EXHIBIT 10.33
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (the "Pledge Agreement"), dated as of
June 25, 1999, is by and between SUMMO MINERALS CORPORATION, a corporation
organized and existing under the laws of British Columbia (the "Pledgor") and
RESOURCE CAPITAL FUND L.P., a Cayman Islands limited partnership, as agent (the
"Agent") for the Lenders named in the Credit Agreement (hereinafter defined).
RECITALS
A. Pursuant to the Amended and Restated Credit Agreement (the "Credit
Agreement"), dated as of June 25, 1999, among the Pledgor, Summo USA
Corporation, a corporation organized and existing under the laws of Colorado
("Summo USA," together with Pledgor, sometimes referred to herein as the
"Borrowers"), the Lenders as defined and named therein and the Agent, the
parties agreed to modify, amend in its entirety and restate certain outstanding
credit obligations as set forth therein and to extend additional credit
thereunder. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement.
B. The Pledgor is willing to enter into this Pledge Agreement to secure
the due and punctual performance of the obligations of the Pledgor and Summo USA
to the Lenders under the Credit Agreement and the other Transaction Documents.
The collateral security offered hereby and all rights and remedies granted to
the Agent hereunder will be for the ratable benefit of the Lenders.
AGREEMENT
NOW, THEREFORE, the parties hereto agree as follows:
1. Pledge and Grant Security Interest.
(a) For value received and to induce the Lenders to enter into the
Credit Agreement and extend additional credit to the Borrowers, the Pledgor
hereby pledges to the Agent for the ratable benefit of the Lenders and grants as
security to the Agent for the ratable benefit of the Lenders, for all present
and future obligations and liabilities of all kinds of the Pledgor to any of the
Lenders under the Credit Agreement and the other Transaction Documents,
hereunder or otherwise, whether incurred by the Pledgor as maker, endorser,
drawer, acceptor, guarantor, accommodation party or otherwise, and whether due
or to become due, secured or unsecured, absolute or contingent, joint or
several, and howsoever or whensoever incurred by the Pledgor or acquired by any
Lender (collectively referred to as the "Obligations"), a charge and first lien
on, and security interest in, all its right, title and interest in and to the
following:
(i) (A) all of (x) the issued and outstanding shares of the
capital stock of Summo USA, any other equity interest in Summo USA whether now
existing or hereafter acquired and all additional shares of capital stock of
Summo USA from time to time acquired by the Pledgor by purchase, stock dividend,
distribution or otherwise and (y) Pledgor's membership and beneficial interest
in Lisbon Valley Mining Co. LLC, a Utah limited liability company ("Lisbon
Valley"), whether now existing or hereafter acquired, all of Pledgor's share of
profits and losses of Lisbon Valley, Pledgor's right to receive distributions of
Lisbon Valley property and assets of any type and characterization, and all
additional membership, ownership or other interest in Lisbon Valley from time to
time acquired by the Pledgor by purchase, distribution or otherwise (all such
shares of stock of and interest in Summo USA and interest in Lisbon Valley
pledged hereunder being referred to collectively as the "Pledged Interest"), (B)
certificates representing any of the Pledged Interest and (C) except as
otherwise provided in Section 4 hereof, any and all dividends, cash, securities,
instruments, warrants, options and other property, proceeds and distributions
from time to time received, receivable, paid or otherwise distributed in respect
of, in substitution for, in addition to or in exchange for or evidencing any of
the Pledged Interest and all proceeds thereof; and
(ii) all of the Pledgor's Equipment, General Intangibles,
Accounts, Chattel Paper, Consumer Goods, Documents, Inventory, Instruments,
Fixtures, Goods and Proceeds, as each of such terms is defined in the Uniform
Commercial Code (the "UCC") in effect in the state where such property is
located, and all other personal property of the Pledgor, whether now existing or
hereafter acquired, which is located on, in or under, used, intended for use,
used or obtained in connection or otherwise associated with or affixed to the
Lisbon Valley Properties as defined in the Credit Agreement and further
described in Schedule 1.1(a) thereto, and all renewals or replacements thereof
or articles in substitution therefor and all proceeds or profits thereof
(collectively, the "Personalty").
