United States Securities and Exchange Commission
Washington, D.C. 20549
Amendment No. 1
to
Form 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly period ended November 30, 1998.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number: 0-25117
NEVADA MANHATTAN GROUP, INCORPORATED
(Exact Name of Small Business Issuer as Specified in Its Charter)
NEVADA 88-0219765
(State or Other Jurisdiction of (I.R.S.Employer Identification No.)
Incorporation or Organization)
5038 N. PARKWAY CALABASAS, SUITE #100, CALABASAS, CA 91302
(Address of Principal Executive Offices)
(818) 591-4400
(Issuer's Telephone Number, Including Area Code)
TERRA NATURAL RESOURCES CORPORATION
(dba Nevada Manhattan)
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by Section
3 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes ____ No X
---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 64,782,539 shares of Common
Stock and 176,414 shares of Series A Preferred Stock.
Traditional Small Business Disclosure Format (check one): Yes X No ___
<PAGE> 2
2
NEVADA MANHATTAN GROUP, INC. AND SUBSIDIARIES
INDEX TO FORM 10-QSB
PART I FINANCIAL INFORMATION PAGE NO.
Item 1 Financial Statements for Nevada Manhattan Group, Inc. 2
Consolidated Balance Sheets -
November 30, 1998 and May 31, 1998 3
Consolidated Statements of Operations -
Three and Six Months Ended November 30, 1998 and 1997 4
Consolidated Statements of Cash Flow -
Six Months Ended November 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operation 11
Year 2000 Disclosure 13
PART II OTHER INFORMATION
Item 1 Legal Proceedings 15
Item 2 Changes in Securities 17
Item 3 Defaults Upon Senior Securities 18
Item 4 Submission of Matters to a Vote of Security Holders 18
Item 5 Other Information 19
Item 6 Exhibits and Reports on Form 8-K 20
Signature 21
<PAGE> 3
3
NEVADA MANHATTAN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited) (Audited)
ASSETS
Current assets: November 30, 1998 May 31, 1998
----------------- ------------
<S> <C> <C>
Cash and cash equivalents $1,420,169 $ 81,529
Accounts receivable, net of allowance
for doubtful accounts of $150,000 898,257 255,027
Inventories 401,199 108,844
Prepaid expenses 232,240 283,354
------------ ----------
Total current assets 2,951,865 728,754
Properties and equipment
Mineral Properties:
Domestic 2,936,000 2,936,000
Indonesia 1,400,000 1,400,000
Timber concession 700,000 700,000
Machinery and equipment, net 428,469 355,392
Other Assets 3,300 265,700
------------ ----------
TOTAL ASSETS $8,419,634 $6,385,846
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY)
Current liabilities:
Accounts payable and Accrued Expenses $1,375,453 $1,445,106
Convertible Notes 1,366,462 1,889,025
Note Payable to Officer 154,009 718,000
Current portion of long-term debt -- 32,214
------------ ----------
Total current liabilities 2,895,924 4,084,345
Long term debt -- 44,327
Convertible debentures 2,419,182 2,313,459
------------ ----------
Total liabilities 5,315,106 6,442,131
Commitments and contingencies --- ---
Stockholders' Equity (Deficiency):
Preferred stock, $1 par, 250,000 shares
Authorized, 176,414 outstanding
At November 30, 1998 and May 31, 1998 176,414 176,414
Common stock, $0.01 par, 49,750,000
Shares authorized, 43,783,563 and
26,492,543 shares issued and outstanding 437,836 264,926
Additional paid-in capital 33,740,597 28,715,550
Accumulated Foreign Currency Translation ( 57,274) 24,940
Subscriptions receivable ( 428,850) --
Accumulated deficit (30,764,195) (29,238,115)
------------ ----------
Total stockholders' equity (deficiency) 3,104,528 ( 56,285)
------------ ----------
TOTAL LIABILITIES AND STOCKHOLDER EQUITY
(DEFICIENCY) $8,419,634 $6,385,846
============ ==========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 4
4
NEVADA MANHATTAN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Six Months Ended November 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
----------------------------- ---------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $7,750,776 $ 195,030 $7,957,464 $ 351,806
Cost of Sales 6,456,327 185,278 6,605,370 265,873
---------- ---------- ---------- ---------
Gross profit 1,294,449 9,752 1,352,094 85,933
General and administrative
Expenses 1,127,031 1,630,881 2,513,347 2,901,426
---------- ---------- ---------- ---------
Net income (loss) from
Operations 167,418 (1,691,693) (1,161,253) (2,970,493)
Other Expenses 130,735 70,564 364,827 155,000
---------- ---------- ---------- ---------
Net Income (Loss) 36,683 (1,691,693) (1,526,080) (2,970,493)
---------- ---------- ---------- ---------
Cumulative preferred dividends -- ( 29,019) -- ( 58,356)
---------- ---------- ---------- ---------
Net income (loss) attributable
to common shareholders $ 36,683 ($1,720,712) ($1,526,080) $3,028,849)
========== =========== =========== ==========
Basic Income (Loss) Per Share $ 0.00 $ (0.14) $ (0.04) $ (0.24)
========== =========== =========== ==========
Diluted Income (Loss)
Per Share $ 0.00 $ (0.14) $ (0.04) $ (0.24)
========== =========== =========== ==========
Weighted average shares
outstanding 34,668,106 12,477,251 34,668,106 12,477,251
---------- ---------- ---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 5
5
NEVADA MANHATTAN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended November 30, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
---- ----
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,526,080) $(2,970,493)
Adjustments to reconcile net loss to net
cash used in operating activities:
Common stock issued for services 322,486 --
Amortization of Debenture Discount 105,723 --
Depreciation and amortization 25,878 213,998
(Increase) Decrease
Accounts receivable (547,230) 38,101
Inventories (292,355) --
Prepaid expenses 228,163 ( 96,651)
Other Assets 262,400 --
Increase (Decrease)
Accounts payable and accrued Expenses 346,573 838,927
---------- ---------
Net cash used in operating activities (1,074,442) (1,976,114)
---------- ---------
Cash flows from investing activities:
Purchase of property and equipment ( 98,955) ( 517,019)
---------- ---------
Cash flows from financing activities:
Proceeds from Issuance of convertible
debentures -- 1,500,000
Payments on long-term debt -- (288,376)
Proceeds from issuance of notes to
stockholders 99,125 739,241
Proceeds from issuance of stock 2,495,129 --
---------- ---------
Net cash provided by financing activities 2,594,254 1,950,865
---------- ---------
Foreign Currency Translation Adjustment ( 82,217) --
---------- ---------
Net increase (decrease) in cash and cash
equivalents 1,338,640 (542,273)
---------- ---------
Cash and cash equivalents at beginning of
period 81,529 559,510
---------- ---------
Cash and cash equivalents at end of period $1,420,169 $ 17,237
---------- ---------
</TABLE>
Supplemental disclosure of cash flow information:
During the six months ended November 30, 1998 and 1997, the Company paid no
income taxes and no interest.
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
During the six months ended November 30, 1998, the Company issued: 568,469
shares of its common stock for services rendered by employees and third parties
for $334,533; and 138,834 shares of its common stock for $187,846 of liquidated
damages associated with Convertible Debentures.
See accompanying notes to consolidated financial statements
<PAGE> 6
6
NEVADA MANHATTAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Statement of Information Furnished
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-QSB instructions and in the opinion of
management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of November
30, 1998, the results of operations for the three and six months ending
November 30, 1998 and 1997, and the cash flows for the six months ended
November 30, 1998 and 1997. These results have been determined on the basis
of generally accepted accounting principles and practices applied
consistently with those used in the preparation of the Company's audited
financial statements for its fiscal year ended May 31, 1998.
2. Business
In the three months ending November 30, 1998 the Company initiated
expansion, diversification and restructuring, with additional experienced
management, into the fields of high technology, some of which is related to
natural resources; metals/mining processing and sales; fish products and
sales; timber harvesting/processing and sales; coal mining and exploration;
and distribution of oil and gas products through its acquisition of an
interest in Meteor Industries.
In the sector of technology, the Company is acquiring and in the process of
implementing groundbreaking technological inventions by Russian scientist
Professor Alexander Bogomolov, Deputy Director of Kometa, Deputy Director
of the Institute of Chemical Kinetics and Burning Processes, Deputy
Director of Siberian Academy of Science (NOVOSIBIRSK), as follows:
a. Backward Wave Linear Accelerator of Protons, ABC3D, Accelerator based
on concept of three-dimensionality and CVC generators attached to them
with the initial uses of these devices being:
1. to produce isotopes for medical and other uses;
2. for proton, ion and medical therapies;
3. the transmutation (elimination) of radioactive waste;
4. to detect explosives and narcotics and other contraband; and
5. for selection and inspection of objects in space.
b. A mass separator with the ability to divide a mass of 20,000 AME
(1/2000 of a micron). This has many uses including the extraction of
metals for tailings of various mines. In addition, it has other
applications including diamond mining.
Additional areas of the Company's technological business include (1) the
acquisition and development and distribution of irradiated carbon tissues,
(2) telecommunications, (3) software and internet services, and (4) coding
protection systems.
<PAGE> 7
7
No assurance can be given that the Company will be able to successfully and
commercially develop any of these inventions or businesses, which are in
their preliminary stages.
The Company is acquiring and deriving revenues from (1) fishing operations
in the Far East of Russia and (2) metals/mining in Russia and (3) timber
operations/holdings in the Russian Far East encompassing over two million
hectares.
The Company is deriving revenue from timber harvesting and production in
Brazil and holds various rights to develop and harvest timber properties on
up to 665,000 hectares located in the State of Para, Brazil.
The Company has the right to conduct exploration activities on seven gold
and four coal properties in Indonesia. One of the coal properties is
currently under contract with Cyprus Amax Coal Company, a unit of Cyprus
Amax Minerals Company, to operate and fund one of the Company's coal
holdings in East Kalimantan, Indonesia.
The Company has a gold exploration property in Manhattan, Nevada which
previously produced in excess of 500,000 ounces of gold.
3. Other
A. On August 31, 1998, the Company announced that it received an initial
capital infusion of $500,000 from a group led by Tetsuo Kitagawa and
during the period October 19, 1998 to November 24, 1998 an additional
equity investment in excess of $1,100,000 was received from the same
group. Mr. Kitagawa had a 25-year history with the Marubeni Group and
until recently was the financial managing director of Marubeni's
subsidiary in Holland. Mr. Kitagawa is currently assigned by the
Office of the President of the Russian Federation to form investment
funds in and outside of Russia under the management of the Office of
the President of the Russian Federation for the improvement of its
economy. Mr. Kitagawa, with his group, will provide full-time
management and financial services for the Company. The Company has
been reviewing acquisition candidates submitted through Mr. Kitagawa
and certain of his associates, many of which are located in the
countries of the former Soviet Union. On October 14, 1998, Mr.
Kitagawa was elected a director of the Company by the Board of
Directors and currently serves as the Company's Chief Financial and
Operating Officer.
B. From July 1997 through October 16, 1998, Jeffrey S. Kramer, President,
provided loans to the Company, aggregating approximately $714,000 in
principal. Mr. Kramer and the Company have reached an agreement for a
partial settlement of these outstanding loans through the issuance of
restricted common shares by the Company. On October 23, 1998, the
Company issued Mr. Kramer 583,200 shares of restricted common stock in
settlement of $583,200 of principal and interest.
On October 20, 1998, Christopher Michaels, Chairman, purchased 929,500
shares of restricted common stock from the Company at a purchase price
of $0.30 per share through the issuance of a promissory note in the
amount of $278,850, due on or before October 20, 2003 at an interest
rate of prime plus 1%. The note is collateralized by the common stock.
<PAGE> 8
8
C. On October 9, 1998, the Company and Cyprus Amax Coal Co., a unit of
Cyprus Amax Minerals Co. (NYSE:CYM) signed an agreement to operate and
fund one of Nevada Manhattan's coal holdings in East Kalimantan,
Indonesia. Under the terms of the agreement, Cyprus will have the
exclusive right to further explore and develop the East Kalimantan coal
property and the right to acquire an 85% interest. Cyprus will manage,
operate and sell the coal. Cyprus will be responsible for 100% of the
costs and expenses of each phase of exploration and development. These
expenditures will be recoverable from production.
D. On October 8, 1998, the Company elected not to proceed with the
acquisition of the Skluth "Timberlands" in the states of Para and
Amazonas, Brazil. The 5,000,000 escrowed shares were immediately
cancelled on the books and records of the Company and the original
property deeds were returned. The Company does not anticipate that the
reduction in timberland holdings will have an impact on current
operations.
E. On November 30, 1998, the Company announced that, as part of the
company's diversification plan, the following three companies were
formed and are operational: Science and Technology Resources, Inc.
("STR"), Nevada Manhattan Tokyo branch and NV Rexco.
STR, a Nevada corporation wholly owned by Nevada Manhattan, with
operations offices in the Washington, DC area, was formed to acquire,
initiate and utilize a variety of patented technologies, some of which
may have important application in the area of natural resources. STR is
headed by Dr. Thomas Ward, a consultant to the U.S. Department of
Energy.
