingent or otherwise, with respect to any employee benefit plan
(collectively, the “Employee Benefit
Plan”).

     

    (b) The
Company and Oceanic have made available to Buyer with respect to each Employee
Benefit Plan, a true, correct and complete copy (or, to the extent no such copy
exists or the Employee Benefit Plan is not in writing, an accurate written
description) thereof.

     

    (c) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (either alone or in combination with
another event) result in any payment becoming due, or increase the amount of any
compensation due, to any current or former officer, director, employee, leased
employee, consultant or agent (or their respective beneficiaries) of the
Company.

     

    3.25 Environmental
Matters. Except as set forth in Section 3.25 of the Disclosure
Schedule:

     

    (a) The
Company, Oceanic and each Subsidiary have materially complied and are each in
material compliance with all applicable Environmental Laws except for any such
noncompliance that would not result in a Material Adverse Effect if
remediated.

     

    (b) Except
as set forth in Section 3.25 of the Disclosure Schedule, neither the
Company, Oceanic nor any Subsidiary has received any written claim, complaint,
citation, report or other written notice regarding any actual or alleged
liabilities or potential liabilities (including any investigatory, remedial or
corrective liabilities) or violations, relating to them or its facilities from
any governmental entity or other Person arising under applicable Environmental
Laws that are, as of the Closing Date, unresolved.

     

    (c) The
Company, Oceanic and each Subsidiary have obtained, complied with, and is in
compliance with all Permits that are required pursuant to Environmental Laws for
the occupation of its facilities and the operation of the Business except where
the failure to comply would not result in a Material Adverse Effect. A list of
all such Permits is set forth in Section 3.25 of the Disclosure
Schedule.  Such Permits are in full force and effect.

     

    (d) Except
as set forth in Section 3.25 of the Disclosure Schedule, neither the
Company, Oceanic nor any Subsidiary treated, recycled, stored, disposed of,
arranged for or permitted the disposal of, transported, handled or released any
substance, including any Hazardous Substance, or owned or operated any facility
or property (and no such property or facility is contaminated by any such
substance), in a manner that has given or could reasonably be expected to give
rise to any damages, including any damages for response costs, corrective action
costs, personal injury, property damage or natural resources damages, pursuant
to Environmental Laws.

     

    (f) To
the extent they exist in the Company’s files, true and complete copies of all
reports, studies, assessments, audits, and similar documents in the possession
or control of the Company or Shareholder that address any issues of actual or
potential noncompliance in any material respect with, or actual or potential
material liability under, any Environmental Laws that may affect the Company
have been provided to Buyer.

    
      
         

      

      
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    (g) Neither
the Company, Oceanic nor any Subsidiary has expressly assumed or undertaken any
liability, including any obligation for corrective or remedial action, of any
other Person relating to environmental matters.

     

    3.26 Proprietary
Rights.

     

    (a) Section 3.26
of the Disclosure Schedule contains a complete and accurate list of all (i)
Patents, Marks and Copyrights used or held for use by the Company, Oceanic and
each of its Subsidiaries for use in connection with the Business and
(ii) licenses, sublicenses or other agreements under which the Company
and/or any Subsidiary is granted rights by others in any Intellectual Property
Assets and licenses, sublicenses or other agreements under which the Company
and/or any Subsidiary has granted rights to others in any Company Intellectual
Property Assets.

     

    (b) Except
as set forth in Section 3.26 of the Disclosure Schedule:

     

    (i) the
Company, Oceanic and/or each Subsidiary, as applicable, owns or possesses
adequate and enforceable rights to use, without payment to a third party, all of
the Company Intellectual Property Assets necessary for the operation of the
Business, free and clear of all Encumbrances granted by the Company or such
Subsidiary of the Company;

     

    (ii) all
Patents, Marks and Copyrights owned by the Company, Oceanic and/or its
Subsidiary which are issued by, or registered or the subject of an application
filed with the relevant Government Authority anywhere in the world have been
duly maintained (including the payment of maintenance fees) and are not expired,
cancelled or abandoned, except for such issuances, registrations or applications
that the Company, Oceanic and/or any Subsidiary has permitted to expire or allow
to be cancelled or abandoned in its reasonable business judgment;

     

    (iii) there
are no pending, or, to the Selling Parties’ Knowledge, threatened claims against
the Company, Oceanic and/or any Subsidiary alleging that the Company, Oceanic,
any Subsidiary or the operation of the Business has infringed upon,
misappropriated, or otherwise violated the Intellectual Property Assets of any
other Person (“Third Party
Rights ”);

     

    (iv) the
Company, Oceanic or any Subsidiary have not and the operation of the
Business does not infringe any Third Party Right; and

     

    (v) there
is no infringement by a third party of any of the Company’s Intellectual
Property Assets.

