United States of America
State of Arizona
County of Santa ▇▇▇▇
MINERAL RIGHTS PLEDGE AGREEMENT
THIS IS A MINERAL RIGHTS PLEDGE AGREEMENT ("this Agreement") among ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, individually, Stealth Enterprises Inc., an Illinois Corporation and
Oro ▇▇▇▇▇▇, LLC, a Nevada limited liability company, (each a "Pledgor and
collectively, the "Pledgors") and GCA Strategic Investment Fund Limited, a
Bermuda corporation (the "Pledgee"), and dated as of May ___, 2005, and by which
such parties, as an inducement for and in consideration of the lendings and
extensions of credit described below and the mutual promises contained in this
Agreement and other good and valuable consideration the mutuality, adequacy and
sufficiency and receipt of which are hereby acknowledged, hereby agree as
follows:
1. Background Information. The Pledgors are the owners of certain mineral
rights of and pertaining to the real property set out in Exhibit A attached
hereto and made a part hereof (the "Minerals"). The Pledgee has entered into a
Securities Purchase Agreement and related Transactional Documents (as that term
is defined therein) dated as of May 3, 2005 (said Agreements, as they may
hereafter be amended or otherwise modified from time to time, being the "Credit
Agreements"; the terms defined in the Credit Agreements and not otherwise
defined in this Agreement being used in the Credit Agreement as defined in the
Credit Agreement) with Galaxy Minerals, Inc., a Florida corporation (the
"Borrower"). It is a condition precedent to the Pledgee's lending and extension
of the financial accommodations to the Borrower that the Pledgors shall have
granted the security interest contemplated by this Agreement and have entered
into this Agreement.
2. Pledge. The Pledgors hereby pledge to the Pledgee, and grant to the
Pledgee a security interest in, the following (the "Pledged Collateral"):
(a) all those certain mineral interests in the patented and
unpatented placer and/or lode mining claims known as the Yellow Jacket and
Phoenix Mines and more particularly described in Exhibit A hereto (the
"Property");
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(b) all proceeds received by Pledgors from that certain Joint
Venture Agreement between Stealth Enterprises Inc., Oro ▇▇▇▇▇▇, LLC and
Borrower, formerly known as Yellow Jacket Finance limited.
(c) all proceeds of any of the foregoing.
3. Security for Obligations. The Pledgee's security interest in the
Pledged Collateral secures the payment and performance of all obligations of the
Borrower now or hereafter existing under the Credit Agreements, whether for
principal, interest, fees, expenses or otherwise, and all obligations of the
Borrower now or hereafter existing under this Agreement and any and all
extensions or renewals of the foregoing in whole or in part, and all other
obligations of the Borrower to the Pledgee, whether now owed or hereafter
arising and whether direct or indirect, absolute or contingent, individual,
joint or several, and whether owed as a drawer, maker, endorser, guarantor,
surety or otherwise (all such obligations being the "Obligations").
4. Security Interest Absolute. The security interests granted hereby and
all rights of the Pledgee under this Agreement, and all obligations of the
Pledgors under this Agreement, shall be absolute and unconditional irrespective
of:
(a) any lack of validity or enforceability of the Credit Agreements,
the Notes or any other agreement or instrument relating to the Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, any or all of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreements, the Notes or any
other agreement or instrument relating to the Obligations;
(c) any exchange, release or non-perfection of any other collateral
for all or any of the Obligations, or any release or amendment or waiver of or
consent to departure from any guaranty for all or any of the Obligations; or
(d) any other circumstance (other than the payment in full of the
Obligations and termination of the Credit Agreements) which might otherwise
constitute a defense available to, or a discharge of, the Borrower in respect of
the Obligations or the Pledgors in respect of this Agreement.
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5. Waiver of Claims. Pledgors hereby irrevocably waive and release the
Borrower from all "claims" (as defined in Bankruptcy Code ss.101(4)) to which
the Pledgors are or would be entitled by virtue of the pledge of the Pledged
Collateral or the performance of the Pledgors' obligations hereunder, including,
without limitation, any right of subrogation (whether contractual, under
Bankruptcy Code ss.509 or otherwise), reimbursement, contribution, exoneration
or other similar right, or indemnity, or any right of recourse to security for
any of the obligations secured hereby.
