-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D+AJV+hMstaVUQKehDJyhQ1Hu2FsxZBw1jvwi/ysjK56n5JIyrw0TYiOSt6RXuc+ j8s4BX2QyXp7P98jiNS3IA== 0001021432-99-000118.txt : 19990902 0001021432-99-000118.hdr.sgml : 19990902 ACCESSION NUMBER: 0001021432-99-000118 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990901 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990901 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AQUA VIE BEVERAGE CORP CENTRAL INDEX KEY: 0001068104 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 820506425 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-24801 FILM NUMBER: 99704219 BUSINESS ADDRESS: STREET 1: 333 SOUTH MAIN STREET STREET 2: PO BOX 6759 CITY: KETCHUM STATE: ID ZIP: 83340 BUSINESS PHONE: 2086227792 MAIL ADDRESS: STREET 1: PO BOX 6759 STREET 2: 333 SOUTH MAIN STREET CITY: KETCHUM STATE: ID ZIP: 83340 FORMER COMPANY: FORMER CONFORMED NAME: BARHILL ACQUISITION CORP DATE OF NAME CHANGE: 19980812 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act August 31, 1999 Date of Report (Date of Earliest Event Reported) AQUA VIE BEVERAGE CORPORATION (Exact Name of Registrant as Specified in its Charter) 333 South Main Street Ketchum, Idaho 83340 (Address of principal executive offices) 208/622-7792 Registrant's telephone number BARHILL ACQUISITION CORPORATION 1504 R Street, N.W. Washington, D.C. 20009 Former name and former address Delaware 0-24801 82-0506425 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) ITEM 1. CHANGES IN CONTROL OF REGISTRANT (a) Pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated as of August 31, 1999 between Barhill Acquisition Corporation ("Barhill"), a Delaware corporation, and Aqua Vie Beverage Corporation, a Delaware corporation, all the outstanding shares of common stock of Barhill Acquisition Corporation were exchanged for 250,000 shares of common stock of Aqua Vie Beverage Corporation ("Aqua Vie" or the "Company") in a transaction in which Aqua Vie was the surviving company. The Merger Agreement was adopted by the unanimous consent of the Board of Directors of Barhill and approved by the unanimous consent of the shareholders of Barhill on August 31, 1999. The Merger Agreement was adopted by the unanimous consent of the Board of Directors of Aqua Vie and by the consent of a majority of the shareholders of Aqua Vie on August 31, 1999. Prior to the merger, Barhill had 5,000,000 shares of common stock outstanding which shares were exchanged for 250,000 shares of common stock of Aqua Vie. By virtue of the merger, Aqua Vie acquired 100% of the issued and outstanding common stock of Barhill. Prior to the effectiveness of the merger, Aqua Vie had an aggregate of 21,785,657 shares of common stock issued and outstanding, and 3,897.689 shares of Series A preferred stock outstanding, $.001 par value, 4,987.444 shares of Series B preferred stock outstanding, $.001 par value, and no shares of Series C preferred stock outstanding. Each share of Series A preferred stock is entitled to approximately 1,800 voting rights on all matters on which shareholders are entitled to vote and can be converted into shares of common stock at a ratio of approximately 1,800 shares of common stock for each share of Series A preferred stock. Series A preferred stock has a preference on dividends, liquidation and merger at approximately $1,500 per share. Each share of Series B preferred stock is entitled to approximately 10,800 voting rights on all matters on which shareholders are entitled to vote. Each Series B share can be converted into shares of common stock on a sliding scale geared to the market price of Aqua Vie's stock starting at a conversion ratio of approximately 1,800 shares of common stock for each Series B share when the common stock is trading at $2.00 per share to a maximum ratio of approximately 10,800 shares of common stock for each Series B share when the common stock is trading at $12.00 per share. Series B preferred stock has a preference on dividends, liquidation and merger at $30 per share. Both Series A and Series B preferred stock have adjustment provisions for sales of common stock by Aqua Vie at a price of less than $1.65 per share. Holders of both Series A and Series B preferred stock have a limited right to convert to shares of common stock over a period of 36 months from the date of issuance. 5% of the preferred stock may be converted after 12 months, an additional 10% may be converted after 24 months, and the remainder after 36 months. The outstanding preferred shares were issued in October 15, 1998, and up to 5% of both the Series A and Series B preferred shares may be converted commencing October 15, 1999. The Company may require conversion on various events, including the election of 51% of the preferred shares outstanding to convert, an acquisition, merger or other action by the Company, after the closing of a public underwriting of $10,000,000, after the Company shall have a net worth of $10,000,000, or after the common stock has been listed on the Nasdaq Stock Market for at least three months. In the event of a mandatory conversion at the election of the Company, any enhanced voting rights or increased conversion rights will be fixed at the time of conversion. Upon effectiveness of the merger, Aqua Vie had an aggregate of 22,035,657 shares of common stock outstanding. The officers of Aqua Vie will continue as officers of the successor issuer. See "Management" below. The officers, directors, and by-laws of Aqua Vie will continue without change as the officers, directors, and by-laws of the successor issuer. Pursuant to the Merger Agreement, the Certificate of Incorporation was amended to increase the number of authorized shares of common stock from 50,000,000 to 120,000,000, to permit increases or decreases in the authorized number of shares of a class without class approval, and to elect not to be governed by the provisions of Section 203 of the Delaware General Corporation Law. A copy of the Merger Agreement is filed as an exhibit to this Form 8-K and is incorporated in its entirety herein. The foregoing description is modified by such reference. (b) The following table contains information regarding the shareholdings of Aqua Vie's current directors and executive officers and those persons or entities who beneficially own more than 5% of its common stock (giving effect to the exercise of the warrants held by each such person or entity): Amount of Preferred Stock Percent of Common Stock Voting Rights Common Stock Name Beneficially Beneficially Owned (1) Owned (2) Thomas Gillespie(3) 1,451,829 53,864,395 73% President, Director Joseph J. Wozniak (4) 0 2,417,400 10.3% Director Bruce A. Butcher (5) 0 1,800,000 7.6% Roy Schneiderman (6) 0 1,616,400 6.8% All directors and 1,451,829 56,281,795 73.7% executive officers as as group (2 persons) * Less than 1% percent (1) Based upon 22,035,657 outstanding shares of common stock (subsequent to the effectiveness of the merger). (2) Assumes exercise of warrants, options or other rights to purchase securities held by the named shareholder exercisable within six months of the date hereof. (3) All 4,987.444 outstanding Series B preferred stock is owned by Brace Foundation Trust on behalf of seven members of the Gillespie family, including Thomas Gillespie, who may be deemed to be the beneficial owner of all the shares. The 4,987.444 Series B preferred shares have voting rights equal to 53,864,395 common shares. (4) Mr. Wozniak holds 1,343 shares of Series A preferred stock which have voting rights equal to 2,417,400 common shares. (5) Mr. Butcher holds 1,000 shares of Series A preferred stock which have voting rights equal to 1,800,000 common shares. (6) Roy Schneiderman holds 898 shares of Series A preferred stock which having voting rights equal to 1,616,400 common shares. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (a) The consideration exchanged pursuant to the Merger Agreement was negotiated between Barhill and Aqua Vie. In evaluating Aqua Vie as a candidate for the proposed merger, Barhill used criteria such as the value of the assets of Aqua Vie, its spring water beverage products taste and design, its trademarks, the demand and use of bottled spring water, the increased use of the Internet as a sales market, Aqua Vie's current business operations and anticipated operations, and Aqua Vie's business name and reputation. Barhill determined that the consideration for the merger was reasonable. (b) Aqua Vie intends to continue developing and marketing its flavored water beverage business with the further development, marketing, and distribution of its naturally flavored spring water and the possible development of additional lines of beverage products. BUSINESS Aqua Vie is a development stage company that has developed and is marketing several flavors of bottled spring water. Aqua Vie Beverage Corporation, a Delaware corporation, was incorporated on July 30, 1998 and was formed as a successor to BEVA Corporation, a Delaware corporation which was liquidated in bankruptcy in 1997, in a transaction under Section 251 (g) of the Delaware Business Corporation Law completed October 14, 1998. BEVA Corporation is a wholly owned subsidiary of Aqua Vie. Although there is intense competition in the bottled water market by companies far larger and better capitalized than Aqua Vie, management believes the flavors and natural quality of its products will allow it to compete successfully with other sources of bottled water. There is no assurance that Aqua Vie will be able to successfully compete with other