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 of 1934
Date of Report: November 9, 1998
THE OHIO & SOUTHWESTERN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
Colorado 33-28188 84-1116458
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
NEW ADDRESS:
650 W. Georgia Street, #450, Vancouver, B.C., Canada V6B 4N8
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (604) 684-8662
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Item 1. Changes in Control of Registrant
None.
Item 2. Acquisition or Disposition of Assets
None.
Item 3. Bankruptcy or Receivership
None.
Item 4. Changes in Registrants Certifying Accountant
None.
Item 5. Other Events
The Company has entered into an Agreement to acquire Canbau Construction GMBH of
Germany for one million shares of common stock of the Registrant. The Agreement
requires certain due diligence investigation and is based upon the
representation of Canbau that it will have audited financial statements showing
a four million dollar asset base. Canbau has been retained to construct a shrimp
processing plant in Germany with an estimated cost of $42 million, subject to
arrangement of financing which is not yet assured as of the date of the
Agreement.
Item 6. Resignation of Directors and Appointment of New Directors
Ralph Shearing resigned as a Director and President on October 7, 1998.
Ronald Genetz was appointed as a Director and as President on October 7,
1998. Abbas Salih was appointed as Chairman of the Board on October 7, 1998.
Item 7. Financial Statements, Pro Forma Financial Statements & Exhibits
a. Financial Statements - None
b. Exhibits
7.1 Plan and Agreement of Reorganization
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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 thereunto duly authorized.
Date: November 9, 1998 The Ohio & Southwestern Energy Company
By: /s/ Abbas Salih
-------------------------------
Chairman
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Exhibit 7.1
<PAGE>
Agreement and Plan of Reorganization
by and among
CANBAU CONSTRUCTION GMBH
a German corporation
and
THE OHIO & SOUTHWESTERN ENERGY COMPANY
a Colorado corporation
dated: November 2, 1998
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
CANBAU CONSTRUCTION GMBH
and
THE OHIO & SOUTHWESTERN ENERGY COMPANY
This Agreement and Plan of Reorganization ("Agreement"), dated as of July
29, 1998, among CANBAU CONSTRUCTION GMBH ("CB"), a German Corporation, THE OHIO
& SOUTHWESTERN ENERGY COMPANY ("OSWE") , a Colorado Corporation, and the
shareholders of CANBAU CONSTRUCTION GMBH ("CB Shareholders") who will join this
agreement by execution.
W I T N E S S E T H:
A. WHEREAS, CB and OSWE are corporations duly organized under the laws of
the State of Germany and Colorado, respectively.
B. Plan of Reorganization. The CB Shareholders are the owners of all of the
issued and outstanding common stock of CB. It is the intention that all of
the issued and outstanding stock of CB shall be acquired by OSWE in exchange
solely for its voting stock. For federal income tax purposes it is intended that
this exchange shall qualify as a reorganization within the meaning of SEC 368
(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code").
C. Exchange of Shares. OSWE and the CB Shareholders agree that all of the
common shares issued and outstanding of CB shall be exchanged with OSWE for
1,000,000 shares of the common stock of OSWE. The pro rata numbers of the OSWE
shares, on the closing date, shall be delivered to the individual shareholders
in exchange for their CB shares as hereinafter set forth.
D. WHEREAS, the parties hereto wish to enter into this Agreement, pursuant
to the provisions of the Colorado Statutes.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE I
The Consideration
1.1 Subject to the conditions set forth herein on the "Effective Date" (as
herein defined), Shareholders of CB shall exchange all of their shares of CB
for 1,000,000 common shares of OSWE common stock. The transactions contemplated
by this Agreement shall be completed at a closing ("Closing") on a closing date
("Closing Date") which shall be as soon as possible after all regulatory
approvals and shareholder approvals are obtained in accordance with law as set
forth in this Agreement, but no later than 30 days after date hereof.
On the Closing Date, all of the documents to be furnished to OSWE and CB,
including the documents to be furnished pursuant to Article VII of this
Agreement, shall be delivered to M.A. Littman, to be held in escrow until the
Effective Date or the date of termination of this Agreement, whichever first
occurs, and thereafter shall be promptly distributed to the parties as their
interests may appear.
1.2 At the Effective Date, CB shall become a wholly owned subsidiary of
OSWE. CB's shareholders shall receive pro rata shares of $.0001 par value
voting common stock as follows:
OSWE shall issue 1,000,000 of its shares of common stock for 100% of
the outstanding common shares of CB, pro rata to the shareholders of
CB.
