UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C., 20549
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 28, 1996
Commission file number 0-16734
C.E.C. INDUSTRIES CORP.
(Exact name of registrant as specified in charter)
Nevada 87-0217252
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
23 Cactus Garden Drive, F-60
Green Valley (Henderson), Nevada 89014
(Address of Principal Executive Office) (Zip Code)
(702) 436-2500
(Registrant's Telephone Number, Including Area Code)
Copies To:
Gerald Levine
President
23 Cactus Garden Drive, F-60
Henderson, Nevada 89014
(702)893-4747
<PAGE>
C.E.C. INDUSTRIES CORP. PAGE 2
Item No. 1. Changes in Control of Registrant.
No events to report.
Item No. 2. Acquisition or Disposition of Assets.
On March 28, 1996, the Company entered into an Agreement to issue to
O.T.S. Holdings, Inc., 8,660,000 shares of common restricted voting stock of
C.E.C. Industries Corp. in exchange for: 100% of the issue and outstanding
common shares of Basia Holdings, Inc., a Tennesee Corporation holding 9,000
acres of fee land with approximately 52,000,000 tons of minable low sulfer
coal, 100% of the issued and outstanding shares of Mid-Nevada Art; and 100%
of the Atlas Methane Development Corporation Gas and Mineral Lease, which
leasehold's interests includes approximately 13,500 acres located in the Black
Warrier Lagoon area of Alabama containing 31 billion cubic feet of methane
reserves.
Item No. 3 Bankruptcy or Receivership.
No events to report.
Item No. 4 Changes in Registrant's Certifying Accountant
No events to report.
Item No. 5. Other Events.
No events to report.
Item No. 6. Resignation of Registrant's Directors.
Effective March 28, 1996, the Company accepted the resignations
of GEORGE A. MATTHEWS, DONALD J. STOECKLEIN and RONALD G.
STOECKLEIN as Directors of the Company. GERALD LEVINE, MARIE
LEVINE and AL GREEN were appointed to the Board of Directors.
Item No. 7. Financial Statement, Proforma Financial Information and
Exhibits.
1. Agreement for the Exchange of Common Stock between O.T.S.
Holdings, Inc. and C.E.C. Industries Corp. dated March 28, 1996.
<PAGE>
C.E.C. INDUSTRIES CORP. PAGE 3
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
C.E.C. INDUSTRIES CORP.
By: /s/Gerald Levine Dated: April 19, 1996
Gerald Levine, President
<PAGE>
AGREEMENT
For the
EXCHANGE OF COMMON STOCK
BETWEEN
O.T.S. HOLDINGS, INC.
AND
C.E.C. INDUSTRIES CORP.
AGREEMENT, made this 28th day of March, l996 by and between O.T.S.
Holdings, Inc., a Nevada Corporation hereinafter referred to as "O.T.S.",
and C.E.C. INDUSTRIES CORP., a Nevada Corporation, hereinafter
referred to as "CEC".
WHEREAS, O.T.S. represents One Hundred percent (100%) of the issued
and outstanding common shares of Basia Holdings, Inc., a Tennessee
corporation, ("Basia"); One Hundred Percent (l00%) of the issued and
outstanding common shares of Mid-Nevada Art, Inc., a Nevada
corporation, ("Mid-Nevada Art"); and l00% of Atlas Methane Development
Corporation Oil and Mineral Leases as described in Exhibit A', attached
hereto and incorporated herein by this reference, ("Atlas").
WHEREAS, O.T.S. is desirous of exchanging 100% of the outstanding
stock of Basia for 2,309,333 shares of common stock of CEC; 100% of the
outstanding stock of Mid-Nevada Art for 2,886,667 shares of common
stock of CEC; and 100% of the Atlas leases for 3,464,000 shares of
common stock of CEC; in a stock for stock exchange reorganization under
IRC Section 368(a)(1)(B).