bottled water products. CURRENT OPERATIONS Aqua Vie develops, bottles and distributes naturally flavored bottled spring water offering such flavors as Avalanche (pear and guava flavored spring water), Bamboo (cherry flavored spring water), Paradise (orange and peach flavored spring water), Harvest (strawberry flavored spring water) and other flavors. These product lines and formulations were acquired in the purchase of assets from the predecessor company in liquidation. There are three additional beverage product lines that are currently being developed. Aqua Vie currently utilizes the Internet to generate sales and maintains an Internet web site at http://www.aquavie.com. Aqua Vie has bottling and labeling arrangements with Lyons Magnus Company, a large contract bottler located in Fresno, California and arrangements for foreign bottling in France. Sales to date have been minimal, and the Company has a small inventory of product which it is utilizing for marketing purposes. Additional capital will be required to support the inventory required for robust sales. SUPPLIERS Aqua Vie has three primary suppliers for its product: Lyons-Magnus, a contract bottler company, Fresno, California, International Flavors & Fragrances, a beverage syrup company, Dayton, New Jersey, and Seal-It, a shrink wrap label company, Farmingdale, New York. The bottler has to be considered as a single or limited source as Aqua Vie utilizes the aseptic bottling process and it is one of the few bottlers which has this capability in the United States. Shipments of bottled spring water are sent directly from warehouses proximate to the bottling companies. The aseptic bottling process, utilized by Aqua Vie, eliminates the use of preservatives. There are a limited number of bottlers in the United States which have the aseptic bottling process available. Aqua Vie intends to select its bottlers upon availability of the aseptic bottling system and geographic location. RAW MATERIALS Aqua Vie utilizes readily available standard PET bottles and sportscaps as its bottling medium. The main volume of the product is still water which is generally readily available. The shrink wrap labels are available from several major sources. The shrink wrap label supplier selected by the Company provides the best combination of label quality, delivery schedule and pricing break points for volume purchases. The main ingredient is the all natural flavored syrups which gives the product its unique tastes and qualities. The main supplier of the syrup is International Flavors & Fragrances which is a large flavor house, although several flavors are furnished by another flavor source. MARKETING The Company currently does not have shelving arrangements with any large retailers, but is actively seeking such arrangements. Marketing and sales are currently through radio and the Internet. TRADEMARKS Aqua Vie has no patents or licenses. Aqua Vie has certain trademarked and copy righted names and proprietary secrets as regards the various beverage formulations. It is believed that the various trademarked and copyrighted material are unique to the Company but that replacement identities are available. PROPERTY Aqua Vie maintains its administrative offices at 333 South Main Street, Sun Valley/Ketchum, Idaho 83340 under an annual lease of $7,833 per month for approximately 3,776 square feet. LITIGATION Thomas Gillespie and Joseph J. Wozniak are both party defendants in an action for the payment of approximately $67,000 in legal fees brought by the law firm that was engaged by Mr. Gillespie to obtain the confirmation of the reorganization of the original Aqua Vie Beverage Corporation in bankruptcy court. The law firm was unsuccessful in achieving reorganization confirmation or in the obtaining of the closing of the bankruptcy liquidation sale of the corporate assets held by the bankruptcy court. Mr. Gillespie and Mr. Wozniak have countersued for the refunding of $117,000 paid in fees to the law firm. MARKET FOR AQUA VIE'S SECURITIES Aqua Vie has been a non-reporting publicly traded company with certain of its securities exempt from registration under the Securities Act of 1933 pursuant to Rules 504 of Regulation D and Rule 701 of the General Rules and Regulations of the Securities and Exchange Commission. Aqua Vie's common stock is traded on the OTC Bulletin Board operated by Nasdaq under the symbol AVBC. Aqua Vie did not file a registration statement with the Securities and Exchange Commission and has not been a reporting company under the Securities Exchange Act of 1934. The Nasdaq Stock Market has implemented a change in its rules requiring all companies trading securities on the OTC Bulletin Board to become reporting companies under the Securities Exchange Act of 1934. Until such registration is achieved the Company's trading symbol is AVBCE to indicate its non-reporting status. The Company was required to become a reporting company by the close of business on September 1, 1999 or no longer be listed on the OTC Bulletin Board. Aqua Vie has effected the merger with Barhill and has become a successor issuer thereto in order to comply with the reporting company requirements implemented by the Nasdaq Stock Market. The following table represents the average prices for the Company's common stock: Opening High Low Closing Price Bid Bid Bid Volume July, 1999 0.5625 1.2188 0.5625 1.125 208,000 June, 1999 0.875 0.875 0.5312 0.5781 209,400 May, 1999 0.7656 0.875 0.75 0.8125 259,300 December, 1998 0.5312 0.5312 0.1406 0.1406 1,029,300 October, 1998 1.4844 1.56525 1.1719 1.25 110,900 May, 1998 1.875 1.9531 1.7969 1.7969 146,800 MANAGEMENT Name Age Title Thomas Gillespie 53 President, Director Joseph J. Wozniak 61 Vice President, Secretary, Director Thomas Gillespie is the founder of Aqua Vie and has served as President, a director and its controlling shareholder since its formation in 1998. Since 1996, Mr. Gillespie has owned Aqua Vie Advance Corporation. From 1991 to 1997, Mr. Gillespie served in various positions with Aqua Vie Beverage Corporation, the predecessor corporation to Aqua Vie's subsidiary, BEVA Corporation, which was liquidated in bankruptcy in 1997. From 1986 to 1991, Mr. Gillespie was the principal of Kauai Water Company, Kauai, Hawaii. Prior to 1986, Mr. Gillespie founded and served as president of Marketing Design, a retail package design and product development company. Joseph J. Wozniak has served as Vice President, Secretary and a director of Aqua Vie since its formation in 1998. From 1996 to 1997, Mr. Wozniak assisted with the reorganization and bankruptcy of the predecessor Aqua Vie Beverage Corporation. Since 1993, Mr. Wozniak has worked as a consultant for various start up entities assisting in the creation of business plans and corporate organizations and reorganizations. EXECUTIVE COMPENSATION Thomas Gillespie, as president, receives $20,000 per month. He has no form of other compensation. Joseph J. Wozniak receives $10,000 per month. Mr. Wozniak has a stock earn-out agreement which runs through January 15, 2000. RELATED TRANSACTIONS Thomas Gillespie, President, a director and controlling shareholder, has provided approximately $40,000 as an unsecured loan to Aqua Vie. RISK FACTORS AQUA VIE IS CURRENTLY OPERATING AT A LOSS. Revenues from Aqua Vie's sales to date have not been sufficient to cover the costs of such operations and Aqua Vie has borrowed funds to maintain its operations. Its ability to develop operations is dependent upon its ability to advertise its products and generate sales of its line of flavored spring water products. If Aqua Vie is unable to sell sufficient amount of its flavored spring water products at a sufficiently profitable level, it will need to raise additional capital through the placement of its securities or from other debt or equity financing. If the Company is not able to raise such financing or to obtain alternative sources of funding, management will be required to curtail operations. There is no assurance that the Company will be able to continue to operate if additional sales cannot be generated. AQUA VIE COMMENCED OPERATIONS IN 1998 AND HAS A LIMITED OPERATING HISTORY. Aqua Vie commenced operations in 1998 and has only a limited history of operations which to date have not been profitable. Its operations are subject to the risks and competition inherent in the establishment of a relatively new business enterprise. There can be no assurance that future operations will be profitable. Revenues and profits, if any, will depend upon various factors, including market acceptance of its concepts, market awareness, reliability and acceptance of the Internet, dependability of its distribution network, and general economic conditions. There is no assurance that Aqua Vie will achieve its expansion goals and the failure to achieve such goals would have an adverse impact on it. AQUA VIE'S ISSUED PREFERRED STOCK HAS SUPER MAJORITY VOTING RIGHTS. Aqua Vie has designated 200,000 shares of Series A preferred stock of which approximately 3,897.689 are issued. Each share of Series A preferred stock entitles the holder to 1,800 voting rights for an aggregate of approximately 7,015,860 for all Class A shares on all matters on which shareholders are entitled to vote. Aqua Vie has designated 200,000 shares of Series B preferred stock of which approximately 4,987.444 are issued. Each share of Series B preferred stock entitles the holder to 10,800 voting rights for an aggregate of approximately 53,863,392 votes for all Class B shares on all matters on which shareholders are entitled