Interest Purchase Agreement
EXHIBIT
10.49
This
Interest Purchase Agreement is entered
into on May 27, 2008, to be effective as of March 31, 2008 (the
“Effective Date”), and is by and among Sentient USA Resources Fund, L.P., a
Delaware limited partnership (“Sentient LP”), Sentient Global Resources Fund
III, LP (“Fund III”), AmerAlia, Inc., a Utah corporation (“AmerAlia”), Natural
Soda, Inc., a Colorado corporation (“Soda”) and Natural Soda Holdings, Inc., a
Colorado corporation (“Holdings”).
R
E C I T A L S
WHEREAS, Holdings has issued
Secured Series A 10% Debentures Due September 30, 2005 (“Series A Debentures” or
a “Series A Debenture”) in a total principal amount of approximately
$10,125,000, plus accrued interest thereon, owned by Sentient L.P. ($5,750,000
principal amount) and AmerAlia ($4,375,000 principal amount);
WHEREAS, AmerAlia wishes to
raise funds so that AmerAlia can pay interest to the holders of some of its
interest bearing debt and Sentient LP is entitled to receive interest at the
same time as AmerAlia;
WHEREAS, pursuant to the terms
of the Series A Debentures, as of March 31, 2008, (i) AmerAlia owns the right to
receive One Million Four Hundred Six Thousand Eight Hundred Seventy
Five and no/100 Dollars ($1,406,875.00) of accrued interest plus interest
accruing thereon from Holdings pursuant to the Series A Debentures owned by
AmerAlia (the “AmerAlia Series A Interest”) and (ii) Sentient LP
owns the right to Two Million Seventy Six Thousand Three Hundred
Thirty Four and 20/100 Dollars ($2,076,334.20) of accrued interest plus interest
accruing thereon from Holdings pursuant to the Series A Debentures owned by
Sentient LP (the “Sentient LP Series A Interest”); and
WHEREAS, Fund III is willing
to purchase (i) the AmerAlia Series A Interest, and (ii) the Sentient LP Series
A Interest, on the terms set forth below.
NOW, THEREFORE, in
consideration of the foregoing premises, the representations, covenants and
conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1.
Reciprocal Representations
and Warranties. The parties each
covenant, represent, and warrant to the other that:
|
|
a.
|
Organization and
Standing. It has been duly organized and is validly
existing.
|
|
|
b.
|
Power and
Authority. It has the full power and authority to carry
on its business as it is now being conducted and to carry out the
transactions contemplated by this Agreement; and the execution of and
performance by it under this Agreement and the other documents to be
delivered as part of the transactions contemplated hereby have been
properly authorized.
|
|
|
c.
|
No
Conflict. Neither the execution and delivery of this
Agreement and the other documents executed or required to be executed
hereunder nor the consummation of the transactions contemplated
hereby or thereby will violate, breach, be in conflict with, or constitute
a default under, or permit the termination or acceleration of the maturity
of, or result in the imposition of any lien, claim, or encumbrance
upon any of its assets pursuant to the terms of any note, bond, mortgage,
deed of trust, loan, lease, other arrangement, agreement, or instrument or
any judgment, order, injunction, or decree to which it is a party or by
which it or its property or any of is assets is bound or
subject.
|
Page
1
|
|
d.
|
Binding
Effect. This Agreement and each of the documents to be
executed and delivered pursuant to the transactions contemplated hereby
are, or when executed and delivered against the consideration to be
received therefor will be, legal, valid, and binding obligations,
enforceable in accordance with their
terms.
|
|
|
e.
|
Consents. No
consent of any party (excluding any consent that may be required by
Sentient LP, AmerAlia, Holdings, or Soda and which is provided herewith)
is necessary for the consummation of the transactions contemplated
hereby.
|
|
|
f.
|
Expenses. Each
party will pay all its expenses and costs, including fees of legal counsel
and accountants, incurred in connection with the execution and delivery
of, and performance by it under, this
Agreement.
|
2.
