U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-9800
LYRIC INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 75-1711324
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
16775 Addison Road, Suite 300, Addison, Texas 75001
(Address of principal executive offices)
(972) 713-0137
(Issuer's telephone number)
16775 Addison Road, Suite 300, Dallas, Texas 75248
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Sections 13 or 15(d) of the Securities Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes...X... No.......
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: 2,871,754 shares of common
stock as of March 15, 1999.
Transitional Small Business Disclosure Format (check one);
Yes....... No...X....
Index to Quarterly Report on Form 10Q-SB
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Report on Review by Independent Certified Public Accountants
Consolidated Balance Sheets as of January 31, 1999 and
April 30, 1998
Consolidated Statements of Operations for the Three and Nine
Months Ended January 31, 1999 and 1998 and Cumulative Period
During the Development Stage
Consolidated Statement of Changes in Stockholders'
Equity/(Deficiency)
Consolidated Statements of Cash Flows for the Nine Months Ended
January 31, 1999 and 1998 and Cumulative Period During the
Development Stage
Selected Information for Consolidated Financial Statements
Item 2. Plan of Operation.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission Of Matters To A Vote Of Security Holders.
Item 5. Other Information.
Item 6. Exhibits And Reports on Form 8-K.
SIGNATURES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Lyric International, Inc.
Dallas, Texas
We have reviewed the accompanying consolidated balance sheet of Lyric
International, Inc. (formerly Lyric Energy, Inc.) as of January 31, 1999, and
the related consolidated statements of operations, changes in stockholders'
equity, and cash flows for three and nine months ended January 31, 1999 and
1998. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical review
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of April 30, 1998, and the related statements
of operations, changes in stockholders' equity, and cash flows for the year
then ended (not presented herein); and in our report dated June 19, 1997, we
expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of April 30, 1998 is fairly stated in all material respects
in relation to the consolidated balance sheet from which it has been derived.
/s/ Robert Early & Company, P.C.
Robert Early & Company, P.C.
Abilene, Texas
March 10, 1999
LYRIC INTERNATIONAL, INC.
(A Development Stage Enterprise)
Consolidated Balance Sheets
<TABLE>
January 31, April 30,
1999 1998
(Unaudited)
Assets
<S> <C> <C>
Current Assets:
Cash $ 271,201 $ -
Accounts receivable-related parties 31,705 -
Accounts receivable-related parties 44,519 -
Prepaid expenses 85,646 -
____________ __________
Total Current Assets 433,071 -
____________ __________
Fixed Assets:
Equipment 382,974 -
Oil and gas properties 2,122,247 -
Accumulated depreciation
and depletion (54,667) -
_____________ ___________
Total Fixed Assets 2,450,554 -
______________ ___________
License agreement 5,138,000 -
______________ ___________
TOTAL ASSETS $ 8,021,625 $ -
=============== ============
Liabilities and Stockholders' Equity/(Deficiency)
Current Liabilities:
Accounts payable $ 119,756 $ -
Accrued expenses 42,396 -
Accrued interest 18,863 -
Note payable - current portion 4,185 -
Note payable 151,022 -
Advance from related parties 206,665 15,117
Advances from stockholders 375,993 -
____________ ___________
Total Current Liabilities 918,880 15,117
Note payable - long term portion 14,577 -
Minority interest in Seismic
International, Inc. 2,569,000 -
Stockholders' Equity/(Deficiency):
Preferred stock:
Series B, $100 stated value
(10,000,000 shares authorized,
1,032 shares outstanding) 103,200 -
Common stock, $.01 stated value
(250,000,000 shares authorized,
2,871,754 and 1,041,366 outstanding) 28,717 10,414
Options outstanding 44,000 -
Additional paid-in capital 7,374,583 2,713,808
Retained (deficit) (2,687,204) (2,687,204)
(Deficit) accumulated during the
Development Stage (344,128) (52,135)
________________ ______________
Total Stockholders' Equity 4,519,168 (15,117)
________________ ______________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 8,021,625 $ -
================= ==============
</TABLE>
See accompanying selected information and accountant's report.
LYRIC INTERNATIONAL, INC.
(A Development Stage Enterprise)
Consolidated Statements of Operations
For Three and Nine Months Ended January 31, 1999 and 1998
(Unaudited)
<TABLE>
Cumulative
During the
Development Three Months Nine Months
Stage 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C>
Revenues:
Oil production $61,852 $20,156 $ - $61,852 $ -
Oilfield services 147,360 96,345 - 147,360 -
_________ ________ _____ ________ ______
Total Revenues 209,212 116,501 - 209,212 -
_________ ________ _____ ________ _______
Costs of Revenues:
Production Taxes 2,874 938 - 2,874 -
Lease Operating 47,033 21,760 - 47,033 -
Rig expenses 59,415 32,904 - 59,415 -
Rig personnel costs 74,755 36,873 - 74,755 -
Depletion and
depreciation 50,267 25,651 - 50,267 -
___________ _________ _____ ________ _______
Total Costs of
Revenues 234,344 118,126 - 234,344 -
Gross Profit (25,132) (1,625) - (25,132) -
___________ _________ _____ ________ _______
General and
administrative expenses:
Personnel costs 96,825 63,617 - 96,825 -
Legal & professional 89,480 52,959 - 77,391 12,089
Other 117,219 49,766 - 78,655 -
__________ __________ _____ _________ _______
Total G & A
expenses 303,524 166,342 - 252,871 12,089
__________ ___________ _____ ________ _______
Loss from Operations (328,656) (167,967) - (278,003) (12,089)
Other Income and (Expenses):
Interest income 5,349 5,349 - 5,349 -
Interest expense
(primarily to related
parties) (20,821) (9,420) - (19,339) -
____________ ________ _____ ________ _______
NET (LOSS) $(344,128) $(172,038) $ - $(291,993) $(12,089)
============ ======== ===== ======== =========
Basic loss per
weighted average share $ (0.33) $ (0.08) $(0.00)$ (0.20) $(0.00)
=========== ========= ========= ====== =======
Weighted average
shares outstanding 1,036,521 2,052,2859 1,041,366 1,440,034 1,041,366
===================================================
</TABLE>
See accompanying selected information and accountant's report.
LYRIC INTERNATIONAL, INC.
(A Development Stage Enterprise)
Consolidated Statement of Changes in Stockholders' Equity/(Deficiency)
<TABLE>
Deficit
Accumulated
Date of Preferred Common Additional Accum- During the
Tran- Stock Stock Paid-In lated Development
saction Shares Amount Shares Amount Capital (Deficit) Stage
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCES,
November
30, 1996 - $ - 195,114 $1,952 $2,158,177 $(2,682,701) $ -
Contributed by
related parties
through
cancellation
of debts 01/15/97 - - - - 464,093 - -
Issued for
Cash 04/10/97 - - 846,252 8,462 91,538 - -
Net (loss) - - - - - (4,503)(37,018)
_________________________________________________________
BALANCES,
April
30, 1997 - - 1,041,366 10,414 2,713,808 (2,687,204) -
Net (loss) - - - - - - (15,117)
________________________________________________________
BALANCES,
April
30, 1998 1,041,366 10,414 2,713,808 (2,687,204)(52,135)
Adjustment
for rounding
in reverse
split 05/01/98 - - 603 6 (6) - -
Issued for
oil & gas
property 07/27/98 13,500 1,350,000 66,000 660 49,340 - -
Adjustment
for cost
in excess
of reserve
value - - - - (174,184) - -
Issued for
note
receiv-
able 08/20/98 1,032 103,200 - - 5 - -
Issued for
Woodman
Enter-
prises 09/01/98 5,000 500,000 - - - - -
Adjustment
for cost in
excess of
related party
basis - - - - (115,592) - -
Issued pursuant
to private
place-
ment 10/15/98 - - 660,000 6,600 493,250 - -
Issued for 1/2
of Seismic
International
and related
party cost
limit-
ation 11/30/98 50,000 5,000,000 - - (2,431,000) - -
Issued for
retirement
of
warrants 01/06/99 - - 385,004 3,850 (3,850) - -
Conversion of
pre-
ferred 01/08/99 (68,500)(6,850,000) 718,781 7,188 6,842,812 - -
Net (loss) - - - - - - (291,993)
____________________________________________________________
BALANCES,
January
31, 1999 1,032 $103,200 2,871,754 $28,687 $7,374,583$(2,687,204)$(344,128)
=================================================================
</TABLE>
See accompanying selected information and accountant's report.
LYRIC INTERNATIONAL, INC.