Nevada Manhattan Tokyo was formed to act on behalf of Nevada Manhattan
to transact the sale and marketing of Nevada Manhattan's products as
well as other companies' products produced from diverse areas around
the world.
NV Rexco, a California corporation, was formed to act on behalf of
Nevada Manhattan for the fishing, processing and distribution of fish
and other seafood, as well as sales and distribution of timber and
other resources, primarily products from the Far East.
All three divisions and/or subsidiaries are operational.
F. On October 5, 1998, the Company announced an agreement for the
acquisition of a substantial interest in a revenue-producing oil and
gas project located on the Plainview natural gas field in Macoupin
County in southwest Illinois. The agreement was subject to verification
of the seller's projections. Upon careful consideration and extensive
due diligence, the Company has elected not to proceed with the
acquisition.
<PAGE> 9
9
4. Subsequent Events
A. On December 23, 1998, the Company acquired 80% of the metal mining
reserves and timber properties of Chrustalnaya, a Russian joint stock
company headquartered in Kavalerovo for 8,000,000 shares of restricted
common stock. Chrustalnaya has approximate reported annual timber and
mining revenues in excess of $16 million. Chrustalnaya's reported
proven mining reserves are in excess of 16,690 tons of tin, 9,970 tons
of lead, 50,970 tons of zinc, 426 tons of silver, 2,760 tons of copper
and 878 kg. of gold. Reported dense timber holdings in the Primorsky
Kray region are over two million hectares or 9,000 square miles.
Chrustalnaya's mining activities include mining, processing ore of
colored metals and obtaining concentrates in the fields of gold,
silver and tin.
The Company intends to continue to mine and harvest the resources of
Chrustalnaya under existing license agreements.
The determination of issuing 8,000,000 shares for consideration is
based on the current and anticipated market value of the Company's
common stock and is based on the current and anticipated value of the
assets that the Company is acquiring.
Nevada Manhattan's activities in Russia and the surrounding
Commonwealth of Independent States (CIS) countries will be supervised
by Dr. Alexander Gonchar, chairman of the General Euro-Asian Committee
of Coal, Metals and Natural Resources, which is comprised of the
presidents of the 11 CIS members. Dr. Gonchar is a well-known
academician and a respected member of the Academy of Science in Russia
as well as other highly respected scientific communities.
While management previously considered an acquisition of
Chrustalnaya's stock, it was determined by the parties that the asset
acquisition, rather than the stock purchase, was in the best interests
of all parties concerned due to international complexities and
reporting requirements.
B. In consideration of other acquisitions being negotiated but not yet
consummated, the Company entered into an agreement with Asset
Management Academy ("AMA"), a California corporation, and issued AMA
5,000,000 shares of restricted common stock for fees and services in
connection with these acquisitions.
C. On December 31, 1998, pursuant to the terms of a Term Sheet executed
by the Company and Capco Acquisub Inc., (the "Term Sheet") the Company
acquired 1,212,000 shares (35%) of Meteor Industries Inc. (NASDAQ:
METR) from Capco Acquisub Inc., ("Capco") at a purchase price of $7.00
per share plus additional consideration in the form of certain options
to buy Nevada Manhattan common stock.. Pursuant to the Term Sheet,
Capco agreed to deliver an additional 518,000 shares of Meteor to the
Company by January 14, 1999 at a purchase price of $7.00 per share.
See Part II, Item 5. for a detailed description of the acquisition.
The entire transaction may be rescinded by the Company at any time
before February 15, 1999.
<PAGE> 10
10
Meteor Industries is a Denver-based company engaged in the business of
distribution and sales of refined petroleum and related products
throughout the Rocky Mountain region. Meteor generated $88 million in
revenues for the nine-month period ended Sept. 30, 1998, and net
profit for the same period was almost $1 million. Meteor owns,
operates and acquires independent refined petroleum product
distribution companies. It sells gasoline, diesel fuel, lubricants,
propane and convenience store items. Meteor's revenues have grown
approximately 35% annually over the past three year through the
acquisition of profitable petroleum firms, primarily in the western
United States.
Under the terms of the acquisition, Ilyas Chaudhary, chairman of
Meteor Industries and Capco, will now serve on Nevada Manhattan's
board of directors. Meteor announced that it intends to expand its
board of directors from the five existing members to seven members
with the two vacancies being filled by representatives of Nevada
Manhattan.
D. At the annual meeting of stockholders on December 9, 1998, more fully
described under Part II, Item 4, the stockholders approved an increase
in the authorized common stock from 49,750,000 shares to 250,000,000
shares, enabling the Company to have greater flexibility in considering
potential future actions involving the issuance of stock which may be
necessary or desirable to accommodate the Company's growth plan,
including capital raising transactions and acquisitions.
E. In December, 1998 an investor subscribed for 6,000,000 shares of Common
Stock, pursuant to a private placement, at a purchase price of
$1,500,000, through the issuance of a Promissory Note (the "Note") at
the interest rate of average monthly Federal Funds rate as listed daily
in the Wall Street Journal, payable in installments of $400,000 on or
around December 20, 1998 and $1,100,000 on March 25, 1999. The first
installment has been received by the Company.
<PAGE> 11
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
RESULTS OF OPERATIONS
Comparison of Results of Operations - Six months ended
---------------------------------------------------------
November 30, 1998 and November 30, 1997
----------------------------------------
Revenues for the six months ended November 30, 1998 were $7,957,464,
as compared to $351,806 for the same period in 1997. The increase of
$7,605,658 in revenues is attributed primarily to the Company's new
operations as follows: $1,326,417 from Fishing operations and
$6,270,000 attributed to the Company's sales and marketing activities
of products manufactured in the Commonwealth of Independent States.
The revenues of $7,957,464 for the six months ended November 30, 1998
are up from $205,885 in the prior six month period ending May 31,
1998. These are new revenue generators for the Company and may be
indicative of what the Company will do in the future. However, no
assurances can be given.
Gross profit margin for the six months ended November 30, 1998 was 17%,
compared to gross profit margin of 24% for the same period in 1997. The
sale of fish had a gross profit margin of 6% and sales and marketing
activities had a gross profit margin of 19%. However, gross profit
margins the Company is experiencing now are not necessarily indicative
of what can be anticipated in the future.
General and administrative expenses for the six months ended November
30, 1998 were $2,513,347 compared to $2,901,427 for the same period in
1997. The decrease of approximately $500,000 is attributed primarily to
reduced expenses and increased efficiencies in the Brazilian operations
and reduction in related travel expense.
Other expense which consists of interest for the six months ended
November 30, 1998 was $364,827 compared to $155,000 for the same
period in 1997. The increase of $209,826 in the Company's interest
expense is attributable primarily to convertible debentures and notes
payable to shareholders.
Comparison of Results of Operations - Three months Ended
------------------------------------------------------------
November 30, 1998 and November 30, 1997
---------------------------------------
Revenues for the quarter ended November 30, 1998 were approximately
$7,750,776 as compared to $195,030 for the same period in 1997. The
increase of $7,555,746 in revenues is attributed primarily to the
Company's new operations as follows: $1,326,417 from Fishing
operations and $6,270,000 attributed to the Company's sales and
marketing activities of products manufactured in the Commonwealth of
Independent States. The revenues of $7,750,776 for the second quarter
ended November 30, 1998 are up from $206,688 in the first quarter
ended August 31, 1998, accounting for the Company's first net income
since inception. These are new revenue generators for the Company and
may be indicative of what the Company will do in the future. However,
no assurances can be given.
<PAGE> 12
12
Gross profit margin for the three months ended November 30, 1998 was
17% compared to gross profit margin of 5% for the same period in 1997.
The sale of fish had a gross profit margin of 6% and the sales and
marketing activities had a gross profit margin of 19%. However, gross
profit margins the Company is experiencing now are not necessarily
indicative of what can be anticipated in the future.
General and administrative expenses for the three months ended November
30, 1998 were $1,127,031 compared to $1,630,881 for the same period in
1997. The decrease of approximately $500,000 is attributed primarily to
reduced expenses and increased efficiencies in the Brazilian operations
and reduction in related travel expense.
Other expense which consists of interest for the three months ended
November 30, 1998 was $130,735 compared to $70,564 for the same period
in 1997. The increase of $60,171 in the Company's interest expense is
attributable primarily to convertible debentures and notes payable to
shareholders.
Net profit for the quarter ended November 30, 1998 was approximately
$36,683 as compared to a net loss of $1,720,712 for the same period in
1997. The net profit for the quarter ended November 30, 1998 was
attributable to increased revenues from the newly instituted fishing
and sales and marketing activities of the Company. No assurance can be
given that the Company's activities resulting in increased revenues and
its first reported earnings can be continued.
LIQUIDITY AND CAPITAL RESOURCES
For the first time since the Company's inception it has experienced
net income. Revenues increased substantially due to increased
activities in the areas of sales and marketing of metals/mining,
fishing and timber operations. Management anticipates that this trend
may continue, though no assurances can be given.
The Company had a cash position, at November 30, 1998, of $1,420,169,
of which $700,000 is being allocated for use in the sales and marketing
activities of the Company and is not available for general corporate
purposes. The other $720,000 is available for general corporate
purposes.
Pursuant to the Company's expansion and diversification plan,
including the formation of NV Rexco and Nevada Manhattan Tokyo Branch,
as well as increased revenue from the Company's metals/mining, fishing
and timber sales and marketing activities, the Company has begun to
generate significant revenue and initial net cash flows for the first
time. The Company believes that with the anticipated increase in daily
production from each of these operations, expenses and overhead will
be funded by the cash flow generated from its operations.
The acquisition of the assets of Chrustalnaya, with reported annual
revenue in excess of $16,000,000, for 8,000,000 shares of restricted
common stock of the Company, represents an additional significant
source of potential revenue and earnings.
<PAGE> 13
13
With the recent acquisition of a 35% interest in Meteor Industries
Inc. ("Meteor") and the anticipated acquisition of an additional 15%
interest in Meteor, the Company intends to acquire a controlling
interest for the purpose of consolidating Meteor's balance sheet which
represents in excess of $100 million in annual revenues and in excess
of $1 million in net profit. The initial 1,212,000 shares of Common
Stock of Meteor were purchased for $8,484,000 ($7.00 per share),
payable $500,000 on December 30, 1998, with the remaining portion
being payable in installments. (See Part II, Item 5.A.) In addition,
the Company has contracted to purchase an additional 518, 000 shares
of Common Stock for $3,626,000 ($7.00 per share) payable in
installments. The $500,000 paid to the seller on December 30, 1998 was
working capital of the Company. The remaining payments will be derived
from working capital, sales of securities of the Company, loans or
other sources.
As of August 28, 1998, TiNV1, Inc., ("TiNV1"), entered into a
Subscription Agreement and a letter agreement with the Company pursuant
to which TiNV1 purchased 5,500,000 shares of the Company's restricted
common stock for $500,000. In the quarter ended November 30, 1998, the
Company received in excess of an additional $1,000,000 of equity
funding from TiNV1 principals and/or affiliates. On December 9, 1998
the Company's stockholders approved an option for TiNV1 to purchase an
additional 70,000,000 shares of restricted common stock at an exercise
price of $0.335 per share which was the trading price of the Company's
common stock on the date of the transaction.
The Company anticipates that it will require additional capital and
intends to secure it by utilizing a publicly registered offering of
its securities, the capital provided by the TiNV1 transaction,
"Private Placements" and/or funds generated from operations.
This section of the Quarterly Report contains forward-looking
statements within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Such statements are
based on management's current expectations and are subject to a number
of factors and uncertainties which could cause actual results to differ
materially from those described in the forward-looking statements.
<PAGE> 14
14
YEAR 2000 DISCLOSURE
--------------------
The Company has appointed a Y2K Risk Manager to look into all possible
effects of Y2K problems within the business operations of the Company
and implement corrective action to ensure that the Company's
operations will not be adversely affected.
The corporate headquarters in the United States maintains eight
computers connected on a peer-to-peer network and four computers
independent of the network. The Company's office in Japan maintains
two computers independent of any network. The company has no
proprietary software. All hardware and software vendors have been
contacted and have expressed no immediate Y2K concerns in relation to
the company's hardware and software. The company has no immediate
plans to either replace or upgrade the computers unless the hardware
and software vendors express concern in regards to the Y2K problem.
The company's Y2K Risk Manager shall periodically seek an update from
hardware and software manufacturers in order to update the company's
Y2K information and re-assess any possible Y2K problems.
If the Company had to replace all of its computers, the costs would be
approximately $25,000. All Company files and records have been backed
up on zip drives and are continuously backed up on a weekly schedule.
Furthermore select Company proprietary, legal and financial
information has been backed up on hard copy in order to preserve
business records and maintain business flow in case of any possible
unforeseen or undisclosed Y2K conflicts by third parties.
The Company maintains a number of subsidiaries and/or affiliates in
various countries including the United States, Brazil, Indonesia, and
various republics of the Commonwealth of Independent States. As part
of the Company's risk assessment, the Risk Manager has contacted and
evaluated each affiliate and subsidiary in order to assess any
possible Y2K conflicts.