1.3 If this Agreement is duly adopted by the holders of the requisite
number of shares, in accordance with the applicable laws and subject to the
other provisions hereof, such documents as may be required by law to accomplish
the Agreement shall be filed as required by law to effectuate same, and it shall
become effective. The time of filing the last document required by law shall be
the Effective Date for the Agreement. For accounting purposes, the Agreement
shall be effective as of 12:01 a.m., on the last day of the month preceding the
Effective Date.
ARTICLE II
Issuance and Exchange of Shares
2.1 The shares of $.0001 par value common stock of OSWE shall be issued by
it to CB shareholders at closing.
2.2 OSWE represents that no outstanding options or warrants for its
unissued shares exist. All preferred stock of OSWE due for redemption as
of the date hereof shall have been redeemed as of closing date, if any.
2.3 The stock transfer books of CB shall be closed on the Effective Date,
and thereafter no transfers of the stock of CB shall be made. CB shall appoint
an exchange agent ("Exchange Agent"), to accept surrender of the certificates
representing the common shares of CB, and to deliver in exchange for such
surrendered certificates, shares of common stock of OSWE. The authorization of
the Exchange Agent may be terminated by OSWE after six months following the
Effective Date. Upon termination of such authorization, any shares of CB and
any funds held by the Exchange Agent for payment to CB shareholders pursuant to
this Agreement shall be transferred to OSWE or its designated agent who shall
thereafter perform the obligations of the Exchange Agent. If outstanding
certificates for shares of CB are not surrendered or the payment for them not
claimed prior to such date on which such payments would otherwise escheat to or
become the property of any governmental unit or agency, the unclaimed items
shall, to the extent permitted by abandoned property and other applicable law,
become the property of OSWE (and to the extent not in its possession shall be
paid over to it), free and clear of all claims or interest of any persons
previously entitled to such items. Notwithstanding the foregoing, neither the
Exchange Agent nor any party to this Agreement shall be liable to any holder of
CB shares for any amount paid to any governmental unit or agency having
jurisdiction of such unclaimed item pursuant to the abandoned property or other
applicable law of such jurisdiction.
2.4 No fractional shares of OSWE stock shall be issued as a result of the
Agreement. Shares shall be rounded to nearest whole share.
2.5 At the Effective Date, each holder of a certificate or certificates
representing common shares of CB, upon presentation and surrender of such
certificate or certificates to the Exchange Agent, shall be entitled to receive
the consideration set forth herein, except that holders of those shares as to
which dissenters' rights shall have been asserted and perfected pursuant to
Germany law shall not be converted into shares of OSWE common stock, but shall
represent only such dissenters' rights. Upon such presentation, surrender, and
exchange as provided in this Section 2.5, certificates representing shares of CB
previously held shall be canceled. Until so presented and surrendered, each
certificate or certificates which represented issued and outstanding shares of
CB at the Effective Date shall be deemed for all purposes to evidence the right
to receive the consideration set forth in Section 1.2 of this Agreement. If the
certificates representing shares of CB have been lost, stolen, mutilated or
destroyed, the Exchange Agent shall require the submission of an indemnity
agreement and may require the submission of a bond in lieu of such certificate.
ARTICLE III
Representations, Warranties
and Covenants of Canbau Construction GMBH
No representations or warranties are made by any director, officer,
employee or shareholder of CB as individuals, except as and to the extent stated
in this Agreement or in a separate written statement (the "CB Disclosure
Statement"), if any. CB hereby represents, warrants and covenants to OSWE except
as stated in the CB Disclosure Statement, as follows:
3.1 CB is a corporation duly organized, validly existing and in good
standing under the laws of the State of Germany, and has the corporate power and
authority to own or lease its properties and to carry on its business as it is
now being conducted. The Articles of Incorporation and Bylaws of CB are complete
and accurate, and the minute books of CB contain a record, which is complete and
accurate in all material respects, of all meetings, and all corporate actions of
the shareholders and board of directors of CB.
3.2 The aggregate number of shares which CB is authorized to issue shares
of common stock with _____ par value of which ___________ shares are issued and
outstanding.
3.3 CB has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.
3.4 Neither the making of nor the compliance with the terms and provisions
of this Agreement and consummation of the transactions contemplated herein by CB
will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of CB.
3.5 The execution, delivery and performance of this Agreement has been
duly authorized and approved by CB's Board of Directors.
