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Exhibit 10.xlii
METEOR INDUSTRIES, INC.
Nevada Manhattan Mining Incorporated
Term Sheet
December 30, 1998
Company: METEOR INDUSTRIES, INC. ("Company"), a Colorado corporation.
Purchaser: NEVADA MANHATTAN MINING INCORPORATED, a Nevada corporation("NM").
Stockholder: CAPCO ACQUISUB, INC., a Colorado corporation ("Stockholder").
Transaction:
For the consideration and on the terms and conditions described
below, NM hereby purchases from Stockholder, and Stockholder
hereby sells to NM, One Million Two Hundred Twelve Thousand
(1,212,000) shares of the restricted voting common stock of the
Company (the "Initial Shares").
In addition, for the consideration and on the terms and
conditions described below, on or before January 14, 1999,
Stockholder shall sell to NM an additional Five Hundred Eighteen
Thousand (518,000) shares of Company common stock (the
"Additional Shares", and, together with the Initial Shares, the
"Shares").
If Stockholder fails to deliver the Additional Shares in
accordance with the paragraph immediately above, NM may, as
liquidated damages for loss of a bargain and not as a penalty, in
lieu of exercising its other rights respecting such Additional
Shares under this Term Sheet, if it shall so elect, either (i)
demand that Stockholder pay NM, and Stockholder shall pay NM,
Five Hundred Thousand Dollars ($500,000) within 45 days or may
(ii) by notice to Stockholder reduce the Initial Consideration
(defined below) payable hereunder by Five Hundred Thousand
Dollars ($500,000).
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Consideration:
In the transaction contemplated by this Term Sheet (the
"Transaction") NM shall pay to the Stockholder the purchase price
of $7.00 per Share, for a total purchase price for (A) the
Initial Shares, Eight Million Four Hundred Eighty Four Thousand
Dollars ($8,484,000) (the "Initial Consideration"), and (B) the
Additional Shares, Three Million Six Hundred Twenty Six Thousand
Dollars ($3,626,000) (the "Additional Consideration", and,
together with the Initial Consideration, the "Consideration") as
follows: (i) Five Hundred Thousand Dollars ($500,000) on the date
hereof , (ii) One Million Dollars ($1,000,000) by March 16, 1999,
and (iii) on each March 31, June 30, September 30 and December 31
following March 31, 1999, NM shall pay to Stockholder, Five
Hundred Thirty Thousand Five Hundred Dollars ($530,500) until the
Consideration shall have been paid in full; provided, however,
that if the Additional Shares are not sold to NM as contemplated
above, the total amount of Consideration shall be the amount of
the Initial Consideration as reduced by NM pursuant to its
liquidated damages rights as provided above, and the amount of
each installment of Consideration payable hereunder shall be
ratably reduced.
Interest:
In addition to the installments of Consideration to be paid by NM
as provided above, NM shall pay interest on any amount of the
balance of the Consideration not then paid at the rate of eleven
percent (11%) per annum, assuming a 365 day year, from the date
hereof until the Consideration shall have been paid in full. On
any date an installment of Consideration shall be paid or payable
as provided above, all amounts of interest accrued and unpaid
shall be paid together with such installment. All amounts of
Consideration and interest thereon shall be paid in cash by wire
transfer to such account of Stockholder located in the United
States as Stockholder shall specify to NM in writing from time to
time.
Representations
and Warranties
of NM:
NM hereby makes each of the following representations and
warranties to and for the benefit of Stockholder on the date
hereof and as of the date of any sale of the Additional Shares:
1. NM is a corporation duly organized, validly existing, and in
good standing under the laws of Nevada.
2. NM has full power and authority (including full corporate
power and authority) to execute and deliver this Term Sheet
and to perform its obligations hereunder. This Term Sheet
constitutes the valid and legally binding obligation of NM,
enforceable in accordance with its terms and conditions. NM
need not give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions
contemplated by this Term Sheet.
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3. Neither the execution and the delivery of this Term Sheet,
nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government,
governmental agency, or court to which NM is subject or any
provision of its charter or bylaws or (B) conflict with,
result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license,
instrument, or other arrangement to which NM is a party or
by which it is bound or to which any of its assets is
subject.
4. NM has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Term Sheet for which
Stockholder could become liable or obligated.
5. NM is not acquiring the Shares with a view to or for sale in
connection with any distribution thereof within the meaning
of the Securities Act of 1933, as amended (the "Securities
Act").
