Agreement and Plan of Reorganization
by and among
NELX, Inc. and Lincoln Aztec Corporation
dated _________________, 1997
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
NELX, Inc.
and
Lincoln Aztec Corporation
This Agreement and Plan of Reorganization ("Agreement"), dated as of
_________________, 1997 among NELX, Inc. ("NELX") a Kansas Corporation
registered with the U.S. Securities and Exchange Commission ("SEC") under 12(g)
of the Securities and Exchange Act of 1934 (the "Exchange Act"), Lincoln Aztec
Corporation ("LAC"), a New Mexico Corporation, and the undersigned shareholders
of Lincoln Aztec Corporation ("LAC Shareholders").
W I T N E S S E T H:
A. WHEREAS, NELX and LAC are corporations duly organized under the laws of
the State of Kansas and New Mexico, respectively.
B. Plan of Reorganization. The LAC Shareholders are the owners of all of
the issued and outstanding common stock of LAC. It is the intention that all of
the issued and outstanding stock of LAC shall be acquired by NELX 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. NELX and the LAC Shareholders agree that all of the
outstanding common shares of LAC shall be exchanged with NELX for 33,500,000
shares of the $.0001 par value voting common stock of NELX. The pro rata numbers
of the NELX Shares, on the closing date, shall be delivered to the individual
shareholders in exchange for their LAC shares as hereinafter set forth. Further,
certain warrants, as provided for in Section 1.3 and 1.4, shall also be
delivered to LAC Shareholders. Any NELX shares which are to be exchanged for LAC
common stock shares which are newly issued to Powers Elevation Co., Inc.
shareholders and/or which are newly issued to others to accomplish the LAC
private placement to raise the funds necessary to complete the Powers Elevation
Co., Inc. transaction, as provided for in Section 4.2 (such newly issued LAC
shares hereinafter referred to as "New LAC Shares") shall be a portion of and
not in addition to such 33,500,000 shares.
D. WHEREAS, the parties hereto wish to enter into this Agreement, pursuant
to the provisions of the Kansas Statutes.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE I
The Exchange
------------
1.1 Subject to the conditions set forth herein on the "Effective Date" (as
herein defined), the Shareholders of LAC shall exchange all of their shares of
Lincoln Aztec Corporation for 33,500,000 NELX Shares. 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.
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On the Closing Date, all of the documents to be furnished to LAC and NELX,
including the documents to be furnished pursuant to Article VII of this
Agreement, shall be delivered to NELX 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, LAC shall become a wholly owned subsidiary of
NELX, Inc. Its shareholders shall receive pro rata shares of $.0001 par value
voting common stock of NELX.
1.3 In addition, NELX shall issue to LAC shareholders a warrant at $.01
convertible to 4,050,000 shares of stock, subject to due diligence and
satisfaction by NELX obtaining an appraisal from a reliable third party and
conducting a sale or sales at an average value or price per net leasehold acre
of at least Ten Dollars covering a combined total of not less than 25,000 net
leasehold acres out of the approximate 120,000 net leasehold acres held by LAC
on the Effective Date. If such sales are for an average price of less than Ten
Dollars per net leasehold acre, a proportionate adjustment shall be made to
lower the balance of the warrant with such adjustment to be by the ratio of the
actual average appraisal or sales price per net leasehold acre divided by Ten
Dollars. Pending review of expiration and rentals of leases and evaluation
within one year of signing unless mutually agreed to another formula. If funds
are needed within the company, the shares will be adjusted proportionately.
1.4 In addition, for each two shares of NELX stock issued in exchange for
New LAC Shares, one warrant shall also be issued. Such warrant will have a one
year term for the purchase of one share of NELX stock at a price of $.75 per
share.
1.5 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 NELX (as provided in
Section 1.2) shall be issued by it to LAC shareholders (other than those shares
as to which dissenters' rights have been perfected in accordance with New Mexico
law), pro rata to the proportion of LAC Shareholders or shares held.
