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EXHIBIT 4.(viii)
SUBSCRIPTION AGREEMENT
NEVADA MANHATTAN MINING INCORPORATED
8% SENIOR 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 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 British Virgin
Islands, (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
$400,000.00 aggregate principal amount of the Issuer's 8%
Convertible Debentures convertible into shares of the Issuer's
common stock ("Common Stock") in the form attached as Schedule "A"
hereto (the "Debentures") for a total consideration, including all
fees and commissions, of $400,000.00 (the "Purchase Price") under
the terms and conditions specified in Paragraph 10 hereof.
b) Form of Payment. Purchaser shall pay such portion of the Purchase
Price required to purchase the Debentures being purchased by
delivering good funds by wire transfer in United States Dollars into
an escrow account (The "Escrow Account") as follows:
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Bank of Xxx Xxxx
Xx. 00
Xxxxxxxxxx, Xxx Xxxxxx 00000
ABA No. 000000000
Account Name: Xxxx X. Xxxxxxxx, Esq., Attorney Trust Account
Account No.: 6104763934
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 aquire 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
Regualtion 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 Purchaseer
by the Issuer or any agent of the Issuer other 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.
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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; (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 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.
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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 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:
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 nonassessable 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
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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 transaction 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 Bylaws 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.
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
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.
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5. 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 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
sufficient shares to permit conversion and/or exercise thereof
in full of all outstanding Securities;
e) 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. Notwithstanding anything contained herein to the
contrary, in the event the Purchaser's stock holdings exceed
4.99% of the then issued and outstanding shares, it shall
immediately comply with all SEC filing and notification
requirements;
f) Neither the SEC Filings nor the Registration Statement (as
hereinafter defined) nor 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 Closing.
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The Issuer agrees to pay all costs and expenses, including reasonable
attorneys' fees, of one-half of one percent, which may be incurred by
the Purchaser in collecting any amount due or exercising the conversion
and/or exercise rights under these Securities.
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, an 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. 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 free trading 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 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
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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 or a notice of conversion
following the effectiveness of the Registration Statement, or fails to
deliver legend 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, judgments, 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. 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:
Xxxx X. Xxxxxxxx, Esq.
0000X Xx. 00 Xxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Facsimile: (000) 000-0000
The Escrow Agent shall be entitled to a fee of 1/2 of one percent for
subsequent 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.
11. 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. Issuer will issue Warrants having a five (5)
year term and having an Exercise Price set at the Conversion Price
applicable to the Debenture being purchased at Closing. The number of
Warrants issued will be 5,000 warrants per $100,000 principal amount of
the Debentures.
12. Conditions to the Issuer's Obligation to Sell.
Issuer shall have the right to reject any subsequent Agreement which is
tendered to the Issuer hereunder for any securities offered after the
initial purchase of $1,700,000 of the Debentures. Any tender for the
initial $1,700,000 of the Debentures may only be rejected if the Issuer
reasonably believes any representations and warranties of such Purchaser
contained herein 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 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 commission hereunder.
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13. Conditions to Purchaser's Obligation to Purchaser.
Issuer understands that Purchaser's obligation to purchase the
Securities is conditioned upon delivery of (i) the opinion of counsel
specified in Section 4(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. 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; (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.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Additionally, all signatories hereby
consent to the State of New York as the jurisdictional situs of all
disputes.
15. 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 contemporaneous 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.
16. 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: Xxxx Xxxx Properties
ADDRESS: 0 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxx
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Tel. No. (000) 000-0000
Fax No. (000) 000-0000
Contact No. Xxxx Xxxxxx, LLC
17. Delivery Instructions: (If different from Registration Name)
NAME: Zazoff Associates, LLC
ADDRESS: 000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
Contact Name: Xxxx Xxxxxx
Special Instructions: In each closing, Purchaser will receive debentures
representing One Hundred Percent (100%) of its
subscription in denominations of $100,000 each. Each
Debenture will specify a First Conversion Date of the
later of the date of effective registration, or
forty-five (45) days from the Closing Date.