Purchase and
Sale. Subject to the terms and conditions contained
herein, effective March 31, 2008, Fund III purchases from AmerAlia the AmerAlia
Series A Interest and effective the same date, AmerAlia sells, assigns,
transfers and delivers to Fund III the AmerAlia Series A Interest, free and
clear of all liens, pledges, charges or encumbrances of any
nature. Subject to the terms and conditions contained herein,
effective March 31, 2008 Fund III purchases from Sentient
LP the Sentient LP Series A Interest and effective the same date,
Sentient LP sells, assigns, transfers and delivers to Fund III the Sentient LP
Series A Interest, free and clear of all liens, pledges, charges or encumbrances
of any nature. Fund III shall pay: (i) AmerAlia the purchase price of One
Million Four Hundred Six Thousand Eight Hundred Seventy Five and no/100 Dollars
($1,406,875.00) in consideration for the AmerAlia Series A Interest,
and (ii) Sentient LP the purchase price of Two Million Seventy Six Thousand
Three Hundred Thirty Four and 20/100 Dollars ($2,076,334.20) in consideration
for the Sentient LP Series A Interest.
3.
Additional Representations,
Warranties, and Covenants.
|
|
a.
|
AmerAlia. AmerAlia
represents, warrants and agrees as
follows:
|
|
|
i.
|
AmerAlia
owns the AmerAlia Series A Interest free and clear of all liens, claims
and encumbrances except as provided pursuant to the terms of a Series A
Debenture Pledge Agreement dated to be effective as of March 19, 2004, by
and among AmerAlia and the pledgees listed therein (the “Series A
Debenture Pledge Agreement”) and as a result of this Agreement, Fund III
will own the AmerAlia Series A Interest free and clear of all liens,
claims and encumbrances except those in favor of Fund
III.
|
|
|
ii.
|
Fund
III may file one or more financing statements or other documents,
agreements, instructions, or filings as it deems necessary or appropriate
to reflect the transactions described in this
Agreement.
|
|
|
iii.
|
AmerAlia
will use the proceeds of the purchase solely to (i) pay interest on the
certain promissory notes in the principal amount of $4,250,000 dated March
19, 2004 and March 23, 2005, and (ii) for no other
purpose.
|
|
|
iv.
|
AmerAlia
will hold any payments it receives from or on behalf of Holdings on the
Series A Debentures owned by AmerAlia in trust for the benefit of Fund III
and AmerAlia agrees that such amounts will be paid to Fund III until it
has been paid the AmerAlia Series A Interest, in
full.
|
Page
2
|
|
v.
|
Pursuant
to any limitations on the transfer contained in the Securityholder
Agreement dated March 19, 2004, by and among AmerAlia, Soda, Holdings and
Sentient LP’s predecessors in interest, AmerAlia consents to the transfer
of the AmerAlia Series A Interest and the Sentient LP Series A Interest to
Fund III.
|
|
|
b.
|
Sentient
LP. Sentient LP represents, warrants and agrees as
follows:
|
|
|
i.
|
Sentient
LP owns the Sentient LP Series A Interest free and clear of all liens,
claims and encumbrances and as a result of this Agreement, Fund III will
own the Sentient LP Series A Interest free and clear of all liens, claims
and encumbrances except those in favor of Fund
III.
|
|
|
ii.
|
Fund
III may file one or more financing statements or other documents,
agreements, instructions, or filings as it deems necessary or appropriate
to reflect the transactions described in this
Agreement.
|
|
|
iii.
|
Sentient
LP will hold any payments it receives from or on behalf of Holdings on the
Series A Debentures owned by Sentient LP in trust for the benefit of Fund
III and Sentient LP agrees that such amounts will be paid to Fund III
until it has been paid the Sentient LP Series A Interest, in
full.
|
|
|
iv.
|
Pursuant
to any limitations on the transfer contained in the Securityholder
Agreement dated March 19, 2004, by and among AmerAlia, Soda, Holdings and
Sentient LP’s predecessors in interest, Sentient LP consents to the
transfer of the AmerAlia Series A Interest and the Sentient LP Series A
Interest to Fund III.
|
|
|
c.
|
Soda. Soda
represents, warrants and agrees as
follows:
|
|
|
i.
|
Pursuant
to any limitations on the transfer contained in the Securityholder
Agreement dated March 19, 2004, by and among AmerAlia, Soda, Holdings and
Sentient LP’s predecessors in interest, Soda consents to the transfer of
the AmerAlia Series A Interest and the Sentient LP Series A Interest to
Fund III.
|
|
|
d.
|
Holdings.