     

    3.27 Brokerage. Neither
the Company, nor Oceanic nor any Subsidiary nor any officers, directors or
employees of the Company, Oceanic and/or any Subsidiary has employed any broker
or finder or incurred any liability for any brokerage fees, commissions or
finders’ fees in connection with the transactions contemplated by this
Agreement.

     

    3.28 Inventories. The
inventories of the Company and its Subsidiary consists of Bluefin tuna, sardines
for fish feed and other materials.  According to the Company’s books
at March 31, 2010, the Company’s inventory of Bluefin tuna consisted of 964
metric tons.  The valuation at which the inventories of the Company
are carried reflects the normal inventory valuation policy of the Company
(applied in accordance with GAAP) which states inventory at the lower of cost or
net realizable value. Buyer has hired independent divers to determine the
estimated inventory of fish.  Section 3.28 of the Disclosure Schedule
includes a copy of the statement signed by the Company and Buyer concluding that
the inventory is within acceptable discrepancy limits.

     

    3.29 Insurance.
Section 3.29 of the Disclosure Schedule sets forth a list of the material
insurance policies held by, or for the benefit of, the Company, Oceanic and/or
its Subsidiaries as of the date of this Agreement, identifying the type of
coverage, the coverage limit, the term thereof, and the annual premiums payable
thereon.  Buyer has been furnished with copies of such policies and Buyer
may determine if such policies are adequate to insure the risks covered
thereby.  Except as set forth in Section 3.29 of the Disclosure
Schedule, neither the Company nor any Subsidiary is in default in any material
respect under any such policy.

     

    3.30
Machinery and
Equipment. Selling Parties warranty that all assets are in working
condition, except for normal wear and tear from ordinary course of business. Set
forth in section 3.30 of the Disclosure Schedule is a list of all major
assets.

    
      
         

      

      
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    3.31 Accounts Receivable.
Except as listed on Section 3.31 of the Disclosure Schedule, the accounts
receivable of the Company, Oceanic and its Subsidiaries result from and will
result from bona fide sales made by the Company and/or its Subsidiaries in the
ordinary course of business consistent with past practices and have been
collected in the ordinary course after provision for doubtful accounts and other
reserves required by GAAP.  The amounts due, or to become due, in respect
of such accounts receivable are not in dispute and there are no, and will not
be, any setoffs or counterclaims asserted against any of the accounts receivable
of the Company and/or its Subsidiaries.  The accounts receivable of
the Company and its Subsidiaries are or will be good and will be collectible,
without resort to litigation or extraordinary collection activity, within
120 days after the Closing.

     

    3.32 Certain
Interests.

     

    (a) None
of the Directors or the spouse of a Principal or any relative of a Principal who
resides with, or is a dependent of, such Principal:

     

    (i) has
any direct or indirect financial interest in any competitor, supplier or
customer of the Company and/or any Subsidiary or the Business;

     

    (ii) owns,
directly or indirectly, in whole or in part, or has any other interest in, any
tangible or intangible property that the Company and/or any Subsidiary uses or
has used in the conduct of the Business or otherwise; or

     

    (iii) has
outstanding any Indebtedness to the Company or any Subsidiary.

     

    (b) Except
as set forth in Section 3.15 of the Disclosure Schedule, none of Selling
Parties has any liability of any nature whatsoever to any officer, director or
shareholder of the Company and/or any Subsidiary or to any relative or spouse
who resides with, or is a dependent of, any such officer, director or
shareholder.

     

    3.33 Business Conduct. The
Company has not, directly or indirectly, paid or delivered any fees, commissions
or other sums of money or items of property however characterized to any
finders, agents, customers, government officials or other parties in any
country, which in any manner are related to the Business, or engaged in any
practice or activity for business purposes or otherwise, which has been illegal
under any Laws of any country or territory having jurisdiction over the
Company.

     

    3.34 Internal Controls.
The Company and each Subsidiary each maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (a) transactions
are executed in accordance with management’s general or specific authorizations,
(b) transactions are recorded as necessary to permit preparation of
financial statements in conformity with Mexican GAAP and US GAAP and to maintain
asset accountability, (c) access to assets is permitted only in accordance
with management’s general or specific authorization, and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.

     

    3.35 Dividends and capital
reimbursement. All dividends declared by the shareholders of the Company
since its incorporation, whether paid or not, derived from freely distributable
profits and were declared in compliance with the Law, the Bylaws of the Company,
and the Mexican-GAAP, after duly offsetting all losses suffered in past taxable
periods and after duly separating, and reflecting on the books of the
Company.  All capital reimbursements resolved by the shareholders of
the Company since its incorporation, whether paid or not, have been resolved by
validly held shareholders’ meetings in compliance with all the legal
requirements, the Bylaws of the Company, and the Mexican-GAAP.  There
is no capital reimbursement obligation or declaration of dividend to any Person
that remains unpaid.