NOW, THEREFORE, in consideration of the mutual intentions, covenants
and representations contained herein, the parties agree as follows:
ARTICLE I
1] ISSUANCE OF SHARES. Subject to all of the terms and conditions
of this Agreement, CEC agrees to issue to O.T.S. Holdings, Inc. 8,660,000
shares of common restricted voting shares of CEC in exchange for ; 100%
of the issued and outstanding common shares of Basia consisting of 2,000
shares, currently held by O.T.S. Holdings, Inc.; 100% of the issued and
outstanding common shares of Mid-Nevada Art consisting of 25,000,000
shares currently held by O.T.S. Holdings, Inc.; and 100% of the Atlas
Methane Development Corporation Gas and Mineral Lease described in
Exhibit A'.
1.2 EXEMPTION FROM REGISTRATION. The parties hereto intend
that the common stock to be issued by Basia to CEC shall be exempt from
the registration requirements of the Securities Act of 1933, as amended
(the "Act"), pursuant to section 4(2) and/or 3(b) of the Act and the rules and
regulations promulgated thereunder.
<PAGE>
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF BASIA
O.T.S. represents and warrants to CEC that:
2] ORGANIZATION.
2.1.1 Basia is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Tennessee, has all
necessary corporation powers to own it's properties and to carry on it's
business as now owned and operated by it, and is duly qualified to do
business and is in good standing in each of the states where it's business
requires qualification. O.T.S. Holdings, Inc. Owns 100% of the issued and
outstanding stock of Basia.
2.1.2 Mid-Nevada Art is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada, has
all necessary corporation powers to own it's properties and to carry on it's
business as now owned and operated by it, and is duly qualified to do
business and is in good standing in each of the states where it's business
requires qualification. O.T.S. Holdings, Inc. Owns 100% of the issued and
outstanding stock of Mid-Nevada Art.
2.1.3 O.T.S. is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Nevada, has all necessary
corporation powers to own it's properties and to carry on it's business as
now owned and operated by it, and is duly qualified to do business and is
in good standing in each of the states where it's business requires
qualification. O.T.S. owns 100% of the Gas and Mineral Leases set forth
in Exhibit A'.
2.2 DIRECTORS AND OFFICERS. The names and titles of all directors
and officers of O.T.S. as of the dated of this Agreement:
Gerry Levine President and Director
Marie Levine Secretary/Treasurer and Director
2.3 FINANCIAL STATEMENTS. CEC has received O.T.S.'s audited
financial statements as of 12/31/94, containing the audited balance sheet
of O.T.S. and the related statements of operations, statements of
stockholders' equity and changes in financial statements have been
prepared in accordance with the generally accepted accounting principles
and practices consistently followed by O.T.S. throughout the period
indicated and fairly present the financial position of Basia, Mid-Nevada Art,
and the Gas and Mineral Lease as of the date of the balance sheet
included in the financial statements and the results of operations for the
period indicated.
<PAGE>
2.4 ABSENCE OF CHANGES. Since the date of the balance sheet there
has been no material change in the financial condition or operations of
O.T.S. as it relates to the above referenced assets, except for changes in
the ordinary course of business, which changes have not in the aggregate
been materially adverse.
2.5 ABSENCE OF UNDISCLOSED LIABILITIES. As of the date of the
balance sheet, Basia, Mid-Nevada Art, and the Gas and Mineral Lease
properties did not have any material debt, liability, or obligation of any
nature, whether accrued, absolute, contingent or otherwise and wether due
or become due, that is not reflected in such balance sheet.
2.6 COMPLIANCE WITH LAWS. O.T.S. has complied with and is not in
violation of applicable federal, state and local laws, statutes and
regulations (including, without limitation, any applicable building, zoning or
other law, ordinance or regulation) affecting it's properties or the operation
of it's business with are being transferred herein.
2.7 LITIGATION. Except as described herein, O.T.S. is not a party to any
suit, action, arbitration or legal, administrative or other proceeding, or
governmental investigation pending or to the best knowledge of O.T.S.
threatened against or affecting the assets being transferred herein.
2.8 AUTHORITY. The board of directors of O.T.S. has authorized the
execution of this Agreement and the consummation of transaction
contemplated herein. O.T.S. has full power to deliver, execute and
perform this Agreement and this Agreement is a valid, legal and binding
obligation of O.T.S. and is enforceable in accordance with it's terms and
conditions.