3.6 CB will deliver to OSWE before the Closing, current consolidated
audited financial statements of CB prepared by a "Big 6" accounting firm or
other firm acceptable to OSWE. These audited financial statements must be dated
within 3 months of the Closing date. All such statements, herein sometimes
called "CB Financial Statements", are complete and correct in all material
respects and, together with the notes to these financial statements, present
fairly the financial position and results of operations of CB for the periods
included. The said statements will have been prepared in accordance with
generally accepted accounting principles.
3.7 Since the dates of the CB Financial Statements, there have not been
any material adverse changes in the business or condition, financial or
otherwise of CB.
3.8 There are no legal proceedings or regulatory proceedings involving
material claims pending, or to the knowledge of the officers of CB, threatened
against CB or affecting any of its assets or properties, and CB is not in any
material breach or violation of or default under any contract or instrument to
which CB is a party, and no event has occurred which with the lapse of time or
action by a third party could result in a material breach or violation of or
default by CB under any contract or other instrument to which CB is a party or
by which it or any of its properties may be bound or affected, or under its
respective Articles of Incorporation or Bylaws, nor is there any court or
regulatory order pending, applicable to CB.
3.9 All liability of CB has been properly provided for and is adequate to
comply with all regulatory requirements regarding same.
3.10 The representations and warranties of CB shall be true and correct as
of the date hereof and as of the Effective Date.
3.11 CB has no employee benefit plan, including non-qualified stock
awards, options, and consulting fees for independent contractors.
3.12 No representation or warranty by CB in this Agreement, the CB
Disclosure Statement or any certificate delivered pursuant hereto contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation or warranty not misleading.
3.13 Intellectual Property. All trade names, inventions, discoveries,
ideas, research, engineering, methods, practices, processes, systems, formulae,
designs, drawings, products, projects, improvements, developments, know-how, and
trade secrets which are used in the conduct of CB's business, whether registered
or unregistered (collectively the "Proprietary Rights") are owned by CB. To the
knowledge of each Seller and CB, CB created or developed such Proprietary Rights
and such Proprietary Rights are not subject to any restriction, lien,
encumbrance, right, title or interest in others. All of the foregoing
Proprietary Rights that are not in the public domain stand solely in the name of
CB and not in the name of any shareholder, director, officer, agent, partner or
employee or anyone else known to any Seller or CB and none of the same have any
right, title, interest, restriction, lien or encumbrance therein or thereon or
thereto. To the knowledge of each Seller and CB, CB's ownership and use of the
Proprietary Rights do not and will not infringe upon, conflict with or violate
in any material respect any patent, copyright, trade secret or other lawful
proprietary right of any other party, and no claim is pending or, to the
knowledge of any Seller or CB, threatened to the effect that the operations of
CB infringe upon or conflict with the asserted rights of any other person under
any of the Proprietary Rights, and to the knowledge of each Seller and CB there
is no reasonable basis for any such claim (whether or not pending or
threatened). No claim is pending, or to the knowledge of each Seller and CB,
threatened to the effect that any such Proprietary Rights owned or licensed by
CB, or which CB otherwise has the right to use, is invalid or unenforceable by
CB and there is no reasonable basis for any such claim (whether or not pending
or threatened). CB has not granted or assigned to any other person or entity any
right to manufacture, have manufactured, assemble or sell the products or
proposed products or to provide the services or proposed services of Seller.
3.14 a. Liens. Except as disclosed on Schedule 3.14(a), no one other than
Seller has any right, title, interest, lien, claim, security interest,
restriction or encumbrance in, on or to CB's assets.
b. Material Contracts. Other than as disclosed on Schedule 3.14(b),
Seller does not have any material obligation, contract, agreement, lease,
sublease, commitment or understanding of any kind, nature or description, oral
or written, fixed or contingent due or to become due, existing or inchoate.
c. No Undisclosed Liabilities. CB does not have any material
liabilities or obligations, including, without limitation, contingent
liabilities for the performance of any obligation, except for (i) liabilities or
obligations which are disclosed or fully provided for in CB's Financial
Statements, (ii) liabilities or obligations disclosed in this Agreement or in
any Exhibit or Schedule to this Agreement, and (iii) liabilities not in excess
of $10,000 in the aggregate.
