SHARE PLEDGE AGREEMENT
This Share Pledge Agreement (this "Agreement"), dated as of March 2,
2006, among Laurus Master Fund, Ltd. (the "Pledgee"), Essential Innovations
Technology Corp., a Nevada corporation (the "Company"), and Essential
Innovations Corp., a Canadian corporation ("Essential, and together with the
Company, the "Pledgor").
BACKGROUND
The Company has entered into a Securities Purchase Agreement, dated as
of the date hereof (as amended, modified, restated or supplemented from time to
time, the "Securities Purchase Agreement"), pursuant to which the Pledgee
provides or will provide certain financial accommodations to the Company.
In order to induce the Pledgee to provide or continue to provide the
financial accommodations described in the Securities Purchase Agreement, the
Pledgor has agreed to pledge and grant a security interest in the collateral
described herein to the Pledgee on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. Defined Terms. All capitalized terms used herein which are not
defined shall have the meanings given to them in the Securities Purchase
Agreement.
2. Pledge and Grant of Security Interest. To secure the full and
punctual payment and performance of (the following clauses (a) and (b),
collectively, the "Indebtedness") (a) the obligations under the Securities
Purchase Agreement and the Related Agreements referred to in the Securities
Purchase Agreement (the Securities Purchase Agreement and the Related
Agreements, as each may be amended, restated, modified and/or supplemented from
time to time, collectively, the "Documents") and (b) all other indebtedness,
obligations and liabilities of the Pledgor to the Pledgee whether now existing
or hereafter arising, direct or indirect, liquidated or unliquidated, absolute
or contingent, due or not due and whether under, pursuant to or evidenced by a
note, agreement, guaranty, instrument or otherwise (in each case, irrespective
of the genuineness, validity, regularity or enforceability of such Indebtedness,
or of any instrument evidencing any of the Indebtedness or of any collateral
therefor or of the existence or extent of such collateral, and irrespective of
the allowability, allowance or disallowance of any or all of such in any case
commenced by or against the Pledgor under Xxxxx 00, Xxxxxx Xxxxxx Code, the
Bankruptcy and Insolvency Act (Canada) (the "BIA") and the Companies' Creditors
Arrangement Act (the "CCAA") including, without limitation, obligations or
indebtedness of the Pledgor for post-petition interest, fees, costs and charges
that would have accrued or been added to the Indebtedness but for the
commencement of such case), the Pledgor hereby pledges, assigns, hypothecates,
transfers and grants a security interest to Pledgee in all of the following (the
"Collateral"):
(a) the shares set forth on Schedule A annexed hereto and
expressly made a part hereof (together with any additional shares or
other equity interests acquired by the Pledgor, the "Pledged Shares"),
the certificates representing the Pledged Shares and all dividends,
cash, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;
(b) all additional shares of any issuer (each, an "Issuer") of
the Pledged Shares from time to time acquired by the Pledgor in any
manner, including, without limitation, dividends or a distribution in
connection with any increase or reduction of capital, reclassification,
merger, amalgamation, consolidation, sale of assets, combination of
shares, stock split, spin-off or split-off (which shares shall be
deemed to be part of the Collateral), and the certificates representing
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such additional shares, and all dividends, cash, instruments and other
property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such shares; and
(c) all options and rights, whether as an addition to, in
substitution of or in exchange for any Pledged Shares and all
dividends, cash, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or
in exchange for any or all such options and rights.
3. Delivery of Collateral. All certificates representing or evidencing
the Pledged Shares shall be delivered to and held by or on behalf of Pledgee
pursuant hereto and shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Pledgee. The Pledgor hereby authorizes the Issuer upon demand by the Pledgee to
deliver any certificates, instruments or other distributions issued in
connection with the Collateral directly to the Pledgee, in each case to be held
by the Pledgee, subject to the terms hereof. Upon an Event of Default (as
defined below) under the Note that has occurred and is continuing beyond any
applicable grace period, the Pledgee shall have the right, during such time in
its discretion and without notice to the Pledgor, to transfer to or to register
in the name of the Pledgee or any of its nominees any or all of the Pledged
Shares. In addition, the Pledgee shall have the right at such time to exchange
certificates or instruments representing or evidencing Pledged Shares for
certificates or instruments of smaller or larger denominations.
