<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION
(Name of Issuer)
NORTHPORT OPERATING COMPANY LC
and TONY VIELE
(Bidder)
Common Stock, par value $0.10 per share
Great Eastern Energy and Development Corporation
(Title of Class of Securities)
390 323-10-3
(CUSIP Number of Class of Securities)
Tony Viele
Northport Operating Company LC
2601 N.W. Expressway Street
Suite 902-East
Oklahoma City, Oklahoma 73112
with copy to:
Phillip A. Wylie
Locke Purnell Rain Harrell
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
Calculation of Filing Fee
Transaction $4,334,176 (18,844,245 shares sought Amount of
Valuation* to be purchased at $0.23 per share Filing Fee
or 80% of said number at a combination $866.84
of $.26 and $.23 per share)
*Set forth the amount on which the filing fee is calculated
and state how it was determined.
/ / Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
Amount Previously Paid: $
-----------------
Form or Registration No.:
-----------------
Filing Party:
-----------------
Date Filed:
-----------------
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CUSIP No. 390 323-10-3
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1. Name Of Reporting Persons or I.R.S. Identification No. of Above Persons
Northport Operating Company LC TIN: 73-1488396
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2. Check The Appropriate Box If A Member Of A Group
(a) /X/
(b) / /
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3. SEC Use Only
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4. Source Of Funds
OO
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5. Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items
2(e) Or 2(f) / /
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6. Citizenship Or Place Of Organization
Texas
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7. Aggregate Amount Beneficially Owned By Each Reporting Person
0
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8. Check Box If The Aggregate Amount In Row (7) Excludes Certain Shares / /
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9. Percent Of Class Represented By Amount In Row (7)
0
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10. Type Of Reporting Person
CO
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CUSIP No. 390 323-10-3
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1. Name Of Reporting Persons or I.R.S. Identification No. of Above Persons
Tony Viele SSN: ###-##-####
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2. Check The Appropriate Box If A Member Of A Group
(a) /X/
(b) / /
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3. SEC Use Only
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4. Source Of Funds
OO
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5. Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To
Items 2(e) Or 2(f) / /
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6. Citizenship Or Place Of Organization
Oklahoma
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7. Aggregate Amount Beneficially Owned By Each Reporting Person
0
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8. Check Box If The Aggregate Amount In Row (7) Excludes Certain Shares / /
- -----------------------------------------------------------------------------
9. Percent Of Class Represented By Amount In Row (7)
0
- -----------------------------------------------------------------------------
10. Type Of Reporting Person
IN
- -----------------------------------------------------------------------------
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ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) Great Eastern Energy and Development Corporation (the "Subject
Company")
5990 Greenwood Plaza Blvd., Suite 127
Greenwood Village, Colorado 80111-4708
(b) The equity securities being sought are the Subject Company's Common
Stock, par value $0.10 per share (the "Shares"), 18,844,245 shares
outstanding as of March 31, 1997. Northport (as defined below) is
offering the shareholders of the Subject Company the opportunity to
tender all of their Shares at $.23 per share ("Option One").
Alternatively, Northport is offering a second option pursuant to which
the shareholders of the Subject Company may tender all of their
Shares, of which 37.5% will be purchased at $.26 per share and the
remainder, at Northport's election and in such combination as it may
determine, will be purchased at $.23 per share or returned to the
tendering shareholders ("Option Two"). It is Northport's desire in
offering Option Two to purchase only 80% of the outstanding Shares
and thereby maintain the Subject Company's status as a "public
company." See Item 5 below. All Shares purchased at $.23 per share
pursuant to Option Two will be purchased on a pro rata basis among
the tendering shareholders. The number of Shares purchased from
each shareholder pursuant to Option Two shall, if necessary, be
rounded upward to the next whole number in order to avoid the receipt
by the shareholder of a fractional share.
(c) See Item 6--"Price Range of Shares; Dividends" in the Offer to
Purchase (the "Offer") filed as Exhibit 11(a)(1) attached hereto and
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
The persons filing this statement are Northport Operating Company LC, a
Texas limited liability company ("Northport"), and Tony Viele ("Viele").
Northport currently has no assets or liabilities other than cash assets and the
loan commitment described under Item 4 hereof. The address of Northport's
principal office is 2601 N.W. Expressway Street, Suite 902-East, Oklahoma City,
Oklahoma 73112. Information required by this Item with respect to Viele is set
forth below.
Northport has not, during the last five years, been convicted in a criminal
proceeding or been a party to a civil proceeding of a judicial or administrative
body and, as a result of such proceeding, been subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
Set forth below is the information required by (a) through (g) of this Item
2 with respect to each natural person who is an executive officer or director of
Northport, or who is in control of Northport, or who is an executive officer or
director of any corporation or other person ultimately in control of Northport.
1. (a) Tony Viele -- Manager and a member of Northport
(b) 2601 N.W. Expressway Street, Suite 902-East, Oklahoma City,
Oklahoma 73112
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(c) Oil and gas investor and operator individually and through
Northport Production Company, an affiliate of Northport.
(d) Oil and gas investor and operator individually and through
Northport Production Company.
(e) No
(f) No
(g) United States citizen
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
Neither Northport or Viele have entered into any contracts, transactions or
negotiations with the Subject Company or any of its executive officers or
directors, although Northport and Viele have engaged in discussions with
representatives of the Subject Company concerning the tender offer which have
not resulted in any contracts, agreements or understandings.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) All of the funds needed to consummate the tender offer (a total of
$4,334,176) will be borrowed from third party lenders and said funds will be
made available to the depositary for the tender offer as needed. See Section
9 -- "Source and Amount of Funds" in the Offer, which is incorporated herein
by reference.
(b) As stated above, all of the funds necessary to consummate the
tender will be borrowed by Northport third party lenders. Founders Equity
Group, Inc. ("Founders") will provide $1,000,000 to Northport to consummate
the tender offer and some of the principal terms of that financing are as
follows: (1) the facility will be a term loan which will mature on December
31, 1997; (2) the loan will bear interest at 8% per annum; (3) the loan will
be personally guaranteed by Mr. Viele and Northport Production Company; (4)
the collateral for the loan will be a pledge of one-half of the shares of
Northport Production Company; and (5) Founders will receive a 2% commitment
fee and warrants to purchase 100,000 shares at $.23 per share. Such terms are
more fully described in the loan commitment letter attached hereto as Exhibit
11(b), which is incorporated herein by reference. In addition, C3, Inc. has
orally agreed to provide $900,000 to Northport on terms identical in all
material respects to those of the Founders' commitment.
Domain Energy Corporation ("Domain") has orally agreed to provide not
less than $2,434,176 to Northport to consummate the tender offer. Some of the
principal terms of that financing are as follows: (1) the facility will be a
production loan; (2) Domain will receive a limited term overriding royalty
interest in certain oil and gas properties of the Subject Company and
Northport Production Company which will entitle it to 60% of the net revenues
received from those properties; (3) the loan will remain in effect until such
time as Domain has received a return of its capital plus an internal rate of
return equal to 18%; and (4) the loan will be non-recourse to the borrowers.
Following consummation of the tender offer and completion of the Mergers
described in Item 5 below, the loan will be paid from the cash and cash flow
of the Subject Company.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
The purpose of the tender offer is for Northport and Viele to acquire
control of the Subject Company with the intent of growing the Subject Company
through the immediate merger of Northport and Northport Production Company with
and into the Subject Company and thereafter through the acquisition of other
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oil and gas properties, businesses and companies using equity securities of
the Subject Company or by using third party financing, or by a combination of
both. For those shareholders who elect to retain their Shares or who elect to
tender their Shares pursuant to Option Two, it is Northport's plan that the
Company will continue as a "public company," that the Shares which are not
tendered will continue to be traded on the NASD Bulletin Board or some other
nationally-recognized trading mechanism and that the Company will continue to
timely fulfill its informational reporting requirements under the Securities
Exchange Act of 1934, as amended.
Upon successful completion of the tender offer, it is anticipated that
the current officers and directors of the Subject Company will resign or be
removed and Viele will become, at least initially, the sole director of the
Subject Company. Viele, as the sole director, will then elect officers
chosen by him. The information with respect to Mr. Viele which is required
by Rule 14f-1 under the Exchange Act to be provided to the shareholders of
the Subject Company is set forth in Sections 7 and 9 of the Offer which will
be mailed to each such shareholder.
See Section 8 --"Purpose of the Offer; Certain Effects of the Offer" and
Section 11 --"Effect of the Offer on the Market for Shares; Registration Under
the Exchange Act" in the Offer, both of which are incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
Neither Northport nor Viele owns any securities of the Subject Company, nor
has Northport or Viele been involved in a transaction in any securities of the
Subject Company within the last 60 days.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Neither Northport nor Viele is a party or otherwise subject to any
contract, arrangement, understanding or relationship with respect to securities
of the Subject Company.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Northport and Viele have engaged the services of Southwest Merchant Group,
an investment banking and financial consulting concern headquartered at One
NorthPark East, 8950 North Central Expressway, Suite 220, Dallas, Texas 75231,
to assist them in connection with the tender offer, including making
recommendations and solicitations in connection with the tender offer, and in
connection with securing the financing for the tender offer. For its services,
Southwest Merchant Group will receive 5% of the financing proceeds and a 20%
interest in Northport.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Northport has no assets or liabilities, other than the loan commitments
described in Item 4 hereof. Therefore, its financial condition is not
material to a decision by a shareholder of the Subject Company to tender or
hold his or her Shares.
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ITEM 10. ADDITIONAL INFORMATION
(a) None.
(b) See Section 12--"Certain Legal Matters; Regulatory Approvals," and
Section 15--"Miscellaneous" in the Offer, which are incorporated
herein by reference.
(c) Not applicable.
(d) Not applicable.
(e) None.
(f) See the Offer attached hereto and incorporated herein by reference,
except those portions of the Offer which have otherwise been
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Offer to Purchase dated August 5, 1997 and accompanying letter of
transmittal.
(2) Press release of Northport dated July 25, 1997 announcing the
tender offer.
(b) Loan Commitment Letter from Founders Equity Group, Inc. to Northport
Operating Company LC dated July 31, 1997.