2.9 ABILITY TO CARRY OUT OBLIGATIONS. The execution and delivery
of this Agreement by O.T.S. and the performance by O.T.S. of it's
obligations hereunder in the time and manner contemplated will not cause,
constitute or conflict with or result in (a) any breach or violation of any of
the provisions of or constitute a default under any license, indenture,
mortgage, charter, instruments, articles of incorporation, bylaws or other
agreement or instrument to which O.T.S. is a party or by which it may be
bound, nor will any consents or authorizations of any party other than
those hereto be required, (b) an event that would permit any party to any
agreement or instrument to terminate it or to accelerate the maturity of any
indebtedness or other obligation of O.T.S. or (c) any event that would
result in the creation or imposition of any event that would result in the
creation or imposition on any lien, charge or encumbrance on any asset of
O.T.S.
2.10 FULL DISCLOSURE. None of the representations and warranties
made by O.T.S. herein, or in any exhibit, certificate or memorandum
furnished or to be furnished by O.T.S. Or on it's behalf, contains or will
contain any untrue statement of material fact the omission of which would
be misleading.
<PAGE>
2.11 ASSETS. Other than as described herein, or pursuant to the financial
statements referenced, O.T.S. has good and marketable title to all of it's
property free and clear of any and all liens, claims and encumbrances of
any nature, form or description.
2.12 INDEMNIFICATION. O.T.S. agrees to defend and hold CEC
harmless against and in respect of any and all claims, demands, loses,
costs, expenses, obligations, liabilities, damages, recoveries, and
deficiencies, including interest, penalties and reasonable attorney fees,
that it shall incur or suffer, which arise out of, result from or relate to any
breach of, or failure by O.T.S. To perform any of it's respective
representations, warranties, covenants and agreements in this Agreement
or in any exhibit or other instrument furnished or to be furnished by O.T.S.
under this Agreement.
ARTICLE III
CEC represents and warrants to O.T.S. that:
3.1 ORGANIZATION. CEC is a corporation duly organized, validly existing
and in good standing under the laws of Nevada, has all necessary
corporate powers to own it's properties and to carry on it's business as
now owned and operated by it, and is duly qualified to du business and is
in good standing in each of the countries and\or states where it's business
requires qualification.
3.2 CAPITAL. The authorized capital stock of CEC consists of 50,000,000
shares of common stock, $.05 par value, of which approximately 6,095,000
shares are currently issued and outstanding. In addition, there are
100,000,000 shares of preferred stock, $.001 par value authorized, of
which approximately 4,400,000 are issued and outstanding. All of the
issued and outstanding shares of CEC are duly and validly issued, fully
paid and non-assessable.
3.3 DIRECTORS AND OFFICERS. The names and titles of all
directors and officers of CEC as of the date of this Agreement:
George Matthews President and Director
Charles McHaffie Secretary/Treasurer and Director
Dwight Jory Director
Ralph Mann Director
Don Stoecklein Director
Ron Stoecklein Director
3.4 SUBSIDIARIES. As of the date hereof, CEC does have subsidiaries
or own any interest in any other enterprise (wether or not such enterprise
is a corporation) except as disclosed herein, or as set forth in the required
reporting to the Securities and Exchange Commission.
<PAGE>
3.5 FINANCIAL STATEMENTS. O.T.S. has been provided the audited
financial statements of CEC as of March 31, 1995, in the form of a 10K,
and the 10Qs filed for periods ending June 30, 1995, September 30, 1995,
and December 31, 1995, containing the audited balance sheet of CEC and
the related statements of operation, statements of stockholders' equity and
changes in financial position for the period then ended. The financial
statements have been prepared in accordance with the generally accepted
accounting principals and practices consistently followed by CEC
throughout the period indicated and fairly present the financial position of
CEC, as of the date of the balance sheet included in the financial
statements and the results of operations for the period indicated.
3.6 ABSENCE OF CHANGES. As of the date of the balance sheet
included in the financial statements there have been no changes in the
financial conditions or operations of CEC except for changes in the
ordinary course of business, which changes have not in the aggregate
been materially adverse.
