LETTER OF INTENT
When signed by each party hereto as set forth hereunder, this shall constitute a
binding Letter of Intent entered into by, between and amongst the undersigned
entities, under which these entities shall agree to and abide by the terms and
conditions set forth in this Letter of Intent and to negotiate in good faith a
more definitive contract to follow this Letter which shall incorporate, in
addition to these terms and conditions, such other terms and conditions as are
necessary to carry out the intent of the parties as evidenced herein.
TERMS AND CONDITIONS
1. NELX, Inc., ("NELX"), a Kansas corporation, registered with the U.S.
Securities and Exchange Commission, under Sec. 12(g) of the Securities Exchange
Act of 1934, shall acquire all of the common stock of ▇▇▇▇▇▇ Coal Company
("FCC"), in exchange for shares of common stock of NELX under the terms of the
attached Agreement and Plan of Reorganization.
2. A formal contract substantially in the form attached hereto as Exhibit
"A" shall be agreed between the parties within ten days after the signing of
this Letter of Intent. The parties agree to provide full disclosure of financial
information of each entity, and understand that SEC regulations may require
certain audits for properties or assets being acquired and such will be a
condition of the resulting contract. FCC represents and warrants that the
financial statements of December 31, 1995, December 31, 1996 and June 30, 1997,
are true and accurate. If the above-referenced SEC audit reveals discrepancies
or a need for adjustment, an equity adjustment will be made in favor of NELX's
existing shareholders. FCC will pay all costs associated with the audit to meet
SEC requirements.
3. During the pendency of the Letter of Intent, NELX will make available
all books and records pertinent to operations at reasonable times.
4. NELX will provide FCC all SEC reports filed during pendency of the
Contract or Letter of Intent.
5. FCC, or its shareholders, will not take NELX common stock with the
intent of distribution, but will accept such stock for investment purposes only.
6. FCC and its principals, will cooperate in any required SEC filing
required regarding the transaction.
7. FCC will assign all the rights to the Gulf of Mexico, East Main Pass,
Blocks 253 & 254 to Westwind, Inc. FCC will then spin off Westwind, Inc. and CS,
Inc. to the pre- merger shareholders of NELX, at which time ▇▇. ▇▇▇▇▇▇▇ will
become the President of Westwind, Inc. FCC will receive a five percent (5%)
equity in these two companies through the issuance of common stock of the
companies.
8. The parties will maintain all operations during pendency of this Letter
of Intent or Contract.
9. FCC will provide monthly operating reports & statements of FCC to NELX.
FCC will provide proof of ownership of sufficient coal reserves to fulfill
existing contracts. FCC will also provide a copy of existing contracts for its
coal reserves.
10. FCC shareholders will be entitled to piggyback registration rights when
NELX files any other registration statement for its common stock. NELX will be
responsible for all registration expenses, (registration to be done by NELX's
designated attorneys), except underwriters' or brokers' discounts and
commissions.
11. The Letter of Intent shall terminate on September 29, 1997, if the
contract with FCC and NELX has not been completed (unless extended by mutual
agreement of the parties) or the contingencies set forth in paragraph one have
not been met.
12. In the event of a dispute under this Letter, the parties agree to
negotiate in good faith, to resolve the dispute in a timely manner.
13. FCC and NELX agree that (1) FCC shall pay a Finders Fee of 10% of the
value of the transaction estimated to be $60,000.00 to ▇▇▇▇ ▇▇▇▇ of ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇., #▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, to be paid as 120,000 shares of
NELX, Inc. common stock post-merger and a warrant for 150,000 at $.50 per share
valid for a period of two years; (2) NELX shall issue to its consultant
appropriate shares approved by NELX's Board of Directors to be issued as S-8
Registered shares, at the time of issuance of the shares to FCC pursuant to the
contract to follow this Letter of Intent.
This document shall be acceptable when executed in counterparts and a
minimum of $25,000 purchased by FCC or its designees in NELX's debenture Series
A, by September 2, 1997.
Dated: September 2, 1997
NELX, Inc. ▇▇▇▇▇▇ Coal Company
by: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ by:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President , President
Diamond River Investor
by: /s/ ▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇, Consultant