     

    3.36 Board Meeting. The
Board of the Company have conducted extensive interviews with members of the
Company’s management team to inquire about any material changes in the affairs
of the Company since March 31, 2010.

     

    ARTICLE
IV

    REPRESENTATIONS
AND WARRANTIES OF BUYER

     

    Buyer
represents and warrants to Shareholder as follows:

     

    
    

    4.1 Organization. Buyer
is a corporation duly organized, validly existing and in good standing under the
Laws of the State of Nevada.  Buyer has all requisite corporate and other
power and authority to enter into this Agreement and the other documents and
instruments to be executed and delivered by Buyer and to carry out the
transactions contemplated hereby and thereby.

    
      
         

      

      
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    4.2 No Violation. The
execution and delivery of this Agreement by Buyer and the consummation by Buyer
of the transactions contemplated hereby will not cause a breach or violation of
or default or result, with or without the giving of notice or the lapse of time
or both, in a default or violation of, any provision of (a) the Certificate
of Incorporation or Bylaws of Buyer; (b) any material mortgage, lien,
lease, agreement, license, instrument, judgment or decree to which Buyer or any
of its properties or assets (real, personal or mixed, tangible or intangible)
are bound; or (c) any Law.

     

    4.3 Authority; Validity.
The execution and delivery of this Agreement and the other documents and
instruments to be executed and delivered by Buyer pursuant hereto and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary actions or proceedings of Buyer.  No other
corporate act or proceeding on the part of Buyer is necessary to authorize this
Agreement or the other documents and instruments to be executed and delivered by
Buyer pursuant hereto or the consummation by Buyer of the transactions
contemplated hereby and thereby. This Agreement constitutes, and when executed
and delivered, the other documents and instruments to be executed and delivered
by Buyer pursuant hereto will constitute, valid and binding agreements of Buyer,
enforceable against Buyer in accordance with their respective terms, except as
such may be limited by bankruptcy, insolvency, reorganization or other Laws
affecting creditors’ rights generally, and by general equitable
principles.

     

    4.4 Brokerage. Neither
Buyer nor any of its officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finders’
fees in connection with the transactions contemplated by this
Agreement.

     

    4.5 Third Party Consents.
No approval, authorization, notice, consent or other action by or filing with
any Person is required for Buyer’s execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
hereby.

     

    ARTICLE
V

    COVENANTS

     

    From and
after the date of this Agreement, the Parties shall comply with the following
covenants:

     

    5.1 Board
Matters.  Commencing on the date hereof until the Option
Closing Date (or, if the Option is not exercised, until such time as the Buyer
no longer owns 33% of the stock in the Company), (a) the Board of Directors of
the Company shall consist of three members, one of which shall be elected by the
Buyer no later than the Issuance Date, and (b) without the unanimous consent of
the new Board of Directors, the Company shall not:

     

    (i)
transfer more than 10% of its total fixed assets;

     

    (ii)
enter into any loan, credit or similar agreements, or issue any guarantees
outside of the ordinary course of business;

     

    (iii)
engage in any acquisitions or enter into any joint venture
agreements;

     

    (iv) make
investments in any Person outside the ordinary course of business;

     

    (v) take
action that may make it difficult in any way for any of the parties hereto to
perform their respective obligations under any of the Transaction
Documents;

     

    (vi) take
any action that will cause the dissolution or liquidation of the Company or will
cause it to cease operations;

     

    (vii)
merge with any Person; and

     

    (viii)
pay any dividend, issue any stock, or repay any loans to any Person, except as
specifically permitted herein and listed on Section 5.1 of the Disclosure
Schedule or in Section 3.17 of the Disclosure Schedule.

    
      
         

      

      
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    5.2 Sale of
Inventory.  The parties hereto agree to cooperate with each
other to sell the Company’s inventory of Bluefin Tuna, whether currently
existing or hereafter acquired during the coming fishing season.  At
the option of the Buyer, up to Ten Million Dollars ($10,000,000) of the proceeds
of such sale will (i) be paid in cash to the Shareholders future capital
reimbursements, or (ii) be guaranteed for payment to them on or before September
30, 2010; provided, however, that the Buyer exercises the option granted under
the Option Agreement; and provided, further, that if the option is not
exercised, Corposa and Holshyrna, in their capacity as Shareholders of the
Company, shall take all requisite action to cancel the Resolution and extinguish
any binding and legal effect that it may have.

     

    5.3 Financing.  Corposa
will secure funding of up to $8,000,000 (Eight Million Dollars) from financial
institutions or other financing parties in order to obtain loans or lines of
credit to finance the Company’s operations during the coming fishing season,
including, if required, the issuance of guarantees and if such loans are not
obtained by the Company, Corposa will provide the financing to the Company up to
$8,000,000 (Eight Million Dollars).  Buyer agrees to have Corposa
released from any related guarantees or cause the Company to pay to Corposa such
funding, as the case may be, not later than December 15, 2010. The Company shall
guarantee Corposa with a certificate of fish inventory from seasons 2008 and
2009, or other type of guarantees in terms acceptable to Corposa and
Buyer.

