GUARANTY
GUARANTY,
dated
as of September 17, 2007 made by each of the undersigned (each a "Guarantor",
and
collectively, the "Guarantors"),
in
favor of YA
GLOBAL INVESTMENTS, L.P.,
in its
capacity as collateral agent (in such capacity, the "Collateral
Agent")
for
the "Buyers" (as defined below) party to the Securities Purchase Agreement,
of
even date herewith (the "Securities
Purchase Agreement").
WHEREAS,
Titan
Global Holdings, Inc., a Utah corporation (the "Parent"),
and
each party listed as a "Buyer" on the Schedule of Buyers attached thereto (each
a "Buyer",
and
collectively, the "Buyers")
are
parties to the Securities Purchase Agreement;
WHEREAS,
it is a
condition precedent to the Buyers purchasing the Debentures (as defined below)
that the Guarantors execute and deliver to the Collateral Agent a guaranty
guaranteeing all of the obligations of the Parent under the Securities Purchase
Agreement, the Debentures and the Transaction Documents (as defined in the
Securities Purchase Agreement, the “Transaction
Documents”);
and
WHEREAS,
each
Guarantor has determined that the execution, delivery and performance of this
Guaranty directly benefits, and is in the best interest of, such
Guarantor;
NOW,
THEREFORE,
in
consideration of the premises and the agreements herein and in order to induce
the Buyers to perform under the Securities Purchase Agreement, each Guarantor
hereby agrees with each Buyer as follows:
SECTION
1. Definitions.
Reference is hereby made to the Securities Purchase Agreement and the
"Debentures" (as defined therein) issued pursuant thereto (collectively, the
"Debentures")
for a
statement of the terms thereof. All terms used in this Guaranty, which are
defined in the Securities Purchase Agreement or the Debentures and not otherwise
defined herein, shall have the same meanings herein as set forth therein.
SECTION
2. Guaranty.
The
Guarantors, jointly and severally, hereby unconditionally and irrevocably,
guaranty the punctual payment, as and when due and payable, by stated maturity
or otherwise, of all Obligations (as defined in the Security Agreement) of
the
Parent from time to time owing by it in respect of the Securities Purchase
Agreement, the Debentures and the other Transaction Documents, including,
without limitation, all fees, commissions, expense reimbursements,
indemnifications and all other amounts due or to become due of the Parent under
any of the Transaction Documents (such obligations, to the extent not paid
by
the Parent, being the "Guaranteed
Obligations"),
and
agrees to pay any and all expenses (including reasonable counsel fees and
expenses) reasonably incurred by the Collateral Agent in enforcing any rights
under this Guaranty. Without limiting the generality of the foregoing, each
Guarantor's liability hereunder shall extend to all amounts that constitute
part
of the Guaranteed Obligations and would be owed by the Parent to the Collateral
Agent under the Securities Purchase Agreement and the Debentures but for the
fact that they are unenforceable or not allowable due to the existence of an
insolvency proceeding involving any Guarantor or the Parent (each, a
"Transaction
Party").
(a)
The
Guarantors, jointly and severally, guaranty that the Guaranteed Obligations
will
be paid strictly in accordance with the terms of the Transaction Documents,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Collateral Agent
with respect thereto. The obligations of each Guarantor under this Guaranty
are
independent of the Guaranteed Obligations, and a separate action or actions
may
be brought and prosecuted against any Guarantor to enforce such obligations,
irrespective of whether any action is brought against any Transaction Party
or
whether any Transaction Party is joined in any such action or actions. The
liability of any Guarantor under this Guaranty shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives,
to the extent permitted by law, any defenses it may now or hereafter have in
any
way relating to, any or all of the following:
(i) any
lack
of validity or enforceability of any Transaction Document or any agreement
or
instrument relating thereto;
(ii) any
change in the time, manner or place of payment of, or in any other term of,
all
or any of the Guaranteed Obligations, or any other amendment or waiver of or
any
consent to departure from any Transaction Document, including, without
limitation, any increase in the Guaranteed Obligations resulting from the
extension of additional credit to any Transaction
Party
or
otherwise;
(iii) any
taking, exchange, release or non-perfection of any Collateral (as defined in
the
Security Documents), or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(iv) any
change, restructuring or termination of the corporate, limited liability company
or partnership structure or existence of any Transaction
Party;
or
(v) any
other
circumstance (including any statute of limitations) or any existence of or
reliance on any representation by the Collateral Agent that might otherwise
constitute a defense available to, or a discharge of, any Transaction Party
or
any other guarantor or surety.
(b)
This
Guaranty shall continue to be effective or be reinstated, as the case may be,
if
at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by the Collateral
Agent
or any
other Person upon the insolvency, bankruptcy or reorganization of any
Transaction Party or otherwise, all as though such payment had not been
made.