Holdings represents, warrants and agrees as
follows:
|
|
|
i.
|
As
of as of the dates of purchase, the AmerAlia Series A Interest
is owed to AmerAlia and the Sentient LP Series A Interest is owed to
Sentient LP and no other interest is owed on these
instruments.
|
|
|
ii.
|
The
obligations purchased by Fund III, i.e., the AmerAlia Series A Interest,
and the Sentient LP Series A Interest are registered on Holdings’ books
and records (noted as owned by Fund III) so that interest accrued and paid
thereon (as provided in the Series A Debentures) will qualify as
“portfolio interest” obligation within the meaning of Section 871(h) of
the Internal Revenue Code of 1986, as amended. Since the Series A
Debentures are registered with the Maker as to both the principal amount
and any interest payable thereunder and may be transferred by the Holder
to any third person only by surrendering the original note to the Maker
and the issuance by the Maker of a new obligation to the transferee, as
required under Section 1.871-14(c) of the Treasury Regulations promulgated
under the United States Internal Revenue Code. Holdings hereby instructs
Xxxxxx X. Xxxxxxx as agent in fact for Holdings to reflect on the face of
the Series A Debentures owned by AmerAlia, that the AmerAlia Series A
Interest is owned by and registered in the books of Holdings in the name
of Fund III.
|
Page
3
|
|
iii.
|
Holdings
has no defense to the payment of principal of and interest on any of its
Series A Debentures, and any defenses and counterclaims to the enforcement
of the Series A Debentures are hereby waived and released by Holdings
which agrees not to assert such defenses against Fund III or any of its
affiliate.
|
|
|
iv.
|
Any
amounts paid or payable pursuant to the Series A Debentures issued to
AmerAlia will first be paid to Sentient LP until it receives all of the
AmerAlia Series A Interest. Payments required to be made to the
Pledgee’s Agent pursuant to the Series A Debenture Pledge Agreement will
be made with a notation as to the amount of AmerAlia Series A Interest
that has not yet been paid to Sentient LP and which is to be paid to Fund
III as the registered owner
thereof.
|
|
|
v.
|
Pursuant
to any limitations on the transfer contained in the Securityholder
Agreement dated March 19, 2004, by and among AmerAlia, Soda, Holdings and
Sentient LP’s predecessors in interest, Holdings consents to the transfer
of the AmerAlia Series A Interest and the Sentient LP Series A
Interest to Fund III.
|
|
|
e.
|
Joint Representations
and Warranties. AmerAlia and Holdings represent, warrant
and agree that:
|
|
|
i.
|
Each
of them has delivered to Fund III: (A) the unaudited financial statements
for AmerAlia & Subsidiaries, consolidated Balance Sheets
and Income Statements for the years ended June 30, 2006 and June 30, 2007
and for the Quarters ended September 30, and December 31, 2007, and (B)
for each of (i) AmerAlia, Inc., (ii) Natural Soda Holdings, Inc., and
(iii) Natural Soda, Inc. Balance Sheets and Income Statements for the
years ended June 30, 2006 and June 30, 2007 and for the Quarters ended
September 30, and December 31, 2007 (collectively (A) and (B) are referred
to herein as the “Unaudited Statements”). In all material respects, the
unaudited statements: (i) are true, accurate and complete, (ii)
have been prepared in accordance with GAAP applied on a consistent basis
(except as otherwise stated in such financial statements), and (iii)
present fairly the financial position and results of operations, cash
flows and of changes in stockholders’ equity as of the dates and for the
periods indicated, subject to normal year-end audit adjustments, which
taken together are not material in amount (with materiality defined as
$50,000 individually or in the
aggregate).
|
|
|
ii.
|
Except
as disclosed herein, none of the assets of Soda have been paid to or for
the benefit of AmerAlia, Holdings, Xxxxxx xxx Xxxxxx or Xxxx X.
Xxxx.
|
|
|
iii.
|
Each
has disclosed all material facts related to AmerAlia, Holdings, Soda, and
any of the debentures issued by Holdings, and has not failed to disclose
to Fund III any material fact necessary to prevent what has been disclosed
to Fund III from being
misleading.
|
|
|
iv.
|
There
are no defenses or counterclaims to the enforcement of any Series A
Debentures, including those issued by Holdings and registered in the name
of Sentient LP, and Holdings and Soda hereby waive and release any such
defense or counterclaims that may
exist.
|
Page
4
|
|
v.
|
Neither
of them has any claim, counterclaim, offset, or other right that it could
possibly assert against Fund III, Sentient LP or any investor, partner,
agent, officer, director, trustee, agent or other representative
of Sentient LP, Fund III, or any entity or person affiliated
with them.
|
4.