6. Memorandum for Recording; Further Assurances. Concurrent with or within
a reasonable amount of time after the execution of this Agreement, the parties
agree to execute for recording purposes a written form of mortgage, deed of
trust, security deed, deed to secure debt or similar document, setting forth the
basic terms and conditions of this Agreement as necessitated or permitted by
Arizona law.
7. Representations and Warranties.
(a) By the Pledgors. The Pledgors, individullay and collectively,
represent and warrant as follows:
(i) The Pledgors are the legal and beneficial owner of the
Pledged Collateral free and clear of any lien, security interest, option or
other charge or encumbrance, except for the security interest created by this
Agreement.
(ii) The pledge of the Property pursuant to this Agreement
creates a valid and perfected first priority security interest in the Pledged
Collateral securing the payment of the Obligations.
(iii) No authorization, approval, or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the pledge by the Pledgors of the Pledged Collateral pursuant to
this Agreement or for the execution, delivery or performance of this Agreement
by the Pledgors.
(b) By All Parties. Each party represents and warrants to the other
(i) that it or he has the power and authority to enter into this Agreement and
to carry out its terms and conditions and (ii) that the carrying out of the
terms and conditions of this Agreement is not restricted by or in violation
either of any applicable law to which it or he is subject or of any
organizational documents (including articles or certificates of incorporation or
bylaws or partnership agreements, as amended or restated), agreement,
commitment, order, ruling or proceeding to which it or he is a party or to which
it or he or any of its or his assets are subject.
8. No Transfers or Liens. The Pledgors agree that it will not (i) sell or
otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral, or (ii) create or permit to exist any lien, security interest, or
other charge or encumbrance upon or with respect to any of the Pledged
Collateral, except for the security interest under this Agreement.
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9. Pledgee May Perform; Pledgee Appointed Attorney-in-Fact. The Pledgors
hereby appoint the Pledgee the Pledgors' attorney-in-fact, with full authority
in the place and stead of the Pledgors and in the name of the Pledgors or
otherwise, from time to time in the Pledgee's discretion to take any action and
to execute any instrument which the Pledgee deems necessary or advisable to
accomplish the purposes of this Agreement, including without limitation to
execute and record any and all instruments necessary or desirable under Arizona
law. If the Pledgors fail to perform any agreement contained herein, the Pledgee
may itself perform, or cause performance of, such agreement, and the expenses of
the Pledgee incurred in connection therewith shall be payable by the Pledgors
under section 12 below.
10. Events of Default. The occurrence of any one or more of the following
shall constitute an Event of Default under this Agreement:
(a) The failure of the Borrower to pay, as and when the same shall
become due and payable [and after taking into account any cure periods], any of
the Obligations;
(b) The failure of the Pledgors or Borrower to perform any of its
other agreements or obligations in this Agreement, the Credit Agreements or in
any other agreement now or hereinafter existing between the Pledgors and the
Pledgee or Borrower and the Pledgee and such default shall continue for a period
of five (5) days after written notice thereof has been given to the Pledgors by
Pledgee;
(c) The failure of the Borrower to pay, as and when the same shall
become due and payable, any principal of or interest on any other obligation for
borrowed money or any obligation secured by purchase money mortgage or title
retention lien beyond any period of grace provided with respect thereto, or the
failure in the performance of any other agreement, term or condition contained
in an agreement under which any such obligation is created, if the effect of
such failure is to cause, or to permit the holder or holders of such obligations
(or a trustee on behalf of such holder or holders) to cause, such obligation to
become due prior to its stated maturity;
(d) If at any time any representation, warranty, statement,
certificate, schedule or report made by the Pledgors to the Pledgee in this
Agreement shall prove to have been false or misleading in any material respect
as of the time made or furnished;
(e) Should any Pledgor or any endorser or guarantor of the
Obligations generally not pay its debts as such debts become due, or admit in
writing its inability to pay its debts generally, or make a general assignment
for the benefit of creditors, or should any proceedings be instituted by or
against any Pledgor seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debt under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian, or other
similar official for it or for any substantial part of its property (and, in the
case of any such proceeding instituted against any Pledgor, should the same
remain undismissed or unstayed for a period of fifteen (15) days), or should any
Pledgor take corporate action to authorize any of the actions set forth in this
subsection (c);
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(f) If any Pledgor, or any endorser or guarantor of any of the
Obligations, is liquidated or dissolved or its articles of incorporation expire
or are revoked; or
(g) The occurrence of any "Event of Default" under the Credit
Agreement, as the same may be amended, modified or supplemented from time to
time.