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 p.m. 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 day of July, 1997.
Purchaser Name: Xxxx Xxxx Properties
BY: /s/ XXXXX XXXXXXXXX
---------------------------------
Official signatory of Purchaser
Name (Printed:) XXXX XXXX PROPERTIES
3 Tora Mezion St
Jerusalem Isreal
Title:
President XXXXX XXXXXXXXX
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Israel
------------------------------------
Accepted this 1st day of July, 1997
A MANHATTAN MINING INCORPORATED
By: /s/ [SIG]
--------------------------------
Official Signatory of Issuer
I have full authority to bind Nevada Manhattan Mining Incorporated JSK ( )
Name (Printed): XXXXXXX X. XXXXXX
--------------------
Xxxxxxx X. Xxxxxx
Title:
C.O.O.
------------------------------------
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SUBSCRIPTION AGREEMENT
NEVADA MANHATTAN MINING INCORPORATED
8% SENIOR 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 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 County of
Leitchenstein, (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
$500,000.00 aggregate principal amount of the Issuer's 8%
Convertible Debentures convertible into shares of the Issuer's
common stock ("Common Stock") in the form attached as Schedule "A"
hereto (the "Debentures") for a total consideration, including all
fees and commissions, of $500,000.00 (the "Purchase Price") under
the terms and conditions specified in Paragraph 10 hereof.
b) Form of Payment. Purchaser shall pay such portion of the Purchase
Price required to purchase the Debentures being purchased by
delivering good funds by wire transfer in United States Dollars into
an escrow account (The "Escrow Account") as follows:
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Bank of Xxx Xxxx
Xx. 00
Xxxxxxxxxx, Xxx Xxxxxx 00000
ABA No. 000000000
Account Name: Xxxx X. Xxxxxxxx, Esq., Attorney Trust Account
Account No.: 6104763934
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 aquire 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
Regualtion 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 Purchaseer
by the Issuer or any agent of the Issuer other 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.
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15
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; (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 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.
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16
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 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:
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 nonassessable 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
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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 transaction 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 Bylaws 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.
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
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.
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5. 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 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
sufficient shares to permit conversion and/or exercise thereof
in full of all outstanding Securities;
e) 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. Notwithstanding anything contained herein to the
contrary, in the event the Purchaser's stock holdings exceed
4.99% of the then issued and outstanding shares, it shall
immediately comply with all SEC filing and notification
requirements;
f) Neither the SEC Filings nor the Registration Statement (as
hereinafter defined) nor 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 Closing.
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19
The Issuer agrees to pay all costs and expenses, including reasonable
attorneys' fees, of one-half of one percent, which may be incurred by
the Purchaser in collecting any amount due or exercising the conversion
and/or exercise rights under these Securities.
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, an 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. 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 free trading 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 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
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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 or a notice of conversion
following the effectiveness of the Registration Statement, or fails to
deliver legend 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, judgments, 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. 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:
Xxxx X. Xxxxxxxx, Esq.
0000X Xx. 00 Xxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Facsimile: (000) 000-0000
The Escrow Agent shall be entitled to a fee of 1/2 of one percent for
subsequent 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.
11. 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. Issuer will issue Warrants having a five (5)
year term and having an Exercise Price set at the Conversion Price
applicable to the Debenture being purchased at Closing. The number of
Warrants issued will be 5,000 warrants per $100,000 principal amount of
the Debentures.
12. Conditions to the Issuer's Obligation to Sell.
Issuer shall have the right to reject any subsequent Agreement which is
tendered to the Issuer hereunder for any securities offered after the
initial purchase of $1,700,000 of the Debentures. Any tender for the
initial $1,700,000 of the Debentures may only be rejected if the Issuer
reasonably believes any representations and warranties of such Purchaser
contained herein 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 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 commission hereunder.
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13. Conditions to Purchaser's Obligation to Purchaser.