3.7 ABSENCE OF UNDISCLOSED LIABILITIES. As of the date of this
agreement CEC did not have any material debt, liability, or obligation of
any nature, whether accrued, absolute, contingent or other wise and
whether due or to become due, that is not reflected in CEC balance sheet.
3.8 TAX RETURNS. Within the times and in the manner prescribed by the
law, CEC has filed all federal, state and local tax returns required by law,
or has filed proper extensions and has paid all taxes, assessments and
penalties due and payable. There are no present disputes as to taxes of
any nature payable by CEC.
3.9 INVESTIGATION OF FINANCIAL CONDITION. Without in any
manner reducing or otherwise mitigating the representations contained
herein, O.T.S. and/or it's attorneys have had the opportunity to meet with
CEC accountants and attorneys to discuss the financial condition of CEC.
3.10 COMPLIANCE WITH LAWS. CEC has complied with and is not in
violation of applicable country, federal, state and local laws, statutes and
regulations (including, without limitation, any applicable building, zoning or
other law, ordinance or regulation) affecting it's properties or the operation
of it's business.
3.11 LITIGATION. CEC is not a party to any suit, action, arbitration or
legal, administrative or other proceeding, or governmental investigation
pending or to the best knowledge of CEC threatened against or affecting
CEC or it's business, assets or financial condition other than the Softpoint
class action suit and the Walters suit. CEC is not in default with respect
to any order, writ injunction or decree of any country, federal, state, local
or foreign court, department, agency or instrumentality. CEC is not
engaged in any legal action to recover monies due to it at this time.
<PAGE>
3.12 AUTHORITY. CEC has full power to deliver, execute and perform
this Agreement and this Agreement is for purposes of setting forth the
terms and conditions of an agreement between the parties herein.
3.13 ABILITY TO CARRY OUT OBLIGATIONS. The execution and
delivery of this Agreement by CEC and the performance by CEC of it's
obligations hereunder in the time and manner contemplated will not cause,
constitute or conflict with or result in (a) any breach or violation of any of
the provisions of or constitute a default under any license, indenture,
mortgage, charter instruments, articles of incorporation, bylaws or other
agreement or instrument to which O.T.S. is a party or by which it may be
bound, nor will any consents or authorizations of any party other than
those hereto be required, (b) an event that would permit any party to any
agreement or instrument to terminate it or to accelerate the maturity of any
indebtedness or other obligation of O.T.S. or (c) any event that would
result in the creation or imposition of any lien, charge or encumbrance on
any asset of O.T.S.
3.14 FULL DISCLOSURE. None of the representations and warranties
made by CEC herein, or in any exhibit, certificate or memorandum
furnished or to be furnished by CEC or on it's behalf, contains or will
contain any untrue statement of material fact the omission of which would
be misleading.
3.16 ASSETS. CEC has good and marketable title to the CEC shares
referenced above, free and clear of any and all liens, claims and
encumbrances of any nature, form or description.
3.17 INDEMNIFICATION. CEC agrees to defend and hold O.T.S.
harmless against and in respect of any and all claims, demands, losses,
costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorney fees,
that it shall incur or suffer, which arise out of, result from or relate to any
breach of, or failure by CEC to perform any of it's respective
representations, warranties, covenants and agreements in this Agreement
or in any exhibit or other instrument furnished or to be furnished by CEC
under this Agreement.
ARTICLE IV
COVENANTS
4.1 INVESTIGATIVE RIGHTS. From the date of this Agreement until the
closing date on Tuesday, April 2, 1996, each party shall provide to the
other party, and such other party's counsels, accountants, auditors and
other authorized representatives, full access during normal business hours
and upon reasonable advanced written notice to all of teach party's
properties, books, contracts, commitments and records for the purpose of
examining the same. Each party shall furnish the other party with all
information concerning each party's affairs as the other party any
reasonable request.
