Exhibit 10.36.1
ERHC INVESTMENT GROUP, LLC
c/o Corporate Builders
777 South Flagler Drive, Suite 909
West Palm Beach, Florida 33401
As of April 27, 1999
Environmental Remediation
Holding Corporation
3-5 Aubry Lane
Oyster Bay, New York 11753
Attention: President
Re: Subscription Agreement
Ladies and Gentlemen:
We refer to the letter if intent, dated as of April 8, 1999 (the "Letter of
Intent"), between ERHC Investment Group, Inc., a corporation organized under the
laws of the State of Florida ("Investment Group Inc."), and Environmental
Remediation Holding Corporation, a corporation organized under the laws of the
State of Colorado (the "Company"), pursuant to which the Company agreed, among
other things: (i) to issue to Investment Group Inc. or its assigns in one or
more transactions validly issued, fully paid, and nonassessable shares (the
"Shares") of common stock, par value $.0001 per share, of the Company (the
"Common Stock") representing fifty-one percent of the issued and outstanding
capital stock of the Company on a fully-diluted basis after giving effect to all
of the transaction contemplated by the Letter of Intent; and (ii) to enter into
a definitive securities purchase agreement (the "Securities Purchase Agreement")
with respect to such issuances of Common Stock. This letter agreement (as
amended, supplemented, or otherwise modified from time to time, this
"Agreement), is intended to set forth the mutual understanding and agreement
between ERHC Investment Group LLC, a limited liability company organized under
the laws of the State of Delaware ("Investor"), the assignee of all of
Investment Group Inc.'s rights under the Letter of Intent, and the Company
regarding Investor's initial subscription for a portion of the Shares prior to
the execution and delivery of the Securities Purchase Agreement by the parties
thereto. In consideration of the respective agreements, covenants,
representations, and warranties hereinafter set forth and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
Investor hereby irrevocably subscribes for the portion of the Shares (the
"Initial Shares") representing twenty-one percent of the issued and outstanding
capital stock of the Company on a fully-diluted basis after giving effect to all
of the transactions contemplated by the Letter of Intent, and Investor shall pay
therefor in lawful money of the United States of America in one or more
installments from time to time after the date hereof $210,000 in the aggregate
(the "Purchase Price"). The unpaid amount of the Purchase Price at any time
outstanding shall bear interest at the "applicable federal rate" per annum
(as such term is used for purposes of ss. 1274(d) of te Internal Revenue Code of
the United States of America) as in effect on the date hereof. Upon payment in
full of the Purchase Price and all accrued interest, the Company shall issue to
Investor the Initial Shares, and shall deliver or cause to be delivered to
Investor a certificate or certificates evidencing such Initial Shares.
Upon the execution and delivery of the Securities Purchase Agreement, the
terms and provisions of the Securities Purchase Agreement shall apply to the
Initial Shares subscribed for and purchased hereby, and the other transactions
contemplated by this Agreement.
Notwithstanding anything to the contrary contained herein, if the Final
Closing (as defined in the Letter of Intent) has not occurred within ninety days
after the date hereof, Investor shall surrender to the Company for cancellation
such rights as it has or such certificates as it has received with respect to
that number of the Initial Shares such that, after giving effect to such
surrender, the remaining Initial Shares held by Investor would represent that
percent of the issued and outstanding capital stock of the Company on a
fully-diluted basis after giving effect to all of the transactions contemplated
by the Letter of Intent based upon a $5,882,352.90 valuation of the Company as
adjusted by the Prior Action of the Board (as defined in the Letter of Intent).
As an inducement to the Company to enter into this Agreement, Investor
hereby represents and warrants to the Company that:
(i) Investor has duly executed and delivered this agreement, and
(assuming due execution and delivery by the Company) this agreement
constitutes a legal, valid and binding obligation of Investor, enforceable
against Investor in accordance with its terms;
(ii) Investor's execution, delivery and performance hereof do not and
will not: (A) violate or conflict with Investor's certificate of formation
or similar organizational documents, or any law or any order, writ,
judgment, injunction, decree, stipulation, determination, or award entered
by or with any governmental authority and applicable to Investor; (B)
violate or infringe upon any rights of any person; or (C) require any
consent, approval, authorization or other order of, action by, filing with,
or notification to, any governmental authority or any other person; and
(iii) Investor understands that the Initial Shares have not been
registered under the Securities Act of 1933, as amended, or the laws of any
state and may not be sold or transferred, or otherwise disposed of, without
registration under the Securities Act and applicable state securities laws,
or pursuant to an exemption therefrom.
As an inducement to Investor to enter into this Agreement, the Company
hereby represents and warrants to Investor as follows:
(i) The Company has duly executed and delivered this agreement, and
(assuming due execution and delivery by Investor) this agreement
constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms;
(ii) The Company's execution, delivery, and performance hereof do not
and will not; (A) violate or conflict with the Company's articles of
incorporation or by-laws or similar organizational documents, or any law or
any order, writ, judgment, injunction, decree, stipulation, determination
or award entered by or with any governmental authority and applicable to
the Company; (B) violate or infringe upon any rights of any person; or (C)
require any consent, approval, authorization or other order of, action by,
filing with, or notification to, any governmental authority or any other
person; and
(iii) Upon issuance, the Initial Shares will be validly issued, fully
paid, and nonassessable and will not be subject to any preemptive rights,
and will represent not less than twenty-one percent of the issued and
outstanding capital stock of the Company on a fully-diluted basis after
giving effect to all of the transactions contemplated by the Letter of
Intent.
No amendment hereof or supplement or other modification hereto, and no
consent to, or waiver, discharge, or release of, any term or provision or breach
hereof, shall be valid or effective unless such amendment, supplement, or other
modification, or such consent, waiver, discharge, or release is in writing,
expressly refers hereto, and is signed by the party to be bound thereby.
If any term or other provision hereof is determined by any court of
competent jurisdiction to be invalid, illegal, or unenforceable in whole or in
part by reason of any applicable law or public policy, and such determination
becomes final and nonappealable, such term or other provision shall remain in
full force and effect to the fullest extent permitted by law, and all other
terms and provisions hereof shall remain in full force and affect in their
entirety.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York.
Each party hereto hereby unconditionally and irrevocably waives all right
to trial by jury in any action, suit, or proceeding (whether based on contract,
tort, or otherwise) based upon, resulting from, arising out of, or relating to
this Agreement or any transaction or agreement contemplated hereby.
This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each which when executed
shall be deemed to be an original, and all of which taken together shall
constitute one and the same agreement with the same effect as if such signatures
were upon the same instrument.
Delivery of an executed counterpart hereof via telecopier shall be as
effective as delivery of an manually executed counterpart hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK].
Please evidence your acknowledgment of and agreement to the foregoing by
executing and delivering to Levin & Srinivasan LLP, counsel to the undersigned,
by telecopier at (212) 957-4565 a counterpart hereof.
Very truly yours,
ERHC INVESTMENT GROUP LLC
By: /s/ HOWARD TALKS
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Howard D. Talks
Member
ACKNOWLEDGED AND AGREED as of April 27, 1999:
ENVIRONMENTAL REMEDIATION
HOLDING CORPORATION
By: /s/ JAMES A. GRIFFIN, CORP SECRETARY
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Name: James A. Griffin
Title: Corp. Secretary