It has been determined that there are no conflicts within the
Company's United States and Indonesia operations/subsidiaries nor are
there any conflicts between suppliers and/or manufacturers within the
United States/Indonesia operations. The primary activities within
these regions are explorative and thus utilize no manufacturers and/or
suppliers as well as no equipment with possible imbedded chips and/or
microcontrollers.
The Company's subsidiaries in Brazil and the Commonwealth of
Independent States are currently in the process of assessing their
state of readiness and any possible counter measures that need to be
undertaken in order to assure Y2K compliance. Although it is believed
that all subsidiaries in Brazil and within the Commonwealth of
Independent States are Y2K compliant, The Company believes that since
the majority of the operations are manually conducted, the effects of
any possible technological problem shall be minimal.
The Company is in the process of contacting our customers and
suppliers and until the Company completes this process, the Company
may have a material adverse effect if they are not compliance with
Y2K.
<PAGE> 15
15
NEVADA MANHATTAN GROUP, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
1. Legal Proceedings
-----------------
Francis Parkes, Dr. Joe C. Rude III, Christopher D. Michaels and Nevada
----------------------------------------------------------------------------
Manhattan Mining, Inc. v. Sheldon Salcman, Arie Rabinowitz, Mayer Rooz, Thomson
- - --------------------------------------------------------------------------------
Kernaghan & Co. Limited, Soreq, Inc., Silenus Limited, Mary Park Properties,
- - --------------------------------------------------------------------------------
L.H. Financial Services, Austost Anstalt Schaan, Tusk Investments, Inc., Mendel
- - --------------------------------------------------------------------------------
Group, Inc., Top Holding International, Ltd., Praha Investments S.A., UFH
- - --------------------------------------------------------------------------------
Endowment, Ltd., Atead Consulting S.A., and Ausinvest Anstalt Balzers, (Case No.
- - ---------------------------------------------------------------------
98-5624 JSL(CTx) (the "Securities Action") was filed in United States District
Court for the Central District of California (the "Court") on July 14, 1998 on
behalf of the Company and Francis Parkes, Dr. Joe C. Rude and Christopher D.
Michaels, who are individual Company shareholders. In the Securities Action,
plaintiffs contend that defendants violated Section 10(b) and 13(g) of the
Securities Exchange Act of 1934, Section 1962(b) of the Racketeer Influenced and
Corrupt Organizations Act, and committed fraud by engaging in a fraudulent
scheme to manipulate and artificially depress the market in and for the
Company's common stock by use of massive short sales. Plaintiffs seek an
unspecified amount of damages, including punitive damages, a judicial
declaration that the terms, conditions and covenants of certain debentures and
subscription agreements were violated and certain injunctive relief. On November
2, 1998, the Court denied various motions to dismiss, strike or transfer the
complaint filed by various defendants. Thereafter, separate counterclaims for
breach of contract and declaratory relief were filed by each of Tusk
Investments, Inc., Silenus Limited, and Thomson Kernaghan & Co., Ltd. Discovery
in the Securities Action has just commenced.
UFH Endowment, Ltd. and Austost Anstalt Schaan v. Nevada Manhattan Mining
----------------------------------------------------------------------------
Inc., Jeffrey Kramer and Christopher Michaels, (Case No. 98 Civ. 5032) (the "UFH
- - ---------------------------------------------
Action") was filed in United States District Court for the Southern District of
New York on July 15, 1998, by the Securities Action defendants UFH Endowment,
Ltd. and Austost Anstalt Schaan against the Company, Jeffrey S. Kramer and
Christopher Michaels, officers and directors of the Company, President of the
Company. The plaintiffs in the UFH Action claim that the Company breached
certain debentures and subscription agreements, and that the other defendants
induced such breach, and thus seek an injunction directing the Company to file a
registration statement with the Securities and Exchange Commission ("SEC") and
to issue common stock, as well as damages from the Company and defendants Kramer
and Michaels. Approximately one month after first filing their complaint, the
plaintiffs amended their complaint to include a claim purporting to allege
violations by the Company and Jeffrey S. Kramer and Christopher Michaels. On or
about July 30, 1998 plaintiffs sought a preliminary injunction requesting that
the Company be compelled to file a registration statement with the SEC and issue
stock to the plaintiffs. This motion was denied. On July 27, 1998, the Company
and Messrs. Kramer and Michaels filed various motions to dismiss, stay, or
transfer the UFH Action. These motions have not yet been ruled upon by the
United States District Court for the Southern District of New York.
<PAGE> 16
16
Mendel Group, Inc. v. Nevada Manhattan Mining, Inc., Jeffrey Kramer and
----------------------------------------------------------------------------
Christopher D. Michaels, (Case No. 98, Civ. 5504) (the "Mendel Action") was
- - -------------------------
filed in United states District Court for the Southern District of New York on
or about August 6, 1998, by the Securities Action defendant Mendel Group, Inc.
("Mendel") against the Company, Jeffrey S. Kramer and Christopher Michaels.
Mendel claimed violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, the Uniform Commercial Code, and breach of contract based on
allegations that the Company wrongfully failed to honor the terms of certain
convertible debentures and failed to file a registration statement with the SEC.
The complaint requested that the court issue an injunction directing the Company
to file a registration statement with the SEC, issue common stock to them, and
requests damages against the Company, Jeffrey S. Kramer and Christopher
Michaels. On or about December 18, 1998, Mendel, on the one hand, and the
Company, Mr. Kramer and Mr. Michaels, on the other hand, agreed to settle and
dismiss the Mendel Action, and simultaneously to dismiss Mendel from the
Securities Action. The Mendel Action's dismissal was approved on January 9, 1999
by the United States District Court for the Southern District of New York.
Mary Park Properties, Inc. v. Nevada Manhattan Mining, Inc. Terra Natural
----------------------------------------------------------------------------
Resources, Inc., Jeffrey Kramer and Christopher Michaels, U.S.D.C. Case No. CV
- - ---------------------------------------------------------
98 6862 (the "Mary Park Action") was filed on November 4, 1998 in the United
States District Court for the Eastern District of New York by Securities Action
defendant Mary Park Properties, Inc. ("Mary Park"). In the Mary Park Action,
plaintiff alleges breach of contract by the Company for failure to permit Mary
Park to convert certain of its debentures in shares of common stock in the
Company, among other things. In addition, on November 4, 1998, Mary Park filed
an application in the Mary Park Action for a temporary restraining order and
order to show cause re preliminary injunction, seeking an order enjoining the
Company from issuing new common stock to any person other than Mary Park and
compelling the Company to convert certain of Mary Park's debentures into common
stock in the Company. On December 30, 1998, the Court denied Mary Park's
application for temporary restraining order and order to show cause re
preliminary injunction.
Tusk Investments, Inc. v. Terra Natural Resources Corp. aka Nevada Manhattan
----------------------------------------------------------------------------
Mining Incorporated, TiNV1, Inc., Jeffrey Kramer and Christopher Michaels, LASC
- - --------------------------------------------------------------------------
Case No. BC 200273 (the "Tusk State Action"), was filed in Los Angeles County
Superior Court on December 1, 1998. The Tusk State Action accused the Company
and Messrs. Kramer and Michaels of issuing new common stock and options to
purchase additional new common stock in the Company to TiNV1, Inc. ("TiNV1") as
part of a conspiracy to effect a "fraudulent transfer" of assets of the Company
to TiNV1. On December 1, 1998, plaintiff Tusk Investments, Inc. ("Tusk") sought
a temporary restraining order and order to show cause re preliminary injunction
in Department 86 of the Los Angeles County Superior Court, seeking an order
enjoining the Company from holding its December 9, 1998 annual shareholders
meeting as well as imposition of a receivership over any common stock in the
Company issued to TiNV1. After briefing and oral argument, on December 1, 1998,
the Court denied Tusk's application for temporary restraining order and order to
show cause re preliminary injunction. On December 22, 1998, the Company and
Messrs. Kramer and Michaels filed a demurrer in the Tusk State Action,
contending that the allegation of the Tusk State Action failed to state a
legally viable claim for relief. On December 29, 1998, Tusk voluntarily
dismissed the Tusk State Action.
<PAGE> 17
17
Silenus Limited v. Terra Natural Resources Corp. aka Nevada Manhattan Mining
----------------------------------------------------------------------------
Incorporated, TiNV1, Inc., Jeffrey Kramer, Joseph C. Rude and Christopher
- - --------------------------------------------------------------------------------
Michaels, LASC Case No. BC 201577 (the "Silenus State Action"), was filed in Los
- - --------
Angeles County Superior Court on December 1, 1998. The Silenus State Action
accused the Company and Messrs. Kramer and Michaels and Joseph Rude, a director,
of issuing new common stock and options to purchase additional new common stock
in the Company to TiNV1, Inc. ("TiNV1") as part of a conspiracy to effect a
"fraudulent transfer" of assets of the Company to TiNV1, and further accused
Messrs. Kramer, Michaels and Rude of breaching their fiduciary duties as
directors by engaging in the alleged conduct described above, as well as by
allegedly attempting to fraudulently transfer assets of the Company to
themselves. On December 7, 1998, plaintiff Silenus Limited ("Silenus") sought a
temporary restraining order and order to show cause re preliminary injunction in
the Los Angeles County Superior Court, seeking an order enjoining the Company
from holding its December 9, 1998 annual shareholders meeting as well as
imposition of a receivership over any common stock in the Company issued to
TiNV1. After briefing and oral argument, on December 7, 1998 the Court denied
Silenus's application for temporary restraining order and order to show cause re
preliminary injunction. On December 31, 1998, the Company and Messrs. Kramer,
Michaels and Rude filed a demurrer in the Silenus State Action, contending that
the allegations of the Silenus State Action failed to state a legally viable
claim for relief, which demurrer is presently set for hearing on January 20,
1999.
2. Changes in Securities
---------------------
From the period September 1, 1998 to November 30, 1998, the Company offered
and sold 4,274,401 shares of its Common Stock in a private placement in reliance
upon Section 4(2) at prices ranging from $.07 to $.50 per share, based on a 50%
discount from market price. The Company believes that it met all of the
requirements contained in Section 4(2).
Sales of shares were made only to the class of persons meeting the
suitability requirements contained within the Offering. The Company reviewed
subscription documents which it required all prospective purchasers to complete.
From the period September 1, 1998 to November 30, 1998, the Company issued
2,910,632 shares of Common Stock to retire outstanding loans made to the
Company. These shares were issued in reliance upon Section 4(2) and were at a
price of $.20 to $1.00 per share. Sales of shares were made only to the class of
persons meeting suitability requirements and the Company has reviewed
subscription documents which it required all prospective purchasers to complete.
The Company believes that it met all of the requirements contained in Section
4(2).
From the period September 1, 1998 to November 30, 1998, the Company issued
304,420 shares of Common Stock in payment for services rendered to the Company.
These shares were issued in reliance upon Section 4(2) and were at an average
price of $.30 per share. Sales of shares were made only to the class of persons
meeting suitability requirements and the Company has reviewed subscription
documents which it required all prospective purchasers to complete. The Company
believes that it met all of the requirements contained in Section 4(2).
<PAGE> 18
18
On December 9, 1998 the Company's stockholders approved an option for TiNV1
to purchase an additional 70,000,000 shares of restricted common stock at an
exercise price of $0.335 per share which was the trading price of the Company's
common stock on August 28, 1998 (see "Management's Discussion - Liquidity and
Capital Resources").
3. Defaults Upon Senior Securities
-------------------------------
Not applicable.
4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The Company held its annual meeting of stockholders on December 9, 1998 in Los
Angeles, California (the "Meeting"). The number of shares of Common Stock issued
and outstanding as of the record date for the Meeting was 41,742,477. The number
of shares represented and voting in person or by proxy at the Meeting was
29,424,887.
1. All Director nominees were elected at the Meeting by the following vote.
These Directors constitute all the Directors of the Company.
Name For Withheld
---- --- --------
Christopher D. Michaels 29,255,151 169,736
Jeffrey S. Kramer 29,255,151 169,736
Joe C. Rude III 29,255,151 169,736
William E. Wilson 29,255,151 169,736
Tetsuo Kitagawa 29,250,892 173,995
Hironao Mutoh 29,234,324 190,563
Neil H. Lewis 29,254,116 170,771
Stockholders voted on the following proposals:
2. Proposed amendment to Articles of Incorporation to change the Company's name
from Terra Natural Resources Corporation to Nevada Manhattan Group,
Incorporated.
For: 28,944,266 Against: 392,658 Abstain: 87,963
3. Proposed amendment to Articles of Incorporation to increase the authorized
Common Stock from 49,750,000 to 250,000,000 shares.
For: 28,003,394 Against: 911,138 Abstain: 510,355
4. Authorization for Board of Directors to grant options to purchase up to
70,000,000 shares of Common Stock to TiNV1 at an exercise price of $.335 per
share, pursuant to an Option Agreement.
For: 24,498,845 Against: 1,108,073 Abstain: 689,246
Broker Non-Votes: 3,128,723
5. Ratification of Merdinger, Fruchter, Rosen & Corso, P.C. as the Company's
independent auditors for the fiscal year ending May 31, 1999.