<PAGE>
4.2 CONDUCT OF BUSINESS. Prior to the closing, CEC and O.T.S., shall
each conducts it's business in the normal course and shall not sell, pledge
or assign any assets, without prior written approval of the other party,
except in the regular course of business. CEC shall not amend or allow
the amendment of O.T.S.'s articles of incorporation (except as described
herein) or bylaws, declare dividends, redeem or sell stock or other
securities, incur any additional or newly-funded liabilities, acquire or
dispose of fixed assets, change employment terms, enter into any material
or long-term contract, guarantee obligations of any third party, settle or
discharge any balance sheet receivable for less than it's stated amount or
enter into any other transaction other than in the regular course of
business.
ARTICLE V
CONDITIONS PRECEDENT TO CEC PERFORMANCE
5.1 CONDITIONS. CEC's obligations hereunder shall be subject to the
satisfaction, at or before the closing, of all the conditions set forth in this
Article V. CEC may waive any or all of these conditions in whole or in part
without any prior notice; provided however that no such waiver of a
condition shall constitute a waiver by CEC of any other condition or any of
CEC's other rights or remedies, at law or in equity, if O.T.S. shall be in
default of any of their representation, warranties or covenants under this
Agreement.
5.2 ACCURACY OF REPRESENTATIONS. Except as otherwise
permitted by this Agreement, all representations and warranties by O.T.S.
in this agreement or in any written statement that shall be delivered to CEC
by O.T.S. under this Agreement shall be true and accurate on and as of
the closing date as through made at that time.
5.3 PERFORMANCE. O.T.S. shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it, on or before the closing
date.
5.4 ABSENCE OF LITIGATION. No action, suit or proceeding before any
court or governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to it's consummation, shall have been
instituted or threatened against O.T.S. in reference to the assets being
transferred herein, on or before the closing date.
5.5 STOCK TRANSFER AT CLOSING. Concurrent with closing, O.T.S.
shall deliver to CEC 2,000 shares of unregistered, restricted, common
voting stock of Basia, 25,000,000 shares of Mid-Nevada Art, and the 100%
Gas and Mineral Leases as described in Exhibit A'.
<PAGE>
ARTICLE VI
CONDITIONS PRECEDENT TO O.T.S. PERFORMANCE
6.1 CONDITIONS. O.T.S.'s obligations hereunder shall be subject to the
satisfaction, at or before the closing, of all the conditions set forth in this
Article VI. O.T.S. may waive any or all of these conditions in whole or in
part without any prior notice; provided however that no such waiver of a
condition shall constitute a waiver by O.T.S. of any other condition or any
of O.T.S.'s other rights or remedies, at law or in equity, if CEC shall be in
default of any of their representation, warranties or covenants under this
Agreement.
6.2 ACCURACY OF REPRESENTATIONS. Except as otherwise
permitted by this Agreement, all representations and warranties by CEC
in this Agreement or in any written statement that shall be delivered to
O.T.S. by CEC under this Agreement shall be true and accurate on and as
of the closing date as though made at that time.
6.3 PERFORMANCE. CEC shall have performed, satisfied and complied
with all covenants, agreements and conditions required by this Agreement
to be performed or complied with by it, on or before the closing date.
6.4 ABSENCE OF LITIGATION. No action, suit or proceeding before any
court or governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to it's consummation, shall have been
instituted or threatened against CEC on or before the closing date.
6.5 FINANCIAL CONDITION OF CEC. On the closing date, the assets
and liabilities of CEC shall not be significantly different than the amounts
shown on it's balance sheet reviewed except for changes in the ordinary
course of business. O.T.S. shall have been provided the opportunity to
review the books and records of CEC, at a cost to O.T.S. Such audit to be
completed prior to the closing date. Any delay in providing O.T.S.'s
auditors or accountants with access to books and records as required by
such auditors shall extend the time for performance by O.T.S. by the
amount of time of such delay.
6.6 STOCK TRANSFER AT CLOSING. Concurrent with closing, CEC
shall deliver to O.T.S., 8,660,000 shares of unregistered, restricted,
common voting stock of CEC.
ARTICLE VII
CLOSING
7.1 CLOSING. The closing of this transaction shall be held at the offices
of O.T.S. or such other place as shall mutually be agreed upon, on the 2nd
day of April, 1996, at 1:00 pm.
