Source MARKET NEWS Date 06272006 Time 031840 AM Company Recap

By Veronica Kelley,2014-11-22 12:32
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Source MARKET NEWS Date 06272006 Time 031840 AM Company Recap


    Date 06/27/2006

    Time 03:18:40 AM

    Company Recap Energy Inc.

    Title Amalgamation

    Agreement with Hyper Energy Inc.

     DMIS Processed No CDNX Symbol: RCE.P

    Exchange: VSE Symbol: RCE

    Exchange: Symbol:

    Exchange: Symbol:

Press Release

    ;[305/Amalgamation]?RCE?V?RECAP ENERGY INC?JUN 27 2006 03:03 AM?Amalgamation Agreement with Hyper Energy Inc.?? --->@NEWS RELEASE?RECAP ENERGY INC ("RCE.P-V")

    - Amalgamation Agreement with Hyper Energy Inc.

    Recap Energy Inc. ("Recap"), a capital pool corporation, is pleased to announce that it has entered into an amalgamation agreement made as of June 23, 2006, with an arm's-length party, Hyper Energy Inc. ("Hyper"), providing for the amalgamation of Recap with a wholly-owned subsidiary of Hyper.

    Pursuant to the proposed transaction, the holders of common shares of Recap would receive 1.38075 common shares and 1.38075 non-voting shares of Hyper for each common share of Recap at a deemed price of $0.1195 per share of Hyper. It is anticipated that approximately 12,610,000 common shares and 12,610,000 non-voting shares of Hyper will be issued pursuant to the transaction and that the total issued and outstanding consolidated common

    shares of Hyper after giving effect to the proposed transaction will be approximately 59,650,000 common shares and 87,550,000 non-voting shares, with options to acquire an additional 690,375 common shares and 690,375 non-voting shares. Prior to closing the proposed transaction, Recap will have approximately $2,100,000 cash and no debt.

    Hyper is a corporation governed by the Business Corporations Act (Alberta) that formerly pursued the development of computer technologies but now has assets solely comprised of approximately $1 million of cash, no debt and certain tax attributes.

    In addition, Hyper has entered into a subscription agreement with certain corporations, principals of which include Joseph Killi, Harold Milavsky and Marc Sardachuk, pursuant to which those corporations have agreed to subscribe for shares of Hyper included in the above numbers for $5,000,000 cash at $0.1195 per share before the proposed transaction is effected.

    The proposed transaction is subject to a number of conditions including:

    a) the reconstitution of the board of directors of Hyper to include Joseph Killi, Harold Milavsky, Marc Sardachuk, David Richards and up to four additional persons mutually acceptable to Hyper and Recap;

    b) certain changes being made to the share capital of Hyper to facilitate the proposed transaction and to change its name to "Realex Properties Corp.";

    c) approval of 66 2/3% of votes of holders of common shares of Recap;

    d) entry into by Hyper, on terms acceptable to Recap, of an option to purchase with respect to the acquisition of commercial real estate assets which will constitute a qualifying transaction within the meaning of applicable policies of the TSX Venture Exchange (the "Exchange"); and

    e) the receipt of all regulatory approvals necessary or desirable in connection with the transaction, including the approval of the Exchange to the listing of the common shares and non-voting shares of Hyper.

    Marc Sardachuk is expected to be the Chief Executive Officer of the resulting amalgamated corporation, which corporation is expected to undertake investments in commercial real estate.

    Marc Sardachuk is president of Law Investments Ltd., a privately-held real estate investment company. Mr. Sardachuk has over 28 years of experience in real estate development and management through various private enterprises. Mr. Sardachuk was also formerly a director of BW

    Technologies Ltd., which was at the time listed on the Toronto Stock Exchange.

    Joseph Killi is chairman of the board of directors of Parkbridge Lifestyle Communities Inc. ("Parkbridge"), which is listed on the Toronto Stock Exchange and is an owner, operator and developer of residential and recreational land lease communities. Mr. Killi was a co-founder of Parkbridge in 1998, and was President since its inception until he assumed the role of Chairman earlier this year. Mr. Killi's real estate experience spans over 25 years, 17 of which were with Trizec Corporation Ltd., where he last held the positions of Executive Vice President, Chief Financial Officer and Chief Operating Officer.

    Harold Milavksy, B.Comm, CA, FCA, is Chair of the Board of Quantico Capital Corp., a privately held company engaged in merchant banking, principal investments and acquisitions. Mr. Milavsky also serves as Chair of the Board of PrimeWest Energy Trust, as a Director of Saskatchewan Wheat Pool and as a Director and Chair of the Board of the 13 investment trusts comprising the Citadel Group of Funds. Mr. Milavsky was President and Chief Executive Officer of Trizec Corporation from 1976 to 1986 and Chair of the Board and Chief Executive Officer from 1986 to 1993.

    David Richards is the President of Recap and has been the Managing Director of Network Capital Inc., an investment management company, since September 1997. Mr. Richards is also a director of several other issuers listed on the Toronto Stock Exchange, including Parkbridge and Boardwalk Real Estate Investment Trust.

    The proposed transaction will not constitute a qualifying transaction within the meaning of applicable policies of the Exchange but, as referred to above, is conditioned upon entry into and exercise of an option to purchase commercial real estate assets which will constitute a qualifying transaction. It is expected that such an agreement will be entered into in the next couple of weeks but no assurance can be provided in that regard. In addition, it is anticipated such transactions may also require additional financing, potentially by way of a private placement. In any event, a further news release or news releases will be issued as circumstances warrant.

    The management information circular to be prepared in connection with the proposed transaction is expected to be mailed to shareholders of Recap at the beginning of August in respect of an anticipated meeting in early September.

    Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the proposed transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

    Trading in the common shares of Recap has been halted by the Exchange and such trading will remain halted pending further documentation to be filed with (and accepted by) the Exchange in connection with the contemplated transactions.

TEL: (403) 303-4490 David Richards, President

    FAX: (403) 303-4491 Paul Jones, Chief Financial Officer Recap Energy Inc.


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