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows
For Nine Months Ended January 31, 1999 and 1998
(Unaudited)
<TABLE>
Cumulative
During the
Development
Stage 1999 1998
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (344,128) $ (291,993) $ (12,089)
Adjustments to reconcile
net income/(loss) to net
cash provided by operations:
Depreciation and depletion 47,461 47,461 -
Decrease/(increase) in:
Accounts receivable-related
parties (12,473) (12,473) -
Prepaid expenses and other 10,944 10,944 -
Increase/(decrease) in:
Accounts payable 57,178 106,548 12,089
Accrued expenses 41,975 40,493 -
____________ _____________ _________
Net Cash Provided/(Used) by
Operating Activities (199,043) (99,020) -
_____________ _____________ __________
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of oil properties (240,000) (240,000) -
Development of oil properties (118,920) (118,920) -
Purchase of equipment (45,764) (45,764) -
Cash from Woodman
Enterprises, Inc. acquisition 12,036 12,036 -
____________ ______________ __________
Net Cash (Used) in Investing
Activities (392,648) (392,648) -
____________ _______________ _________
CASH FLOWS FROM FINANCING
ACTIVITIES:
Advances from related parties 166,665 166,665 -
Advances from stockholders 360,876 360,876 -
Borrowing from bank 19,265 19,265 -
Repayments to bank (504) (504) -
Repayments on lease
acquisition note (58,978) (58,978) -
Proceeds from issuing stock 599,850 499,850 -
___________ _____________ __________
Net Cash Provided by
Investing Activities 1,087,174 987,174 -
___________ ______________ __________
Increase in cash for period 495,483 495,506 -
Cash, Beginning of period 23 - -
___________ ______________ _________
Cash, End of period $ 495,506 $ 495,506 $ -
=========== =============== =========
</TABLE>
See accompanying selected information and accountant's report.
LYRIC INTERNATIONAL, INC.
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows (continued)
For Nine Months Ended January 31, 1999 and 1998
(Unaudited)
<TABLE>
Cumulative
During the
Development
Stage 1999 1998
<S> <C> <C> <C>
Supplemental Disclosures:
Cash payments for:
Interest $ - $ - $ -
Income taxes - - -
Cancellation of related
party and other
indebtedness $458,166 $ - $ -
Acquisition of oil properties:
Note payable 210,000 210,000 -
Common & Series B
preferred stock issued 1,225,816 1,225,816 -
Cancellation of notes
receivable 103,205 103,205 -
Assumption of liability
to related parties 224,307 224,307 -
Acquisition of Woodman
Enterprises, Inc.:
Current assets 88,377 88,377 -
Fixed assets (net) 330,004 330,004 -
Liabilities (33,974) (33,974) -
Series B preferred
shares issued (384,407) (384,407) -
Acquisition of Seismic
International, Inc.:
Series B preferred
shares issued 5,000,000 5,000,000 -
Adjustment due to
limitation to cost
basis in hands of
related party (2,431,000) (2,431,000) -
</TABLE>
See accompanying selected information and accountant's report.
Lyric International, Inc.
(A Development Stage Enterprise)
Selected Information for Consolidated Financial Statements
January 31, 1999
(Unaudited)
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions of Regulation S-B.
They do not include all information and footnotes required by generally
accepted accounting principles for complete financial statements. However,
except as disclosed herein, there has been no material change in the
information included in the Company's Annual Report on Form 10-KSB for the
year ended April 30, 1998. In the opinion of Management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The report of Robert Early & Company, P.C.
commenting on their review accompanies the condensed financial statements
included in Item 1 of Part 1. Operating results for the nine-month period
ended January 31, 1999, are not necessarily indicative of the results that may
be expected for the year ending April 30, 1999.
Development Stage Enterprise -- The Company returned to the development stage
in November 1996 with the transfer of its final operating responsibility to
others and thereby reducing its activities to the sole pursuit of identifying,
evaluating, structuring, and completing a merger with or acquisition of a
privately owned entity. During the nine months ended January 1999 and
subsequent to that date, the Company has acquired oil interests in Mitchell
County, Texas, an oil field service Company, and a 50% interest in Seismic
International, Inc., which has contracts to develop maps indicating
subterranean fresh water supply sources in Mexico using a new mapping
technology. Management anticipates exiting the development stage during the
current fiscal year.
Going Concern Issues The Company has been relatively inactive during the
past three years due to a shortage of operating assets and working capital.
The Company's activities (described below) have not generated sufficient
revenues to cover operating expenses. These factors raise substantial doubt
about the Company's ability to continue as a going concern. The Company
signed a Letter of Intent to merge with Natural Gas Technologies, Inc. (NGT)
in October 1997. In January 1998, the merger agreement with NGT was
terminated by NGT. During July 1998, the Company acquired a producing oil and
gas lease in Mitchell County, Texas with limited production and significant
development potential. Work over and rework efforts were begun to bring
existing wells back into production.
The ability of the Company to continue as a going concern is dependent on its
ability to acquire the additional funds to bring its property and investments
into profitable production or for its stockholders to continue to fund its
activities. There have been no adjustments to financial statement information
which might be required should the Company be unable to continue as a going
concern.
NOTE 2: STOCK TRANSACTIONS
During July, the Company held a special stockholder meeting at which the
following was approved: a reverse split of common shares of 1 for 240.597, the
authorization of 10,000,000 shares of preferred stock, and a name change for
the Company from Lyric Energy, Inc. to its current name. All share amounts
presented have been restated as though the reverse split had occurred at the
earliest date presented.
The directors established a Series B Preferred Stock with par value set at
$100 per share and which is entitled to cumulative dividends at 8% of par
value. These Series B shares are also convertible, at the option of the
holder, into the Company's common stock during calendar 1999. The conversion
will be based on the 10-day average closing price of the Company's common
stock immediately prior to the conversion effective date. Additionally, all
Series B preferred shares convert to common shares on January 1, 2000 based on
the average of the last 10 days' closing prices in 1999.
During August 1998, the Company issued 1,032 shares of Series B preferred
stock to its majority shareholder in exchange for the transfer of a $103,250
note receivable from Trans Energy, Inc. which is due upon demand and bears
interest at 8% per annum.
During October 1998, the Company placed 660,000 units as the result of a
private placement effort that yielded the Company $499,850. The units
consisted of one common share, one Class A warrant to purchase one common
share, and one Class B warrant to purchase one common share. The Class A
warrants may be exercised at $1 per share while the Class B warrants may be
exercised at $2 per share. Both classes of warrants expire five years after
the underlying common shares have been registered. The Company has the option
of calling the Class A warrants after the Company's stock has closed at a
price above $1 for 20 consecutive trading days. The Class B warrants may be
called after the stock has closed above $2 for 20 consecutive trading days.
On November 30, 1998, the Company signed an agreement to acquire one-half of
Seismic International, Inc. from Redbank Petroleum, Inc. in exchange for
50,000 shares of Series B preferred stock valued at par. This transaction is
discussed further at Note 5 .
During January 1999, the Company called the Class A and Class B warrants
described above through issuance of 385,004 common shares. Additionally, all
of the 68,500 shares of Series B preferred which were issued for acquisitions
were converted into 718,781 common shares. These shares had not been issued
by the Company's stock transfer agent at January 31, 1998. However, they have
been presented as issued in these financial statements due to contract
requirements.
NOTE 3: ACQUISITION OF OIL AND GAS ASSETS
During July 1998, the Company purchased an oil and gas field in Mitchell
County, Texas covering approximately 560 acres. This property has 56 existing
wells with limited production but needing work. The Company planned to
convert a number of wells to water injection wells to enhance oil recovery.
Some existing wells will have to be plugged.
The Company paid a total of $1,850,000 for this property. The purchase price
consisted of $240,000 cash, a note for $210,000, 66,000 units identical to the
units sold in the private placement discussed in Note 2, and 13,500 shares of
Series B preferred stock. The note bears interest at 8% and is due July 27,
1999. The stock has been valued at $0.375 per share for the common and $100
per share for the preferred. However, due to a discounted present value
calculation by a petroleum engineer using a 20% discount factor, the property
was recorded at the lower estimated fair value of $1,675,816 with the balance
being an adjustment of additional paid in capital.
In December 1998, the Company acquired a nonproducing prospect in Wyoming from
Trans Energy Corporation. This acquisition was accomplished by the Company's
assumption of certain liabilities of Trans Energy to Brent Wagman and Natural
Gas Technologies, Inc. (both being related parties) and the forgiveness of a
$103,205 note receivable from Trans Energy which had been assigned to the
Company from Natural Gas Technologies previously. The agreement contained a
commitment to make certain payments to a third party during December 1998.
The Company was unable to meet this commitment and the prospect has been
forfeited.
NOTE 4: ACQUISITION OF WOODMAN ENTERPRISES, INC.
Effective September 1, 1998, the Company entered into an agreement to acquire
Woodman Enterprises, Inc. from Redbank Petroleum, Inc. in exchange for 5,000
shares of Series B preferred stock. Woodman is an entity created in February
1998 to obtain the necessary equipment to be able to provide a broad range of
well work over services. Woodman purchased a work over rig, a reverse
drilling unit, a cement truck, and other pertinent equipment. The Company
acquired this entity for work on its own properties as well as to be able to
offer services to other oil and gas producers. The following tables present a
condensed balance sheet for Woodman at September 1, 1998 and the related
condensed statement of operations for the period from inception to August 31,
1998.
<TABLE>
Condensed Balance Sheet
<S> <C>
Cash $ 12,036
Accounts receivable 63,751
Other current assets 12,590
___________
Total current assets 88,377
Fixed assets (net of depreciation) 330,004
___________
Total Assets $ 418,381
===========
Accounts payable & accrued expenses $ 33,974
Total stockholders' equity 384,407
____________
Total Liabilities and Stockholders' Equity $ 418,381
============
Condensed Statement of Operations
Total revenues $ 78,492
Costs of revenues 62,035
_____________
Gross profit 16,457
Other operating expenses 29,514
_______________
Net Loss $ (13,057)
===============
</TABLE>
NOTE 5: ACQUISITION OF SEISMIC INTERNATIONAL, INC.