     

    5.4 Powers of
Attorney.  The Shareholders will vote to issue Powers of
Attorney authorizing the individuals designated by Buyer and the Shareholders to
act on behalf of the Company, effectively immediately following the Closing and
no later than August 30th, 2010.

     

    5.5 Authorization and Issuance
of Company Shares.  The Company and each of the Shareholders
covenant to take all requisite action to authorize an increase in the capital of
the Company, including without limitation calling a meeting of the Company’s
shareholders, and to ensure that the Company issue the Company Shares to the
Buyer no later than the Issuance Date. Buyer shall appoint and authorize a
special attorney in fact to appear to the shareholders meeting of the Company
issuing the Company Shares.

     

    5.6 Release. Effective as
of the Closing, each Selling Party releases and forever discharges each Released
Party from any and all claims that such Selling Party now has, have ever had or
may hereafter have against the respective Released Party arising
contemporaneously with or prior to the Closing Date or on account of or arising
out of any matter, cause or event occurring contemporaneously with or prior to
the Closing Date.  The foregoing release includes any rights to
indemnification or reimbursement from the Company, Oceanic and their
Subsidiaries, whether pursuant to its organizational documents, Law, contract or
otherwise and whether or not relating to claims pending on, or asserted after,
the Closing Date.

     

    5.7 Ancillary Purchase
Agreement.  Simultaneously with the exercise by Buyer of the
Option Agreement, Buyer, Marpesca, Corposa, and Holshyrna shall execute the
Ancillary Purchase Agreement.

     

    5.8 Future shareholders
meetings. The Company shall inform Buyer of any shareholder meeting of
the Company to be held between the Closing Date and the Issuance Date and Buyer
shall appoint and authorize a special attorney in fact to appear to any of such
shareholders meetings of the Company, including any shareholder meeting of the
Company authorizing a capital reimbursement.

     

    ARTICLE
VI

    CONDITIONS
PRECEDENT TO BUYER’S OBLIGATIONS

     

    Each and
every obligation of Buyer to be performed on the Closing Date shall be subject
to the satisfaction prior to or at the Closing of each of the following
conditions:

     

    6.1 Representations and
Warranties True on the Closing Date. Each of the representations and
warranties made by the Selling Parties in this Agreement shall be true and
correct in all respects at and as of the time of the Closing.

     

    6.2 Compliance With
Agreement. The Selling Parties shall have in all respects performed and
complied with all of the agreements and obligations under this Agreement which
are to be performed or complied with by them prior to or on the Closing
Date.

    
      
         

      

      
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    6.3 Consents and
Approvals. All approvals, consents and waivers that are listed in
Section 6.3 of the Disclosure Schedules shall have been received, and
executed counterparts thereof shall have been delivered to Buyer at or prior to
the Closing.

     

    6.4 Documents to be Delivered by
Shareholder. 

     

    (a)           At
the Closing, each Shareholder shall have delivered or cause to be delivered to
Buyer the following documents, in each case duly executed or otherwise in proper
form:

     

    (i)
 Option
Agreement. Option Agreement signed by the Company and each
Shareholder.

     

    (ii)  Option Payment
Assignment. Option Payment Assignment signed by Corposa.

     

    (iii)  Oceanic
Shares.  Certificates representing the Oceanic
Shares.

     

    (iv)
 Good Standing
Certificates. A good standing certificate (or its equivalent) for each of
the Company, Oceanic and each of their respective Subsidiaries from the
secretary of state or similar governmental authority of the jurisdiction under
the Laws in which it is organized and each jurisdiction where either the Company
and/or its Subsidiary is qualified to do business.

     

    (v) Other Documents. Such
other documents or instruments as Buyer reasonably requests and are reasonably
necessary to consummate the transactions contemplated by this
Agreement.

     

    (vi)
Performance and
Obligations of the Company. The Company shall have performed or complied
with all agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Closing including, but not limited to,
the Company shall have delivered a certificate of an authorized officer of the
Company, dated as of the Closing Date, certifying as to (i) the incumbency
of officers of the Company executing documents executed and delivered in
connection herewith, (ii) the representations and warranties made herein and
(iii) the copies of the Articles of Incorporation and Bylaws of the Company
and its Subsidiary, each as in effect from the date of this Agreement until the
Closing.

     

    (b)           No
later than the Issuance Date, the Shareholders shall deliver or cause the
delivery to the Buyer of certificates representing the Company
Shares.

     

    6.5 Legal Restraints;
Proceedings. No law, injunction, judgment or ruling, enacted,
promulgated, issued, entered, amended or enforced by any Governmental Authority
shall be in effect enjoining, restraining, preventing or prohibiting the
consummation of the transactions contemplated hereby or the documents or
instruments delivered pursuant hereto or making such transactions
illegal.