For: 29,221,362 Against: 186,815 Abstain: 16,710
<PAGE> 19
19
5. Other Information
-----------------
A. Meteor Industries, Inc. Stock Acquisition
The Company entered into a binding term sheet, dated December 30, 1998
(the "Term Sheet"), with Capco Acquisub, Inc. (the "Seller"), pursuant to which
the Company purchased 1,212,000 shares of Common Stock (the "Initial Shares") of
Meteor Industries Inc. ("Meteor") from Capco for $8,484,000 ($7.00 per share),
payable $500,000 on December 30, 1998, with the remaining portion being payable
in installments. In addition, the Term Sheet provides for the purchase of an
additional 518, 000 shares of Common Stock (the "Additional Shares") from the
Seller by January 14, 1999, which Additional Shares are not presently owned by
the Seller. The purchase price for the Additional Shares is $3,626,000 ($7.00
per share) payable in installments.
If the Seller does not tender such additional shares by such date, the
Term Sheet requires the Seller to pay liquidated damages in the amount of
$500,000 or the Company may reduce the consideration otherwise payable to the
Seller for the Initial Shares by $500,000. The Seller's obligation to pay such
liquidated damages amount has been guaranteed by Ilyas Chaudhary (the owner of
substantially all of Seller). Under the provisions of the Term Sheet, the
Company agrees to cause one person nominated by the Seller to be included in
each management slate of Directors of the Company until January 1, 2002. Mr.
Chaudhary has been appointed to the Board of Directors of the Company pursuant
to such provision. The Term Sheet provides, among other things, that the Company
is to pay interest on the unpaid consideration at the rate of 11% per annum, and
that the parties are to negotiate definitive documents containing customary
representations, warranties, and covenants, including a pledge agreement
providing for a pledge by the Company of the Issuer stock acquired by it from
the Seller securing the Company's obligations to pay the purchase price and
interest. The Term Sheet also provides for the issuance to the Seller of options
expiring January 1, 2002 to purchase 15,000,000 shares of the Company's common
stock at an exercise price of $.335 per share and 2,000,000 shares at an
exercise price of $.65 per share. As of January 11, 1999, the Company's common
stock was trading at approximately $1.25 per share. The entire transaction may
be rescinded by the Company at any time before February 15, 1999. Exhibits
10.(xlii) and 10.(xliii) to this Report are hereby incorporated herein by this
reference and the foregoing description is qualified in its entirety thereby.
In determining the consideration, the Company took into account the
current and anticipated value of Meteor's common stock, the options to purchase
the Company's common stock and the value of Mr. Chaudhary as a member of the
Company's Board of Directors.
The $500,000 paid to the Seller on December 30, 1998 was working capital
of the Company. The remaining payments will be derived from working capital,
sales of securities of the Company, loans or other sources.
The Company is seeking to acquire a majority interest in Meteor by
January 14, 1999 pursuant to the Term Sheet. The Company intends to seek to
appoint a majority of Meteor's Board of Directors. The Company presently intends
to propose to Meteor that Meteor enter into a gasoline supply contract with the
Company pursuant to which the Company would supply significant amounts of
gasoline to Meteor at what is believed to be favorable prices. No assurance can
be given that the Company will either gain the aforesaid representation on
Meteor's Board of Directors or enter into a gasoline supply contract with
Meteor.
B. On January 13, 1999 the Company received comments from the Securities and
Exchange Commission relative to its valuation of its domestic mineral
properties. The Company and its accountants currently disagree with the position
of the staff of the Commission relative to the domestic mineral properties. The
Company plans to engage in discussions with the Commission's staff. A decision
will be made by management of the Company as to whether the financial statements
submitted herewith will require adjustment consistent with the final position of
the staff.
<PAGE> 20
20
6. Exhibits and Reports on Form 8-K
--------------------------------
EXHIBITS
Exhibit Description Reference No.
- - ------------------- -------------
Restated Amended By-Laws of Terra Natural Resources
Corporation as of November 30, 1998 3.(xii)
Certificate of Amendment of Articles of Incorporation
of Terra Natural Resources Corporation filed December 11, 1998 3.(xiii)
Memorandum of Agreement effective as of October 9, 1998,
between Cyprus Amax Coal Company and Nevada Manhattan
Mining, Inc. 10.(xli)
Term Sheet dated December 30, 1998 between Nevada Manhattan
Group, Inc. and Capco Acquisub, Inc. re Purchase of Common
Stock of Meteor Industries, Inc. 10.(xlii)
Personal Guaranty of Ilyas Chaudhary re Purchase of Common
Stock of Meteor Industries, Inc. 10.(xliii)
Letter Agreement for Asset Acquisition by and between Nevada
Manhatten Group, Incorporated and LLC NPK Edikt,
re Chrustalnaya Mining, dated December 23, 1998 10.(xliv)
Financial Data Schedule 27
Reports on Form 8-K
- - -------------------
None
<PAGE> 21
21
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Nevada Manhattan Group, Incorporated
/s/ Jeffrey S. Kramer
January 19, 1999 _________________________________
Jeffrey S. Kramer, President
<PAGE> 22
22
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- - ------- ----------------------
3.(xii) Restated Amended By-Laws of Terra Natural Resources
Corporation as of November 30, 1998
3.(xiii) Certificate of Amendment of Articles of Incorporation
of Terra Natural Resources Corporation filed December 11, 1998
10.(xli) Memorandum of Agreement effective as of October 9,
1998, between Cyprus Amax Coal Company and Nevada
Manhattan Mining, Inc.
10.(xlii) Term Sheet dated December 30, 1998 between Nevada Manhattan
Group, Inc. and Capco Acquisub, Inc. re Purchase of Common
Stock of Meteor Industries, Inc.
10.(xliii) Personal Guaranty of Ilyas Chaudhary re Purchase of Common
Stock of Meteor Industries, Inc.
10.(xliv) Letter Agreement for Asset Acquisition by and between
Nevada Manhatten Group, Incorporated and LLC NPK
Edikt, re Chrustalnaya Mining, dated December 23,
1998
27 Financial Data Schedule
<PAGE> 1
Exhibit 3.xii
RESTATED BY-LAWS
OF
TERRA NATURAL RESOURCES CORPORATION.
-------------------------------------------------------------------------------
ARTICLE I-OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall be
established and maintained at the office of the resident agent.
SECTION 2. OTHER OFFICES. The corporation may have other offices,
either within or without the State of Nevada, at such place or places as the
Board of Directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II-MEETING OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Annual meetings of stockholders for the
election of directors and for such business as may be stated in the notice of
the meeting, shall be held at such place, either within or without the State of
Nevada, and at such time and date as the Board of Directors, by resolution,
shall determine and as set forth in the notice of the meeting. In the event the
Board of Directors fails to so determine the time, date and place of meeting,
the annual meeting of stockholders shall be held at the registered office of the
corporation in Nevada on: The first Monday which occurs after the annual
anniversary of the date upon which the corporation's Articles of Incorporation
were certified by the Secretary of State of Nevada.
If the date of the annual meeting shall fall upon a legal holiday, the
meeting shall be held an the next succeeding business day. At each annual
meeting, the stockholders entitled to vote shall elect a Board of Directors and
may transact such other corporate business as shall be stated in the notice of
the meeting.
SECTION 2. OTHER MEETINGS. Meetings of stockholders for any purpose
other than the election of Directors may be held at such time and place, within
or without the State of Nevada, as shall be stated in the notice of the meeting.
<PAGE> 2
2
SECTION 3. VOTING. Each stockholder entitled to vote in accordance with
the terms and provisions of the Articles of Incorporation and these By-Laws
shall be entitled to one vote, in person or by proxy, from each share of stock
entitled to vote held by such stockholder, but no proxy shall be voted after
three years from its date unless such proxy provides for a longer period. Upon
the demand of any stockholder, the vote for directors and upon any question
before the meeting shall be by ballot. All elections for Directors shall be
decided by plurality vote; all other questions shall be decided by majority vote
except as otherwise provided by the Articles of Incorporation or the laws of the
State of Nevada.
SECTION 4. STOCKHOLDER LIST. The Officer who has charge of the stock
ledger of the corporation shall at least 10 days before each meeting of
stockholders prepare a completely alphabetically addressed list of the
stockholders entitled to vote at the ensuing election, with the number of shares
held by each. Said list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least 10 days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or if not so specified, at the place where the meeting is to be
held. The list shall be available for inspection at the meeting.
SECTION 5. QUORUM. Except as otherwise required by law, by the Articles
of Incorporation or by these By-Laws, the presence, in person or by proxy, of
stockholders holding a majority of the stock of the corporation entitled to vote
shall constitute a meeting. A majority in interest of the stockholders entitled
to vote thereat, present in person or by proxy, shall have the power to adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until the requisite amount of stock entitled to vote shall be present.
At any such adjourned meeting at which the requisite amount of stock entitled to
vote shall be represented, any business may be transacted which might have been
transacted at the meeting as originally noticed; but only those stockholders
entitled to vote at the meeting as originally noticed shall be entitled to vote
at any adjournment or adjournments thereof.
SECTION 6. SPECIAL MEETINGS. Special meetings of the stockholders, for
any purpose, unless otherwise prescribed by statute or by the Articles of
incorporation, may be called by the President and shall be called by the
President or Secretary at the request in writing of a majority of the Directors
or stockholders entitled to vote. Such request shall state the purpose of the
proposed meeting.
<PAGE> 3
3
SECTION 7. NOTICE OF MEETINGS. Written notice, stating the place, date
and time of the meeting, and the general nature of the business to be
considered, shall be given to each stockholder entitled to vote thereat at his
address as it appears on the records of the corporation, not less than 10 nor
more than 50 days before the date of the meeting.
SECTION 8. BUSINESS TRANSACTED. No business other than that stated in
the notice shall be transacted at any meeting without the unanimous consent of
all the stockholders entitled to vote thereat.
SECTION 9. ACTION WITHOUT MEETING. Except as otherwise provided by the
Articles of Incorporation, whenever the vote of stockholders at a meeting
thereof is required or permitted to be taken in connection with any corporate
action by any provisions of the statutes or the Articles of Incorporation or of
these By-Laws, the meeting and vote of stockholders may be dispensed with, if
all the stockholders who would have been entitled to vote upon the action if
such meeting were held, shall consent in writing to such corporate action being
taken.
SECTION 10. STOCKHOLDER NOMINATION OF DIRECTORS. Nominations for the
Board of Directors may be made by resolution of the Board of Directors or a
committee appointed by the Board of Directors or by any stockholder entitled to
vote in the election of Directors. Notwithstanding the foregoing, any
stockholder may nominate one or more persons for election as Directors at a
meeting of the stockholders only if written notice of such stockholder's intent
to make such nomination or nominations has been given to the Secretary of the
Company not later than the close of business on the fifteenth day following the
date on which notice of such meeting or the record date thereof is first
publicly announced or, if earlier with respect to an election of Directors to be
held at the annual meeting of stockholders, ninety days prior to the date that
is one year from the date of the immediately preceding annual meeting of
stockholders. Each such notice shall set forth: (a) the name and address of the
stockholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the stockholder is a holder of record of
stock of the Company entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified in
the notice; (c) a description of any arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such
persons) pursuant to which the nomination or nominations are to be made by the
stockholder; (d) such other information regarding each nominee as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission had the nominee been nominated by the
Board of Directors; and (e) the consent of each nominee to serve as a Director
of the Company if so elected. The presiding officer at the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.
<PAGE> 4
4
SECTION 11. STOCKHOLDER PROPOSALS. Proposals for business to be
conducted and actions to be taken by the stockholders at any annual or special
meeting may be made by resolution of the Board of Directors or a committee
appointed by the Board of Directors or by any stockholder entitled to vote at
such meeting. Notwithstanding the foregoing, any stockholder may propose
business to be conducted or actions to be taken at a meeting of the stockholders
only if written notice of such stockholder's intent to propose such business or
action has been given to the Secretary of the Company not later than the earlier
of (a) the close of business on the fifteenth day following the date on which
notice of such meeting or the record date thereof is first publicly announced,
and (b) forty-five days prior to the date that the Company first mailed its
proxy materials for the immediately preceding annual meeting of stockholders
with respect to proposals to be considered at an annual meeting of stockholders.
Each such notice shall set forth: (a) the name and address of the stockholder
who intends to make the proposal; (b) a representation that the stockholder is a
holder of record of stock of the Company entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to make the proposals
specified in the notice; (c) a copy of the proposal; and (d) such other
information regarding the proposal as is necessary to inform the stockholders
with reasonable particularity of the nature, purpose, intent and consequences of
the proposal to the Company if adopted. The presiding officer at the meeting may
refuse to acknowledge any proposal not made in compliance with the foregoing
procedure.
ARTICLE III-DIRECTORS
SECTION 1. NUMBER AND TERM. The number of Directors shall be not more
than 7. The Directors shall be elected at the annual meeting of stockholders and
each Director shall be elected to serve until his successor shall be elected and
shall qualify. The number of Directors may not be less than 3 except that where
all the shares of the corporation are owned beneficially and of record by either
one or two stockholders, the number of Directors may be less than 3 but not less
than the number of stockholders.