d. Environmental Matters. (i) CB has not received notice of any
violation of or investigation relating to any environmental or pollution law,
regulation, or ordinance with respect to assets now or previously owned or
operated by CB that has not been fully and finally resolved; (ii) All permits,
licenses and other authorizations which are required under United States,
federal, state, provincial and local laws with respect to pollution or
protection of the environment ("Environmental Laws") relating to assets now
owned or operated by CB or any of its subsidiaries, including Environmental Laws
relating to actual or threatened emissions, discharges or releases of
pollutants, contaminants or hazardous or toxic materials or wastes
("Pollutants"), have been obtained and are effective, and, with respect to
assets previously owned or operated by CB, were obtained and were effective
during the time of CB's operation; (iii) To the knowledge of CB, no conditions
exist on, in or about the properties now or previously owned or operated by CB
or any third-party properties to which any Pollutants generated by CB were sent
or released that could give rise on the part of CB to liability under any
Environmental Laws, claims by third parties under Environmental Laws or under
common law or the occurrence of costs to avoid any such liability or claim; and
(iv) to the knowledge of CB, all operators of CB's assets are in compliance with
all terms and conditions of such Environmental Laws, permits, licenses and
authorizations, and are also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in such laws or contained in any regulation,
code, plan, order, decree, judgment, notice or demand letter issued, entered,
promulgated or approved thereunder, relating to CB's assets.
ARTICLE IV
Representations, Warranties and Covenants of
The Ohio & Southwestern Energy Company
No representations or warranties are made by any director, officer,
employee or shareholder of OSWE as individuals, except as and to the extent
stated in this Agreement or in a separate written statement.
OSWE hereby represents, warrants and covenants to CB, except as stated in
the OSWE Disclosure Statement, as follows:
4.1 OSWE is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado, and has the corporate power
and authority to own or lease its properties and to carry on its business as it
is now being conducted. The Articles of Incorporation and Bylaws of OSWE,
copies of which have been delivered to CB, are complete and accurate, and the
minute books of OSWE contain a record, which is complete and accurate in all
material respects, of all meetings, and all corporate actions of the
shareholders and Board of Directors of OSWE.
4.2 The aggregate number of shares which OSWE is authorized to issue is
300,000,000 shares of common stock with a par value of $.0001 per share, of
which 14,382,000 shares of such common stock will be issued and outstanding,
fully paid and non-assessable, prior to closing under this agreement. OSWE has
no outstanding options, warrants or other rights to purchase, or subscribe to,
or securities convertible into or exchangeable for any shares of capital stock.
No preferred stock of OSWE is outstanding.
4.3 OSWE has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.
4.4 Neither the making of nor the compliance with the terms and provisions
of this Agreement and consummation of the transactions contemplated herein by
OSWE will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of OSWE.
4.5 The execution of this Agreement has been duly authorized and approved
by the OSWE's Board of Directors.
4.6 OSWE has delivered to CB financial statements of OSWE dated December
31, 1997. All such statements, herein sometimes called "OSWE Financial
Statements" are (and will be) complete and correct in all material respects and,
together with the notes to these financial statements, present fairly the
financial position and results of operations of OSWE of the periods indicated.
All statements of OSWE will have been prepared in accordance with generally
accepted accounting principles.
4.7 Since the dates of the OSWE Financial Statements, there have not been
any material adverse changes in the business or condition, financial or
otherwise, of OSWE. OSWE does not have any material liabilities or obligations,
secured or unsecured except as shown on updated financials (whether accrued,
absolute, contingent or otherwise).
4.8 OSWE has delivered to CB a list and description of all pending legal
proceedings involving OSWE, none of which will materially adversely affect them,
and, except for these proceedings, there are no legal proceedings or regulatory
proceeding involving material claims pending, or, to the knowledge of the
officers of OSWE, threatened against OSWE or affecting any of its assets or
properties, and OSWE is not in any material breach or violation of or default
under any contract or instrument to which OSWE is a party, and no event has
occurred which with the lapse of time or action by a third party could result in
a material breach or violation of or default by OSWE under any contract or other
instrument to which OSWE is a party or by which they or any of their respective
properties may be bound or affected, or under their respective Articles of
Incorporation or Bylaws, nor is there any court or regulatory order pending,
applicable to OSWE.
4.9 OSWE shall not enter into or consummate any transactions prior to the
Effective Date other than in the ordinary course of business and will pay no
dividend, or increase the compensation of officers and will not enter into any
agreement or transaction which would adversely affect its financial condition.
4.10 OSWE is not a party to any contract performable in the future except
its land lease obligation which will not adversely affect it.
4.11 The representations and warranties of OSWE shall be true and correct
as of the date hereof and as of the Effective Date.
