United States of America
State of Arizona
County of Santa Cruz
MINERAL RIGHTS PLEDGE AGREEMENT
THIS IS A
MINERAL RIGHTS PLEDGE AGREEMENT ("this Agreement") among Scott
Goldstein, individually, Stealth
Enterprises Inc., an Illinois Corporation and
Oro Blanco, 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 Blanco, 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 prov