SECTION 2. RESIGNATIONS. Any Director, member of a committee or other
Officer may resign at any time. Such resignation shall be made in writing, and
shall take effect at the time specified therein, and if no time be specified, at
the time of its receipt by the President or Secretary. The acceptance of a
resignation shall not be necessary to make it effective.
<PAGE> 5
5
SECTION 3. VACANCIES. If the office of any Director, member of a
committee or other Officer becomes vacant, the remaining Directors in office,
though less than a quorum, by a majority vote may appoint any qualified person
to fill such vacancy, who shall hold office for the unexpired term and until his
successor shall be duly chosen.
SECTION 4. REMOVAL. Any Director or Directors may be removed either for
or without cause at any time by the affirmative vote of the holders of
two-thirds of the Company's shares then entitled to vote at an election of
Directors, at a special meeting of stockholders duly called for such purpose,
and the vacancies thus created may be filled at the meeting held for the purpose
of removal by the affirmative vote of two-thirds in interest of the
stockholders, provided that any person elected as a Director pursuant hereto
must be duly nominated as provided in Article II, Section 10 of these By-Laws.
If the stockholders fail to fill the vacancies created by removal at such
special meeting, the vacancies shall be filled as provided in Article III,
Section 3 of these By-Laws.
SECTION 5. INCREASE IN NUMBER. The number of Directors may be increased
by amendment of these By-Laws by the affirmative vote of a majority of the
Directors, though less than a quorum, or, by the affirmative vote of a majority
in interest of the stockholders, at the annual meeting or at a special meeting
called for that purpose, and by like vote the additional Directors may be chosen
at such meeting to hold office until the next annual election and until their
successors are elected and qualify.
SECTION 6. COMPENSATION. Directors shall not receive any stated salary
for their services as Directors or as members of committees, but by resolution
of the Board a fixed fee and expenses of attendance my be allowed for attendance
at each meeting. Nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity as an Officer,
Agent, or otherwise, and receiving compensation therefor.
SECTION 7. ACTION WITHOUT MEETING. Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting, if prior to such action a written consent
thereto is signed by all members of the Board, or of such committee as the case
may be, and such written consent is filed with the minutes of proceedings of the
Board or committee.
<PAGE> 6
6
SECTION 8. SUPERMAJORITY BOARD APPROVAL. Supermajority approval
(defined as one vote greater than a simple majority) by vote of the Board of
Directors shall be required for the following transactions: Acquisitions or
divestitures of significant assets (defined as requiring the filing of an 8-K
Current Report with the U.S. Securities and Exchange Commission); issuance of
shares of Common Stock of the Company in settlement of Debentures and or related
litigation.
ARTICLE IV-OFFICERS
SECTION 1. OFFICERS. The Officers of the corporation shall consist of a
President, a Treasurer, and a Secretary, and shall be elected by the Board of
Directors and shall hold office until their successors are elected and
qualified. In addition, the Board of Directors may elect a Chairman of the
Board, one or more Vice Presidents, and such Assistant Secretaries and Assistant
Treasurers as it may deem proper. None of the Officers of the corporation need
be Directors. The Officers shall be elected at the first meeting of the Board of
Directors after each annual meeting. More than two offices may be held by the
same person.
SECTION 2. OTHER OFFICERS AND AGENTS. The Board of Directors may
appoint such Officers and Agents as it may deem advisable, who shall hold their
offices for such terms and shall exercise such power and perform such duties as
shall be determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the
Board of Directors, if one be elected, shall preside at all meetings of the
Board of Directors and he shall have and perform such other duties as from time
to time may be assigned to him by the Board of Directors.
SECTION 4. PRESIDENT. The President shall be the Chief Executive
Officer of the corporation and shall have the general powers and duties of
supervision and management usually vested in the Office of President of a
corporation. He shall preside at all meetings of the stockholders if present
thereat, and in the absence or non-election of the Chairman of the Board of
Directors, at all meetings of the Board of Directors, and shall have general
supervision, direction and control of the business of the corporation. Except as
the Board of Directors shall authorize the execution thereof in some manner, he
shall execute bonds, mortgages, and other contracts in behalf of the
corporation, and shall cause the seal to be affixed to any instrument requiring
it and when so affixed the seal shall be attested by the signature of the
Secretary or the Treasurer or an Assistant Secretary or an Assist- and
Treasurer.
<PAGE> 7
7
SECTION 5. VICE-PRESIDENT. Each Vice-President shall have such powers
and shall perform such duties as shall be assigned to him by the Directors.
SECTION 6. TREASURER. The Treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate account of receipts and
disbursements in books belonging to the corporation. He shall deposit all moneys
and other valuables in the name and to the credit of the corporation in such
depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as may be
ordered by the Board of Directors, or the President, taking proper vouchers for
such disbursements. He shall render to the President and Board of Directors at
the regular meetings of the Board of Directors, or whenever they may request it,
an account of all his transactions as Treasurer and of the financial condition
of the corporation. If required by the Board of Directors, he shall give the
corporation a bond for the faithful discharge of his duties in such amount and
with such surety as the Board shall prescribe.
SECTION 7. SECRETARY. The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and Directors, and all other notices
required by law or by these By-Laws, and in case of his absence or refusal or
neglect to do so, any such notice may be given by any person thereunto directed
by the President, or by the Directors, or stockholders, upon whose requisition
the meeting is called as provided in these By-Laws. He shall record all the
proceedings of the meetings of the corporation's stockholders and Directors in a
book to be kept for that purpose, and shall affix the seal to all instruments
requiring it, when authorized by the Directors or the President, and attest the
same.
SECTION 8. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the Directors.
<PAGE> 8
8
ARTICLE V-STOCK
SECTION 1. CERTIFICATES OF STOCK. Every holder of stock in the
corporation shall be entitled to have a certificate, signed by, or in the name
of the corporation by, the Chairman or Vice-Chairman of the Board of Directors,
or the President or a Vice-President, and the Treasurer or Assistant Treasurer,
or the Secretary or Assistant Secretary of the corporation, certifying the
number of shares owned by him in the corporation. If the corporation shall be
authorized to issue more than one class of stock or more than one series of any
class, the designations, preferences and relative, participating, optional or
other special rights of each class of stock or series thereof, and the
qualifications, limitations, or restrictions of such preferences and/or rights
shall be set forth in full or summarized on the face or back of the certificate
which the corporation shall issue to represent such class or series of stock,
provided that, except as otherwise provided in the General Corporation Law of
Nevada, in lieu of the foregoing requirements, there may be set forth on the
face or back of the certificate which the corporation shall issue to represent
such class or series of stock, a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preference and/or rights. Where a certificate is
countersigned (1) by a Transfer Agent other than the corporation or its
employee, or (2) by a registrar other than the corporation or its employee, the
signatures of such persons may be facsimiles.
SECTION 2. LOST CERTIFICATES. New certificates of stock my be issued in
the place of any certificate therefore issued by the corporation, alleged to
have been lost or destroyed, and the Directors may, in their discretion, require
the owner of the lost or destroyed certificate or his legal representatives, to
give the corporation a bond, in such sum as they my direct, not exceeding double
the value of the stock, to indemnify the corporation against it on account of
the alleged loss of any new certificate.
SECTION 3. TRANSFER OF SHARES. The shares of stock of the corporation
shall be transferable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old certificates shall be surrendered to the corporation by the delivery
thereof to the person in charge of the stock and transfer books and ledgers, or
to such other persons as the Directors may designate, by whom they shall be
cancelled, and new certificates shall thereupon be issued. A record shall be
made of each transfer and whenever a transfer shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer.
<PAGE> 9
9
SECTION 4. STOCKHOLDERS RECORD DATE. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than 50 nor less than 10 days
before the day of such meeting, nor more than 50 days prior to any other action.
A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
SECTION 5. DIVIDENDS. Subject to the provisions of the Articles of
Incorporation the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividends there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the Directors from time to time in their
discretion deem proper working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Directors shall deem conducive to the interests of the corporation.
SECTION 6. SEAL. The corporate seal shall be circular in form and shall
contain the name of the corporation, the year of its creation and the words
"CORPORATE SEAL NEVADA." Said seal may be used by causing it or a facsimile
thereof to be impressed or affixed or otherwise reproduced.
SECTION 7. FISCAL YEAR. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
SECTION 8. CHECKS. All checks, drafts, or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by an Officer or Officers, or Agent or Agents of the
corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
<PAGE> 10
10
SECTION 9. NOTICE AND WAIVER OF NOTICE. Whenever any notice is required
by these By-Laws to be given, personal notice is not meant unless expressly
stated, and any notice so required shall be deemed, to be sufficient if given by
depositing the same in the United States Postal System, postage prepaid,
addressed to the person entitled thereto at his address as it appears on the
records of the corporation, and such notice shall be deemed to have been given
on the day of such mailing. Stockholders not entitled to vote shall not be
entitled to receive notice of any meetings except as otherwise provided by
statute.
Whenever any notice whatever is required to be given under the
provisions of any law, or under the provisions of the Articles of Incorporation
of the corporation or these By-Laws, a waiver thereof in writing signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed proper notice.
SECTION 10. NRS GOVERNANCE. The Board of Directors of the Company, by
virtue of this Section 10 of the By-Laws, elects not to be governed by Nevada
Revised Statutes Sections 78.378 through 78.3793 inclusive in connection with
the acquisition of common stock and options by TiNV1, Inc. approved by the Board
of Directors on August 28, 1998.
ARTICLE VI-AMENDMENTS
These By-Laws may be altered and repealed and By-Laws may be made at
any annual meeting of the stockholders or at any special meeting thereof if
notice thereof is contained in the notice of such special meeting by the
affirmative vote of a majority of the stock issued and outstanding or entitled
to vote thereat, or by the regular meeting of the Board of Directors, or at any
special meeting of the Board of Directors, if notice thereof is contained in the
notice of such special meetings.
(SEAL)
RESTATED BY-LAWS AS OF NOVEMBER 30, 1998
<PAGE> 1
Exhibit 3.xiii
FILED
in the office of the
Secretary of State of the
STATE OF NEVADA
DEC 11 1998
No. C3947-85
/s/ Dean Heller
Dean Heller, Secretary of State
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
TERRA NATURAL RESOURCES CORPORATION
(dba NEVADA MANHATTAN)
We the undersigned as President and Secretary of Terra Natural
Resources Corporation (dba Nevada Manhattan), do hereby certify: (i) That the
Board of Directors of said corporation at a meeting duly convened and held on
the 3rd day of September, 1998, adopted a resolution to amend the Articles of
Incorporation as follows:
Article I shall be amended to read as follows:
"The name of the corporation TERRA NATURAL RESOURCES CORPORATION (dba
NEVADA MANHATTAN), shall be changed to the corporate name of NEVADA MANHATTAN
GROUP, INCORPORATED."
(ii) That the Board of Directors of said
corporation at a meeting duly convened and held on the 30th day of August, 1998,
adopted a resolution to amend the Articles of Incorporation as follows:
Article V is amended to read in its entirety as follows:
"ARTICLE V
This corporation is authorized to issue two classes of stock to be
designated, respectively, 'Common Stock' and 'Preferred Stock.' The total number
of shares which the corporation is authorized to issue is 250,250,000 shares, of
which 250,000,000 shares shall be Common Stock, par value of $.01 per share, and
250,000 shares shall be Preferred Stock, par value of $1.00 per share. The
Preferred Stock may be issued from time to time in one or more series. The Board
of Directors is authorized to fix the number of shares of any series of
Preferred Stock and to determine or alter the voting rights, designations,
preferences, limitations, restrictions and relative rights granted to or imposed
upon any wholly unissued series of Preferred Stock and, within the limits and
restrictions stated in any resolution or resolutions of the Board of Directors
originally fixing the number of shares constituting any series, to increase or
decrease (but not below the number of shares of such series then outstanding)
the number of shares of any such series subsequent to the issues of shares of
that series."
<PAGE> 2
2
The said changes and amendments have been consented to and approved by
a majority of the stockholders holding each class of stock outstanding and
entitled to vote thereon at an annual stockholders meeting of Terra Natural
Resources Corporation held on December 9, 1998; that the number of shares of the
corporation outstanding and entitled to vote on amendments to the Articles of
Incorporation was forty-one million, seven hundred forty-two thousand four
hundred seventy-seven (41,742,477) shares, one cent par value.
/s/ Christopher D. Michaels
-----------------------------------
CHRISTOPHER D. MICHAELS, President
/s/ Jeffrey S. Kramer
------------------------------------
JEFFREY S. KRAMER, Secretary
<PAGE> 1
Exhibit 10.xli
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement ("MOA") is made effective as of October 9th 1998,
by and among:
CYPRUS AMAX COAL COMPANY ("Cyprus"), a company established under the laws of
Delaware, United States, with offices at 9100 E. Mineral Circle, P.O. Box 3299,
Englewood, Colorado 80155-3299, Fax number (1 303) 643-5298;
NEVADA MANHATTAN MINING INC. ("Nevada"), a company established under the laws of
Nevada, with offices at 5038 North Parkway Calabasas, Calabasas, CA 91302; and
The individuals listed on the attached Exhibit A, all of whom are Indonesian
citizens, residing in Indonesia, whom for notices purposes shall be held to all
reside at Jl. Mampang Prapatani II No 14 Tegal Parang Utara - Jakarta 12790
Indonesia, Fax number __________________, and shall collectively be referred to
as "Shareholders."