     

    ARTICLE
VII

    CONDITIONS
PRECEDENT TO SELLING PARTIES’ OBLIGATIONS

    

    Each and
every obligation of the Shareholders to be performed on the Closing Date shall
be subject to the satisfaction prior to or at the Closing of the following
conditions:

    

    7.1 Representations and
Warranties True on the Closing Date.  Each of the
representations and warranties made by Buyer in this Agreement shall be true and
correct in at and as of the time of the Closing.

    

    7.2 Compliance With
Agreement Buyer shall have performed and complied in all respects with
its obligations under Section 2.3 hereof and shall have performed and
completed with its other agreements and obligations under this Agreement which
are to be performed or complied with by it prior to or on the Closing
Date.

    

    7.3 Absence of Litigation
No action, suit or proceeding shall have been instituted by any Person which
seeks to prohibit, restrict or delay consummation of the transaction
contemplated herein or any of the conditions to the transactions contemplated
herein, or seeks damages as a result of the consummation of the transactions
contemplated herein or speaks to the conduct of the business of the Company
after the Closing Date.

    
      
         

      

      
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    7.4 Consents and
Approvals. All approvals, consents and waivers that are listed in
Section 7.4 of the Disclosure Schedules shall have been received, and
executed counterparts thereof shall have been delivered to Shareholder at or
prior to the Closing.

    

    7.5 Documents to be Delivered by
Buyer.  Buyer shall deliver to Shareholder the following documents,
in each case duly executed or otherwise in proper form:

     

              (a)
Good Standing
Certificate. A good standing certificate (or its equivalent) for Buyer
from the secretary of state or similar governmental authority of the
jurisdiction under the Laws in which it is organized.

     

              (b)
Other
Documents. Such other documents or instruments as Shareholder reasonably
request and are reasonably necessary to consummate the transactions contemplated
by this Agreement.

     

    ARTICLE
VIII

    SURVIVAL;
INDEMNIFICATION

     

    8.1 Survival.  Subject
to the limitations and other provisions of this Agreement, the representations
and warranties of the Selling Parties and the Buyer hereto contained herein
shall survive the Closing and shall remain in full force and effect). Neither
the period of survival nor the liability of the Selling Parties with respect to
the Selling Parties’ representations and warranties shall be reduced by any
investigation made at any time by or on behalf of Buyer.

     

    8.2 Indemnification by Selling
Parties.

     

    (a) Subject
to the other terms and conditions of this Agreement, Selling Parties, jointly
and severally, agree to indemnify Buyer and its Affiliates (including following
the Closing, the Company and its Subsidiary) and their respective officers,
directors, stockholders and each of their respective Affiliates (each a “Buyer Indemnified
Party”) against and hold them harmless to the extent of any Losses
arising out of or resulting from (i) intentional misrepresentation, illegal
conduct or fraud of any of the Selling Parties; and (ii) any breach of any
covenant or agreement of the Selling Parties contained
herein.  Notwithstanding anything herein to the contrary, no
obligation to indemnify shall exist for Losses arising from a breach of any
representation or warranty set forth in Sections 3.16 and 3.28 hereof (except
for fraud or intentional misrepresentations).

     

    (b) The
amount of any Loss subject to indemnification under this Section 8.2 shall
be calculated net of (i) any insurance proceeds actually received by Buyer
Indemnified Party on account of such Loss, and (ii) any indemnification
payments made by any third party.

     

    (c) A
Buyer Indemnified Party shall give any Selling Party written notice of any
claim, assertion, event or proceeding as to which such Buyer Indemnified Party
has determined has given or could give rise to a right of indemnification under
this Agreement, within sixty (60) days of such determination, stating the
amount of the Loss, if known, and method of computation thereof, and containing
a reference to the provisions of this Agreement in respect of which such right
of indemnification is claimed or arises and shall include copies of all
correspondence received from any third party in connection with any such claim;
provided, however, that the failure to provide such notice shall not release the
Indemnifying Parties from any of their obligations under this Article VIII
except to the extent that the Indemnifying Parties are materially prejudiced by
such failure and shall not relieve any Indemnifying Party from any other
obligation or Liability that it may have to any Buyer Indemnified Party
otherwise than under this Article VIII.