(c) Depositary Agreement dated as of August 1, 1997 by and between
Northport and Securities Transfer Corporation.
(d) None.
(e) Not applicable.
(f) Not applicable.
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
NORTHPORT OPERATING COMPANY LC
August 5, 1997
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(Date)
By: /s/ John Vaughn
----------------------------------------
John Vaughn, Vice President
/s/ Tony Viele
----------------------------------------
Tony Viele
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<PAGE>
INDEX OF EXHIBITS
11(a)(1) The Offer to Purchase dated August 5, 1997 and accompanying
letter of transmittal.
11(a)(2) Press release of Northport Operating Company LC dated
July 25, 1997 announcing the tender offer.
11(b) Loan Commitment Letter from Founders Equity Group, Inc. to
Northport Operating Company LC dated July 31, 1997.
11(c) Depositary Agreement dated as of August 1, 1997 by and
between Northport and Securities Transfer Corporation
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Exhibit 11(a)(1)
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
OF
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION
BY
NORTHPORT OPERATING COMPANY LC
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., CENTRAL DAYLIGHT TIME,
ON SEPTEMBER 1, 1997.
-------------------------
THE OFFER IS CONDITIONED ON A MINIMUM OF 15,075,396 (80%) OF THE
OUTSTANDING SHARES BEING TENDERED.
-------------------------
IMPORTANT
ANY SHAREHOLDER DESIRING TO TENDER ALL OR ANY PORTION OF HIS SHARES SHOULD
EITHER (1) COMPLETE AND SIGN THE LETTER OF TRANSMITTAL OR A FACSIMILE COPY
THEREOF IN ACCORDANCE WITH THE INSTRUCTIONS IN THE LETTER OF TRANSMITTAL, MAIL
OR DELIVER IT AND ANY OTHER REQUIRED DOCUMENTS TO SECURITIES TRANSFER
CORPORATION (THE "DEPOSITARY"), AND EITHER MAIL OR DELIVER HIS STOCK
CERTIFICATES FOR SUCH SHARES TO THE DEPOSITARY, OR (2) REQUEST HIS BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE
TRANSACTION FOR HIM. A SHAREHOLDER HAVING SHARES REGISTERED IN THE NAME OF A
BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST CONTACT
THAT BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE IF SUCH
SHAREHOLDER DESIRES TO TENDER SUCH SHARES.
-------------------------
The shares of Common Stock, par value $.10 per share (the "Shares"), of
Great Eastern Energy and Development Corporation (the "Company") are traded on
the NASD Bulletin Board.
Questions and requests for assistance or for additional copies of this
Offer to Purchase and related documents may be directed to the Depositary at
(972) 447-9890.
August 5, 1997
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THE PURCHASER HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE PURCHASER AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. THE PURCHASER HAS NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH
THE OFFER ON BEHALF OF THE PURCHASER OTHER THAN THOSE CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL. DO NOT RELY ON ANY SUCH RECOMMENDATION
OR ANY SUCH INFORMATION OR REPRESENTATIONS, IF GIVEN OR MADE, AS HAVING BEEN
AUTHORIZED BY THE PURCHASER.
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1. Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . 4
2. Procedure for Tendering Shares . . . . . . . . . . . . . . . . . 4
3. Withdrawal Rights. . . . . . . . . . . . . . . . . . . . . . . . 7
4. Purchase of Shares and Payment of Purchase Price . . . . . . . . 8
5. Certain Conditions of the Offer. . . . . . . . . . . . . . . . . 8
6. Price Range of Shares; Dividends . . . . . . . . . . . . . . . . 10
7. Background Information about the Company and the
Purchaser. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8. Purpose of Offer; Certain Effects of the Offer . . . . . . . . . 12
9. Interest in the Shares; Transactions and Arrangements
Concerning the Shares. . . . . . . . . . . . . . . . . . . . . . 13
10. Source and Amount of Funds . . . . . . . . . . . . . . . . . . . 13
11. Effects of the Offer on the Market for Shares;
Registration under the Exchange Act. . . . . . . . . . . . . . . 13
12. Certain Legal Matters; Regulatory Approvals. . . . . . . . . . . 14
13. Extension of the Offer; Termination; Amendments. . . . . . . . . 14
14. Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . 15
15. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . 15
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TO THE OWNERS OF SHARES OF THE COMMON STOCK OF GREAT EASTERN ENERGY AND
DEVELOPMENT CORPORATION:
INTRODUCTION
Northport Operating Company LC, a Texas limited liability company (the
"Purchaser"), invites shareholders of Great Eastern Energy and Development
Corporation, a Virginia corporation (the "Company"), to tender shares of the
Company's Common Stock, par value $.10 per share (the "Shares"), upon the terms
and subject to the conditions set forth in this Offer to Purchase and in the
related Letter of Transmittal (which together constitute the "Offer").
Purchaser is offering the shareholders of the Company the opportunity to
tender all of their Shares at $.23 per share ("Option One"). Alternatively,
Purchaser is offering a second option pursuant to which the shareholders of
the Company may tender all of their Shares, of which 37.5% will be purchased
at $.26 per share and the remainder, at the Purchaser's election and in such
combination as it may determine, will be purchased at $.23 per share or
returned to the tendering shareholders ("Option Two"). It is the Purchaser's
desire in offering Option Two to purchase only 80% of the outstanding Shares
and thereby maintain the Company's status as a "public company." See Section
8. All Shares purchased at $.23 per share pursuant to Option Two will be
purchased on a pro rata basis among the tendering shareholders. The
number of Shares purchased from each shareholder pursuant to Option Two shall,
if necessary, be rounded upward to the next whole number in order to avoid the
receipt by the shareholder of a fractional share.
THE OFFER IS CONDITIONED ON A MINIMUM OF 15,075,396 (80%) OF THE
OUTSTANDING SHARES BEING TENDERED, AND IS ALSO SUBJECT TO CERTAIN
OTHER CONDITIONS. See Section 1 and 5.
If, at the Expiration Time (as defined in Section 1), fewer than 15,075,396
(80%) of the outstanding Shares are properly tendered, the Purchaser may elect
not to purchase any of the Shares and, in such event, it will return all
tendered Shares. Tendering shareholders will not be obligated to pay brokerage
commissions, solicitation fees or stock transfer taxes on the sale of Shares.
The Purchaser will pay all fees and expenses of Securities Transfer Corporation
(the "Depositary") in connection with the Offer. See Section 14.
The Purchaser is making the offer in order to acquire a minimum of
15,075,396 (80%) of the outstanding Shares (and thus control of the Company)
with the intent of subsequently growing the Company through acquisitions of
other oil and gas properties, businesses and companies. For those shareholders
who elect to retain their Shares or who elect to tender their Shares pursuant to
Option Two, it is the Purchaser's plan that the Company will continue as a
"public company," that the Shares that are not tendered will continue to be
traded on the NASD Bulletin Board or some other nationally-recognized trading
mechanism and that the Company will continue to timely fulfill its informational
reporting requirements under the Exchange Act. See Sections 8 and 11.
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The Purchaser and its Manager, Tony Viele, have filed a Schedule 14D-1 with
the Securities and Exchange Commission (the "Commission") in connection with
this Offer. The Schedule 14D-1 contains additional information, including
exhibits, relating to the Offer, the Purchaser and Mr. Viele.
The Shares are traded on the NASD Bulletin Board, although the trading
volume of the Shares has historically been limited. See Section 6.
1. NUMBER OF SHARES.
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment (and thereby purchase), subject to the right of
Purchaser to return Shares tendered pursuant to Option Two, all Shares which
are properly tendered on or before the Expiration Time (and not withdrawn in
accordance with Section 3). The term "Expiration Time" means 5:00 P.M.,
Central Daylight Time, on September 1, 1997 (or such other date to which the
Offer may be extended). The Offer will not be extended after the Expiration
Time except as described in the following paragraph and tenders of Shares
received after the Expiration Time will not be accepted. See Section 13 for a
description of the Purchaser's right to delay, terminate or amend the Offer.
See also Section 5 for conditions to closing related to the Offer.
The offer is subject to, among other things, not less than 15,075,396
(80%) of the outstanding Shares being tendered. In the event less than
15,075,396 of the Shares are tendered, the Offer may be terminated and, in
such event, no Shares will be purchased. If the Offer is terminated, the
tendered Shares will be returned to the tendering shareholders at the
Purchaser's expense as promptly as practicable following the Expiration Time.
If the number of Shares tendered exceeds the minimum, the Purchaser will,
upon the terms and subject to the conditions of the Offer, purchase all
properly tendered Shares, subject to the right of Purchaser to return Shares
tendered pursuant to Option Two.
2. PROCEDURE FOR TENDERING SHARES.
GENERAL. In order for a holder of Shares to validly tender Shares pursuant
to the Offer, a letter of transmittal (the "Letter of Transmittal") or facsimile
copy thereof, properly completed and duly executed, together with any other
required documents and certificates evidencing tendered Shares must be received
by the Depositary at its address set forth on the front of this Offer prior to
the Expiration Date. In order for a holder of Shares to validly tender such
Shares either (a) the Letter of Transmittal and other required documents must be
delivered as described in the preceding sentence and (b) in the case of a
book-entry transfer, an Agent's Message (as defined below) and any other
requirement documents, must be received by the Depositary at its address set
forth on the front of this Offer, and either certificates representing such
Shares must be received by the Depositary at such address or be delivered
pursuant to the procedures for book-entry transfer set forth below and
confirmation thereof must be received by the Depositary, in each case prior to
the Expiration Date or (c) such holder must comply with the Guaranteed Delivery
Procedures (as defined below).
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ANY SHAREHOLDER WHOSE SHARES ARE REGISTERED IN THE NAME OF A BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST CONTACT SUCH PERSON
IF SUCH SHAREHOLDER DESIRES TO TENDER SUCH SHARES.
THE METHOD OF DELIVERY OF ALL REQUIRED DOCUMENTS, INCLUDING DELIVERY
THROUGH ANY BOOK-ENTRY TRANSFER FACILITY (AS DEFINED BELOW), IS AT THE OPTION
AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
If certificates for Shares are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or a facsimile copy
thereof) must accompany each such delivery.