2.2 LAC represents that no outstanding options or warrants for its shares
exist.
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2.3 The stock transfer books of LAC shall be closed on the Effective Date,
and thereafter no transfers of the stock of LAC shall be made. LAC shall appoint
an exchange agent ("Exchange Agent"), which is expected to be NELX's then stock
transfer agent ("Stock Transfer Agent"), to accept surrender of the certificates
representing the shares of LAC, and to deliver in exchange for such surrender
certificates, shares of common stock of NELX. The authorization of the Exchange
Agent may be terminated by NELX after six months following the Effective Date.
Upon termination of such authorization, any shares of LAC and funds held by the
Exchange Agent for payment to LAC shareholders pursuant to this Agreement shall
be transferred to NELX or its designated agent who shall thereafter perform the
obligations of the Exchange Agent. If outstanding certificates for shares of LAC
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 NELX (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 LAC 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 NELX 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 shares of LAC, 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 New Mexico
law shall not be converted into shares of NELX 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 LAC previously
held shall be canceled. Until so presented and surrendered, each certificate or
certificates which represented issued and outstanding shares of LAC at the
Effective Date shall be deemed for all purposes to evidence the right to receive
the consideration set forth in Sections 1.2 and 1.3 of this Agreement. If the
certificates representing shares of LAC 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 NELX
-------------------------------------------------
No representations or warranties are made by any director, officer,
employee or shareholder of NELX as individuals, except as and to the extent
stated in this Agreement or in a separate written statement (the "NELX
Disclosure Statement") if any. NELX hereby represents, warrants and covenants to
LAC except as stated in the NELX Disclosure Statement, as follows:
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3.1 NELX is a corporation duly organized, validly existing and in good
standing under the laws of the State of Kansas, 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 NELX, copies of
which have been delivered to LAC herewith, are complete and accurate, and the
minute books of NELX 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 NELX.
3.2 The aggregate number of shares which NELX is authorized to issue is
500,000,000 shares of common stock with $.0001 par value and no shares of
preferred stock of which no more than 25,000,000 shares of such common stock are
issued and outstanding, fully paid and non-assessable. NELX 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, except pending
acquisition contracts for exchange of assets for common stock as disclosed to
LAC in writing. This contract is subject to cancellation of the Firstland
Offshore Exploration, Inc. agreement, or the spin-off of Firstland Exploration,
Inc. prior to consummation of the transaction contemplated hereunder. NELX
existing shareholders will retain any interests in the Gulf of Mexico, East Main
Pass, Blocks 253 & 254 it may own and spin same off to its shareholders.
The subsidiaries of NELX are each an association, corporation, or other
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or association; each has the power and
authority to lease its properties and to carry on its business as now being
conducted and is qualified to do business; and each holds or shall hold all
licenses, franchises, permits or other governmental authorizations required to
enable it to conduct its business or own its properties in every jurisdiction in
which it currently conducts business or owns property and where the failure to
do so would have a material adverse effect on the business of the subsidiary.
All outstanding shares of capital stock of each subsidiary are duly and validly
authorized and issued, fully paid and non-assessable. NELX directly or
indirectly owns all of the issued and outstanding capital stock of such
subsidiaries.
3.3 NELX 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
NELX will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of NELX.
3.5 The execution, delivery and performance of this Agreement has been duly
authorized and approved by NELX's Board of Directors.
3.6 NELX will deliver to LAC consolidated audited financial statements of
NELX and its subsidiaries, as of May 31, 1996. All such statements, herein
sometimes called "NELX 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 NELX for the
periods included. The May 31, 1996, statements have been prepared in accordance
with generally accepted accounting principles.
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3.7 Since the dates of the NELX Financial Statements, there have not been
any material adverse changes in the business or condition, financial or
otherwise of NELX except foreclosures commenced on real property. NELX does not
have any material liabilities or obligations secured or unsecured (whether
accrued, absolute, contingent or otherwise), except as disclosed under the
acquisition agreements listed on Exhibit B attached hereto.