Representations
and Warranties
of Stockholder:
Stockholder hereby makes the representations and warranties
appearing on Exhibit A hereto to and for the benefit of NM on the
date hereof and as of the date of any sale of the Additional
Shares.
Grant of Option:
NM hereby grants to Stockholder the option to purchase from NM
from time to time prior to January 1, 2002 (the "Option
Termination Date"), (i) 15,000,000 shares of common stock of NM
at the exercise price of thirty-three and one-half cents ($0.335)
per share, and (ii) 2,000,000 shares of common stock of NM at the
exercise price of sixty-five cents ($.65) per share (the
"Options"). Each Option and its exercise price shall be ratably
adjusted for any stock split, reverse stock split or share
dividend which becomes effective after the date hereof and before
the Option Termination Date. Each Option may be assigned by
Stockholder, and thereafter shall be nonassignable.
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NV Board
Representation:
NM hereby agrees (A) promptly to cause one individual nominated
by Stockholder to be appointed as a member of the NM Board of
Directors, and (B) to cause one individual nominated by
Stockholder to be included in each management slate of
individuals proposed by NM to be elected as members of the NM
Board after the date hereof and prior to the Option Termination
Date. If at any time the aggregate number of shares of NM stock
held by Stockholder and purchasable by Stockholder under the
Option shall be less than Seven Million Five Hundred Thousand
(7,500,00) shares, Stockholder's rights under this paragraph
shall cease and terminate.
Expenses:
Each Party shall bear such Party's own costs and expenses arising
out of or relating to the Transaction (including such Party's own
attorneys fees and expenses).
Assurances:
The Parties hereby agree to execute and deliver all documents and
instruments, and take such action as may be required, in order to
effectuate the terms and conditions set forth in this Term Sheet.
(Stockholder shall not disclose to any third party any
information concerning the Transaction (or the transactions
contemplated by the Other Term Sheets) without the prior written
consent of NM.)
Due Diligence:
Anything to the contrary appearing in this Term Sheet
notwithstanding, NM shall have the right to rescind the
Transaction by no later than February 15, 1999. Upon any such
rescission, NM shall return all of the Shares to Stockholder, and
Stockholder shall return to NM all Consideration and any other
consideration received by Stockholder hereunder, and there shall
be no further liability to either party.
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The terms and conditions set forth in this Term Sheet shall be binding and
enforceable among the Parties. This Term Sheet and all transactions and disputes
arising out of or related hereto shall be governed by the laws of California.
The Parties contemplate that the Transaction will be consummated in accordance
with the terms of this Term Sheet, and that this Term Sheet will be amended and
restated in its entirety in definitive documents by February 15, 1999, and the
Parties agree to negotiate in good faith such definitive documents, which will
contain customary representations, warranties, covenants and conditions as
reasonably required by NM. The definitive documents shall include, without
limitation, a pledge agreement providing for a pledge of the Shares by NM to the
Stockholder securing NM's obligations to pay the Consideration and interest
thereon, which pledge agreement shall provide, among other things, that (i) the
Shares pledged thereunder shall be held by a pledge agent reasonably acceptable
to the parties hereto, and (ii) a ratable potion of the number of Shares pledged
thereunder shall be released from such pledge upon payment of each installment
of Consideration (together with interest thereon). In the event that final
definitive documents either are not executed or not agreed upon between the
Parties, then it is expressly understood and agreed that this Term Sheet shall
be in lieu of any such definitive documents and shall be enforceable in
accordance with the terms and conditions contained herein, and each Party shall
be deemed to have made such additional representations and warranties as are
consistent with those set forth herein and are reasonably customary in
transactions involving private purchases of control positions in, and restricted
stock of, a public company. All claims and disputes arising out of or related to
this Term Sheet shall exclusively be subject to resolution by, and in accordance
with the commercial rules of, the American Arbitration Association by
arbitration conducted in Los Angeles, California. The Parties further agree that
any arbitrator's order or judgment issued pursuant hereto may be enforced in any
court of competent jurisdiction, and that the arbitrators appointed pursuant
hereto shall have the right to award specific performance. In the event any
action is necessary to enforce the rights of any of the Parties, the prevailing
party in any such action shall be entitled to reasonable attorneys fees in
addition to costs, including any arbitrators' costs and expenses. In the event
there is no prevailing Party, each Party to such arbitration shall bear the
fees, costs and expenses of the arbitrators equally.