BOOK-ENTRY TRANSFER. The Depositary will establish accounts with respect
to the Shares at the Depositary Trust Company, the Midwest Securities Trust
Company and the Philadelphia Depositary Trust Company and any other applicable
depository holding Shares (each a "Book-Entry Transfer Facility" and
collectively, the "Book-Entry Transfer Facilities") for purposes of the Offer.
Any financial institution that is a participant in the system of any Book-Entry
Transfer Facility may make book-entry transfers of the Shares by causing such
book-entry transfers to be made in accordance with that Book-Entry Transfer
Facility's procedure for such transfer. Although delivery of the Shares may be
effected through book-entry transfer at the Book-Entry Transfer Facilities, the
Letter of Transmittal (or facsimile copy thereof), properly completed and duly
executed, together with any required signature guarantees and any other required
documents and an Agent's Message, must, in any case, be received by the
Depositary at its address set forth on the front cover this Offer prior to the
Expiration Date, or the tendering shareholder must comply with the Guaranteed
Delivery Procedures described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The confirmation of a book-entry transfer of Shares into the Depositary's
account at a Book-Entry Transfer Facility as described above is referred to
herein as a "Book-Entry Confirmation." The term "Agent's Message" means a
message transmitted by a Book-Entry Transfer Facility to, and received by, the
Depositary and forming a part of a Book-Entry Confirmation, which states that
such Book-Entry Transfer Facility has received an express acknowledgment from
the participant in such Book-Entry Transfer Facility tendering the Shares that
such participant has received and agrees to be bound by the terms of the Letter
of Transmittal and this Offer and that the Purchaser may enforce such agreement
against the participant.
SIGNATURE GUARANTEES. No signature guarantee is required on Letters of
Transmittal if Shares are tendered (a) by a registered holder of the Shares that
has not completed either the box entitled "Special Delivery Instructions" or the
box entitled "Special Payment Instructions" on the Letter of Transmittal or (b)
for the account of financial institutions (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Securities Transfers Agents Medallion Program, the New York Stock Exchange, Inc.
Medallion Signature Program or the Stock Exchange Medallion Program (an
"Eligible Institution"). In all other cases, all signatures on the Letter of
Transmittal must be guaranteed by an Eligible Institution. See
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Instructions VI and VII to the Letter of Transmittal. If the certificates
for Shares are registered in the name of a person other than the signer of
the Letter of Transmittal, or if the certificates for Shares not accepted are
to be returned to, a person other than the registered owner(s) of the Shares
so surrendered, then the certificates for the Shares so tendered must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name (s) of the registered owner(s) appear on the certificates
for the Shares, with the signature(s) on such certificates or stock powers
guaranteed as aforesaid. See Instructions VI and VII to the Letter of
Transmittal.
GUARANTEED DELIVERY. If a holder of Shares desires to tender Shares
pursuant to the Offer and such holder's certificates are not immediately
available, or the procedures for book-entry transfer cannot be completed on a
timely basis, or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such Shares may nevertheless be
tendered, provided all the following conditions are satisfied (the "Guaranteed
Delivery Procedures"):
(a) such tender is made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Depositary is received by the
Depositary, as provided below, prior to the Expiration Date; and
(c) the certificates for all tendered Shares (or, in the case of
book-entry transfer of any Shares into the Depositary's account at a Book-Entry
Transfer Facility, an Agent's Message and timely Book-Entry Confirmation as
described above), in proper form for transfer, in each case, together with a
Letter of Transmittal (or facsimile copy thereof) properly completed and duly
executed, with any required signature guarantees and any other required
documents, are received by the Depositary within three business days after the
date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of certificates evidencing such Shares (or timely
Book-Entry Confirmation with respect to such Shares), and a Letter of
Transmittal (or facsimile copy thereof) properly completed and duly executed,
together with any required signature guarantees or, in the case of a book-entry
transfer, an Agent's Message and any other required documents. Accordingly,
payment might not be made to all tendering shareholders at the same time, and
will depend upon when certificates for Shares are received by the Depositary or
Book-Entry Confirmations of such Shares are received into the Depositary's
account at a Book-Entry Facility.
The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering shareholder and
the Purchaser upon the terms and subject to the conditions of the Offer.
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<PAGE>
FEDERAL INCOME TAX WITHHOLDING. To prevent backup federal income tax
withholding equal to 31% of the gross payments made pursuant to the Offer, each
shareholder who does not otherwise establish an exemption from such withholding
must notify the Depositary of such shareholder's correct taxpayer identification
number (or certify that such taxpayer is awaiting a taxpayer identification
number) and provide certain other information by completing the Substitute Form
W-9 included in the Letter of Transmittal.
Shareholders are encouraged to contact their own legal and tax consultants
with respect to the tax consequences and other effects of tendering Shares.
DETERMINATIONS OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the Shares to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Purchaser, in its sole discretion, which determination
shall be final and binding on all parties. The Purchaser reserves the absolute
right to reject any or all tenders it determines not to be in proper form or
with respect to which the acceptance of, or payment for, may, in the opinion of
the Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right to waive any of the conditions of the Offer and any defect or irregularity
in the tender of any particular Shares. No tender of Shares will be deemed to
be properly made until all defects or irregularities have been cured or waived.
Neither the Purchaser nor the Depositary is or will be obligated to give notice
of any defects or irregularities in tenders, and neither of them will incur any
liability for failure to give any such notice.
3. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 3, a tender of Shares pursuant
to the Offer is irrevocable. Shares tendered pursuant to the Offer may be
withdrawn, subject to the requirements set forth below, at any time before the
Expiration Time, and at any time after October 4, 1997 if the Shares sought to
be withdrawn have not previously been accepted by the Purchaser prior to the
Depositary's receipt of a proper notice of withdrawal.
For a withdrawal to be effective, the Depositary must timely receive a
written and signed notice of withdrawal by mail, overnight delivery, hand
delivery, or telegraphic or facsimile transmission. Such notice of withdrawal
must specify the name of the person having deposited the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered owner, if
different from that of the person who tendered such Shares. If the certificates
have been delivered or otherwise identified to the Depositary, then, prior to
the release of such certificates, the tendering shareholder must also submit the
serial numbers shown on the particular certificates evidencing the Shares and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution).
All questions as to the form and validity (including time of receipt) of notices
of withdrawal will be determined by the Purchaser, in its sole discretion, which
determination shall be final and binding on all parties. Neither the Purchaser
nor the Depositary is or will be obligated to give any notice of any defects or
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irregularities in any notice of withdrawal, and neither of them will incur any
liability for failure to give any such notice. Any Shares properly withdrawn
will thereafter be deemed not tendered for purposes of the Offer. Withdrawn
Shares may, however, be re-tendered before the Expiration Time by again
following the procedures described in Section 2.
4. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and therefore purchased) Shares which are validly tendered and not
withdrawn when, as and if it gives oral or written notice to the Depositary of
its acceptance of such Shares for payment pursuant to the Offer.
Upon the terms and subject to the conditions of Option One, the
Purchaser will purchase and pay the purchase price of $0.23 per share for all
Shares properly tendered pursuant to Option One and not withdrawn as
permitted in Section 3, as soon as practicable after the Expiration Time.
Upon the terms and subject to the conditions of Option Two, the Purchaser
will purchase and pay the purchase price of $0.26 per share for 37.5% of the
Shares, and the Purchaser, at its election and in such combination as it may
determine, will either purchase the remaining Shares at $0.23 per share or
return such Shares, for all Shares properly tendered pursuant to Option Two
and not withdrawn as permitted in Section 3, as soon as practicable after the
Expiration Time; provided, that all Shares purchased at $.23 per share
pursuant to Option Two will be purchased on a pro rata basis among all such
tendering shareholders. The number of Shares purchased from each shareholder
pursuant to Option Two shall, if necessary, be rounded upward to the next
whole number in order to avoid the receipt by the shareholder of a fractional
share. In all cases, payment for Shares accepted for payment pursuant to the
Offer will be made promptly but only after timely receipt by the Depositary
of certificates for Shares, a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other required documents. Any
Shares tendered pursuant to Option Two and not purchased will be promptly
returned to shareholders.
Payment for Shares purchased pursuant to the Offer will be made by the
Purchaser depositing the aggregate purchase price therefor with the Depositary,
which will act as agent for tendering shareholders for the purpose of receiving
payment from the Purchaser and transmitting payment to the tendering
shareholders. Under no circumstances will the Purchaser pay, or any tendering
shareholder be entitled to, interest on the purchase price. The Purchaser will
pay all stock transfer taxes, if any, payable on the transfer to it of Shares
purchased pursuant to the Offer.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO FULLY COMPLETE AND
SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL MAY BE
SUBJECT TO REQUIRED FEDERAL INCOME TAX WITHHOLDING OF 20% OF THE GROSS PROCEEDS
PAID TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER.
5. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Purchaser shall not
be required to accept for payment, purchase or pay for any Shares
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<PAGE>
tendered, and may terminate or amend the Offer if at any time on or before
the Expiration Time, any of the following events shall have occurred (as
determined by the Purchaser in good faith) which makes it inadvisable for the
Purchaser in its reasonable judgment to proceed with the Offer or with such
purchase or payment:
(a) there shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or administrative
agency or authority or tribunal or any other person, domestic or foreign, or
before any court or governmental, regulatory or administrative authority or
agency or tribunal, domestic or foreign, or any judgment, order or injunction
entered, enforced or deemed applicable by any such court, authority, agency or
tribunal, which:
(1) challenges the making of the Offer, the acquisition of Shares
pursuant to the Offer or otherwise related in any manner to the Offer; or
(2) could materially affect the business, condition (financial or
other), income, operations or prospects of the Company, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Company or its subsidiaries; or
(b) there shall have been any action threatened or taken, or approval
withheld, or any statute, rule or regulation proposed, sought, promulgated,
enacted, entered, amended, enforced or deemed to be applicable to the Offer, the
Purchaser or the Company by any government or governmental, regulatory or
administrative authority or agency or tribunal, domestic or foreign, which would
or might directly or indirectly:
(1) make the acceptance for payment of, or payment for, some or all
of the Shares illegal or otherwise restrict or prohibit consummation of the
Offer;
(2) delay or restrict the ability of the Purchaser, or render the
Purchaser unable, to accept for payment or pay for some or all of the
Shares;
(3) materially impair the contemplated benefits of the Offer to the
Purchaser; or
(4) materially affect the business, condition (financial or other),
income, operations or prospects of the Company, or otherwise materially
impair in any way the contemplated future conduct of the business of the
Company or its subsidiaries; or
(c) there shall have occurred the declaration of any banking moratorium or
suspension of payments in respect of banks in the United States; or
(d) any change (including any change in the cash position or reserve base
of the Company) from that reflected in the Company's Form 10-KSB for the period
ending December 31, 1996 as filed with the Commission on March 31, 1997 shall
occur or be threatened in the
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business, condition (financial or other), income, operations or prospects of
the Company which is or may be material to the Company or its subsidiaries; or
(e) less than 15,075,396 (80%) of the outstanding Shares are properly
tendered and accepted pursuant to the Offer; or
(f) the Company conducts its business other than in the ordinary course or
does any of the following without the consent of the Purchaser: (1) make any
material commitments or any material operations changes; (2) enter into any
material leases; (3) incur or guarantee any material obligations for borrowed
money; (4) issue, sell or redeem any capital stock or other securities; (5)
declare or pay any dividends or other distributions in respect of its
outstanding capital stock; (6) enter into any material employment or deferred
compensation contract or materially increase or announce any material increase
of salaries, wages, incentive compensation, bonus or other employee benefits or
programs for employees or retirees; (7) sell or otherwise dispose of, outside
the ordinary course of business, any assets, including its cash, in excess of
$10,000; or (8) prepay any existing indebtedness.
As a further condition, the Purchaser shall not be required to accept
for payment, purchase or pay for any Shares tendered, and may terminate or
amend the Offer, if the Board of Directors of the Company on or before of the
date of consummation of the Offer fail to elect Tony Viele as a director of
the Company or the directors and officers of the Company fail to submit their
respective resignations from such positions at the closing of the Offer.
The foregoing conditions are for the Purchaser's sole benefit and may be
asserted by the Purchaser regardless of the circumstances giving rise to any
such condition (including any action or inaction by the Purchaser) or may be
waived by the Purchaser in whole or in part. The Purchaser's failure at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time. Any determination by the Purchaser
concerning the events described in this Section 5 and any related judgment by
the Purchaser regarding the inadvisability of proceeding with the purchase of or
payment for any Shares tendered shall be final and shall be binding on all
parties.
6. PRICE RANGE OF SHARES; DIVIDENDS.
During May 1994, the Shares (symbol GREN) were delisted from the Nasdaq
System, Small-Cap Issues. The Shares are traded on the NASD Bulletin Board
under the symbol GREN.U, although the trading volume has historically been
limited. The high and low bid prices during the first quarter of 1997 were $.16
and $.09, respectively. The high and low bid prices for 1996 and 1995 were as
follows:
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1996 High Low
---- ---- ---
1st quarter $0.06 $0.06
2nd quarter 0.06 0.06
3rd quarter 0.13 0.06
4th quarter 0.13 0.03
1995
----
1st quarter 0.13 0.09
2nd quarter 0.13 0.13
3rd quarter 0.13 0.13
4th quarter 0.13 0.06
There has historically been only limited trading of the Shares,
according to information provided to the Purchaser by the Company and its
transfer agent. As a result, an isolated trade involving a small volume of
Shares may cause a significant increase or decrease in the reported closing
sales price for the Shares even though that isolated trade may not reflect a
change in the market (bid) price for the Shares and may or may not be
indicative of the underlying value of the Shares or the Company.
Notwithstanding such fluctuations based upon isolated, small volume trades,
the historical bid price range described in the table above indicates that
the Purchase Price in this Offer represents a significant premium over the
trading price for the Shares during the past few years.
As of December 31, 1996, there were approximately 1,200 holders of
record of the Shares, with 18,844,245 Shares outstanding.
Since inception, the Company has not paid any cash dividends on its
common stock. The Purchaser has been advised by the Company that any
earnings realized by the Company have been reinvested into the development of
its business and, accordingly, no payment of dividends is anticipated in the
foreseeable future.
7. BACKGROUND INFORMATION ABOUT THE COMPANY AND THE PURCHASER.
The Company was incorporated in 1978. From its inception, the Company
has been engaged in the acquisition and exploration of undeveloped leasehold
acreage in potential oil and gas producing areas and, more recently, in the
acquisition and development of more mature oil and gas properties in
established areas of production. In addition, the Company owns and operates
a gas gathering system. Since 1982, the Company has maintained its principal
place of business in Colorado and the address of its principal executive
office is 5990 Greenwood Plaza Blvd., Suite 127, Greenwood Village, Colorado.
The Company's primary area of oil and gas production is in central
Kansas, where the Company began a waterflood project in 1994. The Company is
the operator of the waterflood project and the related oil and gas leases.
The Company's primary exploratory efforts are in northwestern Colorado,
although the Company has not expended its
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resources in any exploratory drilling in recent years. The Company's gas
gathering business consists of a gas gathering system in southeastern Kansas.
In addition, prior to 1993, the Company owned and developed methane gas
reserves from coalbeds in southeastern Kansas. The sale of methane gas from
coalbeds generated a tax credit under Section 29 of the Internal Revenue
Code, but the Company could not utilize the benefits of the tax credit due to
its tax position. Therefore, in 1993, the Company sold its interests in the
properties associated with the methane gas reserves to an entity which could
utilize the tax credit, pursuant to the terms of an Asset Purchase Agreement
which provides that the Company will receive monthly payments that are
secured by a mortgage through the year 2002. The Company operates the
properties for a fee.
The Company is subject to the informational reporting requirements of
the Exchange Act, and in accordance therewith files periodic reports, proxy
statements and other information with the Commission. The foregoing
information was extracted from such reports. Additional information
concerning the Company, its business, properties, directors, officers, and
principal shareholders may be obtained from such filings with the Commission.
Such materials can be inspected and copied at the public reference facilities
of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549
and may also be obtained by mail from the Commission's Public Reference
Branch, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, certain
materials filed after May 1996 are available on the Commission's EDGAR
database on the Internet.
The Purchaser is a Texas limited liability company which has no assets
or liabilities other than the loan commitment described in Section 10 hereof
and certain cash assets which will be used to fund the payment of the
Purchase Price pursuant to the Offer. Tony Viele is the Manager and a member
of the Purchaser. Mr. Viele's principal occupation is oil and gas exploration
and development, individually and by and through Northport Production
Company, an affiliate of the Purchaser. Mr. Viele is a citizen of the United
States.
8. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The purpose of the Offer is for the Purchaser to acquire control of
Company with the intent of growing the Company through the immediate merger
of the Purchaser and it affiliate, Northport Production Company, with and
into the Company and thereafter through the acquisition of other oil and gas
properties, businesses and companies using equity securities of the Company
or by using third part financing, or by a combination of both. For those
shareholders who elect to retain their Shares or who elect to tender their
Shares pursuant to Option Two, it is part of the Purchaser's plan that the
Company will continue as a "public company," that the Shares which are not
purchased pursuant to the Offer will continue to be traded on the NASD
Bulletin Board or some other nationally-recognized trading mechanism and that
the Company will continue to timely fulfill its informational reporting
requirements under the Exchange Act.
Upon successful completion of the Offer, it is anticipated that the
current officers and directors of the Company will resign or be removed and
Mr. Viele will become, at least initially, the sole director of the Company.
Mr. Viele, as the sole director, will then elect officers chosen by him. Mr.
Viele does not own any securities of the Company, does not currently hold
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any position with the Company and has not received any remuneration or
benefits from the Company. He has not had any transactions with the Company
or representatives of the Company, although he has had discussions with
representatives of the Company concerning the Offer. See Section 9. Mr.
Viele's current occupation, which he has had for in excess of the past five
years, is a private oil and gas investor and operator both individually and
through Northport Production Company, an Oklahoma corporation and an
affiliate of the Purchaser.
9. INTEREST IN THE SHARES; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE
SHARES.
Neither the Purchaser nor any affiliate own any of the Shares and none
of them have been involved in any transactions in the Shares within the past
60 days. In addition, neither the Purchaser nor any affiliate has any
contracts, arrangements, understandings or relationships with respect to any
securities of the Company, although the Purchaser's representatives have
engaged in discussions with representatives of the Company concerning the
Offer.
10. SOURCE AND AMOUNT OF FUNDS.
All of the funds (a total of $4,334,176) needed to consummate the Offer
will be borrowed from third party lenders. Founders Equity Group, Inc.
("Founders") will provide $1,000,000 to the Purchaser to consummate the Offer
and some of the principal terms of the financing are as follows: (i) the
facility will be a term loan which will mature on December 31, 1997; (ii) the
loan will bear interest at 8% per annum; (iii) the loan will be personally
guaranteed by Mr. Viele and Northport Production Company; (iv) the collateral
for the loan will be a pledge of one-half of the shares of Northport
Production Company; and (v) Founders will receive a 2% commitment fee and
warrants to purchase 100,000 Shares at $.23 per share. In addition, C3, Inc.
has orally agreed to provide $900,000 to the Purchaser on terms identical in
all material respects to those of the Founders' commitment.
Domain Energy Corporation ("Domain") has orally agreed to provide not
less than $2,434,176 to the Purchaser to consummate the Offer. Some of the
principal terms of that financing are as follows: (1) the facility will be a
production loan; (2) Domain will receive a limited term overriding royalty
interest in certain oil and gas properties of the Company and Northport
Production Company which will entitle it to 60% of the net revenues received
from those properties; (3) the loan will remain in effect until such time as
Domain has received a return of its capital plus an internal rate of return
equal to 18%; and (4) the loan will be non-recourse to the borrowers.
Following consummation of the offer and completion of the mergers
referred to in Section 8, the loan will be paid from the cash and cash flow
of the combined Company. A copy of the loan commitment letter between the
Purchaser and Founders is attached as an exhibit to the Schedule 14D-1 filed
with the Commission by the Purchaser and Mr. Viele.
