GUARANTY
EXECUTION
COPY
This
GUARANTY
(as
amended, restated, supplemented, or otherwise modified and in effect from time
to time, this “Guaranty”)
is
made as of this 19th day of October, 2007, jointly and severally, by each of
Embark
Corp., a Delaware corporation (“Embark”),
Embark Online, Inc,
a
Delaware corporation (“Embark
Online”),
Goto
College Holdings Inc., a Delaware corporation (“Goto
College”),
iempower, inc., a Delaware corporation (“iempower”),
MRU
Originations, Inc., a Delaware corporation (“MRU
Originations”),
MRU
Universal Guaranty Agency, Inc., a Delaware corporation (“MRU
Universal”;
Embark,
Embark Online, Goto College, iempower, MRU Originations and MRU Universal,
together with each other person or entity who becomes a party to this Guaranty
by execution of a joinder in the form of Exhibit
A
attached
hereto, is referred to individually as a “Guarantor”
and
collectively as the “Guarantors”)
in
favor of VIKING
ASSET MANAGEMENT, LLC,
a
California limited liability company, on its own behalf and in its capacity
as
collateral agent (together with its successors and assigns in such capacity,
the
“Collateral
Agent”)
for
the benefit of the Buyers (as defined in the Purchase Agreement described
below).
WITNESSETH:
WHEREAS,
as of the date hereof, Buyers have made loans and certain other financial
accommodations (collectively,
the “Loans”)
to
MRU
HOLDINGS, INC., a
Delaware corporation (the
“Company”),
as
evidenced by those certain secured senior
notes in an original aggregate principal amount of $11,200,000 (such
notes, as any of the same may be amended, supplemented, restated or modified
and
in effect from time to time, the “Notes”);
WHEREAS,
the Notes are being acquired by Buyers pursuant to a Securities Purchase
Agreement dated as of October 19, 2007 among the Buyers and the Company (as
the
same may be amended, restated, supplemented or otherwise modified from time
to
time, the “Purchase
Agreement”);
WHEREAS,
pursuant to a Pledge and Security Agreement of even date herewith (as the same
may be amended, restated, supplemented or otherwise modified and in effect
from
time to time, the “Pledge
and Security
Agreement”)
by the
Company in favor of the Collateral Agent, the Company has granted the Collateral
Agent, for its benefit and the benefit of the Buyers, a first priority security
interest in, lien upon and pledge of its rights in the Pledge Collateral and
the
Account Collateral (as each term is defined in the Pledge and Security
Agreement); and
WHEREAS,
the Guarantors are direct or indirect subsidiaries of the Company and, as such,
will derive substantial benefit and advantage from the Loans and other financial
accommodations available to the Company set forth in the Purchase Agreement,
the
Notes and the other Transaction Documents, and it will be to each Guarantor’s
direct interest and economic benefit to assist the Company in procuring said
Loans and other financial accommodations from Buyers.
NOW,
THEREFORE,
for and
in consideration of the premises and in order to induce Buyers to make the
Loans, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Guarantor hereby jointly
and
severally agrees as follows:
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1. Definitions:
Capitalized
terms used herein without definition and defined in the Purchase Agreement
are
used herein as defined therein. In addition, as used herein:
“Bankruptcy
Code”
shall
mean
the
Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et
seq.),
as
amended and in effect from time to time thereunder.
“Obligations”
shall
mean (i) all obligations, liabilities and indebtedness of every nature of the
Company from time to time owed or owing to the Buyers and Collateral Agent,
including, without limitation, all obligations, liabilities and indebtedness
of
every nature of the Company under the Security Documents, the Purchase
Agreement, the Notes, the Loans and the other Transaction Documents, including,
without limitation, the principal amount of all debts, claims and indebtedness,
accrued and unpaid interest and all fees, taxes, indemnities, costs and
expenses, whether primary, secondary, direct, contingent, fixed or otherwise,
heretofore, now and/or from time to time hereafter owing, due or payable whether
before or after the filing of a bankruptcy, insolvency or similar proceeding
under applicable federal, state, foreign or other law and whether or not an
allowed claim in any such proceeding, and (ii) all obligations, liabilities
and indebtedness of every nature of the Guarantors from time to time owed or
owing to the Buyers and/or Collateral Agent, including, without limitation,
all
obligations, liabilities and indebtedness of every nature of the Guarantors
under or in respect of this Guaranty and the other Transaction Documents, as
the
case may be, including, without limitation, the principal amount of all debts,
claims and indebtedness, accrued and unpaid interest and all fees, taxes,
indemnities, costs and expenses, whether primary, secondary, direct, contingent,
fixed or otherwise, heretofore, now and/or from time to time hereafter owing,
due or payable whether before or after the filing of a bankruptcy, insolvency
or
similar proceeding under applicable federal, state, foreign or other law and
whether or not an allowed claim in any such proceeding.