11. Remedies upon Default. If any Event of Default shall have occurred and
be continuing:
(a) Sale. The Pledgee may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party upon
default under the Code of the State of Arizona at that time, and the Pledgee may
also, without notice except as specified below, sell the Pledged Collateral or
any part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Pledgee's offices or elsewhere, for
cash, on credit or for future delivery, and at such price or prices and upon
such other terms as the Pledgee may deem commercially reasonable. The Pledgee
shall not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Pledgee may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefore,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.
(b) Proceeds. Any cash held by the Pledgee as Pledged Collateral and
all cash proceeds received by the Pledgee in respect of any sale of, collection
from, or other realization upon all or any part of the Pledged Collateral may,
in the discretion of the Pledgee, be held by the Pledgee as collateral for,
and/or then or at any time thereafter applied (after payment of any amounts
payable to the Pledgee pursuant to section 12 below) in whole or in part by the
Pledgee against, all or any part of the Obligations in such order as the Pledgee
shall elect. Any surplus of such cash or cash proceeds held by the Pledgee and
remaining after payment in full of all the Obligations shall be paid over to the
Pledgors or to whomsoever may be lawfully entitled to receive such surplus.
(c) Notice. Any requirement imposed by law regarding the giving to
the Pledgor of prior notice of any sale or other disposition of the Pledged
Collateral shall be deemed reasonable if given by the Pledgee in writing at
least ten (10) [business] days prior to such sale or other disposition,
specifying the time and place thereof.
(d) Status of Pledgors. Any purchaser at a sale conducted pursuant
to the terms of this Agreement shall hold the property sold absolutely, free
from any claim or right on the part of the Pledgors, and the Pledgors hereby
waive any right of redemption, stay or appraisal under present or future law.
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(e) Return of Pledged Collateral. Upon the satisfaction in full of
the Obligations, the Pledgors shall be entitled to the return, upon its request
and at its expense, of such of the Pledged Collateral as shall not have been
sold or otherwise applied pursuant to the terms hereof.
12. Expenses. The Pledgors, joint and severally, upon demand, will pay to
the Pledgee the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Pledgee may incur in connection with (a) the administration of this
Agreement, (b) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (c) the exercise or
enforcement of any of the rights of the Pledgee hereunder, or (d) the failure by
the Pledgors to perform or observe any of the provisions hereof.
83. Continuing Security Interest; Transfer of Note. This Agreement shall
create a continuing security interest in the Pledged Collateral and shall (a)
remain in full force and effect until payment in full of the Obligations, (b) be
binding upon the Pledgor, its successors and assigns, and (c) inure to the
benefit of the Pledgee and its permitted, if any, successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), the
Pledgee may assign or otherwise transfer the Note to any other person, and such
other person shall thereupon become vested with all the benefits in respect
thereof granted to the Pledgee herein or otherwise.
94. Indemnification. The Pledgors, joint and severally, hereby agree that
they shall indemnify and hold the Pledgee harmless from and against any and all
costs, expenses, claims, causes of action, damages, injury, or harm suffered by
the Pledgee or asserted against the Pledgee relating to Pledgee's performance
under this Agreement. The Pledgee, so long as it acts diligently in good faith,
shall not have any liability whatsoever to the Pledgors for any act, failure,
refusal or omission to act under this Agreement.
105. Termination. Upon the final payment of all Obligations and provided
that the Pledgee shall be under no further obligation to lend or advance funds
to the Borrower constituting Obligations and satisfaction of all liabilities and
obligations under this Agreement, the pledge and the grant of the security
interest under this Agreement and all related obligations of the Pledgors and
rights of the Pledgee shall terminate and the Pledgee shall cancel or otherwise
quitclaim its interest in the Pledged Collateral to whosoever shall be lawfully
entitled to the same, marked "Terminated--Underlying Obligations Satisfied" and
dated and signed by the Pledgee.
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16. Miscellaneous.
(a) Survival. All representations, warranties, covenants and
agreements herein contained shall survive the execution and delivery of this
Agreement and the pledge of the Pledged Collateral, the remedies of a party for
breaches of representations, warranties, covenants or agreements shall not be
affected by any investigation by, or knowledge of, the non-breaching party prior
to the date of this Agreement, and each party shall indemnity, defend and hold
the other harmless for all losses, costs and expenses (including reasonable
attorneys' fees) arising out of its breach of any representation, warranty,
covenant or agreement made by it in this Agreement.