Issuer understands that Purchaser's obligation to purchase the
Securities is conditioned upon delivery of (i) the opinion of counsel
specified in Section 4(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. 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; (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.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Additionally, all signatories hereby
consent to the State of New York as the jurisdictional situs of all
disputes.
15. 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 contemporaneous 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.
16. 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: UFH Endowment, Ltd.
ADDRESS:
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Tel. No. (000) 000-0000
Fax No. (000) 000-0000
Contact No. Xxxx Xxxxxxxxxx
17. Delivery Instructions: (If different from Registration Name)
NAME: L.H. Financial Services
ADDRESS: Essex House, 000 Xxxxxxx Xxxx Xxxxx, Xxxxx 0000, Xxx Xxxx, XX
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
Contact Name: Xxxx Xxxxxxxxxx
Special Instructions: In each closing, Purchaser will receive debentures
representing One Hundred Percent (100%) of its
subscription in denominations of $100,000 each. Each
Debenture will specify a First Conversion Date of the
later of the date of effective registration, or
forty-five (45) days from the Closing Date.
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 p.m. 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 day of July, 1997.
Purchaser Name: UFH Endowment, Ltd.
BY: /s/ [SIG]
---------------------------------
Official signatory of Purchaser
Name (Printed:) XXXXXX XXX
Title:
President Executive Director
---------------------------
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Liechtenstein
------------------------------------
Accepted this 1st day of July, 1997
A MANHATTAN MINING INCORPORATED
By: /s/ [SIG]
--------------------------------
Official Signatory of Issuer
I have full authority to bind Nevada Manhattan Mining Incorporated JSK ( )
Name (Printed): XXXXXXX X. XXXXXX
--------------------
Xxxxxxx X. Xxxxxx
Title:
C.O.O.
------------------------------------
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SUBSCRIPTION AGREEMENT
NEVADA MANHATTAN MINING INCORPORATED
8% SENIOR 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 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 County of
Leitchenstein, (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
$500,000.00 aggregate principal amount of the Issuer's 8%
Convertible Debentures convertible into shares of the Issuer's
common stock ("Common Stock") in the form attached as Schedule "A"
hereto (the "Debentures") for a total consideration, including all
fees and commissions, of $500,000.00 (the "Purchase Price") under
the terms and conditions specified in Paragraph 10 hereof.
b) Form of Payment. Purchaser shall pay such portion of the Purchase
Price required to purchase the Debentures being purchased by
delivering good funds by wire transfer in United States Dollars into
an escrow account (The "Escrow Account") as follows:
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Bank of Xxx Xxxx
Xx. 00
Xxxxxxxxxx, Xxx Xxxxxx 00000
ABA No. 000000000
Account Name: Xxxx X. Xxxxxxxx, Esq., Attorney Trust Account
Account No.: 6104763934
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 aquire 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
Regualtion 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 Purchaseer
by the Issuer or any agent of the Issuer other 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.
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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; (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 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.
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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 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:
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 nonassessable 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
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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 transaction 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 Bylaws 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.
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
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.
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5. 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 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
sufficient shares to permit conversion and/or exercise thereof
in full of all outstanding Securities;
e) 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. Notwithstanding anything contained herein to the
contrary, in the event the Purchaser's stock holdings exceed
4.99% of the then issued and outstanding shares, it shall
immediately comply with all SEC filing and notification
requirements;
f) Neither the SEC Filings nor the Registration Statement (as
hereinafter defined) nor 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 Closing.
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The Issuer agrees to pay all costs and expenses, including reasonable
attorneys' fees, of one-half of one percent, which may be incurred by
the Purchaser in collecting any amount due or exercising the conversion
and/or exercise rights under these Securities.
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, an 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. 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 free trading 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 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
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32
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 or a notice of conversion
following the effectiveness of the Registration Statement, or fails to
deliver legend 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, judgments, 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. 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:
Xxxx X. Xxxxxxxx, Esq.