At the closing the following documents, in form reasonably acceptable to
counsel to the parties or as set forth herein shall be delivered:
7.2 By CEC:
<PAGE>
7.2.1 A letter to the transfer agent requesting the transfer of
8,660,000 shares of the common stock of CEC Industries, Corp.
7.2.2 A corporate resolution signed by the recording secretary of the
Board of Directors meeting of March 28,1996 authorizing the
President to complete this transaction.
7.3 By O.T.S.:
7.3.1 A board of Directors resolution of O.T.S. authorizing this
transaction.
7.3.2 Stock Certificates representing the transfer of 100% of Basia
Holdings, Inc., 100% of Mid-Nevada Art, Inc., and 100% of the Gas
and Minerals Leases attached as Exhibit A'.
ARTICLE VIII
REMEDIES
8.1 DISPUTES. Any dispute that might arise over the enforcement,
interpretation or execution of this Agreement and which is not amicably
settled will be submitted to arbitration in (place) before a panel of
arbitrators selected as follows: Within ten (10) days of demand by either
party for arbitration, each party will select one (1) arbitrator and those two
arbitrators will select a third arbitrator and those (3) three persons shall
constitute a panel of arbitrators. The arbitrators will conduct the hearings
on continuous business days, and their decisions will be majority vote. All
costs of the arbitrators will be shared equally, but the arbitrators are
authorized to award costs and counsel fees to the prevailing party, if
necessary. All documents to be brought into evidence will be produced
withing 10 days of notice of request for arbitration.
8.2 COSTS. If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing part or parties
shall be entitled to recover reasonable attorney's fees and other costs
incurred in that action or proceeding, in addition to any other relief to which
it or they may be entitled.
ARTICLE IX
MISCELLANEOUS
9.1 CAPTIONS AND HEADINGS. The Article and paragraph headings
throughout this Agreement are for convenience and reference only and
shall in no way be deemed to define, limit or add to the meaning of any
provision of this agreement.
<PAGE>
9.2 NO ORAL CHANGE. This Agreement and any provisions hereof, may
not be waived, changed, modified or discharged orally, but it can be
changed by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
9.3 NON-WAIVER. Except as otherwise expressly provided herein, no
waiver of any covenant, provision or condition of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the
party against whom such waiver is charged; and (i) the failure of any party
to insist in any one or more cases upon the performance of any of the
provisions, covenants or conditions of this Agreement or to exercise any
option herein contained shall not be construed as a waiver or
relinquishment for the future of any such provisions, covenants or
conditions, (ii) the acceptance of performance of anything required by this
agreement to be performed with the knowledge of the breach or failure of
a covenant, provision or conditions hereof shall not be deemed a waiver
of such breach or failure and (iii) no waiver by any party shall be construed
as a waiver with respect to any other subsequent breach.
9.4 TIME OF ESSENCE. Time is the essence of this Agreement and of
each and every provision hereof.
9.5 ENTIRE AGREEMENT. This Agreement contains the entire
Agreement and understanding between the parties hereto and supersedes
all prior agreement and understandings.
9.6 CHOICE OF LAW. This Agreement and it's application shall be
governed by the laws of the State of Nevada.
9.7 COUNTERPARTS. This Agreement may be executed simultaneously
in one or more counterparts each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
9.8 NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been
duly given on the date of service if given personally on the party to whom
notice is to be given or on the third day after mailing to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid and properly addressed.
9.9 BINDING EFFECT. This Agreement shall be binding upon the heirs,
executors, personal representatives, successors and assigns of each of
the parties to this agreement.
9.10 EFFECT OF CLOSING. All representations, warranties, covenants
and agreements of the parties contained in this Letter of Intent, or in any
instrument, certificate, opinion or other writing provided for in it shall
survive the closing of this Letter of Intent.
<PAGE>
9.11 MUTUAL COOPERATION. The parties hereto shall cooperate with
each other to achieve the purpose of this Agreement and shall execute
such other and further actions as may be necessary or convenient to effect
the transaction described herein.
