FIRST AMENDMENT TO STOCK PLEDGE AGREEMENT
THIS FIRST AMENDMENT TO STOCK PLEDGE AGREEMENT (the "First Amendment")
is made and entered into as of the 28th day of December, 2001 by and among
Altair International, Inc., an Ontario corporation ("Pledgor") and Doral 18,
LLC, a Cayman Islands limited liability company ("Pledgee").
Preliminary Statement
A. Pledgor and Pledgee previously entered into a Securities Purchase
Agreement dated as of December 15, 2000 (the "Securities Purchase Agreement")
pursuant to which Pledgee agreed to purchase from Pledgor an Asset Backed
Exchangeable Term Note dated as of December 15, 2000 (the "Prior Note")
B. Pledgor owns one hundred percent (100%) of the shares of the common
stock (the "Securities") of Mineral Recovery Systems, Inc. ("Mineral Recovery
Systems"), a Nevada corporation and Mineral Recovery Systems owns certain
leasehold interests in mineral deposits located in Tennessee (the "Leaseholds").
C. As security for the payments to be made to Pledgee by Pledgor under
the Prior Note, Pledgor granted to Pledgee a security interest in and to the
Securities and caused Mineral Recovery Systems to grant to Pledgee a security
interest in the Leaseholds to secure Pledgor's obligations under the Prior Note
pursuant to that certain Stock Pledge Agreement dated as of December 15, 2000
(the "Prior Stock Pledge Agreement").
D. Pledgor and certain of Pledgor's affiliates (collectively, the
"Altair Parties") and Pledgee have agreed to enter into a Note Termination and
Issuance Agreement dated as of the date hereof (the "Termination Agreement")
pursuant to which the Prior Note will be terminated in its entirety and replaced
with that certain Secured Term Note dated as of the date hereof in the original
principal amount of $2,000,000 (the "New Note") to be executed by the Altair
Parties in favor of the Pledgee;
E. Pledgee has required as a condition precedent to its execution of
the Termination Agreement that the Prior Stock Pledge Agreement be amended on
the terms set forth in this First Amendment.
NOW, THEREFORE, in consideration of the premises set forth herein, it
is hereby agreed as follows:
1. Incorporation of Recitals/Defined Terms. All the recitals contained
herein and in the Prior Stock Pledge Agreement are hereby incorporated into and
made a part of this First Amendment. Capitalized terms used herein and not
otherwise defined herein shall have the meanings given to such terms in the
Termination Agreement or the New Note.
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2. Leaseholds as Collateral. Section 9 of the Prior Stock Pledge
Agreement is hereby deleted in its entirety and the following shall be inserted
and substituted therefor:
9. Delivery of Additional Collateral/Disbursement of
Sale Proceeds. On or prior to January 7, 2002,
Pledgor shall be obligated to deliver to Pledgee a
fully executed original copy of an Amended and
Restated Absolute Assignment of Leases and Rents
substantially in the form attached hereto as Exhibit
A (the "Lease Assignment") covering Mineral Recovery
Systems' interests in the mineral deposits which are
described in the Memoranda of Mineral Leases set
forth in Exhibit B attached hereto (the "Mineral
Leases"). Pledgee, at its sole cost and expense,
shall have the right to record the Lease Assignment
in the proper jurisdictions to perfect Pledgee's
security interest in Mineral Leases at any time
during the term of the New Note.