0000X Xx. 00 Xxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Facsimile: (000) 000-0000
The Escrow Agent shall be entitled to a fee of 1/2 of one percent for
subsequent 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.
11. 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. Issuer will issue Warrants having a five (5)
year term and having an Exercise Price set at the Conversion Price
applicable to the Debenture being purchased at Closing. The number of
Warrants issued will be 5,000 warrants per $100,000 principal amount of
the Debentures.
12. Conditions to the Issuer's Obligation to Sell.
Issuer shall have the right to reject any subsequent Agreement which is
tendered to the Issuer hereunder for any securities offered after the
initial purchase of $1,700,000 of the Debentures. Any tender for the
initial $1,700,000 of the Debentures may only be rejected if the Issuer
reasonably believes any representations and warranties of such Purchaser
contained herein 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 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 commission hereunder.
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13. Conditions to Purchaser's Obligation to Purchaser.
Issuer understands that Purchaser's obligation to purchase the
Securities is conditioned upon delivery of (i) the opinion of counsel
specified in Section 4(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. 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; (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.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Additionally, all signatories hereby
consent to the State of New York as the jurisdictional situs of all
disputes.
15. 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 contemporaneous 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.
16. 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: Austat Anstalt Schaan
ADDRESS: 7440 Fuerstentum, Xxxxxxxxxxxxx, Xxxxxxxxxxx
00
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Tel. No. (000) 000-0000
Fax No. (000) 000-0000
Contact No. Xxxx Xxxxxxxxxx
17. Delivery Instructions: (If different from Registration Name)
NAME: L.H. Financial Services
ADDRESS: Essex House, 000 Xxxxxxx Xxxx Xxxxx, Xxxxx 0000, Xxx Xxxx, XX
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
Contact Name: Xxxx Xxxxxxxxxx
Special Instructions: In each closing, Purchaser will receive debentures
representing One Hundred Percent (100%) of its
subscription in denominations of $100,000 each. Each
Debenture will specify a First Conversion Date of the
later of the date of effective registration, or
forty-five (45) days from the Closing Date.
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 p.m. 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 day of July, 1997.
Purchaser Name: Austat Anstalt Schaan
BY: /s/ [SIG]
---------------------------------
Official signatory of Purchaser
Name (Printed:) AUSTAT ANSTALT SCHAAN
7440 FUERSTENTUM
LIECHTENSTEIN, LANDSTRASSE
Title:
President
---------------------------
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Liechtenstein
------------------------------------
Accepted this 1st day of July, 1997
A MANHATTAN MINING INCORPORATED
By: /s/ [SIG]
--------------------------------
Official Signatory of Issuer
I have full authority to bind Nevada Manhattan Mining Incorporated JSK ( )
Name (Printed): XXXXXXX X. XXXXXX
--------------------
Xxxxxxx X. Xxxxxx
Title:
C.O.O.
------------------------------------
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37
SUBSCRIPTION AGREEMENT
NEVADA MANHATTAN MINING INCORPORATED
8% SENIOR 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 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 State of
New York, (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
$500,000.00 aggregate principal amount of the Issuer's 8%
Convertible Debentures convertible into shares of the Issuer's
common stock ("Common Stock") in the form attached as Schedule "A"
hereto (the "Debentures") for a total consideration, including all
fees and commissions, of $500,000.00 (the "Purchase Price") under
the terms and conditions specified in Paragraph 10 hereof.
b) Form of Payment. Purchaser shall pay such portion of the Purchase
Price required to purchase the Debentures being purchased by
delivering good funds by wire transfer in United States Dollars into
an escrow account (The "Escrow Account") as follows:
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Bank of Xxx Xxxx
Xx. 00
Xxxxxxxxxx, Xxx Xxxxxx 00000
ABA No. 000000000
Account Name: Xxxx X. Xxxxxxxx, Esq., Attorney Trust Account
Account No.: 6104763934
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 aquire 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
Regualtion 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 Purchaseer
by the Issuer or any agent of the Issuer other 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.