4.12 OSWE has delivered, or will deliver within two weeks of the date of
this Agreement, to CB, all of its corporate books and records for review. OSWE
will also deliver to CB on or before the Closing Date any reports relating to
the financial and business condition of OSWE which occur after the date of this
Agreement and any other reports sent generally to its shareholders after the
date of this Agreement.
4.13 OSWE has no employee benefit plan in effect at this time.
4.14 No representation or warranty by OSWE in this Agreement, the OSWE
Disclosure Statement or any certificate delivered pursuant hereto contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation or warranty not misleading.
4.15 OSWE agrees that all rights to indemnification now existing in favor
of the employees, agents, directors or officers of CB and its subsidiaries, as
provided in the Articles of Incorporation or Bylaws or otherwise in effect on
the date hereof shall survive the transactions contemplated hereby in accordance
with their terms, and OSWE expressly assumes such indemnification obligations of
CB.
ARTICLE V
Obligations of the Parties Pending the Effective Date
5.1 This Agreement shall be duly submitted to the shareholders of
CB for the purpose of considering and acting upon this Agreement in the manner
required by law at a meeting of shareholders on a date selected by CB, such date
to be the earliest practicable date. The Board of Directors of CB, subject to
its fiduciary obligations to shareholders, shall use its best efforts to obtain
the requisite approval of CB shareholders of this Agreement and the transactions
contemplated herein. CB and OSWE shall take all reasonable and necessary steps
and actions to comply with and to secure CB shareholder approval of this
Agreement and regulations of such states.
5.2 At all times prior to the Effective Date during regular business
hours, each party will permit the other to examine its books and records and the
books and records of its subsidiaries and will furnish copies thereof on
request. It is recognized that, during the performance of this Agreement, each
party may provide the other parties with information which is confidential or
proprietary information. During the term of this Agreement, and for four years
following the termination of this Agreement, the recipient of such information
shall protect such information from disclosure to persons, other than members of
its own or affiliated organizations and its professional advisers, in the same
manner as it protects its own confidential or proprietary information from
unauthorized disclosure, and not use such information to the competitive
detriment of the disclosing party. In addition, if this Agreement is terminated
for any reason, each party shall promptly return or cause to be returned all
documents or other written records of such confidential or proprietary
information, together with all copies of such writings and, in addition, shall
either furnish or cause to be furnished, or shall destroy, or shall maintain
with such standard of care as is exercised with respect to its own confidential
or proprietary information, all copies of all documents or other written records
developed or prepared by such party on the basis of such confidential or
proprietary information. No information shall be considered confidential or
proprietary if it is (a) information already in the possession of the party to
whom disclosure is made, (b) information acquired by the party to whom the
disclosure is made from other sources, or (c) information in the public domain
or generally available to interested persons or which at a later date passes
into the public domain or becomes available to the party to whom disclosure is
made without any wrongdoing by the party to whom the disclosure is made.
5.3 OSWE and CB shall promptly provide each other with information as to
any significant developments in the performance of this Agreement, and shall
promptly notify the other if it discovers that any of its representations,
warranties and covenants contained in this Agreement or in any document
delivered in connection with this Agreement was not true and correct in all
material respects or became untrue or incorrect in any material respect.
5.4 All parties to this Agreement shall take all such action as may be
reasonably necessary and appropriate and shall use their best efforts in order
to consummate the transactions contemplated hereby as promptly as practicable.
ARTICLE VI
Procedure Exchange
6.1 At the Effective Date, the exchange shall be effected as set forth in
Colorado Laws with common stock certificates of OSWE being exchanged for CB
common stock certificates as and when submitted to the transfer agent.
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ARTICLE VII
Conditions Precedent to the
Consummation of the Exchange
The following are conditions precedent to the consummation of the Agreement
on or before the Effective Date:
7.1 CB shall have performed and complied with all of its respective
obligations hereunder which are to be complied with or performed on or before
the Effective Date and OSWE and CB shall provide one another at the Closing with
a certificate to the effect that such party has performed each of the acts and
undertakings required to be performed by it on or before the Closing Date
pursuant to the terms of this Agreement.
7.2 This Agreement, the transactions contemplated herein shall have been
duly and validly authorized, approved and adopted, at meetings of the
shareholders of CB duly and properly called for such purpose in accordance with
the applicable laws.