2. Guaranty
of Payment.
(a) Each
Guarantor, jointly and severally, hereby unconditionally and irrevocably
guaranties the full and prompt payment and performance to Buyers and Collateral
Agent, on behalf of itself and in its capacity as collateral agent for the
benefit of Buyers, when due, upon demand, at maturity or by reason of
acceleration or otherwise and at all times thereafter, of any and all of the
Obligations.
(b) Each
Guarantor acknowledges that valuable consideration supports this Guaranty,
including, without limitation, the consideration set forth in the recitals
above, as well as any commitment to lend, extension of credit or other financial
accommodation, whether heretofore or hereafter made by Buyers to the Company;
any extension, renewal or replacement of any of the Obligations; any forbearance
with respect to any of the Obligations or otherwise; any cancellation of an
existing guaranty; any purchase of any of the Company’s assets by any Buyer or
Collateral Agent; or any other valuable consideration.
(c) Each
Guarantor agrees that all payments under this Guaranty shall be made in United
States currency and in the same manner as provided for the
Obligations.
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(d) Notwithstanding
any provision of this Guaranty to the contrary, it is intended that this
Guaranty, and any interests, liens and security interests granted by any
Guarantor as security for this Guaranty, not constitute a “Fraudulent
Conveyance” (as defined below) in the event that this Guaranty or such interest
is subject to the Bankruptcy Code or any applicable fraudulent conveyance or
fraudulent transfer law or similar law of any state. Consequently, Guarantors,
Collateral Agent and Buyers agree that if this Guaranty, or any such interests,
liens or security interests securing this Guaranty, would, but for the
application of this sentence, constitute a Fraudulent Conveyance, this Guaranty
and each such lien and security interest shall be valid and enforceable only
to
the maximum extent that would not cause this Guaranty or such interest, lien
or
security interest to constitute a Fraudulent Conveyance, and this Guaranty
shall
automatically be deemed to have been amended accordingly at all relevant times.
For purposes hereof, “Fraudulent
Conveyance”
means
a
fraudulent conveyance under Section 548 of the Bankruptcy Code or a fraudulent
conveyance or fraudulent transfer under the provisions of any applicable
fraudulent conveyance or fraudulent transfer law or similar law of any state,
as
in effect from time to time.
3. Costs
and Expenses. Each
Guarantor, jointly and severally, agrees to pay on demand, all costs and
expenses of every kind incurred by any Buyer or Collateral Agent: (a) in
enforcing this Guaranty, (b) in collecting any of the Obligations from the
Company or any Guarantor, (c) in realizing upon or protecting or preserving
any
collateral for this Guaranty or for payment of any of the Obligations, and
(d)
in connection with any amendment of, modification to, waiver or forbearance
granted under, or enforcement or administration of any Transaction Document
or
for any other purpose in connection with any Transaction Document. “Costs
and expenses”
as
used
in the preceding sentence shall include, without limitation, reasonable
attorneys’ fees incurred by any Buyer or Collateral Agent in retaining counsel
for advice, suit, appeal, any insolvency or other proceedings under the
Bankruptcy Code or otherwise, or for any purpose specified in the preceding
sentence.
4. Nature
of Guaranty: Continuing, Absolute and Unconditional.
(a) This
Guaranty is and is intended to be a continuing guaranty of payment of the
Obligations, and not of collectibility, and is intended to be independent of
and
in addition to any other guaranty, indorsement, collateral or other agreement
held by Buyers or Collateral Agent therefor or with respect thereto, whether
or
not furnished by a Guarantor. None of Buyers and Collateral Agent shall be
required to prosecute collection, enforcement or other remedies against Company,
any other Guarantor or guarantor of the Obligations or any other person or
entity, or to enforce or resort to any of the Collateral or other rights or
remedies pertaining thereto, before calling on a Guarantor for payment. The
obligations of each Guarantor to repay the Obligations hereunder shall be
unconditional. Each Guarantor shall have no right of subrogation with respect
to
any payments made by any Guarantor hereunder until the termination of this
Guaranty in accordance with Section
8
below,
and hereby waives any benefit of, and any right to participate in, any security
or collateral given to Buyers to secure payment of the Obligations, and each
Guarantor agrees that it will not take any action to enforce any obligations
of
the Company to any Guarantor prior to the Obligations being finally and
irrevocably paid in full in cash, provided
that, in
the event of the bankruptcy or insolvency of the Company, Collateral Agent,
for
the benefit of itself and Buyers, and Buyers shall be entitled notwithstanding
the foregoing, to file in the name of any Guarantor or in its own name a claim
for any and all indebtedness owing to a Guarantor by the Company (exclusive
of
this Guaranty), vote such claim and to apply the proceeds of any such claim
to
the Obligations.