4. Representations and Warranties of each Pledgor. The Pledgor
represents and warrants to the Pledgee (which representations and warranties
shall be deemed to continue to be made until all of the Indebtedness has been
paid in full and each Document and each agreement and instrument entered into in
connection therewith has been irrevocably terminated) that:
(a) the execution, delivery and performance by the Pledgor of
this Agreement and the pledge of the Collateral hereunder do not and
will not result in any violation of any agreement, indenture,
instrument, license, judgment, decree, order, law, statute, ordinance
or other governmental rule or regulation applicable to the Pledgor;
(b) this Agreement constitutes the legal, valid, and binding
obligation of the Pledgor enforceable against the Pledgor in accordance
with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization and other similar laws of general application limiting
the enforcement of creditors' rights generally and the fact that the
courts may deny the granting or enforcement of equitable remedies;
(c) (i) all Pledged Shares owned by the Pledgor are set forth
on Schedule A hereto and (ii) the Pledgor is the direct and beneficial
owner of all of the Pledged Shares;
(d) all of the Pledged Shares have been duly authorized,
validly issued and are fully paid and nonassessable;
(e) no consent or approval of any person (including any
Issuer), corporation, governmental body, regulatory authority or other
entity, is or will be necessary for (i) the execution, delivery and
performance of this Agreement, (ii) the exercise by the Pledgee of any
rights with respect to the Collateral or (iii) the pledge and
assignment of, and the grant of a security interest in, the Collateral
hereunder;
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(f) there are no pending or, to the best of Pledgor's
knowledge, threatened actions or proceedings before any court, judicial
body, administrative agency or arbitrator which may materially
adversely affect the Collateral;
(g) the Pledgor has the requisite power and authority to enter
into this Agreement and to pledge and assign the Collateral to the
Pledgee in accordance with the terms of this Agreement;
(h) the Pledgor owns the Collateral set out in Schedule A
hereto and, except for the pledge and security interest granted to
Pledgee hereunder, the Collateral shall be, immediately following the
closing of the transactions contemplated by the Documents, free and
clear of any other security interest, pledge, claim, lien, charge,
hypothecation, assignment, offset or encumbrance whatsoever
(collectively, "Liens");
(i) other than restrictions generally applicable under the US
Securities Act (as defined below) or the Securities Act (British
Columbia), there are no restrictions on transfer of the Pledged Shares
contained in the certificate of incorporation or by-laws (or equivalent
organizational documents) of the Issuer or otherwise which have not
otherwise been enforceably and legally complied with or waived as the
case may be, by the necessary parties;
(j) none of the Pledged Shares have been issued or transferred
in violation of the securities registration, securities disclosure or
similar laws of any jurisdiction to which such issuance or transfer may
be subject;
(k) the pledge and assignment of the Collateral and the grant
of a security interest under this Agreement vest in the Pledgee all
rights of the Pledgor in the Collateral as contemplated by this
Agreement; and
(l) except as set forth on Schedule A hereto, the Pledged
Shares constitute one hundred percent (100%) of the issued and
outstanding shares of each Issuer.
5. Covenants. The Pledgor covenants that, until the Indebtedness shall
be satisfied in full and each Document and each agreement and instrument entered
into in connection therewith is irrevocably terminated:
(a) The Pledgor will not sell, assign, transfer, convey, or
otherwise dispose of its rights in or to the Collateral or any interest
therein; nor will the Pledgor create, incur or permit to exist any Lien
whatsoever with respect to any of the Collateral or the proceeds
thereof other than that created hereby.
(b) The Pledgor will, at its expense, defend Pledgee's right,
title and security interest in and to the Collateral against the claims
of any other party.
(c) The Pledgor shall at any time, and from time to time, upon
the written request of Pledgee, execute and deliver such further
documents and do such further acts and things as Pledgee may reasonably
request in order to effect the purposes of this Agreement including,
but without limitation, delivering to Pledgee upon the occurrence of an
Event of Default irrevocable proxies in respect of the Collateral in
form satisfactory to Pledgee. Until receipt thereof, upon an Event of
Default that has occurred and is continuing beyond any applicable grace
period, this Agreement shall constitute Pledgor's proxy to Pledgee or
its nominee to vote all shares of Collateral then registered in each
Pledgor's name.