(b) The Pledged Interest, the certificates therefor, all dividends,
cash, securities, instruments, warrants, options and other property, proceeds
and distributions from time to time received, receivable, paid or otherwise
distributed in respect of, in substitution for, in addition to or in exchange
for or evidencing any of the Pledged Interest and all proceeds thereof, and the
Personalty are referred to herein collectively as the "Pledged Collateral."
2. Delivery of Pledged Interest Certificates; Registry Notations.
(a) All certificates or instruments representing or evidencing the
Pledged Interest referred to in Section 1 hereof have previously been delivered
or are being delivered to and held by the Agent, for the ratable benefit of the
Lenders, concurrently with the execution of this Pledge Agreement and are in
suitable form for transfer by delivery, endorsed in blank or accompanied by duly
executed undated instruments of transfer or assignments in blank, having
attached thereto or to such certificates all requisite federal, state or
provincial stock transfer tax stamps, all in form and substance satisfactory to
the Agent.
(b) All necessary and appropriate entries, notations and written
descriptions in the books, share registry or membership registry of Summo USA
and Lisbon Valley evidencing and necessary or desirable to perfect the pledge of
the Pledged Collateral pursuant hereto have been or will be made concurrently
with the execution of this Pledge Agreement. The Pledgor
shall forthwith take all other actions necessary, appropriate or desirable
pursuant to applicable law to perfect the pledge of the Pledged Collateral and
all requisite federal, state or provincial fees or taxes therefor have been
paid.
3. Representations, Warranties, Covenants and Agreements of the
Pledgor.
The Pledgor represents, warrants, covenants and agrees that:
(a) The portion of the Pledged Interest consisting of the shares in
Summo USA listed on Schedule 1 hereto constitutes all of the issued and
outstanding common stock or other equity interests in Summo USA, and the Pledged
Interest listed on Schedule 1 constitutes all of the shares of Summo USA owned
or controlled by the Pledgor. The portion of the Pledged Interest described on
Schedule 1 consisting of the membership interest in Lisbon Valley constitutes
all of the membership interest in Lisbon Valley owned or controlled by the
Pledgor.
(b) The Pledged Interest has been duly authorized and is validly
issued, fully paid and non-assessable.
(c) Except for the security interests granted hereby, the Pledgor
is, and as to Pledged Collateral acquired after the date hereof the Pledgor
shall and will be at the time of acquisition, the owner and holder of the
Pledged Collateral free from any adverse claim, security interest, encumbrance,
lien, charge, or other right, title or interest of any person other than the
Agent, except for Permitted Liens, and covenants that at all times the Pledged
Collateral will be and remain free of all such adverse claims, security
interests, or other liens or encumbrances, other than Permitted Liens.
(d) (i) The Pledgor has full power and lawful authority to enter
into this Pledge Agreement and to pledge the Pledged Collateral to the Agent and
to grant to the Agent a first and prior security interest therein as herein
provided, all of which have been duly authorized by all necessary corporate
action.
(ii) The execution and delivery and the performance hereof are
not in contravention of any charter, articles of incorporation or by-law
provision, or of any Instrument or undertaking to which the Pledgor is a party
or by which the Pledgor or its property is bound.
(iii) This Pledge Agreement constitutes the valid and legally
binding obligation of the Pledgor enforceable in accordance with its terms.
(iv) The Pledgor will defend the Pledged Collateral against
all claims and demands of all persons at any time claiming the same or any
interest therein. Any officer, agent or representative acting for or on behalf
of the Pledgor in connection with this Pledge Agreement or any aspect hereof, or
entering into or executing this Pledge Agreement on behalf of the Pledgor, has
been duly authorized to do so, and is fully empowered to act for and represent
the Pledgor in connection with this Pledge Agreement and all matters related
thereto or in connection therewith.
(e) (i) Pledgor's principal place of business and chief executive
office is in Denver, Colorado. Pledgor shall not change the location of its
principal place of business or chief executive office without the prior written
consent of the Agent, not to be unreasonably withheld.
(ii) The preamble hereof states the correct legal name of the
Pledgor and the Pledgor does not conduct business under any other name. Pledgor
shall not change its corporate name, nor do business under any name other than
its current name, unless the Pledgor has delivered to the Agent written notice
of such other names at least 30 days prior to the date of first use thereof by
the Pledgor.
