Contract

GUARANTYNew York, New York February 18, 2005 FOR VALUE RECEIVED, and in consideration certain financial accommodationsto be provided by Laurus Master Fund, Ltd. (“Laurus”) to Centurion GoldHoldings, Inc. , a Florida corporation (the “Company”) and to induce Laurus, inits discretion, to make other extensions of credit and to make or grant suchrenewals, extensions, releases of collateral or relinquishments of legal rightsas Laurus may deem advisable to the Company or the undersigned, each of theundersigned (and each of them if more than one, the liability under thisGuaranty being joint and several) (jointly and severally referred to as”Guarantors ” or “the undersigned”) unconditionally guaranties to Laurus, itssuccessors, endorsees and assigns the prompt payment when due (whether byacceleration or otherwise) of all present and future obligations and liabilitiesof any and all kinds of the Company to Laurus and of all instruments of anynature evidencing or relating to any such obligations and liabilities upon whichthe Company or one or more parties and the Company is or may become liable toLaurus, whether incurred by the Company as maker, endorser, drawer, acceptor,guarantors , accommodation party or otherwise, and whether due or to become due,secured or unsecured, absolute or contingent, joint or several, and however orwhenever acquired by Laurus, whether arising under, out of, or in connectionwith (i) that certain Securities Purchase Agreement dated as of the date hereofby and between the Company, the Issuer and Laurus (the “Securities PurchaseAgreement”) and (ii) the Related Agreements referred to in the SecuritiesPurchase Agreement (the Securities Purchase Agreement and each RelatedAgreement, as each may be amended, modified, restated or supplemented from timeto time, are collectively referred to herein as the “Documents”), or anydocuments, instruments or agreements relating to or executed in connection withthe Documents or any documents, instruments or agreements referred to therein orotherwise, or any other indebtedness, obligations or liabilities of the Companyto Laurus, whether now existing or hereafter arising, direct or indirect,liquidated or unliquidated, absolute or contingent, due or not due and whetherunder, pursuant to or evidenced by a note, agreement, guaranty, instrument orotherwise (all of which are herein collectively referred to as the”Obligations”), and irrespective of the genuineness, validity, regularity orenforceability of such Obligations, or of any instrument evidencing any of theObligations or of any collateral therefor or of the existence or extent of suchcollateral, and irrespective of the allowability, allowance or disallowance ofany or all of the Obligations in any case commenced by or against the Companyunder Title 11, United States Code, including, without limitation, obligationsor indebtedness of the Company for post-petition interest, fees, costs andcharges that would have accrued or been added to the Obligations but for thecommencement of such case. Terms not otherwise defined herein shall have themeaning assigned such terms in the Securities Purchase Agreement. In furtheranceof the foregoing, the undersigned hereby agrees as follows: 1. No Impairment. Laurus may at any time and from time to time, eitherbefore or after the maturity thereof, without notice to or further consent ofthe undersigned, extend the time of payment of, exchange or surrender anycollateral for, renew or extend any of the Obligations or increase or decreasethe interest rate thereon, or any other agreement with the Company or with anyother party to or person liable on any of the Obligations, or interestedtherein, for the extension, renewal, payment, compromise, discharge or releasethereof, in whole or in part, or for any modification of the terms thereof or ofany agreement between Laurus and the Company the Company or any such other partyor person, or make any election of rights Laurus may deem desirable under theUnited States Bankruptcy Code, as amended, or any other federal or statebankruptcy, reorganization, moratorium or insolvency law relating to oraffecting the enforcement of creditors’ rights generally (any of the foregoing,an “Insolvency Law”) without in any way impairing or affecting this Guaranty.This instrument shall be effective regardless of the subsequent incorporation,merger or consolidation of the Company and/or the Issuer, or any change in thecomposition, nature, personnel or location of the Company and shall extend toany successor entity to the Company and/or the Issuer, including a the Companyin possession or the like under any Insolvency Law. 2. Guaranty Absolute. Subject to Section 5(c), each of the undersignedjointly and severally guarantees that the Obligations will be paid strictly inaccordance with the terms of the Documents and/or any other document, instrumentor agreement creating or