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
If less than all of the outstanding Shares are tendered, it is part of
the Purchaser's plan that the Company remain a "public company" following
consummation of the Offer. See Section 8. Accordingly, the Company will
continue to timely fulfill it informational reporting obligations under the
Exchange Act and take such other actions as may be
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necessary to enable the Shares which are not acquired pursuant to the Offer
to be traded on the NASD Bulletin Board or other nationally-recognized
trading mechanism.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Purchaser is not aware of any license or regulatory permit that
appears to be material to its business that might be adversely affected by
its acquisition of Shares as contemplated in the Offer or of any approval or
other action by any governmental, administrative or regulatory authority or
agency that would be required for the Purchaser's acquisition or ownership of
Shares as contemplated by the Offer. Should any such approval or other
action be required, the Purchaser currently contemplates that it will seek
such approval or other action. The Purchaser cannot predict whether it may
determine that it is required to delay the acceptance for payment of, or
payment for, Shares tendered pursuant to the Offer pending the outcome of any
such matter. There can be no assurance that any such approval or other
action, if needed, would be obtained or would be obtained without substantial
conditions or that the failure to obtain any such approval or other action
might not result in adverse consequences to the Company's business. The
Purchaser intends to make all required filings under the Exchange Act and
appropriate state tender offer laws. The Purchaser's obligations under the
Offer to accept for payment and pay for Shares is subject to certain
conditions. See Section 5.
13. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS.
Other than as set forth in the following paragraph, the Offer will not
be extended past the Expiration Time. The Purchaser expressly reserves the
right, in its sole discretion, to terminate the Offer and not accept for
payment or pay for any Shares not theretofore accepted for payment or paid
for upon the occurrence at any time prior to the Expiration Time of any of
the conditions specified in Section 5 by giving oral or written notice of
such termination to the Depositary and making a public announcement thereof.
Subject to compliance with applicable law, the Purchaser further reserves the
right to amend the Offer in any respect or to waive the limitation on the
minimum number of Shares to be purchased pursuant to the Offer. Amendments
to the Offer may be made at any time and from time to time effected by public
announcement thereof, such announcement, in the case of an extension, to be
issued no later than 8:00 A.M., Central Daylight Time, on the next business
day after the previously scheduled Expiration Time. Any public announcement
made pursuant to the Offer will be disseminated promptly to shareholders in a
manner reasonably designed to inform shareholders of such change. Without
limiting the manner in which the Purchaser may choose to make a public
announcement, except as required by applicable law, the Company shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release.
If the Purchaser materially changes the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Purchaser will give notice and extend the Offer to the extent
required by Rules 14d-4(c) and 14e-1(b) promulgated under the Exchange Act
and the Commission's rulings interpreting those Rules.
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<PAGE>
14. FEES AND EXPENSES.
The Purchaser has retained Securities Transfer Corporation as
Depositary. The Depositary will receive reasonable and customary compensation
for their services. The Purchaser will also reimburse the Depositary for
out-of-pocket expenses. Neither the Depositary nor any other person has not
been retained to make solicitations or recommendations in connection with the
Offer.
The Purchaser will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person, except Southwest Merchant
Group, for soliciting any Shares pursuant to the Offer. The Purchaser will,
however, on request, reimburse such persons for customary handling and
mailing expenses incurred in forwarding materials relating to the Offer to
the beneficial owners for which they act as nominees. No such broker,
dealer, commercial bank or trust company has been authorized to act as the
Purchaser's agent for purposes of the Offer. The Purchaser will pay (or
cause to be paid) any stock transfer taxes on its purchase of Shares.
15. MISCELLANEOUS
The Offer is not being made to, nor will the Purchaser accept tenders from,
owners of Shares in any jurisdiction in which the Offer or its acceptance would
not comply with the securities or Blue Sky laws of such jurisdiction.
NORTHPORT OPERATING COMPANY LC
August 5, 1997
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LETTER OF TRANSMITTAL
for
Common Stock, $0.10 Par Value
of
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION
Tendered Pursuant to the Offer to Purchase
for Cash All Outstanding Shares of Common Stock
of Great Eastern Energy and Development Corporation
by
NORTHPORT OPERATING COMPANY LC
DATED AUGUST 5, 1997
PLEASE FOLLOW CAREFULLY THE ACCOMPANYING INSTRUCTIONS
(Send this Letter of Transmittal and certificate(s) representing
Shares of Great Eastern Energy and Development Corporation
Common Stock to Securities Transfer Corporation as set forth below)
TO: Securities Transfer Corporation
16910 Dallas Parkway
Suite 100
Dallas, Texas 75240
Attention: George Johnson
FOR INFORMATION, CALL: 972-447-9890
Delivery of this Letter of Transmittal to an address other
than as set forth above will not constitute a valid delivery.
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- -------------------------------------------------------------------------------
DESCRIPTION OF SHARES SURRENDERED
- -------------------------------------------------------------------------------
Name(s) and Address(es) of Great Eastern Energy and
Registered Holder(s) Development Corporation Common
(Please fill in. If already Stock Certificate(s) Surrendered
filled in, please correct any
errors.)
- -------------------------------------------------------------------------------
Certificate Number(s) Number of Shares Represented by
Certificate(s)
OPTION ONE (AS DEFINED BELOW)
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
OPTION TWO (AS DEFINED BELOW)
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
Total Shares. . . . . . . . . . . . . -------------------------------------
(Attach a separate, signed schedule if necessary)
- -------------------------------------------------------------------------------
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TERMS AND CONDITIONS
The person on whose behalf the within described tender is made (the
"Tendering Holder") hereby tenders to Northport Operating Company LC (the
"Purchaser") the Shares of Common Stock, par value $0.10 per share of Great
Eastern Energy and Development Corporation listed herein and on the attached
sheets, if any (the "Tendered Shares"), pursuant to the Purchaser's Offer to
Purchase for Cash all of the outstanding Shares of Common Stock of Great Eastern
Energy and Development Corporation as described in the Offer to Purchase, dated
August 1, 1997, receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer").
The Tendering Holder acknowledges that Purchaser is offering the
shareholders of Great Eastern Energy and Development Corporation the
opportunity to tender all of their Shares at $.23 per share ("Option One").
Alternatively, Purchaser is offering a second option pursuant to which the
shareholders of Great Eastern Energy and Development Corporation may tender
all of their Shares, of which 37.5% will be purchased at $.26 per share and
the remainder, at the Purchaser's election and in such combination as it may
determine, will be purchased at $.23 per share or returned to the Tendering
Shareholders ("Option Two"). It is the Purchaser's desire in offering Option
Two to purchase only 80% of the outstanding Shares and thereby maintain Great
Eastern Energy and Development Corporation's status as a "public company."
See Section 8. All Shares purchased at $.23 per share pursuant to Option Two
will be purchased on a pro rata basis among the Tendering Shareholders. The
number of Shares purchased from each Tendering Holder pursuant to Option Two
shall, if necessary, be rounded upward to the next whole number in order to
avoid the receipt by the shareholder of a fractional share.
The Tendering Holder acknowledges and agrees that all Tendered Shares
delivered pursuant to Option One and/or Option Two, as indicated above, are
delivered in accordance with the terms of the foregoing paragraph.
Upon the terms and conditions of the Offer, the Tendering Holder hereby (i)
delivers to the Depositary the Tendered Shares, and (ii) sells, assigns and
transfers to the Purchaser all right, title and interest in and to the Tendered
Shares being tendered hereby. The Tendering Holder represents that the
Tendering Holder has read and agrees to all terms and conditions set forth in
the Offer and herein.
The Tendering Holder hereby represents and warrants that the Tendering
Holder has full power and authority to tender, sell, assign and transfer the
Tendered Shares and that the Purchaser will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claim when the same are received by the Purchaser.
The Tendering Holder will, upon request of the Purchaser or the Depositary,
execute and deliver any additional documents deemed by the Depositary or the
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of the Tendered Shares.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the Tendering Holder and every obligation of the
Tendering Holder hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the Tendering Holder. This tender is
irrevocable, subject to limited withdrawal rights described in the Offer.
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The Tendering Holder understands that acceptance of the Offer will
constitute an agreement between the Tendering Holder and the Purchaser upon the
terms and subject to the conditions of the Offer and risk of loss and title to
the Tendered Shares will pass only when the Shares, this Letter of Transmittal
and any other required documentation are properly completed and received by the
Depositary, all in accordance with the Instructions contained herein and in the
Offer.
Unless otherwise indicated in Box A or Box B below, the Tendering Holder
hereby instructs the Depositary to mail the purchase price for the Tendered
Shares (and to mail any Tendered Shares returned pursuant to Option Two) to the
undersigned at the address specified above.
-4-
<PAGE>
- -------------------------------------------------------------------------------
BOX A:
SPECIAL PAYMENT INSTRUCTIONS
Fill in only if the check to be issued by the Depositary is to be issued in
a name other than the name appearing on the first page hereof.
Name:
-------------------------
(Please Print)
Address:
----------------------
------------------------
------------------------
(Zip Code)
- -------------------------------------------------------------------------------
BOX B:
SPECIAL DELIVERY INSTRUCTIONS
Fill in only if the check to be issued by the Depositary is to be sent to
an address other than the address appearing on the first page hereof, or if Box
A is filled in, to an address other than the address appearing therein.
Deliver to:
Address:
----------------------
------------------------
------------------------
(Zip Code)
SIGN HERE
------------------------------
------------------------------
(signature(s) of Owner(s))
See Items VI and VII on Page 5 hereof for signature guarantee requirements)
Dated: ________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or by person(s) authorized to become registered holder(s) by
certificate(s) and documents transmitted herewith. If signature is by an
officer on behalf of a corporation or by an executor, administrator, trustee,
guardian, attorney-in-fact, agent or other person acting in a fiduciary or
representative capacity, please provide the following information, and see Item
IV on page 4 hereof).
