RESCISSION AGREEMENT
This Rescission Agreement is made and entered into as of
September 6, 2002, by and among AMERICAN WATER STAR, INC. (f/k/a
American Career Centers, Inc.), a Nevada corporation ("AMWS"),
WATER STAR BOTTLING, INC., a Wyoming corporation ("WSBI"), DeBAUX
HOLDINGS, LLC, an Arizona limited liability company, the sole
shareholder of WSBI ("DeBaux"), and GEYSER PRODUCTS, LLC, a
Delaware limited liability company ("GPL"). AMWS, WSBI, DeBaux
and GPL are collectively referred to herein as the "Parties."
WHEREAS, this Rescission Agreement is a Memorandum Agreement to
rescind the transaction described herein and to effect the return
of each party to its condition before the acquisition; and
WHEREAS, the Parties previously entered into a Definitive
Agreement dated as of January 18, 2002 (the "Definitive
Agreement") whereby AMWS acquired 82,820 shares of WSBI,
representing approximately 97.5% of the total outstanding shares
of capital stock of WSBI (the "Acquisition"), in exchange for the
issuance of 4,000,000 shares of AMWS's common stock (as
subsequently adjusted) (the "Common Stock") and 4,000,000 shares
of AMWS's Series A Convertible Preferred Stock convertible into
2.5 shares of common stock with voting rights of 2.5 votes for
each share of preferred stock (as subsequently adjusted (the
"Series A Stock") to DeBaux, the sole shareholder of WSBI; and
WHEREAS, at the time of the Acquisition, WSBI owned 85% of the
member units of GPL, and as a result of AMWS's acquisition of the
majority interest in WSBI, WSBI and GPL became majority owned
subsidiaries of AMWS; and
WHEREAS, closing of the transaction contemplated by the
Definitive Agreement occurred on February 28, 2002 (the
"Closing"); and
WHEREAS, subsequent to the Closing, DeBaux delivered the Common
Stock and the Series A Stock to AMWS for cancellation in exchange
for warrants to purchase up to 1,500,000 shares of AMWS's common
stock (the "Warrants"); and
WHEREAS, the Parties desire to rescind the transaction and cancel
the Definitive Agreement. This rescission is amicable and
consensual, and is based on the parties' desire for mutual
accommodation and good will. It is apparent to the parties that
the rescission can be accomplished in a lawful manner.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the
representations, warranties, and covenants herein contained, the
Parties, intending to be legally bound, hereby agree as follows.
1. CANCELLATION OF DEFINITIVE AGREEMENT.
(a) The Definitive Agreement is hereby rescinded and is
VOID AB INITIO, so that ownership and control of WSBI shall be
returned to DeBaux, and WSBI and GPL shall be restored to their
conditions as private companies; and further, so that AMWS shall
be restored to its condition immediately preceding the exchange
and resulting acquisition of WSBI and GPL. Any actions taken by
WSBI and/or GPL in the ordinary course of its business from the
Closing until the rescission to be effected by this Agreement
shall be deemed solely the actions of WSBI and/or GPL as private
companies and not those of AMWS.
(b) AMWS will immediately deliver to WSBI for cancellation
the 82,820 shares of WSBI issued to it pursuant to the Definitive
Agreement, and AMWS hereby surrenders any and all rights it has
or may have with respect to said shares under the Definitive
Agreement or otherwise.
(c) DeBaux will immediately deliver to AMWS for
cancellation the Warrants it acquired in exchange for the
consideration given to it pursuant to the Definitive Agreement,
and DeBaux hereby surrenders any and all rights it has or may
have with respect to the Warrants and the AMWS common stock
underlying the Warrants under the Definitive Agreement or
otherwise.
(d) Xxxxxxxxxxx X. Xxxxx, a director of AMWS and 100% owner
of DeBaux, will submit his resignation from the Board of
Directors of AMWS to be effective immediately upon the closing
date hereunder.
2. CERTAIN REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES OF AMWS. AMWS represents
and warrants that the statements contained in this Section 2(a)
are correct and complete as of the date of this Rescission
Agreement and will be correct and complete as of the closing date
hereunder.
(i) ORGANIZATION AND GOOD STANDING. AMWS is duly
organized, validly existing, and in good standing under the
laws of the State of Nevada.
