STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT ("Agreement") is made and entered into as
of the 15th day of December, 2000 by and among Mineral Recovery Systems, Inc., a
Nevada corporation ("Pledgor") and Doral 18, LLC, a Cayman Islands limited
liability company ("Pledgee").
Preliminary Statement
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A. Altair International Inc., an Ontario corporation ("Altair") and
Pledgee have agreed to enter into a Securities Purchase Agreement dated as of
December 15, 2000 (the "Securities Purchase Agreement") pursuant to which
Pledgee has agreed to purchase from Altair (i) an Asset Backed Exchangeable Term
Note in the form of Exhibit A attached to the Securities Purchase Agreement (the
"Note") and a Warrant in the form of Exhibit B attached to the Securities
Purchase Agreement (the "Warrant").
B. Pledgor owns one hundred percent (100%) of the shares of common
stock of Altair Technologies, Inc., a Nevada corporation (the "Securities").
C. Pledgor is a wholly-owned subsidiary of Altair and expects to
benefit from the proposed transaction between Altair and Pledgee, such that it
is and will be in Pledgor's interest and to its financial benefit to induce
Pledgee to purchase the Note and the Warrant.
D. As security for the payments to be made to Pledgee by Altair under
the Note, Pledgor desires to pledge the Securities to Pledgee.
NOW, THEREFORE, in consideration of the premises set forth herein, it
is hereby agreed as follows:
1. Collateral. The term "Collateral" shall mean the Securities and all
dividends, distributions and other amounts or additional securities to which
Pledgor (with or without additional consideration) is or becomes entitled by
virtue of its ownership of any of the Securities or as the result of any
corporate reorganization, merger, consolidation, stock split, stock dividend,
conversion, preemptive right or otherwise, and the proceeds thereof.
2. Deposit of Collateral. To secure payment of the Pledgor's
obligations under the Note, Pledgor hereby pledges and deposits the Securities
with Pledgee and hereby grants to Pledgee a valid and perfected first lien on
and security interest in the Securities and other items of the Collateral.
3. Representations and Warranties. Pledgor hereby represents and warrants to
Pledgee that as to the Collateral deposited by such Pledgor with Pledgee on the
date hereof, (i) Pledgor is the legal and beneficial owner of such Collateral;
(ii) such Collateral is validly issued, fully paid and non-assessable and is
registered in the name of Pledgor; (iii) the pledge of Collateral pursuant to
the terms of this Agreement, together with delivery thereof, creates a valid and
perfected first lien on and security interest in such Collateral in favor of
Pledgee; (iv) the stock power attached to the certificate(s) representing such
Collateral have been duly executed and delivered by Pledgor to Pledgee; (v) none
of such Collateral is subject to any lien, except for the perfected first
security interest granted to Pledgee hereby and, so long as any portion of the
Note remains unpaid, Pledgor will not create or permit to exist any lien upon or
with respect to such Collateral without the consent of Pledgee; and (vi) Pledgor
will not sell, transfer, convey, assign or otherwise divest its interests in
such Collateral, or any part thereof, to any other person.
4. Stock Splits, Stock Dividends, Etc.
4.1 Pledgor agrees that if by virtue of Pledgor's ownership of
the Collateral, Pledgor becomes entitled (with or without
additional consideration) to other or additional securities as
the result of any corporate reorganization, merger,
consolidation, stock split, stock dividend, conversion or
preemptive right or otherwise, such Pledgor shall: 8.2
4.1.1 Cause the issuer of such additional securities to
deliver to Pledgee the certificates evidencing Pledgor's
ownership thereof and hereby authorizes and empowers Pledgee
to demand the same from such issuer, and agrees if such
certificates are delivered to Pledgor, to take possession
thereof in trust for Pledgee;
4.1.2 Deliver to Pledgee a stock power with respect to such
securities, executed in blank by Pledgor;
4.1.3 Deliver to Pledgee such other certificates, forms and
other instruments as Pledgee may request in connection with
such pledge.