Name(s)
-------------------
---------------------
---------------------
(Print Name(s))
Capacity (full title)
-5-
<PAGE>
Address
-------------------
---------------------
---------------------
(Print Address, including Zip Code)
Area Code and Telephone Number _______________
Social Security or Employer Identification Number _______
(Also complete Substitute Form W-9 on page 7 hereof)
-6-
<PAGE>
INSTRUCTIONS TO LETTER OF TRANSMITTAL
I. GENERAL.
In accordance with the Offer, each Shareholder of Great Eastern Energy and
Development Corporation is entitled upon surrender of certificate(s)
representing the Tendered Shares of Great Eastern Energy and Development
Corporation to receive in exchange therefor a check in the amount equal to the
aggregate of $0.23 or $0.26 per Share hereby surrendered, depending upon whether
such Shares are surrendered pursuant to Option One or Option Two (with the
Purchaser being entitled to return up to one-half of any Shares surrendered
pursuant to Option Two). YOU ARE URGED TO COMPLETE AND RETURN THIS LETTER OF
TRANSMITTAL PROMPTLY. NO CONDITIONAL OR CONTINGENT SURRENDER OF TENDERED SHARES
WILL BE ACCEPTED.
UNTIL YOU HAVE SURRENDERED TO THE DEPOSITARY YOUR CERTIFICATE(S), OR AN
AFFIDAVIT RELATING TO THE LOSS OF THE CERTIFICATE(S), AND A PROPERLY
COMPLETED AND SIGNED LETTER OF TRANSMITTAL, SUBSTITUTE W-9 AND ANY OTHER
REQUIRED DOCUMENTS YOU WILL NOT RECEIVE THE PURCHASE PRICE.
II. EXECUTION AND DELIVERY
This Letter of Transmittal or a facsimile hereof must be properly
completed, dated and signed, and must be mailed with your certificate(s)
representing the Tendered Shares and any other required documents to the
Depositary, at the address set forth on the first page hereof. THE METHOD OF
DELIVERY OF CERTIFICATE(S), LETTERS OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS TO THE DEPOSITARY IS AT YOUR OPTION AND RISK. IF MAIL IS USED TO SEND
CERTIFICATE(S), REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IS SUGGESTED. An addressed envelope is enclosed for your convenience. Delivery
of your certificate(s) that represent the Tendered Shares will not be complete
until actually received by the Depositary together with any other required
documents.
III. INADEQUATE SPACE
If there is insufficient space to list all your stock certificates being
submitted to the Depositary, please attach a separate signed schedule.
IV. SIGNATURES
The signature (or signatures, in the case of certificate(s) owned by two or
more joint holders where record ownership is not stated in the alternative) on
this Letter of Transmittal or facsimile should correspond exactly with the name
as written on the face of the stock certificate(s) transmitted, without
alteration, enlargement or any change whatsoever, unless the certificate(s)
representing the Tendered Shares described on this Letter of Transmittal have
been transferred or assigned by the registered holder, or holders, in which
event this Letter of Transmittal or facsimile should be signed in exactly the
same form as the name of the last transferee indicated on the transfers attached
to or endorsed on the certificate(s).
-7-
<PAGE>
If any certificates representing the Tendered Shares are registered in
different names on several certificates, it will be necessary to complete, sign
and submit as many separate Letters of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal or facsimile or any certificate(s) are signed
by a trustee, executor, administrator, guardian, officer of a corporation,
attorney-in-fact, agent or in any other representative or fiduciary capacity,
the person signing must give such person's full title in such capacity and
appropriate evidence of authority to act in such capacity must be forwarded with
this Letter of Transmittal or facsimile.
V. CHECK PAYABLE TO SAME NAME AS ON CERTIFICATE
If the check to be issued by the Depositary is payable to exactly the same
name that appears on the certificate(s) formerly representing the Tendered
Shares being submitted herewith, you will not be required to endorse such
certificate(s).
VI. CHECK PAYABLE TO DIFFERENT NAME OR ADDRESS
If the check to be issued by the Depositary is payable other than in
exactly the name and address of the registered holder of the certificate(s)
submitted herewith, then the certificate(s) submitted must be properly endorsed
to the person who is to receive such check, or accompanied by appropriate stock
powers, properly executed by such registered holder and the signature guaranteed
by a participant in the Securities Transfers Agents Medallion Program, the Stock
Exchange Medallion Program or the New York Stock Exchange, Inc. Medallion
Signature Program (each of the foregoing being referred to herein as an
"Eligible Institution"). Also, in such case this Letter of Transmittal or
facsimile must be signed by the transferee or by his agent, and should not be
signed by the transferor. The signature of such transferee or agent must also
be guaranteed by the Eligible Institution.
VII. CORRECTION OF OR CHANGE IN NAME
For a correction of name or for a change in name which in either case does
not involve a change of ownership, proceed as follows: (i) for a change in name,
by marriage, etc., the surrendered certificate(s) should be endorsed, e.g.,
"Mary Doe, now by marriage Mrs. Mary Jones," with the signature guaranteed by an
Eligible Institution; and (ii) for a correction in name, the surrendered
certificate(s) should be endorsed, e.g., "James E. Browne, incorrectly inscribed
as J.E. Brown," with the signature guaranteed by an Eligible Institution.
VIII. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES
Any questions and requests for assistance or additional copies of this
Letter of Transmittal and these instructions may be directed to the Depositary
at the address or telephone number set forth on the first page hereof.
IX. SPECIAL ISSUANCE, PAYMENT AND DELIVERY INSTRUCTIONS
If the check to be issued in exchange for the Tendered Shares is to be
issued in the name of and sent to a person other than the name appearing on the
first page hereof or to an address other than that
-8-
<PAGE>
appearing on the first page hereof or sent to a person other than the name
appearing on the first page hereof, the appropriate boxes on this Letter of
Transmittal or facsimile should be completed.
X. LOST, STOLEN OR DESTROYED CERTIFICATES
If your certificate representing the tendered Shares has been lost, stolen
or destroyed, so indicate on the front of this Letter of Transmittal. The
Depositary will send you additional documentation that will need to be completed
to effectively surrender such lost, stolen or destroyed certificate.
XI. WAIVER OF CONDITIONS
The Depositary and the Purchaser reserve the absolute right to waive any of
the conditions set forth herein or any defect with respect to the transmittal of
certificate(s) representing Tendered Shares.
XII. MISCELLANEOUS
Neither the Purchaser nor the Depositary is under any duty to give
notification of defects in any Letter of Transmittal or facsimile or in any
other required documents and shall not incur any liability for failure to give
such notification. Any and all Letters of Transmittal or facsimiles (including
any other required documents) not in proper form are subject to rejection. The
Purchaser shall have the absolute right to reject any surrender of Tendered
Shares not in proper form or to waive any defect or irregularity. Surrender of
Tendered Shares will be deemed to have NOT been made until all defects and
irregularities have been cured or waived.
IMPORTANT TAX INFORMATION
Under federal income tax law, a registered holder whose certificate(s) are
surrendered for exchange and payment is required to provide the Purchaser with
such registered holder's correct taxpayer identification number on Substitute
Form W-9 below. If such registered holder is an individual, the taxpayer
identification number is such individual's social security number. If the
Depositary is not provided with the correct taxpayer identification number, the
registered holder may be subject to a $50 penalty imposed by the Internal
Revenue Service. In addition, payments that are made to such registered holder
may be subject to federal income tax backup withholding.
Certain registered holders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. Nonetheless, exempt registered holders should complete
the Substitute Form W-9 below and so indicate their exempt status by writing
"exempt" across the face of the Substitute Form W-9. In order for a foreign
individual to qualify as an exempt recipient, that registered holder must submit
a statement, signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Depositary. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions.
-9-
<PAGE>
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the registered holder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding payments that are made to a registered
holder, the registered holder is required to notify the Depositary of his
correct taxpayer identification number by completing the form below certifying
that the taxpayer identification number provided on Substitute Form W-9 is
correct (or that such registered holder is awaiting a taxpayer identification
number) and that (1) the registered holder has not been notified by the Internal
Revenue Service that he is subject to backup withholding as a result of failure
to report all interest or dividends or (2) the Internal Revenue Service has
notified the registered holder that he is no longer subject to backup
withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The registered holder is required to give the Depositary the social
security number or employer identification number of the registered holder of
the certificate(s). If the certificate(s) are in more than one name or are not
in the name of the actual owner, consult the enclosed guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance on which number to report.
-10-
<PAGE>
================================================================================
PAYOR'S NAME:
------------------------------
Name, as shown on first page
hereof (if held in joint
account, list first and circle
the name of the person or
entity whose number you enter
in Part I below.)
- --------------------------------------------------------------------------------
Address (if stockholder does
not complete, signature in
Part 1 below will constitute a
certification that the address
on the first page hereof is
correct.)
- --------------------------------------------------------------------------------
City, State and ZIP code
- --------------------------------------------------------------------------------
Part 1-PLEASE PROVIDE YOUR TIN TIN _________________________
IN THE BOX AT RIGHT AND
CERTIFY BY SIGNING AND DATING BELOW Social Security Number or
Employer Identification Number
- --------------------------------------------------------------------------------
SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
Department of the Treasury For Payees exempt from backup
Internal Revenue Service withholding, see the enclosed
Guidelines for Certification
Part II - Awaiting TIN / / of Taxpayer Number on
Substitute Form W-9 and
complete as instructed under
"Important Tax Information"
above.
- --------------------------------------------------------------------------------
Payor's Request for Taxpayer
Identification Number (TIN)
------------------------------
================================================================================
CERTIFICATION. Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all interest or dividends, or the
IRS has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of under
reporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received any
other notification from the IRS that
-11-
<PAGE>
you are no longer subject to backup withholding, do not cross out item (2).
(Also see the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.)
SIGNATURE DATE
------------------------------ ----------------------------
-12-
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
For this type of account: Give the SOCIAL SECURITY For this type of Give the EMPLOYER
number of account: IDENTIFICATION number of
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. An individual's The individual 8. Sole proprietorship The owner
account
- ------------------------------------------------------------------------------------------------------------------
2. Two or more The actual owner of the 9. A valid trust of The legal entity (do not
individuals (joint account or, if combined pension trust. furnish the identifying
account) any one of the number of the personal
individuals (1) representative or trustee
unless the legal entity
itself is not designated
in the account title.) (5)
- ------------------------------------------------------------------------------------------------------------------
3. Husband and wife The actual owner of the 10. Corporate account The corporation
(joint account) account or, if joint
funds, either person (1)
- ------------------------------------------------------------------------------------------------------------------
4. Custodian account of a The minor (2) 11. Religious, The organization
minor (Uniform Gift to charitable, or
Minors Act) educational organization
account.