(Together the "Parties" and separately a "Party")
RECITALS
A. PT Mecfa Energy International, a limited liability company formed in
the status of a PMDN company by Notarial Deed Number 52 dated October
12, 1993, Decree of Minister of Justice Number C2-981.HT.01.01Th98
dated February 18, 1998 ("Contractor") which was formed to act as a
contractor under a Coal Contract of Work executed with the Republic of
Indonesia on February 19, 1998 ("CCOW").
B. Under the CCOW Contractor is granted the exclusive right to explore
for, develop and mine coal resources on certain lands located under
Kode Wilayah 97PB0330, in East Kalimantan, the area of which is more
particularly described on the attached Exhibit A.
C. The Shareholders collectively hold 100% of the shares of Contractor.
D. Cyprus has experience and expertise in coal exploration and mining and
wishes to acquire an interest in the CCOW and cooperate with Nevada and
the Shareholders in the exploration and development of the CCOW.
E. Nevada has assisted in locating Cyprus to assist with the development
of the CCOW and the Parties wish for Nevada to hold an interest in the
CCOW.
F. The Parties wish to set forth the terms of their agreement for Cyprus
to acquire an 85% interest in the CCOW and provide for the exploration
and development of the CCOW.
<PAGE> 2
2
AGREEMENT
NOW THEREFORE, in consideration for the mutual promises and covenants contained
herein, the sufficiency of which is hereby acknowledged by the Parties, the
Parties agree as follows:
1. Structure of the CCOW. The Parties agree that they will use all reasonable
endeavours in conformity with applicable laws to cause the Contractor's
status to be changed to a PMA company and receive all necessary approvals
such that Cyprus is allowed to acquire 85% of the shares of the Contractor.
2. Interests in the CCOW. Following the conversion of the Contractor into a
PMA company and receipt of all necessary government approvals, Cyprus, or
its designee, shall be entitled to acquire 85% of the shares of the
Contractor (the "Shares"), and Nevada and the Shareholders shall
collectively hold the remaining 15% of the shares of the Contractor. Until
such time as the Contractor can be converted into a PMA company and Cyprus
can acquire title to the Shares, the Parties acknowledge that the
Shareholders shall hold the Shares for the benefit of Cyprus and shall take
such actions, including without limitation, the voting of such Shares in
such manner as Cyprus may direct.
3. General Survey and Exploration Obligations: Subject to the provisions of
Section 4, Cyprus agrees that it will be responsible for the initial
payment of 100% of the costs and expenses of each Phase of exploration and
development, in a total amount of not less than US$450,000 (the "Costs").
Each of the programs for each Phase of exploration and development shall be
sufficient in scope and expenditure and shall be conducted within the time
frames established in the CCOW; provided however, that upon expenditure of
the Costs and if Cyprus elects not to proceed with additional exploration
and development it shall have no further obligation to the Shareholders or
Nevada, the Contractor or the Government of the Republic of Indonesia to
proceed under the terms of the CCOW.
4. Nevada and Shareholders. Nevada and the Shareholders shall collectively
hold a 15% carried interest in the Contractor, which means that Cyprus will
provide them with an interest bearing loan on commercial terms in an amount
equal to their 15% share of funds for all of the costs and expenses,
including without limitation, the Costs, associated with the exploration
and development of a mine on the CCOW (collectively, the "Total Costs");
provided however, that Cyprus shall be entitled to recover 100% of Nevada's
and the Shareholders' share of the Total Costs plus interest at the agreed
upon rate from 95% of the dividends due to Nevada and the Shareholders
derived from the sale of coal from the CCOW.
5. Exclusive Rights. Cyprus shall have the exclusive right to conduct
exploration and development of the CCOW and to acquire an 85% shareholding
in the Contractor. Cyprus shall be the manager, operator, and sales agent
of the project and shall have the exclusive and sole right to determine the
manner of proceeding with exploration and development, subject to the terms
of the CCOW.
<PAGE> 3
3
6. Joint Venture Agreements. The Parties each agree to use reasonable
endeavours to cause a more definitive Joint Venture Agreement to be
finalized and executed, as is necessary to further reflect the terms of
their agreements. The terms and conditions of such Joint Venture Agreement
shall be in conformity with the terms and conditions of this Agreement and
set out in greater detail the terms and conditions governing the
relationships between the parties thereto, their respective rights and
obligations, and such other terms as are customarily found in such
agreements. Execution of the Joint Venture Agreement by Cyprus shall be
dependent upon final approval by its Board of Directors.
7. Representations and Warranties. The Shareholders and Nevada represent and
warrant that:
7.1 all requirements of the CCOW have currently been met and the CCOW
is in good standing.
7.2 as to Nevada, Nevada represents that it is duly established and
has all necessary authority to enter into this Agreement.
7.3 as to each individual Shareholder, he or she has full authority
to enter into this agreement and has obtained to the extent
necessary, any spousal waiver or other legal consent necessary to
enter into this Agreement.
8. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the Republic of Indonesia.
9. Disputes. Any dispute ("Dispute") arising between the Parties in connection
with this Agreement and the performance of obligations or exercise of
rights hereunder shall if possible be settled first by amicable discussion
to be initiated by any Party(ies) delivering to the other Parties a written
notice ("Notice") setting forth the nature of the Dispute in reasonable
detail. If the Dispute is not amicably settled within thirty (30) days of
the date of delivery of a notice, then any Party may initiate arbitration
by written notice thereof to the other Parties. The Dispute shall then be
finally settled by a single arbitrator under the Rules of the Singapore
International Arbitration Centre ("SIAC"), applying the law of the Republic
of Indonesia. If within thirty (30) days of the date of delivery of the
Notice, the Parties have not agreed upon an arbitrator, such arbitrator
will at the request of any Party be appointed by and in the sole discretion
of the SIAC. Arbitration shall be in English and in Singapore. The Parties
agree that an arbitration award hereunder shall be final and binding and no
person or legal entity may appeal any award to any court or otherwise
initiate court proceedings with respect to a Dispute or any arbitration
thereof except for purposes of enforcement of an arbitration awards. An
arbitration award may be entered for enforcement in any court having
jurisdiction therefore. The Parties waive any provisions of otherwise
applicable law which could operate to terminate the appointment of an
arbitrator or require an arbitration to be completed within a fixed period
of time or provide for a right of appeal of any arbitration award.
<PAGE> 4
4
10. Assignment of Rights/Assumption of Obligations. None of the Parties may
assign its rights or cause a third party to assume its obligations
hereunder without the prior written consent of the other Parties except
that Cyprus may assign its rights to and cause a wholly owned subsidiary
("WOS") to assume its obligations hereunder without such consent.
11. Force Majeure. None of the Parties shall be liable to the other Parties for
failure or delay in performance of its obligations hereunder except an
obligation to pay money for periods of time and to the extent such failure
or delays is caused by events of force majeure beyond the reasonable
control of the affected Party.
12. Termination.
12.1 For Default. In the event a Party defaults and fails to perform its
obligations hereunder ("Default"), the other Party(ies) may deliver a
written notice describing such failure in reasonable detail and
requesting remedial action. If remedial action has not occurred and
the Default remedied within sixty (60) days of the date of receipt of
such notice, the non-defaulting Parties may terminate this Agreement
by written notice thereof.
12.2 Liquidated Damages. The defaulting Party(ies) will convey to the other
Party(ies) their entire interest in the Contractor. For purposes of
this paragraph, entire interest includes equity AND any claims on the
assets of the Contractor.
12.3 At Will by Cyprus. If Cyprus at any time determines that further
exploration is not justified by results to date or development is not
feasible, it may terminate this Agreement on thirty (30) days written
notice to the Shareholders and Nevada provided all payments and
reports required under the CCOW have been made and the CCOW is in good
standing. On such termination, Cyprus shall return 80% of the shares
of the Contractor (and retain 5% of the shares of the Contractor) to
be returned to the Shareholders and Nevada, or their designees whether
by transfer of shares or assignment of rights or interests for $1.00.
However, Cyprus shall be entitled to retain 5% of the shares of the
Contractor (and return 80% of the shares of the Contractor) in the
CCOW or property and mining rights subject to the CCOW; provided,
however, that Cyprus shall have no further obligations in respect of
funding under the CCOW. In the event that the rights provided under
the CCOW or land subject to the CCOW are transferred subsequent to the
time Cyprus retains its 5% interest, then Cyprus shall be entitled to
not less than 5% of the proceeds, fees, bonuses, or other payments
made for the transfer of interests in the CCOW.
<PAGE> 5
5
12.4 Following termination of the Agreement, Cyprus agrees that it shall
deliver to the Shareholders and Nevada, all data, records, reports,
maps or information of whatsoever kind regarding the CCOW
(collectively, the "Data").
13. WAIVER OF ARTICLE 1266. For purposes of termination of this Agreement as
contemplated hereby, the Parties waive the application of Article 1266 of
the Indonesian Civil Code to the extent it would otherwise require a
judicial order or intervention to effect termination of this Agreement in
accordance with its terms and conditions.
14. NOTICE AND DELIVERY. The delivery by a Party of any notice contemplated
hereby may be effected by messenger or by fax (with receipt confirmed by
the transmitting fax machine) to the address of the Parties first above
written or as may otherwise be specified by a Party in a written notice to
the other Parties. The date of delivery shall be the date the notice is
delivered by messenger or one (1) day following the transmission of a
notice by fax as specified herein.
15. CONFIDENTIALITY AND NON-DISCLOSURE. During the term of this Agreement, the
Parties each agree to keep and cause the Contractor, to keep confidential
and not disclose to third parties information about the CCOW and its
potential for mineral exploitation, information which the Parties may
obtain as a result of the relationship of the Parties contemplated hereby
and information generated by exploration, development or mining activities
in the CCOW whether in the possession of the Parties, subcontractors,
employees, agents, officers and directors (collectively, "Information")
except:
15.1 if such disclosure is required by law or the applicable rules of any
stock exchange;
15.2 is in or enters the public domain through no action of the Party
contemplating disclosure to a third party;
15.3 is disclosed to a Party by a third party not bound by any obligation
of confidentiality or nondisclosure with respect thereto; or
15.4 if the written consent of the non-disclosing Parties to a specified
disclosure is first obtained.
16. COUNTERPARTS. This Agreement may be executed in three (3) counterparts.
Upon the execution by each Party of a separate counterpart, each such
counterpart when delivered to the other Parties shall be deemed to be an
original and both together shall constitute one and the same instrument.
<PAGE> 6
6
IN WITNESS WHEREOF, the Parties have caused this Agreement or a counterpart
thereof to be executed by their duly authorized representatives as of the date
first above written.
CYPRUS AMAX COAL COMPANY
/s/ Richard D. Mills
By __________________________
Name: Richard D. Mills
Title: Senior Vice President
NEVADA MANHATTAN MINING INCORPORATED
/s/ Jeffrey Kramer
By ___________________________________
Name: Jeffrey Kramer
Title: Chief Operating Officer
The Shareholders:
(attach necessary signature page)
<PAGE> 7
7
EXHIBIT A
Shareholders
Memorandum of Agreement
dated effective as of October 7, 1998
by and among
Cyprus Amax Coal Company
1. Yoeslin Nasution
2. Achmad Sony Septana
3. Muchtar Amin
4. Iryan Nasution
5. Ridzki Granito Bona Simanjuntak
6. Alison Hasibuan
7. Leonard Manuasal Simanjuntak
<PAGE> 1
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).
<PAGE> 2
2
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.
<PAGE> 3
3
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.
<PAGE> 4
4
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.
<PAGE> 5
5
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/ Neil H. Lewis, Sec.
BY: ____________________________________________________
Title: Secretary
Stockholder:
CAPCO ACQUISUB, INC.
/s/ Ilyas Chaudhary
BY: ____________________________________________________
Title: President
<PAGE> 6
6
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.
<PAGE> 7
7
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.
<PAGE> 1
Exhibit 10.xliii
PERSONAL GUARANTY
WHEREAS, CAPCO ACQUISUB, INC., a Colorado corporation (hereinafter referred
to as "Stockholder"), is entering into a Term Sheet (the "Term Sheet") of even
date herewith with NEVADA MANHATTAN MINING INCORPORATED, a Nevada corporation
("NM"); and
WHEREAS, NM is willing to enter in the Term Sheet with Stockholder on the
condition it receives the guaranty of the undersigned, ILYAS CHAUDHARY, covering
the obligations of the Stockholder to NM in accordance with the terms hereof;
WHEREAS, the undersigned owns substantially all of Stockholder and will
benefit substantially from the Term Sheet;
NOW THEREFORE, in consideration of inducing NM to enter into the Term Sheet
with Stockholder, the undersigned hereby guaranties, absolutely and
unconditionally, to NM the punctual performance when due and to become due of
all obligations of Stockholder to pay up to Five Hundred Thousand Dollars
($500,000) in liquidated damages to NM under the Term Sheet (collectively, the
"Obligations").
