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EXHIBIT 10.(XXXVII)
SUBSCRIPTION AGREEMENT
Nevada Manhattan Mining Incorporated
0000 Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxxxxx, President
Gentlemen:
This letter is delivered to you in connection with the issuance of
shares of Common Stock and options to purchase Common Stock (the "Securities")
of Nevada Manhattan Mining Incorporated, a Nevada corporation (the "Company"),
by the Company to the undersigned ("Subscriber"), as provided in this
Subscription Agreement.
A. Agreements, Representations, and Warranties of Subscriber.
1. Subscription to Purchase Shares. Subject to paragraph A.2(e), the
Subscriber hereby agrees to purchase the number of shares of Securities
indicated on the signature page, subject to acceptance of this subscription by
the Company. The Subscriber shall pay the purchase price for the Securities by
delivering to the Company with this Agreement a check for the full amount of the
purchase price of the Securities indicated on the signature page (the
"Subscription Price").
2. Stock Option.
(a) As a material inducement to Subscriber to purchase the
Securities, the Company desires to grant to Subscriber options ("Options") to
purchase up to 70,000,000 shares ("Option Shares") of the Company's Securities
pursuant to the terms of a Stock Option Agreement, a copy of which is attached
hereto as Exhibit "A" ("Option Agreement"). The Subscription Shares, Options,
and Option Shares are collectively referred to as "Subscription Shares."
(b) The parties acknowledge and agree that the Company's
present number of authorized shares is insufficient to cover the Option Shares,
and that the Company must obtain its shareholders' approval ("Shareholders'
Approval") to: (i) amend its certificate of incorporation to increase its
authorized shares to 250,000,000, and (ii) enter into the Option Agreement.
(c) Within forty-five (45) days of the date of this
Subscription Agreement, the Company shall file proxy materials with the
Securities and Exchange Commission relating to its solicitation of the
Shareholders' Approval to: (i) amend this Company's certificate of incorporation
to increase the number of this Company's authorized shares of common stock to
250,000,000; and (ii) approve the Option Agreement. The Company agrees,
represents, and warrants that the foregoing solicitation shall be performed in
accordance with applicable law governing the solicitation of shareholder votes,
including, but not limited to applicable state and federal proxy rules and
regulations. The Company shall use its best efforts to obtain the Shareholders'
Approval.
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(d) The Company shall immediately execute the Stock Option
Agreement, provided however, that the effectiveness of the Stock Option
Agreement is subject to Shareholders' Approval of the items in paragraph A.2.(c)
above.
(e) If the Company is unable to obtain Shareholders' Approval
of the items in paragraph A.2.(c) above within 150 days of the date of this
Subscription Agreement, then the Option Agreement shall be void, and subject to
paragraph A.2.(f), Subscriber shall have the right to rescind this Subscription
Agreement, return any Subscribed Shares to Company, and obtain a full refund of
the Subscription Price ("Subscriber's Rescission Rights").
(f) The parties acknowledge that the Subscriber has entered
into an agreement with Xxxxxxx X. Xxxxxx and Xxxxxxxxxxx X. Xxxxxxxx, who are
officers and directors of this Company. Under the terms of the subject
agreement, Messrs. Xxxxxx and Michaels have agreed, among other things, that if
the Company is unable to obtain the Shareholders' Approval within 150 days of
the date of this letter, then in lieu of Subscriber's exercise of Subscriber's
Rescission Rights that they will, without any further consideration: (a) assign
and transfer to TiNV1 all their respective right, title, and interest, in and to
all securities, including, but not limited to common shares of the Company, that
they directly or indirectly own, excluding options to acquire the Company's
securities, and (b) cancel and waive any further rights that they have pursuant
to any options to acquire the Company's securities.
3. Representations, Warranties and Covenants of Subscriber. The
Subscriber hereby represents and warrants to, and covenants with, the Company as
follows:
(a) The Subscriber has received and carefully reviewed the following
materials, all of which are incorporated herein by reference ("Offering
Materials") describing the Securities, the offering under which the
Securities are being offered, and the business of the Company:
(i) A copy of Amendment No. 2 to Form 10 filed April 3, 1997;
(ii) A copy of the Company's Form 10-QSB for the quarter ending
Feb. 28, 1998;
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(iii) Press Releases dated: December 1, 1997; January 12, 1998;
February 27, 1998; March 11, 1998; March 31, 1998; April 29, 1998;
June 3, 1998; July 15, 1998; July 22, 1998 (2); July 30, 1998; and
August 3, 1998; and
(iv) Audit Confirmation prepared by U.S. Stock Transfer
Corporation dated August 17, 1998, which shows stock information as of
May 31, 1998.