3.8 There are no legal proceedings or regulatory proceedings involving
material claims pending, or to the knowledge of the officers of NELX, threatened
against NELX or affecting any of its assets or properties, and NELX is not in
any material breach or violation of or default under any contract or instrument
to which NELX 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 NELX under any contract or other instrument to which NELX 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 NELX, except foreclosure actions
relating to its real property, and the Xxxxxxx lawsuit.
3.9 NELX shall not enter into or consummate any transactions prior to the
Effective Date other than in the ordinary course of business except those
disclosed by Exhibit B and will pay no dividend, or increase the compensation of
officers and will enter into no agreement or transaction which would adversely
affect its financial condition; however NELX is legally obligated to issue
approximately 2 million shares of common stock to satisfy obligations and
accounts.
3.10 All liability of NELX has been properly provided for and is adequate
to comply with all regulatory requirements regarding same.
3.11 The representations and warranties of NELX shall be true and correct
as of the date hereof and as of the Effective Date.
3.12 NELX has delivered, to LAC true and correct copies of the NELX 10-K
and each of its other reports to shareholders and filing with the Securities and
Exchange Commission ("SEC") for the current year. NELX will also deliver to LAC
on or before the Closing Date any reports relating to the financial and business
condition of NELX which are filed with the SEC after the date of this Agreement
and any other reports sent generally to its shareholders after the date of this
Agreement.
NELX has duly filed all reports required to be filed by it under the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, (the "Federal Securities Laws") except 1995 10K. No such reports, or
any reports sent to the shareholders of NELX generally, contained any untrue
statement of material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements in such report, in light of
the circumstances under which they were made, not misleading.
3.13 NELX has delivered to LAC a copy of each of the federal income tax
returns of NELX for the year ending May 31, 1996. The provisions for taxes paid
by NELX are believed by NELX to be sufficient for payment of all accrued and
unpaid federal, state, county and local taxes of NELX (including any penalties
or interest payable) whether or not disputed for the periods then ended and for
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all prior fiscal periods. All returns and reports of other information required
or requested by federal, state, county, and local tax authorities have been
filed or supplied in a timely fashion, and all such information is true and
correct in all material respects. Provision has been made for the payment of all
taxes due to date by NELX, including taxes for the current year ending May 31,
1996. No federal income tax return of NELX is currently under audit.
3.14 NELX has an employee benefit plan.
3.15 No representation or warranty by NELX in this Agreement, the NELX
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.
3.16 NELX agrees that all rights to indemnification now existing in favor
of the employees, agents, directors or officers of LAC 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 NELX expressly assumes such indemnification obligations of
LAC.
ARTICLE IV
Representations, Warranties and Covenants of LAC
------------------------------------------------
No representations or warranties are made by any director, officer,
employee or shareholder of LAC as individuals, except as and to the extent
stated in this Agreement or in a separate written statement (the "LAC Disclosure
Statement").
LAC hereby represents, warrants and covenants to NELX, except as stated in
the LAC Disclosure Statement, as follows:
4.1 LAC is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Mexico, 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 LAC, copies
of which have been delivered to NELX, are complete and accurate, and the minute
books of LAC 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 LAC.
4.2 The aggregate number of shares which LAC is authorized to issue is
5,000,000 shares of common stock with a par value of $.01 per share, and no
shares of preferred stock of which 2,000,000 shares of such common stock are
issued and outstanding, fully paid and non-assessable. LAC 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. Except that
LAC may issue up to 1,000,000 New LAC Shares in a planned private placement
and/or to Powers Shareholders for the acquisition of Powers Elevation Co., Inc.,
which shall convert to NELX shares included in the total of 33,500,000 shares
contemplated in this agreement.
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LAC owns or will own concurrent with closing 100% of the issued and
outstanding stock of Powers Elevation Co., Inc.