to vote. All the outstanding Class B shares are held by the Brace Foundation of which Thomas Gillespie is one of the beneficiaries and for which he holds all the voting proxies. In addition, Aqua Vie may, without further action or vote by its shareholders, designate and issue additional series or shares of preferred stock. The terms of the super majority preferred stock adversely affect the voting power of the holders of the common stock and may in turn reduce the value of the common stock. Such designation and issuance of preferred stock favorable to current management or shareholders makes the possible takeover of the Company or the removal of management of the Company very difficult and discourages hostile bids for control of the Company which bids might have provided shareholders with premiums for their shares. VOTING CONTROL OF AQUA VIE BY PRESIDENT. Thomas Gillespie, founder, President and a director of Aqua Vie, owns and controls beneficially the voting rights ascribed to all the outstanding Series B preferred shares aggregating a total of approximately 53,867,160 votes. Through such voting rights, Thomas Gillespie may control the vote of all matters brought before the shareholders and holders of the common stock may have no power in corporate decisions usually brought before the shareholders for shareholder vote. ADVANCES TO AN AFFILIATE. Aqua Vie has borrowed approximately $40,000 from its president and controlling shareholder. If it is unable to generate additional sales or other revenues sources, Aqua Vie may require additional borrowings in order to continue development of its operations. The current loan to the affiliate is unsecured. LACK OF CONTINUED DEVELOPMENT OF E-COMMERCE MARKET. The use of the Internet and World Wide Web for commercial purposes is expanding dramatically. There is no assurance, however, that as increased commerce takes place on the Internet that unforeseen overloads, lack of sufficient hardware, telephone availability or other problems may develop. In addition, consumer use of the Internet for purchases, banking, and other commercial uses may decline for any number of reasons such as security problems, overload difficulties, shopping trends, or slow Internet access. COMPETITION FROM LARGER AND MORE ESTABLISHED COMPANIES MAY HAMPER MARKETABILITY. The competition in the bottled water industry is intense. There are numerous well-established competitors, including national, regional and local companies possessing substantially greater financial, marketing, personnel and other resources than Aqua Vie. Aqua Vie may not be able to market or sell its products if faced with direct product competition from these larger and more established bottled water companies. TRADEMARK PROTECTION AND PROPRIETARY MARKS. Notwithstanding the pending registration of certain trade names with the United States Trademark Office, there is no assurance that Aqua Vie will be able to enforce against use of any of its marks. There is also no assurance that Aqua Vie will be able to prevent competitors from using the same or similar names, marks, concepts or appearances or that it will have the financial resources necessary to protect its marks against infringing use. MANAGEMENT AND AFFILIATES OWN ENOUGH SHARES TO CONTROL SHAREHOLDER VOTE. Aqua Vie's executive officers and directors beneficially own approximately 6.6% of the outstanding common stock of Aqua Vie (not including conversion of any preferred stock), but have voting rights equal to approximately 73% of the outstanding vote. As a result, these executive officers are able to exercise controlling interest over matters requiring stockholder approval, including the election of directors and the approval of material corporate matters such as change of control transactions. The effects of such control could be to delay or prevent a change of control of Aqua Vie unless the terms are approved by such stockholders. ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS SHARE VALUE. The Certificate of Incorporation as amended of Aqua Vie authorizes the issuance of 120,000,000 shares of common stock and 1,000,000 shares of preferred stock. The future issuance of all or part of the remaining authorized common stock may result in substantial dilution in the percentage of the Company's common stock held by the its then existing shareholders. Moreover, any common stock issued in the future may be valued on an arbitrary basis by Aqua Vie. The issuance of the Company's shares for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by investors, and might have an adverse effect on any trading market, should a trading market develop for the Company's common stock. CURRENT TRADING MARKET FOR THE COMPANY'S SECURITIES. Aqua Vie's common stock is traded on the OTC Bulletin Board operated by Nasdaq under the symbol AVBC. Aqua Vie did not file a registration statement with the Securities and Exchange Commission and has not been a reporting company under the Securities Exchange Act of 1934. The Nasdaq Stock Market has implemented a change in its rules requiring all companies trading securities on the OTC Bulletin Board to be registered as a reporting company. Until such registration is achieved the Company's trading symbol is AVBCE to indicate its non-reporting status. The Company was required to become a reporting company by the close of business on September 1, 1999 or no longer be listed on the OTC Bulletin Board. Aqua Vie has effected the merger with Barhill and has become a successor issuer thereto in order to comply with the reporting company requirements implemented by the Nasdaq Stock Market. No assurance can be given that an active trading market in the Company's securities will be sustained if it is able to retain its listed status. PENNY STOCK REGULATION. Upon commencement of trading in the Company's stock, if such continues (of which there can be no assurance) the Company's common stock may be deemed a penny stock. Penny stocks generally are equity securities with a price of less than $5.00 per share other than securities registered on certain national securities exchanges or quoted on the Nasdaq Stock Market, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The Company's securities may be subject to "penny stock rules" that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the "penny stock rules" require the delivery, prior to the transaction, of a disclosure schedule prescribed by the Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks. Consequently, the "penny stock rules" may restrict the ability of broker-dealers to sell the Company's securities. The foregoing required penny stock restrictions will not apply to the Company's securities if such securities maintain a market price of $5.00 or greater. There can be no assurance that the price of the Company's securities will reach or maintain such a level. COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000. Many existing computer programs use only two digits to identify a year in such program's date field. These programs were designed and developed without consideration of the impact of the change in the century for which four digits will be required to accurately report the date. If not corrected, many computer applications could fail or create erroneous results by or following the year 2000 (the "Year 2000 problem"). Many of the computer programs containing such date language problems have been corrected by the companies or governments operating such programs. The Company's operations are dependent upon the timely delivery of supplies which deliveries and production of bottled water may be delayed or canceled because of such Year 2000 problem computer failures. The Company does not know what steps, if any, have been taken by any of its suppliers or bottlers in regard to the Year 2000 problems. The Company's operations will be severally curtailed if one or more of its suppliers were to suffer Year 2000 problems. Furthermore, it is impossible to predict if the basic utilities serving the company, its bottlers, or suppliers will continue uninterrupted. ITEM 3. BANKRUPTCY OR RECEIVERSHIP Aqua Vie Beverage Corporation, the predecessor corporation of the Company's subsidiary BEVA Corporation, was incorporated in the state of Delaware on March 30, 1990 as the JIB Group, Inc. and changed its name on January 22, 1991 to Aqua Vie Beverage Corporation. The original Aqua Vie Beverage Corporation was placed into involuntary Chapter 11 bankruptcy in January 1995 as a move in a hostile takeover attempt and a trustee was assigned. From January 1995 to November 1996, Mr. Gillespie attempted to reorganize the original Aqua Vie Beverage Corporation and regain management control. This was not effected and in early November 1996 it was decided and agreed to with the trustee to acquire the assets, the corporate and the corporate shell through a bankruptcy liquidation sale. In September 1997, a bill of sale was obtained from the bankruptcy trustee and the assets were purchased. Subsequently a reorganization was effected pursuant to a merger under Section 251(g) of the Delaware General Business Corporation Law in October 1998. Except for the time under control of the bankruptcy trustee, Mr. Gillespie was the chief executive officer of the original Aqua Vie Beverage Corporation. ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT Not applicable. ITEM 5. OTHER EVENTS Successor Issuer Election. Upon effectiveness of the merger, pursuant to Rule 12g-3(a) of the General Rules and Regulations of the Securities and Exchange Commission, Aqua Vie became the successor issuer to Barhill Acquisition Corporation for reporting purposes under the Securities Exchange Act of 1934 and elects to report under the Act effective on September 1, 1999. ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS Not applicable. ITEM 7. FINANCIAL STATEMENTS No financial statements are filed herewith. The Registrant shall file financial statements by amendment hereto not later than 60 days after the date that this initial report on Form 8-K must be filed. ITEM 8. CHANGE IN FISCAL YEAR The successor issuer is adopting a fiscal year end of July 31. The Company will file a transitional annual report as required. EXHIBITS 1.1 Agreement and Plan of Merger and amendment thereto between Barhill Acquisition Corporation and Aqua Vie Beverage Corporation. 1.2 Original unamended Certificate of Incorporation of Aqua vie Beverage Corporation-H SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AQUA VIE BEVERAGE CORPORATION By /s/ Thomas Gillespie Date: September 1, 1999 EX-1 2 AGREEMENT AND PLAN OF MERGER between BARHILL ACQUISITION CORPORATION, a Delaware corporation ("Barhill"), and AQUA VIE BEVERAGE CORPORATION, a Delaware corporation ("Aqua Vie"), Barhill and Aqua Vie being sometimes referred to herein as the "Constituent Corporations." WHEREAS, the board of directors of each Constituent Corporation deems it advisable that the Constituent Corporations merge into a single corporation in a transaction intended to qualify as a reorganization within the meaning of Section368(a)(1)(A) of the Internal Revenue Code of 1986, as amended ("the Merger"); NOW, THEREFORE, in consideration of the premises and the respective mutual covenants, representations and warranties herein contained, the parties agree as follows: 1. SURVIVING CORPORATION. Barhill shall be merged with and into Aqua Vie which shall be the surviving reporting corporation (hereinafter the "Surviving Corporation") in accordance with the applicable laws of the State of Delaware. 2. MERGER DATE. The Merger shall become effective (the "Merger Date") upon the completion of: 2.1 Adoption of this Agreement by the shareholders of Barhill pursuant to the General Corporation Law of Delaware and by the shareholders of Aqua Vie by a vote of the shareholders ratified by the Board of Directors of Aqua Vie, pursuant to the Business Corporation Law of Delaware. 2.2 Execution and filing of the Certificate of Merger with the Secretary of State of the State of Delaware in accordance with the General Corporation Law of Delaware. 3. TIME OF FILINGS. The Certificate of Merger shall be filed with the Secretary of State of Delaware upon the approval of this Agreement by the shareholders of the Constituent Corporations and the fulfillment or waiver of the terms and conditions herein. 4. GOVERNING LAW. The Surviving Corporation shall be governed by the laws of the State of Delaware. 5. CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of Aqua Vie shall be the Certificate of Incorporation of the Surviving Corporation from and after the Merger Date, subject to the following changes in its Certificate of Incorporation: ARTICLE FOURTH: The first complete sentence of Article Fourth of the Certificate of Incorporation of AQUA VIE BEVERAGE CORPORATION shall be amended to read as follows: "The aggregate number of shares of common stock which the corporation shall have authority to issue is One Hundred Twenty Million, $.001 par value per share". ARTICLE FOURTH: Article Fourth is further amended to add a new Subsection D which shall provide as follows: "The authorized shares of a class of stock may be increased or decreased without the approval of the shares of that class, but not below the number of shares issued unless a combination shall have occurred." ARTICLE FOURTEENTH: A new Article Fourteenth is added to read as follows: "Section 203 of the Delaware General Corporation Law shall not be applicable to the Corporation. 6. BYLAWS. The Bylaws of the Surviving Corporation shall be the Bylaws of Aqua Vie as in effect on the date of this Agreement. 7. NAME OF SURVIVING CORPORATION. The Surviving Corporation will continue to use its name "Aqua Vie Beverage Corporation" or such name as it may choose and shall be available. 8. CONVERSION. The mode of carrying the merger into effect and the manner and basis of converting the shares of Barhill into shares of the Surviving Corporation are as follows: 8.1 The aggregate number of shares of Barhill Common Stock issued and outstanding on the Merger Date shall, by virtue of the merger and without any action on the part of the holders thereof, be converted into an aggregate of 250,000 shares of Aqua Vie Common Stock adjusted by any increase for fractional shares and reduced by any Dissenting Shares (defined below). 8.2 At June 30, 1999, there were issued and outstanding approximately 21,785,657 shares of Common Stock of Aqua Vie. 8.3 The Aqua Vie Common Stock shall be issued to the holders of such Barhill Common Stock in exchange for their shares on a pro rata basis in accordance with each holder's relative ownership of the Barhill Common Stock that is being exchanged. 8.4 All outstanding warrants of Barhill and any other outstanding rights to purchase stock of Barhill shall be adjusted, pursuant to the terms contained in such warrants or other rights documents, for conversion to warrants or rights to purchase stock of Aqua Vie on the same ratio as provided herein for holders of Aqua Vie Common Stock. 8.5 The shares of Aqua Vie Common Stock to be issued in exchange for Barhill Common Stock hereunder shall be proportionately reduced by any shares owned by Barhill shareholders who shall have timely objected to the merger (the "Dissenting Shares") in accordance with the provisions of General Corporation Law of Delaware which objections will be dealt with as provided in those sections. 8.6 Each share of Barhill Common Stock that is issued and outstanding and owned by Barhill on the Merger Date shall, by virtue of the merger and without any action on the part of Barhill, be retired and canceled. 8.7 Each certificate evidencing ownership of shares of Aqua Vie Common Stock issued and outstanding on the Merger Date or held by Aqua Vie in its treasury shall continue to evidence ownership of the same number of shares of Aqua Vie Common Stock. 9. EXCHANGE OF CERTIFICATES. As promptly as practicable after the Merger Date, each holder of an outstanding certificate or certificates theretofore representing shares of Barhill Common Stock (other than certificates representing Dissenting Shares) shall surrender such certificate(s) for cancellation to the party designated by the Surviving Corporation to handle such exchange (the "Exchange Agent"), and shall receive in exchange a certificate or certificates representing the number of full shares of Aqua Vie Common Stock into which the shares of Barhill Common Stock represented by the certificate or certificates so surrendered shall have been converted. 10. UNEXCHANGED CERTIFICATES. Until surrendered, each outstanding certificate that prior to the Merger Date represented Barhill Common Stock (other than certificates representing Dissenting Shares) shall be deemed for all purposes, other than the payment of dividends or other distributions, to evidence ownership of the number of shares of Aqua Vie Common Stock into which it was converted. No dividend or other distribution payable to holders of Aqua Vie Common Stock as of any date subsequent to the Merger Date shall be paid to the holders of outstanding certificates of Barhill Common Stock; provided, however, that upon surrender and exchange of such outstanding certificates (other than certificates representing Dissenting Shares), there shall be paid to the record holders of the certificates issued in exchange therefor the amount, without interest thereon, of dividends and other distributions that would have been payable subsequent to the Merger Date with respect to the shares of Aqua Vie Common Stock represented thereby. 11. BOARD OF DIRECTORS AND OFFICERS. The members of the board of directors of the Surviving Corporation shall be the members of the board of directors of Aqua Vie on the Merger Date or such others as Aqua Vie may designate. The officers of the Surviving Corporation shall be the officers of Aqua Vie on the Merger Date or such others as Aqua Vie may designate. 12. EFFECT OF THE MERGER. On the Merger Date, the separate existence of Barhill shall cease (except insofar as continued by statute), and it shall be merged with and into the Surviving Corporation. All the property, real, personal, and mixed, of each of the Constituent Corporations, and all debts due to either of them, shall be transferred to and vested in the Surviving Corporation, without further act or deed. The Surviving Corporation shall thenceforth be responsible and liable for all the liabilities and obligations, including liabilities to holders of Dissenting Shares, of each of the Constituent Corporations, and any claim or judgment against either of the Constituent Corporations may be enforced against the Surviving Corporation. 13. APPROVAL OF SHAREHOLDERS. This Agreement shall be adopted by the shareholders of the Constituent Corporations at meetings of such shareholders called for that purpose or by written consent pursuant to the laws applicable thereto. There shall be required for the adoption of this Agreement the affirmative vote of the holders of at least a majority of the holders of all the shares of the Common Stock issued and outstanding and entitled to vote for each of the Constituent Corporations. 