In the event that the Mineral Leases are sold,
subleased, assigned or otherwise transferred (a
"Mineral Lease Transfer") prior to the repayment to
Pledgee of all the amounts due under the New Note,
Pledgor shall cause all or a portion of the proceeds
from such Mineral Lease Transfer to be delivered to
Pledgee in the amount equal to the greater of (i) 50%
of the proceeds of the Mineral Lease Transfer, (ii)
$500,000 or (iii) the principal amount of the New
Note then outstanding plus any accrued but unpaid
interest applicable thereto, which shall be applied
by Pledgee to satisfy any payment obligations of the
Altair Parties under the New Note due at the time of
such Mineral Lease Transfer and, thereafter, to
reduce (without prepayment penalty) the remaining
outstanding principal balance of the New Note to the
extent additional proceeds from the Mineral Lease
Transfer are available. In addition, in connection
with any Mineral Lease Transfer, Pledgee, upon
receipt of ten (10) days' written notice from Pledgor
confirming the proceeds received by Pledgee from such
Mineral Lease Transfer will be delivered to Pledgor
pursuant to the terms hereof, shall, at its own
expense, take all steps necessary to cause the Lease
Assignment recorded against the Mineral Leases
subject to the Mineral Lease Transfer to be
terminated and all liens with respect thereto to be
released as of the closing of the Mineral Lease
Transfer. Furthermore, Pledgee shall take all steps
necessary to cause the Lease Assignments recorded
against all of the Mineral Leases to be terminated
and all liens with respect thereto to be released
upon the repayment of all amounts due under the New
Note.
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3. Actions to Maintain Pledgee's Security Interest in the Collateral.
Pledgor agrees to provide Pledgee promptly upon request with all documents and
information with respect to the Mineral Leases and the real property related
thereto in order for Pledgee to perfect its security interest in the Mineral
Leases. Pledgor and Mineral Recovery Systems shall, at Pledgee's request, at any
time and from time to time during the term of the New Note, execute and deliver
to Pledgee such financing statements, amendments and other documents and do such
acts as Pledgee deems necessary in order to establish and maintain valid,
attached and perfected first security interests in the Mineral Leases and the
Securities in favor of Pledgee, free and clear of all liens and claims and
rights of third parties whatsoever. Pledgor and Mineral Recovery Systems hereby
irrevocably authorize Pledgee at any time, and from time to time, to file in any
jurisdiction any initial financing statements and amendments thereto that
describe the Securities and the Mineral Leases as collateral for the repayment
of the amounts due under the New Note and which contain any other information
required by Section 5 of Article 9 of the Uniform Commercial Code of the
jurisdiction wherein such financing statement or amendment is filed regarding
the sufficiency or filing office acceptance of any financing statement or
amendment, including (i) any organization identification number issued to
Pledgor or Mineral Recovery Systems, and (ii) in the case of a financing
statement filed as a fixture filing or indicating the Mineral Leases as
"as-extracted collateral", a sufficient description of real property to which
the Mineral Leases relates. Pledgor and Mineral Recovery Systems further ratify
and affirm their authorization for any financing statements and/or amendments
thereto, executed and filed by Pledgee in any jurisdiction prior to the date of
this First Amendment.
4. Continuing Obligations. Except as expressly modified pursuant to the
terms of this First Amendment, all of the terms and provisions of the Prior
Stock Pledge Agreement remain in full force and effect as if restated herein.
Except as provided herein, this First Amendment does not constitute a waiver by
the Pledgor of any rights or remedies it may have pursuant to the Prior Stock
Pledge Agreement. Pursuant to the terms of the Termination Agreement and the New
Note, Pledgor hereby acknowledges and agrees that the Prior Stock Pledge
Agreement, as amended hereby, shall continue to secure the obligations of the
Altair Parties under the New Note.
5. Successors and Assigns. This First Amendment shall be binding on the
Pledgor, mineral Recovery Systems, and their respective successors and assigns,
and shall inure to the benefit of the Pledgee and its successors and assigns.
6. Governing Law. This First Amendment shall be governed by and
construed in accordance with the internal laws (as opposed to the conflicts of
law provisions) of the State of Illinois.
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IN WITNESS WHEREOF, the parties have executed this First Amendment as
of the date first above written.
PLEDGOR:
ALTAIR INTERNATIONAL, INC.
By: ________________________________
Its: ________________________________
Accepted by: PLEDGEE:
DORAL 18, LLC
By: ________________________________
Its: ________________________________
Acknowledged and Agreed: MINERAL RECOVERY SYSTEMS, INC.
By: ________________________________
Its: ________________________________
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EXHIBIT A
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EXHIBIT B
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