7.3 No action, suit or proceeding shall have been instituted or shall have
been threatened before any court or other governmental body or by any public
authority to restrain, enjoin or prohibit the transactions contemplated herein,
or which might subject any of the parties hereto or their directors or officers
to any material liability, fine, forfeiture or penalty on the grounds that the
transactions contemplated hereby, the parties hereto or their directors or
officers, have violated any applicable law or regulation or have otherwise acted
improperly in connection with the transactions contemplated hereby, and the
parties hereto have been advised by counsel that, in the opinion of such
counsel, such action, suit or proceeding raises substantial questions of law or
fact which could reasonably be decided adversely to any party hereto or its
directors or officers.
7.4 All actions, proceedings, instruments and documents required to carry
out this Agreement and the transactions contemplated hereby and the form and
substance of all legal proceedings and related matters shall have been approved
by counsel for CB and OSWE.
7.5 The representations and warranties made by CB and OSWE in this
Agreement shall be true as though such representations and warranties had been
made or given on and as of the Effective Date, except to the extent that such
representations and warranties may be untrue on and as of the Effective Date
because of (1) changes caused by transactions suggested or approved in writing
by CB or (2) events or changes (which shall not, in the aggregate, have
materially and adversely affected the business, assets, or financial condition
of OSWE or CB during or arising after the date of this Agreement.)
<PAGE>
7.6 CB shall have furnished OSWE with:
(1) a certified copy of a resolution or resolutions duly adopted by the
Board of Directors of CB approving this Agreement and the transactions
contemplated by it and directing the submission thereof to a vote of
the shareholders of CB;
(2) a certified copy of a resolution or resolutions duly adopted by a
majority of all of the classes of outstanding shares of CB capital
stock approving this Agreement and the transactions contemplated by
it;
(3) an agreement from each "affiliate" of CB as defined in the rules
adopted under the Securities Act of 1933, as amended, to the effect
that (a) the affiliate is familiar with SEC Rules 144 and 145; (b)
none of the shares of OSWE common stock will be transferred by or
through the affiliate in violation of the Federal Securities Laws; (c)
the affiliate will not sell or in any way reduce his risk relative to
any OSWE common stock received pursuant to this Agreement until such
time as financial results covering at least 30 days of post-closing
date combined operations shall have been published by OSWE on SEC Form
10-Q or otherwise; and (d) the affiliate acknowledges that OSWE is
under no obligation to register the sale, transfer, or the disposition
of OSWE common stock by the affiliate or to take any action necessary
in order to make an exemption from registration available to the
affiliate, but understands that OSWE will satisfy the public
information requirements of Rules 144 and 145 during the three-year
period following the Closing Date.
(4) Securities Laws Compliance. Each NON-U.S. citizen who is a shareholder
of CB shall sign an affidavit as contained on Exhibit "A".
7.7 OSWE shall furnish CB with a certified copy of a resolution or
resolutions duly adopted by the Board of Directors of OSWE, approving this
Agreement and the transactions contemplated by it.
7.8 As a condition to closing, the CB Financial Statements, as described
in Article III, 3.6, must show an unencumbered minimum asset value of US
$4,000,000. Should this value not be demonstrated in the audited financial
statements this agreement will terminate unless an extension to the Closing is
agreed to by both CB and OSEW.
<PAGE>
ARTICLE VIII
Termination and Abandonment
8.1 Anything contained in this Agreement to the contrary notwithstanding,
the Agreement may be terminated and abandoned at any time (whether before or
after the approval and adoption thereof by the shareholders of CB) prior to the
Effective Date:
(a) By mutual consent of CB and OSWE;
(b) By CB, or OSWE, if any condition set forth in Article VII
relating to the other party has not been met or has not been
waived;
(c) By CB, or OSWE, if any suit, action or other proceeding shall be
pending or threatened by the federal or a state government before
any court or governmental agency, in which it is sought to
restrain, prohibit or otherwise affect the consummation of the
transactions contemplated hereby;
(d) By any party, if there is discovered any material error,
misstatement or omission in the representations and warranties of
another party;
(e) By any party if the Agreement Effective Date is not within 30
days from the date hereof; or
(f) CB shall have the right to assign this agreement to any other
entity, at any time, subject to the due diligence terms herein.
8.2 Any of the terms or conditions of this Agreement may be waived at any
time by the party which is entitled to the benefit thereof, by action taken by
its Board of Directors provided; however, that such action shall be taken only
if, in the judgment of the Board of Directors taking the action, such waiver
will not have a materially adverse effect on the benefits intended under this
Agreement to the party waiving such term or condition.