Mutual
Covenants. For the benefit of each other, the parties
covenant, promise, and agree that:
|
|
a.
|
Further
Assurances. From time to time, at the request of Fund
III, AmerAlia, Holdings, and or Soda will, without further consideration,
execute and deliver such further instruments of conveyance, assignment,
and transfer, assumption, or agreement to perform and discharge, pay,
encumber or indemnify, as appropriate, in order to more effectively convey
and transfer the AmerAlia Series A Interest to Fund III. From time to
time, at the request of Fund III, Sentient LP will, without further
consideration, execute and deliver such further instruments of conveyance,
assignment, and transfer, assumption, or agreement to perform and
discharge, pay, encumber or indemnify, as appropriate, in order to more
effectively convey and transfer the Sentient LP Series A Interest to Fund
III.
|
|
|
b.
|
Expenses. Each
party will pay all his or its expenses and costs, including fees of legal
counsel and accountants, incurred in connection with the execution and
delivery of, and performance by it under, this
Agreement.
|
|
|
c.
|
Indemnification. AmerAlia
and Holdings, jointly and severally as to their and Soda’s
representations, warranties and agreements, and Sentient LP, severally as
to its representations, warranties and agreements, will indemnify and hold
harmless Fund III and its affiliates against any and all liabilities,
obligations, damages, or deficiencies resulting from any omission,
misrepresentation, breach of warranty, or non-fulfillment by them or
it of any agreement contained in this Agreement or in any instrument,
certificate, document or agreement to be delivered as the result of the
transactions contemplated hereby. Those matters are hereinafter
referred to as claims. The party entitled to indemnification is
referred to herein as the “indemnified party” and the party obligated to
provide indemnification is referred to herein as the “indemnifying
party.”
|
An
indemnified party shall promptly advise an indemnifying party of the existence
of any claim promptly after becoming aware of such claim. Thereafter the
indemnifying party may notify the indemnified party in writing of an intention
and agreement to undertake the defense, settlement or other resolution of
the claim. If that happens, the indemnified party shall cooperate
with the indemnifying party; provided, however, (i) any expenses reasonably
incurred by the indemnified party shall be paid by the indemnifying party, and
(ii) if reasonably requested by the indemnified party, the indemnifying party
shall provide satisfactory assurances of its ability to resolve the claim
including but not limited to providing evidence of sufficient funds available to
satisfy the claim.
If the
indemnifying party fails to provide the written notice and agreement described
above, within ten days after notice of a claim from the indemnified party or if
the indemnifying party fails to pay the expenses of or to provide assurances to
the indemnified party as required above, the indemnified party may defend,
settle, compromise or otherwise resolve the claim and the indemnifying party
shall be responsible for damages, deficiencies, costs, expenses (including legal
fees, costs and other expenses) incurred by the indemnified party in connection
therewith.
5.
Ancillary Documents.
AmerAlia and Soda have delivered to Fund III the following
documents:
|
|
a.
|
Agreement
of Xxxxxx X. Xxxxxxx as Pledgee’s Agent set forth
below.
|
Page
5
|
|
b.
|
The
Unaudited Financial Statements.
|
|
|
c.
|
Copies
of resolutions of the Boards of Directors of AmerAlia, Holdings and Soda
approving the execution and delivery of this Agreement and any other
document, certificate or instruction contemplated by this
Agreement.
|
6.
Security
Interest. The parties intend that the transfer of the AmerAlia
Series A Interest and the Sentient LP Series A Interest shall be a sale of those
rights for all purposes. To the extent that it is ultimately determined that the
transaction is not a sale, the AmerAlia hereby grants Fund III a security
interest in the Series A Debentures owned by AmerAlia and the AmerAlia Series A
Interest as collateral security for the rights of Fund III to receive the
AmerAlia Series A Interest. Fund III may file financing statements to perfect
this security interest and Xxxxxx Xxxxxxx agrees that he will hold the Series A
Debentures registered in AmerAlia’s name to perfect the security interest
contemplated by this Section. To the extent that it is ultimately determined
that the transaction is not a sale, Sentient LP hereby grants Fund III a
security interest in the Sentient LP Series A Interest as collateral security
for the rights of Fund III to receive the Sentient LP Series A Interest. The
secured party is authorized to file any financing statements it deems necessary
to prefect this security interest.
7.