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(d) The Pledgor will not consent to or approve the issuance of
(i) any additional shares of any class of shares or other equity
interests of the Issuer; or (ii) any securities convertible either
voluntarily by the holder thereof or automatically upon the occurrence
or nonoccurrence of any event or condition into, or any securities
exchangeable for, any such shares, unless, in either case, such shares
are pledged as Collateral pursuant to this Agreement.
6. Voting Rights and Dividends. Until the occurrence of an Event of
Default which is continuing: i) the Pledgor may exercise all rights to vote and
to exercise all rights of conversion or retraction or other similar rights with
respect to any Collateral; provided that no such exercise, in the opinion of the
Pledgee, will have an adverse effect on the value of Collateral and all expenses
of the Pledgee in connection therewith have been paid in full and provided
further that, upon the exercise of the conversion or retraction right, the
additional Collateral resulting therefrom shall be paid or delivered to the
Pledgee; (ii) the Pledgor shall be entitled to receive all dividends (whether
paid or distributed in cash, securities or other property) and interest declared
and paid or distributed in respect of the Collateral, and such dividends and
interest shall cease to be subject to the security interest if paid or
distributed to the Pledgor prior to the occurrence of an Event of Default but
not otherwise; and (iii) the Collateral will remain registered in the name of
the Pledgor and will not be transferred into the name of the Pledgee or its
nominee. In addition to the Pledgee's rights and remedies set forth in Section 9
hereof, in case an Event of Default shall have occurred and be continuing,
beyond any applicable cure period, the Pledgee shall (i) be entitled to vote the
Collateral, (ii) be entitled to give consents, waivers and ratifications in
respect of the Collateral (the Pledgor hereby irrevocably constituting and
appointing the Pledgee, with full power of substitution, the proxy and
attorney-in-fact of the Pledgor for such purposes) and (iii) be entitled to
collect and receive for its own use cash dividends paid on the Collateral. The
Pledgor shall not be permitted to exercise or refrain from exercising any voting
rights or other powers if, in the reasonable judgment of the Pledgee, such
action would have a material adverse effect on the value of the Collateral or
any part thereof; and, provided, further, that the Pledgor shall give at least
five (5) days' written notice of the manner in which the Pledgor intends to
exercise, or the reasons for refraining from exercising, any voting rights or
other powers other than with respect to any election of directors and voting
with respect to any incidental matters. Following the occurrence of an Event of
Default, all dividends and all other distributions in respect of any of the
Collateral, shall be delivered to the Pledgee to hold as Collateral and shall,
if received by the Pledgor, be received in trust for the benefit of the Pledgee,
be segregated from the other property or funds of the Pledgor, and be forthwith
delivered to the Pledgee as Collateral in the same form as so received (with any
necessary endorsement).
7. Attachment. The Pledgor acknowledges and agrees that: (i) value has
been given, or will be given upon the making of payment under the Securities
Purchase Agreement by Laurus; (ii) the Pledgor has rights in the Collateral; and
(iii) Pledgor and Laurus have not agreed to postpone the time for attachment of
the security interest granted hereunder which shall attach upon the execution of
this Agreement and, in the case of Collateral acquired after the date hereof,
when the Pledgor has rights therein.
8. Event of Default. An Event of Default shall be deemed to have
occurred and may be declared by the Pledgee upon the occurrence of an "Event of
Default" under and as defined in the Note which shall have occurred and be
continuing beyond any applicable cure period.