ARTICLE IX
Termination of Representation and
Warranties and Certain Agreements
9.1 The respective representations and warranties of the parties hereto
shall expire with, and be terminated and extinguished by consummation of the
Agreement; provided, however, that the covenants and agreements of the parties
hereto shall survive in accordance with their terms.
ARTICLE X
Miscellaneous
10.1 This Agreement embodies the entire agreement between the parties, and
there have been and are no agreements, representations or warranties among the
parties other than those set forth herein or those provided for herein.
10.2 To facilitate the execution of this Agreement, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one instrument. Counterparts shall include the execution of the
Exchange Agreement and Representations by all shareholders.
10.3 All parties to this Agreement agree that if it becomes necessary or
desirable to execute further instruments or to make such other assurances as are
deemed necessary, the party requested to do so will use its best efforts to
provide such executed instruments or do all things necessary or proper to carry
out the purpose of this Agreement.
10.4 This Agreement may be amended upon approval of the Board of Directors
of each party provided that the shares issuable hereunder shall not be amended
without approval of the requisite shareholders of CB.
10.5 Any notices, requests, or other communiCBions required or permitted
hereunder shall be delivered personally or sent by overnight courier service,
fees prepaid, addressed as follows:
To Canbau Construction GMBH:
Rose-Luxembourg - Str. 16-18
18055 Rostock, Germany
To The Ohio & Southwestern Energy Company:
650 W. Georgia Street, #450
Vancouver, BC, Canada V6B 4N8
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
10.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of CB and
OSWE. However, either CB or OSWE may issue at any time any press release or
other public statement it believes on the advice of its counsel it is obligated
to issue to avoid liability under the law relating to disclosures, but the party
issuing such press release or public statement shall make a reasonable effort to
give the other party prior notice of and opportunity to participate in such
release or statement.
<PAGE>
IN WITNESS WHEREOF, the parties have set their hands and seals this _____
day of October, 1998.
Canbau Construction GMBH
By: ___________________________
President
Attest:________________________
Secretary
The Ohio & Southwestern Energy Company
By:_______________________________
President
Attest: __________________________
Secretary
CANBAU CONSTRUCTION GMBH, SHAREHOLDERS (by signature below or pursuant to
execution of the Exchange Agreement and Representations incorporating this
Agreement by reference.)
___________________________ ___________________________
___________________________ ___________________________
___________________________ ___________________________
___________________________ ___________________________
___________________________ ___________________________
___________________________ ___________________________
<PAGE>
EXHIBIT "A"
Affidavit
I hereby certify under penalty of perjury that the following statements
are true and correct as of the date hereof:
Each NON-U.S. citizen (hereafter "Affiant"):
(i) has been represented by such legal and tax counsel and others, each of
whom has been personally selected by Affiant, as Affiant has found necessary to
consult concerning this transaction, and any such representation has included an
examination of applicable documents, and an analysis of all tax, financial, and
securities law aspects. Affiant, his counsel and advisors, and such other
persons with whom Affiant has found it necessary to consult, have sufficient
knowledge and experience in business and financial matters to evaluate the above
information, and the merits and risks of the share exchange contemplated by this
Agreement, and to make an informed investment decision with respect thereto;
(ii) is acquiring the OSWE Common Stock for Affiant's own account and not
as a fiduciary for any other person and for investment purposes only and not
with a view to or for the transfer, assignment, resale, or distribution thereof,
in whole or in part. Affiant represents and warrants to OSWE, as of the date of
this Agreement, that Affiant has no present plan or intention to sell such Stock
in the United States at any predetermined time, and has made no predetermined
arrangements to sell the OSWE Common Stock. Affiant covenants that neither
Affiant nor its affiliates nor any person acting on its or their behalf has
entered into, has the intention of entering into, or will enter into any hedging
transactions, put option, short position or other similar instrument, contract,
arrangements or position with respect to the OSWE Common Stock any time until
the end of the Distribution Compliance period, as hereinafter defined. Affiant
understands the meaning and legal consequences of the foregoing representations
and warranties;
(iii) understands that the OSWE Common Stock has not been registered under
the Securities Act nor pursuant to the provisions of the securities or other
laws of any applicable jurisdictions and such Stock is being offered and sold
pursuant to Regulation S based in part upon the representations of Affiant
contained herein. Affiant further understands that the OSWE Common Stock cannot
be sold, assigned, pledged, transformed or otherwise disposed of unless such
shares are registered or an exemption from registration is available, and that
the OSWE Common Stock will bear a restrictive legend to that effect;
(iv) represents and warrants to OSWE that (i) the Affiant is not a U.S.