The undersigned hereby expressly waives notice of the acceptance of this
Guaranty by NM; presentment and demand with respect to any Obligations under
this Guaranty; protest and notice of dishonor, default, or non-payment to the
undersigned with respect to any Obligations; any right to require suit against
Stockholder before enforcing this Guaranty; and any right of applied before
enforcing this Guaranty; and any right of subrogation to any of NM's rights
against Stockholder unless and until the liabilities of the Stockholder are
indefeasibly satisfied in full.
The undersigned hereby consent and agree that from time to time, with or
without notice to or assent from the undersigned, and security held by or
available to NM for any Obligations of Stockholder may be exchanged,
surrendered, or released and any Obligations or Stockholder may be changed,
altered, renewed, extended, waived, or released in whole or in part and
generally deal with Stockholder or any security as NM may see fit, and the
undersigned shall remain bound under this Guaranty notwithstanding any such
exchange, surrender, release, change, or alteration of collateral.
The undersigned further agrees with NM that all present and future
Obligations of the Stockholder to the undersigned, if any, shall be and is
subordinated to, assigned, and transferred to NM and pledged and made security
for the payment of all Obligations of the Stockholder to NM; and that the
undersigned shall on request by NM execute such assignment and transfer as
<PAGE> 2
2
NM may request to evidence that assignment hereby agreed to; and the
undersigned hereby enforce payment of said Obligations in any proceeding
whatsoever affecting the Stockholder or its property and to take any action in
regard to the Obligations which the undersigned might otherwise do.
This Guaranty shall enure to the benefit of NM and its successors and
assigns and each reference to the undersigned shall be deemed to include his
successors and assigns, heirs, executors, administrators, and legal
representatives.
No delay on the part of NM in exercising any rights hereunder or its
failure to exercise same shall operate as a waiver of such rights and the
failure by NM to provide any notice or demand to the undersigned shall not be
deemed to be a waiver of any obligation of the undersigned or of the right of NM
to take other or further action without notice or demand as provided herein. In
any event, no notification or waiver of the provisions hereof shall be effective
unless in writing and signed by NM nor shall any waiver be applicable except in
the specific instance or matter for which given.
The undersigned hereby waives any and all rights and defenses available to
the undersigned by reason of California Civil Code ("Code") sections 2787 to
2855, inclusive. The undersigned hereby waives any and all rights of
subrogation, reimbursement, indemnification, contribution and election of
remedies and any other rights and defenses that are or may become available to
the undersigned by reason of said sections of the Code. The undersigned hereby
waives any requirement that NM exhaust any right or take any action or proceed
in any particular order against the undersigned or any other person or any
security or collateral with respect to any of the Obligations.
This Agreement shall be deemed to be c contract entered into and made
pursuant to the laws of the State of California and shall be in all respects be
governed, construed, and enforced in accordance with the laws of said state.
IN WITNESS WHEREOF, this Guaranty has been executed and delivered to NM by
the undersigned this 30 day of December, 1998.
/s/ Ilyas Chaudhary
_____________________________
ILYAS CHAUDHARY
<PAGE> 1
Exhibit 10.xliv
LETTER AGREEMENT FOR
ASSET ACQUISITION
This LETTER AGREEMENT FOR ASSET ACQUISITION (the "Agreement") as of the
date set forth below, by and between Nevada Manhattan Group, Incorporated, a
Nevada corporation, hereinafter known as (NVMG") and LLC NPK Edikt, a Russian
Limited Liability Company, hereinafter ("LLC").
RECITALS
A. LLC has authority to assign assets held by Chrustalnaya Mining
Company, a Russian corporation ("Chrustalnaya"), and Chrustalnaya's wholly-owned
subsidiary, Stanum Ltd., a Russian corporation, ("Stanum").
B. NVMG desires to acquire 80% of Chrustalnaya's assets as defined in
this Agreement and the exhibits attached hereto and made a part of this
Agreement in exchange for 8,000,000 shares of NVMG common stock, as more fully
described below.
C. LLC, in exchange for the receipt of 8,000,000 common shares agrees
to assign, within the framework of Chrustalnaya, all rights to 80% of the assets
as set forth below.
IN WITNESS WHEREOF, AND RECEIPT OF CONSIDERATION, THE PARTIES AGREE AS FOLLOWS:
1. LLC shall transfer 80% of its rights as stated in the licensing
agreement for the right to exploit, explore and develop using the
earth's mineral wealth , License No. 00591 as issued to ZAO
Chrustalnoye Ore Mining Company (Exhibit A).
LLC shall transfer 80% of its rights as stated in the licensing
agreement for the right to exploit, explore and develop using the
earth's mineral wealth , License No. 09593 as issued to ZAO
Chrustalnoye Ore Mining Company (Exhibit B).
The assets are further described in reports/information attached hereto
as Exhibit C.
2. NVMG agrees to accept the transfer of 80% of the rights stated in the
licensing agreements within the limits of the frame by which the LLC
can operate. In consideration of the receipt of 80% of those assets
within the frame of Chrustalnaya, NVMG shall issue 8,000,000 shares of
common stock
3. This document shall be subject to a more definitive agreement setting
forth operational management terms to be approved by the parties.
<PAGE> 2
2
4. Miscellaneous
a. Attorneys Fees.
In any dispute between the parties, whether or not resulting
in litigation or arbitration, the prevailing party shall be entitled to
recover from the other party all reasonable costs, including, but not
limited to reasonable attorneys' fees and costs.
b. Applicable Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of California notwithstanding the
fact the executing party will be signing this agreement outside the
territories of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
"NVMG"
Nevada Manhattan Group Incorporated,
a Nevada corporation
December 17, 1998 /s/ Tetsuo Kitagawa
Dated: _____________________ By:_____________________________
/s/ Neil H. Lewis
Approved as to form: By:_____________________________
Neil H. Lewis, Corporate Counsel
"LLC"
LLC NPK Edikt, a Russian Limited
Liability Company
December 23, 1998 /s/ Vyatcheslav Ignatov
Dated: _______________________ By:_____________________________
Vyatcheslav Ignatov
/s/ Harold R. Stokes
Approved as to form: By:_____________________________
Harold R. Stokes, Corporate Counsel
<PAGE> 3
3
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
312 NORTH SPRING STREET, ROOM G-3
LOS ANGELES, CA 90012
213-894-4445
(seal)
SHERRI R. CARTER
Clerk of Court
COURT INTERPRETER SERVICES
DECLARATION OF INTERPRETER
I, the undersigned say I am an Official Court interpreter of English and
Russian. I certify that the attached translation from Russian into English is
true and correct to the best of my abilities and belief.
DESCRIPTION OF DOCUMENT(S)
LICENSE
for the right to use earth's mineral wealth No. 00591
issued to ZAO Chrustalnoye Ore Mining Company
LEGEND; All text in the translation contained in brackets ([ ]) represents
translator's comments or explanatory remarks.
Executed this 16th day of November, 1998, at Agoura Hills, California.
Varvara Olson
- - --------------
/s/ Varvara Olson
- - --------------
Signature of Interpreter
Case No. N/A
Case Name: N/A
No. of words: 563
Exhibit A.1
<PAGE> 4
4
The Russian Federation
Committee
for geology and
the use of earth's mineral wealth
of the PRIMORGEOLKSM
The Primorsky
Territorial
Geological Fund
REGISTERED
November 2--[second digit illegible], 1996
Chief of the T.G.F. (signature)
(Logo of the USSR)
LICENSE
for the right to use earth's mineral wealth
VLV 00591 T--[second letter illegible]
- - --- ----- ----------------------------
Series Number Type of license
Is issued to: PRIVATE STOCK COMPANY [ZAO]
---------------------------
(Subject of the entrepreneurial activity receiving
"CHRUSTALNOYE ORE MINING COMPANY"
---------------------------------
this license)
- - --------------------------------------------------------------------------------
in the person of: Director General
----------------
(surname, first name, patronymic of the person
representing the subject of
LATYSHEV, Mikhail Zakharovich
-----------------------------
the entrepreneurial activity)
with the target purpose and type of operations:
mining of tin ores at the "Iskra" deposit
-----------------------------------------
The section of the mineral wealth is located in:
The Kavalerovsky region of the Primorsky Krai
-----------------------------------------------
(Name of the populated point, region, county,
krai, republic)
Description of the boundaries of the mineral wealth section, coordinates of the
corner points, copies of the topography plans, cross sections and others are
found in appendix:
No. I
-----
(Number of the appendix)
The right to use land sections is received from:
The Council of People's Deputies for Kavalerskiy
------------------------------------------------
Region Resolution No. 18 of March 20, 1992.
------------------------------------------
(Name of the authority issuing the permission, the
number of the resolution, the date)
Exhibit A.2
<PAGE> 5
5
Copies of the documents and the description of the boundaries of the land
section are found in Appendix:
No. 2, on 2 pages
-----------------
(Number of the appendix, quantity of pages)
The section of the mineral wealth has the status of:
mining extraction
-----------------
(geological or mining extraction)
Expiration of the license's validity:
13 of August, 2008
------------------
(day, month, year)
Exhibit A.3
<PAGE> 6
6
The following documents are integral components parts of the present license:
1 Appendix 1. Layout of the surface and the cross-sections of the
2 deposit with the boundaries of the mining and land extraction
(name of the document, number of pages)
3 on 4 sheets
Appendix 2. Copy of the resolution of the Council of People's Deputies for
Kavalerskiy Region of March 20, 1992. 18 - 1 sheet.
Appendix 3. Payment terms on 1 sheet
Appendix 4. Conditions for use of mineral wealth use on 2 sheets.
Appendix 5. Agreement regarding geological information on 1 page.
Appendix 6. Certificate about the deposit group.
Appendix 7. Order concerning the re-legalizing the licenses - 1 page.
Appendix 8. The statement by the ZAO GK Chrustalnenskaya stannic company
regarding the transfer of mineral deposits use rights - 1 page.
Appendix 9. The statement of ZAO GK Chrustalnaya regarding the re-legalizing of
the licenses and the extract from the transfer deed - 2 pages.
Authorized representative Authorized representative
of the Russian Federation of the Office of State Authority
Committee for Geology and for the subject of the Federation
use of earth's mineral wealth
SAMOVAROV, Boris Ivanovich STOMATIUK, Evgeniy Stepanovich
- - -------------------------- ------------------------------
(Surname, first name, patronymic) (Surname, first name, patronymic)
(Signature)
- - ----------- ------------------------------------
Signature, date: October 8, 1996 Signature, date: (signature)
--------------- -----------
[illegible]96 M.P.
-------------
[Round seal stating as below] [Round seal stating as below]
ROSKOMNEDR The Committee for [illeg.] resources
Primorskiy Krai Russian State logo in the middle
Committee for geology and use of
mineral wealth
Head of the enterprise
receiving the license
LATYSHEV, Mikhail Zaharovich
----------------------------
(surname, first name, patronymic)
-----------------------------
[partially visible round seal with the following words]
Russian Federation [illegible]
Exhibit A.4
<PAGE> 7
7
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
312 NORTH SPRING STREET, ROOM G-3
LOS ANGELES, CA 90012
213-894-4445
(seal)
SHERRI R. CARTER
Clerk of Court
COURT INTERPRETER SERVICES
DECLARATION OF INTERPRETER
I, the undersigned say I am an Official Court interpreter of English and
Russian. I certify that the attached translation from Russian into English is
true and correct to the best of my abilities and belief.
DESCRIPTION OF DOCUMENT(S)
LICENSE
for the right to use earth's mineral wealth No. 09593
issued to ZAO Chrustalnoye Ore Mining Company
LEGEND; All text in the translation contained in brackets ([ ]) represents
translator's comments or explanatory remarks.
Executed this 16th day of November, 1998, at Agoura Hills, California.
Varvara Olson
- - --------------
/s/ Varvara Olson
- - --------------
Signature of Interpreter
Case No. N/A
Case Name: N/A
No. of words: 593
Exhibit B.1
<PAGE> 8
8
The Russian Federation
Committee
for geology and
the use of earth's mineral wealth
of the PRIMORGEOLKSM
The Primorsky
Territorial
Geological Fund
REGISTERED
November 29], 1996
Chief of the T.G.F. (signature)
(Logo of the USSR)
LICENSE
for the right to use earth's mineral wealth
VLV 09593 BR
- - --- ----- --
Series Number Type of license
Is issued to: PRIVATE STOCK COMPANY [ZAO]
---------------------------
(subject of the entrepreneurial activity receiving
"CHRUSTALNOYE ORE MINING COMPANY"
---------------------------------
this license)
- - --------------------------------------------------------------------------------
in the person of: Director General
(first name, patronymic, surname of the person
representing the subject of
Mikhail Zakharovich LATYSHEV
----------------------------
the entrepreneurial activity)
with the target purpose and type of operations:
search, prospecting and mining of silver ores at the
----------------------------------------------------
Zamanchiviy section of the Kumirniy ore field.