This Term Sheet shall become effective upon the execution and delivery
hereof by each of the Parties, each of the parties to each thereof. All
signatures may be delivered in counterparts by facsimile or original
counterpart. By executing and delivering this Term Sheet, (i) NM acknowledges
its receipt of certificates representing the Initial Shares, and (ii)
Stockholder hereby acknowledges its receipt of $500,000 of Initial
Consideration.
AGREED AND ACCEPTED BY:
Purchaser:
NEVADA MANHATTAN MINING INCORPORATED
/s/ Xxxx X. Xxxxx, Sec.
BY: ____________________________________________________
Title: Secretary
Stockholder:
CAPCO ACQUISUB, INC.
/s/ Xxxxx Xxxxxxxxx
BY: ____________________________________________________
Title: President
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EXHIBIT A
1. The Stockholder is duly organized, validly existing, and in good standing
under the laws of Colorado.
2. The Stockholder has full power and authority (including full corporate
power and authority) to execute and deliver this Term Sheet and to perform
his or its obligations hereunder. This Term Sheet constitutes the valid and
legally binding obligation of the Stockholder, enforceable in accordance
with its terms and conditions. The Stockholder need not give any notice to,
make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the
transactions contemplated by this Term Sheet.
3. Neither the execution and the delivery of this Term Sheet, nor the
consummation of the transactions contemplated hereby, will (A) violate any
constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Stockholder is subject or, if
the Stockholder is a corporation, any provision of its charter or bylaws or
(B) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Stockholder is a party or by which it is bound or to which any of his or
its assets is subject.
4. The Stockholder has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Term Sheet for which NM could become
liable or obligated.
5. The Stockholder holds of record and owns beneficially the Shares which
Stockholder is selling to NM as of the date this representation is made,
free and clear of any restrictions on transfer (other than any restrictions
under the Securities Act and state securities laws and, except that,
pursuant to the terms of an agreement with the Company, a copy of which has
been delivered by the Stockholder to NM (the "Stockholder Agreement"), the
Shares may not be sold at a date earlier than December 31, 1999), taxes,
security interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. All restrictions on transfer of
the Shares under the Stockholder Agreement have been effectively waived
with respect to the Transaction, and the Transaction will not constitute or
cause a breach of the Stockholder Agreement. The Stockholder is not a party
to any option, warrant, purchase right, or other contract or commitment
that could require the Stockholder to sell, transfer, or otherwise dispose
of any capital stock of the Company (other than this Term Sheet). The
Stockholder is not a party to any voting trust, proxy, or other agreement
or understanding with respect to the voting of any capital stock of the
Company.
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6. The statements and information provided to NM by or on behalf of
Stockholder in, or in connection with, this Term Sheet (including the
representations and warranties contained herein and information provided
relating to NM's due diligence investigation concerning the Transaction) do
not, and will not, contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make any such statements
or information not misleading.
7. To the best knowledge of the Stockholder, Company has made all filings with
the Securities and Exchange Commission ("SEC") that it has been required to
make under the Securities Act and the Securities Exchange Act (collectively
the "Company Public Reports"). Each of the Company Public Reports, as of
its respective date (and, with respect to the most recent Company Public
Report, as of the date hereof) has complied with the Securities Act and the
Securities Exchange Act in all material respects.
8. To the best knowledge of the Stockholder, except for (i) liabilities
disclosed in the Company Public Reports, and (ii) liabilities which have
arisen after January 1, 1998 in the ordinary course of business (none of
which results from, arises out of, relates to, is in the nature of, or was
caused by any breach of contract, breach of warranty, tort, infringement,
or violation of law), none of Company or any of its subsidiaries has any
liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, whether arising under environmental law or
other applicable law or otherwise, and whether due or to become due),
including any liability for any taxes, which, individually or in the
aggregate, would have a material adverse effect on Company.
9. The entire authorized capital stock of Company is as follows:
Class of Stock Authorized Number Issued and Outstanding
of Shares (excluding treasury shares)
Common Stock 10,000,000 3,458,892
(ii) Ninety Seven Thousand (97,000) shares of Company capital
stock are held in the Company's treasury. All of the issued and
outstanding shares of the Company's capital stock, and all capital
stock of each of Company's subsidiaries, have been duly authorized and
are validly issued, fully paid, and nonassessable. There are no
outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require Company or any of its
subsidiaries to issue, sell, or otherwise cause to become outstanding
any of its capital stock except for 350,534 options outstanding under
the Employees Stock Option Plan. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or
similar rights with respect to Company or any of its subsidiaries
except as reported in the Company Public Reports except outstanding
warrants to purchase 1,372,000 shares of Company common stock.