On November 30, 1998, the Company signed an agreement to purchase 50% of the
outstanding stock of Seismic International, Inc. from Redbank Petroleum,
Inc., a related party, for 50,000 shares of Series B preferred valued at
$5,000,000. (However, due to accounting rules, the Company has recorded an
adjustment limiting the book basis of this investment to Redbank's cost basis
of $2,569,000.) Seismic International has obtained a license to utilize a
surveying process using a combination of new and old technologies which
enables the surveyor to produce subsurface maps detailed enough to distinguish
the difference between fresh water, salt water, sand, limestones, clays, and
shales. This technology also has possibilities in other areas of mining and
exploration due to its ability to pinpoint not only the structures, as with
traditional seismic, but also the contents of the structure. Seismic is
currently negotiating contracts ranging upwards from $5,000,000 in Mexico for
the location of municipal and commercial grade fresh water deposits. In
March 1999, the Company has agreed to purchase the remaining 50% of Seismic.
NOTE 6: EARNINGS PER SHARE
Basic earnings per share have been presented on the statement of operations.
The outstanding Series B preferred shares (1,032 shares) are convertible into
common shares based on their $100 par value and the average market price for
common shares for the 10 days prior to conversion. Based on the stock price
at January 31, 1999, the preferred would convert into 8,600 common shares.
These shares are common stock equivalents. However, they have not been
included in a calculation of diluted earnings per share because they would be
antidilutive due to the losses reported.
NOTE 7: CONSULTING AGREEMENTS
During December 1998, the Company entered into a consulting agreement with
Criswell and Company, Inc. for management, accounting, and fund-raising
services. Consideration for this agreement consisted of 2,000 common shares
and options for Criswell and Company to purchase up to 200,000 shares of
common stock of the Company at $3.00 per share for a five-year period ending
in December 2003. These options were valued at $.22 per option share and this
cost will be amortized over the term of the agreement. The shares were loaned
to the Company by a related entity which will be repaid the value or have its
shares replaced in the future.
During November 1998, the Company entered into agreement with another
individual for investment banking services. Consideration for this agreement
was 8,000 shares valued at $40,000. These shares were also loaned to the
Company by a related entity which will be repaid in cash or through
replacement of the shares. This agreement has been terminated for lack of
performance by the individual and the Company is seeking to have the shares
returned.
NOTE 9: SUBSEQUENT EVENTS
In March 1999, the Company entered into an agreement to purchase the remaining
50% interest in Seismic International, Inc. which it did not own for 625,000
shares of common stock. The Company has valued this transaction at $5,000,000
based on the trading price of the Company's stock on March 1.
Item 2. Plan of Operation
Cautionary Statement with Regard to Forward Looking Information
This report may include certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included in this report that address
activities, events or developments that Lyric International, Inc. (the
"Company" or "Lyric") expects, believes or anticipates will or may occur in
the future, including such matters as costs and expenses of the acquisition of
producing, developmental or exploratory properties, oil and gas reserve data
and information, costs of capital, projected margins, business strategies,
expansion and growth of the Company's operations, Year 2000 issues and other
such matters are forward-looking statements. These statements are based on
certain assumptions and analyses made by the Company in light of its
experience and its perception of historical trends, current conditions,
expected future developments and other factors it believes are appropriate in
the circumstances. Such statements are subject to a number of assumptions,
risks and uncertainties, including general economic and business conditions,
oil and gas pricing issues, the availability of certain business opportunities
(or lack thereof) that may be presented to and pursued by the Company, changes
in laws or regulations and other factors, many of which are beyond the control
of the Company. You are cautioned that any such statements are not guarantees
of future performance and that actual results or developments may differ
materially from those projected in the forward-looking statements.
General
Lyric currently is focusing on three areas in which it conducts business:
(i) natural resources, (ii) subsurface mapping technology, and (iii) oil well
servicing.
Natural Resources
The Company primarily plans to build shareholder value through consistent
growth in per share reserves, production and the resulting cash flow in
earnings of the Company. To accomplish this, the Company plans to acquire
working interests in properties which are expected to produce secondary
recoveries of oil and gas through the use of new technologies, water floods or
additional drilling. These types of properties can usually be acquired on
more favorable terms than properties in primary production, although lease
operating costs for these properties are higher upon acquisition than
properties in primary production.
In July 1998, the Company completed an acquisition of oil and gas
properties from West Texas Recovery, Inc. in exchange for 13,500 shares of the
Company's $100 par value Series B Preferred Stock, a $210,000 promissory note,
$240,000 cash and 66,000 units consisting of one share of the Company's $.01
par value common stock (the "Common Stock"), one Class A Warrant and one Class
B Warrant. The property covers 600 acres in Mitchell County, Texas, all of
which are developed. At the time the Company acquired the property it
contained a total of 56 wells which had limited production and needed
reconditioning. The Company has reconditioned a number of the wells and has
converted a number of the wells into water injection wells to enhance the oil
recovery from those wells. Two of the wells on the property are required to
be plugged.
As of March 15, 1999, the Company had 20 producing wells, 10 operating
injection wells and 26 shut-in wells on the property in Mitchell County. The
Company is currently producing and selling approximately 100 to 120 barrels of
oil per day under one lease on the property that includes 14 producing wells.
The remainder of the producing wells are being operated under two other leases
on the property. The approximately 100 barrels of oil per day being produced
from wells under those two other leases currently are being stored in tanks on
the property. The Company currently has approximately 3,000 barrels of oil
stored in those tanks. The State of Texas will not permit the Company to sell
the oil in those tanks until the Company plugs two wells operated under the
two leases. The Company anticipates that those two wells will be plugged
prior to April 30, 1999.
Lyric plans to recondition the remaining shut-in wells on the oil and gas
properties acquired from West Texas Recovery, Inc. and increase revenues from
those properties. There is not however any assurance that the Company will be
successful in reconditioning the remaining shut-in wells on a profitable
basis.
All of the Company's properties in Mitchell County are operated by West
Texas Recovery, Inc. The Company pays West Texas Recovery, Inc. $2,000 per
month for overhead expenses for operating those wells and reimburses West
Texas Recovery, Inc. for all well operating costs. Michael G. Maguire, the
President and Chairman of the Board of the Company, is the President of West
Texas Recovery, Inc.
Subsurface Mapping Technology
On November 30, 1998, Lyric acquired 50 percent of the outstanding common
stock of Seismic International, Inc. from Redbank Petroleum, Inc. in exchange
for 50,000 shares of the Company's Series B Preferred Stock. The Company also
agreed with Redbank Petroleum, Inc. that Redbank Petroleum, Inc. is entitled
to receive 10 percent of the first $50,000,000 of gross revenue generated by
Seismic International, Inc. Redbank Petroleum, Inc. is owned 50 percent by
Warren Donohue, a director and officer of Lyric, and 50 percent by Brent
Wagman, the majority shareholder of Lyric.
Seismic International, Inc. is a company that currently negotiates and
obtains contracts to produce subsurface maps. Seismic International, Inc.
currently plans to subcontract the work to be performed under those contracts
to North American Geophysical, the owner of the subsurface mapping technology.
The subsurface mapping technology includes the equipment that obtains the
subsurface data and the software that analyzes that data. North American
Geophysical has agreed with Seismic International, Inc. that Seismic
International, Inc. has a non-exclusive right to use the subsurface
technology.
The subsurface mapping technology has numerous applications. The
technology may be used to look for subsurface water formations and will show
depths, zones and any possible contamination in the water. In the mining area
the technology can be used for the location of coal seams, gravel, limestone
and sand layers, veins of precious metals including gold, silver, uranium, and
copper. In the area of oil and gas exploration, the technology is capable of
processing data in 2D, 3D, 3C, and 4D formats. Those formats will allow for
structural analysis, porosity analysis, oil/water contact lines, and reserve
calculations. Additionally, from an engineering aspect, the technology will
help to identify structural layers, help in tunneling by anticipating
formations, and to detect sinkholes or caves. The technology can also be used
for oil or chemical spills to detect the extent of contamination without
having to drill multiple test holes. The technology can be used to detect
leaks beneath surface and subsurface storage tanks. The technology can also
be used to determine structural integrity of dams, dikes or possible mud slide
areas.
On October 23, 1998, Seismic International, Inc. executed its first
contract with Geophysical de Mexico to perform subsurface mapping in central
Mexico to locate municipal and commercial grade water deposits. That contract
was amended on March 18, 1999. That contract is for $7,500,000 and requires
Seismic International, Inc. to commence work on the subsurface maps prior to
June 29, 1999 and complete the subsurface maps prior to July 29, 1999.
Geophysical de Mexico has paid Seismic International, Inc. $500,000 of the
contract price and is required to pay Seismic International, Inc. $3,500,000
upon the arrival of the subsurface mapping equipment at the site in central
Mexico and prior to the commencement of the subsurface mapping work.