(f) (i) The Pledgor has not heretofore agreed to or signed any
pledge, financing statement or security agreement which covers any of the
Pledged Collateral, and no such pledge, financing statement or security
agreement is now on file in any public office and the Pledgor has not heretofore
filed or inserted any entries or notations in the books or share registry of the
Pledgor evidencing any pledge of the Pledged Collateral (other than such
financing statements, security agreements and share registry notations, if any,
of which both written notice and true and correct copies have heretofore been
given by the Pledgor to the Agent).
(ii) As long as any amount remains unpaid on any of the
Obligations or under any agreements entered into in connection with the
Obligations, except as expressly permitted by any such agreements, (A) the
Pledgor will not enter into or execute any pledge, security agreement or
financing statement covering the Pledged Collateral, other than those pledges,
security agreements and financing statements in favor of the Agent hereunder,
(B) the Pledgor shall not file or consent to the filing of any pledge, financing
statement or statements (or any documents or papers filed as such) covering the
Pledged Collateral, other than financing statements in favor of the Agent
hereunder, unless in any case the prior written consent of the Agent shall have
been obtained, and further (C) the Pledgor shall not insert, file or make any
notations in the books, share registry or membership registry of Summo USA or
Lisbon Valley evidencing any pledge of the Pledged Collateral, other than such
entries and notations in favor of the Agent hereunder.
(iii) The Pledgor authorizes the Agent to file, in its
discretion, in jurisdictions where this authorization will be given effect, a
financing statement or other instrument for filing required by any jurisdiction
applicable to the Pledged Collateral signed only by the Agent covering the
Pledged Collateral, and hereby appoints the Agent as the Pledgor's
attorney-in-fact to sign and file any such financing statements or other
instruments covering the Pledged Collateral. At the request of the Agent, the
Pledgor will join the Agent in executing such documents as the Agent may
determine from time to time to be necessary or desirable under provisions of any
applicable Uniform Commercial Code, Personal Property Security Act or other
applicable laws in effect where the Pledged Collateral is located or where the
Pledgor conducts business; without limiting the generality of the foregoing, the
Pledgor agrees to join the Agent, at the Agent's request, in executing one or
more financing statements or other instruments in form satisfactory to the
Agent, and the Pledgor will pay the costs of filing or recording the same in all
public offices at any time and from time to time whenever filing or recording of
any such financing statement is deemed by the Agent to be necessary or
desirable.
(g) In the event that the Pledgor receives any promissory notes or
evidences of indebtedness of Summo USA or Lisbon Valley, the Pledgor shall hold
the same in trust as property of the Agent and forthwith assign, pledge and
deliver the same to the Agent.
4. Rights of the Agent and the Pledgor Related to Pledged
Collateral.
The Agent may from time to time following the occurrence of an Event
of Default, as defined in Section 6 hereof:
(a) Transfer any of the Pledged Collateral into the name of the
Agent or its nominee.
(b) Notify parties obligated on any of the Pledged Collateral to
make payment to the Agent of any amounts due or to become due thereunder.
(c) Enforce collection of any of the Pledged Collateral by suit or
otherwise; surrender, release or exchange all or any part thereof, or compromise
or extend or renew for any period (whether or not longer than the original
period) any obligation of any nature of any party with respect thereto; and
exercise all other rights of the Pledgor in any of the Pledged Collateral,
except as hereinafter provided with respect to income from or interest on the
Pledged Collateral and except that, prior to an Event of Default, the Pledgor
may exercise its voting and consensual rights with respect to any Pledged
Collateral constituting voting securities.
(d) Take possession or control of any proceeds of the Pledged
Collateral.
Until the occurrence of an Event of Default, the Pledgor shall have
the right to receive all income from or interest on the Pledged Collateral, and
if the Agent receives any such income or interest prior to the occurrence of an
Event of Default, the Agent shall pay the same promptly to the Pledgor, except
that in the case of securities or other property distributed by way of a
dividend or otherwise with respect to the Pledged Collateral, such securities or
other property shall be promptly delivered to the Agent to be held as Pledged
Interest or other Pledged Collateral hereunder. Upon the occurrence of an Event
of Default, the Pledgor will not demand or receive any income from or interest
on the Pledged Collateral, and if the Pledgor receives any such income or
interest without any demand by it, the same shall be held by the Pledgor in
trust for the Agent in the same medium in which received, shall not be
commingled with any assets of the Pledgor and shall be delivered to the Agent in
the form received, properly endorsed to permit collection, not later than the
next business day following the day of its receipt. The Agent may apply the net
cash received from such income or interest to payment of any of the Obligations,
provided that the Agent shall account for and pay over to the Pledgor any such
income or interest remaining after payment in full of the Obligations then
outstanding.