evidencing the Obligations, regardless of any law,regulation or order now or hereafter in effect in any jurisdiction affecting anyof such terms or the rights of the Company with respect thereto. Guarantorshereby knowingly accept the full range of risk encompassed within a contract of”continuing guaranty” which risk includes the possibility that the Company willcontract additional indebtedness or issue additional preferred stock for whichGuarantors may be liable hereunder after the Company’s and/or the Issuer’sfinancial condition or ability to pay its lawful debts when they fall due hasdeteriorated, whether or not the Company has properly authorized incurring suchadditional indebtedness. The undersigned acknowledge that (i) no oralrepresentations, including any representations to extend credit or provide otherfinancial accommodations to the Company and/or the Issuer, have been made byLaurus to induce the undersigned to enter into this Guaranty and (ii) anyextension of credit to the the Company shall be governed solely by theprovisions of the Documents. The liability of each of the undersigned under thisGuaranty shall be absolute and unconditional, in accordance with its terms, andshall remain in full force and effect without regard to, and shall not bereleased, suspended, discharged, terminated or otherwise affected by, anycircumstance or occurrence whatsoever, including, without limitation: (a) anywaiver, indulgence, renewal, extension, amendment or modification of oraddition, consent or supplement to or deletion from or any other action orinaction under or in respect of the Documents or any other instruments oragreements relating to the Obligations or any assignment or transfer of anythereof, (b) any lack of validity or enforceability of any Document or otherdocuments, instruments or agreements relating to the Obligations or anyassignment or transfer of any thereof, (c) any furnishing of any additionalsecurity to Laurus or its assignees or any acceptance thereof or any release ofany security by Laurus or its assignees, (d) any limitation on any party’sliability or obligation under the Documents or any other documents, instrumentsor agreements relating to the Obligations or any assignment or transfer of anythereof or any invalidity or unenforceability, in whole or in part, of any suchdocument, instrument or agreement or any term thereof, (e) any bankruptcy,insolvency, reorganization, composition, adjustment, dissolution, liquidation orother like proceeding relating to the Company and/or the Issuer, or any actiontaken with respect to this Guaranty by any trustee or receiver, or by any court,in any such proceeding, whether or not the undersigned shall have notice orknowledge of any of the foregoing, (f) any exchange, release or nonperfection ofany collateral, or any release, or amendment or waiver of or consent todeparture from any guaranty or security, for all or any of the Obligations or(g) any other circumstance which might otherwise constitute a defense availableto, or a discharge of, the undersigned. Any amounts due from the undersigned toLaurus shall bear interest until such amounts are paid in full at the highestrate then applicable to the Obligations. Obligations include post-petitioninterest whether or not allowed or allowable. 2 3. Waivers. (a) This Guaranty is a guaranty of payment and not of collection. Laurus shall be under no obligation to institute suit, exercise rights or remedies or take any other action against the Company or any other person liable with respect to any of the Obligations or resort to any collateral security held by it to secure any of the Obligations as a condition precedent to the undersigned being obligated to perform as agreed herein and each of the Guarantors hereby waives any and all rights which it may have by statute or otherwise which would require Laurus to do any of the foregoing. Each of the Guarantors further consents and agrees that Laurus shall be under no obligation to marshal any assets in favor of Guarantors, or against or in payment of any or all of the Obligations. The undersigned hereby waives all suretyship defenses and any rights to interpose any defense, counterclaim or offset of any nature and description which the undersigned may have or which may exist between and among Laurus, the Company, the Issuer and/or the undersigned with respect to the undersigned’s obligations under this Guaranty, or which the Company may assert on the underlying debt, including but not limited to failure of consideration, breach of warranty, fraud, payment (other than cash payment in full of the Obligations), statute of frauds, bankruptcy, infancy, statute of limitations, accord and satisfaction, and usury. (b) Each of the undersigned further waives (i) notice of the acceptance of this Guaranty, of the making of any such loans or extensions of credit, and of all notices and demands of any kind to