----------------------------------------------
The section of the mineral wealth is located in:
The Terneisky region of the Primorsky Krai
--------------------------------------------
(Name of the populated point, region, county, krai,
republic)
Description of the boundaries of the mineral wealth section, coordinates of the
corner points, copies of the topography plans, cross sections and others are
found in appendix:
No. 1
-----
(Number of the appendix)
The right to use land sections is received from:
The administration of the Terneisky Region
------------------------------------------
Resolution No. 626 of November 9, 1994.
--------------------------------------
(Name of the authority issuing the permission, the
number of the resolution, the date)
Exhibit B.2
<PAGE> 9
9
Copies of the documents and the description of the boundaries of the land
section are found in Appendix:
2.
-
(Number of the appendix, quantity of pages)
The section of earth's mineral wealth has the status of:
mining extraction
(geological or mining extraction)
Expiration of the license's validity:
31st of December, 2019
----------------------
(day, month, year)
The following documents are integral component parts of the present license:
1. Appendix 1. Layout of the mining extraction with the scale of
1:10000 on 1 sheet
(name of the document, number of pages).
2.
3. Appendix 2. Resolution by the administration of the Terneisky
region No. 626 of November 9, 1994 - 1 page.
Appendix 3. The licensing agreement concerning the conditions
for use of earth's mineral wealth - 5 pages.
Appendix 4. The Minutes No. 74 of the expert commission meeting
regarding licensing of sites for use of earth's
mineral wealth - 5 pages
Appendix 5. Information concerning the user of earth's mineral
wealth - 1 page.
Appendix 6. Order to re-legalize the licenses - 1 page
Appendix 7. The statement by the Chrustalneskaya tin company
regarding the transfer of mineral wealth use rights -
1 page.
Appendix 8. The statement by the ZAO GK Chrustalnaya
concerning re-legalizing of the licenses and an
extract from the transfer deed - 2 pages.
Exhibit B.3
<PAGE> 10
10
- - --------------------------------------------------------------------------------
Authorized representative Authorized representative
of the Russian Federation of the Office of State Authority
Committee for Geology and for the subject of the Federation
use of earth's mineral wealth
SAMOVAROV, Boris Ivanovich STOMATIUK, Evgeniy Stepanovich
- - -------------------------- ------------------------------
(Surname, first name, patronymic) (Surname, first name, patronymic)
(Signature)
- - ----------- ----------------------------------
Signature, date: October 8, 1996 Signature, date: (signature)
--------------- -----------
[illegible]96
[Round seal stating as below] [Round seal stating as below]
ROSKOMNEDR The Committee for [illeg.] resources
Primorskiy Krai of [illegible] Krai
Committeefor geology and Russian State Logo in the middle
use of mineral wealth
Russian State logo in the middle
Head of the enterprise
receiving the license:
LATYSHEV, Mikhail Zaharovich
(surname, first name, patronymic)
--------------------------------
Signature, date (signature) December 24, 1996
-----------------------------
[Round seal with the following words]
Russian Federation
K[illegible] subsidiary of the ZAO Ore Mining Company "Chrustalnaya"
Logo in center with letters of M.....GRK
Exhibit B.4
<PAGE> 11
11
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
312 NORTH SPRING STREET, ROOM G-3
LOS ANGELES, CA 90012
213-894-4445
(seal)
SHERRI R. CARTER
Clerk of Court
COURT INTERPRETER SERVICES
DECLARATION OF INTERPRETER
I, the undersigned say I am an Official Court interpreter of English and
Russian. I certify that the attached translation from Russian into English is
true and correct to the best of my abilities and belief.
DESCRIPTION OF DOCUMENT(S)
Table
"Reserves of metals in the ores of deposits and potential annual output volumes"
LEGEND; All text in the translation contained in brackets ([ ]) represents
translator's comments or explanatory remarks.
Executed this 16th day of November, 1998, at Agoura Hills, California.
Varvara Olson
- - --------------
/s/ Varvara Olson
- - --------------
Signature of Interpreter
Case No. N/A
Case Name: N/A
No. of words: 249
Exhibit C.1
<PAGE> 12
12
<TABLE>
<CAPTION>
RESERVES OF METALS IN THE ORES OF DEPOSITS AND POTENTIAL ANNUAL OUTPUT VOLUMES
- - ------------------------------------------------------------------------------
Maximum
Annual possible
Proven volume of annual
Deposits, Reserves Forecasted Total output, vol. of
metals Category reserves reserves anticipated output
- - ------------------------ --------- ---------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
- - ------------------------ --------- ---------- --------- ------------ -----------
1 2 3 4 5 6
- - ------------------------ --------- ---------- --------- ------------ -----------
- - ------------------------ --------- ---------- --------- ------------ -----------
1. Tin ore deposits
"Iskra"
Tin, tons 7600 6000 13600 1700 2000
- - ------------------------ --------- ---------- --------- ------------ -----------
2. Silver ore deposits
"Kumirnoye" section
"Zamanchiviv"
Silver, tons x 269-469 269-469 22 40
Gold, tons x 120-190 120-190 10 18
- - ------------------------ --------- ---------- --------- ------------ -----------
3. Polymetal deposit
"Shcherbakovskoye"
Lead, tons 63280 x 63280 6410 12820
Zinc, tons 84900 x 84900 8930 17860
Tin, tons 2400 x 2400 240 480
Silver, tons 257 x 257 25.2 50.4
- - ------------------------ --------- ---------- --------- ------------ -----------
4. Polymetal deposits
"Fasoinoye"
Lead, tons 22000 118000 140000 8720 13.08
Zinc, tons 26000 143000 169000 10540 15.81
Silver, tons 42 232 274 17.2 25.8
- - ------------------------ --------- ---------- --------- ------------ -----------
5. Tin-polymetal
deposit "Yubileynoye"
Tin, tons 6690 x 6690 670 1000
Lead, tons 1140 x 1140 120 180
Zinc, tons 16480 x 16480 1600 2500
Copper, tons 2760 x 2760 270 430
Silver, tons 54.6 x 382 38 60
- - ------------------------ --------- ---------- --------- ------------ -----------
6. Gold ore field
"Porozhistoye"
Gold, kg. 88 8908 8996 530
- - ------------------------ --------- ---------- --------- ------------ -----------
7. Gold-silver ore
field "Mineralnoye"
Gold, kg. 560 7700 8260 460 720
Silver, tons 56 110 166 9
- - ------------------------ --------- ---------- --------- ------------ -----------
8. Gold-silver ore
deposits "Soyuznoye"
Gold, kg. 230 1500 1730 100 150
Silver, tons 17 120 137 8 12
- - ------------------------ --------- ---------- --------- ------------ -----------
9. Gold-silver ore
field "Vasilkovskoye"
Gold, kg x 2500 2500 300 500
Silver, tons x 250 250 30 50
- - ------------------------ --------- ---------- --------- ------------ -----------
10. Gold-silver ore
deposit "Vershinnoye"
Gold, kg x 5000 5000 310 500
Silver, tons x 500 500 30 50
- - ------------------------ --------- ---------- --------- ------------ -----------
</TABLE>
<PAGE> 13
13
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
312 NORTH SPRING STREET, ROOM G-3
LOS ANGELES, CA 90012
213-894-4445
(seal)
SHERRI R. CARTER
Clerk of Court
COURT INTERPRETER SERVICES
DECLARATION OF INTERPRETER
I, the undersigned say I am an Official Court interpreter of English and
Russian. I certify that the attached translation from Russian into English is
true and correct to the best of my abilities and belief.
DESCRIPTION OF DOCUMENT(S)
Description of locations of deposits and ownership of licenses
by ZAO GRK "Chrustalnaya" and AO "Dalmorgeo"
LEGEND; All text in the translation contained in brackets ([ ]) represents
translator's comments or explanatory remarks.
Executed this 16th day of November, 1998, at Agoura Hills, California.
Varvara Olson
- - --------------
/s/ Varvara Olson
- - --------------
Signature of Interpreter
Case No. N/A
Case Name: N/A
No. of words: 114
Exhibit C.3
<PAGE> 13
13
The "Iskra" deposit is in the Kavalerovsky region; at the present time
it is actively mined. The silver carrying "Kumirnoye" deposit is located in the
Terneysky region of the Primorsky krai [province]; requires prospecting.
The remaining deposits are in the Olginsky region.
The area of the Soboliniy ore junction requires completion of
geological study for the purpose of identification of a gold ore site with
complex copper molybdenum ores. The forecasted resources of the area are
evaluated at 120 tons of gold, the reserves of copper ores at 15 thousand tons.
The polymetallic deposits of Shcherbakovskoye, Fasolnoye, Jubileynoye
require completion of prospecting, the remaining ones [require] prospecting
accompanied by mining.
ZAO GRK "Chrustalnaya" is the owner of the licenses for the deposits of
"Iskra" [and] "Kurnirnoye". The "Porozhistoye" deposit is AO "Dalmorgeo's. There
is an opportunity to draw up licenses for the remaining deposits.
Exhibit C.4
<PAGE> 15
15
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
312 NORTH SPRING STREET, ROOM G-3
LOS ANGELES, CA 90012
213-894-4445
(seal)
SHERRI R. CARTER
Clerk of Court
COURT INTERPRETER SERVICES
DECLARATION OF INTERPRETER
I, the undersigned say I am an Official Court interpreter of English and
Russian. I certify that the attached translation from Russian into English is
true and correct to the best of my abilities and belief.
DESCRIPTION OF DOCUMENT(S)
Information sheet stating the limits for cutting of lumber, volumes of
procurement, potential export volume,
residual value of "Chrustalnaya" Ore Mining Company's fixed assets
LEGEND; All text in the translation contained in brackets ([ ]) represents
translator's comments or explanatory remarks.
Executed this 16th day of November, 1998, at Agoura Hills, California.
Varvara Olson
- - --------------
/s/ Varvara Olson
- - --------------
Signature of Interpreter
Case No. N/A
Case Name: N/A
No. of words: 412
Exhibit C.5
<PAGE> 15
16
The limits of cutting down lumber in the Primorsky Krai are
approximately 4 million cubic meters per year. At the present time approximately
50% is achieved.
In order to obtain a permit to conduct lumber cutting operations it is
necessary to - conduct an attestation of the enterprise with the federal forest
service regarding the subject of
readiness of the enterprise to carry out lumber cutting works and the
proposed technology; - coordinate with the administration and the federal forest
service the locations of proposed sites for
the felling, which are not secured to [some] enterprises, and to draw them
up as rentals for an expended period; to formalize the licenses.
The volumes of procurement of lumber materials and processing of them at
the enterprise depend on obtaining equipment for producing work and on
specialists.
The initial real volume of procurement of timber is 100 thousand cubic
meters per year and purchases from the neighboring lumber procuring enterprises
- - - 200 thousand cubic meters per year with the removal of this timber to
processing facilities and with complex processing [of it].
With the enterprise developed the volume of procurement in the future can
be brought up to 500 thousand cubic meters per year; the complex processing
(with the availability of equipment) permits the production of saw-timber,
technological chips, OSB boards, which are used to manufacture the panels in
home constructions, furniture, as well as shipments for export. Waste could be
used for the production of thermal and electrical power.
The possible [potential] volume of exports of non-processed timber and
saw-timber [is] 10 to 30% of the volume of procurement. The volume of exports of
the OSB boards at the annual manufacture of it in the quantity of 13,000,000
square meters will depend on demand from the domestic market.
The residual value of GRK "Chrustalnaya's fixed assets, rented by the OOO
[Limited Liability Company] "Stanum," consists of 2,922 thousand $, including
the main [capital] and auxiliary equipment of the departments of the company,
and is distributed in the following way:
1. The main, auxiliary equipment of the enrichment factory OOO [Ltd.] "Stanum"
1. Power - electric engines, transformers, distribution boards, tractors
residual value - 12.5 thousand $ degree of wear and tear
[depreciation] - 78%
2. The main operating equipment for preparation of the ore for enrichment are
the cone breakers of large, medium and fine crushing, classifiers, screens,
mills.
residual value - 37.2 thousand $
degree of wear and tear [depreciation] - 80%
Exhibit C.7
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-01-1998
<PERIOD-END> NOV-30-1998
<CASH> 1,420,169
<SECURITIES> 0
<RECEIVABLES> 1,048,257
<ALLOWANCES> (150)
<INVENTORY> 401,199
<CURRENT-ASSETS> 2,951,865
<PP&E> 567,490
<DEPRECIATION> (139,021)
<TOTAL-ASSETS> 8,419,634
<CURRENT-LIABILITIES> 2,895,924
<BONDS> 0
0
176,414
<COMMON> 437,836
<OTHER-SE> 2,490,248
<TOTAL-LIABILITY-AND-EQUITY> 8,419,634
<SALES> 7,957,464
<TOTAL-REVENUES> 7,957,464
<CGS> 6,605,370
<TOTAL-COSTS> 6,605,370
<OTHER-EXPENSES> 2,513,347
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 364,827
<INCOME-PRETAX> (1,526,080)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,526,080)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,526,080)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