    
      
         

      

      
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    (d) With
respect to any Third Party Claim for which indemnification is sought under
Section 8.2, Selling Parties shall have the right to direct, through counsel of
its own choosing, the defense or settlement of any such claim or proceeding at
Selling Parties’ expense, provided that such Selling Parties acknowledge on
behalf of the Indemnifying Parties in writing their obligation to indemnify
Buyer Indemnified Party hereunder against any Losses that may result from such
Third Party Claim. If Selling Parties elect to assume the defense of any such
claim or proceeding, Selling Parties shall consult with Buyer Indemnified Party
for the purpose of allowing Buyer Indemnified Party to participate in such
defense.  In the event Selling Parties assume the defense of a Third
Party Claim, Selling Parties shall not have the right to settle such claim
without the consent of any Buyer Indemnified Party, unless such settlement
(i) includes injunctive or other equitable relief imposed against any Buyer
Indemnified Party, or (ii) contains an admission of wrongdoing or liability
on behalf of any Buyer Indemnified Party or its Affiliates.  Each
Buyer Indemnified Party shall, and shall cause the Company and its Subsidiary
to, reasonably cooperate with Selling Parties and to provide Selling Parties and
their counsel with reasonable access to all records and personnel relating to
any such claim, assertion, event or proceeding during normal business hours and
shall otherwise reasonably cooperate with Selling Parties in the defense or
settlement thereof.  If Selling Parties elect to direct the defense of
any such claim or proceeding, Buyer Indemnified Party shall not pay, or permit
to be paid, any part of any claim or demand arising from such asserted liability
unless Selling Parties consent in writing to such payment, which consent shall
not be unreasonably withheld or delayed.  If Selling Parties fail to
defend or if, after commencing or undertaking any such defense, Selling Parties
fail to prosecute or withdraw from such defense, Buyer Indemnified Party shall
have the right to undertake the defense or settlement thereof. If Buyer
Indemnified Party assumes the defense of any such claim or proceeding and
proposes to settle such claim or proceeding, then Buyer Indemnified Party shall
give Shareholder prompt written notice thereof, and Selling Parties shall have
the right to participate in the settlement of such claim or proceeding and to
consent thereto or assume or reassume the defense of such claim or proceeding.
In all circumstances, Buyer Indemnified Parties shall reasonably cooperate and
in good faith with Shareholder with respect to any claims subject to this
Article VIII.

     

    (f) With
respect to any non-Third Party Claim for indemnification hereunder, if the
parties hereto are unable to negotiate a settlement of such claim, then such
claim shall be resolved in accordance with Article VIII.

     

    8.3 Indemnification by
Buyer.

     

    (a) Subject
to the other terms and conditions of this Agreement, Selling Parties and their
respective officers, directors, stockholders and each of their respective
affiliates (each a “Selling Party
Indemnified Party”) shall be held harmless and indemnified by Buyer to
the extent of any Losses resulting from (i) the breach of any
representation or warranty of Buyer contained herein; or (ii) any breach of
any covenant or agreement of Buyer contained herein.

     

    (b) The
amount of any Loss subject to indemnification under this Section 8.3 shall
be calculated net of (i) any insurance proceeds actually received by the
Shareholder Indemnified Party on account of such Loss and (ii) any
indemnification payments made by any third party.

     

    (c) A
Selling Party Indemnified Party shall give Buyer written notice of any claim,
assertion, event or proceeding as to which such Selling Party Indemnified Party
has determined has given or would give rise to a right of indemnification under
this Agreement, within sixty (60) days of such determination, stating the
amount of the Loss, if known, and method of computation thereof, and containing
a reference to the provisions of this Agreement in respect of which such right
of indemnification is claimed or arises and shall include copies of all
correspondence received from any third party in connection with any such claim;
provided, however, that the failure to provide such notice shall not release the
Indemnifying Parties from any of their obligations under this Article VIII
except to the extent that the Indemnifying Parties are materially prejudiced by
such failure and shall not relieve any Indemnifying Party from any other
obligation or Liability that it may have to any Selling Party Indemnified Party
otherwise than under this Article VIII.

     

    (e) With
respect to any Third Party Claim for which indemnification is sought under
Section 8.3, Buyer shall have the right to direct, through counsel of its own
choosing, the defense or settlement of any such claim or proceeding at its own
expense, provided, that Buyer acknowledges on behalf of the Indemnifying Parties
in writing its obligation to indemnify the Selling Party Indemnified Party
hereunder against any Losses that may result from such Third Party Claim. If
Buyer elects to assume the defense of any such claim or proceeding, Buyer shall
consult with the Selling Party Indemnified Party for the purpose of allowing the
Selling Party Indemnified Party to participate in such defense, but in such case
the expenses of the Selling Party Indemnified Party shall be paid for by the
Selling Party Indemnified Party and shall not be recoverable as part of any
indemnification claim. A Selling Party Indemnified Party shall provide Buyer and
its counsel with reasonable access to all records and personnel relating to any
such claim, assertion, event or proceeding during normal business hours and
shall otherwise reasonably cooperate with Buyer in the defense or settlement
thereof. If Buyer elects to direct the defense of any such claim or proceeding,
the Selling Party Indemnified Party shall not pay, or permit to be paid, any
part of any claim or demand arising from such asserted liability unless Buyer
consents in writing to such payment, which consent shall not be unreasonably
withheld or delayed. If Buyer fails to defend or if, after commencing or
undertaking any such defense, Buyer fails to prosecute or withdraws from such
defense, the Selling Party Indemnified Party shall have the right to undertake
the defense or settlement thereof.  If the Selling Party Indemnified
Party assumes the defense of any such claim or proceeding and proposes to settle
such claim or proceeding, then the Selling Party Indemnified Party shall give
Buyer prompt written notice thereof, and Buyer shall have the right to
participate in the settlement of such claim or proceeding and consent thereto or
assume or reassume the defense of such claim or proceeding.