(b) The information in the Investor Questionnaire furnished to the
Company by the Subscriber is complete and correct;
(c) The Subscriber is an experienced investor, is capable of
evaluating the merits and risks of the investment, can hold the
Subscription Shares indefinitely, and has the ability to afford the
complete loss of Subscriber's investment in the Subscription Shares;
(d) The Subscriber has not received, and is not aware that anyone else
has received, any general or public solicitation or advertisement
pertaining to any offer or sale of any securities of the Company;
(e) The Subscriber has received all information about the Company and
the investment covered by this Agreement that the Subscriber desires and
feels is necessary to enable the Subscriber to recognize and evaluate the
merits and risks of the investment, and has had the opportunity to ask
questions of, and receive answers from, the Company and its officers,
directors and agents;
(f) The Subscription Shares will be acquired by the Subscriber for the
Subscriber's own account for investment and not with a view to or for sale
in connection with any distribution thereof;
(g) There do not currently exist any circumstances which will compel
the Subscriber to sell, transfer, or otherwise distribute any of the
Subscription Shares or any interest therein; and
(h) All of the Subscriber's beneficial owner(s) are accredited
investors as that term is defined in Regulation D under the Securities Act
of 1933, as amended.
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4. Securities Laws Matters. The Subscriber is aware of and acknowledges
and agrees with the Company as follows:
(a) the Subscription Shares will not be registered under the federal
Securities Act of 1933, as amended (the "Act"), in reliance on the
so-called "private placement" exemption provided by Regulation D
promulgated thereunder and will not be registered or qualified under
applicable securities laws of any state in reliance on similar exemptions;
(b) The Subscription Shares, when issued, will be "restricted
securities" within the meaning of Rule 144 promulgated by the Securities
and Exchange Commission (the "Commission") under the Act;
(c) Any person to whom any of the Subscription Shares, or any interest
therein, are transferred will, in turn, be subject to applicable retransfer
restrictions;
(d) The Subscriber fully comprehends that the Company is relying to a
material degree on the representations, warranties and agreements contained
herein and with such realization authorizes the Company to act as it may
see fit in full reliance hereon, including the placement on the
certificates or other documents evidencing the Subscription Shares of the
following legend and any legends required by any applicable state
securities laws:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE RESTRICTED SECURITIES AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD OR
TRANSFERRED UNLESS SO REGISTERED OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT IS AVAILABLE. THE ISSUER MAY REQUIRE AN
OPINION OF COUNSEL SKILLED IN SECURITIES MATTERS AND OTHER EVIDENCE OF
COMPLIANCE WITH THE ACT PRIOR TO PERMITTING A TRANSFER OF THE
SECURITIES."
The Subscriber understands that the imposition of such a legend
condition may limit or destroy the value, and the value as collateral, of
the Subscription Shares;
(e) The Subscriber agrees that none of the Subscription Shares or any
interest therein will be sold, transferred or otherwise disposed of unless
registered under the Act, without his having first presented to the Company
or its counsel (i) a written opinion of counsel experienced in securities
law matters indicating that the proposed disposition will not be in
violation of any of the registration provisions of the Act and the rules
and regulations promulgated thereunder, or (ii) a "no-action" letter to
such effect issued by the Staff of the Commission; and
(f) The Subscriber acknowledges that the foregoing is not a complete
statement of the law applicable to resale of the Subscription Shares, but
merely an outline of some of the more salient features. For legal advice in
these matters, the Subscriber will continue to rely on its own legal
counsel as the Subscriber has throughout this transaction concerning the
purchase of the Subscription Shares.