So long as no Event of Default shall have occurred and be
continuing, the Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Collateral or any part thereof
for any purpose not inconsistent with the terms of this Pledge and Security
Agreement or the Credit Agreement; provided, however, that the Pledgor shall not
exercise or refrain from exercising any such right if, in the Agent's judgment,
such
action would have a material adverse effect on the value of the Pledged
Collateral or any part thereof; and, provided, further, that the Pledgor shall
give the Agent at least five days' written notice of the manner in which it
intends to exercise, or the reasons for refraining from exercising, any such
rights.
The Agent shall never be under any obligation to collect, attempt to
collect, protect or enforce the Pledged Collateral or any security therefor,
which the Pledgor agrees and undertakes to do at the Pledgor's expense, but the
Agent may do so in its discretion at any time after the occurrence of an Event
of Default and at such time the Agent shall have the right to take any steps by
judicial process or otherwise as it may deem proper to effect the collection of
all or any portion of the Pledged Collateral or to protect or to enforce the
Pledged Collateral or any security therefor. All expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred or paid by the
Agent in connection with or incident to any such collection or attempt to
collect the Pledged Collateral or actions to protect or enforce the Pledged
Collateral or any security therefor shall be borne by the Pledgor or reimbursed
by the Pledgor to the Agent upon demand. The proceeds received by the Agent as a
result of any such actions in collecting or enforcing or protecting the Pledged
Collateral shall be utilized by the Agent in accordance with Section 9 hereof.
In the event the Agent, after giving notice to the Pledgor thereof
and a period of five days after notifying the Pledgor within which to make
payment thereon, shall pay any taxes, assessments, interests, costs, penalties
or expenses incident to or in connection with the collection of the Pledged
Collateral or protection or enforcement of the Pledged Collateral or any
security therefor, the Pledgor, upon demand of the Agent, shall pay to the Agent
the full amount thereof with interest at a rate per annum (based on a 360-day
year for the actual number of days involved) from the date expended by the Agent
until repaid equal to the sum of two percent (2%) plus the LIBOR Rate in effect
under and defined by the Credit Agreement. So long as the Agent shall be
entitled to any such payment, this Pledge Agreement shall operate as security
therefor as fully and to the same extent as it operates as security for payment
of the other Obligations secured hereunder, and for the enforcement of such
repayment, the Agent shall have every right and remedy provided hereunder for
enforcement of payment of the Obligations. The Pledged Collateral and all rights
and remedies exercised by the Agent hereby shall be for the ratable benefit of
the Lenders.
5. Further Assurances.
The Pledgor agrees to take such actions and to execute such stock or
bond powers and such other or different writings as the Agent may reasonably
request (and irrevocably authorizes the Agent to execute such writings as the
Pledgor's agent and attorney-in-fact) further to perfect, confirm and assure the
Agent's security interest in the Pledged Collateral and to assist the Agent's
realization thereon including, without limitation, the right to receive,
indorse, and collect all instruments made payable to the Pledgor representing
any dividend, interest payment or other distribution in respect of the Pledged
Interest or any part thereof.
6. Event of Default.
The occurrence of any of the following shall constitute an "Event of
Default" hereunder:
(a) Failure of the Pledgor to pay any Obligation (including any
installment of principal or interest thereon) when due and payable, whether at
maturity, by notice of intention to prepay or otherwise;
(b) Default in the timely performance by the Pledgor of any
obligation or covenant contained herein or an Event of Default under the Credit
Agreement or any other Transaction Document;
(c) Any representation or warranty made by the Pledgor herein or in
any other agreement with or instrument delivered to the Agent, or any statement
or representation made in any certificate, report or opinion delivered in
connection herewith or in connection with any such other agreement or instrument
that proves to be false or misleading in any material respect when made;
(d) The insolvency of the Pledgor, the admission by the Pledgor of
its inability to pay its debts as they become due, the commencement of any case
by or against the Pledgor under any bankruptcy or insolvency law, or the making
by the Pledgor of any assignment for the benefit of creditors; or
(e) The Pledgor shall terminate all or any material part of its
current business operations.