Geophysical de Mexico is required to pay the remaining $3,500,000 under the
contract upon delivery of the subsurface maps from Seismic International, Inc.
Seismic International, Inc. has agreed with North American Geophysical to
subcontract all of the mapping work to North American Geophysical relating to
the contract between Geophysical de Mexico and Seismic International, Inc.
Seismic International, Inc. will pay North American Geophysical $3,000,000 for
that subcontract work.
Seismic International, Inc. also is currently negotiating additional
contracts with Geophysical de Mexico in excess of $5,000,000 each. There is
not however any assurance that such contracts will be consummated.
Oil Well Servicing
On September 1, 1998, the Company acquired all of the outstanding shares
of common stock of Woodman Enterprises, Inc. in exchange for 5,000 shares of
Lyric's Series B Preferred Stock. Woodman Enterprises, Inc. is a company
primarily engaged in the business of subcontracting equipment used to service
and maintain oil and gas wells up to 12,000 feet in depth. Woodman
Enterprises, Inc. also has a culk cement and water truck and subcontracts
equipment used for the re-entry of oil and gas wells. The Company has used
and intends to continue to use the that equipment to rework properties which
it has acquired and other properties which it intends to acquire. Woodman
Enterprises, Inc. also provides services to customers unrelated to the
Company. Woodman Enterprises, Inc. was a wholly owned subsidiary of Redbank
Petroleum, Inc.
For the nine months ended January 31, 1999, 53 percent of the services of
Woodman Enterprises, Inc. were provided to West Texas Recovery, Inc. and 29
percent to Wagman Petroleum, Inc. Brent Wagman beneficially owns
approximately 45 percent of the outstanding common stock, and is an officer
and director, of Wagman Petroleum, Inc. All of the services provided to West
Texas Recovery, Inc. were on the previously described properties owned by the
Company in Mitchell County. The prices charged to related parties have been
the same prices as have been quoted to unrelated entities for similar work and
are believed to be in line with prices generally charged by the industry.
Liquidity and Capital Resources
As of January 31, 1999, Lyric had a cash balance of $271,201. The
Company's capital requirements to conduct its plan of operation is significant
and there is not any assurance that the Company will be able to obtain such
funds or obtain the required capital on terms favorable to the Company. The
Company plans to satisfy its capital requirements for the next twelve months
by selling the Company's securities and obtaining financing from related
parties. If Lyric is unable to obtain financing from related parties, the
sale of its securities or some other source, it is unlikely that Lyric will
continue as a going concern.
Year 2000 Issues
Computer programs or other embedded technology that have been written
using two digits (rather than four) to define the applicable year and that
have time-sensitive logic may recognize a date using "00" as the year 1900
rather than the year 2000, which could result in widespread miscalculations or
system failures. Both information technology ("IT") systems and non-IT
systems may be affected by the Year 2000.
The Company has completed an internal assessment of the Year 2000 issue
and believes that its computer equipment, computer software and drilling
equipment are Year 2000 compliant. The Company's computer equipment was
purchased within the prior two years and the Company has been informed it is
Year 2000 compliant. The Company uses a commercially available accounting
software program from Wolfe Pak and the 1998 Microsoft Word word processing
program. The Company has been advised that those software programs are Year
2000 compliant. The Company's drilling equipment does not make use of embedded
chips, and the Company believes that such equipment will not be affected by
the Year 2000.
The Company has not completed the process of verification of whether
vendors, suppliers and significant customers with which the Company has
material relationships are Year 2000 compliant. Under a worst-case scenario,
if the Company and such third parties are unable to address Year 2000 issues
in a timely manner, it could result in a material financial risk to the
Company, including supplier and service customer delays resulting in short-
term delay of revenue and substantial unanticipated costs. Accordingly, the
Company plans to devote all resources necessary to resolve significant Year
2000 issues in a timely manner. The Company does not expect that costs of
remediating its Year 2000 issues will be material and has not incurred any
material costs associated with its assessment of the Year 2000 issue. The
Company does not currently have a Year 2000 contingency plan.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See the Company's Annual Report on Form 10-KSB for the fiscal year ended
April 30, 1998.
Item 2. Changes in Securities
During November 1998, the Company issued to one individual 8,000 shares
of the Company's Common Stock in exchange for investment banking services to
be performed on behalf of the Company by that individual. The Company issued
its shares of Common Stock in that transaction pursuant to Section 4(2) under
the Securities Act of 1933 as an offering not involving a public offering.
During December 1998, the Company issued to Criswell and Company, Inc.
options to purchase 200,000 shares of the Company's Common Stock in exchange
for consulting services to be performed on behalf of the Company by Criswell
and Company, Inc. Each option may be exercised until December 2003 to
purchase one share of the Company's Common Stock at $3.00 per share. The
Company issued the options in that transaction pursuant to Section 4(2) under
the Securities Act of 1933 as an offering not involving a public offering.
On January 9, 1999, West Texas Recovery, Inc. converted its 13,500 shares
of the Company's Series A Preferred Stock and the accrued dividends thereon
into 144,551 shares of the Company's Common Stock. The Company issued its
shares of Common Stock in that transaction pursuant to Section 4(2) under the
Securities Act of 1933 as an offering not involving a public offering.
On January 9, 1999, Redbank Petroleum, Inc. converted its 55,000 shares
of the Company's Series A Preferred Stock and the accrued dividends thereon
into 574,230 shares of the Company's Common Stock. The Company issued its
shares of Common Stock in that transaction pursuant to Section 4(2) under the
Securities Act of 1933 as an offering not involving a public offering.
On January 10, 1999, the Company issued an aggregate of 385,004 shares of
Company's Common Stock to twelve persons in exchange for the surrender of all
of the 726,000 outstanding Class A Warrants of the Company and all of the
726,000 outstanding Class B Warrants of the Company. The issuance of the
Company's Common Stock in that transaction was made pursuant to
Section 3(a)(9) of the Securities Act of 1933.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
Effective March 1, 1999, the Company entered into agreements to
acquire the 50 percent of Seismic International, Inc. it did not own from
Ameritech Petroleum, Inc. and Cooke Enterprises, Inc. The Company will issue
468,750 shares of the Company's Common Stock to Ameritech Petroleum, Inc. and
156,250 shares of the Company's Common Stock to Cooke Enterprises, Inc. in
exchange for the remaining 50 percent of Seismic International, Inc. Ameritech
Petroleum, Inc. is owned 50 percent by Warren Donohue and 50 percent by Brent
Wagman. Cooke Enterprises, Inc. is not affiliated with the Company.
Item 6. Exhibits And Reports On Form 8-K
(a) Exhibits
10.1 Contract for Sale and Purchase of Business dated November
30, 1998 between Redbank Petroleum, Inc. and the Company.
10.2 Contract for Sale and Purchase of Stock dated March 1, 1999
between Ameritech Petroleum, Inc. and the Company.
10.3 Contract for Sale and Purchase of Stock dated March 1, 1999
between Cooke Enterprises, Inc. and the Company.
10.4 Agreement dated December 1, 1997 between Ameritech
Petroleum, Inc. and North American Geophysical.
10.5 Amendment dated March 1, 1999 to the Agreement dated
December 1, 1997 between Ameritech Petroleum, Inc. and
North American Geophysical.
10.6 Agreement dated April 15, 1998 between Redbank Petroleum,
Inc. and North American Geophysical.
10.7 Amendment dated March 1, 1999 to the Agreement dated April
15, 1998 between Redbank Petroleum, Inc. and North American
Geophysical.
10.8 Agreement dated January 31, 1999 between Seismic
International, Inc. and North American Geophysical.
10.9 Amendment dated March 18, 1999 to the Agreement dated
October 30, 1998 between Seismic International, Inc. and
Geophysical de Mexico.
27.1 Financial Data Schedule
(b) Reports On Form 8-K
The Company filed two Current Reports on Form 8-K during the quarter
ended January 31, 1999. The Company's Form 8-K filed on December 9, 1998
reported the Company's acquisition of Woodman Enterprises, Inc. on
September 1, 1998. The Company's form 8-K filed on December 15, 1998 reported
the Company's acquisition of 50 percent of the outstanding common stock of
Seismic International, Inc. on November 30, 1998.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
LYRIC INTERNATIONAL, INC.
/s/ Michael G. Maguire
Date: March 18, 1999 By: ____________________________
Michael G. Maguire, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-END> JAN-31-1998
<CASH> 271,201
<SECURITIES> 0
<RECEIVABLES> 76,224
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 433,071
<PP&E> 2,505,221
<DEPRECIATION> (54,667)
<TOTAL-ASSETS> 10,452,625
<CURRENT-LIABILITIES> 918,880
<BONDS> 0
0
103,220
<COMMON> 28,687
<OTHER-SE> 4,343,287
<TOTAL-LIABILITY-AND-EQUITY> 10,452,625
<SALES> 209,212
<TOTAL-REVENUES> 209,212
<CGS> 234,344
<TOTAL-COSTS> 234,344
<OTHER-EXPENSES> 252,871
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,339
<INCOME-PRETAX> (291,993)
<INCOME-TAX> 0
<INCOME-CONTINUING> (291,993)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (291,993)
<EPS-PRIMARY> (.20)
<EPS-DILUTED> (.20)
</TABLE>
EXHIBIT 10.1
CONTRACT FOR SALE AND PURCHASE OF BUSINESS
This contract for sale and purchase OF BUSINESS, hereinafter referred to
as "Contract" or "Agreement," is executed this 30th day of November, 1998, by
and between Redbank Petroleum, Inc., a Texas corporation, (as "Seller"), and
Lyric International, Inc., a Colorado corporation, (as "Buyer").