    
      
         

      

      
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    ARTICLE
IX

    MISCELLANEOUS

     

    9.1 Further Assurance
From time to time, at a Party’s request and without further consideration, the
other Parties will execute and deliver to the requesting Party such documents
and take such other action as the requesting Party may reasonably request in
order to consummate more effectively the transactions contemplated
hereby.

     

    9.2 Law Governing
Agreement.

     

    (a) All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement in connection with the Transactions Documents involving the
Company and its Subsidiaries shall be governed by and construed and enforced in
accordance with the internal laws of Mexico, without regard to the principles of
conflicts of law thereof.  Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in Guadalajara, Jalisco, Mexico and all parties hereto expressly
waive any other forum or jurisdiction that may apply or correspond to them by
virtue of law, their current or future domiciles or due to any other
cause.  Each party hereby irrevocably and waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law.  If
either party shall commence an action or proceeding to enforce any provisions of
this Agreement, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.

     

    (b) All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement in connection with the Transactions Documents involving
Oceanic and its Subsidiaries shall be governed by and construed and enforced in
accordance with the internal laws of California, United States of America,
without regard to the principles of conflicts of law thereof.  Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in San Diego, California and all parties
hereto expressly waive any other forum or jurisdiction that may apply or
correspond to them by virtue of law, their current or future domiciles or due to
any other cause.  Each party hereby irrevocably and waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law.  If
either party shall commence an action or proceeding to enforce any provisions of
this Agreement, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.

     

    9.3 Assignment; Amendment and
Modification.

     

    (a) Except
as expressly permitted by the terms hereof, neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned (including by
merger or operation of law) by any of the parties hereto without the prior
written consent of the other parties; provided, however , that Buyer
may assign this Agreement or any of its rights and obligations hereunder to one
or more Affiliates of Buyer without the consent of any other party
hereto.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    (b) This
Agreement may not be amended or modified, nor may compliance with any condition
or covenant set forth herein be waived, except by a writing duly and validly
executed by Buyer and the Selling Parties, or in the case of a waiver, the party
waiving compliance.

     

    9.4 Notice All notices
and other communications under this Agreement or any other document executed
hereunder must be in writing and shall be (i) transmitted by hand delivery
or nationally recognized overnight courier, (ii) mailed by first-class,
registered or certified mail, return receipt requested, postage prepaid, or
(iii) sent by facsimile, return receipt requested, addressed as
follows:

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    (a) If
to Buyer, to:

    

    
      
        
          
            	
                    Lions
      Gate Lighting Corp.

                  
	
                    405
      Lexington Avenue

                  
	
                    26th
      Floor, Suite 2640

                  
	
                    New
      York, NY 10174

                  
	
                    Attention:

                  	
                    Oli
      Valur Steindorsson

                  
	
                    Telephone:

                  	
                    (212)
      907-6492

                  
	
                    Facsimile:

                  	
                    (917)
      368-8005

                  

          

        

      

    

     

    (with a
copy to)

    

    Louis A.
Brilleman, Esq.

    110 Wall
Street, 11th
Floor

    New York,
NY 10005

    Facsimile:            212-943-2300

     

    (b) If
to Shareholder:

     

    Corposa,
S.A. de C.V.

    Marpesca,
S.A. de C.V.

    Holshyrna,
ehf

    1230
Columbia St, Suite 1100

    San
Diego, California, 92101

    Attention:
Vilhelm M. Gudmundsson

    Telephone:
619-544-9177

    Facsimile:
619-544-9178

     

    (c) If
to Company, to:

     

    Baja
Aqua-Farms, S.A. de C.V.

    1230
Columbia St, Suite 1100

    San
Diego, California, 92101

    Attention:
Vilhelm M. Gudmundsson

    Telephone:
619-544-9177

    Facsimile:
619-544-9178

     

    (with a
copy to)

    

    RSM
Bogarin, Erhard, Padilla, Álvarez, Martínez, S.C.