(c)
This
Guaranty is a continuing guaranty and shall (i) remain in full force and effect
until the indefeasible cash payment in full of the Guaranteed Obligations (other
than inchoate indemnity obligations) and/or complete conversion of all of the
Company's obligations under the Debentures to equity securities of the Company
and payment of all other amounts payable under this Guaranty (other
than inchoate indemnity obligations) and
shall
not terminate for any reason prior to the respective Maturity Date of each
Debenture (other than payment in full of the Debentures and/or complete
conversion of all of the Company's obligations under the Debentures to equity
securities of the Company) and (ii) be binding upon each Guarantor and its
respective successors and assigns. This Guaranty shall inure to the benefit
of
and be enforceable by the Collateral
Agent
and its
successors, and permitted pledgees, transferees and assigns. Without limiting
the generality of the foregoing sentence, the Collateral Agent or any Buyer
may
pledge, assign or otherwise transfer all or any portion of its rights and
obligations under and subject to the terms of any Transaction Document to any
other Person, and such other Person shall thereupon become vested with all
the
benefits in respect thereof granted to such Buyer herein or otherwise, in each
case as provided in the Securities Purchase Agreement or such Transaction
Document.
SECTION
4. Waivers.
To the
extent permitted by applicable law, each Guarantor hereby
waives promptness, diligence, notice of acceptance and any other notice with
respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that the Collateral Agent exhaust any right or take any action
against any Transaction Party or any other Person or any Collateral. The
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated herein and that the waiver set forth
in
this Section 4 is knowingly made in contemplation of such benefits. The
Guarantors hereby waive any right to revoke this Guaranty, and acknowledges
that
this Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.
SECTION
5. Subrogation.
No
Guarantor may exercise any rights that it may now or hereafter acquire against
any Transaction Party or any other guarantor that arise from the existence,
payment, performance or enforcement of any Guarantor's obligations under this
Guaranty, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Collateral Agent against any
Transaction Party or any other guarantor or any Collateral, whether or not
such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any
Transaction Party or any other guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security solely
on account of such claim, remedy or right, unless and until all of the
Guaranteed Obligations (other than inchoate indemnity obligations) and all
other
amounts payable under this Guaranty (other than inchoate indemnity obligations)
shall have indefeasibly
been
paid
in full in cash. If any amount shall be paid to the Guarantor in violation
of
the immediately preceding sentence at any time prior to the later of the payment
in full in cash of the Guaranteed Obligations and all other amounts payable
under this Guaranty, such amount shall be held in trust for the benefit of
the
Collateral Agent and shall forthwith be paid to the Collateral Agent to be
credited and applied to the Guaranteed Obligations and all other amounts payable
under this Guaranty, whether matured or unmatured, in accordance with the terms
of the Transaction Document, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter arising.
If
(a) any Guarantor shall make payment to the Collateral Agent of all or any
part of the Guaranteed Obligations, and (b) all of the Guaranteed
Obligations (other than inchoate indemnity obligations) and all other amounts
payable under this Guaranty (other than inchoate indemnity obligations) shall
indefeasibly
be
paid
in full in cash, the Collateral Agent will, at such Guarantor's request and
expense, execute and deliver to such Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to such Guarantor of an interest in the Guaranteed
Obligations resulting from such payment by such Guarantor.
SECTION
6. Representations,
Warranties and Covenants.
(a) Each
Guarantor hereby represents and warrants as of the date first written above
as
follows:
(i) The
Guarantor (A) is a corporation, limited liability company or limited partnership
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (B) has all corporate, limited liability
company or limited partnership power and authority to conduct its business
as
now conducted and as presently contemplated and to execute and deliver this
Guaranty and each other Transaction Document to which the
Guarantor
is a
party, and to consummate the transactions contemplated hereby and thereby and
(C) is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it
or
in which the transaction of its business makes such qualification necessary
except where the failure to be so qualified would not result in a Material
Adverse Effect.
(ii) The
execution, delivery and performance by the
Guarantor
of this
Guaranty and each other Transaction Document to which the
Guarantor
is a
party (A) have been duly authorized by all necessary corporate, limited
liability company or limited partnership action, (B) do not and will not
contravene its charter or by-laws, its limited liability company or operating
agreement or its certificate of partnership or partnership agreement, as
applicable, or any applicable law or any contractual restriction binding on
the
Guarantor
or its
properties (except where the contravention of such contractual restriction
would
not result in a Material Adverse Effect), (C) do not and will not result in
or
require the creation of any lien (other than pursuant to any Transaction
Document) upon or with respect to any of its properties, and (D) do not and
will
not result in any default, noncompliance, suspension, revocation, impairment,
forfeiture or nonrenewal of any material permit, license, authorization or
approval applicable to it or its operations or any of its
properties.