W I T N E S S E T H:
WHEREAS, Seller is the owner of the 50% of all the issued and outstanding
stock, and any and all intellectual property of Seismic International, Inc., a
Delaware corporation, hereinafter referred to as the "Property" or "Seller's
Property," located in Dallas County, State of Texas; and
WHEREAS, Buyer desires to purchase Seller's Property and Seller desires
to sell said Property to Buyer;
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises hereinafter contained, the Seller agrees to sell and the Buyer agrees
to buy the Property upon the following terms and conditions.
1. PURCHASE PRICE AND METHOD OF PAYMENT. The Purchase Price of the
Property is Five Million and No/100 Dollars ($5,000,000.00). Buyer shall pay
and Seller shall accept the purchase price for the Property in the manner of
fifty thousand (50,000) shares of Lyric Energy, Inc.'s Preferred Stock B, at
One Hundred and No/100 Dollars ($100.00) par value per share. Additionally,
Buyer shall pay to Seller 10% of the Gross Revenues Generated by Seismic
International, Inc. on the first fifty million dollars ($50,000,000.00) of
revenue. Thereafter, there shall be no additional compensation to Seller.
2. CLOSING. The closing of the transactions contemplated by this
Agreement, hereinafter referred to as the "Closing," shall be held at the
corporate offices of Lyric International, Inc., located in Dallas, Texas, on
the 30th day of December, 1998, at 3:30 p.m. (such date to be referred to in
this Agreement as the "Closing Date").
3.a. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer the correctness, truthfulness and accuracy of the matters
above-written, all of which shall survive the Closing. In addition, Seller
represents and warrants to Buyer that Seller is the true and rightful owner of
said stock of Seismic International, Inc. and it has the legal right to sell
such stock.
b. Seller represents that upon receiving payment from buyer that it
will obtain the resignations of 2/3's of the board of directors and
effectively deliver control of Seismic International, Inc. to Buyer.
c. Seller represents that it will further assist Buyer in perfecting
additional contracts for work, (not less than a gross total of $12,000,000.00
in additional contracts) for Seismic International, Inc. As evidence that
Seller shall continue to help, 10,000 shares (one million dollars worth) of
the Buyer's preferred stock shall be withheld until this is performed.
d. Seller agrees to help obtain a license or a raw data processing
agreement for Seismic International, Inc. to use the technologies for the
electronic mapping. It is understood that Buyer may have to invest additional
monies for said license or agreement and for working capital in Seismic
International, Inc.
e. Seller represents that Seismic International, Inc. has had no
business prior to the contract attached hereto for accounting purposes.
4. REPRESENTATIONS AND WARRANTIES. Buyer and Seller hereby represent
and warrant the following: There has been no act or omission by Buyer or
Seller which would give rise to any valid claim against any of the parties
hereto for a brokerage commission, finder's fee, or other like payment in
connection with the transactions contemplated hereby.
5. TRANSACTIONS PRIOR TO CLOSING. Seller hereby covenants the
following:
a. Conduct of Seller's Business Until Closing. Except as Buyer may
otherwise consent in writing prior to the Closing Date, Seller will not enter
into any transaction, take any action or fail to take any action which would
result in, or could reasonably be expected to result in or cause any of the
representations and warranties of Seller contained in this Agreement to be
void, invalid or false on the Closing Date.
b. Resignations. Seller shall deliver to Buyer prior to the Closing
Date, such resignations of officers or employees of the business including Ulf
L. Helleisz as its Chairman of the Board and President, as Buyer shall
indicate, each such resignation to be effective on the Closing Date. However,
it is agreed that Mr. Helleisz shall remain on the Board of Directors as a
representative of the other shareholders.
c. Documents. Seller shall deliver to Buyer at closing such
documents which are, in Buyer's sole discretion, necessary to fully satisfy
the objectives of this Agreement in content and form reasonably intended to do
so.
6. EXPENSES. Each of the parties hereto shall pay its own expenses
in connection with this Agreement and the transactions contemplated hereby,
including the fees and expenses of its counsel and its certified public
accountants.
7. GENERAL.
a. Survival of Representations and Warranties. Each of the parties
to this Agreement covenants and agrees that their respective representations,
warranties, covenants, statements, and agreements contained in this Agreement
shall survive the Closing Date and terminate on the second anniversary of such
date. Except as set forth in this Agreement, or in the documents and papers
delivered by Seller to Buyer in connection herewith, there are no other
agreements, representations, warranties, or covenants by or among the parties
hereto with respect to the subject matter hereof.
b. Waivers. No action taken pursuant to this Agreement, including
any investigation by or on behalf of any party shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein or therein and in any
documents delivered in connection herewith or therewith. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach.
c. Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing
and shall be deemed to have been duly given if delivered or mailed, first
class mail, postage prepaid,
To Seller: Redbank Petroleum, Inc.
16901 Dallas Parkway, Suite 111
Dallas, Texas 75248
To Buyer: Lyric Energy, Inc.
16775 Addison Road, Suite 300
Dallas, Texas 75248
or to such other address as such party shall have specified by notice in
writing to the other party.
d. Sections and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretations of this Agreement.
e. Governing Law. This Agreement, and all transactions contemplated
hereby, shall be governed by, construed and enforced in accordance with the
laws of the State of Texas. The parties herein waive trial by jury and agree
to submit to the personal jurisdiction and venue of a court of subject matter
jurisdiction located in Dallas County, State of Texas. In the event that
litigation results from or arises out of this Agreement or the performance
thereof, the parties agree to reimburse the prevailing party's reasonable
attorney's fees, court costs, and all other expenses, whether or not taxable
by the court as costs, in addition to any other relief to which the prevailing
party may be entitled. In such event, no action shall be entertained by said
court or any court of competent jurisdiction if filed more than one year
subsequent to the date the cause(s) of action actually accrued regardless of
whether damages were otherwise as of said time calculable.
f. Captions. The Captions of this contract are for convenience and
reference only and in no way define, describe, extend, or limit the scope or
intent of this contract, or the intent of any provisions hereof.
g. Time of the Essence. Time and timely performance are of the
essence of this contract and of the covenants and provisions hereunder.
h. Successors and Assigns. Rights and obligations created by this
Agreement shall be binding upon and inure to the benefit of the parties
hereto, their successors and assigns. Whenever used, the singular number
shall include the plural, the plural the singular, and the use of any gender
shall include all genders.
i. Contractual Procedures. Unless specifically disallowed by law,
should litigation arise hereunder, service of process therefore may be
obtained through certified mail, return receipt requested; the parties hereto
waiving any and all rights they may have to object to the method by which
service was perfected.
8. AMENDMENTS OR ADDENDA. As of the date above-written, there are no
amendments, addenda, modifications, or changes to this Agreement.
9. SIGNATURES. This Agreement shall not be valid and enforceable
unless it is properly executed by Buyer and Seller and their signatures
affixed below.
IN WITNESS WHEREOF, this Agreement has been executed by each of the
individual parties hereto and signed by an officer thereunto duly authorized,
on the date and year first above-written.
Signed and delivered in the presence of:
SELLER:
REDBANK PETROLEUM, INC.
a Texas corporation
By:/s/ Brent A. Wagman
Brent A. Wagman
President
BUYER
LYRIC ENERGY, INC.
a Texas corporation
By:/s/ Michael G. Maguire
Michael G. Maguire
President
EXHIBIT 10.2
CONTRACT FOR SALE AND PURCHASE OF STOCK
THIS CONTRACT FOR SALE AND PURCHASE OF STOCK, hereinafter referred to
as "Contract" or "Agreement," is executed this 1st day of March 1999, by and
between Ameritech Petroleum, Inc., a Texas corporation, (as "Seller") and
Lyric International, Inc., a Colorado corporation, (as "Buyer").
WITNESSETH:
WHEREAS, Seller is the owner of 37.5% or 563 shares of all the issued and
outstanding stock, and any and all intellectual property of Seismic
International, Inc. a Delaware corporation, hereinafter referred to as the
"Property" or "Seller's Property," located in Dallas County, State of Texas;
and
WHEREAS, Buyer desires to purchase Seller's Property and Seller desires
to sell said Property to Buyer;
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises hereinafter contained, the Seller agrees to sell and the Buyer agrees
to buy the Property upon the following terms and conditions.
1. PURCHASE PRICE AND METHOD OF PAYMENT. The Purchase Price of the
Stock is Three Million Seven Hundred Fifty Thousand and No/l00 Dollars
($3,750,000.00). Buyer shall pay and Seller shall accept the purchase price
for the Property in the manner of Four Hundred Sixty Eight thousand Seven
Hundred Fifty (468,750) shares of Lyric International, Inc.'s Common Stock, at
a value equal to $8.00 per share or the closing price as of March 1, 1999.