which the undersigned may be entitled, including, without limitation, notice of adverse change in the Company and/or the Issuer’s financial condition or of any other fact which might materially increase the risk of the undersigned and (ii) presentment to or demand of payment from anyone whomsoever liable upon any of the Obligations, protest, notices of presentment, non-payment or protest and notice of any sale of collateral security or any default of any sort. (c) Notwithstanding any payment or payments made by the undersigned hereunder, or any setoff or application of funds of the undersigned by Laurus, the undersigned shall not be entitled to be subrogated to any of the rights of Laurus against the Company or against any collateral or guarantee or right of offset held by Laurus for the payment of the Obligations, nor shall the undersigned seek or be entitled to seek any contribution or reimbursement from the Company in respect of payments made by the undersigned hereunder, until all amounts owing to Laurus by the Company on account of the Obligations are paid in full and Laurus’ obligation to extend credit pursuant to the Documents have been terminated. If, notwithstanding the foregoing, any amount shall be paid to the undersigned on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full and Laurus’ obligation to extend credit pursuant to the Documents shall not have been terminated, such amount shall be held by the undersigned in trust for Laurus, segregated from other funds of the undersigned, and shall forthwith upon, and in any event within two (2) business days of, receipt by the undersigned, be turned over to Laurus in the exact form received by the undersigned (duly endorsed by the undersigned to Laurus, if required), to be applied against the Obligations, whether matured or unmatured, in such order as Laurus may determine, subject to the provisions of the Documents. Any and all present and future debts and obligations of the Company to any of the undersigned are hereby waived and postponed in favor of, and subordinated to the full payment and performance of, all present and future debts and Obligations of the Company to Laurus. 3 4. Security. All sums at any time to the credit of the undersigned and anyproperty of the undersigned in Laurus’ possession or in the possession of anybank, financial institution or other entity that directly or indirectly, throughone or more intermediaries, controls or is controlled by, or is under commoncontrol with, Laurus (each such entity, an “Affiliate”) shall be deemed held byLaurus or such Affiliate, as the case may be, as security for any and all of theundersigned’s obligations to Laurus and to any Affiliate of Laurus, no matterhow or when arising and whether under this or any other instrument, agreement orotherwise. 5. Representations and Warranties. Each of the undersigned respectively,hereby jointly and severally represents and warrants (all of whichrepresentations and warranties shall survive until all Obligations areindefeasibly satisfied in full and the Documents have been irrevocablyterminated), that: (a) Corporate Status. It is a corporation, partnership or limited liability company, as the case may be, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization indicated on the signature page hereof and has full power, authority and legal right to own its property and assets and to transact the business in which it is engaged. (b) Authority and Execution. It has full power, authority and legal right to execute and deliver, and to perform its obligations under, this Guaranty and has taken all necessary corporate, partnership or limited liability company, as the case may be, action to authorize the execution, delivery and performance of this Guaranty. (c) Legal, Valid and Binding Character. This Guaranty constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditor’s rights and general principles of equity that restrict the availability of equitable or legal remedies. (d) Violations. The execution, delivery and performance of this Guaranty will not violate any requirement of law applicable to it or any contract, agreement or instrument to it is a party or by which it or any of its property is bound or result in the creation or imposition of any mortgage, lien or other encumbrance other than to Laurus on any of its property or assets pursuant to the provisions of any of the foregoing, which, in any of the foregoing cases, could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. (e) Consents or Approvals. No consent of any other person or entity (including, without limitation, any creditor of the undersigned) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty by it, except to the extent that the failure to obtain any of the foregoing could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. 