9. Remedies. In case an Event of Default shall have occurred and is
continuing and be declared by the Pledgee, the Pledgee may:
(a) Transfer any or all of the Collateral into its name, or
into the name of its nominee or nominees;
(b) Exercise all corporate rights with respect to the
Collateral including, without limitation, all rights of conversion,
exchange, subscription or any other rights, privileges or options
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pertaining to any shares of the Collateral as if it were the absolute
owner thereof, including, but without limitation, the right to
exchange, at its discretion, any or all of the Collateral upon the
merger, consolidation, amalgamation, reorganization, recapitalization
or other readjustment of the Issuer thereof, or upon the exercise by
the Issuer of any right, privilege or option pertaining to any of the
Collateral, and, in connection therewith, to deposit and deliver any
and all of the Collateral with any committee, depository, transfer
agent, registrar or other designated agent upon such terms and
conditions as it may determine, all without liability except to account
for property actually received by it; and
(c) Subject to any requirement of applicable law including for
greater certainty, the Personal Property Security Act (British
Columbia) and any other similar provincial statute (as amended from
time to time, which Act, including amendments thereto and any Act
substituted therefore and amendments thereto is herein referred to as
the "PPSA") and the Uniform Commercial Code of New York (the "UCC"),
sell, assign and deliver the whole or, from time to time, any part of
the Collateral at the time held by the Pledgee, at any private sale or
at public auction, with or without demand, advertisement or notice of
the time or place of sale or adjournment thereof or otherwise (all of
which are hereby waived, except such notice as is required by
applicable law and cannot be waived), for cash or credit or for other
property for immediate or future delivery, and for such price or prices
and on such terms as the Pledgee in its sole discretion may determine,
or as may be required by applicable law, provided that the foregoing
shall be done in a commercially reasonable manner.
The Pledgor hereby waives and releases any and all right or equity of
redemption, whether before or after sale hereunder. At any such sale, unless
prohibited by applicable law, the Pledgee may bid for and purchase the whole or
any part of the Collateral so sold free from any such right or equity of
redemption. All moneys received by the Pledgee hereunder whether upon sale of
the Collateral or any part thereof or otherwise shall be held by the Pledgee and
applied by it as provided in Section 11 hereof. No failure or delay on the part
of the Pledgee in exercising any rights hereunder shall operate as a waiver of
any such rights nor shall any single or partial exercise of any such rights
preclude any other or future exercise thereof or the exercise of any other
rights hereunder. The Pledgee shall have no duty as to the collection or
protection of the Collateral or any income thereon nor any duty as to
preservation of any rights pertaining thereto, except to apply the funds in
accordance with the requirements of Section 11 hereof. The Pledgee may exercise
its rights with respect to property held hereunder without resort to other
security for or sources of reimbursement for the Indebtedness. In addition to
the foregoing, to the extent applicable, Pledgee shall have all of the rights,
remedies and privileges of a secured party under the UCC and the PPSA regardless
of the jurisdiction in which enforcement hereof is sought.
10. Private Sale. The Pledgor recognizes that the Pledgee may be unable
to effect (or to do so only after delay which would adversely affect the value
that might be realized from the Collateral) a public sale of all or part of the
Collateral by reason of certain prohibitions contained in the Securities Act of
1933 (the "US Securities Act"), or the Securities Act (Ontario), and may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire such
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. The Pledgor agrees that any such private sale
may be at prices and on terms less favorable to the seller than if sold at
public sales and that such private sales shall be deemed to have been made in a
commercially reasonable manner. The Pledgor agrees that the Pledgee has no
obligation to delay sale of any Collateral for the period of time necessary to
permit the Issuer to register the Collateral for public sale under the US
Securities Act or the Securities Act (Ontario).
11. Proceeds of Sale. Subject to applicable law, the proceeds of any
collection, recovery, receipt, appropriation, realization or sale of the
Collateral shall be applied by the Pledgee as follows:
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(a) First, to the payment of all costs, reasonable expenses
and charges of the Pledgee and to the reimbursement of the Pledgee for
the prior payment of such costs, reasonable expenses and charges
incurred in connection with the care and safekeeping of the Collateral
(including, without limitation, the reasonable expenses of any sale or
any other disposition of any of the Collateral), the expenses of any
taking, legal fees and reasonable expenses, court costs, any other fees
or expenses incurred or expenditures or advances made by Pledgee in the
protection, enforcement or exercise of its rights, powers or remedies
hereunder;
(b) Second, to the payment of the Indebtedness, in whole or in
part, in such order as the Pledgee may elect, whether or not such
Indebtedness is then due;
(c) Third, to the extent applicable, to such persons, firms,
corporations or other entities as required by applicable law including,
without limitation, Section 9-504(1)(c) of the UCC and 64(1) of the
PPSA; and
(d) Fourth, to the extent of any surplus to the Pledgor or as
a court of competent jurisdiction may direct.