9.12 BROKERS. The parties hereto represent that a finder's fee in the
sum of 866,000 shares of unregistered Rule 144 common stock of CEC is
due Roger Ellsworth, concurrent with the closing of this transaction. Each
of the parties hereto shall indemnify and hold the other harmless against
any and all claims, losses, liabilities or expenses which may be asserted
against it as a result of it's dealings, arrangements or agreements with any
such broker or person.
9.13 ANNOUNCEMENTS. The parties will consult and cooperate with
each other as to the timing and content of any announcements of the
transactions contemplated hereby to the general public or to employees,
customers or suppliers.
9.14 EXPENSES. Each party will pay it's own legal, accounting and any
other out-of-pocket expenses reasonably incurred in connection with this
transaction, whether or not the transaction contemplated hereby is
consummated.
9.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations, warranties and agreements of the parties set forth in this
Agreement shall survive the Closing irrespective of any investigation made
for or on the behalf of any party.
9.16 EXHIBITS. As of the execution hereof, the parties hereto have
provided each other with the Exhibits provided for herein-above, including
any items referenced therein or required to be attached thereto. Any
material changes to the Exhibit shall be immediately disclosed to the other
party.
AGREED TO AND ACCEPTED as of the date first above written:
O.T.S. Holding, Inc.
By: /s/Gerald Levine
Gerald Levine, President
C.E.C. Industries Corp.
By: /s/George Matthews
George Matthews,President
<PAGE>
C.E.C. INDUSTRIES CORP. AND SUBSIDIARIES
PROFORMA CONSOLIDATED BALANCE SHEET
March 31, 1996
ASSETS
1996
Current Assets
Cash and Cash Equivalents (Note 1) $ 3,276
Restricted Cash (Note 11) 500,000
Accounts Receivable 543,566
Notes Receivable - Related Party (Note 5)
Inventory (Notes 1 & 2) 181,199
Other 64,115
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Total Current Assets 1,292,156
Property and Equipment, at Cost (Note 1)
Furniture and Equipment 148,478
Less Accumulated Depreciation (89,213)
----------
Net Book Value 59,265
Other Assets
Investment in Undeveloped Land (Note 11) 4,157,528
Notes Receivable - Related Parties (Note 5) 1,380,000
Accrued Interest Receivable - Related
Parties (Note 5) 46,554
Patents, at Cost (Net of Accumulated
Amortization of $9,500 in 1996 and $3,190
in 1995) (Note 1) 101,696
Investment - Limited Partnership (Note 12) 300,000
Artworks (Note 11 & 12) 1,747,199
Coal Reserves (Note 11 & 12) 800,000
Oil and Gas Interests (Note 11 & 12) 1,231,250
----------
Total Other Assets 9,764,227
----------
Total Assets $11,115,648
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C.E.C. INDUSTRIES CORP. AND SUBSIDIARIES
PROFORMA CONSOLIDATED BALANCE SHEET
March 31, 1996
LIABILITIES AND STO CKHOLDERS' EQUITY
1996
Current Liabilities
Accounts Payable $ 293,112
Bank Overdraft 29,411
Payroll Taxes Payable 119,422
Notes Payable (Note 11) 2,723,319
Line of Credit (Note 11) 500,000
Notes Payable - Related Parties (Note 11) 582,210
Accrued Liability-Related Parties (Note 5) 125,788
Accrued Liabilities - Other 303,351
------------
Total Current Liabilities 4,676,613
Commitments & Contingencies (Note 8)
Stockholders' Equity (Notes 6,7,10, & 12)
Convertible Preferred Stock, Par Value
$.001 Per Share, Authorized 100,000,000
Shares, Issued 13,063,041 Shares in 1996
and 725,000 Shares in 1995 13,063
Common Stock, Par Value $.05 Per Share,
Authorized 50,000,000 shares;
Issued and Outstanding, 15,671,795
Shares in 1996 and 1,867,459 Shares
in 1995 783,590
Paid In Capital 9,315,554
Retained Earnings - A Deficit (3,673,173)
Treasury Stock, At Cost (0 Shares in
1996 and 5,986 Shares in 1995) ( 0)
------------
Total Stockholders' Equity 6,439,053
--------------
Total Liabilities and Stockholders' Equity $11,115,648
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