7. Rights and Remedies of the Agent Upon Default.
If an Event of Default shall have occurred:
(a) The Agent shall have and may exercise with reference to the
Pledged Collateral and the Obligations any and all of the rights and remedies of
a secured party under the UCC or the Personal Property Security Act (British
Columbia) ("PPSA"), as applicable, and as otherwise granted herein or under any
other applicable law or under any other agreement now or hereafter in effect
executed by the Pledgor, including, without limitation, the right and power to
sell, at public or private sale or sales, or otherwise dispose of, or otherwise
utilize the Pledged Collateral and any part or parts thereof in any manner
authorized or permitted under said UCC or PPSA after default by a debtor, and to
apply the proceeds thereof toward payment of any costs and expenses and
attorneys' fees and expenses thereby incurred by the Agent and toward payment of
the Obligations in such order or manner as the Agent may elect. Specifically and
without limiting the foregoing, the Agent shall have the right to take
possession of all or any part of the Pledged Collateral or any security thereof
and of all books, records, papers and documents of the Pledgor or in the
Pledgor's possession or control relating to the Pledged Collateral which are not
already in the Agent's possession, and for such purpose may enter upon any
premises upon which any of the Pledged Collateral or any security therefor or
any of said books, records, papers and documents are situated and remove the
same therefrom without any liability for trespass or damages thereby occasioned.
To the extent permitted by law, the Pledgor expressly waives any notice of sale
or other disposition of the Pledged Collateral and all other rights or remedies
of the Pledgor or formalities prescribed by law relative to sale or disposition
of the Pledged Collateral or exercise of any other right or remedy of the Agent
existing after default
hereunder; and to the extent any such notice is required and cannot be waived,
the Pledgor agrees that if such notice is given in the manner provided in
Section 13 hereof at least ten days before the time of the sale or disposition,
such notice shall be deemed reasonable and shall fully satisfy any requirement
for giving of said notice. The Agent shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given. The Agent may
adjourn any public or private sale.
(b) Upon notice by the Agent to the Pledgor, the Agent or its
nominee or nominees shall have the sole and exclusive right to exercise all
voting and consensual powers pertaining to the Pledged Collateral or any part
thereof and may exercise such powers in such manner as the Agent may elect.
(c) All dividends, payments of interest and other distributions of
every character made upon or in respect of the Pledged Interest or any part
thereof shall be deemed to be Pledged Collateral and shall be paid directly to
and shall be held by the Agent as additional Pledged Collateral pledged under
and subject to this Pledge and Security Agreement.
(d) All rights to marshaling of assets of the Pledgor, including any
such right with respect to the Pledged Collateral, are hereby waived by the
Pledgor.
(e) All recitals in any instrument of assignment or any other
instrument executed by the Agent incident to sale, lease, transfer, assignment
or other disposition, lease or utilization of the Pledged Collateral or any part
thereof hereunder shall be full proof of the matters stated therein and no other
proof shall be requisite to establish full legal propriety of the sale or other
action taken by the Agent or of any fact, condition or thing incident thereto,
and all requisites of such sale or other action or of any fact, condition or
thing incident thereto shall be presumed conclusively to have been performed or
to have occurred.
8. Special Provisions for Pledged Interest.
The Pledgor hereby acknowledges that the sale by the Agent of any of
the Pledged Interest pursuant to the terms hereof in compliance with federal and
applicable state or provincial securities laws or the securities laws of any
other applicable jurisdiction exercising valid jurisdiction over the Pledged
Interest (as now in effect or as hereafter amended, or any similar statute
hereafter adopted with similar purpose or effect, the "Securities Laws") may
require strict limitations as to the manner in which the Agent or any subsequent
transferee of the Pledged Interest may dispose of such securities. The Pledgor
understands that in order to protect the Agent's interest it may be necessary to
sell the Pledged Interest at a price less than the maximum price attainable if a
sale were delayed or were made in another manner, such as a public offering
requested under the Securities Laws. The Pledgor has no and waives any objection
to a sale in such a manner.