- ------------------------------------------------------------------------------------------------------------------
5. Adult and minor (joint The adult or, if the minor 12. Partnership account The partnership
account) is the only contributor, held in the name of the
the minor (1) business
- ------------------------------------------------------------------------------------------------------------------
6. Account in the name of The ward, minor, or 13. Association, The organization
guardian or committee for incompetent person (3) club, or other tax-exempt
a designated ward, minor, organization
or incompetent person
- ------------------------------------------------------------------------------------------------------------------
7. a. The usual The grantor-trustee (1) 14. A broker or The broker or nominee
revocable savings trust registered nominee
account (grantor is also
trustee)
- ------------------------------------------------------------------------------------------------------------------
-13-
<PAGE>
- ------------------------------------------------------------------------------------------------------------------
For this type of account: Give the SOCIAL SECURITY For this type of Give the EMPLOYER
number of account: IDENTIFICATION number of
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
b. So-called trust The actual owner (1) 15. Account with the The public entity
account that is not a Department of
legal or valid trust Agriculture in the name
under State law. of a public entity (such
as a State or local
government, school
district, or prison)
that received
agricultural program
payments
- ------------------------------------------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE CONSIDERED TO BE THAT OF THE
FIRST NAME LISTED.
</TABLE>
-14-
<PAGE>
Exhibit 11(a)(2)
FOR IMMEDIATE RELEASE July 25, 1997
NORTHPORT OPERATING COMPANY LC MAKES TENDER OFFER FOR
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION
Oklahoma City, Oklahoma -- Northport Operating Company LC (Northport LC),
an affiliate of Northport Production Company (Northport), today announced that
it is making a competing cash tender offer for up to 100% of the total
outstanding common shares of Great Eastern Energy and Development Corporation
(Great Eastern) of Denver, Colorado. The tender offer is conditional on
receiving a minimum of 80% of the outstanding shares. The offer would entitle
current shareholders of Great Eastern the opportunity to tender 100% of their
shares at $.23 per share. However, because Northport LC intends to maintain the
public status of Great Eastern, it is also offering Great Eastern shareholders a
financial inducement to retain a portion of their shares. For Great Eastern
shareholders that elect to take advantage of this second option, Northport LC
will accept up to 75% of Great Eastern's outstanding shares of which one half
will be purchased at $.26 per share with the remaining one half, at Northport
LC's option, either purchased at $.23 per share or returned to the shareholder.
To the extent that more than 75% of Great Eastern shares are tendered pursuant
to this second option, the excess shares will be purchased by Northport LC at
$.23 per share. Currently there are 18,844,245 shares outstanding. In a thinly
traded market, the closing price of Great Eastern on the OTC Bulletin Board as
of market close on July 23, 1997 was $.25 per share.
Upon successful completion of this offer, Northport LC and Northport will
be merged into Great Eastern which will continue to operate as a public
corporation under the surviving name of Great Eastern Energy and Development
Corporation. The funds necessary to consummate this tender offer will be
provided by bank financing in the amount of $3.2 million, with additional
capital provided from other sources. This proposed tender offer will be open
for twenty business days from the date of the published dissemination of this
tender offer.
A previous tender offer submitted by Caprito Gas Corporation (Caprito) of
Midland, Texas, calls for tendering a minimum of 80% and up to 100% of all
outstanding Great Eastern shares at $.22 per share. Under Caprito's plan, the
surviving entity would become a private corporation where all non-tendering
shareholders would be frozen out at $.22 per share.
Tony Viele, chief executive officer of Northport LC, commented, "Our
intention is to provide an offer that will allow inclined shareholders to tender
100% of their shares at a greater value ($.23 per share) than the Caprito offer
or the opportunity to tender a portion of their shares at an even greater value
($.26 per share) while maintaining an equity interest in a public corporation.
In addition, shareholders have a third option to maintain their full equity
positions in order to participate in our anticipated growth. We believe our use
of new recovery technologies and 3-D seismic, in addition to our plans to make
certain acquisitions will enhance and maximize shareholder value."
Northport Operating Company LC is an affiliate of Northport Production
Company. Northport, headquartered in Oklahoma City, Oklahoma, is a private
company engaged in the exploration and development of oil and natural gas and
has production principally in New Mexico and Oklahoma.
Contacts: John Vaughan, Northport 405/848-1212
Richard Marcus, Southwest Merchant Group 214/373-0024
<PAGE>
Exhibit 11(b)
[LETTERHEAD OF FOUNDERS EQUITY GROUP]
July 31, 1997
Via Facsimile 214-969-2622
Mr. Steve Cook
Managing Director
Southwest Merchant Group, Inc.
3422 Binkley
Dallas, Texas 75205
Re: Commitment Letter for Northport Operating Company, LC
Dear Steve:
Founders Equity Group, Inc. ("Founders") is pleased to commit to provide debt
financing to Northport Operating Company, LC ("Borrower") of One Million dollars
($1,000,000) for use in conjunction with the acquisition of a minimum of 80% of
the outstanding shares of common stock of Great Eastern Energy and Development
Corporation ("Great Eastern"). This letter represents Founders' commitment to
provide such financing, subject to (i) terms and conditions specified herein,
and (ii) negotiation, execution and delivery of documentation acceptable to the
satisfaction of Founders and its counsel.
BORROWER: Northport Operating Company, LC
GUARANTORS: Northport Production Company, its subsidiaries, affiliates
and Tony Viele personally.
LENDER: Founders Equity Group, Inc.
TOTAL COMMITMENT: $1,000,000
INTEREST RATE: 8%
PURPOSE: To assist in the acquisition of a minimum of 80% of the
outstanding shares of common stock of Great Eastern.
MATURITY: December 31, 1997
DEPOSITORY: $1,000,000 shall be delivered to Securities Transfer
Corporation as depository in connection with the acquisition
of a minimum of 15,075,396 shares of Great Eastern common
stock. These funds are not to be released by the depository
unless a minimum of 15,075,396 shares (80% of the
outstanding shares) are received by the depository and
accepted by the Borrower.
<PAGE>
Mr. Steve Cook
July 31, 1997
Page 2
PLEDGE OF STOCK: To further secure this loan, Tony Viele agrees to deliver to
Founders one-half the shares and debt instruments held by
him in Northport Production Company.
VOTING PREFERRED: If all interest, principal and fees are not repaid before
the earlier of (i) five days from the tender offer, or
(ii) fifteen days from funding to Securities Transfer
Corporation, Borrower agrees to issue to Founders a class
of preferred stock that gives Founders 51% of the voting
control in Borrower.
COMMITMENT FEE: 2% of the total commitment amount payable upon funding to
Securities Transfer Corporation.
WARRANT COVERAGE: Upon completion of the tender, Founders shall be issued a
five year warrant to purchase 100,000 shares of Great
Eastern or successor public company at $0.23.
This commitment letter, when executed, shall constitute the final entire
agreement of the parties with respect to the subject matter hereof and shall
supersede and replace any other previous commitment or arrangements relating to
the subject matter hereof, whether written or oral and may not be contradicted
by evidence of prior, contemporaneous or subsequent oral agreements of the
parties. There are no written or oral commitments or other agreements between
Borrower and Founders.
Sincerely,
/s/ Thomas J. Spackman, Jr.
- ---------------------------------
Thomas J. Spackman, Jr.
President
TSJ/ra
cc: Scotty D. Cook (CEO and Chairman/Founders Equity Group, Inc.)
<PAGE>
Exhibit 11(c)
DEPOSITARY AGREEMENT
August 1, 1997
Securities Transfer Corporation
16910 Dallas Parkway, Suite 100
Dallas, TX 75248
Attention: George Johnson
Dear Sirs:
Northport Operating Company LC (the "Offeror") is inviting the shareholders of
Great Eastern Energy and Development Corporation ("Great Eastern") to tender all
of the outstanding shares of Great Eastern common stock, par value $.10 per
share (the "Shares"), upon the terms and conditions set forth in the Offer to
Purchase and the Letter of Transmittal annexed hereto as Exhibits A and B,
respectively (collectively, the "Offer").
The Offeror hereby appoints Securities Transfer Corporation ("you" or the
"Depositary") to act as Depositary in connection with the Offer. For services
rendered as Depositary hereunder, you shall be entitled to the compensation set
forth on Schedule I attached hereto.
The Offer is being made by the Offeror to all holders of Shares on or about
August 5, 1997. The Letter of Transmittal that will accompany the Offer to
Purchase is to be used by the stockholders of the Offeror to accept the Offer,
and contains instructions with respect to the delivery of certificates for
Shares tendered.
In carrying out your duties as Depositary, you agree to act in accordance with
the following:
1. The Offer shall expire at 5:00 p.m., Central Daylight Time on September 1,
1997 (the "Initial Expiration Date"), or at any subsequent time to which
the Offeror may extend the Offer. The Offeror expressly reserves the right
to extend the Offer from time to time. The Offer may be extended by the
Offeror giving oral or written notice to you before 8:00 a.m. central
daylight time, on the business day following the Initial Expiration Date or
any subsequent scheduled expiration date. The later of the Initial
Expiration Date or the latest time and date to which the offer may be so
extended is herein referred to as the "Expiration Date."
2. You will immediately establish an account with the various Book-Entry
Facilities for purposes of the Offer and any financial institution that is
a participant in any of the systems of the Book-Entry Transfer Facilities
may make book-entry delivery of the Shares by causing the Book-Entry
Transfer Facilities to transfer such Shares into the account maintained by
you pursuant to this paragraph in accordance
<PAGE>
with procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer, the Letter of Transmittal
(or facsimile thereof) with any required signature guarantees and any
other documents must, in any case, be received by you in order for Shares
to be properly tendered.