2. CLOSING. The closing of the transactions contemplated by this
Agreement, hereinafter referred to as the "Closing," shall be held at the
corporate offices of Lyric Energy, Inc., located in Dallas, Texas, on or
before the 21st day of March, 1999, at 1:00 p.m. (such date to be referred to
in this Agreement as the "Closing Date").
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer the correctness, truthfulness and accuracy of the matters
above-written; all of which shall survive the Closing. In addition, Seller
represents and warrants to Buyer that Seller is the true and rightful owner of
said stock of Seismic International, Inc. and it has the legal right to sell
such stock.
4. REPRESENTATIONS AND WARRANTIES. Buyer and Seller hereby represent
and warrant the following: There has been no act or omission by Buyer or
Seller which would give rise to any valid claim against any of the parties
hereto for a brokerage commission, finder's fee, or other like payment in
connection with the transactions contemplated hereby.
5. TRANSACTIONS PRIOR TO CLOSING. Seller hereby covenants the
following:
a. Conduct of Seller's Business until Closing. Except as Buyer
may otherwise consent in writing prior to the Closing Date, Seller will not
enter into any transaction, take any action or fail to take any action which
would result in, or could reasonably be expected to result in or cause any of
the representations and warranties of Seller contained in this Agreement to be
void, invalid or false on the Closing Date.
b. Resignations. Seller shall deliver to Buyer prior to the
Closing Date, such resignations of officers or employees of the business, as
Buyer shall indicate, each such resignation to be effective on the Closing
Date.
c. Documents. Seller shall deliver to Buyer at closing such
documents which are, in Buyer's sole discretion, necessary to fully satisfy
the objectives of this Agreement in content and form reasonably intended to do
so.
6. EXPENSES. Each of the parties hereto shall pay its own expenses in
connection with this Agreement and the transactions contemplated hereby,
including the fees and expenses of its counsel and its certified public
accountants.
7. GENERAL.
a. Survival of Representations and Warranties. Each of the
parties to this Agreement covenants and agrees that their respective
representations, warranties, covenants, statements, and agreements contained
in this Agreement shall survive the Closing Date and terminate on the second
anniversary of such date. Except as set forth in this Agreement, or in the
documents and papers delivered by Seller to Buyer in connection herewith,
there are no other agreements, representations, warranties, or covenants by or
among the parties hereto with respect to the subject matter hereof.
b. Waivers. No action taken pursuant to this Agreement, including
any investigation by or on behalf of any party shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein or therein and in any
documents delivered in connection herewith or therewith. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach.
c. Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall
be in writing and shall be deemed to have been duly given if delivered or
mailed, first class mail, postage prepaid,
To Seller: Ameritech Petroleum, Inc.
16775 Addison Rd., Suite 358
Addison, Texas 75001
To Buyer: Lyric International, Inc.
16775 Addison Road, Suite 300
Dallas, Texas 75248
or to such other address as such party shall have specified by notice in
writing to the other party.
d. Sections and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretations of this Agreement.
e. Governing Law. This Agreement, and all transactions
contemplated hereby, shall be governed by, construed and enforced in
accordance with the laws of the State of Texas. The parties herein waive trial
by jury and agree to submit to the personal jurisdiction and venue of a court
of subject matter jurisdiction located in Dallas County, State of Texas. In
the event that litigation results from or arises out of this Agreement or the
performance thereof, the parties agree to reimburse the prevailing party's
reasonable attorney's fees, court costs, and all other expenses, whether or
not taxable by the court as costs, in addition to any other relief to which
the prevailing party may be entitled. In such event, no action shall be
entertained by said court or any court of competent jurisdiction if filed more
than one year subsequent to the date the cause(s) of action actually accrued
regardless of whether damages were otherwise as of said time calculable.
f. Captions. The Captions of this contract are for convenience
and reference only and in no way define, describe, extend, or limit the scope
or intent of this contract, or the intent of any provisions hereof.
g. Time of the Essence. Time and timely performance are of the
essence of this contract and of the covenants and provisions hereunder.
h. Successors and Assigns. Rights and obligations created by this
Agreement shall be binding upon and inure to the benefit of the parties
hereto, their successors and assigns. Whenever used, the singular number shall
include the plural, the plural the singular, and the use of any gender shall
include all genders.
i. Contractual Procedures. Unless specifically disallowed by law,
should litigation arise hereunder, service of process therefore may be
obtained through certified mail, return receipt requested; the parties hereto
waiving any and all rights they may have to object to the method by which
service was perfected.
8. AMENDMENTS OR ADDENDA. As of the date above-written, there are no
amendments, addenda, modifications, or changes to this Agreement.
9. SIGNATURES. This Agreement shall not be valid and enforceable
unless it is properly executed by Buyer and Seller and their signatures
affixed below.
IN WITNESS WHEREOF, this Agreement has been executed by each of the
individual parties hereto and signed by an officer thereunto duly authorized,
on the date and year first above-written.
Signed and delivered in the presence of:
SELLER:
AMERITECH PETROLEUM, INC.
a Texas corporation
/s/ Brent A. Wagman
Brent A. Wagman
President
BUYER
LYRIC INTERNATIONAL, INC.
a Colorado corporation
/s/ Michael G. Maguire
Michael G. Maguire
President
EXHIBIT 10.3
CONTRACT FOR SALE AND PURCHASE OF STOCK
THIS CONTRACT FOR SALE AND PURCHASE OF STOCK, hereinafter referred to
as "Contract" or "Agreement," is executed this 1st day of March 1999, by and
between Cooke Enterprises, Inc. a Bahamian corporation, (as "Seller") and
Lyric International, Inc., a Colorado corporation, (as "Buyer").
WITNESSETH:
WHEREAS, Seller is the owner of 12.5% or 187 shares of all the issued and
outstanding stock, and any and all intellectual property of Seismic
International, Inc. a Delaware corporation, hereinafter referred to as the
"Property" or "Seller's Property," located in Dallas County, State of Texas;
and
WHEREAS, Buyer desires to purchase Seller's Property and Seller desires
to sell said Property to Buyer;
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises hereinafter contained, the Seller agrees to sell and the Buyer agrees
to buy the Property upon the following terms and conditions.
1. PURCHASE PRICE AND METHOD OF PAYMENT. The Purchase Price of the
Stock is One Million Two Hundred Fifty Thousand and No/l00 Dollars
($1,250,000.00). Buyer shall pay and Seller shall accept the purchase price
for the Property in the manner of One Hundred Fifty Six Thousand Two Hundred
Fifty (156,250) shares of Lyric International, Inc.'s Common Stock, at a value
equal to $8.00 per share or the closing price as of March 1, 1999.
2. CLOSING. The closing of the transactions contemplated by this
Agreement, hereinafter referred to as the "Closing," shall be held at the
corporate offices of Lyric Energy, Inc., located in Dallas, Texas, on or
before the 21st day of March, 1999, at 1:00 p.m. (such date to be referred to
in this Agreement as the "Closing Date").
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer the correctness, truthfulness and accuracy of the matters
above-written; all of which shall survive the Closing. In addition, Seller
represents and warrants to Buyer that Seller is the true and rightful owner of
said stock of Seismic International, Inc. and it has the legal right to sell
such stock.
4. REPRESENTATIONS AND WARRANTIES. Buyer and Seller hereby represent
and warrant the following: There has been no act or omission by Buyer or
Seller which would give rise to any valid claim against any of the parties
hereto for a brokerage commission, finder's fee, or other like payment in
connection with the transactions contemplated hereby.
5. TRANSACTIONS PRIOR TO CLOSING. Seller hereby covenants the
following:
a. Conduct of Seller's Business until Closing. Except as Buyer
may otherwise consent in writing prior to the Closing Date, Seller will not
enter into any transaction, take any action or fail to take any action which
would result in, or could reasonably be expected to result in or cause any of
the representations and warranties of Seller contained in this Agreement to be
void, invalid or false on the Closing Date.
b. Resignations. Seller shall deliver to Buyer prior to the
Closing Date, such resignations of officers or employees of the business, as
Buyer shall indicate, each such resignation to be effective on the Closing
Date.
c. Documents. Seller shall deliver to Buyer at closing such
documents which are, in Buyer's sole discretion, necessary to fully satisfy
the objectives of this Agreement in content and form reasonably intended to do
so.
6. EXPENSES. Each of the parties hereto shall pay its own expenses in
connection with this Agreement and the transactions contemplated hereby,
including the fees and expenses of its counsel and its certified public
accountants.
7. GENERAL.
a. Survival of Representations and Warranties. Each of the
parties to this Agreement covenants and agrees that their respective
representations, warranties, covenants, statements, and agreements contained
in this Agreement shall survive the Closing Date and terminate on the second
anniversary of such date. Except as set forth in this Agreement, or in the
documents and papers delivered by Seller to Buyer in connection herewith,
there are no other agreements, representations, warranties, or covenants by or
among the parties hereto with respect to the subject matter hereof.
b. Waivers. No action taken pursuant to this Agreement, including
any investigation by or on behalf of any party shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein or therein and in any
documents delivered in connection herewith or therewith. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach.
c. Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall
be in writing and shall be deemed to have been duly given if delivered or
mailed, first class mail, postage prepaid,
To Seller: Cooke Enterprises, Inc.