4.2 Pledgor agrees that such additional securities shall constitute a portion of
the Collateral and be subject to this Pledge Agreement in the same manner and to
the same extent as the securities pledged hereby to Pledgee on the date hereof.
5. Dividend Rights/Voting Power. Unless and until an Event of Default shall have
occurred under the Note and such default shall not have been cured within the
applicable cure period, Pledgor shall be entitled to receive all dividends paid
on the Securities and to exercise all voting powers in all corporate matters
pertaining to the Collateral for any purpose not inconsistent with, or in
violation of, the provisions of the Securities Purchase Agreement or the Note.
6. Default and Remedies.
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6.1 If an Event of Default shall occur under the Note and such default shall not
have been cured within the applicable cure period, Pledgee, at its option, may:
6.1.1 Cause the Collateral to be registered in its name or in
the name of its nominee;
6.1.2 Exercise all voting powers pertaining to the Collateral
and otherwise act with respect thereto as though Pledgee were
the owner thereof;
6.1.3 Receive all dividends and all other distributions of any
kind whatsoever on all or any of such Collateral;
6.1.4 Exercise any and all rights of collection, conversion or
exchange, and any and all other rights, privileges, options or
powers of Pledgor pertaining or relating to the Collateral;
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6.1.5Sell, assign and deliver the whole, or from time to time,
any part of such Collateral at any private sale, with or
without demand for performance or advertisement of the time or
place of sale or adjournment thereof or otherwise, and free
from any right of redemption (all of which hereby expressly
are waived by Pledgor) for cash, for credit or for other
property, for immediate or future delivery, and for such price
and on such terms as Pledgee in its sole discretion may
determine; and 1.1.1 Exercise any other remedy specifically
granted under this Agreement or now or hereafter existing in
equity or at law, by virtue of statute or otherwise.
With respect to the actions described in each of subsections 6.1.2 and 6.1.4
above, Pledgor hereby irrevocably constitutes and appoints Pledgee its proxy and
attorney-in-fact with full power of substitution and acknowledges that the
constitution and appointment of such proxy and attorney-in-fact are coupled with
an interest and are irrevocable.
6.2 At any sale made pursuant to Section 6.1 above, Pledgee may bid for and
purchase, free from any right or equity of redemption on the part of the Pledgor
(the same hereby being waived and released by Pledgor), any part or all of the
Collateral that is offered for sale, and Pledgee, upon compliance with the terms
of sale and other applicable federal regulatory requirements, may hold, retain
and dispose of such Collateral without further accountability therefor.
6.3 Pledgee shall apply the proceeds of any sale of the whole or any part of the
Collateral and any other monies at the time held by Pledgee under the provisions
of this Agreement in satisfaction of the Note.
6.4 Pledgee shall not have any duty to exercise any of the rights, privileges,
options or powers or, except as otherwise required by law, to sell or otherwise
realize upon any of the Collateral, as hereinbefore authorized, and Pledgee
shall not be responsible for any failure to do so or delay in so doing.
6.5 Any sale of all or any portion of the Collateral pursuant to Section 6.1
above shall operate to divest all right, title and interest of the Pledgor to
the Collateral which is the subject of any such sale.
6.6 Pledgor acknowledges that Pledgee may be unable to effect a public sale of
all or a part of the Collateral or that it may be able to do so only after delay
which might adversely affect the value that might be realized upon the sale of
the Collateral. Accordingly, Pledgor agrees that Pledgee may sell the Collateral
or any part thereof in one or more private sales to a restricted group of
purchasers who may be required to agree, among other things, that they are
acquiring the Collateral for their own account, for investment purposes only,
and not with a view toward the distribution or resale thereof. Pledgor agrees
that any such private sale may be at prices or on terms less favorable to the
owner of the Collateral than would be the case if such Collateral was sold at
public sale, and that any such private sale shall not be deemed not to have been
made in a commercially reasonable manner by virtue of such sale having been a
private sale.
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6.7 Pledgee shall give not less than ten (10) business days prior written
notice to the Pledgor of any sale pursuant to this Section 6. Pledgor hereby
agrees that such notice is commercially reasonable.