(ii) AUTHORIZATION OF TRANSACTION. AMWS has full
corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding
obligation of AMWS, enforceable in accordance with its terms
and conditions.
(iii) WSBI STOCK. AMWS holds of record and owns
beneficially the WSBI stock, free and clear of any
restrictions on transfer (other than any restrictions under
the Securities Act of 1933, as amended (the "Securities
Act") and state securities laws), taxes, security interests,
options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. AMWS is not a party to any
option, warrant, purchase right, or other contract or
commitment that could require AMWS to sell, transfer, or
otherwise dispose of any capital stock of WSBI. AMWS is not
a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital
stock of WSBI.
(b) REPRESENTATIONS AND WARRANTIES OF WSBI, DeBAUX AND GPL.
WSBI, DeBaux and GPL, respectively, represent and warrant to AMWS
that the statements contained in this Section 2(b) are correct
and complete as of the date of this Rescission Agreement and will
be correct and complete as of the closing date hereunder.
(i) ORGANIZATION OF WSBI. WSBI is a corporation duly
organized, validly existing, and in good standing under the
laws of the State of Wyoming.
(ii) ORGANIZATION OF DeBAUX. DeBaux is a limited
liability company duly organized, validly existing, and in
good standing under the laws of the State of Arizona.
(iii) ORGANIZATION OF GPL. GPL is a limited
liability company duly organized, validly existing, and in
good standing under the laws of the State of Delaware.
(iv) AUTHORIZATION OF TRANSACTION. WSBI, DeBaux
and GPL have full power and authority (including full
corporate power and authority) to execute and deliver this
Agreement and to perform their respective obligations
hereunder. This Rescission Agreement constitutes the valid
and legally binding obligations of WSBI, DeBaux and GPL,
enforceable in accordance with its terms and conditions.
(v) AMWS WARRANTS. DeBaux holds of record and owns
beneficially the Warrants, free and clear of any
restrictions on transfer (other than any restrictions under
the Securities Act and state securities laws), taxes,
security interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. WSBI,
DeBaux or GPL are not parties to any option, warrant,
purchase right, or other contract or commitment that could
require DeBaux to sell, transfer, or otherwise dispose of
the Warrants or the common stock of AMWS underlying the
Warrants. WSBI, DeBaux or GPL are not parties to any voting
trust, proxy, or other agreement or understanding with
respect to the voting of any capital stock of AMWS.
(vi) ACCESS TO INFORMATION; NO OTHER
REPRESENTATIONS BY COMPANY. WSBI, DeBaux and GPL have been
furnished with or provided access to all materials relating
to AMWS required to enable each of them to make an informed
decision with respect to the Warrants and the AMWS common
stock underlying the Warrants. WSBI, DeBaux and GPL
acknowledge that, in making their decision to rescind the
Definitive Agreement, they have been given an opportunity to
ask questions of and to receive answers from AMWS executive
officers and management personnel. Notwithstanding the
foregoing, WSBI, DeBaux and GPL acknowledge that AMWS has
made no representation or warranty relating to WSBI's,
DeBaux's or GPL's business, financial position and results
of operations except as expressly set forth in this
Rescission Agreement.
3. POST-CLOSING COVENANTS.
(a) AMWS will conduct SEC reporting of its affairs,
including reporting of this rescission. In the case of the
initial news release, if any, announcing the rescission, the form
of that news release shall be subject to mutual agreement as to
its wording and mutual non-disparagement.
(b) AMWS will not retain the use of the "Geyser" name or
trade-style, except to the extent as provided in a license
agreement executed by and between the parties on even date
herewith and attached as Exhibit A hereto.
(c) AMWS shall be responsible for the filing of any
Exchange Act reports required to be filed by AMWS, DeBaux or
Xxxxxxxxxxx X. Xxxxx.
(d) WSBI, DeBaux and/or GPL shall be responsible for any
debts or obligations incurred in the ordinary course of its
businesses, which may have become obligations of AMWS during the
period from the Closing to the date of this Agreement.
(e) The Parties shall separate their interests and go their
ways in peace. The parties agree to provide each other such
further assurances of the transaction as may be reasonable and
appropriate, shall continue to deal with each other fairly and in
good faith to effect and perfect the rescission agreed to herein.
