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total indebtedness against his Merrill Lynch margin account to $4
million. Mr. Rendall made the $2 million loan as an inducement
to outside lenders to put up an additional $20 million of
financing for Solv-Ex. Solv-Ex used the $2 million received from
Mr. Rendall (plus an additional $10 million received from three
outside lenders in April 1997 in exchange for convertible
debentures) to continue work on the initial stage plant.
Mr. Rendall’s Pledge of Solv-Ex Common Stock to Merrill Lynch
In order to receive a line of credit through his Merrill
Lynch margin account, Mr. Rendall, on March 20, 1997 (the same
day he opened the account), executed a document entitled “Pledge
Agreement For Lending on Shelf Registered, Control or Restricted
Securities” (the pledge agreement). Pursuant to the terms of the
pledge agreement, Mr. Rendall pledged 2,610,000 shares of Solv-Ex
common stock “as security for the repayment of indebtedness of
the pledgor to the pledgee.” Also, pursuant to the pledge
agreement, any loans made by Merrill Lynch thereunder were
payable on demand. On April 3, 1997, Mr. Rendall pledged an
additional 50,000 shares of Solv-Ex common stock as collateral
for loans from Merrill Lynch through his margin account. Of the
2,660,000 shares of Solv-Ex stock pledged to Merrill Lynch,
2,500,000 shares consisted of certificates for stock purchased by
Mr. Rendall for 1 cent a share in 1980. The certificates for the
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Last modified: May 25, 2011