Miscellaneous.
|
|
a.
|
Governing
Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of
Colorado.
|
|
|
b.
|
Entire
Agreement. This Agreement contains the entire
understanding between the parties with respect to the subject matter
hereof and supersedes all prior understandings, oral and
written.
|
|
|
c.
|
Waiver and
Modification. No waiver or modification of any term of
this Agreement shall be enforceable unless it is in writing, signed by or
on behalf of the party against whom such waiver or modification is
asserted.
|
|
|
d.
|
Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed
to be an original but both of which together shall constitute but one
agreement. The parties agree that the documents being executed
and faxed or sent by email to each other, followed by mailing of the
executed originals by mail within three (3) business
days.
|
|
|
e.
|
Survival. The
representations, warranties and covenants contained in this Agreement
shall survive the closing and payment of the purchase price and shall have
full force and effect regardless of any investigation by or on behalf of
any party hereto.
|
|
|
f.
|
Attorney's
Fees. If either party is required to engage in any proceedings,
legal or otherwise, to enforce its rights under this Agreement, the
prevailing party shall be entitled to recover from the other, in addition
to any other sums due, the attorneys' fees, costs and disbursements
involved in said proceedings.
|
|
|
g.
|
Dispute
Resolution. Any dispute, claim or controversy arising
out of or relating to this Agreement or the breach, termination,
enforcement, interpretation or validity thereof, including the
determination of the scope or applicability of this agreement to
arbitrate, shall be determined by arbitration in Denver, Colorado, before
three arbitrators. The arbitration shall be administered by JAMS pursuant
to its Comprehensive Arbitration Rules and Procedures. Judgment on the
Award may be entered in any court having jurisdiction. This clause shall
not preclude parties from seeking provisional remedies in aid of
arbitration from a court of appropriate jurisdiction. The
arbitrator shall, in the Award, allocate all or part of the costs of the
arbitration, including the fees of the arbitrator and the reasonable
attorneys’ fees of the prevailing
party.
|
Page
6
The
parties agree that any and all disputes, claims or controversies arising
out of or relating to this Agreement shall be submitted to JAMS, or its
successor, for mediation, and if the matter is not resolved through mediation,
then it shall be submitted to JAMS, or its successor, for final and binding
arbitration pursuant to the arbitration clause set forth above. Either party may
commence mediation by providing to JAMS and the other party a written request
for mediation, setting forth the subject of the dispute and the relief
requested. The parties will cooperate with JAMS and with one another in
selecting a mediator from JAMS panel of neutrals, and in scheduling the
mediation proceedings. The parties covenant that they will participate in the
mediation in good faith, and that they will share equally in its costs. All
offers, promises, conduct and statements, whether oral or written, made in the
course of the mediation by any of the parties, their agents, employees, experts
and attorneys, and by the mediator or any JAMS employees, are confidential,
privileged and inadmissible for any purpose, including impeachment, in any
arbitration or other proceeding involving the parties, provided that evidence
that is otherwise admissible or discoverable shall not be rendered inadmissible
or non-discoverable as a result of its use in the mediation. Either party may
initiate arbitration with respect to the matters submitted to mediation by
filing a written demand for arbitration at any time following the initial
mediation session or 45 days after the date of filing the written request for
mediation, whichever occurs first. The mediation may continue after the
commencement of arbitration if the parties so desire. Unless otherwise
agreed by the parties, the mediator shall be disqualified from serving as
arbitrator in the case. The provisions of this Clause may be enforced by any
Court of competent jurisdiction, and the party seeking enforcement shall be
entitled to an award of all costs, fees and expenses, including attorneys’ fees,
to be paid by the party against whom enforcement is ordered.
|
|
h.
|
No
Finder. No agent, broker or similar person is or will be
entitled to any broker's or finder's fee in connection with the
transaction contemplated by this
Agreement.
|
|
|
i.
|
Assignment. This
Agreement shall be binding upon and inure to the benefit of the parties
named herein and their respective successors and permitted assigns,
provided that neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party hereto without the
prior written consent of the other
party.
|
|
|
j.
|
Severability. If
any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in
full force and effect.
|
|
|
k.
|
Notices. All
notices, tender, delivery or other communications to be given shall be in
writing and shall be deemed to be properly given if delivered, mailed or
sent by wire or other telegraphic communication in the manner provided in
this section,
|
Page
7
|
If
to Sentient LP or Fund III:
|
If
to AmerAlia, Holdings or Soda:
|
||
|
Sentient
USA Resources Fund, L.P.
|
c/o
AmerAlia, Inc.
|
||
|
Sentient
Global Resources Fund III, L.P.
|
Attn:
Chairman
|
||
|
c/o
Sentient Executive MLP 1, Limited
|
0000
Xxxx Xxxxxxx Xxxxx
|
||
|
P.O.