The subsidiaries of LAC are each an association, corporation, or other
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or association; each has the power and
authority to lease its properties and to carry on its business as now being
conducted and is qualified to do business; and each holds or shall hold all
licenses, franchises, permits or other governmental authorizations required to
enable it to conduct its business or own its properties in every jurisdiction in
which it currently conducts business or owns property and where the failure to
do so would have a material adverse effect on the business of the subsidiary.
All outstanding shares of capital stock of each subsidiary are duly and validly
authorized and issued, fully paid and non-assessable. LAC directly or indirectly
owns all of the issued and outstanding capital stock of such subsidiaries.
4.3 LAC 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
LAC will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of LAC.
4.5 The execution of this Agreement has been duly authorized and approved
by the LAC's Board of Directors.
4.6 LAC has delivered to NELX such financial statements of LAC as currently
exist.
4.7 LAC has delivered to NELX a list and description of all pending legal
proceedings involving LAC, none of which will materially adversely affect them,
and, except for these proceedings, there are no legal proceedings or regulatory
proceedings involving material claims pending, or, to the knowledge of the
officers of LAC, threatened against LAC or affecting any of its assets or
properties, and LAC is not in any material breach or violation of or default
under any contract or instrument to which LAC 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 LAC under any contract or other
instrument to which LAC 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 LAC .
4.8 Other than the possible acquisition of Powers Elevation Co., Inc., LAC
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, except that it
may sell parcels of its property and pay off debt.
4.9 LAC is not a party to any contract performable in the future except
contracts to be performed in the normal course of business.
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4.10 The representations and warranties of LAC shall be true and correct as
of the date hereof and as of the Effective Date.
4.11 LAC has delivered, or will deliver within two weeks of the date of
this Agreement, to NELX, all of its corporate books and records for review, true
and correct copies of LAC 's tax return since 1993. LAC will also deliver to
NELX on or before the Closing Date any reports relating to the financial and
business condition of LAC which occur after the date of this Agreement and any
other reports sent generally to its shareholders after the date of this
Agreement.
4.12 LAC will deliver to NELX a copy of the federal income tax returns of
LAC for the year ended December 31, 1995, and for any additional open years. The
provisions for taxes paid by LAC are believed by LAC to be sufficient for
payment of all accrued and unpaid federal, state, county and local taxes of LAC
(including any penalties or interest payable) whether or not disputed for the
periods then ended and for all prior fiscal periods. All returns and reports or
other information required or requested by federal, state, county, and local tax
authorities have been filed or supplied in a timely fashion, and all such
information is true and correct in all material respects. No federal income tax
return of LAC is currently under audit. Ad Valorem taxes due shall be paid by
NELX at closing.
4.13 LAC has no employee benefit plan in effect at this time.
4.14 No representation or warranty by LAC in this Agreement, the LAC
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 LAC understands and agrees that NELX, in light of the circumstance in
which they were made, reserves the right to cancel this agreement if NELX finds
the books and records of the corporation unsatisfactory or if disclosure is
inadequate or cannot be accurately made. Such cancellation shall not be
unreasonable.
ARTICLE V
Obligations of the Parties Pending the Effective Date
-----------------------------------------------------
5.1 This Agreement shall be duly submitted to the shareholders of LAC 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 LAC, such date to be
the earliest practicable date. The Board of Directors of LAC, subject to its
fiduciary obligations to shareholders, shall use its best efforts to obtain the
requisite approval of LAC shareholders of this Agreement and the transactions
contemplated herein. LAC and NELX shall take all reasonable and necessary steps
and actions to comply with and to secure LAC shareholder approval of this
Agreement and regulations of such states.
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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 LAC and NELX 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 for Exchange
----------------------
6.1 At the Effective Date, the exchange shall be effected as set forth in
Kansas Revised Statutes with stock certificates (or proper stock powers for
certificates) of LAC being exchanged for NELX certificates as and when submitted
to the transfer agent. If no agreement with Powers Elevation Co., Inc. is made
this Agreement is null and void.