9. Application of Proceeds by the Agent.
In the event the Agent sells or otherwise disposes of the Pledged
Collateral in the course of exercising the remedies provided for in Section 7 or
8 hereof, any amounts held, realized or received by the Agent pursuant to the
provisions hereof, including the proceeds of the
sale of any of the Pledged Collateral or any part thereof, shall be applied by
the Agent first toward the payment of any costs and expenses incurred by the
Agent and any Lender in enforcing this Pledge Agreement, in realizing on or
protecting any Pledged Collateral and in enforcing or collecting any Obligations
or any guaranty thereof, including, without limitation, the actual attorneys'
fees and expenses incurred by the Agent (all of which costs and expenses are
secured by the Pledged Collateral), all of which costs and expenses the Pledgor
agrees to pay, and then as provided in the Credit Agreement. Any amounts and any
Pledged Collateral remaining after such application and after payment to the
Agent of all of the Obligations in full shall be paid or delivered to the
Pledgor, its successor or assigns, or as a court of competent jurisdiction may
direct.
The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment substantially equal to that which the
Agent accords its own property, it being understood that the Agent shall not
have any responsibility for (x) ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Pledged Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters or (y) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Collateral.
10. Absolute Interest.
(a) All rights of the Agent hereunder, and all obligations of the
Pledgor hereunder, shall be absolute and unconditional irrespective of (i) any
lack of validity or enforceability of any provision of the Credit Agreement, any
agreement with respect to the Obligations or any other agreement or instrument
relating to any of the foregoing, (ii) any change in the time, manner or place
of payment of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from the Credit
Agreement or any other agreement or instrument, (iii) any exchange, release or
non-perfection of any Pledged Collateral, or any release or amendment or waiver
of or any consent to or departure from any guarantee, for all or any of the
Obligations or (iv) any other circumstance which might constitute a defense
available to, or a discharge of, the Pledgor in respect of the Obligations or
this Pledge Agreement.
(b) The Agent is hereby subrogated to all of the Pledgor's
interests, rights and remedies in respect to the Pledged Collateral and all
security now or hereafter existing with respect thereto and all guaranties and
endorsements thereof and with respect thereto.
11. Termination.
This Pledge Agreement and the security interests created hereunder
shall terminate when all the Obligations have been indefeasibly paid in full and
when the Lenders have no further obligation to extend credit under the Credit
Agreement or any other agreement relating to Obligations, at which time the
Agent shall execute and deliver to the Pledgor all documents which the Pledgor
shall reasonably request to evidence termination of such security interest and
shall return physical possession of any Pledged Collateral then held by the
Agent to the Pledgor; provided, however, that all indemnities of the Pledgor
contained in this Pledge
Agreement shall survive, and remain in full force and effect regardless of the
termination of the security interest of this Pledge Agreement.
12. Additional Information.
The Pledgor agrees to furnish the Agent from time to time such
additional information and copies of such documents relating to this Pledge
Agreement, the Pledged Collateral, the Obligations and the Pledgor's financial
condition as the Agent may reasonably request.
13. Notices.
Any communication, notice or demand to be given hereunder shall be
in writing (including telex and facsimile communication) and sent by facsimile
or delivered by courier,
if to the Pledgor,
Summo Minerals Corporation
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000;
and if to the Agent,
Resource Capital Fund L.P.
0000 Xxxxxxxx Xxxxx Xxxxxxxx
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. XxXxxxxxxx
Facsimile: (000) 000-0000
as to each party, at such other address or numbers as shall be designated by
either party hereto to the other party in a written notice. All such notices and
communications shall be effective (a) when received, if physically delivered,
and (b) upon confirmation of transmission, if sent by telex or telecopier,
addressed in each case as aforesaid.
14. Indemnity and Expenses.
The Pledgor agrees to indemnify the Agent and each of the Lenders,
and the officers, directors, employees and agents of the Agent and each of the
Lenders (with the foregoing referred to collectively as the "Indemnified
Parties"), for, and to hold each Indemnified Party harmless against, any loss,
liability, claim judgment, settlement, compromise, obligation, damage or penalty
of any kind or nature, including the costs and expenses of the Indemnified Party
incurred in defending itself against any claim of liability in connection with
or arising out
of this Pledge Agreement, unless arising from the gross negligence or willful
misconduct of such Indemnified Party.
15. No Waiver; Cumulative Rights.
No failure on the part of the Agent to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Agent of any right,
remedy or power hereunder preclude any other or future exercise of any other
right, remedy or power. Each and every right, remedy and power hereby granted to
the Agent or allowed it by law or other agreement shall be cumulative and not
exclusive of any other and may be exercised by the Agent from time to time.
