Share Exchange and Royalty Agreement between Camden Agro-Systems Inc. and Hyaton Organics Inc.

Summary

Camden Agro-Systems Inc. (CASI) and Hyaton Organics Inc. agree to exchange 9,000 CASI common shares held by Hyaton Organics for 1,000 CASI Preference Shares and $100. The Preference Shares have a face value of $1,000 each and pay dividends and redemptions through a royalty of $1.34 per ton on certain product sales. After full redemption, a perpetual royalty continues. Hyaton Organics may convert Preference Shares to common shares after ten years if not redeemed. Relevant trademarks and registers will also be transferred to CASI. The agreement is effective as of February 12, 2001.

EX-2.3 4 0004.txt CAMDEN AGRO-SYSTEMS INC. 2285 St. Laurent Blvd., Building C6 Telephone: (613) 260-1108 Ottawa, Ontario, Canada, K1G 4Z6 Facsimile: (613) 738-4406 - ----------------------------------------------------------------------------- 12 February 2001 Mr. Gordon Robinson Director Hyaton Organics Inc. c/o Mr. Clarke Wilson 800 - 885 West Georgia St. Vancouver, BC V6C 3H1 Dear Mr. Robinson: SUBJECT: CAMDEN AGRO-SYSTEMS INC. With respect to the proposed sale of 9,000 common shares of Camden Agro-Systems Inc. ("CASI") held by Hyaton Organics Inc. ("Hyaton Organics") in exchange for Preferred Shares of CASI, we outline the following: 1. Consideration will be U.S.$100.00 and 1,000 Preference Shares of CASI with a face and redemption value of U.S.$1,000.00 per share with a dividend feature as outlined below. The share redemption and dividend shall be paid via a "royalty" of U.S.$1.34 per ton on the sale of all fertilizer and plant growth medium products sold or licenced by CASI under the three AAFC pending patents and the resulting patents therefrom. For each ton of said product sold or licenced by CASI, U.S.$1.00 shall be used for the Preference Share face value redemption and U.S.$0.34 shall be credited as a dividend. Payments shall be made semi-annually. On payment of the full face value of U.S.$1,000,000.00 all Preference Shares shall be redeemed and no further dividend shall be payable; however, once the face value of the Preferred Shares have been paid back in full, the dividend will convert to a perpetual royalty stream to the extend of U.S.$1.00 per ton. The royalty shall apply regardless of whether the patents are issued in any country. Hyaton Organics shall have the option after ten years from the date of this Agreement, if no Preference Shares have been redeemed, to convert the Preference Shares to common shares and the conversion rate shall provide Hyaton Organics with 2.5% of the outstanding common shares of CASI on the date of conversion. These Preferred Shares will be subordinated to the bank debt which is anticipated to be received in order to build the North Carolina plant. 2. The relevant "fertilizer" trademarks and the CASI Register will be transferred from Hyaton Organics and Kafus Industries Ltd. ("Kafus") to CASI as part of this deal. This transaction will be effective as at the date written above. Yours truly, CASI /s/ Robert Novitsky Robert Novitsky President ACKNOWLEDGED AND ACCEPTED /s/ Gordon Robinson Feb. 22 2001 - ----------------------------- --------------- Gordon Robinson DATE