Nassau, Bahamas
To Buyer: Lyric International, Inc.
16775 Addison Road, Suite 300
Dallas, Texas 75248
or to such other address as such party shall have specified by notice in
writing to the other party.
d. Sections and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretations of this Agreement.
e. Governing Law. This Agreement, and all transactions
contemplated hereby, shall be governed by, construed and enforced in
accordance with the laws of the State of Texas. The parties herein waive trial
by jury and agree to submit to the personal jurisdiction and venue of a court
of subject matter jurisdiction located in Dallas County, State of Texas. In
the event that litigation results from or arises out of this Agreement or the
performance thereof, the parties agree to reimburse the prevailing party's
reasonable attorney's fees, court costs, and all other expenses, whether or
not taxable by the court as costs, in addition to any other relief to which
the prevailing party may be entitled. In such event, no action shall be
entertained by said court or any court of competent jurisdiction if filed more
than one year subsequent to the date the cause(s) of action actually accrued
regardless of whether damages were otherwise as of said time calculable.
f. Captions. The Captions of this contract are for convenience
and reference only and in no way define, describe, extend, or limit the scope
or intent of this contract, or the intent of any provisions hereof.
g. Time of the Essence. Time and timely performance are of the
essence of this contract and of the covenants and provisions hereunder.
h. Successors and Assigns. Rights and obligations created by this
Agreement shall be binding upon and inure to the benefit of the parties
hereto, their successors and assigns. Whenever used, the singular number shall
include the plural, the plural the singular, and the use of any gender shall
include all genders.
i. Contractual Procedures. Unless specifically disallowed by law,
should litigation arise hereunder, service of process therefore may be
obtained through certified mail, return receipt requested; the parties hereto
waiving any and all rights they may have to object to the method by which
service was perfected.
8. AMENDMENTS OR ADDENDA. As of the date above-written, there are no
amendments, addenda, modifications, or changes to this Agreement.
9. SIGNATURES. This Agreement shall not be valid and enforceable
unless it is properly executed by Buyer and Seller and their signatures
affixed below.
IN WITNESS WHEREOF, this Agreement has been executed by each of the
individual parties hereto and signed by an officer thereunto duly authorized,
on the date and year first above-written.
Signed and delivered in the presence of:
SELLER:
COOKE ENTERPRISES, INC.
a Bahamian corporation
/s/ Pedro Miguel
Pedro Miguel
Management, Inc.
BUYER
LYRIC INTERNATIONAL, INC.
a Colorado corporation
/s/ Michael G. Maguire
Michael G. Maguire
President
EXHIBIT 10.4
NORTH AMERICAN GEOPHYSICAL
29 Retirement Road
Nassau, Bahamas
AGREEMENT
This contract dated December 1, 1997, is by and between AmeriTech Petroleum,
Inc. ("AmeriTech") and North American Geophysical ("North American"). For
and in consideration of mutual promises and covenants contained within this
Agreement, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. North American acknowledges receipt of $1,000,000.00(one million U.S.
dollars) from AmeriTech as part consideration to conduct a seismic
survey on the lands and to the extent identified in the Appendices to
this Agreement.
2. North American agrees to commence and complete a 3-D seismic survey
within a reasonable period of time from the date this Agreement is
executed, and submit a
report or reports concerning such survey to AmeriTech as more fully
described on the Appendices to this Agreement.
3. AmeriTech agrees to pay additional consideration to North American as
shown on the Appendices to this Agreement, on or before completion of
the work required in each such Appendix, but in no event later than the
date AmeriTech requests reports concerning such surveys from North
American.
4. If AmeriTech fails to pay additional consideration required by this
Agreement or as specifically provided in any Appendix to this
Agreement, such failure to pay will result in the survey and all data
relating to the survey becoming the property of North American; and
AmeriTech agrees that in such circumstances title to the survey and the
data associated with such survey will remain with North American until
full payment of the amount required by this Agreement and the
applicable Appendix is made.
5. Should the work required by any Appendix to this Agreement not be
commenced or completed for any reason, AmeriTech shall not be obligated
to pay the additional consideration required by this Agreement and the
applicable Appendix, but in no event will North American ever be
required to refund the $1,000,000.00 already received by North American
in conjunction with this Agreement.
6. AmeriTech agrees to provide North American access to the lands
described in the Appendices to this Agreement, so that North American
may conduct activities relating to the seismic survey, and AmeriTech
represents it has the authority, or will have the authority, to grant
North American access to the lands described in the Appendices to
conduct such activities.
7. North American may subcontract any and all work required to be
performed by it under this Agreement, as it deems necessary or
appropriate, but in so doing will remain solely liable to AmeriTech to
comply with the terms of this Agreement and AmeriTech agrees to look
solely to North American for compliance with the terms of this Agreement.
8. This instrument constitutes the entire agreement of the parties, except as
additional Appendices may be added to this Agreement, and this Agreement
supersedes any prior oral or written agreements or understandings
concerning the subject matter of this Agreement. This agreement may not
be amended, except by written instrument referring specifically to this
Agreement. It is however, contemplated that the parties will, from time
to time, prepare and execute Appendices to this Agreement, which the
parties specifically agree will, to the extent state in such
Appendices, amend this Agreement.
9. This Agreement will be construed under the laws of the State of Texas,
and venue for any action in conjunction with this agreement will be in
Dallas County, Texas.
10. This Agreement inures to the benefit of the parities, their assigns,
successors, and representatives.
AMERITECH PETROLEUM, INC.
/s/ Brent A. Wagman
By:___________________________
Brent A. Wagman, President
North Americna Geophysical
By: /s/ M.W. Taylor
__________________________
M.W. Taylor, Director
EXHIBIT 10.5
North American Geophysical
29 Retirement Road
Nassau, Bahamas
AMENDMENT TO AGREEMENT DATED DECEMBER 1, 1997
On December 1, 1997 North American Geophysical, Inc. ("North American") and
AmeriTech Petroleum, Inc. ("AmeriTech") entered into a contract (the
"Contract"). Both parties have agreed with the execution of this amendment to
modify, amend and clarify the original Contract to grant AmeriTech, its
successors, assigns and/or any subsidiary it owns or may own, a non-exclusive,
worldwide, perpetual, royalty free license and the right to use any and all
technology (the "Technology") developed under the Contract. North American
agrees to provide training to AmeriTech and/or its assigns to use the
technology in the field as may be required by Ameritech and/or its assigns.
The Technology was developed by North American who by this amendment and the
original Contract retains the ownership to the Technology and the rights to
continue developing said Technology. North American agrees to grant AmeriTech
and/or its assigns the right to use any and all future developments to the
Technology in exchange for payments North American deems necessary, if any,
for such development. Any charges billed by North American will be reasonable
and customary for the time and expenses required for such development.
North American further agrees to process any and all data AmeriTech and/or its
assigns may gather while using the Technology for a reasonable fee that in no
case will exceed fees charged by North American for the same or similar work
to its other customers. In addition, North American agrees that should it
cease processing the data for any reason or sell either the Technology,
company or the rights to the Technology, whether by merger or license to
another party or any other form of sale, it will provide any and all software
necessary to process the data to AmeriTech and/or its assigns along with the
documentation and techniques required for AmeriTech and/or its assigns to
process the data themselves.
Accepted: Accepted:
/s/ M.W. Taylor /s/ Brent Wagman
_____________________ March 1, 1999 ______________________ March 1, 1999
M.W. Taylor, Director Brent Wagman, President
North American Geophysical, Inc. AmeriTech Petroleum, Inc.
EXHIBIT 10.6
AGREEMENT
This contract dated April 15, 1998, is by and between REDBANK PETROLEUM,
INC.. ("REDBANK") and NORTH AMERICAN GEOPHYSICAL ("NAG"). For and in
consideration of mutual promises and covenants contained within this agreement
the receipt and sufficiency of which is hereby acknowledged the parties agree
as follows:
1. NAG agrees to commence and complete a 3-D seismic survey on the lands and
to the extent identified in the Appendices attached to this Agreement,
within a reasonable period of time from the date this agreement is
executed, and submit a report or reports concerning such survey to
REDBANK.
2. REDBANK agrees to pay additional consideration to NAG as shown on the
Appendices to this Agreement on or before completion of the work required
in each such Appendix, but in no event no later than the date REDBANK
requests reports concerning such surveys from NAG.
3. If REDBANK fails to pay the additional consideration required by this
Agreement or as specifically provided in any Appendix to this Agreement,
such failure to pay will result in the survey and all data relating to the
survey becoming the property of NAG; and REDBANK agrees that in such
circumstance title to the. survey and the data associated with such survey
will remain with NAG until full payment of the amount required by this
Agreement and the applicable Appendix is made.
4. Should the work required by any Appendix to this Agreement not be commenced
or completed for any reason, REDBANK shall not be obligated to pay the
additional consideration required by this Agreement and the applicable
Appendix, but in no event will NAG ever be required to refund the payments
already received, if any, by NAG in conjunction with this Agreement.
5. REDBANK agrees to provide NAG access to the lands described in the
Appendices to this Agreement, so that NAG may conduct activities relating
to the seismic survey, and REDBANK represents it has the authority, or will
have the authority, to grant NAG access to the lands described in the
Appendices to conduct such activities.
