EXHIBIT 99.1
May 14, 1997
Voyager Energy Corp.
Two Chasewood Park
00000 Xxxxx Xxxxxxx 000, Xxx. 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Gentlemen:
This letter will establish the basic terms of the proposed acquisition
("Acquisition") of Voyager Energy Corp. ("Seller") by Buyer Corporation
("Buyer"), pursuant to which it is contemplated that (i) the outstanding capital
stock of Seller will be converted into common shares of Buyer and (ii) Seller
will become a wholly-owned direct or indirect subsidiary of Buyer. Xxxxx is
prepared to commence immediately the negotiation of a definitive agreement
pursuant to which the acquisition would be effected.
The definitive agreement will, among other things, provide:
1. The Acquisition will constitute a reorganization under
Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended. Based on
the assumptions and subject to the conditions set forth below, in the
Acquisition the aggregate outstanding shares of common stock of Seller shall be
converted into approximately 340,000 shares of the common stock of Buyer (the
"Merger Consideration").
2. This letter is based on the assumptions that (i) Seller owns certain
interests in oil and gas leases, royalty interests, overriding royalty interests
and mineral interests, as well as being the sole general partner of Partnership,
which owns certain working interests in oil and gas leases, (ii) the principal
amount of the indebtedness of Seller to financial institutions, which shall be
assumed by Buyer in the Acquisition, shall not exceed $752,600, (iii) the
principal amount of the indebtedness of Seller to investors in the Partnership,
which shall be assumed by Buyer in the Acquisition, will not exceed $800,000,
and (iv) there are no outstanding options, warrants or other rights to acquire
common stock of Seller corporation, or receive cash payments in lieu thereof.
3. For representations, warranties, covenants, conditions and indemnities
acceptable to Buyer and Seller and customary in transactions of this nature.
4. That the closing of the Acquisition shall be subject to, among other
things: (a) satisfactory completion of Buyer's due diligence examination of
Seller and its properties, (b) approval of the final terms of the Agreement and
Plan of Reorganization by Buyer's Board of Directors, (c) approval by the
stockholders of Buyer and (d) the obtaining of all other necessary governmental
and third party consents and approvals.
Please confirm that this letter accurately sets forth our mutual
understanding by executing two copies of this letter and returning a fully
executed copy to Xxxxx. It is recognized that the definitive agreement will
include terms, provisions, conditions, representations and warranties in
addition to those discussed above. It is our expectation that the parties would
enter into a definitive agreement as promptly as practicable after completion of
due diligence, and that the stockholders' meeting of Buyer will be held as soon
as practicable thereafter. The closing would take place as soon as practicable
after approval of the stockholders.
This letter shall be void and of no force or effect if not executed and
delivered by both parties on or before 5:00 p.m. Houston, Texas time on May 14,
1997.
If the foregoing is in accordance with your understanding, kindly execute
and return the enclosed copy of this letter as provided above.
Very truly yours,
XXXXXX CORPORATION
By:/s/ XXXXXX X. XXXXXXX
_______________________
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, General Counsel and
Secretary
Confirmed:
VOYAGER ENERGY CORP.
By: /s/ XXXXXXX X. XXXXXX
_________________________
Name: Xxxxxxx X. Xxxxxx
Title: CEO
_________________
and
By: /s/ XXXXXX X. XXXXXXX
________________________
Name: Xxxxxx X. Xxxxxxx
Title: President
_________________