7. Pledgee's Obligations, Custodial Agreement, Performance Rights, Pledge Does
Not Make Pledgee Shareholder. Pledgee shall not have any duty to protect,
preserve or enforce rights against the Collateral other than a duty of
reasonable custodial care of any such Collateral in its possession, it being
understood that Pledgee shall have no responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relating to the Collateral, whether or not Pledgee has or is
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to the Collateral, or (iii)
making any capital contributions or other payments on behalf of Pledgor with
respect to the Collateral.
8. Termination of Pledge Agreement. Upon the payment and
performance in full of all amounts due under the Note, the Pledgee shall deliver
to the Pledgor the Collateral in its possession and this Agreement thereupon
shall be terminated. 5.
9. Miscellaneous.
9.1 Each and every right, remedy and power granted to Pledgee hereunder shall be
cumulative and in addition to any other right, remedy or power specifically
granted herein or now or hereafter existing in equity or at law, by virtue of
statute or otherwise and may be exercised by Pledgee, from time to time,
concurrently or independently and as often and in such order as Pledgee may deem
expedient. Any failure or delay on the part of Pledgee in exercising any such
right, remedy or power, or abandonment or discontinuance of steps to enforce the
same, shall not operate as a waiver thereof or affect Pledgee's right thereafter
to exercise the same, and any single or partial exercise of any such right,
remedy or power shall not preclude any other right, remedy or power, and no such
failure, delay, abandonment or single or partial exercise of Pledgee's rights
hereunder shall be deemed to establish a custom or course of dealing or
performance among the parties hereto.
9.3 Any modification or waiver of any provision of this Agreement, or any
consent to any departure by Pledgor therefrom, shall not be effective in any
event unless the same is in writing and signed by Pledgee, and then such
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose given. Any notice to or demand on Pledgor in any
event not specifically required of Pledgee hereunder shall not entitle Pledgor
to any other or further notice or demand in the same, similar or other
circumstances unless specifically required hereunder.
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9.3 Pledgor agrees that at any time, and from time to time, after the execution
and delivery of this Agreement, Pledgor shall, upon the request of Pledgee and
at the expense of Pledgor, promptly execute and deliver such further documents
and do such further acts and things as Pledgee may request in order to effect
fully the purposes of this Agreement and to subject to the security interest
created hereby any property intended by the provisions hereof to be covered
hereby.
9.4 Pledgor agrees that it will warrant, preserve, maintain and defend, at its
own expense, the right, title and interest of Pledgee in and to the Collateral
and all right, title and interest represented thereby against all claims,
charges and demands of all persons whomsoever.
9.5 Any notice or other communication herein required or permitted to be given
shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex, or three (3) business days after depositing it in the
United States mail with postage prepaid and properly addressed. For the purposes
hereof, the address of each party hereto shall be as provided in the Securities
Purchase Agreement hereto, or at such other address as such party may
subsequently advise the other parties hereto.
9.6 In the event that any provision of this Agreement is deemed to be invalid
by reason of the operation of any law, or by reason of the interpretation placed
thereon by any court, this Agreement shall be construed as not containing such
provision and the invalidity of such provision shall not affect the validity of
any other provision hereof, and any and all other provisions hereof which
otherwise are lawful and valid shall remain in full force and effect.
9.7 This Agreement shall inure to the benefit of the successors and assigns of
Pledgee and shall be binding upon the heirs, legatees, administrators, legal
representatives, successors and assigns of Pledgor.
9.8 This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which taken together shall be one
and the same instrument.
9.9 This Agreement shall be governed by the laws and decisions of the State of
Illinois. 7.18
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290790 v2
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
PLEDGOR:
MINERAL RECOVERY SYSTEMS, INC.
By: /s/ C. Xxxxxxx Xxxxxx
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C. Xxxxxxx Xxxxxx
Its: President
Accepted by: PLEDGEE:
DORAL 18, LLC
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Its: Director
Acknowledged by: ALTAIR TECHNOLOGIES, INC.
By: /s/ C. Xxxxxxx Xxxxxx
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C. Xxxxxxx Xxxxxx
Its: Vice President
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