(b) Further Assurances. Each party shall do such further acts, and
shall execute and deliver such additional conveyances, assignments, agreements
and instruments, as another party may at any time request in connection with the
administration and enforcement of this Agreement or relating to the Pledged
Collateral or any part of it, or in order better to assure and confirm to the
requesting party its rights, powers and remedies under this Agreement.
(c) Exhibits. Each exhibit, each attachment to an exhibit and each
other attachment to this Agreement is hereby incorporated into, and is hereby
made a part of, this Agreement as if set out in full in the first place that
reference is made to it.
(d) Notices. All notices, communications and deliveries under this
Agreement (i) shall be made in writing signed by the party making the same to
the address [and with copies] as specified below, (ii) shall specify the section
of this Agreement pursuant to which given, (iii) shall be given either (A) in
person or (B) by telecopier, by first class mail [Express Mail] or by Federal
Express or comparable next business day delivery service, (iv) unless given in
person, shall be given to the address specified below, (v) shall be deemed to be
given if delivered in person, on the date delivered, if sent by telecopier, on
the date of telephonic confirmation of receipt, if mailed first class registered
or certified mail, return receipt requested, Express Mail (with postage and
other fees prepaid), on the date mailed, or if given by Federal Express or
comparable next business day delivery service, on the date sent, and (vi) shall
be deemed received if delivered in person, on the date of personal delivery, if
telecopied, on the date of telephonic confirmation of receipt, or if so mailed,
on the fifth (5) day after so mailed, or if given by Federal Express or
comparable next business day delivery service, on the first business day after
sent. To the extent practicable, any notice not given personally shall also be
given by telecopier or similar means, but the failure to give such additional
telecopied notice shall not affect the validity of notice otherwise duly given.
The addresses and requirements for copies are as follows:
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If to Pledgee, to:
GCA Strategic Investment Fund
c/o Prime Management Limited
Mechanics ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇
Telecopier No: 441-295-3926
Confirmation No: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Global Capital Advisors, LLC
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation No: ▇▇▇-▇▇▇-▇▇▇▇
If to Pledgors, to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
--------------------------------
Telecopier No: _______________
Confirmation No: _____________
Stealth Enterprises, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation No: _____________
Oro ▇▇▇▇▇▇, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation No: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Law Offices of Ouriel & Sendzischew, PA
11693 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No: 310-826-4536
Confirmation No: ▇▇▇-▇▇▇-▇▇▇▇
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Such notice shall be given at such other address or to such other representative
as a party to this Agreement may furnish pursuant to this subsection (d) to the
other parties. If notice is given pursuant to this subsection (d) of a permitted
successor or assign of a party, then notice shall thereafter be given as set
forth above also to such successor or assign of such party.
(e) Time of the Essence; Computation of Time. Time is of the essence
of each and every provision of this Agreement. Whenever the last day for the
exercise of any privilege or the discharge of any duty under this Agreement
shall fall upon Saturday, Sunday or any public or legal holiday, whether federal
or of a state in which the person or entity having such privilege or duty
resides or has its principal place of business, the party having such privilege
or duty shall have until 5:00 p.m. on the next succeeding regular business day
to exercise such privilege or to discharge such duty.
(f) Assignment; Successors in Interest.
(i) Assignment. Except with the prior written consent of the
other party, no assignment or transfer by a party of its rights and obligations
under this Agreement may be made; provided, however, that the Pledgee may assign
or transfer its rights and obligations to an entity in common control with or a
successor to a substantial portion or all of its business (but then only if such
entity expressly assumes all obligations and liabilities of the Pledgee under
this Agreement, and in such event, the Pledgee shall remain liable for the
performance of all its obligations under this Agreement, which liability shall
be a primary obligation for full and prompt performance rather than a secondary
guarantee of collectibility or damages), and no transfer by Pledgee of all or a
substantial portion of its business shall be made unless its obligations under
this Agreement are assumed in connection with such transfer either by operation
of law or by specific assumption executed by the transferee. No consent to
assignment under this Agreement may be unreasonably withheld.