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5. Indemnification. The Subscriber hereby indemnifies and holds
harmless the Company and its officers, directors, shareholders, agents,
employees, attorneys, successors, and assigns from and against all damages,
losses, costs, liabilities, and expenses (including costs of investigation,
defense, and attorneys' fees) incurred by reason of the failure of the
Subscriber to fulfill any of the Subscriber's obligations hereunder or by reason
of any breach or inaccuracy of any of the representations or warranties made by
the Subscriber herein.
B. Agreements, Representations and Warranties of the Company.
1. Company's Representations and Warranties. As an inducement to
Subscriber to execute and deliver this Subscription Agreement, the Company
represents and warrants to Subscriber that:
(a) The Offering Materials, and any other written disclosures
made by Company to Subscriber (collectively "Offering Materials"), do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(b) The Company and its subsidiaries have been duly organized
and are validly existing as corporations in good standing under the laws of the
jurisdiction of their organization, with full power and authority (corporate and
other) to own or lease its properties and conduct its business as described in
the Offering Materials and each is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the business conducted
by it or the location of the properties or leased by it, makes such
qualification necessary, except in each case where the failure to so qualify
would not have a material adverse effect on the financial condition or business
prospects of the Company and/or its subsidiary; and the Company and its
subsidiaries hold all material licenses, certificates and permits from
governmental authorities necessary to the conduct of its business as described
in the Offering Materials;
(c) Upon issuance and delivery and payment therefor, in the
manner described, the Subscription Shares will be, duly authorized, validly
issued, fully paid and non-assessable;
(d) To the best of Company's knowledge, which shall include
the knowledge of the Company's officers and directors, except as described in or
contemplated by the Offering Materials, there has not been any material adverse
change in, or any adverse development which would materially effect the
business, properties, financial condition, results of operations or prospects of
the Company and its subsidiary taken as a whole from the date as of which
information is given in the Offering Materials;
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(e) To the best of Company's knowledge, which shall include
the knowledge of the Company's officers and directors, except as described in
the Offering Materials, there is no litigation or governmental proceeding to
which the Company or its subsidiaries is a party or to which the property of the
Company or its subsidiaries is subject, or which is pending, or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries which would result in any material adverse change in the financial
condition, results of operations, business or prospects of the Company or which
is required to be disclosed in the Offering Materials;
(f) To the best of Company's knowledge, which shall include
the knowledge of the Company's officers and directors, neither the Company nor
its subsidiaries is in violation of any law or ordinance, governmental rule or
regulation or court decree to which it may be subject which violation would have
a material adverse effect on the condition (financial or other), properties,
perspective results of operations or net worth of the Company and its
subsidiaries taken as a whole;
(g) As of May 31, 1998, the Company had 24,473,343 shares of
common stock issued and outstanding, and has outstanding options for 430,000
shares. Since that date, the Company has issued: (i) 6,600,000 shares pursuant
to a private placement in June and July 1998 ; and (ii) 1,500,000 shares
pursuant to a stock exchange which closed in June and July 1998. In addition,
the Company has obligations to issue not more than an additional 5,380,000
shares of common stock, and may have an obligation to issue additional shares
under certain conditions to its debenture holders. Assuming full exercise of all
options, and excluding the issuance of additional shares to its debenture
holders, the Company will have issued and outstanding a total of approximately
38,383,343 shares of common stock;
(h) Except as disclosed in paragraph B.1.(g), above, the
Company has no commitment or obligation to issue additional shares of any class
of stock or options, as of the date of this Subscription Agreement.
(i) Subject to the Shareholders' Approval referenced above,
the Company has the full right, power and authority to execute, deliver, perform
and comply with this Agreement and has taken all other actions necessary to
enable the Company to comply with the terms hereof, including, but not limited
to the issuance of the Subscription Shares and the Options. This Agreement has
been duly and validly executed and delivered by the Company and constitutes the
valid and legally binding obligation of the Company.
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2. Indemnification. The Company shall indemnify, defend, and hold
harmless the Subscriber, its officers, directors, shareholders, agents,
employees, attorneys, successors, and assigns from and against all damages,
losses, costs, liabilities, and expenses (including costs of investigation,
defense, and attorneys' fees) incurred by reason of the failure of the Company
to fulfill any of the Company's obligations hereunder or by reason of any breach
or inaccuracy of any of the representations or warranties made by the Company
herein.
