-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N/P2mcq4bM+pJCX8zMtLh4SKdzsjlkviNGmKX1kKWCO3Zm2vo7BKpj6QPALc8Hiv b7qsmuXv7nIT8KBtXDasKw== 0000848821-99-000009.txt : 19990120 0000848821-99-000009.hdr.sgml : 19990120 ACCESSION NUMBER: 0000848821-99-000009 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19981130 FILED AS OF DATE: 19990119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEVADA MANHATTAN GROUP INC CENTRAL INDEX KEY: 0000848821 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 880219765 STATE OF INCORPORATION: NV FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-25117 FILM NUMBER: 99508084 BUSINESS ADDRESS: STREET 1: 5038 N PARKWAY CALABASAS STREET 2: STE 100 CITY: CALABASAS STATE: CA ZIP: 91302 BUSINESS PHONE: 8185914400 MAIL ADDRESS: STREET 1: 5038 N PARKWAY CALABASAS STREET 2: STE 100 CITY: CALABASAS STATE: CA ZIP: 91302 FORMER COMPANY: FORMER CONFORMED NAME: TERRA NATURAL RESOURCES CORP DATE OF NAME CHANGE: 19980828 FORMER COMPANY: FORMER CONFORMED NAME: NEVADA MANHATTAN MINING INC DATE OF NAME CHANGE: 19961126 10QSB 1 QUARTERLY REPORT United States Securities and Exchange Commission Washington, D.C. 20549 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 ___ 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 10 Year 2000 Disclosure 13 PART II OTHER INFORMATION Item 1 Legal Proceedings 14 Item 2 Changes in Securities 16 Item 3 Defaults Upon Senior Securities 16 Item 4 Submission of Matters to a Vote of Security Holders 17 Item 5 Other Information 18 Item 6 Exhibits and Reports on Form 8-K 19 Signature 20 3 3 NEVADA MANHATTAN GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Unaudited) (Audited) ASSETS Current assets: November 30, 1998 May 31, 1998 ----------------- ------------ 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 ============ ==========
See accompanying notes to consolidated financial statements 4 4 NEVADA MANHATTAN GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three and Six Months Ended November 30, 1998 and 1997 (Unaudited)
Three Months Six Months ----------------------------- --------------------------- 1998 1997 1998 1997 ---- ---- ---- ---- 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 ---------- ---------- ---------- ----------
See accompanying notes to consolidated financial statements 5 5 NEVADA MANHATTAN GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended November 30, 1998 and 1997
1998 1997 ---- ---- (Unaudited) (Unaudited) 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 ---------- ---------
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 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 The Company's business is the harvesting of timber and the production and sales of rough sawn lumber and other finished wood products in Brazil, the exploration of precious metals in Nevada and the exploration, production and sales of precious metals, timber and fish products in Russia and the Commonwealth of Independent States, and the exploration of coal and precious metals in Indonesia. The Company holds various rights to develop and/or harvest timber properties on up to approximately 665,000 hectares located in the state of Para, Brazil; the right to conduct sawmill operations at a 3.6 hectare sawmill facility located near the port city of Belem, Para, Brazil; fishing operations in Russia; and mining and timber rights and reserves in Russia; and the right to conduct exploration activities on seven (7) gold properties and four (4) coal properties in Indonesia. In August 1998, the Company entered into an agreement to harvest timber from an additional 1,380 hectares in Para, Brazil, for a period of thirty years. The Company also has sales and marketing activities for timber products, metals and mining products and fish products. 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. 7 7 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. 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. 8 8 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. 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. 9 9 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. 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. 10 10 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. 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. 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. 11 11 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, fishing and Brazilian 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 fishing and sales and marketing activities, as well as increased revenue from the Company's Brazilian Timber Operations, 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. 12 12 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. 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 Company does not know the source of the remaining payments, which may be 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. On March 27, 1998, the Company executed an agreement securing $14 million in equity financing. The financing, through Bristol Asset Management Company II LLC, requires an effective registration statement and enables the Company to draw up to $14 million over a three-year period. As of the filing date of this Quarterly Report, the Company has not effected a registration statement covering the common stock to be issued pursuant to the $14 million equity financing agreement. The Company anticipates that it will require additional capital and intends to secure it through its agreement with Bristol Asset Management Company II LLC, 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. 13 13 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. 14 14 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. 15 15 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. 16 16 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. 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. The Company believes that it met all of the requirements contained in Section 4(2). 3. Defaults Upon Senior Securities ------------------------------- Not applicable. 17 17 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 18 18 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 Company does not know the source of the remaining payments, which may be 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. 19 19 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 20 20 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 21 21 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 EX-3.XII 2 EXHIBIT 3.XII 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. 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. 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. 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. 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. 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. 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. 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. 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. 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 EX-3.XIII 3 EXHIBIT 3.XIII 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." 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 EX-10.XLI 4 EXHIBIT 10.XLI 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. 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. 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. 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. 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. 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) 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 EX-10.XLII 5 EXHIBIT 10.XLII 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). 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. 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. 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. 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 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. 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. EX-10.XLIII 6 EXHIBIT 10.XLIII 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 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 EX-10.XLIV 7 EXHIBIT 10.XLIV 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. 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 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 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 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 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 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 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 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 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 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 12 12
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 - ------------------------ --------- ---------- --------- ------------ ----------- - ------------------------ --------- ---------- --------- ------------ ----------- 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 - ------------------------ --------- ---------- --------- ------------ -----------
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 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 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 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 EX-27 8 EXHIBIT 27
5 6-MOS MAY-31-1998 JUN-01-1998 NOV-30-1998 1,420,169 0 1,048,257 (150) 401,199 2,951,865 567,490 (139,021) 8,419,634 2,895,924 0 0 176,414 437,836 2,490,248 8,419,634 7,957,464 7,957,464 6,605,370 6,605,370 2,513,347 0 364,827 (1,526,080) 0 (1,526,080) 0 0 0 (1,526,080) (0.04) (0.04)
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