The Parties mutually warrant and represent that there are no
undisclosed matters which would make this rescission inequitable
or impossible to effect in the manner agreed to herein. The
Parties agree not to disclose any and all correspondences,
whether oral or in writing, made while this transaction was
effective, unless required by governmental agencies or as
otherwise required by federal or state law.
4. MUTUAL RELEASE; INDEMNIFICATION.
(a) RELEASE BY WSBI, DeBAUX AND GPL. WSBI, DeBaux and GPL,
for themselves and their successors, assigns, heirs,
administrators and executors, do hereby remise, release and
forever discharge AMWS and its agents, affiliates, attorneys,
representatives, employees, successors and assigns, from any and
all manner of action and causes of action, suits, debts,
accounts, bonds, covenants, contracts, agreements, judgments,
claims and demands whatsoever in equity or law which WSBI, DeBaux
or GPL now have arising under, related to or in connection with
the Definitive Agreement, which the parties have declared to be
VOID AB INITIO.
(b) RELEASE BY AMWS. Subject to Section 4(c) below, AMWS,
for itself and its affiliates, predecessors, successors and
assigns, does hereby remise, release and forever discharge WSBI,
DeBaux and GPL and their respective agents, affiliates,
attorneys, representatives, employees, successors, heirs and
assigns, from any and all manner of action and causes of action,
suits, debts, accounts, bonds, covenants, contracts, agreements,
judgments, claims and demands whatsoever in equity or law which
AMWS now has arising under the Definitive Agreement, which the
parties have declared to be VOID AB INITIO.
(c) INDEMNIFICATION OF AMWS. WSBI, DeBaux and GPL, jointly
and severally, will indemnify and hold AMWS and its agents,
affiliates, attorneys, representatives, employees, successors and
assigns harmless from and against any and all actions, suits,
proceedings, liabilities, losses, damages, judgments, fines,
amounts paid in settlement, costs and expenses, including, but
not limited to, reasonable attorneys' and experts' fees and court
costs, paid or incurred by AMWS and arising out of or in
connection with any claim by a third party relating in any way to
the Definitive Agreement; provided, however, nothing herein shall
affect that certain Indemnity Agreement given by AMWS to
Xxxxxxxxxxx X. Xxxxx and Xxxxx X. Xxxxx.
5. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Rescission Agreement constitutes
the entire agreement among the Parties and supersedes any prior
understandings, agreements, or representations by or among the
Parties, written or oral, to the extent they related in any way
to the subject matter hereof.
(b) AMENDMENTS AND WAIVERS. This Rescission Agreement may
not be modified, amended, or terminated except by a written
agreement specifically referring to this Rescission Agreement
signed by all of the Parties.
(c) GOVERNING LAW. This Rescission Agreement will be
governed by and construed in accordance with the domestic laws of
the State of Nevada without giving effect to any choice or
conflict of law provision or rule (whether of the State of Nevada
or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Nevada. The
state and federal courts of the State of Nevada will have
exclusive jurisdiction and venue over all controversies in
connection herewith, and the Parties hereby irrevocably consent
to such exclusive and personal jurisdiction and venue.
(d) EXPENSES. Each of the Parties will bear its own costs
and expenses (including legal fees and expenses) incurred in
connection with this Rescission Agreement and the transactions
contemplated hereby.
(e) COUNTERPARTS. This Rescission Agreement may be executed
in one or more counterparts, each of which will be deemed an
original but all of which together will constitute one and the
same instrument.
IN WITNESS WHEREOF, this Rescission Agreement is executed on
behalf of each of the Parties by its duly authorized
representatives as of the date first above written.
AMERICAN WATER STAR, INC., WATER STAR BOTTLING,INC.,
a Nevada corporation a Wyoming corporation
By: /s/ Xxxxx Xxxxxxx By:
Its: CEO Its:
DeBAUX HOLDINGS, LLC, GEYSER PRODUCTS,LLC,
an Arizona limited liability a Delaware limited liability
company company
By: /s/ Xxxxxxxxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxxx
Its: President Its: CEO
EXHIBIT A
GEYSER PRODUCTS, LLC
Sublicense Agreement
(Attached at Exhibit 10.4 to this Report)