4 (f) Litigation. No litigation, arbitration, investigation or administrative proceeding of or before any court, arbitrator or governmental authority, bureau or agency is currently pending or, to the best of its knowledge, threatened (i) with respect to this Guaranty or any of the transactions contemplated by this Guaranty or (ii) against or affecting it, or any of its property or assets, which, in each of the foregoing cases, if adversely determined, could reasonably be expected to have a Material Adverse Effect. (g) Financial Benefit. It has derived or expects to derive a financial or other advantage from each and every loan, advance or extension of credit made under the Documents or other Obligation incurred by the Company to Laurus. 6. Acceleration. (a) If any breach of any covenant or condition or other event of default shall occur and be continuing under any agreement made by the Company or any of the undersigned to Laurus, or either the Company or any of the undersigned should at any time become insolvent, or make a general assignment, or if a proceeding in or under any Insolvency Law shall be filed or commenced by, or in respect of, any of the undersigned, or if a notice of any lien, levy, or assessment is filed of record with respect to any assets of any of the undersigned by the United States of America or any department, agency, or instrumentality thereof, or if any taxes or debts owing at any time or times hereafter to any one of them becomes a lien or encumbrance upon any assets of the undersigned in Laurus’ possession, or otherwise, any and all Obligations shall for purposes hereof, at Laurus’ option, be deemed due and payable without notice notwithstanding that any such Obligation is not then due and payable by the Company and/or the Issuer. (b) Each of the undersigned will promptly notify Laurus of any default by such undersigned in its respective performance or observance of any term or condition of any agreement to which the undersigned is a party if the effect of such default is to cause, or permit the holder of any obligation under such agreement to cause, such obligation to become due prior to its stated maturity and, if such an event occurs, Laurus shall have the right to accelerate such undersigned’s obligations hereunder. 7. Payments from Guarantors. Laurus, in its sole and absolute discretion,with or without notice to the undersigned, may apply on account of theObligations any payment from the undersigned or any other guarantors, or amountsrealized from any security for the Obligations, or may deposit any and all suchamounts realized in a non-interest bearing cash collateral deposit account to bemaintained as security for the Obligations. 8. Costs. The undersigned shall pay on demand, all costs, fees andexpenses (including expenses for legal services of every kind) relating orincidental to the enforcement or protection of the rights of Laurus hereunder orunder any of the Obligations. 9. No Termination. This is a continuing irrevocable guaranty and shallremain in full force and effect and be binding upon the undersigned, and each ofthe undersigned’s successors and assigns, until all of the Obligations have beenpaid in full and Laurus’ obligation to extend credit pursuant to the Documentshas been irrevocably terminated. If any of the present or future Obligations areguarantied by persons, partnerships or corporations in addition to theundersigned, the death, release or discharge in whole or in part or thebankruptcy, merger, consolidation, incorporation, liquidation or dissolution ofone or more of them shall not discharge or affect the liabilities of anyundersigned under this Guaranty. 5 10. Recapture. Anything in this Guaranty to the contrary notwithstanding,if Laurus receives any payment or payments on account of the liabilitiesguaranteed hereby, which payment or payments or any part thereof aresubsequently invalidated, declared to be fraudulent or preferential, set asideand/or required to be repaid to a trustee, receiver, or any other party underany Insolvency Law, common law or equitable doctrine, then to the extent of anysum not finally retained by Laurus, the undersigned’s obligations to Laurusshall be reinstated and this Guaranty shall remain in full force and effect (orbe reinstated) until payment shall have been made to Laurus, which payment shallbe due on demand. 11. Books and Records. The books and records of Laurus showing the accountbetween Laurus and the Company shall be admissible in evidence in any action orproceeding, shall be binding upon the undersigned for the purpose ofestablishing the items therein set forth and shall constitute prima facie proofthereof. 