Exhibit 10.8
LETTER OF INTENT
Energex, Inc.
Attn: Xxxxxxx Xxxxxx
Dear Xx. Xxxxxx:
The following will summarize the principal terms of a stock purchase
agreement ("Stock Purchase Agreement") to be entered into between Celebrity
Entertainment, Inc., a Delaware corporation ("Buyer"), Energex, Inc., a Texas
corporation ("Energex") and Xxxxxxx Xxxxxx ("Pedrie"), as the controlling
principal of Energex, as follows:
1. Buyer will purchase from Energex eighty percent (80%) of the
issued and outstanding capital stock in Energex (the "Stock").
2. The purchase price shall be $2,350,000, payable as follows:
(a) $605,000 has previously been paid in cash;
(b) $100,000 shall be paid this date, but Energex shall return
to Buyer $65,000 of said amount no later than February 7,
1997 (resulting in a net amount of $35,000 having been paid
this date);
(c) at least $65,000 shall be paid by February 17, 1996; and
(d) the remainder shall be paid according to a schedule to be
mutually agreed on by the parties (to be attached hereto
upon completion), which schedule shall at a minimum include
payments enabling Energex to meet its obligations to third
parties (provided, however, that this provision shall apply
only to those obligations to third parties of which Buyer
has knowledge as of this date, as they currently exist or as
they are modified with Buyer's consent, and to obligations
arising in the normal course of Energex's business as
described in Authorizations for Expenditure provided in
advance to Buyer by Energex and approved by Buyer); and
Buyer and Energex shall from the date hereof mutually
endeavor to negotiate more beneficial payment schedules with
respect to Energex's obligations to third parties.
If Buyer fails to make payments enabling Energex to meet its obligations to
third parties as set forth above, or otherwise fails to meet such mutually
agreed upon schedule, at any time while the parties are continuing to
negotiate in good faith the Stock Purchase Agreement or have executed the
Stock Purchase Agreement, then Buyer shall forfeit its right to a 10%
ownership interest in Energex as described in item 3 below.
3. The terms of the proposed purchase will be memorialized as soon as
possible in greater detail in a Stock Purchase Agreement, which will contain
provisions as to the disposition of a promissory note owed by Energex to Buyer
in the amount of $1,312,500, the usual selling company's representations and
warranties, specific obligations of the parties pending the Closing and
conditions precedent to Closing, including but not limited to each party's
representatives having made a full, complete and satisfactory investigation of
the business, properties, financial statements, books and records and all
other aspects of the other parties hereto and their businesses. The closing
of the purchase (the "Closing") shall take place simultaneously with the
execution of the Stock Purchase Agreement (the "Closing Date"). In the event
the Closing does not occur on or before April 4, 1997, then all amounts
theretofore advanced by Buyer to Energex shall become an obligation of Energex
with interest at the rate of prime + 1.5% per annum, not to exceed 12% per
annum, all due and payable on terms to be agreed upon, the repayment period
not to exceed 24 months, and Energex shall at the time of execution of such
note transfer to Buyer an undilutable 10% ownership interest in Energex
without voting rights. Energex and/or Pedrie shall have a one-year option to
repurchase such 10% ownership interest at a price to be mutually agreed upon.
If the parties are unable to agree upon such price they shall submit the
matter to a professional appraiser or arbitration.
This Letter of Intent is intended to be binding on the parties hereto,
subject to all parties' satisfactory due diligence. If the foregoing
correctly sets forth our agreement, kindly so indicate by signing and
returning a copy to me.
AGREED AND ACCEPTED Very truly yours,
AS OF THE DATE OF THIS LETTER:
Energex, Inc. Celebrity Entertainment, Inc.
By:/s/ Xxxxxxx X. Xxxxxx By:/s/ J. Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxx, President J. Xxxxxxx Xxxxxxx, Exec. Vice. Pres.
Xxxxxxx Xxxxxx, Individually