C. Miscellaneous.
1. Survival.The respective agreements, representations, and warranties,
of the Company and Subscriber, shall survive the delivery of the Shares to
the Subscriber, without limitation.
2. Arbitration. Unless the relief sought requires the exercise of the
equity powers of a court of competent jurisdiction, any dispute arising in
connection with the offer, sale or purchase of the Subscription Shares, the
interpretation or enforcement of the provisions of this Agreement, or the
application or validity thereof, shall be submitted to binding arbitration. Such
arbitration proceedings shall be held in Los Angeles, California, in accordance
with the rules then obtaining of the American Arbitration Association. The
provisions of Sections 1282.6, 1283, and 1283.05 of the California Code of Civil
Procedure apply to the arbitration. This agreement to arbitrate shall be
specifically enforceable. Any award rendered in any such arbitration proceedings
shall be final and binding on each of the parties hereto, and judgment may be
entered thereon in any court of competent jurisdiction.
3. No Assignment. The Subscriber shall not transfer or assign this
Subscription Agreement.
4. Entire Agreement. This Subscription Agreement, Stock Option
Agreement, and all other written agreements relating to this Subscription
Agreement and the Subscription Shares constitute the entire agreement between
the Subscriber and the Company and may be amended only by a writing executed by
both parties.
5. Governing Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of California.
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6. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given on the date of service if
personally served on the party to whom notice is to be given or on the third day
after mailing if mailed to the party to whom notice is to be given, by
first-class mail, registered or certified, postage prepaid, and properly
addressed, to the Subscriber or the Company at their respective addresses set
forth herein or at such other address as either party shall give for purposes of
notice in accordance with the foregoing.
7. Cancellation. The Subscriber may cancel this Subscription Agreement
and the offer and subscription made hereby by notice of cancellation to the
Company at any time prior to the date notice of acceptance is given to the
Subscriber by the Company. The Subscriber acknowledges and agrees that this
Subscription Agreement shall not be binding on the Company unless and until it
has been accepted by the Company at its office in Calabasas, California and
that, after notice of acceptance has been given to the Subscriber, the
Subscriber shall not be entitled to cancel, terminate, or revoke this
Subscription Agreement or the offer and subscription made hereby or any
agreements of the Subscriber hereunder, except as provided in paragraph A.2(e).
8. Attorneys' Fees. If any party commences any suit or action,
including but not limited to any arbitration, arising out of or connected with
this Agreement then the prevailing party(ies) shall recover his or its
reasonable attorneys' fees from the non-prevailing party(ies) in addition to any
other relief awarded to the prevailing party(ies).
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NEVADA MANHATTAN MINING INCORPORATED
Private Placement of Common Stock
(Signature Page for Subscription by Entities)
The Subscriber is (complete one):
CORPORATION incorporated in State of California.
PARTNERSHIP formed under laws of State of _______________________
TRUST established under laws of State of ________________________
Number of shares of the Securities
subscribed for: 5,500,000 Common Stock
70,000,000 Options to Purchase
Common Stock
(Subject to Shareholder Approval)
Subscription Price of the Securities
subscribed for: $500,000.00
(Please print or type all information exactly as you wish it to appear on the
Company's records)
5,500,000 shares of common stock in the name of:
TiNV1 Inc.
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Name of Subscriber Federal Taxpayer I.D. No.
000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxxxxx
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Principal Office Address Telephone
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The undersigned officer, partner, trustee, or other signatory certifies that he
or she has full power and authority to execute this Subscription Agreement on
behalf of the Subscriber or Company and that the purchase and sale of the
Company has been duly authorized and is not prohibited by the governing
instrument of the Subscriber or Company.
DATED: As of August 28, 1998 TiNV1, INC.
/s/ Xxxxxx Xxxxxxxx
By:___________________________
Xxxxxx Xxxxxxxx,
President and Secretary
DATED: As of August 28, 1998 NEVADA MANHATTAN MINING
INCORPORATED
/s/ Xxxxxxxxxxx X. Xxxxxxxx
By:____________________________
Xxxxxxxxxxx X.Xxxxxxxx, President
/s/ Xxxxxxx X. Xxxxxx
By:____________________________
Xxxxxxx X. Xxxxxx, Secretary
