STOCK EXCHANGE AGREEMENT

2.05           Resale Restrictions.  The Parties to this Agreement agree to abide by all applicable resale restrictions and hold periods imposed by Applicable Securities Laws.

3.01           Organization and Standing of BWI.  BWI is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada.  BWI has full requisite corporate power and authority to carry on its business as it is now being conducted, and to own, operate, and lease the properties now owned, operated, or leased by it.  BWI is duly authorized and qualified to carry on its business in the manner as now conducted in jurisdiction in which authorization and qualification is required.  BWI will make available to AQUASIL and the AQUASIL Shareholder true, correct and complete copies of the contents of its minute book, which is accurate in all respec ts and set forth fully and fairly all of BWI’s transactions.

3.02           Capitalization of BWI.  The authorized capital stock of BWI currently consists 100,000,000 shares of common stock, as of the date of this Agreement, of which a total of 9,498,063 shares are issued and outstanding. Simultaneously with the

3.03           Subsidiaries and Other Ventures.  BWI has no subsidiaries or affiliated corporations, and owns no capital stock, bond, or other security of, or has any equity or proprietary interest in, any corporation, partnership, joint venture, trust, or unincorporated association.

3.04           Capacity to Enter into Agreement.  BWI has full right, power and authority to execute and deliver this Agreement and all other agreements, documents and instruments to be executed in connection herewith and perform such its or his obligations hereunder and thereunder.  The execution and delivery by BWI of this Agreement and all other agreements, documents and instruments to be executed in connection herewith have been duly authorized. When this Agreement and all other agreements, documents and instruments to be executed by BWI, this Agreement and such other agreements, documents and instruments will constitute the valid and binding agreements of BWI and enforceable against BWI in acc ordance with their respective terms.

 

3.05           Valid Issuance.  The shares of common stock to be issued pursuant to this Agreement are duly and validly authorized and will (when issued) be duly and validly authorized and fully paid and non-assessable, and will not be issued in violation of the pre-emptive rights of any current shareholder.

3.06           Consents and Approvals.  The execution, delivery and performance of this Agreement and the completion of the transactions contemplated herein do not require BWI to obtain any consent, approval any person or entity necessary in connection with the execution, delivery, or performance of this Agreement by BWI, except for the agreement of the Debt Settlement Creditors and the Note Holders, which approvals shall be provided at or prior to Closing.

3.07           No Conflict.  The execution, delivery and performance of this Agreement and the completion of the transactions contemplated herein will not:

(a)	violate any provisions of the Articles or Certificate of Incorporation, By-laws or other charter or organizational document of BWI;

(b)

violate, conflict with or result in any modification of the effect of, otherwise give any other contracting party the right to terminate, or constitute (or with notice or lapse of time or both, constitute) a default under, any contract or agreement to which BWI is a party to by or to which BWI or any of its respective assets or properties may be bound or subject;

(c)

violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon or any agreement with, or condition imposed by, any governmental or regulatory body, foreign or domestic, binding upon BWI or upon shares of BWI or the properties or business of BWI;

(d)	violate any statute, law or regulation of any jurisdiction as such statute, law or regulation relates to BWI; or

 

 

(e)	result in the breach of any of the terms or conditions of, constitute a default under, or otherwise cause an impairment of, any permit or license.

3.08           SEC Filings and Financial Statements.  BWI is required to file all forms, reports, statements and other documents required to be filed with the U.S. Securities and Exchange Commission as a reporting issuer, including, without limitation, all proxy statements relating to meetings of shareholders (whether annual or special), all Reports on Form 10-K, Form 10-Q and Form 8-K and all Registration Statements (all such filings being referred to hereinafter as the "SEC Reports").  The SEC Reports (i) were prepared in all material respects in accordance with the requirements of the Securities Act of 1933 as amended, and the Securities Ex change Act of 1934, as amended, and the rules and regulations thereunder applicable to such SEC Reports and (ii) did not at the time they were filed and (with respect to registration statements) as of their effective dates, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The financial statements as filed with the SEC on Form 10-K (the "Financial Statements") fully and fairly set forth the financial position of BWI as of the dates thereof and the results of operations for the periods indicated and have been prepared in accordance with accounting principles applied on a consistent basis.  There is no basis for the assertion of any liabilities or obligations, either accrued, absolute, contingent, or otherwise, which might adversely affect BWI, or the value, use, operation or enjoyment of the assets of BWI and which is not expressly set forth on the balance sheet of BWI as of September 30, 2010 (the "Balance Sheet").  BWI is not a party to or bound either absolutely or on a contingent basis by any agreement of guarantee, indemnification, assumption or endorsement or any like commitment of the obligations, liabilities or indebtedness of any other person (whether accrued, absolute, contingent or otherwise).