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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; (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 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.
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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 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:
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 nonassessable 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
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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 transaction 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 Bylaws 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.
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
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.
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5. 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 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
sufficient shares to permit conversion and/or exercise thereof
in full of all outstanding Securities;
e) 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. Notwithstanding anything contained herein to the
contrary, in the event the Purchaser's stock holdings exceed
4.99% of the then issued and outstanding shares, it shall
immediately comply with all SEC filing and notification
requirements;
f) Neither the SEC Filings nor the Registration Statement (as
hereinafter defined) nor 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 Closing.
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The Issuer agrees to pay all costs and expenses, including reasonable
attorneys' fees, of one-half of one percent, which may be incurred by
the Purchaser in collecting any amount due or exercising the conversion
and/or exercise rights under these Securities.
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, an 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. 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 free trading 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 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
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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 or a notice of conversion
following the effectiveness of the Registration Statement, or fails to
deliver legend 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, judgments, 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. 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:
Xxxx X. Xxxxxxxx, Esq.
0000X Xx. 00 Xxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Facsimile: (000) 000-0000
The Escrow Agent shall be entitled to a fee of 1/2 of one percent for
subsequent 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.
11. 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. Issuer will issue Warrants having a five (5)
year term and having an Exercise Price set at the Conversion Price
applicable to the Debenture being purchased at Closing. The number of
Warrants issued will be 5,000 warrants per $100,000 principal amount of
the Debentures.
12. Conditions to the Issuer's Obligation to Sell.
Issuer shall have the right to reject any subsequent Agreement which is
tendered to the Issuer hereunder for any securities offered after the
initial purchase of $1,700,000 of the Debentures. Any tender for the
initial $1,700,000 of the Debentures may only be rejected if the Issuer
reasonably believes any representations and warranties of such Purchaser
contained herein 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 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 commission hereunder.
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13. Conditions to Purchaser's Obligation to Purchaser.
Issuer understands that Purchaser's obligation to purchase the
Securities is conditioned upon delivery of (i) the opinion of counsel
specified in Section 4(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. 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; (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.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Additionally, all signatories hereby
consent to the State of New York as the jurisdictional situs of all
disputes.
15. 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 contemporaneous 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.
16. 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: Mendel Group, Inc.
ADDRESS: 00 Xxxx 00xx Xx., 0xx Xxxxx, Xxx Xxxx, XX 00000
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Tel. No. (000) 000-0000
Fax No. (000) 000-0000
Contact No. Xxxxxxxx Xxxxxx, President
17. Delivery Instructions: (If different from Registration Name)
NAME: L. H. Financial Services
ADDRESS: c/o Essex House, 000 Xxxxxxx Xxxx Xxxxx, Xxxxx 0000, Xxx Xxxx, XX
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
Contact Name: Xxxx Xxxxxxxxxx
Special Instructions: In each closing, Purchaser will receive debentures
representing One Hundred Percent (100%) of its
subscription in denominations of $100,000 each. Each
Debenture will specify a First Conversion Date of the
later of the date of effective registration, or
forty-five (45) days from the Closing Date.
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 p.m. 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 day of July, 1997.
Purchaser Name: Xxxx Xxxx Properties
BY: /s/ XXXXXXXX XXXXXX
---------------------------------
Official signatory of Purchaser
Name (Printed:) MENDEL GROUP, INC.
00 Xxxx 00xx Xx., 0xx Xxxxx, Xxx Xxxx, XX
Title:
President MENDEL GROUP, INC.
---------------------------
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United States
------------------------------------
Accepted this 1st day of July, 1997
A MANHATTAN MINING INCORPORATED
By: /s/ [SIG]
--------------------------------
Official Signatory of Issuer
I have full authority to bind Nevada Manhattan Mining Incorporated JSK ( )
Name (Printed): XXXXXXX X. XXXXXX
--------------------
Xxxxxxx X. Xxxxxx
Title:
C.O.O.
------------------------------------
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