14. REPRESENTATIONS AND WARRANTIES OF BARHILL. Barhill represents and warrants that: 14.1 CORPORATE ORGANIZATION AND GOOD STANDING. Barhill is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and is qualified to do business as a foreign corporation in each jurisdiction, if any, in which its property or business requires such qualification. 14.2 REPORTING COMPANY. Barhill has filed with the Securities and Exchange Commission a registration statement on Form F-10 which became effective pursuant to the Securities Exchange Act of 1934 and is a reporting company pursuant to Section12 thereunder. 14.3 REPORTING COMPANY STATUS. Barhill has timely filed and is current on all reports required to be filed by it pursuant to Section12(g) of the Securities Exchange Act of 1934. 14.4 CAPITALIZATION. Barhill's authorized capital stock consists of 120,000,000 shares of Common Stock, $.0001 par value, of which 5,000,000 shares are issued and outstanding, and 20,000,000 shares of non-designated preferred stock of which no shares are designated or issued. 14.5 ISSUANCE OF STOCK. All the outstanding shares of its Common Stock are duly authorized and validly issued, fully paid and non-assessable. 14.6 STOCK RIGHTS. There are no stock grants, options, rights, warrants or other rights to purchase or obtain the Barhill Common or Preferred Stock issued or committed to be issued. 14.7 CORPORATE AUTHORITY. Barhill 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. 14.8 AUTHORIZATION. Execution of this Agreement has been duly authorized and approved by Barhill's board of directors. 14.9 SUBSIDIARIES. Barhill has no subsidiaries. 14.10 FINANCIAL STATEMENTS. Barhill's audited financial statements dated December 31, 1998, copies of which will have been delivered by Barhill to Aqua Vie prior to the Merger Date (the "Barhill Financial Statements"), fairly present the financial condition of Barhill as of the date therein and the results of its operations for the periods then ended in conformity with generally accepted accounting principles consistently applied. 14.11 ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent reflected or reserved against in the Barhill Financial Statements, Barhill did not have at that date any liabilities or obligations (secured, unsecured, contingent, or otherwise) of a nature customarily reflected in a corporate balance sheet prepared in accordance with generally accepted accounting principles. 14.12 NO MATERIAL CHANGES. There has been no material adverse change in the business, properties, or financial condition of Barhill since the date of the Barhill Financial Statements. 14.13 LITIGATION. There is not, to the knowledge of Barhill, any pending, threatened, or existing litigation, bankruptcy, criminal, civil, or regulatory proceeding or investigation, threatened or contemplated against Barhill or against any of its officers. 14.14 CONTRACTS. Barhill is not a party to any material contract not in the ordinary course of business that is to be performed in whole or in part at or after the date of this Agreement. 14.15 TITLE. Barhill has good and marketable title to all the real property and good and valid title to all other property included in the Barhill Financial Statements. Except as set out in the balance sheet thereof, the properties of Barhill are not subject to any mortgage, encumbrance, or lien of any kind except minor encumbrances that do not materially interfere with the use of the property in the conduct of the business of Barhill. 14.16 TAX RETURNS. All federal, state, county, municipal, local, foreign and other taxes and assessments, including any and all interest, penalties and additions imposed with respect to such amounts, have been properly prepared and filed by Barhill for all years to and including the taxable year ending December 31, 1998. Any and all federal, state, county, municipal, local, foreign and other taxes and assessments, including any and all interest, penalties and additions imposed with respect to such amounts for the year ending December 31, 1998, have been paid or if any is outstanding as at the date hereof provision has been made prorated to the date hereof to be an adjustment to the credit of Aqua Vie payable to Aqua Vie on the merger hereof. The provisions for federal and state taxes reflected in the Barhill Financial Statements are adequate to cover any such taxes that may be assessed against Barhill in respect of its business and its operations during the periods covered by the Barhill Financial Statements and all prior periods. 14.17 NO VIOLATION. Consummation of the merger will not constitute or result in a breach or default under any provision of any charter, bylaw, indenture, mortgage, lease, or agreement, or any order, judgment, decree, law, or regulation to which any property of Barhill is subject or by which Barhill is bound. 15. REPRESENTATIONS AND WARRANTIES OF AQUA VIE. Aqua Vie represents and warrants that: 15.1 CORPORATE ORGANIZATION AND GOOD STANDING. Aqua Vie is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and is qualified to do business as a foreign corporation in each jurisdiction, if any, in which its property or business requires such qualification. 15.2 CAPITALIZATION. Aqua Vie's authorized capital stock consists of 50,000,000 shares of Common Stock, $.001 par value, of which 21,785,657 shares are issued and outstanding, and 1,000,000 shares of Preferred Stock, $.001 par value, of which 3,897.689 shares of Series A and 4,987.444 shares of Series B Preferred Stock have been issued. Each Series A share of Preferred Stock is entitled to 1,800 voting rights on all matters on which shareholders are entitled to vote and can be converted into shares of Common Stock at a ratio of 1,800 shares of common stock for each Series A share. Each Series B share of Preferred Stock is entitled to 10,800 voting rights on all matters on which shareholders are entitled to vote. Each Series B share can be converted into shares of common stock on a sliding scale geared to the market price of Aqua Vie's stock starting at a conversion ratio of 1,800 shares of Common Stock for each Series B share when the Common Stock is trading at $2.00 per share to a maximum ratio of 10,800 shares of Common Stock for each Series B share when the Common Stock is trading at $12.00 per share. 15.3 ISSUED STOCK. All the outstanding shares of its Common Stock are duly authorized and validly issued, fully paid and non-assessable. 15.4 CORPORATE AUTHORITY. Aqua Vie 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. 15.5 AUTHORIZATION. Execution of this Agreement has been duly authorized and approved by Aqua Vie's board of directors. 15.6 SUBSIDIARIES. Aqua Vie has one subsidiary. 15.7 FINANCIAL STATEMENTS. Aqua Vie's unaudited financial statements of May 30, 1999, copies of which will have been delivered by Aqua Vie to Barhill by the Merger Date (the "Aqua Vie Financial Statements"), are believed to be substantially correct and fairly present the financial condition of Aqua Vie as of the date therein and the results of its operations for the periods then ended in conformity with generally accepted accounting principles consistently applied. 15.8 ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent reflected or reserved against in the Aqua Vie Financial Statements, Aqua Vie did not have at that date any liabilities or obligations (secured, unsecured, contingent, or otherwise) of a nature customarily reflected in a corporate balance sheet prepared in accordance with generally accepted accounting principles. 15.9 NO MATERIAL CHANGES. There has been no material adverse change in the business, properties, or financial condition of Aqua Vie since the date of the Aqua Vie Financial Statements. 15.10 LITIGATION. There is not, to the knowledge of Aqua Vie, any pending, threatened, or existing litigation, bankruptcy, criminal, civil, or regulatory proceeding or investigation, threatened or contemplated against Aqua Vie or against any of its officers. 15.11 CONTRACTS. Aqua Vie is not a party to any material contract not in the ordinary course of business that is to be performed in whole or in part at or after the date of this Agreement. 15.12 TITLE. Aqua Vie has good and marketable title to all the real property and good and valid title to all other property included in the Aqua Vie Financial Statements. Except as set out in the balance sheet thereof, the properties of Aqua Vie are not subject to any mortgage, encumbrance, or lien of any kind except minor encumbrances that do not materially interfere with the use of the property in the conduct of the business of Aqua Vie. 15.13 NO VIOLATION. Consummation of the merger will not constitute or result in a breach or default under any provision of any charter, bylaw, indenture, mortgage, lease, or agreement, or any order, judgment, decree, law, or regulation to which any property of Aqua Vie is subject or by which Aqua Vie is bound. 16. CONDUCT OF BARHILL PENDING THE MERGER DATE. Barhill covenants that between the date of this Agreement and the Merger Date: 16.1 No change will be made in Barhill's articles of incorporation or bylaws. 16.2 Barhill will not make any change in its authorized or issued capital stock, declare or pay any dividend or other distribution or issue, encumber, purchase, or otherwise acquire any of its capital stock other than as provided herein. 16.3 Barhill will submit this Agreement for its shareholders' approval with a favorable recommendation by its board of directors and will use its best efforts to obtain the requisite shareholder approval. 16.4 Barhill will use its best efforts to maintain and preserve its business organization, employee relationships, and goodwill intact, and will not enter into any material commitment except in the ordinary course of business. 17. CONDUCT OF AQUA VIE PENDING THE MERGER DATE. Aqua Vie covenants that between the date of this Agreement and the Merger Date: 17.1 No change will be made in Aqua Vie's certificate of incorporation or bylaws. 17.2 Aqua Vie will not make any change in its authorized or issued capital stock, declare or pay any dividend or other distribution or issue, encumber, purchase, or otherwise acquire any of its capital stock otherwise than as provided herein. 17.3 Aqua Vie will submit this Agreement for its shareholders' approval with a favorable recommendation by its board of directors and will use its best efforts to obtain the requisite shareholder approval. 17.4 Aqua Vie will use its best efforts to maintain and preserve its business organization, employee relationships, and goodwill intact, and will not enter into any material commitment except in the ordinary course of business. 18. CONDITIONS PRECEDENT TO OBLIGATION OF BARHILL. Barhill's obligation to consummate this merger shall be subject to fulfillment on or before the Merger Date of each of the following conditions, unless waived in writing by Barhill: 18.1 AQUA VIE'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of Aqua Vie set forth herein shall be true and correct at the Merger Date as though made at and as of that date, except as affected by transactions contemplated hereby. 18.2 AQUA VIE'S COVENANTS. Aqua Vie shall have performed all covenants required by this Agreement to be performed by it on or before the Merger Date. 18.3 SHAREHOLDER APPROVAL. This Agreement shall have been approved by the required number of shareholders of the Constituent Corporations. 18.4 SUPPORTING DOCUMENTS OF AQUA VIE. Aqua Vie shall have delivered to Barhill supporting documents in form and substance satisfactory to Barhill to the effect that: (i) Aqua Vie is a corporation duly organized, validly existing, and in good standing. (ii) Aqua Vie's authorized and issued capital stock is as set forth herein. (iii) The execution and consummation of this Agreement have been duly authorized and approved by Aqua Vie's board of directors. 19. CONDITIONS PRECEDENT TO OBLIGATION OF AQUA VIE. Aqua Vie's obligation to consummate this merger shall be subject to fulfillment on or before the Merger Date of each of the following conditions, unless waived in writing by Aqua Vie: 19.1 BARHILL'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of Barhill set forth herein shall be true and correct at the Merger Date as though made at and as of that date, except as affected by transactions contemplated hereby. 19.2 BARHILL'S COVENANTS. Barhill shall have performed all covenants required by this Agreement to be performed by it on or before the Merger Date. 19.3 SHAREHOLDER APPROVAL. This Agreement shall have been approved by the required number of shareholders of the Constituent Corporations. 19.4 SUPPORTING DOCUMENTS OF BARHILL. Barhill shall have delivered to Aqua Vie supporting documents in form and substance satisfactory to Aqua Vie to the effect that: (i) Barhill is a corporation duly organized, validly existing, and in good standing. (ii) Barhill's authorized and issued capital stock is as set forth herein. (iii) The execution and consummation of this Agreement have been duly authorized and approved by Barhill's board of directors. 20. ACCESS. From the date hereof to the Merger Date, Aqua Vie and Barhill shall provide each other with such information and permit each other's officers and representatives such access to its properties and books and records as the other may from time to time reasonably request. If the merger is not consummated, all documents received in connection with this Agreement shall be returned to the party furnishing such documents, and all information so received shall be treated as confidential. 21. CLOSING. The transfers and deliveries to be made pursuant to this Agreement (the "Closing") shall be made by and take place at the offices of the Exchange Agent or other location designated by the Constituent Corporations without requiring the meeting of the parties hereof. All proceedings to be taken and all documents to be executed at the Closing shall be deemed to have been taken, delivered and executed simultaneously, and no proceeding shall be deemed taken nor documents deemed executed or delivered until all have been taken, delivered and executed. 21.1 Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission required by this Agreement or any signature required thereon may be used in lieu of an original writing or transmission or signature for any and all purposes for which the original could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission or original signature. 21.2 At the Closing, Barhill shall deliver to the Exchange Agent in satisfactory form, if not already delivered to Aqua Vie: (i) A list of the holders of the shares of Barhill Common Stock being exchanged with an itemization of the number of shares held by each, the address of each holder, and the aggregate number of shares of Aqua Vie Common Stock to be issued to each holder; (ii) Evidence of the consent of shareholders of Barhill to this Agreement; (iii) Certificate of the Secretary of State of Delaware as of a recent date as to the good standing of Barhill; (iv) Certified copies of the resolutions of the board of directors of Barhill authorizing the execution of this Agreement and the consummation of the Merger; (v) The Barhill Financial Statements; (vi) Secretary's certificate of incumbency of the officers and directors of Barhill; and (vii) Any document as may be specified herein or required to satisfy the conditions, representations and warranties enumerated elsewhere herein. 21.3 At the Closing, Aqua Vie shall deliver to the Exchange Agent in satisfactory form, if not already delivered to Barhill: (i) A list of the shareholders of record of Aqua Vie, including, wherever available, addresses and telephone numbers; (ii) Evidence of the consent of shareholders of Aqua Vie to this Agreement; (iii) Certificate of the Secretary of State of Delaware as of a recent date as to the good standing of Aqua Vie; (iv) Certified copies of the resolutions of the board of directors of Aqua Vie authorizing the execution of this Agreement and the consummation of the merger; (v) The Aqua Vie Financial Statements; (vi) Secretary's certificate of incumbency of the officers and directors of Aqua Vie; and (vii) Any document as may be specified herein or required to satisfy the conditions, representations and warranties enumerated elsewhere herein. 22. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Constituent Corporations set out herein shall survive the Merger Date. 23. ARBITRATION. 23.1 SCOPE. The parties hereby agree that any and all claims (except only for requests for injunctive or other equitable relief) whether existing now, in the past or in the future as to which the parties or any affiliates may be adverse parties, and whether arising out of this agreement or from any other cause, will be resolved by arbitration before the American Arbitration Association within the District of Columbia. 23.2 CONSENT TO JURISDICTION, SITUS AND JUDGEMENT. The parties hereby irrevocably consent to the jurisdiction of the American Arbitration Association and the situs of the arbitration within the District of Columbia. Any award in arbitration may be entered in any domestic or foreign court having jurisdiction over the enforcement of such awards. 23.3 APPLICABLE LAW. The law applicable to the arbitration and this agreement shall be that of the District of Columbia, determined without regard to its provisions which would otherwise apply to a question of conflict of laws. 23.4 DISCLOSURE AND DISCOVERY. The arbitrator may, in its discretion, allow the parties to make reasonable disclosure and discovery in regard to any matters which are the subject of the arbitration and to compel compliance with such disclosure and discovery order. The arbitrator may order the parties to comply with all or any of the disclosure and discovery provisions of the Federal Rules of Civil Procedure, as they then exist, as may be modified by the arbitrator consistent with the desire to simplify the conduct and minimize the expense of the arbitration. 23.5 RULES OF LAW. Regardless of any practices of arbitration to the contrary, the arbitrator will apply the rules of contract and other law of the jurisdiction whose law applies to the arbitration so that the decision of the arbitrator will be, as much as possible, the same as if the dispute had been determined by a court of competent jurisdiction. 23.6 FINALITY AND FEES. Any award or decision by the American Arbitration Association shall be final, binding and non-appealable except as to errors of law or the failure of the arbitrator to adhere to the arbitration provisions contained in this agreement. Each party to the arbitration shall pay its own costs and counsel fees except as specifically provided otherwise in this agreement. 23.7 MEASURE OF DAMAGES. In any adverse action, the parties shall restrict themselves to claims for compensatory damages and\or securities issued or to be issued and no claims shall be made by any party or affiliate for lost profits, punitive or multiple damages. 