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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
September 2, 1998
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Date of report (Date of earliest event reported)
TERRA NATURAL RESOURCES CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
NEVADA
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(State or Other Jurisdiction of Incorporation)
001-12867 88-0219765
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(Commission File Number) (IRS Employer Identification No.)
5038 N. PARKWAY CALABASAS, SUITE #100, CALABASAS, CA 91302
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(Address of Principal Executive Offices) (Zip Code)
(818) 591-4400
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(Issuer's Telephone Number, Including Area Code)
NEVADA MANHATTAN MINING INCORPORATED
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(Former Name, if Changed Since Last Report)
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Item 5. Other Events.
On September 2, 1998, TiNV1, Inc., a newly-formed California corporation
(the "Purchaser"), entered into a Subscription Agreement and a letter agreement,
each dated as of August 28, 1998 (collectively, the "Purchase Agreements"), with
Terra Natural Resources Corporation (formerly Nevada Manhattan Mining
Incorporated) (the "Company") pursuant to which the Purchaser purchased
5,500,000 shares of the Company's common stock from the Company for $500,000.
The Purchaser has advised the Company that the source of the funds used to
purchase the stock was capital contributions. The 5,500,000 shares represents
approximately 14% of the Company's presently outstanding common stock on a pro
forma basis. The Purchase Agreements provide that the Company's Board of
Directors will be expanded to seven and that three designees of the Purchaser
will be elected to the Board of Directors. Subject to certain exceptions
provided for in the Purchase Agreements, including exceptions arising on sales
of the Company's common stock by the Purchaser, the Company has also agreed that
three designees of the Purchaser will be included in management's slate of
nominees for the Board of Directors and that the Company will use its continuing
best efforts to cause such nominees to be elected to the Board. The Purchase
Agreements provide that all acquisitions and divestitures by the Company which
require Board Approval and any issuances of securities to the Company's
debentureholders must be approved by a supermajority of the Company's directors.
The Company has agreed to use its best efforts to create a class of
preferred stock (the "Preferred Stock") automatically convertible into common
stock on a public sale with attributes no less favorable than those comprising
the shares purchased by the Purchaser. The Preferred Stock voting as a class
will be entitled to elect three Directors (except as provided in the Purchase
Agreements), and the Company has the right to exchange the Preferred Stock for
the common stock acquired by the Purchaser.
If the Purchaser's nominees are not elected to the Board of Directors in
accordance with the Purchase Agreement, the Purchaser will have the right to
sell any of the common stock purchased by it (or Preferred Stock issued in
exchange therefor) to the Company at a price equal to the greater of the
purchase price therefor and the average price established by an independent
valuation by two major accounting firms. The Purchase Agreements provide that
the Purchaser shall have certain other rights if its designees are not so
elected in the event that the Company does not have legally sufficient funds to
repurchase its stock.
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Simultaneously with the execution of the Purchase Agreements, the Company
entered into an option agreement (the "Option Agreement") with the Purchaser,
which Option Agreement is subject to shareholder approval, including approval of
an amendment to the Company's charter documents to increase the number of
authorized shares of common stock to 250,000,000. The Option Agreement allows
the optionee to purchase on or before September 1, 2005, 70,000,000 shares of
the Company's common stock at a purchase price of $.335 per share. (The
70,000,000 shares, together with the 5,500,000 shares would represent
approximately 69% of the Company's presently outstanding stock on a pro forma
basis.) If the required shareholder approval is not obtained within 150 days of
August 28, 1998, then the Option Agreement will be void. The Purchaser has
advised the Company's Board of Directors that the Purchaser plans to transfer a
portion of the options evidenced by the Option Agreement to Christopher Michaels
and Jeffrey Kramer, the Company's two principal executive officers, to induce
them to remain with the Company. While the number of options which may be
transferred has not been specified, it is anticipated that it will be material.
In the event the Company does not obtain the aforesaid shareholder approval
within the 150 day period, the Purchaser may elect to rescind the Purchase
Agreements and receive a refund of the purchase price or obtain from Messrs.
Michaels and Kramer for no consideration all of the Company securities owned by
them with the exception of stock options, which will then be canceled.
A copy of the Purchase Agreements, the Option Agreement and the letter
agreement between Messrs. Michaels and Kramer and the Purchaser are attached as
exhibits to this Form 8-K. Any descriptions of such agreements are qualified in
their entirety by the aforesaid exhibits, which are incorporated herein by this
reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit Number Reference
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(99) Additional Exhibits
Subscription Agreement dated as of August 28, 1998 Exhibit (99.1)
Agreement dated as of August 28, 1998 Exhibit (99.2)
Option Agreement dated as of August 28, 1998 Exhibit (99.3)
Letter Agreement dated as of August 28, 1998 Exhibit (99.4)
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TERRA NATURAL RESOURCES CORPORATION
(Registrant)
Date: September 14, 1998 BY: /s/ Jeffrey S. Kramer
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JEFFREY S. KRAMER
CHIEF FINANCIAL OFFICER
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EXHIBIT INDEX
EXHIBIT NO DESCRIPTION
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99.1 Subscription Agreement dated as of August 28, 1998
99.2 Agreement dated as of August 28, 1998
99.3 Option Agreement dated as of August 28, 1998
99.4 Letter Agreement dated as of August 28, 1998