EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT, by and between TREND MINING COMPANY, a
Delaware corporation (the "Company"), and Howard Schraub (the "Investor") is
dated as of December 12, 2005 (this "Agreement").
In consideration of the mutual covenants and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
SUBSCRIPTION
1.1 Subscription. The Investor hereby subscribes and agrees to
purchase, and the Company hereby agrees to issue and sell to the Investor, one
million five hundred thousand (1,500,000) shares of the Company's common stock,
$0.01 par value per share (the "Shares"), at the price of $0.10 per share.
1.2 Closing. The purchase and sale of the Shares (the "Closing") was
consummated on or about December 6, 2005 (the "Closing Date"). The Closing shall
take place at the offices of the Company or at such other time and/or place as
the parties may agree or via the exchange of facsimile signatures (as
contemplated herein).
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1 Representations and Warranties. The Company hereby represents and
warrants to the Investor as follows, which representations and warranties are
true as of the date hereof and will be true as of the Closing Date:
(a) The Company is a corporation duly formed, validly existing
and subsisting under the laws of the State of Delaware. The Company has
all requisite power and authority to execute and deliver this Agreement
and to carry out the Company's obligations hereunder. As used in this
Agreement, "Material Adverse Effect" means any event, circumstance or
development which individually or in the aggregate could have a
material adverse effect on the business, properties, operations,
condition (financial or otherwise), prospects, assets, liabilities,
earnings or results of operations of the Company or on the performance
of the transactions contemplated hereby.
(b) The Company is currently in compliance with all applicable
laws (whether statutory or otherwise), rules, regulations, orders,
ordinances, judgments, decrees, writs,
requirements and injunctions of all governmental authorities, agencies,
courts, and administrative tribunals, except for such noncompliance
that, individually and in the aggregate, would not have a Material
Adverse Effect.
(c) Except for the filing of any forms required under the
federal securities laws and any filings required under state "blue sky"
laws, no consent, approval or authorization of, or declaration, filing
or registration with, any governmental or regulatory authority is
required to be made or obtained by the Company in connection with the
execution and delivery of this Agreement or the performance by the
Company of its obligations hereunder.
(d) There is no action, suit or proceeding pending or, to the
knowledge of the Company, threatened against the Company, before any
court or arbitrator, or any governmental body, agency or official in
which there is a reasonable likelihood of a decision which could have a
Material Adverse Effect on the Company or which challenges the validity
of this Agreement.
(e) The offer, sale and issuance of the Shares without
registration (assuming the accuracy of the representations and
warranties made by the Investor in Article III hereof) will not violate
the Securities Act of 1933, as amended (the "Securities Act"), or any
applicable state securities or "blue sky" laws or other applicable
laws. None of the Company, its affiliates or any person acting on its
behalf has engaged in any form of general solicitation or advertising
(as defined in Rule 502(c) of the Securities Act) or engaged in any
action that would require the registration under the Securities Act of
the offering and sale of the Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
3.1 Representations and Warranties. The Investor hereby represents and
warrants to the Company as follows, which representations and warranties are
true as of the date hereof and will be true as of the Closing Date:
(a) The Investor has all requisite power, capacity and full
legal right to execute and deliver the Agreement and to carry out the
Investor's obligations hereunder. The execution and delivery of, and
performance of his obligations hereunder, this Agreement and the
consummation of the transaction contemplated hereby has been duly
authorized and no other proceeding on the Investor's part is required.
This Agreement has been duly executed and delivered by the Investor and
constitutes a valid and binding obligation, enforceable against the
Investor in accordance with its terms.
(b) The Investor is purchasing the Shares pursuant to this
Agreement for the Investor's own account and for investment purposes
only and without a view to making a distribution thereof in violation
of the Securities Act.
(c) The Investor has such knowledge and experience in
financial and business matters that the Investor is capable of
evaluating the merits and risks of the investment
contemplated by this Agreement and making an informed investment
decision with respect thereto.
(d) The Investor is an "accredited investor" as such term
is defined in Rule 501 under the Securities Act.