3. You are to examine the Notices of Guaranteed Delivery, Letters of
Transmittal, certificates for Shares ("Share Certificates") and other
documents delivered or mailed to you to ascertain whether the Letters of
Transmittal or other documents are filled out and executed in accordance
with instructions set forth therein. In each case where the Letter of
Transmittal or other document has been improperly filled out or executed
or, for any other reason, is not in proper form, or some other irregularity
in connection with the acceptance of the Offer exists, you will notify the
Offeror of such matter and endeavor to take such action as may be necessary
to cause such irregularity to be corrected to the satisfaction of the
Offeror.
With the written approval of an Officer of the Offeror, or any party
designated by the Offeror, you are authorized to waive irregularities in
connection with the acceptance of the Offer.
4. If a stockholder desires to tender shares pursuant to the Offer and such
stockholder's Share Certificates are not immediately available or time will
not permit all required documents to reach you on or prior to the
Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be deemed to be
tendered if all the following guaranteed delivery procedures are fully
complied with:
(i) such tender is made by or through an Eligible Institution (as
defined in the Offer);
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the
Depositary, is received by you as provided below, on or prior
to the Expiration Date; and
(iii) the Share Certificates or a Book-Entry Confirmation (as defined
in the Offer) representing all tendered Shares, in proper form
for transfer together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required
signature guarantees (or, in the case of a book-entry transfer of
Shares, an Agent's message (as defined in the Offer)) and any
other documents required by the Letter of Transmittal are
received by you within three business days after the date of
execution of the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by facsimile transmission to you and must include a guarantee
by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery.
Page 2
<PAGE>
Notwithstanding any other provisions hereof, payment for Shares accepted
for payment pursuant to the Offer will in all cases be made only after
timely receipt by you of Share Certificates for, or of Book-Entry
Confirmations with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), together with any
required signature guarantees (or, in the case of book-entry transfer of
Shares, an Agent's message) and any other documents required by the Letter
of Transmittal. Accordingly, payment might not be made to all tendering
stockholders at the same time, and will depend upon when Share Certificates
are received by you or Book-Entry Confirmations of such Shares are received
into your account at the Book-Entry Facility.
5. The Offeror will purchase Shares duly tendered on the terms and subject to
the conditions set forth in the Offer. Payment for Shares duly tendered
and purchased pursuant to the Offer will be made by check on behalf of the
Offeror by you as soon as practicable after notice of acceptance of said
Shares by the Offeror is received by you. Federal Funds will be deposited
with you 24 hours before the day checks are mailed or delivered by you.
The Offeror will wire funds to: Duncanville National Bank, P. O. Box
381910, Duncanville, Texas 75138, for the account of Securities Transfer
Corporation, as Escrow Agent.
6. Shares tendered pursuant to the Offer are irrevocable, except that Shares
tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore purchased by the Offeror, may also
be withdrawn at any time after October 4, 1997, if not accepted for
purchase. See the Offer to Purchase for further details.
7. The Offeror shall not be required to purchase any Shares tendered if any of
the conditions set forth in the Offer are not met. Notice of any decision
by the Offeror not to purchase or pay for any shares tendered shall be
given (and confirmed in writing) by the Offeror to you.
8. If, pursuant to the Offer, the Offeror does not accept for purchase all or
part of the Shares tendered, you shall promptly return the deposited
certificates for Shares, with any related required documents and the Letter
of Transmittal relating thereto that are in your possession, to the persons
who deposited same, together with a notice explaining the reasons for their
return.
9. Certificates for unpurchased Shares shall be forwarded by (a) first class
mail under a blanket surety bond protecting you and the Offeror from loss
or liability arising out of the non-
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receipt or non-delivery of such certificates for Shares, or (b) by
registered mail insured separately for the replacement value of such
certificates for Shares.
10. As Depositary hereunder, you:
a. shall have no duties or obligations other than those specifically set
forth herein or in Exhibits A or B;
b. will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness
of any stock certificates or the Shares represented thereby deposited
with you hereunder, and will not be required to and will make no
representation as to the validity, value or genuineness of the Offer;
c. shall not be obligated to take any legal action hereunder which might,
in your judgment, involve any expense or liability, unless you shall
have been furnished with such indemnity as shall be reasonably
satisfactory to you;
d. may rely on and shall be protected in acting in reliance upon any
certificate, instrument, opinion, notice, letter, telegram or other
document or security delivered to you and believed by you to be
genuine and to have been signed by the proper party or parties;
e. may rely on and shall be protected in acting upon written instructions
from John Vaughan, who is an officer of the Offeror;
f. may consult counsel satisfactory to you (including counsel for the
Offeror) and the opinion of such counsel shall be full and complete
authorization and protection in respect to any action taken, suffered
or omitted by you hereunder in good faith and in accordance with the
opinion of such counsel; and
g. shall not be called upon at any time to advise any person tendering
hereunder as to the wisdom of making such tender or as to the market
value or decline or appreciation in market value of any Share.
11. At 5:00 p.m. central daylight time, or as promptly as practicable
thereafter, daily or more frequently if requested as to major tally
figures, you shall advise the party named below by telephone or by
facsimile transmission as to (i) the number of Shares duly tendered; (ii)
the number of Shares defectively tendered and the nature of the defects;
(iii) the number of Shares duly tendered represented by certificates
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physically held by you; (iv) the number of Shares represented by Notice of
Guaranteed Delivery; (v) the number of Shares withdrawn on such day; and
(vi) the cumulative totals of Shares in categories (i) through (v) above
through 12:00 noon on such day:
(a) Mr. John Vaughan
Telephone No. 405-848-1212
Facsimile No. 405-840-2528
(b) Mr. Richard Marcus
Telephone No. 214-373-0024
Facsimile No. 214-696-2622
You shall also furnish to the above persons a written report by facsimile
transmission confirming any of the above information which has been
communicated orally by telephone on the day following any such oral
communication.
You shall cooperate with and furnish to the Offeror, Southwest Merchant
Group and any other organization (and its representatives) designated by
the Offeror, such other information on the tendering stockholders as may be
reasonably requested from time to time.
You shall furnish to the Offeror, upon request, master lists of Shares
tendered for purchase, including an A to Z list of the tendering
stockholders.
You are also authorized and directed to provide the persons listed above or
any other person designated by such person with such other information
relating to the Shares, the Offer to Purchase, Letter of Transmittal, and
Notice of Guaranteed Delivery as the Offeror or such person(s) may
reasonably request from time to time.
12. All shares duly purchased by the Offeror pursuant to the Offer should be
canceled.
13. You are not authorized to offer to pay any concessions, commissions or
solicitation fees to any broker, dealer, bank or other persons or to engage
or utilize any person to solicit tenders.
14. Letters of Transmittal shall be stamped by you as to the date of receipt
thereof and shall be preserved by you for a period of time at least equal
to the period of time you preserve other records pertaining to the transfer
of securities. You shall dispose of unused Letters of Transmittal and
other surplus materials by returning them to the Offeror.
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15. Any inconsistency between this agreement, on the one hand, and the Offer to
Purchase and Letter of Transmittal (as they may be amended from time to
time), on the other hand, shall be resolved in favor of the Offer to
Purchase and Letter of Transmittal, except with respect to the duties,
liabilities and indemnification of you as Depositary.
16. The Offeror covenants and agrees to indemnify and hold you harmless against
any loss, liability or expenses incurred without gross negligence or bad
faith on your part arising out of or in connection with the administration
of your duties hereunder, including the cost and expenses of defending
yourself against any claim or liability in the premises.
17. This agreement and appointment as Depositary shall be construed and
enforced in accordance with the laws of the State of Texas, and shall inure
to the benefit of, and the obligations created hereby shall be binding
upon, the successors and assigns of the parties hereto. This agreement is
intended for the benefit of the parties hereto and is not intended to
confer upon any other person or entity any rights or remedies. THIS
AGREEMENT MAY NOT BE MODIFIED ORALLY.
18. This agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original but all of which together shall
constitute one and the same agreement.
19. You will arrange to comply with IRS regulations with regard to obtaining
certified Tax Identification Numbers (TIN). We understand that you are
required to deduct 31% on payments (a) to non-exempt holders who have not
supplied their correct TIN and the required certification and (b) to
holders as to whom you have been instructed by the IRS to deduct. You will
forward appropriate funds to the IRS.
For further information, refer to Instruction 8 regarding backup
withholding and Substitute Form W-9 in the Letter of Transmittal annexed
hereto as Exhibit B.
20. Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Offer.
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Please indicate your agreement with the foregoing by signing and returning
the enclosed copy of this Depositary Agreement.
Sincerely,
NORTHPORT OPERATING COMPANY LC
By: /s/ John Vaughn
-------------------------------------
Its Vice President
-------------------------------
SECURITIES TRANSFER CORPORATION
By: /s/ George Johnson
----------------------------
Its: Vice President
---------------------------
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SECURITIES TRANSFER CORPORATION
(Schedule I)
*DEPOSITARY AGREEMENT FEE SCHEDULE*
SPECIAL SERVICES
Depositary Appointment Fee . . . . . $2,500.00 (paid at the time of appointment)
Processing fee per shareholder . . . . . . . . . . . . . . .9.00 per shareholder
Processing & printing checks . . . . . . . . . . . . . . . . . . . . . .Included
1099 preparation & mailing . . . . . . . . . . . . . . . . . . . . . . .Included
IRS electronic filing. . . . . . . . . . . . . . . . . . . . . . . . . .Included
Establish & reconcile escrow account . . . . . . . . . . . . . . . . . .Included
*Also included will be any processing and re-issuance of stock certificates with
the company's transfer agent (any transfer fee charged by the current Transfer
Agent will be at additional cost.)
MAILING SERVICES
1. Postage at cost. Payment for postage must be received prior to mailing
date.
2. Affix labels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.05
3. Fold or inserting of mailing material . . . . . . . . . . . 0.05 each piece
4. Collating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0.01
5. Meter of postage. . . . . . . . . . . . . . . . . . . . . . . . . . . .0.01
6. Sealing by hand . . . . . . . . . . . . . . . . . . . . . . . . . . . .0.01
7. 9x12 envelopes. . . . . . . . . . . . . . . . . . . . . . . . . . 0.10 each
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