23.8 COVENANT NOT TO SUE. The parties covenant that under no conditions will any party or any affiliate file any action against the other (except only requests for injunctive or other equitable relief) in any forum other than before the American Arbitration Association, and the parties agree that any such action, if filed, shall be dismissed upon application and shall be referred for arbitration hereunder with costs and attorney's fees to the prevailing party. 23.9 INTENTION. It is the intention of the parties and their affiliates that all disputes of any nature between them, whenever arising, whether in regard to this agreement or any other matter, from whatever cause, based on whatever law, rule or regulation, whether statutory or common law, and however characterized, be decided by arbitration as provided herein and that no party or affiliate be required to litigate in any other forum any disputes or other matters except for requests for injunctive or equitable relief. This agreement shall be interpreted in conformance with this stated intent of the parties and their affiliates. 23.10 SURVIVAL. The provisions for arbitration contained herein shall survive the termination of this agreement for any reason. 24. GENERAL PROVISIONS. 24.1 FURTHER ASSURANCES. From time to time, each party will execute such additional instruments and take such actions as may be reasonably required to carry out the intent and purposes of this Agreement. 24.2 WAIVER. Any failure on the part of either party hereto to comply with any of its obligations, agreements, or conditions hereunder may be waived in writing by the party to whom such compliance is owed. 24.3 BROKERS. Each party agrees to indemnify and hold harmless the other party against any fee, loss, or expense arising out of claims by brokers or finders employed or alleged to have been employed by the indemnifying party. 24.4 NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been given if delivered in person or sent by prepaid first-class certified mail, return receipt requested, or recognized commercial courier service, as follows: If to Barhill, to: Barhill Acquisition Corporation 1504 R Street, N.W. Washington, D.C. 20009 If to Aqua Vie, to Aqua Vie Beverage Corporation PO Box 6759 333 South Main Street Ketchum, Idaho 83340 25 GOVERNING LAW. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. 26. ASSIGNMENT. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their successors and assigns; provided, however, that any assignment by either party of its rights under this Agreement without the written consent of the other party shall be void. 27. COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures sent by facsimile transmission shall be deemed to be evidence of the original execution thereof. 28. EXCHANGE AGENT AND CLOSING DATE. The Exchange Agent shall be Cassidy & Associates. Closing shall take place on August 31, 1999, or as soon thereafter as practicable. The date of Closing may be accelerated or extended by agreement of the parties. 29. EFFECTIVE DATE. This effective date of this Agreement shall be August 31, 1999. SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER BETWEEN BARHILL ACQUISITION CORPORATION AND AQUA VIE BEVERAGE CORPORATION IN WITNESS WHEREOF, the parties have executed this Agreement. BARHILL ACQUISITION CORPORATION By /s/ James M. Cassidy AQUA VIE BEVERAGE CORPORATION By /s/ Thomas Gillespie EX-2 3 CERTIFICATE OF INCORPORATION OF AQUA VIE BEVERAGE CORPORATION-H FIRST: The name of the Corporation is Aqua Vie Beverage Corporation-H, (the "Corporation"). SECOND: The registered office of the Corporation in the State of Delaware is located at 1013 Centre Road, City of Wilmington, County of New Castle. The name and address of its registered agent is CSC, 1013 Centre Road, City of Wilmington, County of New Castle, Delaware 19805. THIRD: The nature of the business, objects and purposes to be transacted, promoted or carried on by the Corporation are: To manufacture, purchase or otherwise acquire, invest in, mortgage, Pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and with goods, wares and merchandise and personal property of every class description; To acquire, and pay for in cash, stock or bonds of this Corporation or otherwise, the goodwill, rights, assets and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, partnership, trust, joint stock company, syndicate, firm, association or corporation; To acquire, hold use, sell, assign, lease, and grant licenses in respect of, mortgage or otherwise dispose of letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trademark and trade names relating to or useful in connection with any business of the Corporation; To acquire by purchase, subscription or otherwise, and to receive, hold, own, sell, assign, exchange, transfer, mortgage, pledge or otherwise dispose of or deal in and with any of the shares of the capital stock, or any voting trust Certificates in respect of the shares of capital stock, scrip, warrants, rights, Bonds, debentures, notes, trust receipts and other securities, obligations, Chooses in action and evidences of indebtedness or interest issued or created by any corporations, joint stock companies, syndicates, associations, firms, trust or person, public or private, or by the government of the United States of America, or by any foreign government, or by any state, territory, province, municipality or other political subdivision or by any governmental agency, and as owner thereof to possess and exercise all the rights, powers, and privileges of ownership, including the right to execute consents and vote thereon, and to do any and all acts and things necessary or advisable for the preservation, protection, improvement and enhancement in value thereof; To borrow or raise money for any of the purposes of the Corporation and, from time to time without limit as to amount, to draw, make, accept, endorse, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures, and other negotiable or nonnegotiable instruments and evidences of indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of the whole or any part of the property of the Corporation, whether at the time owned or thereafter acquired, and to sell, pledge, or otherwise dispose of such bonds or other obligations of the Corporation for its corporate purposes; To purchase, receive, take by grant, gift, devise, bequest or otherwise lease, or otherwise acquire, own, hold, improve, employ, use and otherwise deal in and with, real or personal property, or any interest therein, wherever situated, and to sell, convey, lease, exchange, transfer or otherwise dispose of, or mortgage or pledge, all or any of the Corporation's property and assets, or any interest therein, wherever situated; and To engage in any lawful act or activity for which corporations may be organized under the existing laws of the state of Delaware. The business and purposes specified in the foregoing clauses shall, except where otherwise expressed, be in nowise limited or restricted by reference to, or inference from, the terms of any other clause in this Certificate of Incorporation, but the business and purposes specified in each of the foregoing clauses of this article shall be regarded as independent business and purposes. FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue shall be 51,000,000 shares, of which 1,000,000 shares will be preferred stock of the par value of one tenth of a cent each ($.001) (hereinafter called the "Preferred Stock") and of which 50,000,000 shares shall be common stock of the par value of one tenth of a cent each ($.001) (hereinafter called the "Common Stock"). The following is a statement of the powers, preferences and rights and the qualifications, limitations and restrictions, of classes of stock of the Corporation, and the authority with respect thereto expressly vested in the Board of Directors of the Corporation. Serial Preferred Stock (1) Shares of Serial Preferred Stock may be issued from time to time in one or more series, each such series to have distinctive serial designations, as shall hereafter be determined in the resolution or resolutions providing for the issue of such Serial Preferred Stock from time to time adopted by the Board of Directors pursuant to authority so to do which is hereby vested in the Board of Directors. (2) Each series of Serial Preferred Stock a. May have such number of shares; b. May have such voting powers, full or limited, or may be without voting powers; c. May be subject to redemption at such time or times and at such prices; d. May be entitled to receive dividends (which may be cumulative or non cumulative ), at such rate or rates, on such conditions, from such date or dates, and at such times, and payable in preference to, or in relation to, the dividends payable on any other class or classes or series of stock; e. May have such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; f. May be made convertible into, or exchangeable for, shares of any other class or classes of any other series of the same or any other class or classes of stock of the Corporation at such price or prices or at such rates of exchange, and with such adjustments; g. May be entitled to the benefit of a sinking fund or purchase fund to be applied to the purchase or redemption of shares of such series in such amount or amounts; h. May be entitled to the benefits of such conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary, upon the issuance of any additional stock (including additional shares of such series or any other series) and upon the payment of dividends or the making of other distributions on and the