H&J Energy Company, Inc.
540 Wilson Avenue
Perris, CA 92571
Bus: (909) 943-2057; Fax: (909) 943-5068
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From:
Mr. Art Simburg, Sr. V.P. Corp. Public Relations 30 December 2002
To:
Prospective Lender
Mr.
Simburg’s Bus. #: (310) 670-1233; Fax: (310) 670-4756
Dear
Prospective Lender,
I am forwarding this letter/agreement for
prospective lenders interested in a timely opportunity related to our coal
venture.
Over twelve months ago we were presented an opportunity to participate in a coal production effort to supply coal orders to foreign interests in Italy and Greece. We assigned our mining engineer the task of investigating the feasibility of our participation in this endeavor. Over the course of this year we have signed an agreement with a close coal-mining associate of our mining engineer to supply coal from the state of Alabama. The Alabama mine owner currently has approximately 80,000 tons at the shipping facilities on the Black Warrior River to be purchased and transported to its destination. The Alabama coal miner is shipping coal on a daily basis to end-users.
Currently, our mining engineer was asked to submit a proposal
on a mine site in Arkansas through a close mining associate in Virginia. The
Senior Buyer from Italy requested samples from each coal mine location from
which coal would be shipped. After providing the samples to Italy, our
companies were informed that we not only met the specifications desired, but
that our coal blend was the best provided and would be quite adequate for the
power and steel industries. Other companies were seeking to be awarded the coal
order from Italy, but after shipping our samples of coal from the various
sources, providing all data regarding mine locations, and fulfilling the
request of the Senior Buyer from Italy we were verbally awarded the contract.
Therefore, our company has been approved to supply a minimum of five and
one half (5 1/2) million tons of steam grade coal per year and five (5) million
tons of coking coal per year to the nation of Italy. The Italian order will
include coking coal from Arkansas, Virginia and steam grade coal from Alabama
as well as other states. The Senior Buyer from Italy arrived in Virginia the
week of December 16th to meet with our mining engineer and the
associate coal producer in Virginia so as to finalize the agreement and post
letters of credit separately to each of our companies. As of December 19th
the letter of intent has been signed and the Virginia law firm is diligently
finalizing the contract by early January. The Senior Buyer has departed for New
York to post the Letters of Credit. The Letter of Credit will be in place by
the first to second week of January 2003. Our coal production will
incrementally increase until full production quotas are met for Arkansas and
Alabama. We anticipate fulfilling the orders initially not only through
currently named mining operations, but will also procure from other sources
additional coal that will meet the specifications of the buyers. The
profitability and quantity of coal from the Italian order supersedes any other
coal order pursued by our company.
All
prospective lenders please be advised that the Italian coal order is nearing
completion. The contract awarded to the producer in Virginia and our company
amounts to multiple yearly options and extensions up to thirty (30) years,
which includes mining of coal reserves to
exhaustion.
____ ____
The
duration of these agreements are not an every day occurrence in the coal mining
industry. The projected net monthly revenues from both Arkansas
and Alabama operations will exceed $3 million USD. We foresee the projected
time for transference of our letter of credit early to mid January 2003.
Secondly, an opportunity has surfaced giving our company the
opportunity to acquire several coal purchase orders in Virginia by January 10th.
The orders currently require per month 54,000 tons of coal shipped to two local
power companies and an industrial plant. The orders can be increased up to
96,000+ tons per month. The current orders net monthly revenues are more
than $150,000.00 USD. The end users
mail payments for coal shipped every 1st and 15th of the
month.
In
addition, our company has been endeavoring to bring to realization a coal
cleaning process, which will substantially reduce the harmful sulfur content in
coal when burned. We have sought capitalization for this phase of our project
well before the coal sales opportunities stated earlier came into existence. We
have submitted substantial paper work in pursuit of a long-term loan. One
company approved our loan but to date has not funded. In October, we received a
letter from the fund manager of the company, stating it would fund our company
prior to the end of year 2002. We have good reason to feel this company will
fund us between the close of December to mid January 2003, thus making it
possible for our company to have a global impact on the health of humanity and
the environment.
In
addition to our coal projects, your loan will help support the coming to
fruition of multiple international projects and transactions we currently have
underway.
We are providing an opportunity to a few friends and
their respective friends to make loans before accessing the letter of credit
early to mid January 2003. Those who place loans to the company for a minimum of
$5,000 receive 100% return on the monies loaned. The loan range is from $5,000
to $300,000. The company will be in the position to carry out this return
commitment due to the net profit projections stated above and or our special
international projects. The minimum loan amount is $5,000 for interested
parties who desire to participate. H&J
Energy Company, Inc. (HJEC) has a present loan need of up to $300,000 to handle
business & travel expenses occurring now through mid January 2003. The
$300,000 will cover immediate business expenses for the international projects,
cover cost to take-over several current coal purchase orders in Virginia,
acquire an option on an Arkansas coal property, finalize the mining permit for
the Arkansas coal property, handle some administrative costs and business
travel to Arkansas, Louisiana, Virginia and specifically Alabama to access the
Letter of Credit once it’s in place.
Repayment
of loan will be made no later than sixty (60) days after letter of credit is
received and clear in our corporate account. The payments will be made from the
brokered Alabama coal shipments before revenue is generated from the start-up
Arkansas mining operation. The repayment will equate to no less than 100%
return on monies loaned HJEC. HJEC will pay 100% return on loaned monies. For example, if a loan is made for $100,000,
the full return and principal will be $200,000.
This
letter binds HJEC to described conditions of loan details outlined in this
letter/agreement. HJEC also is bound to said agreement to perform at the
percentage described herein. This agreement carries the full consent of a
quorum of the Board of Directors. The duration of this opportunity is until
HJEC receives the letter of credit early to mid January 2003. An executed faxed
copy carries the full authority of an original copy of this agreement.
____ ____
Signature Page
H&J Energy Company, Inc.
(Loan Agreement)
Witnessed
hereto by the undersigned on ____ day of ___________ 2003.
________________________________
_______________________________
Chief Operating Officer, HJEC Lender Signature
_______________________________
Lender
Print Name
_______________________________
Lender’s Address
______________________
Loan Amount _______________________________
Lender’s City, State, Zip code
______________________
Loan
Return Amount
________________________________
Lender’s Telephone No.
________________________________
Lender’s Immediate Beneficiary
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