Box 10795, Xxxxxx Town
|
Lone
Xxxx, XX 00000
|
||
|
Grand
Cayman KY1-1007
|
|||
|
Cayman
Islands, BWI
|
|||
|
With
copies to (which shall not constitute notice):
|
With
copies to (which shall not constitute notice):
|
||
|
Xxxxxxx
X. Xxxxx, Esq.
|
Xxxxxxx
Xxxxxx, Esq.
|
||
|
Xxxxx
& Xxxxxx LLP
|
Holland
& Xxxx LLP
|
||
|
0000
Xx. Xxxxxxx Xx., Xxxxx 000
|
0000
Xxxx Xxxxxxxx Xxxxxxx
|
||
|
Xxxxxxxxx,
Xxxxxxxx 00000
|
Xxxxx
000
|
||
|
Xxxxxxxxx
Xxxxxxx, XX 00000
|
|||
Any party
may change that party's address for these purposes by giving written notice of
the change to the other party in the manner provided in this section. If sent by
mail, any notice, delivery, or other communication shall be effective or deemed
to have been given two (2) days after it has been deposited in the United States
mail, duly registered or certified, with postage prepaid, and addressed as set
forth above. If sent by wire or other form of telegraphic
communication, including facsimile transmission, or if delivered by courier
or personal service, any notice, delivery or other communication shall be
effective or deemed to have been given upon receipt.
[Signature
Page Follows]
Page
8
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement to be effective as of the date and
year described above, notwithstanding the actual date of execution.
|
AMERALIA,
INC
|
NATURAL
SODA HOLDINGS, INC.
|
|||
|
By:
|
/s/
Xxxx X. Xxxx
|
By:
|
/s/
Xxxx X. Xxxx
|
|
|
Name:
|
Xxxx
X. Xxxx
|
Name:
|
Xxxx
X. Xxxx
|
|
|
Title:
|
President
|
Title:
|
President
|
|
|
NATURAL
SODA, INC.
|
SENTIENT
USA RESOURCES FUND, L.P.
|
|||
|
By:
|
Sentient
Executive MLP 1, Limited, General Partner
|
|||
|
By:
|
/s/
Xxxx X. Xxxx
|
By:
|
/s/
Xxxxx X. Xxxxxxx
|
|
|
Name:
|
Xxxx
X. Xxxx
|
Name:
|
Xxxxx
X. Xxxxxxx
|
|
|
Title:
|
President
|
Title:
|
Director
|
|
|
SENTIENT
USA RESOURCES FUND III, L.P.
|
||||
|
By:
|
Sentient
Executive GP III, Limited, General Partner
|
|||
|
By:
|
/s/
Xxxxx X. Xxxxxxx
|
|||
|
Name:
|
Xxxxx
X. Xxxxxxx
|
|||
|
Title:
|
Director
|
|||
By
signing below, I represent and warrant that I am the Pledgee’s Agent pursuant to
a Series A Debenture Pledge Agreement concerning Secured Series A 10% Debentures
Due September 30, 2005 issued by Natural Soda Holdings, Inc., and registered in
the name of AmerAlia, Inc. and I agree that: (i) the AmerAlia Series A Interest
is owned beneficially and of record by Fund III, (ii) that as Pledgee’s Agent, I
agree to hold all amounts received by me with respect to any Series A debentures
owned by AmerAlia in trust for Fund III until the AmerAlia Series A Interest has
been paid in full to Fund III, (iii) the AmerAlia Series A Interest will be paid
in full before any principal or interest received with respect to the Series A
Debentures issued to AmerAlia is paid to the pledgees, (iv) I have noted on the
original AmerAlia Series A Debenture(s) that Fund III is the owner of the
AmerAlia Series A Interest pursuant to this Agreement, and (v) I am holding the
Series A Debenture(s) that is (are) the subject of the pledge also
for the benefit of Fund III (thereby perfecting the security interest granted
hereunder by AmerAlia to Fund III) and that I will not release or otherwise
transfer possession of any Series A Debentures owned by AmerAlia and pledged to
me as Pledgee’s Agent without the prior written consent of Fund III until the
AmerAlia Series A Interest has been paid in full to Fund III.
/s/
Xxxxxx
Xxxxxxx
Xxxxxx
Xxxxxxx, individually and as Pledgee’s Agent
Page 9