(ii) Binding Nature. This Agreement is binding upon the
parties and their respective successors and assigns, inures to the benefit of
the parties and their respective permitted successors and assignees (and to or
for the benefit of no other person or entity whatsoever); and upon an assignment
any reference to a party shall also be a reference to a successor or assign.
(g) Number; Gender; Captions; Certain Definitions. Whenever the
context so requires, the singular includes the plural, the plural includes the
singular, and the gender of any pronoun includes the other genders. Titles and
captions of or in this Agreement are inserted only as a matter of convenience
and for reference and in no way define, limit, extend or describe the scope of
this Agreement or the intent of any provision of this Agreement. The parties
agree: (i) to all definitions in the statement of parties and in the "Background
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Statement" and other introductory language to this Agreement; (ii) that
"applicable law" means all provisions of any constitution, statute, law, rule,
regulation, decision, order, decree, judgment, release, license, permit,
stipulation or other official pronouncement enacted, promulgated or issued by
any governmental authority or arbitrator or arbitration panel; (iii) that
"governmental authority" means any legislative, executive, judicial,
quasi-judicial or other public authority, agency, department, bureau, division,
unit, court or other public body or person; (iv) that "including" and other
words or phrases of inclusion, if any, shall not be construed as terms of
limitation, so that references to "included" matters shall be regarded as
non-exclusive, non-characterizing illustrations; (v) that "party", "parties" and
variations of them means any, some or all, as appropriate, of the persons who
have executed and delivered this Agreement, each permitted successor or assign
of a party, and when appropriate to effect the binding nature of this Agreement
for the benefit of another party, any other successor or assign of a party; (vi)
that "person" shall mean any individual, sole proprietorship, partnership, joint
venture, limited liability company, estate, trust, unincorporated organization,
association, corporation, institution, or other entity or governmental
authority; and (vii) that "this Agreement" includes any amendments or other
modifications and supplements, and all exhibits, schedules and other
attachments, to it.
(h) Severability. Any determination by any court of competent
jurisdiction of the invalidity of any provision of this Agreement that is not
essential to accomplishing its purposes shall not affect the validity of any
other provision of this Agreement, which shall remain in full force and effect
and which shall be construed as to be valid under applicable law.
(i) Remedies Cumulative. The remedies of a party provided in this
Agreement are cumulative and shall not exclude any other remedies to which any
party to this Agreement may be lawfully entitled, under this Agreement or
applicable law, and the exercise of a remedy shall not be deemed an election
excluding any other remedy (any such claim by each other party being hereby
waived).
(j) Integration; Amendment; Waiver. This Agreement (i) constitutes
the entire agreement of the parties with respect to its subject matter, (ii)
supersedes all prior agreements, if any, of the parties with respect to its
subject matter, and (iii) may not be amended except in writing signed by the
party against whom the change is being asserted. The failure of any party at any
time or times to require the performance of any provision of this Agreement
shall in no manner affect the right to enforce the same; and no waiver by any
party of any provision (or of a breach of any provision) of this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
or construed either as a further or continuing waiver of any such provision or
breach or as a waiver of any other provision (or of a breach of any other
provision) of this Agreement.
(k) Controlling Law. This Agreement is governed by, and shall be
construed and enforced in accordance with, the laws of the State of Arizona
[except the laws of that state that would render such choice of laws
ineffective].
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(l) Copies. This Agreement may be executed in two or more copies,
each of which shall be deemed an original, and it shall not be necessary in
making proof of this Agreement or its terms to produce or account for more than
one of such copies.
[Signature page follows]
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IN WITNESS WHEREOF the undersigned have duly executed this Agreement
through their authorized officers and delivered same, under seal, as of May 3,
2005.
PLEDGORS:
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
Witness
--------------------------
Notary Public
Stealth Enterprises, Inc.
(Corporate Seal)
By:
------------------------
Its:
-----------------------
--------------------------
Attest:
Witness
---------------------------
-------------------------- Secretary
Notary Public
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Oro ▇▇▇▇▇▇ Mining, LLC
(Corporate Seal)
By:
------------------------
Managing Member
-------------------------- Attest:
Witness
---------------------------
-------------------------- Secretary
Notary Public
Accepted by Pledgee as of May 3, 2005, effective as specified in this Agreement.
PLEDGEE
By:
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Director
Acknowledged and accepted by Borrower as of May 3, 2005.
BORROWER
By:
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Its:
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