12. No Waiver. No failure on the part of Laurus to exercise, and no delayin exercising, any right, remedy or power hereunder shall operate as a waiverthereof, nor shall any single or partial exercise by Laurus of any right, remedyor power hereunder preclude any other or future exercise of any other legalright, remedy or power. Each and every right, remedy and power hereby granted toLaurus or allowed it by law or other agreement shall be cumulative and notexclusive of any other, and may be exercised by Laurus at any time and from timeto time. 13. Waiver of Jury Trial. EACH OF THE UNDERSIGNED DOES HEREBY KNOWINGLY,VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION ORPROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF THE TRANSACTIONSCONTEMPLATED HEREBY OR RELATING OR INCIDENTAL HERETO. THE UNDERSIGNED DOESHEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF LAURUS HAS REPRESENTED,EXPRESSLY OR OTHERWISE, THAT LAURUS WOULD NOT, IN THE EVENT OF LITIGATION, SEEKTO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. 14. Governing Law; Jurisdiction; Amendments. THIS INSTRUMENT CANNOT BECHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED AND INTERPRETEDAS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE WITH THELAWS OF THE STATE OF NEW YORK WITHOUT HAVING EFFECT TO PRINCIPLES OF CONFLICTSOF LAWS. EACH OF THE UNDERSIGNED EXPRESSLY CONSENTS TO THE JURISDICTION ANDVENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, AND OFTHE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR ALLPURPOSES IN CONNECTION HEREWITH. ANY JUDICIAL PROCEEDING BY THE UNDERSIGNEDAGAINST LAURUS INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR CLAIM IN ANY WAYARISING OUT OF, RELATED TO OR CONNECTED HEREWITH SHALL BE BROUGHT ONLY IN THESUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK OR THE UNITED STATESDISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE UNDERSIGNED FURTHERCONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS (INCLUDING,WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER APPLICATION TO EITHER OF THEAFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY NOTICE IN CONNECTION WITH ANYPROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR OUTSIDE OF THE STATE OF NEW YORKOR THE SOUTHERN DISTRICT OF NEW YORK BY REGISTERED OR CERTIFIED MAIL, RETURNRECEIPT REQUESTED, OR BY PERSONAL SERVICE PROVIDED A REASONABLE TIME FORAPPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER THERULES OF SAID COURTS. EACH OF THE UNDERSIGNED WAIVES ANY OBJECTION TOJURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREON AND SHALL NOT ASSERT ANYDEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON FORUM NONCONVENIENS. 6 15. Severability. To the extent permitted by applicable law, any provisionof this Guaranty which is prohibited or unenforceable in any jurisdiction shall,as to such jurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall not invalidate orrender unenforceable such provision in any other jurisdiction. 16. Amendments, Waivers. No amendment or waiver of any provision of thisGuaranty nor consent to any departure by the undersigned therefrom shall in anyevent be effective unless the same shall be in writing executed by each of theundersigned directly affected by such amendment and/or waiver and Laurus. 17. Notice. All notices, requests and demands to or upon the undersigned,shall be in writing and shall be deemed to have been duly given or made (a) whendelivered, if by hand, (b) three (3) days after being sent, postage prepaid, ifby registered or certified mail, (c) when confirmed electronically, if byfacsimile, or (d) when delivered, if by a recognized overnight delivery servicein each event, to the numbers and/or address set forth beneath the signature ofthe undersigned. 18. Successors. Laurus may, from time to time, without notice to theundersigned, sell, assign, transfer or otherwise dispose of all or any part ofthe Obligations and/or rights under this Guaranty. Without limiting thegenerality of the foregoing, Laurus may assign, or grant participations to, oneor more banks, financial institutions or other entities all or any part of anyof the Obligations. In each such event, Laurus, its Affiliates and each andevery immediate and successive purchaser, assignee, transferee or holder of allor any part of the Obligations shall have the right to enforce this Guaranty, bylegal action or otherwise, for its own benefit as fully as if such purchaser,assignee, transferee or holder were herein by name specifically given suchright. Laurus shall have an unimpaired right to enforce this Guaranty for itsbenefit with respect to that portion of the Obligations which Laurus has notdisposed of, sold, assigned, or otherwise transferred. 19. Release. Nothing except cash payment in full of the Obligations shallrelease any of the undersigned from liability under this Guaranty. [REMAINDER OF THIS PAGE IS BLANK. SIGNATURE PAGE IMMEDIATELY FOLLOWS] 7 IN WITNESS WHEREOF, this Guaranty has been executed by the undersignedthis 18th day of February, 2005. CENTURION DELAWARE GOLD HOLDINGS, INC. By: ——————————- Name: ——————————- Title: ——————————- Address: Telephone: Facsimile: State of Delaware Incorporation: 8