(iii) No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority is required in connection with the due execution,
delivery and performance by the
Guarantor
of this
Guaranty or any of the other Transaction Documents to which the
Guarantor
is a
party (other than expressly provided for in any of the Transaction
Documents).
(iv) Each
of
this Guaranty and the other Transaction Documents to which the
Guarantor
is or
will be a party, when delivered, will be, a legal, valid and binding obligation
of the
Guarantor,
enforceable against the
Guarantor
in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or
other similar laws and equitable principles (regardless of whether enforcement
is sought in equity or at law).
(v) There
is
no pending or, to the knowledge of the
Guarantor,
threatened action, suit or proceeding against the
Guarantor
or to
which any of the properties of the
Guarantor
is
subject, before any court or other governmental authority or any arbitrator
that
(A) if adversely determined, could reasonably be expected to have a Material
Adverse Effect or (B) relates to this Guaranty or any of the other Transaction
Documents to which the
Guarantor
is a
party or any transaction contemplated hereby or thereby.
(vi) The
Guarantor (A) has read and understands the terms and conditions of the
Securities Purchase Agreement and the other Transaction Documents, and (B)
now
has and will continue to have independent means of obtaining information
concerning the affairs, financial condition and business of the Parent and
the
other Transaction Parties, and has no need of, or right to obtain from any
Buyer, any credit or other information concerning the affairs, financial
condition or business of the Parent or the other Transaction Parties that may
come under the control of any Buyer.
SECTION
7. Right
of Set-off.
Upon
the occurrence and during the continuance of any Event of Default, any
Buyer may, and is hereby authorized to, at any time and from time to time,
without notice to the Guarantors (any such notice being expressly waived by
each
Guarantor) and to the fullest extent permitted by law, set-off and apply any
and
all deposits (general or special, time or demand, provisional or final) at
any
time held and other indebtedness at any time owing by any Buyer to or for the
credit or the account of any Guarantor against any and all obligations of the
Guarantors now or hereafter existing under this Guaranty or any other
Transaction Document, irrespective of whether or not any Buyer shall have made
any demand under this Guaranty or any other Transaction Document and although
such obligations may be contingent or unmatured. Each Buyer agrees to notify
the
relevant Guarantor promptly after any such set-off and application made by
such
Buyer, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of any Buyer under this
Section 7 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Buyer may have under this
Guaranty or any other Transaction Document in law or otherwise.
SECTION
8. Notices,
Etc.
All
notices and other communications provided for hereunder shall be in writing
and
shall be mailed, telecopied or delivered, if to any Guarantor, to it at its
address set forth on the signature page hereto, or if to the Collateral Agent
or
any Buyer, to it at its respective address set forth in the Securities Purchase
Agreement; or as to either such Person at such other address as shall be
designated by such Person in a written notice to such other Person complying
as
to delivery with the terms of this Section 8. All such notices and other
communications shall be effective (i) if mailed (by certified mail, postage
prepaid and return receipt requested), when received or three Business Days
after deposited in the mails, whichever occurs first; (ii) if telecopied, when
transmitted and confirmation is received, provided same is on a Business Day
and, if not, on the next Business Day; or (iii) if delivered by hand, upon
delivery, provided same is on a Business Day and, if not, on the next Business
Day.
SECTION
9. Governing
Law.
This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of New Jersey without regard to the principles of conflict of laws.
The parties further agree that any action between them shall be heard in Xxxxxx
County, New Jersey, and expressly consent to the jurisdiction and venue of
the
Superior Court of New Jersey, sitting in Xxxxxx County and the United States
District Court for the District of New Jersey sitting in Newark, New Jersey
for
the adjudication of any civil action asserted pursuant to this
Paragraph.
SECTION
10. WAIVER
OF JURY TRIAL, ETC.
EACH
GUARANTOR HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS GUARANTY OR THE OTHER
TRANSACTION DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT,
DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED
IN
CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS,
AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY. EACH GUARANTOR CERTIFIES THAT NO OFFICER,
REPRESENTATIVE, AGENT OR ATTORNEY OF THE COLLATERAL AGENT OR ANY BUYER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY BUYER WOULD NOT, IN THE EVENT
OF
ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.
EACH GUARANTOR HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE COLLATERAL
AGENT
ENTERING
INTO THIS AGREEMENT.
SECTION
11. Miscellaneous.
(a)
Each
Guarantor will make each payment hereunder in lawful money of the United States
of America and in immediately available funds to each Buyer, at such address
specified by such Buyer from time to time by notice to the
Guarantors.
(b)
No
amendment or waiver of any provision of this Guaranty and no consent to any
departure by any Guarantor therefrom shall in any event be effective unless
the
same shall be in writing and signed by each Guarantor and each Buyer, and then
such waiver or consent shall be effective only in the specific instance and
for
the specific purpose for which given.
