Natural Gas Technologies, Inc.
000 Xxxx Xxxxxx
Xxxxx 000X
Xxxxxxx, Xxxxx 00000
March 17, 1997
Lyric Energy, Inc.
c/x Xxxxx Petroleum Company
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Gentlemen:
This letter agreement supplements our earlier agreement
dated January 2, 1997 (the "January 2 Agreement"). All
capitalized terms not defined herein have the same meaning as in
the January 2 Agreement.
1. As a result of certain non-dilution rights granted to
Amarillo National Bank (the "Bank"), Lyric issued an additional
425,150 shares of Common Stock to the Bank in February 1997.
Accordingly, 46,958,483 shares of Common Stock are currently
outstanding and 203,041,517 shares of Common Stock are currently
authorized but unissued.
2. Lyric and NGT shall immediately commence the
preparation of an information statement at NGT's expense to be
used in connection with a special meeting of Lyric stockholders
to approve (i) a 268.3342 share for one share reverse stock
split; (ii) a name change to Natural Gas Technologies, Inc.;
(iii) amendments to Lyric's articles of incorporation to
eliminate the liability of officers and directors and to reduce
the voting requirements for certain significant corporate
actions; and (iv) the authorization of 10,000,000 shares of no
par value preferred stock which will be reserved for future
issuance in the discretion of the Board of Directors. Lyric and
NGT shall use their best efforts to complete the information
statement and obtain SEC approval of the same so as to allow the
special meeting of stockholders to occur in May 1997.
3. The Note, which was entered into on or about February
4, 1997, shall be amended and restated (i) to indicate that the
Note will be convertible into 203,041,517 shares; (ii) to provide
that conversion shall occur upon the later to occur of Lyric
becoming current on its periodic reports required under the
Securities Exchange Act of 1934, as amended (the "'34 Act"), and
the receipt by Lyric of a waiver by the Bank of its non-dilution
rights; and (iii) to delete the provisions of Section 9.6 and
provide instead that the vacancies created by the resignations of
X.X. Xxxxxxxx and Xxx Xxxxxxxx from Lyric's board of directors
shall be filled upon conversion of the Note by two directors
selected by NGT. NGT and Lyric shall use their best efforts to
complete and file as soon as practicable the periodic reports
required to bring Lyric current under the '34 Act and thereafter
Lyric shall use its best efforts to obtain the above-referenced
waiver from the Bank as soon as practicable.
4. The Share Exchange shall occur in two stages. The
first stage shall occur immediately after stockholder approval of
the matters set forth in paragraph 2 above and shall consist of
the exchange of approximately 2,055,000 shares of Lyric Common
Stock (post-reverse split) for approximately eighty percent of
the equity interests, which interests are held by certain NGT
officers, directors and their family members and affiliates.
Upon the completion of the first stage, Lyric will own
approximately eighty percent of all of the issued and outstanding
shares of NGT and shall thereafter consolidate the financial
statements of NGT with its own financial statements. The second
stage shall occur upon the effective date of an S-4 registration
statement registering the exchange of all of the remaining equity
interests of NGT into 513,000 shares of Lyric Common Stock
(post-reverse split) and providing for the distribution of the
756,674 post-reverse split shares issued to NGT upon conversion
of the Note to the shareholders of NGT immediately prior to the
Share Exchange. The foregoing terms are subject to adjustment
based upon the anticipated conversion of certain preferred stock
of NGT and based upon certain anticipated oil and gas property
acquisitions by NGT prior to the Share Exchange. Notwithstanding
the foregoing, the current Lyric shareholders shall hold five
percent of the Common Stock at the conclusion of the Share
Exchange.
5. The consummation of the Share Exchange shall be
conditioned upon the completion of due diligence and final
documentation therefor.
6. Except as modified hereby, the January 2 Agreement
shall remain in full force and effect.
If the foregoing terms are agreeable, please indicate your
acceptance by signing and returning to NGT the enclosed copy of
this letter agreement.
Very truly yours,
NATURAL GAS TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, President
Agreed and accepted this
18th day of March, 1997.
LYRIC ENERGY, INC.
By: /s/ X.X. Xxxxx
X.X. Xxxxx, President