    Av.
Madero 1212 Altos

    Col.
Nueva

    Mexicali,
Baja California, México

    Attention:
Luis Manuel López Urquijo

    Telephone:
686-554-0271

    Facsimile:
686-554-0271

     

    (d) All
such notices and other communications shall be deemed to have been
received:

     

    (i) if
transmitted by hand delivery, on the day of delivery;

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    (ii) if
mailed by first-class, registered or certified mail, return receipt requested,
postage prepaid, on the third Business Day after mailing;

     

    (iii) if
sent prepaid by a nationally recognized overnight delivery service, on the first
Business Day after mailing; and

     

    (iv) if
sent by facsimile and the transmitting Party receives a transmission receipt
dated the day of transmission in the recipient’s jurisdiction, on the day of
transmission.

     

    9.5 Expenses. Except as
otherwise expressly provided herein, Buyer and the Selling Parties will each pay
all of their own fees, costs and expenses (including fees, costs and expenses of
legal counsel, investment bankers, accountants, brokers or other representatives
and consultants and appraisal fees, costs and expenses) incurred in connection
with the preparation, negotiation, execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby.

     

    9.6 Entire Agreement; Binding
Effect. This Agreement, together with all other Transaction Documents and
the Confidentiality Agreement, embodies the entire agreement between the Parties
hereto with respect to the transactions contemplated herein, and there have been
and are no agreements, representations or warranties between the Parties other
than those set forth or provided for herein or executed contemporaneously or in
connection herewith. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their respective legal representatives,
successors and permitted assigns.

     

    9.7 No Third Party
Beneficiary. This Agreement is not intended to and shall not confer upon
any person other than the parties hereto any rights or remedies
hereunder.

     

    9.8 Counterparts and Fax and
Electronic Signatures. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute a single instrument. The parties agree that a fax
signature or an electronically transmitted signature of a party hereto shall be
deemed to be as legally effective and binding as a signed original; provided,
however, any party providing a fax signature hereof shall be required to
promptly forward a signed original to any requesting party.

     

    9.9 Headings. The
headings in this Agreement are inserted for convenience only and shall not
constitute a part hereof.

     

    9.10
No Strict
Construction. The language used in this Agreement will be deemed to be
the language chosen by the Parties to express their mutual intent. In the event
an ambiguity or question of intent or interpretation arises, this Agreement will
be construed as if drafted jointly by the Parties, and no presumption or burden
of proof will arise favoring or disfavoring any Person by virtue of the
authorship of any of the provisions of this Agreement.

     

    9.11
Severability.
If any provision of this Agreement, or the application thereof to any Person or
circumstance is held invalid or unenforceable, the remainder of this Agreement,
and the application of such provision to other Persons or circumstances, shall
not be affected thereby, and to such end, the provisions of this Agreement are
agreed to be severable.

     

    9.12
No Agreement Until
Executed. Irrespective of negotiations among the Parties or the
exchanging of drafts of this Agreement, this Agreement shall not constitute or
be deemed to evidence a contract, agreement, arrangement or understanding among
the Parties unless and until this Agreement is executed and delivered by the
parties hereto.

     

    9.13
Interpretation.
When a reference is made in this Agreement to an Article, Section, Schedule or
Exhibit, such reference will be to an Article or Section of, or a Schedule or
Exhibit to, this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and will
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words “include,” “includes” or “including” are used in this Agreement, they
will be deemed to be followed by the words “without limitation.” The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms used herein with initial capital letters
have the meanings ascribed to them herein and all terms defined in this
Agreement will have such defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein, or in any agreement or instrument that is
referred to herein, means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its
permitted successors and assigns.

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    9.14
Specific
Performance. The Parties agree that the Company and its Subsidiary as a
going concern constitute unique property and that there would be no adequate
remedy at law for the damage which any Party might sustain for the failure of
the other to consummate the transaction contemplated by this Agreement.
Accordingly, each Party will be entitled, at its option, to the remedy of
specific performance to enforce the consummation of the transactions described
in this Agreement.

     

    [Signature
Page to Follow]

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date and year first above
written.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        BAJA
      AQUA-FARMS, S.A. DE C.V.

                                      	 
	 
      	 
      	 
	
                                        By:

                                      	 
      	 
	 
      	 
      	 
	
                                        OCEANIC
      ENTERPRISES INC.

                                      	 
	 
      	 
      	 
	
                                        By:

                                      	 
      	 
	 
      	 
      	 
	
                                        CORPOSA
      S.A. DE C.V.

                                      	 
	 
      	 
      	 
	
                                        By:

                                      	 
      	 
	 
      	 
      	 
	
                                        HOLSHYRNA
      ehf

                                      	 
	 
      	 
      	 
	
                                        By:

                                      	 
      	 
	 
      	 
      	 
	 	 
	
                                        VILHELM
      MAR GUDMUNDSSON

                                      	 
	 
      	 
	 	 
	
                                        ROBERT
      GUDFINNSSON

                                      	 
	 
      	 
	 	 
	
                                        LIONS
      GATE LIGHTING CORP.

                                      	 
	 
      	 
      	 
	
                                        By:

                                      	 
      	 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        29

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