6. NAG may subcontract any and all work required to be performed by NAG under
this Agreement, as it deems necessary or appropriate, but in so doing will
remain solely liable to REDBANK to comply with the terms of this Agreement,
and REDBANK agrees to look solely to NAG for compliance with the terms of
this Agreement.
7. This instrument constitutes the entire agreement of the parties, except as
additional Appendices may be added to this Agreement and this Agreement
supercedes any prior oral or written agreements or understandings
concerning the subject matter of this Agreement. This Agreement may not be
amended except by written instrument referring specifically to this
Agreement. It is, however, contemplated that the parties will, from time
to time, prepare and execute Appendices to this Agreement, which the
parties specifically agree will, to the extent stated in such Appendices,
amend this Agreement.
8. This Agreement will be construed under the laws of thc State of Texas, and
venue for any action in conjunction with this Agreement will be in Dallas
County, Texas.
9. This Agreement inures to the benefit of the parties, their assigns,
successors, and representatives.
REDBANK PETROLEUM, INC.
/s/ Brent Wagman, President
By: _____________________
Brent Wagman, President
NORTH AMERICAN GEOPHYSICAL
/s/ M.W. Taylor
By:______________________
M.W. Taylor
EXHIBIT 10.7
North American Geophysical
29 Retirement Road
Nassau, Bahamas
AMENDMENT TO AGREEMENT DATED APRIL 15, 1998
On April 15, 1998 North American Geophysical, Inc. ("North American") and
Redbank Petroleum, Inc. ("Redbank") entered into a contract (the "Contract").
Both parties have agreed with the execution of this amendment to modify, amend
and clarify the original Contract to grant Redbank, its successors, assigns
and/or any subsidiary it owns or may own, a non-exclusive, worldwide,
perpetual, royalty free license and the right to use any and all technology
(the "Technology") developed under the Contract. North American agrees to
provide training to Redbank and/or its assigns to use the technology in the
field as may be required by Redbank and/or its assigns. The Technology was
developed by North American who by this amendment and the original Contract
retains the ownership to the Technology and the rights to continue developing
said Technology. North American agrees to grant Redbank and/or its assigns
the right to use any and all future developments to the Technology in exchange
for payments North American deems necessary, if any, for such development.
Any charges billed by North American will be reasonable and customary for the
time and expenses required for such development.
North American further agrees to process any and all data Redbank and/or its
assigns may gather while using the Technology for a reasonable fee that in no
case will exceed fees charged by North American for the same or similar work
to its other customers. In addition, North American agrees that should it
cease processing the data for any reason or sell either the Technology,
company or the rights to the Technology, whether by merger or license to
another party or any other form of sale, it will provide any and all software
necessary to process the data to Redbank and/or its assigns along with the
documentation and techniques required for Redbank and/or its assigns to
process the data themselves.
Accepted: Accepted:
/s/ M.W. Taylor /s/ Brent A. Wagman
_______________________ March 1, 1999 _____________________ March 1, 1999
M.W. Taylor, Director Brent Wagman, President
North American Geophysical, Inc. Redbank Petroleum, Inc.
EXHIBIT 10.8
AGREEMENT
This contract dated January 31, 1999 is by and between SEISMIC
INTERNATIONAL, INC. ("INTERNATIONAL") and NORTH AMERICAN GEOPHYSICAL ("NORTH
AMERICAN"). For and in consideration of the mutual promises and covenants
contained within this agreement, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. INTERNATIONAL has a contract (the "Contract") (Attached as "Exhibit
A") to provide an interpretive map or maps and related information
which may be used to evaluate the potential for potable water
supplies with Geophysical de Mexico ("GdM").
2. NORTH AMERICAN agrees to provide, through the use of various 3-D and
4-D, 3-C and 4-C seismic, electronic and resistivity surveys detailed
interpretive map or maps and related information outlined in the
Contract with GdM according to the terms and conditions therein
outlined as written and amended as necessary. It is understood that
the techniques and certain procedures used by NORTH AMERICAN are
proprietary information and may not be disclosed except with the
written consent of NORTH AMERICAN.
3. NORTH AMERICAN acknowledges the receipt of FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($500,000.00) from GdM on behalf of INTERNATIONAL as
part consideration under this Agreement. INTERNATIONAL agrees to pay
NORTH AMERICAN additional consideration of TWO MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($2,500,000.00) prior to the delivery to
INTERNATIONAL of the detailed map(s) and related information
described in the Contract. Said $2,500,000.00 shall be full payment
for said work on contract attached as Exhibit A. Any additional work
for future contracts shall be negotiated at the time of presentation.
4. INTERNATIONAL acknowledges that NORTH AMERICAN has begun preliminary
surveys pursuant to this contract. INTERNATIONAL also acknowledges
that the work will not be completed until NORTH AMERICAN has received
final payment of the $2,500,000.00. NORTH AMERICAN hereby agrees to
complete the work within seventy-five (75) days of receipt of final
payment. If for any reason other than acts of God or war work is not
completed then NORTH AMERICAN will be obligated to refund the entire
TWO MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($2,500,000.00)
received by NORTH AMERICAN to INTERNATIONAL.
5. NORTH AMERICAN may subcontract any and/or all work required to be
performed under this Agreement, as it deems necessary or appropriate.
In so doing, NORTH AMERICAN will remain solely liable to
INTERNATIONAL to comply with the terms of this Agreement and the
Contract with GdM.
6. NORTH AMERICAN acknowledges that INTERNATIONAL through assignment
from a contract with Redbank Petroleum, Inc. dated April 15, 1998 has
the right to use all of NORTH AMERICAN's field mapping technologies
worldwide. It is further understood that NORTH AMERICAN shall
process the data collected into maps for INTERNATIONAL. The fees for
this processing shall not be greater than those charged to any other
entities by NORTH AMERICAN. INTERNATIONAL acknowledges that the
information and techniques used to produced such maps is proprietary
and if disclosed to any outside parties may invite undue and
unnecessary competition. Therefore, certain aspects of the process
shall remain secret. NORTH AMERICAN agrees that should it cease
processing the data for any reason or sell either the Technology,
company or the rights to any and/or all Technology(s), whether by
merger or license to another party or any other form of sale, it will
provide any and all software necessary to process the data to
INTERNATIONAL and/or its assigns along with the documentation and
techniques required for INTERNATIONAL and/or its assigns to process
the data themselves.
7. This instrument constitutes the entire agreement of the parties, and
this Agreement supercedes any prior oral or written agreements or
understandings concerning the subject matter of this Agreement. This
Agreement may not be amended, except by written instrument signed by
all parties, referring specifically to this Agreement
8. This Agreement will be construed under the laws of the State of
Texas, and venue for any action in conjunction with this Agreement
will be in Dallas County, Texas. All monies and or funds referred to
in this contract shall be in United States dollars unless otherwise
listed.
9. This Agreement inures to the benefit of the parties, their assigns,
success representatives.
SEISMIC INTERNATIONAL, INC.
/s/ Michael Maguire
Michael Maguire, President
NORTH AMERICAN GEOPHYSICAL
/s/ M.W. Taylor
M.W. Taylor, Director
EXHIBIT 10.9
AMENDMENT TO AGREEMENT DATED OCTOBER 30, 1998
On October 30, 1998 Geophysical de Mexico ("GdM") and Seismic International,
Inc. ("INTERNATIONAL") entered into a contract (the "Contract"). Both parties
have agreed with the execution of this amendment to modify the Contract to
allow for different terms of payment as outlined in paragraph 3 of the
contract and to grant INTERNATIONAL additional time to perform the services as
outlined in paragraph 4 of the contract. The two paragraphs in question shall
be amended in their entirety to read as follows:
3. INTERNATIONAL acknowledges the receipt of FIVE HUNDRED THOUSAND
AND NO/100 DOLLARS ($500,000.00) from GdM as part consideration
under this Agreement. GdM agrees to pay INTERNATIONAL an
additional consideration of SEVEN MILLION AND NO/100 DOLLARS
($7,000,000). The first 50% or THREE MILLION FIVE HUNDRED
THOUSAND DOLLARS ($3,500,000) will be due and payable upon the
arrival of the equipment and prior to commencement of the work.
The balance of THREE MILLION FIVE HUNDRED THOUSAND DOLLARS
($3,500,000) will be due upon delivery of the detailed map(s)
and related information described.
4. INTERNATIONAL shall be given 90 days to commence the work and
120 days to complete the detailed interpretive map(s) and
related information from March 31, 1999. Geophysical de Mexico
acknowledges that the FIVE HUNDRED THOUSAND DOLLARS ($500,000)
advanced to NORTH AMERICAN GEOPHYSICAL on behalf of the Contract
with INTERNATIONAL has been spent on gathering information and
testing the site for the benefit of both parties and
INTERNATIONAL will not be obligate to refund any funds.
Accepted: Accepted:
/s/ Encino Rivera Celia /s/ Michael G. Maguire
____________________ March 18, 1999 _____________________ March 18, 1999
Administrator Uniro Michael Maguire, President
Geophysical de Mexico Seismic International, Inc.