purchase redemption or other acquisition by the Corporation or any subsidiary of any outstanding stock of the Corporation; and i. May have such other relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof; all as shall be stated in said resolution or resolutions providing for the issuance of such Serial Preferred Stock. Except where otherwise set forth in the resolution or resolutions adopted by the Board of Directors providing for the issuance of any series of Serial Preferred Stock, the number of shares comprising such series may be increased or decreased (but not below the number of shares then outstanding) from time to time by like action of the Board of Directors. (3) Shares of any series of Serial Preferred Stock which have been redeemed (whether through the operation of a sinking fund or otherwise) or purchased by the Corporation, or which, if convertible or exchangeable, have been converted into or exchanged for shares of stock of any other class or classes shall have the statue of authorized and unissued shares of Serial Preferred Stock and may be reissued as a part of the series of which there were originally a part or may be reclassified and reissued as part of a new series of Serial Preferred Stock to be created by resolution or resolutions of the Board of Directors or as part of any other series of Preferred Stock, all subject to the conditions or restrictions on issuance set forth in the resolution or resolutions adopted by the Board of Directors providing for the issuance of any series of Serial Preferred Stock and to any filing required by law. D. Common Stock (1) Except as otherwise provided by law or by the resolution or resolutions of the Board of Directors providing for the issuance of any series of the Serial Preferred Stock, the Common Stock shall have the exclusive right to vote for the election of Directors and for all other purposes, each holder of the Common Stock being entitled to one vote for each share held. (2) Subject to all of the rights of the Serial Preferred Stock or any series thereof, the holders of the Common Stock shall be entitled to receive, which, as and if declared by the Board of Directors, out of funds legally available therefor, dividends payable in cash, stock or otherwise. (3) Upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, and after the holders of the Serial Preferred Stock of each series shall have been paid in full, the amounts to which they respectively shall be entitled, or a sum sufficient for such payments in full shall have been set aside, the remaining net assets of the Corporation shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights and interests, to the exclusion of the holders of the Serial Preferred Stock. D. General Provisions Whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, the meeting and vote of stockholders may be dispensed with and such action may be taken with the written consent of stockholders having not less than the minimum percentage of the vote required by statute for the proposed corporate action, provided that prompt notice shall be given to all stockholders of the taking of the corporate action without a meeting and by less than unanimous vote. FIFTH: No stockholder of this Corporation shall by reason of his holding shares of any class have any pre-emptive or preferential right to purchase or subscribe to any shares of any class of the Corporation, now or hereafter to be authorized or any notes, debentures, bonds or other securities convertible into or carrying warrants or options to purchase shares of any class, now or hereafter to be authorized, whether or not the issuance of any such shares or such notes, debentures, bonds or other securities would adversely affect the dividend or voting rights of such stockholder other than such rights, in any, as the Board of Directors, in its discretion, may fix; and the Board of Directors may issue shares of any class of this Corporation, or any note, debentures, bonds or other securities convertible into or carrying options or warrants to purchase shares of any class, without offering any such shares of any class, whether in whole or in part, to the existing stockholders of any class. SIXTH: The name and mailing address of the incorporator is: Name Mailing Address Bruce A. Butcher, Esq. Suite 3827-1001 Fourth Ave. Plaza Seattle, WA 98154 SEVENTH: The Corporation is to have perpetual existence. EIGTH: The number of directors constituting the original Board of Directors is one (1). The number of the directors shall be fixed by, or in the manner provided in, the By- Laws of the Corporation. The names and addresses of the initial directors of the Corporation who are to serve until the first annual meeting of the shareholders or until their successors are elected and qualified are: Name Mailing Address Thomas J. Gillespie 191 Sun Valley Road. PO Box 5569 Ketchum, Idaho 83340 NINTH: In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized: (1) To make, alter or repeal the By- Laws of the Corporation. (2) To authorize and cause to be executed mortgages and liens upon the real and personal property of the Corporation. (3) To set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any purpose and to abolish any such reserve in the manner in which it was created. (4) By a majority of the whole Board of Directors, to designate one or more committees to consist of two or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution or in the by- laws of the corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, the by- laws may provide that in the absence or disqualification of any member of such committee or committees the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. (5) When and as authorized by the affirmative vote of the holders of a majority of the stock issued and outstanding having voting power given at a stockholder's meeting duly called upon such notice as is required by statute, or when authorized by the written consent of the holders of a majority of the voting stock issued and outstanding, to sell, lease or exchange all or substantially all the property and assets of the Corporation, including its goodwill and its corporate franchises, upon such terms and conditions and for such consideration, which may consist in whole or in part of money or property including securities of any other corporation or corporations, as the Board of Directors shall deem expedient and for the best interests of the Corporation. TENTH: Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the by-laws of the Corporation shall so provide. ELEVENTH: A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts of omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, as the same exists or hereafter may be amended, or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law hereafter is amended to authorize the further elimination of limitation of the liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended Delaware General Corporation Law. Any repeal or modification of this paragraph by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification. The Corporation shall, to the extent permitted by Section 145 of the Delaware General Corporation Law, as amended from time to time, indemnify and reimburse all persons whom it may indemnify and reimburse pursuant thereto. Expenses incurred by an officer of director in defending a civil or criminal action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in Section 145(e) of the Delaware General Corporation Law. Notwithstanding the foregoing, the indemnification provided for herein shall not be deemed exclusive of any other rights to which those entitled to receive indemnification or reimbursement hereunder may be entitled under any by-law of this Corporation, agreement, vote of stockholders or disinterested directors of otherwise. TWELTH: No contract or transaction between this corporation and any person, firm, association, or corporation and no act of this Corporation shall, in the absence of fraud, be invalidated or in any way affected by the fact that any of the directors of this Corporation are pecuniarily or otherwise interested directly or indirectly, in such contract, transaction or act, or are related to or interested in, as a director, stockholder, officer, employee, member or otherwise, such person, firm, association or corporation. Any director so interested or related who is present at any meeting of the Board of Directors or committee of directors at which action on any contract, transaction or act is taken may be counted in determining the presence of a quorum at such meeting and may vote thereat with respect to such contract, transaction or act with like force and effect as if he were not so interested or related. No director so interested or related shall, because of such interest or relationship, be disqualified from holding his office or be liable to the Corporation or to any stockholder or creditor thereof for any loss incurred by this Corporation under or by reason of such contract, transaction or act, or be accountable for any gains or profits he may have realized therein. THIRTEENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner how or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. THE UNDERSIGNED, being the incorporator herein before named, for the purpose of forming a corporation pursuant to the Corporation Laws of the State of Delaware, does make this Certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true and accordingly have hereunto set my hand this 29th day of July, 1998. -----END PRIVACY-ENHANCED MESSAGE-----