In the event that the proceeds of any collection, recovery, receipt,
appropriation, realization or sale are insufficient to satisfy the Indebtedness,
the Pledgor shall be liable for the deficiency plus the costs and fees of any
lawyers employed by Pledgee to collect such deficiency.
12. Waiver of Marshaling. The Pledgor hereby waives any right to compel
any marshaling of any of the Collateral.
13. No Waiver. Any and all of the Pledgee's rights with respect to the
Liens granted under this Agreement shall continue unimpaired, and Pledgor shall
be and remain obligated in accordance with the terms hereof, notwithstanding (a)
the bankruptcy, insolvency or reorganization of the Pledgor, (b) the release or
substitution of any item of the Collateral at any time, or of any rights or
interests therein, or (c) any delay, extension of time, renewal, compromise or
other indulgence granted by the Pledgee in reference to any of the Indebtedness.
The Pledgor hereby waives all notice of any such delay, extension, release,
substitution, renewal, compromise or other indulgence, and hereby consents to be
bound hereby as fully and effectively as if the Pledgor had expressly agreed
thereto in advance. No delay or extension of time by the Pledgee in exercising
any power of sale, option or other right or remedy hereunder, and no failure by
the Pledgee to give notice or make demand, shall constitute a waiver thereof, or
limit, impair or prejudice the Pledgee's right to take any action against the
Pledgor or to exercise any other power of sale, option or any other right or
remedy.
14. Expenses. The Collateral shall secure, and the Pledgor shall pay to
Pledgee on demand, from time to time, all reasonable costs and expenses,
(including but not limited to, reasonable legal fees and costs, taxes, and all
transfer, recording, filing and other charges) of, or incidental to, the
custody, care, transfer, administration of the Collateral or any other
collateral, or in any way relating to the enforcement, protection or
preservation of the rights or remedies of the Pledgee under this Agreement or
with respect to any of the Indebtedness.
15. The Pledgee Appointed Attorney-In-Fact and Performance by the
Pledgee. Upon the occurrence of an Event of Default, the Pledgor hereby
irrevocably constitutes and appoints the Pledgee as such Pledgor's true and
lawful attorney-in-fact, with full power of substitution, to execute,
acknowledge and deliver any instruments and to do in such Pledgor's name, place
and stead, all such acts, things and deeds for and on behalf of and in the name
of the Pledgor, which the Pledgor could or might do or which the Pledgee may
deem necessary, desirable or convenient to accomplish the purposes of this
Agreement, including, without limitation, to execute such instruments of
assignment or transfer or orders and to register, convey or otherwise transfer
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title to the Collateral into the Pledgee's name. The Pledgor hereby ratifies and
confirms all that said attorney-in-fact may so do and hereby declares this power
of attorney to be coupled with an interest and irrevocable. If the Pledgor fails
to perform any agreement herein contained, the Pledgee may itself perform or
cause performance thereof, and any costs and expenses of the Pledgee incurred in
connection therewith shall be paid by the Pledgor as provided in Section 0
hereof.
16. Waivers. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OTHER AGREEMENT EXECUTED
OR DELIVERED BY THEM IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HERETO HEREBY AGREES
AND CONSENTS THAT ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF EACH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
17. Recapture. Notwithstanding anything to the contrary in this
Agreement, if the Pledgee receives any payment or payments on account of the
Indebtedness, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver, interim receiver, receiver and
manager or any other party under the United States Bankruptcy Code, the BIA, the
CCAA, or any other federal, provincial or state bankruptcy, reorganization,
moratorium or insolvency law relating to or affecting the enforcement of
creditors' rights generally, common law or equitable doctrine, then to the
extent of any sum not finally retained by the Pledgee, the Pledgor's obligations
to the Pledgee shall be reinstated and this Agreement shall remain in full force
and effect (or be reinstated) until payment shall have been made to Pledgee,
which payment shall be due on demand.
18. Captions. All captions in this Agreement are included herein for
convenience of reference only and shall not constitute part of this Agreement
for any other purpose.
19. Miscellaneous.
(a) This Agreement constitutes the entire and final agreement
among the parties with respect to the subject matter hereof and may not
be changed, terminated or otherwise varied except by a writing duly
executed by the parties hereto.
