PLAN AND AGREEMENT OF REORGANIZATION
UNDER I.R.C. SS.368(A)(1)(A)
AQUA MOTION, INC.,
AND
CONTROLLING SHAREHOLDER OF
ROAST-N-ROLL RESTAURANTS OF THE PAST, INC.
THIS PLAN AND AGREEMENT OF REORGANIZATION, dated and effective this 1st day
of May, 2001, among AQUA MOTION, INC., a Nevada corporation having its principal
business office located at 0000 Xxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000
(hereinafter sometimes referred to as "AQUA MOTION") and the Controlling
Shareholder of ROAST-N-ROLL RESTAURANTS OF THE PAST, INC., a New York
corporation having its principal business office located at 0000 Xxxxx Xxxx.,
Xxxxxx Xxxxxx, Xxx Xxxx 00000 (hereinafter sometimes referred to as "ROAST")
executing this Agreement (such shareholder and the other ROAST shareholders
being hereinafter collectively referred to as the "ROAST SHAREHOLDERS").
WITNESSETH THAT:
WHEREAS, AQUA MOTION desires to acquire from the ROAST SHAREHOLDERS control
of ROAST by acquiring 100% of the issued and outstanding capital stock of ROAST
and distributing $140,000 to its shareholders, pro-rata, in exchange for
5,000,000 shares of the Common Stock of AQUA MOTION to be distributed to the
ROAST shareholders or their designees in a transaction qualifying as a tax-free
I.R.C. Section 368(a)(1)(A) reorganization;
WHEREAS, AQUA MOTION, by its Nevada Articles of Incorporation, which were
issued on March 14, 1995, is authorized to issue 25,000,000 shares of Common
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Stock, par value of $.0027 per share, 5,000,000 of which are issued and
outstanding.
WHEREAS, ROAST, by its Certificate of Incorporation, which was issued on
January 24, 1997 and amended on February 25, 1997, is authorized to issue
2,500,000 shares of Common Stock having a par value of $.01 per share, of which
1,489,000 shares are issued and outstanding;
NOW, THEREFORE, AQUA MOTION and the ROAST SHAREHOLDERS, in consideration of
the mutual covenants, agreements and provisions hereinafter contained, do hereby
prescribe the terms and conditions of the reorganization of AQUA MOTION and
ROAST and the mode of carrying the same into effect as listed below. Xxxx
Xxxxxxxx, Xx. as the holder of 85% of the shares of ROAST to be acquired by AQUA
MOTION hereunder (hereinafter to be sometimes referred to as the "CONTROLLING
ROAST SHAREHOLDER"), represents and warrants that the shares to be delivered
hereunder represent 100% of the issued and outstanding shares of ROAST and,
therefore, a controlling interest in ROAST.
ARTICLE I
THE REORGANIZATION/EXCHANGE
1. PLAN OF REORGANIZATION. The ROAST SHAREHOLDERS are the owners of 1,489,000
of the issued and outstanding capital stock of ROAST, which 1,489,000
shares constitute 100% of the total issued and outstanding shares of Common
Stock of ROAST (such 1,489,000 shares being referred to herein as the
"Acquired Shares"). It is the intention of the parties that all of the
Acquired Shares and $140,000 to be distributed to the AQUA MOTION
shareholders, pro-rata, in exchange for 5,000,000 shares of the Common
Stock of AQUA MOTION to be distributed to the ROAST shareholders or their
designees in a transaction qualifying as a tax-free I.R.C. 368 a(1)(a)
reorganization; as amended.
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2. EXCHANGE OF SHARES. AQUA MOTION and the ROAST SHAREHOLDERS agree that at
Closing, all 1,489,000 shares of ROAST shall be exchanged for 5,000,000
shares of AQUA MOTION Common Stock to be immediately issued, at an exchange
rate of 3.358 AQUA MOTION shares for each ROAST share. AQUA MOTION hereby
acknowledges that 3,300,000 shares of the AQUA MOTION Common Stock
exchanged hereunder are "restricted" shares in accordance with Rule 144 of
the Securities Act of 1933 and 1,700,000 shares of the AQUA MOTION Common
Stock exchanged hereunder are not restricted shares in accordance with Rule
144 of the Securities Act of 1933. The following numbers of AQUA MOTION
shares will, at Closing, be delivered to the individual ROAST SHAREHOLDERS
in exchange for their ROAST shares, as follows:
No. of Shares No. of Shares
of ROAST of AQUA MOTION
SHAREHOLDERS EXCHANGED TO BE ISSUED(1)
------------ --------- ---------------
Xxxxxxxx Xxxxxxxx, Xx. 1,275,000 3,300,000
Xxxxx Xxxx 25,000 83,950
Xxxxxxx X. Xxxxxx 10,000 33,580
Xxxxxxx & Xxxx Xxxxxx 5,000 16,790
C. Xxxx Xxxxxx 2,500 8,395
Xxxxxx X. Xxxx Trust 2,000 6,716
Xxxxxxx Xxxx 5,000 16,790
Xxxx X. Xxxxxx 12,500 41,975
Xxxxxxx & Xxxxx Xxxxx Trust 10,000 33,580
Xxxxxxx Xxxxxxx 8,000 26,864
Xxxxxxx X. Xxxxxxx 7,000 23,506
Xxxxxxx & Moria Szabolesi 2,500 8,395
Xxxxx X. Xxxx 4,500 15,111
Xxxx Xxxxx 2,000 6,716
Xxxxxx Xxxxxxx 2,500 8,395
Xxxxxxx Xxxxxxxxx 2,500 8,395
Xxxxxxx Xxxxxx 2,500 8,395
Xxxxx Xxxxxxxxxx Xxxxxxx, Jr. 20,000 67,160
Xxxxxxx Xxxxxx 25,000 83,950
Xxxx & Xxxxx Xxxxx 15,000 50,370
Xxx Xxxxxxx 25,000 83,950
Xxxx Xxxxxxx 5,500 18,469
Xxx Xxxxxxx 10,000 33,580
Xxxxxx Xxxxxxxx 10,000 33,580
Xxxxxxx Xxxxxx * 115,000
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Xxx Xxxxxxxxxx * 121,388
Xxxxx Xxxxxx * 95,000
Xxxxxx Xxxxxx * 40,000
Xxxxxxxx X. Xxxxx * 90,000
Xxxxxxxx X. Xxxxx * 80,000
Xxxxxxx X. Xxxxxxx * 75,000
Xxxxxxx & Xxxxxxxx
Xxxxx,JTROS * 15,000
Xxxxx X. Rinnaldi * 70,000
Xxxxxx X. Xxxxxxx * 85,000
Xxxx Xxxxxxxx * 25,000
Xxxxxxx Rinnaldi * 30,000
Xxxxxxx Xxxx * 25,000
KB Design and Display Inc. * 15,000
Xxxx Xxxxxxx * 20,000
Xxxx & Xxxx Xxx, JTROS * 15,000
Xxxxxx Xxxxxxxx * 30,000
Xxxx X. Xxxxxxxxx * 35,000
-------------
TOTAL 1,489,000 5,000,000
============= ===========
*-Nominee of Xxxxxxxx Xxxxxxxx, Xx.
(1) All shares of AQUA MOTION common stock received by Xxxxxxxx Xxxxxxxx,
Xx. will be "restricted" shares issued in accordance with Rule 144 of
the Securities Act of 1933. All other shareholders shall receive shares
of the AQUA MOTION Common Stock that are not restricted shares in
accordance with Rule 144 of the Securities Act of 1933.
3. DELIVERY OF SHARES. At the Closing, each ROAST SHAREHOLDER shall deliver
his or her certificates for all of the issued and outstanding shares of
ROAST owned by such shareholder so as to make AQUA MOTION the sole owner
thereof, free and clear of all claims and encumbrances. In the alternative,
the CONTROLLING ROAST SHAREHOLDER may deliver to AQUA MOTION duly executed
instructions to ROAST's transfer agent authorizing the transfer of the
Acquired Shares to AQUA MOTION based on the approval of the transaction by
the CONTROLLING ROAST SHAREHOLDER.
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Simultaneously at the Closing, AQUA MOTION shall issue and deliver to the ROAST
SHAREHOLDERS certificates representing all of the AQUA MOTION shares to be
issued in exchange for the ROAST shares, in such names, denominations and
amounts as set forth in Section 2 herein above. In the alternative, AQUA MOTION
may deliver to the CONTROLLING ROAST SHAREHOLDER duly executed instructions to
its Transfer Agent for the immediate issuance of such shares.
4. INVESTMENT REPRESENTATIONS. The CONTROLLING ROAST SHAREHOLDER acknowledges,
agrees and represents that:
(a) He or she has been advised that none of the shares of AQUA MOTION
being acquired by him or her hereunder have been registered under
the Securities Act of 1933 (the "1933 Act").
(b) All of the shares of AQUA MOTION being acquired by him or her
hereunder are being, and will be, acquired and held for
investment, not for resale or distribution to the public and not
for the purpose of effecting or causing to be effected a public
offering of such securities and, further, that none of such
securities will be sold, transferred, assigned or disposed of
except to, or in trust for the benefit of, members of such
shareholder's immediate family or their personal representatives,
devisees, and legatees, or in accordance with the 1933 Act and
the Rules and Regulations of the Securities and Exchange
Commission ("SEC") promulgated thereunder.
(c) He or she has been advised and is aware of the fact, that by
reason of the foregoing investment representations and
restrictions upon transfer: (i) if Rule 144 of the Rules and
Regulations promulgated by the SEC is applicable to any future
routine sales of any such securities, such sales can be made only
in limited amounts in accordance with the terms and conditions of
that Rule; (ii) in the case of securities to which that Rule is
not applicable, compliance with some applicable registration
exemption, if any be available,
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will be required;
(d) He or she has relied only and exclusively upon the
representations of AQUA MOTION contained herein and his or her
own investigation into AQUA MOTION and its financial condition
for purposes of deciding to enter into and close the transaction
contemplated by this Agreement and to accept shares of AQUA
MOTION in exchange for his or her shares of ROAST No
representation or statements of AQUA MOTION shall survive the
Closing with the exception of the representations and warranties
contained in this Agreement.
5. CLOSING.
(a) Closing shall take place on May 1, 2001 or at such other time as
the parties may mutually select.
(b) In addition to the share certificates or transfer agent
instructions to be delivered to AQUA MOTION pursuant to Paragraph
3 above, the CONTROLLING ROAST SHAREHOLDER shall deliver or cause
to be delivered to AQUA MOTION the following documents at
Closing:
(1) Certified copy of the Minutes of the Meeting of the Board of
Directors of ROAST ratifying and approving this Agreement
and the Closing thereof;
(2) Certificate of good standing reflecting that ROAST is a
corporation in good standing in the state of its
incorporation;
(3) A certificate from the CONTROLLING ROAST SHAREHOLDER
updating the representations and warranties included in this
agreement, as if made on the Closing date; and
(4) Any and all other documents which may be reasonably
requested by AQUA MOTION to effect and close this
transaction.
(c) In addition to the share certificates or Transfer Agent
instructions to be
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delivered to the ROAST SHAREHOLDERS pursuant to Paragraph 3 above, AQUA MOTION
shall deliver to the CONTROLLING ROAST SHAREHOLDER the following documents at
Closing:
(1) Certified resolution of the Board of Directors of AQUA
MOTION ratifying this Agreement and the Closing thereof and
expressly authorizing the issuance of shares as required by
this Agreement;
(2) A certificate of good standing of AQUA MOTION reflecting
that AQUA MOTION is in good standing under the laws of the
state of its incorporation;
(3) A certificate from the President and Secretary of AQUA
MOTION confirming the representations and warranties made by
AQUA MOTION as if made on the Closing date; and
(4) Any and all other documents as may be required by the ROAST
SHAREHOLDERS to close this Agreement.
(5) Amendments to the December 31, 1999 10-KSB and March 31,
2000 10-QSB filed with the Securities and Exchange
Commission which indicates that there was a 5-1 forward
split undertaken by AQUA MOTION in November, 1999 and any
other changes to such documents required by the Rules and
Regulations promulgated by the Exchange Act of 1934.
6. OFFICERS AND DIRECTORS. It is the intent of the parties that immediately
after the Closing, AQUA MOTION shall have a Board of Directors consisting
of Xxxxxxxx Xxxxxxxx, Xx., Xxxxx Xxxxxxxxxx and Xxxxxxxx Xxxxxx. At the
Closing, the existing Board of Directors of AQUA MOTION shall, after
appointing Mssrs. Xxxxxxxx, Xxxxxxxxxx and Xxxxxx to the Board, resign
their positions with the Board. The Board will, also, prior to closing,
sign a Unanimous Consent to Action changing the name of AQUA MOTION to
ROAST-N-ROLL RESTAURANT HOLDINGS, INC. , and will file such changes with
the Nevada Secretary of State in an Amendment to AQUA MOTION's Articles of
Incorporation.
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ARTICLE II
CONDITIONS PRECEDENT
1. Between the date hereof and the Closing AQUA MOTION and its
representatives shall have such reasonable access during normal business hours
to the properties, offices, records and books of account of ROAST as will not
unreasonably interfere with the business and operations of ROAST for the
purposes of investigating the financial position, assets, liabilities and all
other matters relating to the business of ROAST and the correctness of the
representations and warranties of the ROAST SHAREHOLDERS and the fulfillment of
the covenants and conditions of the ROAST SHAREHOLDERS as required in this
Agreement.
2. Between the date hereof and the Closing the ROAST SHAREHOLDERS and their
representatives shall have such reasonable access during normal business hours
to the properties, offices, records and books of account of AQUA MOTION as will
not unreasonably interfere with the business and operations of AQUA MOTION, for
the purposes of investigating the financial position, assets, liabilities and
all other matters relating to the business of AQUA MOTION and the correctness of
AQUA MOTION's representations and warranties and the fulfillment of the
covenants and conditions of AQUA MOTION as required in this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF
AQUA MOTION
AQUA MOTION, intending the ROAST SHAREHOLDERS to rely thereon,
represents, warrants and agrees as follows:
1. AQUA MOTION is, as of the date of Closing, a validly existing
corporation in good standing, duly organized pursuant to the laws of the State
of Nevada, with all legal and corporate authority and power to conduct its
business as now being conducted and
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to own its properties and to the best of its knowledge it possesses all
necessary permits and licenses required in connection with the conduct of its
business.
2. The conduct of AQUA MOTION's present business is, to the best of its
knowledge, in material compliance with all applicable, federal, state and local
governmental statutes, rules, regulations, ordinances and decrees.
3. Pursuant to its Articles of Incorporation, as amended, AQUA MOTION is
authorized to issue 25,000,000 shares of Common Stock having a par value of
$.0027 per share, of which 5,000,000 shares are presently issued and outstanding
There are no other authorized or outstanding securities of any class or of any
kind or character of the corporation and there are no outstanding subscriptions,
options, warrants or other agreements or commitments obligating AQUA MOTION, to
issue or to sell any additional shares of its stock or any options or rights
with respect thereto, or any securities convertible into any shares of stock of
any class.
4. Upon issuance of the Common Stock of AQUA MOTION to the ROAST
SHAREHOLDERS, the ROAST SHAREHOLDERS will become the owners of 100% of AQUA
MOTION's authorized, issued and outstanding shares of Common Stock.
5. The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this Agreement
will not result in a breach of any of the terms or provisions of, or constitute
a default under, the Articles of Incorporation or By-Laws of AQUA MOTION ; any
indenture, other agreement or instrument to which the corporation is a party or
by which it or its assets are bound; or any applicable regulation, judgment,
order or decree of any governmental instrumentality or court, domestic or
foreign, having jurisdiction over the corporation, its securities or its
properties.
6. AQUA MOTION is not a party to any written or oral agreement which grants
an option or right of first refusal or other arrangement to acquire any of its
stock or to any agreement that affects the voting rights of any of its stock,
nor has such company made any commitment of any kind relating to the issuance of
shares of any of its stock, whether by subscription, right of conversion, option
or otherwise.
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7. AQUA MOTION has filed with the appropriate governmental agencies all tax
returns and tax reports required to be filed, in correct form; all federal,
state and local income, franchise, sales, use, occupation or other taxes due
have been fully paid or adequately reserved for; to the extent that tax
liabilities have accrued, but have not become payable, they are adequately
reflected as liabilities on the books of the company; and AQUA MOTION is not a
party to any action or proceeding by any governmental authority for assessment
or collection of taxes, nor has any claim for assessments been asserted against
AQUA MOTION.
8. There are presently no contingent liabilities, factual circumstances,
threatened or pending litigation, contractually assumed obligations or
unasserted possible claims which are known to AQUA MOTION, which might result in
a material adverse change in the future financial condition or operations of
AQUA MOTION other than as previously disclosed to ROAST or reflected in AQUA
MOTION's audited financial statements filed with the March 31, 2000 10-QSB.
9. The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not require the consent, authority or
approval of any other person or entity except such as have been obtained.
10. No transactions have been entered into either by or on behalf of AQUA
MOTION, other than in the ordinary course of business, nor have any acts been
performed (including within the definition of the term "performed" the failure
to perform any required acts) which would adversely affect the goodwill of AQUA
MOTION.
11. The entering into of this Agreement and the performance thereof has
been duly and validly authorized by all required corporate action and does not
require any consents other than such as have been unconditionally obtained.
12. At Closing, AQUA MOTION shall not have any debt or liability nor any
contract or commitment which will require the payment of any sum which will
survive Closing.
13. The Audited Financial Statements for AQUA MOTION for the year ended
December 31, 1999, and the unaudited financial statements covering the period
from January 1, 2000 to March 31, 2000, were prepared in conformity with
generally accepted
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accounting principles consistently applied during the periods, and present
fairly the financial position, results of operations, and changes in financial
position, of AQUA MOTION. In the event, however, that an amended December 31,
1999 10-KSB and March 31, 2000 10-QSB are not filed at the date of the Closing,
AQUA MOTION hereby makes the following warrants and covenants to the ROAST
SHAREHOLDERS:
(a) AQUA MOTION will file such documents within fifteen (15) days after
the Closing; and
(b) All costs associated with preparing such documents shall be borne by
the shareholders of AQUA MOTION.
14. Except as set forth in the Audited Financial Statements of AQUA MOTION
for the year ended December 31, 1999, and the financial statements covering the
period ended March 31, 2000, AQUA MOTION is the owner, free and clear of any
liens, pledges, or encumbrances, of all of the property and assets set forth in
its Balance Sheets;
15. AQUA MOTION has no material liabilities or obligations except those
disclosed in the Audited Financial Statements of AQUA MOTION and does not have
any knowledge of facts which would require the setting up of additional reserves
with respect thereto;
16. AQUA MOTION is not in default under or in breach of the provisions of
any debt, security, mortgage, indebtedness, material contract, or agreement to
which it is a party or by which it is bound, which default or breach would
materially adversely affect its business or properties or condition, financial
or otherwise, or would result in the creation of a lien or charge upon any of
the properties or assets of AQUA MOTION;
17. No waiver, indulgence or postponement of any of the obligations of AQUA
MOTION has been granted by any obligee;
18. There exists no event, current condition, or act which, with the giving
of notice of the lapse of time or the happening of any other event or condition,
would become a default under or breach of any such debt, security, mortgage,
indebtedness, or material contract, or would result in the creation of a lien or
charge upon the properties or assets of AQUA MOTION as reflected in its Balance
Sheets. None of the terms of any debt, security, mortgage indebtedness or other
material contract or any other contract
11
agreement would prevent the consummation of the Closing of this Agreement;
19. There has been no adverse material change in the business or financial
position and no event, condition or state of facts which materially and
adversely affects, or threatens to materially and adversely affect, the business
or results of operations or financial condition of AQUA MOTION;
20. There are no loans, accrued obligations, liabilities, claims, or
contractual obligations owed by AQUA MOTION to any of its Officers, Directors,
or Stockholders;
21. There is no suit, action, or legal, administrative, arbitration or
other proceeding or governmental investigation, or any change in the zoning,
building, or licensing ordinances affecting the real property or any significant
leasehold interests of AQUA MOTION, pending or threatened, which might affect
the business, financial condition, or earnings of AQUA MOTION;
22. AQUA MOTION does not have any debts and liabilities over $5,000 nor any
contracts or commitments which will require the payment of any obligation
(disputed or undisputed) which will survive the reorganization.
23. The shares of AQUA MOTION being acquired by the ROAST SHAREHOLDERS
hereby are duly and validly authorized, issued and outstanding and are fully
paid and nonassessable. There are no adverse claims against such shares or liens
and encumbrances thereon. There are no agreements between AQUA MOTION and any
other individual or entity which would prevent or affect the consummation of the
transaction provided for in this Agreement;
24. The corporate record book of AQUA MOTION is complete and contains all
amendments to the Articles, Bylaws and all Minutes of meetings of its Directors
and Shareholders; and
25. This Agreement and all Exhibits to this Agreement and all documents
delivered to the ROAST SHAREHOLDERS at the Closing in connection with this
transaction are true and correct. The representations and warranties made by
AQUA MOTION in this Agreement contain no untrue statements of material facts and
do not omit to state a material fact necessary to make the statements contained
herein not misleading.
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Notwithstanding any investigation that may be made by the ROAST SHAREHOLDERS,
all representations and warranties of AQUA MOTION made in this Agreement shall
be deemed to have been made both at the time of the execution of this Agreement
and at the Closing and shall survive the Closing of this Agreement.
The foregoing representations, warranties and agreements shall be true and
correct as of the effective date of the reorganization. Such representations,
warranties and agreements shall survive the reorganization until June 30, 2001.
None of such representations, warranties and agreements contain on the date
hereof, or shall contain as of the effective date of the reorganization, any
false or misleading statement of a material fact or omit to state any material
fact necessary in order to make the representations, warranties and agreements
that are made not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF
XXXXXXXX XXXXXXXX, XX.
XXXXXXXX XXXXXXXX, as the CONTROLLING ROAST SHAREHOLDER of the Acquired
Shares hereunder, intending AQUA MOTION to rely thereon, and subject to the
limitations contained in the last paragraph of this Article IV, represents and
warrants as follows:
1. ROAST is, as of the date of this Agreement, a validly existing
corporation in good standing, duly organized pursuant to the laws of the State
of New York with all legal and corporate authority and power to conduct its
business as now being conducted and to own its properties and it possesses all
necessary permits and licenses required in connection with the conduct of its
business.
2. The conduct of ROAST's business is, to the best of his knowledge, in
material compliance with all applicable, federal, state and local governmental
statutes, rules, regulations, ordinances and decrees.
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3. Pursuant to its Articles of Incorporation ROAST is authorized to issue
2,500,000 shares of Common Stock, of which 1,489,000 shares are issued and
outstanding. There are no other authorized or outstanding equity or debt
securities of ROAST of any kind or character, there are no outstanding
subscriptions, options, warrants or other agreements or commitments obligating
the corporation, to issue or to sell any additional shares of ROAST's stock or
any options or rights with respect thereto, or any securities convertible into
any shares of stock of any class.
4. To the best of his knowledge, the execution and delivery of this
Agreement, the consummation of the transactions herein contemplated and
compliance with the terms of this Agreement will not result in a breach of any
of the terms or provisions of, or constitute a default under, the Articles of
Incorporation or By-Laws of ROAST; any indenture, other agreement or instrument
to which such corporation is a party or by which it or its assets are bound; or
any applicable regulation, judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
corporation, its securities or its properties.
5. ROAST is not a party to any written or oral agreement which grants an
option or right of first refusal or other arrangement to acquire any of the
stock or to any agreement that affects the voting rights of any of the stock,
nor is there any commitment of any kind relating to the issuance of shares of
any of its stock, whether by subscription, right of conversion, option or
otherwise.
6. ROAST is not a party to any agreement or understanding for the sale or
exchange of inventory or services for consideration other than cash or at a
discount in excess of normal discounts for quantity or for cash payment.
7. To the best of his knowledge, ROAST has filed with the appropriate
governmental agencies all tax returns and tax reports required to be filed in
correct form; all federal, state and local income, franchise, sales, use,
occupation or other taxes due have been fully paid or adequately reserved for;
to the extent that tax liabilities have accrued, but have not become payable,
they are adequately reflected as liabilities on the books of such company; and
ROAST is not a party to any action or proceeding by any
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governmental authority for assessment or collection of taxes, nor has any claim
for assessment been asserted against ROAST.
8. To the best of his knowledge, there are presently no contingent
liabilities, factual circumstances, threatened or pending litigation,
contractually assumed obligations or unasserted possible claims, which might
result in a material adverse change in the future financial condition or
operations of ROAST other than as previously disclosed to AQUA MOTION.
9. To the best of his knowledge, the execution, delivery and performance of
this Agreement and the transactions contemplated hereby do not require the
consent, authority or approval of any other person or entity except such as have
been obtained.
10. No transactions have been entered into either by or on behalf of ROAST,
other than in the ordinary course of business nor have any acts been performed
(including within the definition of the term "performed" the failure to perform
any required acts) which would adversely affect the goodwill of ROAST.
11. The entering into of this Agreement and the performance thereof have
been duly and validly authorized by all required corporate action and , to the
best of his knowledge, do not require any consents other than such as have been
unconditionally obtained.
12. ROAST is the owner, free and clear of any liens, pledges, or
encumbrances, of all of the property and assets set forth in the Balance Sheet;
13. ROAST has no material liabilities or obligations. He does not have any
knowledge of facts which would require the setting up of additional reserves
with respect thereto;
14. ROAST is not in default under or in breach of the provisions of any
debt, security, mortgage, indebtedness, material contract, or agreement to which
it is a party or by which it is bound, which default or breach would materially
adversely affect its business or properties or condition, financial or
otherwise, or would result in the creation of a lien or charge upon any of the
properties or assets of ROAST;
15. No waiver, indulgence or postponement of any of the obligations of
ROAST has
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been granted by any obligee.
16. To the best of his knowledge, there exists no event, current condition,
or act which, with the giving of notice of the lapse of time or the happening of
any other event or condition, would become a default under or breach of any such
debt, security, mortgage, indebtedness, or material contract, or would result in
the creation of a lien or charge upon the properties or assets of ROAST. None of
the terms of any debt, security, mortgage indebtedness or other material
contract or any other contract or agreement would prevent the consummation of
the Closing of this Agreement.
17. There has been no adverse material change in the business or
consolidated financial position and no event, condition or state of facts which
materially and adversely affects, or threatens to materially and adversely
affect, the business or results of operations or financial condition of ROAST.
18. There are no loans, accrued obligations, liabilities, claims, or
contractual obligations owed by ROAST to any of its Officers, Directors, or
Stockholders.
19. There is no suit, action, or legal, administrative, arbitration or
other proceeding or governmental investigation, or any change in the zoning,
building, or licensing ordinances affecting the real property or any significant
leasehold interests of ROAST and its subsidiary, pending or threatened, which
might affect the business, financial condition, or earnings of ROAST.
20. The shares of ROAST being acquired by AQUA MOTION from the ROAST
SHAREHOLDERS hereby are duly and validly authorized, issued and outstanding and
are fully paid and nonassessable. To the best of his knowledge, the ROAST
SHAREHOLDERS are the legal and beneficial owners of the shares claimed to be
owned by them and, to the best of his knowledge, there are no adverse claims
against such shares or liens and encumbrances thereon. To the best of his
knowledge, there are no agreements between any of the ROAST SHAREHOLDERS and any
other individual or entity which would prevent or affect the consummation of the
transaction provided for in this Agreement.
21. To the best of his knowledge, the corporate record book of ROAST is
complete
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and contains all amendments to the Articles, Bylaws and all Minutes of meetings
of Directors and Shareholders.
22. This Agreement and all Exhibits to this Agreement and all documents
delivered to AQUA MOTION by the ROAST SHAREHOLDERS at the Closing in connection
with this transaction are true and correct. The representations and warranties
made by him in this Agreement contain no untrue statements of material facts and
do not omit to state a material fact necessary to make the statements contained
herein not misleading. Notwithstanding any investigation that may be made by
AQUA MOTION, all of his representations and warranties made in this Agreement
shall be deemed to have been made both at the time of the execution of this
Agreement and at the Closing and shall survive the Closing of this Agreement.
The foregoing representations, warranties and agreements and those
contained in Article I, Paragraph 4 above shall be true and correct as of the
effective date of the reorganization. Such representations, warranties and
agreements shall survive the reorganization until June 30, 2001. None of such
representations, warranties and agreements contain on the date hereof, or shall
contain as of the effective date of the reorganization, any false or misleading
statement of a material fact or omit to state any material fact necessary in
order to make the representations, warranties and agreements contained herein
not misleading.
Notwithstanding anything contained herein to the contrary, AQUA MOTION
hereby covenants and agrees that, if any action or proceeding is brought against
any of the ROAST SHAREHOLDERS arising out of any breach of any representation,
warranty or covenant contained herein, the liability of any such ROAST
SHAREHOLDER shall be limited to the value of the shares of AQUA MOTION acquired
by such ROAST SHAREHOLDER in accordance with the terms of this Agreement, and
that at the sole option of any such ROAST SHAREHOLDER, he or she may tender his
or her shares of AQUA MOTION acquired in the reorganization contemplated
hereunder and, upon such tender, the action or proceeding against such ROAST
SHAREHOLDER shall be withdrawn
17
with prejudice.
ARTICLE V
CONDUCT OF AQUA MOTION BEFORE CLOSING
From the execution of this Agreement to Closing, AQUA MOTION shall not take
any action, or enter into any agreement, that would constitute or cause any
inducement, representation or warranty of AQUA MOTION contained in this
Agreement to become untrue, nor take any action or enter into any agreement that
would constitute or cause a breach of this Agreement. Specifically, but not in
limitation of the foregoing, AQUA MOTION shall not:
(a) enter into any employment or consulting agreement or otherwise
create any employment relationship or salary/wage/
compensation/remuneration liability;
(b) amend its Articles of Incorporation and/or By-Laws, except as
otherwise provided herein;
(c) issue or agree to issue any stock or other securities, including
any right, warrant or option to purchase or otherwise acquire any
of its stock or securities;
(d) issue any bonds, debentures, notes or other evidences of
indebtedness;
(e) declare or pay any dividend (whether in cash, property, or
securities);
(f) purchase or redeem any of its stock;
(g) enter into any Agreement, whether written or oral, which shall
survive the Closing except agreements which are executed in the
ordinary course of business; or
(h) sell, lease, or encumber, or enter into any agreement to do any
of the foregoing with respect to, any real or personal property
owned by it except in the ordinary course of business.
18
ARTICLE VI
CONDUCT OF ROAST BEFORE CLOSING
From the execution of this Agreement to Closing, ROAST shall not take any
action, or enter into any agreement, that would constitute or cause any
inducement, representation or warranty of ROAST contained in this Agreement to
become untrue, nor take any action or enter into any agreement that would
constitute or cause a breach of this Agreement. Specifically, but not in
limitation of the foregoing, ROAST shall not:
(a) enter into any employment/consulting or consulting agreement or
otherwise create any employment relationship or salary/wage/
compensation/remuneration liability;
(b) amend its Articles of Incorporation and/or By-Laws;
(c) issue or agree to issue any stock or other securities, including
any right, warrant or option to purchase or otherwise acquire any
of its stock or securities;
(d) issue any bonds, debentures, notes or other evidences of
indebtedness;
(e) declare or pay any dividend (whether in cash, property, or
securities);
(f) purchase or redeem any of its stock;
(g) enter into any Agreement, whether written or oral, which shall
survive the Closing except agreements which are executed in the
ordinary course of business; or
(h) sell, lease, or encumber, or enter into any agreement to do any
of the foregoing, any real or personal property owned by it
except in the ordinary course of business.
Xxxxxxxx Xxxxxxxx, Xx. agrees that from the date hereof until the Closing he
will cause ROAST to use its best efforts to preserve intact the business
organization of ROAST, to keep available to it the services of its present
officers and employees, to preserve its present relationships with persons
having significant business relations with it, to maintain all of its properties
in customary repair and condition and to maintain insurance policies
19
in respect of its business and properties consistent with current practice.
ARTICLE VII
CONDUCT OF PARTIES PENDING CLOSING
1. AQUA MOTION and the CONTROLLING ROAST SHAREHOLDERS each agree to give to
the other and the authorized representatives of the other full access to all the
premises and books and records of AQUA MOTION and ROAST, as the case may be, and
to furnish the other with such financial and operating data and other
information with respect to the business and properties of AQUA MOTION and
ROAST, as the case may be, as the other shall from time to time request;
provided, however, that any such investigation shall not affect any of the
representations and warranties hereunder; and provided further, that any such
investigation shall be conducted in such manner as not to interfere unreasonably
with the operation of the business of AQUA MOTION or ROAST, as the case may be.
In the event of termination of this agreement, each party will each return to
the other all documents, work papers and other material obtained from the other
in connection with the transactions contemplated hereby and will use all
reasonable efforts to keep confidential any information obtained pursuant to
this agreement unless such information is readily ascertainable from public or
published information or trade sources.
2. Each of ROAST and the CONTROLLING ROAST SHAREHOLDERS shall use their
best efforts to obtain the consent or approval of each person whose consent or
approval shall be required in order to permit the CONTROLLING ROAST SHAREHOLDERS
or AQUA MOTION, as the case may be, to consummate the reorganization.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF AQUA MOTION
The obligations of AQUA MOTION to consummate the transactions contemplated
20
by this Agreement are subject to the fulfillment, at or before the Closing date,
of the following conditions, any one or more of which may be waived by AQUA
MOTION in its sole discretion:
1. All representations and warranties made by the CONTROLLING ROAST
SHAREHOLDERS in this Agreement shall be true and correct in all material
respects on and as of the Closing date as if again made by the CONTROLLING ROAST
SHAREHOLDERS on and as of such date, and, if the Closing date is other than the
date hereof, AQUA MOTION shall have received a certificate dated the Closing
date and signed by Xxxxxxxx Xxxxxxxx, Xx. to that effect.
2. The CONTROLLING ROAST SHAREHOLDERS shall have performed in all material
respects all obligations required under this Agreement to be performed by them
on or before the Closing date, and AQUA MOTION shall have received a certificate
dated the Closing date and signed by the CONTROLLING ROAST SHAREHOLDER to that
effect.
3. All consents, waivers, authorizations and approvals required in order
for the CONTROLLING ROAST SHAREHOLDER to deliver his shares hereunder shall have
been duly obtained and shall be in full force and effect on the Closing date.
4. No preliminary or permanent injunction or other order issued by any
court or governmental or regulatory authority, domestic or foreign, nor any
statute, rule, regulation, decree or executive order promulgated or enacted by
any government or governmental or regulatory authority, which declares this
Agreement invalid in any respect or prevents the consummation of the
transactions contemplated hereby, or which materially and adversely
21
affects the assets, properties, operations, prospects, net income or financial
condition of ROAST shall be in effect; and no action or proceeding before any
court or governmental or regulatory authority, domestic or foreign, shall have
been instituted by any government or governmental or regulatory authority,
domestic or foreign, or by any other person or entity, which seeks to prevent or
delay the consummation of the transactions contemplated by this Agreement or
which challenges the validity or enforceability of this Agreement.
5. During the period from the date hereof to the Closing date, there shall
not have been any event, development, occurrence or change that has had or could
reasonably be expected to have a material adverse effect on the financial
position of ROAST.
6. AQUA MOTION shall have received such other duly executed certificates,
instruments and documents in furtherance of the transactions contemplated by
this Agreement as AQUA MOTION or its counsel may reasonably request.
7. All certificates, instruments and other documents required to be
executed or delivered by or on behalf of the CONTROLLING ROAST SHAREHOLDER under
the provisions of this Agreement, and all other actions and proceedings required
to be taken by or on behalf of the CONTROLLING ROAST SHAREHOLDER in furtherance
of the transactions contemplated hereby, shall be reasonably satisfactory in
form and substance to counsel for AQUA MOTION.
22
ARTICLE IX
CONDITIONS TO OBLIGATIONS
OF THE CONTROLLING ROAST SHAREHOLDER
The obligations of the ROAST SHAREHOLDERS to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing date, of the following conditions, any one or more of which may be
waived by the CONTROLLING ROAST SHAREHOLDER.
1. All representations and warranties made by AQUA MOTION in this Agreement
shall be true and correct in all material respects on and as of the Closing date
as if again made by AQUA MOTION on and as of such date, and if the Closing date
is other than the date hereof, the CONTROLLING ROAST SHAREHOLDER shall have
received a certificate dated the Closing date and signed by the President of
AQUA MOTION to that effect.
2. AQUA MOTION shall have performed in all material respects all
obligations required under this Agreement to be performed by it on or before the
Closing date, and the CONTROLLING ROAST SHAREHOLDER shall have received a
certificate dated the Closing date and signed by the President of AQUA MOTION to
that effect.
3. Each of the officers and directors of AQUA MOTION shall have tendered
his or her resignations.
4. All consents, waivers, authorizations and approvals required in order
for AQUA MOTION to deliver its shares as required hereunder shall have been duly
obtained and shall be in full force and effect on the Closing date.
5. Amendments to the December 31, 1999 10K-SB and March 31, 2000 10Q-SB
shall be filed with the Securities and Exchange Commission indicating that there
was a 5-1 forward split undertaken by AQUA MOTION in November, 1999.
23
6. No preliminary or permanent injunction or other order issued by any
court or governmental or regulatory authority, domestic or foreign, nor any
statute, rule, regulation, decree or executive order promulgated or enacted by
any government or governmental or regulatory authority, domestic or foreign,
that declares this Agreement invalid or unenforceable in any respect or which
prevents the consummation of the transactions contemplated hereby shall be in
effect; and no action or proceeding before any court or governmental or
regulatory authority, domestic or foreign, shall have been instituted by any
government or governmental or regulatory authority, domestic or foreign, or by
any other person or entity, which seeks to prevent or delay the consummation of
the transactions contemplated by this Agreement or which challenges the validity
or enforceability of this Agreement.
7. The CONTROLLING ROAST SHAREHOLDER shall have received such other duly
executed certificates, instruments and documents in furtherance of the
transactions contemplated by this agreement as they or their counsel may
reasonably request.
8. All certificates, instruments, opinions and other documents required to
be executed or delivered by or on behalf of AQUA MOTION under the provisions of
this Agreement, and all other actions and proceedings required to be taken by or
on behalf of AQUA MOTION in furtherance of the transactions contemplated hereby,
shall be reasonably satisfactory in form and substance to the CONTROLLING ROAST
SHAREHOLDER.
24
ARTICLE X
TERMINATION AND ABANDONMENT
1. This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time before the Closing:
(a) by the mutual written consent of AQUA MOTION and the CONTROLLING
ROAST SHAREHOLDER;
(b) by AQUA MOTION if all the conditions set forth in Article VIII of
this Agreement shall not have been satisfied or waived on or
before the Closing date;
(c) by the CONTROLLING ROAST SHAREHOLDER, if all the conditions set
forth in Article IX of this Agreement shall not have been
satisfied or waived on or before the Closing date;
(d) by the CONTROLLING ROAST SHAREHOLDER or AQUA MOTION if the other
party or parties hereto fail to comply in any material respect
with any of its or their covenants or agreements contained
herein, or breaches its or their representations and warranties
in any material way;
(e) by the CONTROLLING ROAST SHAREHOLDER or by AQUA MOTION if a court
of competent jurisdiction or governmental, regulatory or
administrative agency or commission shall have issued an order,
decree or taken any other action (which order, decree or ruling
the parties hereto shall use their best efforts to lift) which
permanently restrains, enjoins or otherwise prohibits the
transactions contemplated by this Agreement; or
25
2. In the event of termination and abandonment of this Agreement pursuant
to Section 1 of this Article X, written notice thereof shall forthwith be given
to the other party or parties and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
the CONTROLLING ROAST SHAREHOLDER or AQUA MOTION. If this Agreement is
terminated as provided herein, no party to this Agreement shall have any
liability or further obligation to any other party to this Agreement; PROVIDED,
HOWEVER, that no termination of this Agreement pursuant to this Article X shall
relieve any party of liability for breach of any provision of this Agreement
occurring before such termination.