3.09           Absence of Certain Changes and Events.  Since the date of the Balance Sheet, there has not been:

(a)

Financial Change.  Any adverse change in the financial condition, operations, business prospects, employee relations, customer relations, assets, liabilities (accrued, absolute, contingent, or otherwise) or income of BWI, or the business of BWI, from that shown on the Financial Statements or reported on Form 10-K or 10-Q;

(b)

Dividends, Etc.  Any declaration, setting aside, or payment of any dividend or other distribution in respect of the capital stock of BWI, or any direct or indirect redemption, purchase, or any other acquisition of any such stock;

(c)

Incurrence of Debt.  Any borrowing of, or agreement to borrow any funds or any debt, obligation, or liability (absolute or contingent) incurred by BWI (whether or not presently outstanding) except current liabilities incurred, and obligations under agreements entered into in the ordinary course of business;

(d)

Creation of Liens.  Any mortgage, pledge, lien, security interest, charge, claim or other encumbrance created on or in any of BWI’s properties or assets, except liens for current taxes not yet due and payable;

(e)

Assets.  Any sale, assignment, or transfer of BWI’s assets, except in the ordinary course of business, any cancellation of any debts or claims owed to BWI, any capital expenditures or commitments therefor exceeding in the aggregate $25,000.00, any damage, destruction or casualty loss exceeding in the aggregate $25,000.00 (whether or not covered by insurance), or any charitable contributions or pledges;

(f)

Material Contracts.  Any amendment or termination of any contract, agreement, license, or arrangement to which BWI is or was a party or to which any properties or assets of BWI are or were subject, which amendment or termination has had, or may be reasonably expected to have, an adverse effect on the financial condition, properties, assets, liabilities (accrued, absolute, contingent, or otherwise), or income of BWI or the business of BWI; or

(g)

Other Material Changes.  Any other material transaction by BWI outside the ordinary course of business or any other event or condition pertaining to, and adversely affecting the operations, assets, liabilities (accrued, absolute, contingent, or otherwise) or income of BWI, or the business of BWI.

3.10           Options or Other Rights.

(a)

Other than those Options disclosed on Schedule C there is no outstanding right, subscription, warrant, call, unsatisfied preemptive right, option, contract or other agreement of any kind to purchase or otherwise to receive from BWI any of the outstanding, unauthorized or treasury shares of the common stock of BWI, other than those disclosed in this Agreement; and

(b)	There is no outstanding security of any kind convertible into any common shares of BWI, and, except as aforesaid, there is no outstanding contract or other agreement to purchase, redeem or otherwise acquire any shares of BWI, other than those disclosed in this Agreement.

 

3.11           Contracts.  Other than those disclosed herein, BWI is not a party to any written or oral lease, contract, agreement, arrangement or commitment, whether or not made in the ordinary course of business, that either (a) involves or may involve aggregate payments by of BWI exceeding $25,000.00 per year; (b) is not by its terms terminable by BWI without premium or penalty within 60 or fewer days notice, or (c) otherwise materially adversely affect or, to the knowledge of BWI, might materially adversely affect the financial condition, property, assets, liabilities (accrued, absolute, contingent, or otherwise), or revenues, of business heretofore conducted by BWI.  All leases, contracts, agr eements, arrangement or commitments to which BWI  is a party are in good standing, valid, and effective.  There is not, under any such lease, contract, agreement, arrangement or commitment, any existing or prospective default or event of default by BWI or event which with notice or lapse of time, or both would constitute a default and in respect to which BWI has not taken adequate steps to prevent a default from occurring; and, to the knowledge of BWI, no other party to any such lease, contract, agreement, arrangement or commitment, is in default or breach thereof nor has any event occurred which with notice or lapse of time would constitute a breach or default of any of such lease, contract, agreement, arrangement or commitment.

3.12           Litigation.  There is no pending suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation to which BWI is a party or which adversely affects or might adversely affect BWI.  BWI is not in default with respect to any judgment, order, writ, injunction, decree, or award applicable to it of any court or other governmental instrumentality or arbitrator.  There is no action, suit, proceeding, or claim pending or, to the knowledge of BWI, threatened against BWI by persons not a party to this Agreement wherein an unfavorable decision, ruling, or finding would render unlawful or otherwise adversely affect the consummation of the transacti ons contemplated by this Agreement.

3.13           Compliance with Law.  BWI is not in violation of, or in default with respect to, or in alleged violation of or alleged default with respect to, any applicable law, rule, regulation, permit, or any writ or decree of any court or any governmental commission, board, bureau, agency, or instrumentality, including without limitation, any laws, ordinances, rules, regulations, permits, or orders relating to the business of BWI, or the business operations and practices, health and safety, and employment practices of BWI.  BWI is not delinquent with respect to any report required to be filed with any governmental commission, board, bureau, agency, or instrumentality, or with any trade associat ion or certification organization that has in the past certified or endorsed the business of BWI.  BWI is not delinquent with respect to any reports required by private covenants or agreements to which it is a party.