(c)
No
failure on the part of any Buyer to exercise, and no delay in exercising, any
right hereunder or under any other Transaction Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
or under any Transaction Document preclude any other or further exercise thereof
or the exercise of any other right. The rights and remedies of the Collateral
Agent and the Buyers provided herein and in the other Transaction Documents
are
cumulative and are in addition to, and not exclusive of, any rights or remedies
provided by law. The rights of the Collateral Agent and the Buyers under any
Transaction Document against any party thereto are not conditional or contingent
on any attempt by the Collateral Agent or any Buyer to exercise any of their
respective rights under any other Transaction Document against such party or
against any other Person.
(d)
Any
provision of this Guaranty that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
(e)
This
Guaranty shall (i) be binding on each Guarantor and its respective successors
and assigns, and (ii) inure, together with all rights and remedies of the
Collateral Agent hereunder, to the benefit of the Collateral Agent, the Buyers
and their respective successors, transferees and assigns. Without limiting
the
generality of clause (ii) of the immediately preceding sentence, the Collateral
Agent and any Buyer may assign or otherwise transfer its rights and obligations
under the Securities Purchase Agreement or any other Transaction Document to
any
other Person in accordance with the terms thereof, and such other Person shall
thereupon become vested with all of the benefits in respect thereof granted
to
the Collateral Agent or Buyer, as the case may be, herein or otherwise. None
of
the rights or obligations of any Guarantor hereunder may be assigned or
otherwise transferred without the prior written consent of each
Buyer.
(f)
This
Guaranty reflects the entire understanding of the transaction contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral
or written, entered into before the date hereof.
(g)
Section
headings herein are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF,
each
Guarantor has caused this Guaranty to be executed by its respective duly
authorized officer, as of the date first above written.
|
OBLIO
TELECOM,
INC.
|
||
| |
|
|
| By: | /s/ | |
|
Name:
Xxxx Xxxxxx
Title: President
Address:
|
||
IN
WITNESS WHEREOF,
each
Guarantor has caused this Guaranty to be executed by its respective duly
authorized officer, as of the date first above written.
|
TITAN
PCB, WEST,
INC.
|
||
| |
|
|
| By: | /s/ Xxxxx Chance | |
|
Name:
Xxxxx Chance
Title:
Address:
|
||
IN
WITNESS WHEREOF,
each
Guarantor has caused this Guaranty to be executed by its respective duly
authorized officer, as of the date first above written.
|
TITAN
PCB EAST,
INC.
|
||
| |
|
|
| By: | /s/ Xxxxx Chance | |
|
Name:
Xxxxx Chance
Title:
Address:
|
||
IN
WITNESS WHEREOF,
each
Guarantor has caused this Guaranty to be executed by its respective duly
authorized officer, as of the date first above written.
|
STARTTALK,
INC.
|
||
| |
|
|
| By: | /s/ Xxxxx Chance | |
|
Name:
Xxxxx Chance
Title:
Address:
|
||
IN
WITNESS WHEREOF,
each
Guarantor has caused this Guaranty to be executed by its respective duly
authorized officer, as of the date first above written.
| TITAN WIRELESS COMMUNICATIONS, INC. | ||
| |
|
|
| By: | /s/ Xxxxx Chance | |
|
Name:
Xxxxx Chance
Title:
Address:
|
||
IN
WITNESS WHEREOF,
each
Guarantor has caused this Guaranty to be executed by its respective duly
authorized officer, as of the date first above written.
|
PINLESS,
INC.
|
||
| |
|
|
| By: | /s/ Xxxxx Chance | |
|
Name:
Xxxxx Chance
Title:
Address:
|
||
IN
WITNESS WHEREOF,
each
Guarantor has caused this Guaranty to be executed by its respective duly
authorized officer, as of the date first above written.
| TITAN CARD SERVICES, INC. | ||
| |
|
|
| By: | /s/ Xxxxx Chance | |
|
Name:
Xxxxx Chance
Title:
Address:
|
||
IN
WITNESS WHEREOF,
each
Guarantor has caused this Guaranty to be executed by its respective duly
authorized officer, as of the date first above written.
|
APPALACHIAN
OIL
COMPANY
|
||
| |
|
|
| By: | /s/ Xxxxx Chance | |
|
Name:
Xxxxx Chance
Title:
Address:
|
||
IN
WITNESS WHEREOF,
each
Guarantor has caused this Guaranty to be executed by its respective duly
authorized officer, as of the date first above written.
| APPCO-KY | ||
| |
|
|
| By: | /s/ Xxxxx Chance | |
|
Name:
Xxxxx Chance
Title:
Address:
|
||