(b) No waiver of any term or condition of this Agreement,
whether by delay, omission or otherwise, shall be effective unless in
writing and signed by the party sought to be charged, and then such
waiver shall be effective only in the specific instance and for the
purpose for which given.
(c) In the event that any provision of this Agreement or the
application thereof to the Pledgor or any circumstance in any
jurisdiction governing this Agreement shall, to any extent, be invalid
or unenforceable under any applicable statute, regulation, or rule of
law, such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform to such
statute, regulation or rule of law, and the remainder of this Agreement
and the application of any such invalid or unenforceable provision to
parties, jurisdictions, or circumstances other than to whom or to which
it is held invalid or unenforceable shall not be affected thereby, nor
shall same affect the validity or enforceability of any other provision
of this Agreement.
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(d) This Agreement shall inure to the benefit of and be
binding upon the Pledgor, and the Pledgor's successors and assigns, and
shall inure to the benefit of and be binding upon the Pledgee and its
successors and assigns.
(e) Any notice or other communication required or permitted
pursuant to this Agreement shall be given in accordance with the
Securities Purchase Agreement.
(f) This Agreement shall be governed by and construed and
enforced in all respects in accordance with the laws of the Province of
British Columbia and the federal laws of Canada.
(g) THE PLEDGOR EXPRESSLY CONSENTS TO THE JURISDICTION AND
VENUE OF EACH COURT OF COMPETENT JURISDICTION LOCATED IN THE STATE OF
NEW YORK FOR ALL PURPOSES IN CONNECTION WITH THIS AGREEMENT. ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR
CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED WITH THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A STATE COURT LOCATED IN THE COUNTY
OF NEW YORK, STATE OF NEW YORK. THE PLEDGOR FURTHER CONSENTS THAT ANY
SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS (INCLUDING, WITHOUT
LIMITATION, ANY NOTICE OR MOTION OR OTHER APPLICATION TO EITHER OF THE
AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY NOTICE IN CONNECTION
WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR OUTSIDE OF THE
STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE
PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH
OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. THE
PLEDGOR WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION
INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE OR BASED UPON FORUM NON CONVENIENS.
(h) It is understood and agreed that any person or entity that
desires to become a Pledgor hereunder, or is required to execute a
counterpart of this Share Pledge Agreement after the date hereof
pursuant to the requirements of any Document, shall become a Pledgor
hereunder by (x) executing a joinder agreement in form and substance
satisfactory to the Pledgee, (y) delivering supplements to such
exhibits and annexes to such Documents as the Pledgee shall reasonably
request and (z) taking all actions as specified in this Agreement as
would have been taken by such Pledgor had it been an original party to
this Agreement, in each case with all documents required above to be
delivered to the Pledgee and with all documents and actions required
above to be taken to the reasonable satisfaction of the Pledgee.
(i) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of
which when taken together shall constitute one and the same agreement.
Any signature delivered by a party by facsimile transmission or by
sending a scanned copy by electronic mail shall be deemed an original
signature hereto.
(j) If there is any inconsistency between the provisions of
this Agreement and the provisions of the Note, the provisions of the
Note shall prevail.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first written above.
ESSENTIAL INNOVATIONS TECHNOLOGY CORP.
By: /s/ Xxxxx XxXxxxxxx
Name: Xxxxx XxXxxxxxx
Title: President
ESSENTIAL INNOVATIONS CORP.
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: President
LAURUS MASTER FUND, LTD.
By: /s/ Xxxxx Grin
Name: Xxxxx Grin
Title: Director
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SCHEDULE A to the Share Pledge Agreement
Pledged Shares
Share
Certificate Number of Percentage of
Pledgor Issuer Class of Share Number Shares Shares Owned
--------------------------------- -------------------------- --------------- ---------------- --------------- -----------------
Essential Innovations Essential Innovations Common 2 1,000,000 100%
Technology Corp. Corp. (Canada)
--------------------------------- -------------------------- --------------- ---------------- --------------- -----------------
Essential Innovations Corp. n/a n/a n/a n/a n/a
--------------------------------- -------------------------- --------------- ---------------- --------------- -----------------