3.14           Taxes.  Complete, proper and accurate federal, state and other appropriate jurisdictional tax returns have been timely filed with appropriate governmental agencies by BWI for each period for which any returns were due.  All taxes shown by such returns to be due and payable have been timely paid.  No extension of time or waiver of any statute of limitations with respect to federal, state, or other political subdivision income or other tax for any period, is currently in effect.  BWI has not received any notice of deficiency or assessment issued or proposed deficiency or assessment by any taxing authority.  There is no pending audit or inquiry of BWI.

3.15           Officers, Directors and Key Employees.  At Closing all contracts with Officers, Directors and Key Employees of BWI shall be terminated and BWI shall have no further contractual obligations.

3.16           Brokerage.  No broker or finder has acted, directly or indirectly, for BWI nor has BWI incurred any finder’s fee or other commission, in connection with the transactions contemplated by this Agreement.

3.17           Transactions with Affiliated Parties.  There are no transactions currently engaged in between BWI and any party affiliated with BWI (other than transactions inherent in the normal capacities of shareholders, officers, directors, or employees).

3.18           Untrue Statements.  This Agreement, the schedules and exhibits hereto, and all other documents and information furnished by BWI or its representatives pursuant hereto or in connection herewith do not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements made herein and therein not misleading or otherwise.

4.01              Corporate Organization and Good Standing.  AQUASIL  is duly organized, validly existing, and in good standing under the laws of the State of New York and is qualified to do business as a foreign corporation in each jurisdiction, if any, in which its property or business requires such qualification.

4.02              Corporate Authority.  AQUASIL has all requisite corporate power and authority to own, operate and lease its properties, to carry on its business as it is now being conducted and to execute, deliver, perform and conclude the transactions contemplated by this Agreement and all other agreements and instruments related to this Agreement.

4.03              Authorization.  Execution of this Agreement has been duly authorized and approved by AQUASIL and the AQUASIL Shareholder.

4.04             Capitalization.

 

(1)    The authorized capital stock of AQUASIL consists of 200 shares common stock, no par value. At December 29, 2010, (i) 100 shares of common stock of AQUASIL are issued and outstanding, all of which are duly authorized, validly issued, fully paid and non-assessable and none of which were issued in violation of any preemptive rights; (ii) no shares of AQUASIL were reserved for issuance upon the exercise of outstanding options, warrants or other rights to purchase shares; and (iii) no shares of AQUASIL stock were held in the treasury of AQUASIL.  Except as set forth above, as of the date hereof, no shares or other voting securities of AQUASIL are issued, reserved for issuance or outstanding and no shares or other voting securities of AQUASIL shall be issued or become outstanding after the date here of.  There are no bonds, debentures, notes or other indebtedness or securities of AQUASIL that have the right to vote (or that are convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of AQUASIL may vote.

 

(2)           AQUASIL has no contract or other obligation to repurchase, redeem or otherwise acquire any shares of Aquasil stock, or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person.  There are no outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements of any character relating to the issued or unissued shares or other securities of AQUASIL.  None of the outstanding equity securities or other securities of AQUASIL was issued in violation of the Securities Act of 1933 or any other legal requirement.

 

4.05           Litigation.  To the knowledge of AQUASIL, there are no pending, threatened, or existing litigation, bankruptcy, criminal, civil, or regulatory proceeding or investigation, threatened or contemplated against AQUASIL.

 

4.06           Financial Statements.  (i) AQUASIL has furnished or made available to BWI, or will make available to BWI prior to the Closing Date, true and complete copies of the financial statements of AQUASIL (the “AQUASIL Financial Statements”), and AQUASIL shall furnish or make available to BWI true and complete copies of AQUASIL's financial statements for all monthly periods ending after its most recent fiscal year up to and including the Closing Date.

 

                                                 (ii) The AQUASIL Financial Statements were prepared in accordance with  GAAP or the equivalent applied on a basis consistent throughout the periods indicated (except as otherwise stated in such financial statements, including the related notes, and except that, in the case of unaudited statements for the subsequent quarterly periods referenced above, such unaudited statements fairly present in all material respects the consolidated financial condition and the results of operations of Buyer as at the respective dates thereof and for the p eriods indicated therein (subject, in the case of unaudited statements, to year-end audit adjustments).

 

4.07           Absence of Certain Changes or Events. Since the end of its most recent fiscal year and to the date of this Agreement, (i) AQUASIL has, in all material respects, conducted its business in the ordinary course consistent with past practice; (ii) there has not occurred any change, event or condition that is or would reasonably be expected to result in a material adverse effect; and (iii)  AQUASIL has not taken and will not take any of the actions that AQUASIL has agreed not to take from the date hereof through the Closing.

 

4.08           Undisclosed Liabilities. AQUASIL has no material obligations or liabilities of any nature (whether accrued, matured or unmatured, fixed or contingent or otherwise) other than (i) those set forth or adequately provided for in the consolidated balance sheet (and the related notes thereto) of AQUASIL as of the end of the most recent fiscal year  included in the AQUASIL Financial Statements, (ii) those incurred in the ordinary course of business consistent with past practice since the end of the most recent fiscal year  and (iii) those incurred in connection with the execution of this Agreement.