(e) The Investor has had the opportunity to ask questions of,
and receive answers from, officers of the Company concerning the
Company and the terms and conditions of this transaction, as well as to
obtain any information, financial or otherwise, requested by the
Investor. The Investor's decision to enter into the transaction
contemplated by this Agreement is based on the Investor's own
evaluation of the Company's business activities and the finances,
merits and risks of purchasing the Shares.
(f) The Investor understands and agrees that the Shares have
not been registered under the 1933 Act or any applicable state
securities laws, by reason of their issuance in a transaction that does
not require registration under the 1933 Act (based in part on the
accuracy of the representations and warranties of Subscriber contained
herein), and that such Securities must be held indefinitely and may not
be transferred unless registered under the 1933 Act or applicable state
securities laws, or is exempt from such registration.
(g) The Shares will bear the following or similar legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW
OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
TREND MINING COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED."
(h) The Investor has adequate means of providing for the
Investor's current financial needs and foreseeable contingencies and
has no need for liquidity of the investment in the Shares for the
foreseeable future.
(i) The Investor is aware that an investment in the Shares
involves a number of very significant risks, including the possible
loss of his entire investment and has considered and reviewed the
information provided by the Company with such advisors as the Investor
deemed necessary.
(j) There are no claims for investment banking fees, brokerage
commissions, finder's fees or similar compensation (other than
professional fees to attorneys and accountants, which shall be borne by
each party for him/her/itself) in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement
made by or on behalf of the Investor.
ARTICLE IV
TERMINATION
4.1 Termination. This Agreement may be terminated by the mutual
agreement of the parties hereto.
4.2 Effect of Termination. In the event of termination of this
Agreement in accordance with Section 4.1, this Agreement will be of no force or
effect.
ARTICLE V
MISCELLANEOUS
5.1 Waivers and Consents. For the purposes of this Agreement, no course
of dealing between the Company and the Investor, or no delay on the part of
either party hereto in exercising any rights hereunder will operate as a waiver
of the rights hereof or thereof. No provision hereof may be waived except by a
written instrument signed by the party waiving the provision.
5.2 Governing Law; Jurisdiction; Venue etc. This Agreement will be
governed by and construed in accordance with the laws of the State of Delaware
without regard to conflicts of laws principles that would result in the
application of the substantive laws of another jurisdiction. Any action brought
by either party against the other concerning the transactions contemplated by
this Agreement shall be brought only in the state courts of Delaware or in the
federal courts located in the State of Delaware.
5.3 Headings. The descriptive headings in this Agreement have been
inserted for convenience only and must not be deemed to limit or otherwise
affect the construction or interpretation of any provision herein.
5.4 Counterparts/Execution. This Agreement may be executed in any
number of counterparts and by the different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. This
Agreement may be executed by facsimile signature and delivered by facsimile
transmission.
5.5 Severability. If any provision of this Agreement is found to be
void or unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement will nevertheless be binding upon the parties with
the same force and effect as though the unenforceable part had been severed and
deleted; provided, however, that no such severability will be effective if it
materially changes the economic benefit of this Agreement to any party.
5.6 Integration. This Agreement constitutes the entire agreement by and
among the parties with respect to the subject matter hereof, and supersedes any
other prior agreements, contracts and understandings, both written and oral.
5.7 Usage. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
All terms defined in this Agreement in their singular or plural forms have
correlative meanings when used herein in their plural or singular forms,
respectively. Reference in this Agreement to "including", "includes" and
"include" shall be deemed to be followed by "without limitation".
5.8 Facsimile Signatures. A facsimile signature on this Agreement or an
original signature delivered by facsimile will be considered the same as an
original.
IN WITNESS WHEREOF, the parties have caused this Subscription Agreement
to be duly executed and delivered as of the day and year first above written.
TREND MINING COMPANY
By: /s/ Thomas A. Loucks
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Name: Thomas A. Loucks
Title: President and Chief Executive Officer
INVESTOR
/s/ Howard Schraub
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Name: Howard Schraub