ARTICLE XI
MISCELLANEOUS
1. NOTICES. All notices to a party shall be deemed given when mailed by
registered or certified mail to the address set forth below or such other
address as may be substituted therefor by notice:
To the CONTROLLING ROAST SHAREHOLDER:
Roast-N-Roll Restaurants of the Past, Inc.
0000 Xxxxx Xxxxxxxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
With a copy to: Xxxxxx & Xxxxxx, LLP
0000 Xxxxx 0, 0xx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
TO: Aqua Motion, Inc.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
26
With a copy to: Xxxxx Xxxxxxx, Esq.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
2. INTEGRATION. This Agreement is the entire Agreement among the parties
and supersedes any other prior agreement(s) among the parties with respect
thereto except as herein specified. There are no representations, warranties or
other agreements except as expressed in this Agreement. No alteration,
modification, or waiver of terms or conditions hereof shall be binding unless in
writing and signed by all parties.
3. AMENDMENTS. This Agreement may be amended only with the written approval
of the party to be charged therewith; provided, however, that no such amendment
may be made that would cause a breach of any warranty or representation herein.
4. NO ASSIGNMENT. This agreement may not be assigned by any party or by
operation of law or otherwise.
5. CONSTRUCTION. Whenever required by the context hereof, the masculine
gender shall be deemed to include the feminine and neuter; and the singular
member shall be deemed to include the plural. This Agreement shall be deemed to
have been mutually prepared by all parties and shall not be construed against
any particular party as the draftsman.
6. INTERPRETATION. It is the intent of the parties that this Agreement
shall be construed and interpreted, and that all questions arising hereunder
shall be determined in accordance with the provisions of the laws of the State
of New York.
7. BINDING EFFECT. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their successors and assigns.
8. ARBITRATION. Any controversy, claim or dispute arising out of or
resulting from this Agreement, or the breach thereof, that cannot be resolved by
negotiation, shall be resolved by arbitration, to be held in New York City, New
York in accordance with the rules and regulations of the American Arbitration
Association, except that the provisions for discovery shall be as set forth in
the Rules of Civil Procedure then in effect in the State of New York. Failure of
a party to participate or cooperate shall constitute grounds for
27
default judgment. The arbitrator shall award legal fees and costs to the
prevailing party. The decision of the arbitrator shall in each case, including
awards and the allocation of costs, be final and binding upon the parties.
Judgment upon the award rendered by the arbitrator may be entered in any Court
having jurisdiction thereof.
9. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, any one of which shall be deemed to be an original.
10. EXHIBITS. All Exhibits described herein which are not attached to the
Agreement at execution shall be attached within three calendar days thereafter,
but not later than the Closing date. Each agreement shall be mutually agreed to
by all parties and shall bear the signature of the party submitting same.
IN WITNESS WHEREOF, and intending to be legally bound, the parties have
hereunto set their hands and seals the day and year first above written.
Dated: May 1, 2001
CONTROLLING ROAST SHAREHOLDER:
BY: /s/ Xxxxxxxx Xxxxxxxx, Xx.
------------------------------
Xxxxxxxx Xxxxxxxx, Xx.
ATTEST: AQUA MOTION, INC.
/s/Xxxxx X. Xxxx By:/s/ Xxxxx Xxxxxxxxxx
--------------------------- -----------------------
Xxxxx X. Xxxx, Secretary Xxxxx Xxxxxxxxxx
President
SELLING AQUA MOTION SHAREHOLDERS:
/s/
-----------------------------
Xxxxx X. Xxxx
/s/
-----------------------------
Xxxxx Xxxxxxxxxx
28
/s/
-----------------------------
Xxxxxx Xxxxxxxxxx
/s/
-----------------------------
Xxxxxxx Xxxxxxx
/s/
----------------------------
Xxxxxxx Xxxxxxxxxxxxx
/s/
-----------------------------
Elftheria Mitskaris
/s/
----------------------------
Xxxxxx Xxxxxxx
/s/
----------------------------
Aphrodite Xxxxxxxxxxxx
/s/
----------------------------
Xxxxxx Xxxxxxxxx
/s/
----------------------------
Xxxxxx Xxxxxxxxxx
/s/
----------------------------
Xxxxxx Xxxxxx
/s/
----------------------------
Xxxxxxx Xxxxxxx
/s/
----------------------------
Xxxx Xxxxxxxxx
/s/
----------------------------
Xxx Xxxxx
/s/
-----------------------------
Xxxxxx Xxxxxxxx
/s/
-----------------------------
Xxxxxxx XxXxxxx
/s/
-----------------------------
Xxxxxxxx Xxxxxx, Jr.
29
/s/
-----------------------------
Xxxx Xxxxx
/s/
-----------------------------
Xxx Xxxxx
/s/
-----------------------------
Xxxxxxx Xxxxx
/s/
-----------------------------
Xxxxxxxxxxx Xxxxxxxxx
/s/
-----------------------------
Xxx Xxxxxx Xxxxx
/s/
------------------------------
Xxxxxx Xxxx
/s/
-----------------------------
Xxxxxxx Xxxx
/s/
------------------------------
Xxxxxx Xxxx
30