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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 NELX 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 LAC and NELX 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 LAC 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 NELX and LAC.
7.5 The representations and warranties made by NELX and LAC 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 NELX or (2) events or changes (which shall not, in the aggregate, have
materially and adversely affected the business, assets, or financial condition
of LAC or NELX during or arising after the date of this Agreement.)
7.6 LAC shall have furnished NELX with:
(1) a certified copy of a resolution or resolutions duly adopted by the
Board of Directors of LAC approving this Agreement and the
transactions contemplated by it and directing the submission thereof
to a vote of the shareholders of LAC;
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(2) a certified copy of a resolution or resolutions duly adopted by a
majority of all of the classes of outstanding shares of LAC capital
stock approving this Agreement and the transactions contemplated by
it;
(3) an agreement from each "affiliate" of LAC 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 NELX 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 NELX 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 NELX on SEC Form
10-Q or otherwise; and (d) the affiliate acknowledges that NELX is
under no obligation to register the sale, transfer, or the disposition
of NELX 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 NELX will satisfy the public
information requirements of Rules 144 and 145 during the three-year
period following the Closing Date.
7.7 NELX shall furnish LAC with a certified copy of a resolution or
resolutions duly adopted by the Board of Directors of NELX, approving
this Agreement and the transactions contemplated by it.
7.8 a) LAC shall provide all books and records necessary to and pay for
and obtain an audit from Certified Public Accountants for LAC, current
to date, pursuant to Reg. S-X under the Securities and Exchange Act of
1934.
b) NELX shall pay for and provide accountants audit services to make all
reports current as required under the Securities Exchange Act of 1934.
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 LAC) prior to the
Effective Date:
(a) By mutual consent of NELX and LAC, in writing;
(b) By NELX, or LAC, if any condition set forth in Article VII relating to
the other party has not been met or has not been waived;
(c) By NELX, or LAC, 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;
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(d) By any party, if there is discovered any material error, misstatement
or omission in the representations and warranties of another party; or
(e) By any party if the Agreement Effective Date is not within 90 days
from the date hereof.
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.
10.3 Each of the parties hereto will pay its own fees and expenses incurred
in connection with the transactions contemplated by this Agreement. NELX and LAC
each represent to the others that if it has employed any investment bankers,
brokers, finders, or intermediaries in connection with the transaction
contemplated hereby who might be entitled to any fee or other payment from NELX,
such shall be the sole responsibility of NELX.
10.4 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.
10.5 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 LAC.
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10.6 Any notices, requests, or other communications required or permitted
hereunder shall be delivered personally or sent by overnight courier service,
fees prepaid, addressed as follows:
To NELX, Inc.:
00000 X. 00xx Xxx, #000
Xxxxx Xxxxx, XX 00000
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To Lincoln Aztec Corporation:
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
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.
10.7 NELX agrees upon closing to appoint three directors to the Board of
NELX choosing to serve until the next Board of Directors meeting. In addition,
NELX agrees to negotiate after the date of the Letter of Intent other management
issues, as may be necessary, to be effective after closing and a separate
agreement will be formalized prior to closing.
IN WITNESS WHEREOF, the parties have set their hands and seals this day of
__________________, 1997.
NELX, Inc. Lincoln Aztec Corporation
By: By:
---------------------------------- ----------------------------
President President
Attest: Attest:
------------------------------ -------------------------
Secretary Secretary
SHAREHOLDERS OF LINCOLN AZTEC CORPORATION
------------------------------------ ---------------------------------------
------------------------------------ ---------------------------------------
------------------------------------ ---------------------------------------
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EXHIBIT "B"
1. NELX has spun out the NELX Marketing, Inc., division with the AeroLink
and AeroSearch devices.
2. NELX intends to spin out any oil and gas and/or the FOEC agreement on
the platform company.
3. NELX intends to sell certain real estate (240 acres in Erie, Colorado
and its Provo, Utah building) for notes and securities under terms it deems
appropriate in its sole discretion.
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