person ("U.S. person") as that term is defined in Rule 902(k) of Regulation S
and which definition includes, without limitation, a corporation or partnership
that is organized under the laws of a jurisdiction other than the United States
if it is formed by a U.S. person principally for the purpose of investing in
securities not registered under the Act, unless it was organized or
incorporated, and is owned, by accredited investors (as defined in Rule 501(a)
of Regulation D under the Act) who are not natural persons, estates or trusts;
(ii) the OSWE Common Stock is not offered to the Affiant in the United States
and at the time of execution of this Agreement and the time of any offer to the
Affiant to purchase the OSWE Common Stock hereunder, the Affiant was physically
outside the United States; (iii) the Affiant is acquiring the OSWE Common Stock
for its own account and not on behalf of or for the benefit of any U.S. person
and the sale and resale of the OSWE Common Stock has not been prearranged with
any U.S. person or buyer in the United States; (iv) the Affiant agrees that no
offers and sales of the OSWE Common Stock prior to the expiration of a period
commencing on the Closing Date and ending one (1) year thereafter (the
"Distribution Compliance Period") shall be made to U.S. persons or for the
account or benefit of U.S. persons and shall otherwise be made in compliance
with the provisions of Regulation S; and (v) Affiant is not an underwriter,
dealer, distributor or other person who is participating, pursuant to
contractual arrangement, in the distribution of the OSWE Common Stock offered or
sold in reliance on Regulation S.
(v) understands and acknowledges that an investment in the OSWE Common
Stock involves a high degree of risk. Affiant acknowledges that there are
limitations on the liquidity of the OSWE Common Stock. The Affiant represents
that the Affiant is able to bear the economic risk of an investment in the OSWE
Common Stock, including a possible total loss of investment. In making this
statement the Affiant hereby represents and warrants to OSWE that the Affiant
has adequate means of providing for the Affiant's current needs and
contingencies; that Affiant is able to afford to hold the OSWE Common Stock for
an indefinite period; and that Affiant has such knowledge and experience in
financial and business matters that the Affiant is capable of evaluating the
merits and risks of the investment in the OSWE Common Stock. Further, the
Affiant represents, as of the date of signing this Agreement, that the Affiant
has no present need for liquidity in the OSWE Common Stock and the Affiant is
willing to accept such investment risks;
(vi) understands that no United States federal or state agency, or similar
agency of any other country, has reviewed, approved, passed upon or made any
recommendation or endorsement of OSWE or the OSWE Common Stock;
(vii) acknowledges that to such Affiant's knowledge, without any
independent investigation, neither OSWE, nor any person acting for OSWE, has
conducted any directed selling efforts in the United States as the term
"directed selling efforts" is defined in Rule 902(c) of Regulation S, which in
general means, any activity undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market in the
United States for any of the OSWE Common Stock being offered in reliance on
Regulation S. Such activity includes, without limitation, the mailing of
printed material to investors residing in the United States, the holding of
promotional seminars in the United States, and the placement of advertisements
with radio or television stations broadcasting in the United States or in
publications with a general circulation in the United States, that refers to the
offering of the OSWE Common Stock in reliance on Regulation S;
(viii) knows of no public solicitation or advertisement of an offer in
connection with the proposed issuance and sale of the OSWE Common Stock;
(ix) covenants that he, she or it will not knowingly make any sale,
transfer or other disposition of the OSWE Common Stock in violation of the Act
(including Regulation S), the Exchange Act, any applicable state acts or the
rules and regulations of the Commission or of any state securities commission or
similar state authorities promulgated under any of the foregoing; and
(x) OSWE has made available to Affiant, Affiant's counsel and advisors,
prior to the date hereof, the opportunity to ask questions of, and to receive
answers from, OSWE and its representatives, concerning the terms and conditions
of the exchange of the OSWE Common Stock for the CB Shares and access to obtain
any information, documents, financial statements, records and books (A) relative
to OSWE, the business and an investment in OSWE, and (B) necessary to verify the
accuracy of any information furnished to Affiant. All materials and information
requested by Affiant, Affiant's counsel and advisors, or others representing
such Affiant, including any information requested to verify any information
furnished to Affiant, have been made available and examined.
Affiant:
________________________________
date: ____________________________
address:
