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EXHIBIT 4.(iv)
SUBSCRIPTION AGREEMENT
NEVADA MANHATTAN MINING INCORPORATED
8% SENIOR SECURED CONVERTIBLE DEBENTURES
THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR ANY APPLICABLE STATE SECURITIES LAWS AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL
REGISTERED UNDER THE ACT AND REGISTERED OR QUALIFIED UNDER SUCH LAWS, OR UNLESS
THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO
THE ISSUER AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED. THE
SECURITIES BEING OFFERED BY THE ISSUER ARE SECURITIES AS THAT TERM HAS BEEN
DEFINED IN THE ACT. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ACT IN
RELIANCE UPON THE EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 4(2) THEREOF,
AND ARE SUBJECT TO RESTRICTIONS ON TRANSFER. FURTHER, THESE SECURITIES MAY
ONLY BE SOLD PURSUANT TO EXEMPTIONS FROM REGISTRATION OR QUALIFICATION IN THE
VARIOUS STATES, AND MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER IN
SUCH JURISDICTIONS.
This Agreement has been executed by the undersigned in connection with the
private placement of Eight Percent (8%) Senior Secured Convertible Debentures
and Common Stock Purchase Warrants (hereinafter referred to as the
"Securities") of Nevada Manhattan Mining Incorporated, 0000 Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxx 00000, a corporation organized
under the laws of Nevada (hereinafter referred to as the "Issuer").
The undersigned, a corporation organized under the laws of the Isle of Man,
(hereinafter referred to as the "Purchaser") hereby represents and warrants to,
and agrees with the Issuer as follows:
1. Agreement to Subscribe: Purchase Price.
a) The undersigned hereby subscribes for and agrees to purchase up to
$10,000,000 aggregate principal amount of the Issuer's 8% Senior
Secured Convertible Debentures convertible into shares of the Issuer's
common stock ("Common Stock") in the form attached as Schedule "A"
hereto (the "Debentures"), and Common Stock Purchase Warrants attached
as Schedule "B" hereto (the "Warrants") for a total consideration,
including all fees and commissions, if all Debentures are purchased,
of $10,000,000 (the "Purchase Price") under the terms and conditions
specified in Paragraph 10 hereof.
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b) Form of Payment. Purchaser shall pay such portion of the Purchase
Price as may be required to purchase the Debentures being purchased,
from time to time, by delivering good funds by wire transfer in United
States Dollars into an escrow account (the "Escrow Account") as
follows:
Preferred Bank
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
ABA No. 1220 42205
Account Name: Xxxxx X. Xxxxx Special Trust Account
Account No.: 004 603 451
2. General Understanding
Purchaser understands that the Securities have not been registered
under the Act, and, accordingly, that the Issuer must be satisfied
that the offer and sale of the Securities to the Purchaser will
satisfy the requirements of Section 4(2) under the Act. Purchaser and
Issuer intend that the representations, declarations, and warranties
set out in this Agreement will be relied upon in determining
Purchaser's suitability as a purchaser of the Securities.
3. Purchaser Representations and Covenants
Purchaser represents, warrants, and acknowledges to the Issuer as
follows:
a) The Securities are being acquired for the account of Purchaser and its
affiliates for investment, with no present intention of distributing
or selling any portion thereof, and will not be transferred by
Purchaser in violation of the Act. No one other than Purchaser has
any interest in or any right to acquire the Securities.
b) The Securities have not been registered under the Act or qualified
under any state securities law in reliance on an exemption from
registration and qualification for private offerings. Purchaser is
purchasing the Securities without being furnished any offering
literature or prospectus other than the SEC Filings (as defined in
Section 3(k) below).
C) Purchaser is an "accredited investor" under Rule 501(a)(3) of
Regulation D under the Act and will sign the Accredited Investor
Declaration, substantially in the form of Schedule "C", attached
hereto, contemporaneously with the execution of this Agreement.
d) No representations or warranties have been made to Purchaser by the
Issuer or any agent of the Issuer other
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than those set forth in this Agreement.
e) Purchaser has investigated the acquisition of the Securities to the
extent it deems necessary or desirable and the Issuer has provided it
with any assistance it has requested in connection therewith.
f) The address set forth below is the true and correct address of
Purchaser's principal business office.
g) Purchaser has full power and authority to make the representations
referred to herein, to purchase the Securities, and to execute and
deliver this Agreement.
h) If Purchaser is not located in the United States, Purchaser has
satisfied himself as to the full observance of the laws of the
Purchaser's jurisdiction in connection with the offer and sale of the
Securities or any use of this Agreement, including (i) the legal
requirements of the Purchaser's jurisdiction for the purchase of
Securities, (ii) any foreign exchange restrictions applicable to such
purchase, and (iii) any governmental or other consents that may need
to be obtained, and (iv) the income tax and other tax consequences, if
any, which may be material to the purchase, holding, redemption,
exchange, sale or transfer of the Securities. Purchaser's purchase
and payment for, and Purchaser's continued beneficial ownership of the
Securities will not violate any applicable securities or other laws of
Purchaser's jurisdiction.
i) Purchaser is aware that this is a private offering and that no United
States federal, state or other agency has made any finding or
determination as to the fairness of the investment nor made any
recommendation or endorsement of the Securities;
j) Purchaser acknowledges and represents that Purchaser has had access to
information concerning the Issuer and its subsidiaries, its
management, its current and proposed business and other details of the
investment believed by Purchaser to be sufficient to enable Purchaser
to make an informed investment decision regarding Purchaser's
acquisition of the Securities. Purchaser has had an opportunity to
ask questions of, and receive answers from, and obtain additional
information from representatives of the Issuer concerning (i) the
business and financial condition of the Issuer; (ii) the current and
proposed business of the Issuer; and (iii) the terms of this Agreement
and the purchase of the Securities, all to the extent such information
is available or could be
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acquired without unreasonable effort or expense.
k) Purchaser represents that Purchaser or its representative has received
copies of the Form 10 Registration Statement under the Securities
Exchange Act of 1934 filed by the Issuer on April 3, 1997 and will
receive all amendments thereto (collectively "SEC Filings").
l) Purchaser represents that all data or information requested by
Purchaser from the Issuer or any of its officers or affiliates
concerning the Issuer has been furnished to Purchaser.
m) Purchaser represents and warrants to the Issuer that (i) Purchaser is
able to bear the economic risk of an investment in the Securities;
(ii) Purchaser has adequate means of providing for Purchaser's current
needs and contingencies; (iii) Purchaser is purchasing the Securities
for investment with the intention of holding the Securities for an
indefinite period, and is able to afford to hold the Securities for an
indefinite period; (iv) Purchaser has such knowledge and experience in
financial and business matters that Purchaser is capable of evaluating
the merits and risks of the investment in the Securities; (v)
Purchaser can afford a complete loss of Purchaser's investment in the
Securities; and (vi) Purchaser is willing to accept the foregoing
investment risks.
n) Purchaser represents and warrants to the Issuer that Purchaser's
acquisition of the Securities is not a transaction (or any element of
a series of transactions) that is part of a plan or scheme to evade
the registration provisions of the Act.
o) Purchaser understands that there is currently no trading market for
the Securities and that none is expected to arise. Purchaser further
acknowledges that, although there currently exists a trading market
for the Issuer's Common Stock, such market may not exist or be
accessible in sufficient volume at such time as the Securities are
converted into Common Stock.
Purchaser covenants to the Issuer that:
excluding the SEC Filings, Purchaser has not distributed, and will not
distribute any materials and has not divulged, and will not divulge,
the contents thereof to anyone other than such legal or financial
advisors as Purchaser has deemed necessary for purposes of evaluating
an investment in the Securities and no one (except such
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advisors) has used such materials, and Purchaser has not made, and
will not make, any copies thereof.
4. Issuer Representations and Covenants.
In order to induce Purchaser to enter into this Agreement, the Issuer
represents and warrants to the Purchaser as follows:
This private placement of Securities in the aggregate principal amount
of up to $10,000,000.00 is being made on a "best efforts" basis
pursuant to Section 4(2) of the Act. Such Securities may be issued in
from one to five tranches of up to $2,000,000 per tranche, at one or
more closings (each a "Closing") with no aggregate minimum investment
amount, but all such Securities shall have identical rights, and
privileges in all respects.
a) The Securities, when issued and delivered pursuant hereto, and the
Common Stock issuable upon conversion and/or exercise thereof, when
issued and delivered upon such conversion and/or exercise thereof,
will be duly and validly authorized and under federal or state law
issued, fully paid and non-assessable and will not subject the
Purchaser thereof to any liability solely by reason of being such
Purchaser.
b) The Issuer has full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and,
when accepted by the Issuer, this Agreement will have been duly
authorized by all necessary actions of the directors and (if
necessary) the shareholders of Issuer, validly executed and delivered
on behalf of the Issuer and be a legally binding obligation of the
Issuer, enforceable in accordance with its terms.
c) The execution and delivery of this Agreement and the sale of the
Securities pursuant hereto and the issuance of the Common Stock
issuable upon conversion and/or exercise thereof of such Securities,
and the transactions contemplated by this Agreement do not and will
not conflict with or result in a breach by the Issuer of any of the
terms or provisions of, or constitute a default under, the Articles of
Incorporation or By-Laws of the Issuer or any indenture, mortgage,
deed of trust or other material agreement or instrument to which the
Issuer is a party or by which it or any of its property or assets are
bound or any existing applicable law, rule or regulation or any
applicable decree, judgment or order of any court, federal or state
regulatory body, administrative agency or other governmental body
having jurisdiction over the Issuer or any of its properties or
assets.
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d) There are no facts or circumstances existing, and there has been no
event, which has had or which reasonably could be expected to have in
the future a material adverse effect with respect to the financial
condition, business affairs or prospects of the Issuer other than as
disclosed in the SEC Filings provided to Purchaser.
e) Issuer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada and is duly qualified
and in good standing as a foreign corporation in all jurisdictions
where the failure to so qualify would have a material adverse effect
on the Issuer. The Issuer has not registered its Common Stock
pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") but filed a registration statement on
Form 10 under the Exchange Act on April 3, 1997, and the Common Stock
is traded on the Electronic Bulletin Board maintained by the National
Association of Securities Dealers, Inc. under the symbol NVMH.
f) The Purchaser shall, upon the purchase of the Securities and at each
Closing, receive an opinion letter from the Issuer's counsel to the
effect that (i) the Issuer is duly incorporated and validly existing;
(ii) this Agreement, the issuance of the Securities, the issuance of
Common Stock upon conversion and/or exercise thereof and the other
transactions contemplated by this Agreement have been approved and
duly authorized by all required corporate action; (iii) the
Securities, upon delivery, shall be validly issued and outstanding,
fully paid and nonassessable; and (iv) the Issuer has reserved from
its authorized but unissued shares of Common Stock a sufficient number
of shares to permit full conversion and/or exercise thereof at the
then applicable conversion and/or exercise rate for all outstanding
Securities.
(9) Contemporaneously with the Closing of the first tranche the Issuer
will pay all existing liens and encumbrances on the Issuer's Nevada
mining properties and deliver a first trust deed on such properties in
favor of Purchaser so that Purchaser shall have a senior security
interest in such properties.
Covenants of the Issuer.
For so long as any Securities held by Purchaser remain outstanding, the Issuer
covenants and agrees with the Purchaser that:
a) Issuer will undertake its best efforts to maintain the listing of its
Common Stock on the Electronic Bulletin
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Board, the NASDAQ SmallCap Stock Market or the American Stock
Exchange;
b) Except as expressly set forth in Section 7 below, and only until the
Registration Statement (as hereinafter defined) has been declared
effective, Issuer will not issue stop transfer instructions to its
transfer agent in regard to the Securities or the Common Stock
issuable upon conversion and/or exercise thereof of the Securities;
C) The SEC Filings and any amendments thereto (i) do and will conform in
all material respects to the rules and regulations of the Commission
with respect thereto; (ii) do not and will not contain an untrue
statement of a material fact or omit to state any material fact
required to make the statements contained therein not misleading;
d) Issuer will reserve from its authorized shares of Common Stock One
Million Five Hundred Thousand (1,500,000) shares to permit conversion
and/or exercise thereof in full of all outstanding Securities;
e) Notwithstanding the foregoing, the conversion and/or exercise right of
the Purchaser set forth herein shall be limited such that in no
instance shall the maximum number of shares of Common Stock into which
the Purchaser may convert these Securities exceed, at any one time, an
amount equal to the remainder of (i) 4.99% of the then issued and
outstanding shares of Common Stock of the Issuer following such
conversion and/or exercise thereof, minus (ii) the number of shares of
common Stock of the Issuer then held by the Purchaser;
f) Neither the SEC Filings nor the Registration Statement (as hereinafter
defined) or any amendments thereto, when declared effective will
contain a misstatement of material fact or will omit a material fact
necessary to make the statements contained therein not misleading; and
g) The President and the Senior Vice President of the Issuer will confirm
the warranties, representations and covenants contained in this
Agreement at each Closing.
5. Attorney's Fees: Due Diligence Fees.
The Issuer agrees to pay all costs and expenses, including reasonable
attorneys' fees, which may be incurred by the Purchaser in collecting
any amount due or exercising the conversion and/or exercise rights
under these Securities. Further, the Issuer agrees to pay from escrow
the Purchaser's legal fees and due diligence costs incurred in an
amount of
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Twenty Five Thousand Dollars ($25,000.00), payable on the first
tranche Closing and due diligence costs (estimated at $15,000) for
representatives of Purchaser to travel to Issuer's facilities in
Nevada, Brazil and Indonesia.
6. Registration Rights; Liquidated Damages.
The Purchaser will be entitled to registration rights in respect of
the shares of Common Stock issuable upon conversion of the Debentures
and exercise of the Warrants (the terms of which are set forth below)
as follows: (1) The Issuer shall prepare and file, within 30 days of
the initial Closing Date, and amendment to its registration statement
under the Act on Form SB-2 (the "Registration Statement"), filed with
the Securities and Exchange Commission (the "Commission") on December
6, 1996, covering the resale of the shares of Common Stock issuable
upon conversion of the Debentures and the shares of Common Stock
issuable upon exercise of the Warrants. The Issuer shall use its best
efforts to cause the Registration Statement to be declared effective
by the Commission no later than 120 days following the initial Closing
Date and shall promptly deliver to Purchaser copies of all amendments
to such Registration Statement and correspondence with the Commission
with respect thereto. The Issuer shall maintain the effectiveness of
the Registration Statement until all of the Common Stock issuable or
issued upon conversion or exercise of the Securities has been sold.
The Issuer shall pay all expenses of registration (other than
underwriting fees and discounts in respect of shares of Common Stock
offered and sold under such registration statement by the Purchaser,
if any). (2) If the Registration Statement is not declared effective
by the Commission during the 120-day period mentioned above, the
Company shall pay in cash (or common stock valued at Market Price, as
hereinafter defined) to the Purchaser, as liquidated damages and not
as a penalty, an amount equal to two percent (2%) per month
(commencing 90 and ending 120 days after the initial Closing) of the
outstanding principal amount of the Debentures, in the event that the
Registration Statement is not declared effective by the Commission
within 90 days of the initial Closing Date and three percent (3%) from
120 days after the Closing Date until the Registration Statement is
declared effective.
7. Transfer Agent Instructions, Book-Entry System, Liquidated Damages.
Each conversion of the Debentures and/or exercise of the Warrants will
be effected through a "book-entry" mechanism. Pursuant to this
book-entry mechanism, (1) immediately following each Closing, the
Escrow Agent will wire payment of the net offering proceeds to the
Issuer and the Issuer will instruct the Issuer's transfer agent to
register the Debentures in the name of the Purchaser on a Debenture
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Register to be maintained by such transfer agent for the benefit of
the Issuer and the Purchaser; (2) the transfer agent will establish a
set of book-entry procedures to record transfers and conversions of
the Debentures; and (3) the Issuer will irrevocably instruct the
transfer agent to issue shares of Common Stock, bearing such legend as
may be required by law, to the Purchaser upon the valid exercise of
the conversion privilege and the fulfillment of other requirements of
the transfer agent, including but not limited to the effectiveness of
the Registration Statement and the delivery of an opinion of the
Company's counsel (which the Company shall promptly supply) as to the
issuance of such shares of Common Stock. If the Company willfully
fails to deliver shares of Common Stock without restrictive legends or
stop-transfer orders within four (4) New York Stock Exchange Trading
Days of delivery of a notice of conversion following the effectiveness
of the Registration Statement, or fails to deliver legended
certificates if requested prior thereto, liquidated damages will
accrue in an amount equal to $1,000.00 for each $100,000.00 principal
amount of Debentures as to which conversion has been requested then
outstanding for each day that such shares of Common Stock are not
delivered up to 10 days, and $2,000.00 for each $100,000.00 principal
amount of Debentures as to which conversion has been requested then
outstanding for each day that such shares of Common Stock are not
delivered in excess of 10 days. Such amounts will accrue and be
payable to the Purchaser by the Issuer upon demand notices of
conversion shall be submitted by facsimile transmission and shall be
deemed to have been received on the date transmitted.
8. Indemnification.
Each of the Issuer and the Purchaser agrees to indemnify and to hold
the other harmless from and against any and all losses, damages,
liabilities, costs and expenses which the other may sustain or incur
in connection with the breach by the indemnifying party of any
representation, warranty or covenant made in this agreement. Each of
the Issuer and the Purchaser agrees that the Escrow Agent shall be
relieved of any liability arising out of acting as escrow agent and
each also hereby agrees to indemnify the Escrow Agent against expenses
including attorneys fees, judgements, fines and amounts paid in
settlement incurred by the Escrow Agent as a result of any threatened,
pending or completed action, suit or proceeding of every nature by
reason of the fact that it served as escrow agent.
9. Notices.
All notices, requests, demands and other communications provided for
herein (collectively "Notices") shall be in writing. All Notices
shall be sent by hand delivery, U.S.
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mail with return receipt requested, overnight courier, or facsimile
with all delivery charges prepaid. All notices will be effective when
received by the addressee as indicated by the return receipt, the
receipt of the courier service, or on the facsimile. All notices to
the Purchaser and/or the Issuer shall be delivered to the Escrow Agent
(who may also act as counsel to Purchaser) at the address indicated
below:
Escrow Agent:
Xxxxx X. Xxxxx
0000 Xxxxxxx Xxxx Xxxx, #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (310) 553 - 9009
Facsimile: (310) 553 - 9693
The Escrow Agent shall be entitled to a fee of $3,000 for each of the
last four tranches which shall close.
10. Closing Date.
This agreement shall be effective from the date of execution by the
Purchaser. Each Closing shall be effected through delivery of funds
and certificates to the Escrow Agent. The Closing Date, which shall
be so designated by a "Closing Certificate" from the Escrow Agent,
shall be deemed to be that date upon which the Escrow Agent shall have
the Securities available for delivery to the Purchaser and the
Purchaser's funds in the Escrow Agent's account available for
delivery to the Issuer. The Debentures will be issuable in five
tranches of $2,000,000 each. The first tranche will close no later
than April 15, 1997. Subject to the provisions of Paragraph 11 the
second tranche will close within five business days after the later of
(a) the effective date of the SEC Filing, or (b) the conversion of the
entire principal amount of Debentures purchased in the first tranche.
Each of the next three tranches will close on the later of (a) ninety
days following the Closing of the previous tranche, or (b) the
conversion of the entire principal amount of Debentures purchased in
the previous tranche.
11. Right of First Refusal.
Provided the Purchaser funds at least two tranches the Issuer will not
sell any new equity securities (or securities convertible into equity
securities) at a discount to the then-current market price per share
of Common Stock, other than offerings in connection with mergers,
acquisitions and certain benefit plans of the Issuer (a "discounted
equity offering") for a period of ninety (90) Days from the funding of
the last tranche. At any time after the effective date of the
Registration Statement and prior to the funding of all tranches
contemplated hereunder Issuer may give written notice (a "Funding
Notice") to Purchaser that funding of a tranche is
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requested. Funding of any tranche after the first is at the sole
discretion of the Purchaser. If Purchaser shall elect not to fund
such tranche by written notice to Issuer or by failing to effect a
Closing within five days of receipt of a Funding Notice, and provided
that such failure to is not the result of Issuer's inability or
unwillingness to satisfy its obligations for such Closing, Issuer
shall be free to sell any of its securities to any third party. In
the event of such sale the Purchaser of such securities shall not
effect a public distribution of Common stock of Issuer until the
earlier of (a) 90 days following the effective date of the SEC Filing,
or (b) the conversion of 75 percent of the Common Stock issuable upon
exercise of the Debentures. Provided the Purchaser funds at least two
tranches, for a period of one year from the Closing of the last
tranche the Company will offer the Purchaser the opportunity to
participate in all or any portion of any such financings on a right of
first refusal basis. The Purchaser will have five (5) days from the
date of receipt of a notice of such offering to respond to any notice
by the Issuer of any right of first refusal.
12. Security.
In order to secure its obligations under this Subscription Agreement
and the Debentures Issuer will (a) grant Purchaser a first lien on the
Issuer's gold mining claims and properties in the state of Nevada,
which shall be released upon the conversion by Purchaser of 75% of the
Debentures, and (b) arrange for Issuer to pledge 1,000,000 shares of
common stock of Issuer in favor of Purchaser.
13. Origination Fee.
Issuer will pay from Escrow (and execute appropriate instructions with
respect thereto) an origination fee of ten percent (10%) of the gross
proceeds of the closing of the first two tranches and seven percent of
the gross proceeds of each tranche thereafter to such persons and in
such manner as Purchaser may advise.
14. Conditions to the Issuer's Obligation to Sell.
Issuer shall have the right to reject any given executed Agreement
which is tendered to the Issuer hereunder, but only for the reason
that the Issuer reasonably believes any representations and warranties
of such Purchaser contained therein to be untrue, and in such event
Issuer shall promptly provide Purchaser written notice of such
rejection and the reason therefor and shall provide reasonable
opportunity for a response to such stated reason. Purchaser
understands that Issuer's obligation to sell the Securities is
conditioned upon:
(i) The receipt and acceptance by Issuer of this
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Agreement for all of the Securities evidenced by execution of
this Agreement by the Issuer or Issuer's duly authorized
agent. In the absence of a written acknowledgement of this
Agreement by the Issuer, the delivery of Securities to the
designated Escrow Agent and/or the transfer of funds to the
Issuer shall be deemed to be constructive acceptance of this
Agreement.
(ii) Delivery to the Escrow Agent by Purchaser of good funds as
payment in full of the Purchase Price of the securities
subscribed for and all fees and commissions hereunder.
15. Conditions to Purchaser's Obligation to Purchase.
Issuer understands that Purchaser's obligation to purchase the
Securities is conditioned upon delivery of (i) the opinion of counsel
specified in Section 4(i)(f) herein, (ii) the Securities as described
herein, and (iii) such documents, certificates and other evidence of
the Issuer's compliance with necessary corporate and statutory
formalities as Purchaser shall reasonably require. Further, the
Purchaser anticipates being in a position to close and fund the
initial tranche no later than April 15, 1997. However, each Closing
is conditioned upon (a) the execution and delivery of, and performance
under, appropriate documentation (including but not limited to an
executed agreement, form of debenture, warrants, and book entry
transfer agreement), all in form and substance mutually acceptable to
the parties and containing representations, warranties and agreements
customary for transactions of this type; (b) the truth and accuracy of
each of the representations and warranties contained herein, both when
made and as of each Closing Date; (c) satisfactory completion of due
diligence by Purchaser (applies to the initial Closing only); (d) the
absence of any material adverse change in the business, condition
(financial or otherwise), earnings or prospects of the Issuer; and
(e) the availability of a valid exemption under the Act regarding the
offering and sale of the Securities and shares of Common Stock
issuable on the conversion or exercise thereof.
16. Governing Law.
This agreement shall be governed by and construed under the laws of
the State of California without regard to its choice of law
principles.
17. Entire Agreement.
This Agreement constitutes the entire agreement among the parties
hereof with respect to the subject matter hereof and supersedes any
and all prior or contemporaneous
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representations, warranties, agreements and understandings in
connection therewith. This Agreement may be amended only by a writing
executed by all parties hereto. This Agreement may be executed in
counterparts, and the facsimile transmission of an executed
counterpart to this Agreement shall be effective as an original.
18. Announcements
No public announcement concerning the events and transactions
contemplated by this Agreement shall be made by Issuer without the
prior approval of Purchaser, which approval shall not be unreasonably
withheld.
Full Name and Address of Purchaser for Registration Purposes:
NAME: Silenus Limited
ADDRESS: x/x Xxxxxx XX, Xxxxxxxxxxxx 00
Xxxxxxxx 0000, Xxx, Xxxxxxxxxxx
Tel No. 000-0000-000-0000
Fax No. 000-0000-000-0000
Contact Name: Xx. Xxxxxxx Xxxxxx
19. Delivery Instructions: (If different from Registration Name)
NAME: Soreg Inc.
ADDRESS: 000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Tel No. 000-000-0000
Fax No. 000-000-0000
Contact Name: Xxxxxxx Xxxxxxx
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Special
Instructions: In each tranche closing, Purchaser will receive Debentures
representing One Hundred Percent (100%) of its subscription
for that tranche in denominations of $100,000 each. Each
Debenture will specify a First Conversion Date of the earlier
of the date of effective registration, or forty-five (45) Days
from the First Closing Date.
The Purchase Warrants being purchased will have a five (5)
year term and will have an Exercise Price set at the lesser of
the Conversion Price applicable to the Debenture being
purchased at (a) the first Closing, or (b) the subsequent
Closing. The value of the Warrants will equal 25% of the
principal amount of the Debenture (valued based on a
Black-Scholes or similar model).
IN WITNESS WHEREOF, this Agreement was duly executed on the date first written
below. This Agreement must be accepted by the Issuer no later than 5:00 pm
Eastern Time, on the third United States business day after the date of
execution by the Purchaser or it shall be deemed to be null and void.
Dated this 14th day of April, 1997.
Purchaser Name:
SILENUS LIMITED [SEAL]
By:
------------------------------------------
Xxxxxxx Xxxxxx
Official signatory of Purchaser
Name (Printed) :
Xxxxxxx Xxxxxx
------------------------------------------
Title:
President
------------------------------------------
Country of Execution:
Switzerland
------------------------------------------
Accepted this 14th day of April, 1997.
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A MANHATTAN MINING INCORPORATED
By: /s/ XXXXXXX XXXXXX
-----------------------------
Official Signatory of Issuer
I have full authority to bind Nevada Manhattan Mining Incorporated
JSK (initial)
Name (Printed): /s/ XXXXXXX XXXXXX
----------------------------------
Xxxxxxx Xxxxxx
Title:
C.O.O.
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SCHEDULE "A"
FORM OF DEBENTURE
No.________ $100,000
NEVADA MANHATTAN MINING INCORPORATED
8% SENIOR SECURED CONVERTIBLE DEBENTURE DUE MARCH 31, 2000
The securities represented hereby have not been registered under the Securities
Act of 1933, as amended (the "Act") and may not be sold, transferred or
hypothecated, except pursuant to registration under the Act or an exemption
from the registration requirements of the Act.
This Debenture is one of a duly authorized issue of Debentures of Nevada
Manhattan Mining Incorporated, a corporation duly organized and existing under
the laws of the state of Nevada (the "Issuer") designated as Eight Percent (8%)
Convertible Debentures Due March 31, 2000, in an aggregate principal amount not
exceeding Ten Million Dollars ($10,000,000.00).
FOR VALUE RECEIVED, the Issuer promises to pay to Silenus Limited, the
registered holder hereof and its successors and assigns (the "Holder"), the
principal sum of One Hundred Thousand Dollars ($100,000), on March 31, 2000
("Maturity Date"), and to pay interest on the principal sum outstanding at the
rate of 8% per annum. Interest shall be due and payable quarterly on the last
day of June, September, December and March in each year. Accrual of interest
shall commence on the first business day to occur after the date hereof and
shall continue until payment in full of the principal amount has been made or
duly provided for. At the option of Issuer interest may be paid in common
stock of the Issuer ("Common Stock") at the average of the closing "bid" prices
for the common stock for the five trading days immediately prior to the date on
which such interest payment is due. The interest so payable will be paid to
the person in whose name this Debenture (or one or more predecessor Debentures)
is registered on the records of the Issuer regarding registration and transfers
of the Debentures (the "Debenture Register"); provided, however, that the
Issuer's obligation to a transferee of this Debenture arises only if such
transfer, sale or other disposition is made in accordance with the terms and
conditions of the Subscription Agreement dated as of April 14, 1997 between the
Issuer and Holder (the "Subscription Agreement"). Except as set forth above,
the principal of, and interest on, this Debenture are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, at the address last appearing
on the Debenture Register of the Issuer as designated in writing by the Holder
hereof from time to time. The Issuer will pay the principal of and all accrued
and unpaid interest due upon
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this Debenture on the Maturity Date, less any amounts required by law to be
deducted or withheld, to the Holder at the last address as set forth on the
Debenture Register.
This Debenture is subject to the following additional provisions:
1. The Debentures are issuable in denominations of One Hundred Thousand
Dollars ($100,000) and integral multiples thereof. The Debentures are
exchangeable for an equal aggregate principal amount of Debentures of
different authorized denominations, as requested by the Holders
surrendering the same. No service charge will be made for
registration, transfer or exchange.
2. The Issuer shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to
be withheld under the applicable provisions of the United States
income tax or other applicable laws at the time of such payments.
3. This Debenture has been issued subject to investment representations
of the original Holder hereof and may be transferred or exchanged in
compliance with the Act and applicable state securities laws. Prior
to the due presentment for transfer of this Debenture, the Issuer and
any agent of the Issuer may treat the person in whose name this
Debenture is duly registered on the Issuer's Debenture Register as the
owner hereof for the purpose of receiving payment as herein provided
and all other purposes, whether or not this Debenture be overdue, and
neither the Issuer nor any such agent shall be affected by notice to
the contrary.
4. The Holder of this Debenture is entitled, at its option, at any time
commencing forty-five days from the date hereof, to convert the
principal amount of this Debenture into shares of Common Stock of the
Issuer (the "Common Stock") at a conversion price for each share of
Common Stock equal to Seventy-Five percent (75%) of the Market Price
(as defined below) of the Common Stock for all conversions for which
notice is received after the date hereof and a conversion price of
Seventy-two and one-half percent (72 1/2%) of the Market Price
thereafter. For purposes of this Section 4, the "Market Price" shall
be the lesser of (a) the closing bid price of the Common Stock on the
day prior to the Closing of the first tranche; (b) the closing bid
price of the Common Stock on the day prior to the Closing of any
subsequent tranche; or (c) the average closing bid price of the Common
Stock for the five (5) New York Stock Exchange Trading days
immediately preceding each conversion date, in each case as reported
by the National Association of Securities Dealers Automated Quoting
System, or as reported by the American Stock Exchange of the Common
Stock
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shall then be listed in trading upon such exchange. Such conversion
shall be effected by surrendering the Debentures to be converted (with
a copy by facsimile or courier, to the Issuer) to the Issuer, with the
form of conversion notice attached hereto as Exhibit 1, executed by
the Holder of this Debenture or a specified portion (as provided)
hereof, and accompanied, if required by the Issuer, by proper
assignment hereof in blank. No fractional shares or scrip
representing fractions of shares will be issued on conversion or
payment in lieu of interest, but the number of shares issuable shall
be rounded to the nearest whole share, with the fraction paid in cash
at the discretion of the Issuer. For purposes of this Debenture, the
"Conversion Date" on which notice of conversion is given shall be
deemed to be the date on which the Holder has delivered by facsimile
transmission a duly executed notice of conversion followed by delivery
by mail or courier of this Debenture, with the conversion notice duly
executed, to the Issuer, if such notice of conversion and this
Debenture are received by mail or courier by the Issuer within three
(3) business days.
5. No provision of this Debenture shall alter or impair the obligation of
the Issuer which is absolute and unconditional, to pay the principal
of, and interest on, this Debenture at the place, time, and rate, and
in the coin or currency, herein prescribed.
6. The Issuer hereby expressly waives demand and presentment for payment,
notice of nonpayment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, bringing of suit and
diligence in taking any action to collect amounts called for hereunder
and shall be directly and primarily liable for the payment of all
sums owing and to be owing hereon, regardless of any without any
notice, diligence, act or omission as or with respect to the
collection of any amount called for hereunder.
7. The Issuer agrees to pay all costs and expenses, including reasonable
attorneys' fees which may be incurred by the Holder in collecting any
amount due or exercising the conversion rights under this Debenture.
8. If one or more of the following described "Events of Default" shall
occur:
(a) The Issuer shall default in the payment of principal or
interest on this Debenture; or
(b) Any of the representations or warranties made by the Issuer
herein, in the Subscription Agreement, or in any certificate
or financial or other statements heretofore
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or hereafter furnished by or on behalf of the Issuer in
connection with the execution and delivery of this Debenture
or the Subscription Agreement shall be false or misleading in
any material respect at the time made; or
(c) The Issuer shall fail to perform or observe any other
covenant, term, provision, condition, agreement or obligation
of the Issuer under this Debenture or the Subscription
Agreement, including but not limited to conversion of this
Debenture as provided herein and therein, and such failure
shall continue uncured for a period of seven (7) days after
notice from the Holder of such failure; or
(d) The Issuer shall (1) become insolvent; (2) admit in writing
its inability to pay its debts generally as they mature; (3)
make an assignment for the benefit of creditors or commence
proceedings for its dissolution; or (4) apply for or consent
to the appointment of a trustee, liquidator or receiver for it
or for a substantial part of its property or business; or
(e) A trustee, liquidator or receiver shall be appointed for the
Issuer for a substantial part of its property or business
without its consent and shall not be discharged within thirty
(30) days after such appointment; or
(f) Any governmental agency or any court of competent jurisdiction
at the instance of any governmental agency shall assume
custody or control of the whole or any substantial portion of
the properties or assets of the Issuer and shall not be
dismissed within thirty (30) calendar days thereafter; or
(g) Any money judgment, writ or warrant of attachment or similar
process in excess of Four Hundred Thousand Dollars
($400,000.00) in the aggregate shall be entered or filed
against the Issuer or any of its properties or other assets
and shall remain unvacated, unbonded or unstayed for a period
of fifteen (15) calendar days or in any event later than five
(5) calendar days prior to the date of any proposed sale
thereunder; or
(h) Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Issuer, and if instituted against
the Issuer, shall not be dismissed within thirty (30) calendar
days after such institution or the Issuer shall by any action
or answer approve of, consent to, or acquiesce in any such
proceedings or admit the material
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allegations of, or default in answering a petition filed in
any such proceedings or admit the material allegations of, or
default in answering a petition filed in any such proceeding;
or
(i) The Issuer shall have its Common Stock delisted from an
exchange or an over-the-counter market;
then, or at any time thereafter, and in each and every such case,
unless such Event of Default shall have been waived in writing by the
Holder (which waiver shall not be deemed to be a waiver of any
subsequent default) at the option of the Holder and in the Holder's
sole discretion, the Holder may consider this Debenture immediately
due and payable, without presentment, demand protest or notice of any
kind, all of which are hereby expressly waived, anything herein or in
any note or other instruments contained to the contrary
notwithstanding, and the Holder may immediately, and without
expiration of any period of grace, enforce any and all of the Holder's
rights and remedies provided herein or any other rights or remedies
afforded by law.
9. This Debenture is subject in all respects to the provisions, terms and
conditions of the Subscription Agreement which is, in its entirety,
incorporated herein by this reference.
10. No recourse shall be had for the payment of the principal of, or the
interest on, this Debenture, or for any claim based hereon, or
otherwise in respect hereof, against any incorporator, shareholder,
officer or director, as such, past, present or future, of the Issuer
or any successor corporation, whether by virtue of any constitution,
statute, or rule of law, or by enforcement by any assessment or
penalty or otherwise, all such liability being, by acceptance hereof
and as part of the consideration for the issue hereof, expressly
waived and released.
11. The Holder of this Debenture, by execution of the Subscription
Agreement and acceptance hereof, agrees that this Debenture is being
acquired for investment purposes and that such Holder will not offer,
sell or otherwise dispose of this Debenture or the shares of Common
Stock issuable upon exercise thereof except under circumstances which
shall not result in a violation of the Act or any applicable state
Blue Sky law or similar laws relating to the sale of securities.
12. The Issuer undertakes to file and amendment to Registration Statement
on Form SB-2 to register the Common Stock to be issued upon conversion
of this Debenture with the Securities and Exchange Commission on or
before May 15, 1997.
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13. In case any provision of this Debenture is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid
or unenforceable, such provision shall be adjusted rather than voided,
if possible, so that it is enforceable to the maximum extent possible,
and the validity and enforceability of the remaining provisions of
this Debenture will not in any way be affected or impaired thereby.
14. This Debenture and the agreements referred to in this Debenture
constitute the full and entire understanding and agreement between the
Issuer and the Holder with respect hereto. Neither this Debenture nor
any terms hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the Issuer and the
Holder. This Debenture is in all respects subject to the terms and
conditions contained in the Subscription Agreement.
15. Payment of the liabilities and obligations of the Issuer under this
Debenture and the other Debentures authorized pursuant to the
Subscription Agreement, and the Subscription Agreement, are secured by
a Trust Deed on certain patented and unpatented mining claims held by
the issuer near Manhattan, Nevada. The Issuer agrees to execute such
documents and take such action as may be necessary to perfect the
security interest of the Issuer in such claims.
16. This Debenture shall be governed by and construed in accordance with
the laws of the state of California.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by an officer thereunto duly authorized.
NEVADA MANHATTAN MINING INCORPORATED
By:
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Official Signatory of Issuer
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Name (Printed)
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Title
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Date
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EXHIBIT 1
NEVADA MANHATTAN MINING INCORPORATED
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Debenture)
The undersigned (the "Holder") hereby irrevocably elects to
convert____________($____________) principal amount of the above Debenture No.
___________ into ___________ (_____________) shares of Common Stock of Nevada
Manhattan mining Incorporated (the "Issuer") and to receive a Debenture in the
principal, amount of ____________. ($___________) representing the unconverted
principal amount of Debenture in accordance with the conditions set forth in
such Debenture, as of the date written below. The shares are to be issued in
the "Street Name" written below.
The undersigned represents and warrants as follows:
(1) The undersigned is the Holder of the Debenture referred to
above, is duly authorized to execute this Notice of Conversion
and has not sold, transferred, hypothecated or encumbered the
Debenture.
(2) The undersigned will not sell, transfer or hypothecate the
shares of common stock of the Issuer issued pursuant to this
Notice except in full compliance with federal and state
securities laws, rules and regulations applicable thereto.
Holder:
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By:
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Official Signatory of Holder
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Title
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Date of Conversion *
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Applicable Conversion Price
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Name of Holder for Registration
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Address for Registration
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"Street Name" for Certificates
* The original Debenture and this Notice of Conversion must be received by the
Issuer within five (5) New York Stock Exchange Trading Days following the Date
of Conversion.
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