16. GOVERNING LAW; CONSENT TO JURISDICTION.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF COLORADO INCLUDING THE CONFLICTS OF LAW PROVISIONS THEREOF, EXCEPT
TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE PLEDGE AND THE SECURITY
INTEREST HEREUNDER, OR ANY REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL, IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
COLORADO. THE PLEDGOR, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, HEREBY
IRREVOCABLY (a) AGREES THAT ANY LEGAL OR EQUITABLE ACTION, SUIT OR PROCEEDING
AGAINST THE PLEDGOR ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREBY OR THE SUBJECT MATTER HEREOF MAY BE INSTITUTED
IN ANY COURT OF APPROPRIATE JURISDICTION IN DENVER, COLORADO; (b) WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF SUCH ACTION, SUIT
OR PROCEEDING OR ANY CLAIM OF FORUM NON CONVENIENS; (c) SUBMITS ITSELF TO THE
NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURT, FOR THE PURPOSES OF SUCH ACTION,
SUIT OR PROCEEDING; (d) WAIVES ANY IMMUNITY FROM JURISDICTION TO WHICH IT MIGHT
OTHERWISE BE ENTITLED IN ANY SUCH ACTION, SUIT OR PROCEEDING WHICH MAY BE
INSTITUTED IN ANY SUCH COURT, AND WAIVES ANY IMMUNITY FROM THE MAINTAINING OF AN
ACTION AGAINST IT TO ENFORCE IN ANY SUCH COURT, ANY JUDGMENT FOR MONEY OBTAINED
IN SUCH ACTION, SUIT OR PROCEEDING AND, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY IMMUNITY FROM EXECUTION; AND (e) APPOINTS THE PERSON NAMED IN THE
NOTICE SECTION HEREOF AS ITS AGENT (THE "PROCESS AGENT") TO RECEIVE ON BEHALF OF
THE PLEDGOR AND ITS PROPERTY SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND
ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH
SERVICE MAY BE MADE BY DELIVERING A COPY OF SUCH PROCESS TO THE PLEDGOR IN CARE
OF ITS PROCESS AGENT AT SUCH PROCESS AGENT'S ADDRESS SO INDICATED, AND THE
PLEDGOR HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS ITS PROCESS AGENT TO ACCEPT
SUCH SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF SERVICE, EACH PARTY ALSO
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO IT AT ITS
ADDRESS REFERRED TO IN SECTION 13 HEREOF. NOTHING IN THIS SECTION 16 SHALL
AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
17. JURY TRIAL.
THE PLEDGOR AND THE AGENT EACH HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY
IN ANY LEGAL OR EQUITABLE ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS PLEDGE AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE
SUBJECT MATTER HEREOF. THE PROVISIONS OF THIS SECTION 17 ARE A MATERIAL
INDUCEMENT FOR THE AGENT TO ENTER INTO THIS PLEDGE AGREEMENT AND THE CREDIT
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN AND THEREIN. THE PLEDGOR
HEREBY ACKNOWLEDGES THAT IT HAS REVIEWED THE PROVISIONS OF THIS SECTION 17 WITH
ITS INDEPENDENT COUNSEL.
18. Execution in Counterparts.
This Pledge Agreement may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute one and the same agreement.
19. Severability.
If any one or more provisions of this Pledge Agreement should be
declared invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected, impaired or prejudiced thereby.
[ REMAINDER OF THIS PAGE INTENTIONALLY BLANK ]
IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to
be duly executed as of the date first above written.
PLEDGOR:
SUMMO MINERALS
CORPORATION
By: /s/ XXXXXXX X. XXXX
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
AGENT:
RESOURCE CAPITAL FUND L.P.
By:Resource Capital Associates L.L.C.,
general partner
By: /s/ XXXXX X. XxXXXXXXXX
---------------------------------
Xxxxx X. XxXxxxxxxx
Managing Director
SCHEDULE 1
DESCRIPTION OF PLEDGED INTEREST
Summo USA Corporation
ISSUER CLASS CERTIFICATE NUMBER OF PERCENTAGE OF
NUMBER SHARES SHARES
OUTSTANDING
OWNED BY PLEDGOR
Summo Common 1 1,000 100%
USA
Corp.
Lisbon Valley Mining Co. L.L.C.
PERCENTAGE OF MEMBERSHIP INTEREST
OWNED BY PLEDGOR
1/46
--------------------------------