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(b) For
the
further security of Buyers and without in any way diminishing the liability
of
the Guarantors, following the occurrence of an Event of Default (as
defined in the Notes), all debts and liabilities, present or future of the
Company to the Guarantors and all monies received from the Company or for its
account by the Guarantors in respect thereof shall be received in trust for
Buyers and Collateral Agent and forthwith upon receipt shall be paid over to
Collateral Agent, for its benefit and in its capacity as collateral agent for
the benefit of Buyers, until all of the Obligations have been finally and
irrevocably paid in full in cash. This assignment and postponement is
independent of and severable from this Guaranty and shall remain in full effect
whether or not any Guarantor is liable for any amount under this
Guaranty.
(c) This
Guaranty is absolute and unconditional and shall not be changed or affected
by
any representation, oral agreement, act or thing whatsoever, except as herein
provided. This Guaranty is intended by the Guarantors to be the final, complete
and exclusive expression of the guaranty agreement between the Guarantors and
Buyers. No modification or amendment of any provision of this Guaranty shall
be
effective against any party hereto unless in writing and signed by a duly
authorized officer of such party.
(d) Each
Guarantor hereby releases the Company from all, and agrees not to assert or
enforce (whether by or in a legal or equitable proceeding or otherwise) any
“claims” (as defined in Section 101(5) of the Bankruptcy Code), whether arising
under any law, ordinance, rule, regulation, order, policy or other requirement
of any domestic or foreign government or any instrumentality or agency thereof,
having jurisdiction over the conduct of its business or assets or otherwise,
to
which the Guarantors are or would at any time be entitled by virtue of its
obligations hereunder, any payment made pursuant hereto or the exercise by
any
Buyer or Collateral Agent of its rights with respect to the Collateral,
including any such claims to which such Guarantors may be entitled as a result
of any right of subrogation, exoneration or reimbursement.
5. Certain
Rights and Obligations.
(a) Each
Guarantor acknowledges and agrees that Buyers and Collateral Agent, for its
benefit and as collateral agent for the benefit of Buyers, may, without notice,
demand or any reservation of rights against such Guarantor and without affecting
such Guarantor’s obligations hereunder, from time to time:
(i) renew,
extend, increase, accelerate or otherwise change the time for payment of, the
terms of or the interest on the Obligations or any part thereof or grant other
indulgences to the Company or others;
(ii) accept
from any person or entity and hold collateral for the payment of the Obligations
or any part thereof, and modify, exchange, enforce or refrain from enforcing,
or
release, compromise, settle, waive, subordinate or surrender, with or without
consideration, such collateral or any part thereof;
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(iii) accept
and hold any indorsement or guaranty of payment of the Obligations or any part
thereof, and discharge, release or substitute any such obligation of any such
indorser or guarantor, or discharge, release or compromise any Guarantor, or
any
other person or entity who has given any security interest in any collateral
as
security for the payment of the Obligations or any part thereof, or any other
person or entity in any way obligated to pay the Obligations or any part
thereof, and enforce or refrain from enforcing, or compromise or modify, the
terms of any obligation of any such indorser, guarantor, or person or
entity;
(iv) dispose
of any and all collateral securing the Obligations in any manner as the
Collateral Agent, in its sole discretion, may deem appropriate, and direct
the
order or manner of such disposition and the enforcement of any and all
endorsements and guaranties relating to the Obligations or any part thereof
as
Collateral Agent in its sole discretion may determine;
(v) determine
the manner, amount and time of application of payments and credits, if any,
to
be made on all or any part of any component or components of the Obligations
(whether principal, interest, fees, costs, and expenses, or otherwise),
including, without limitation, the application of payments received from any
source to the payment of indebtedness other than the Obligations even though
Buyers might lawfully have elected to apply such payments to the Obligations
to
amounts which are not covered by this Guaranty; and
(vi) take
advantage or refrain from taking advantage of any security or accept or make
or
refrain from accepting or making any compositions or arrangements when and
in
such manner as Collateral Agent, in its sole discretion, may deem
appropriate;
and
generally do or refrain from doing any act or thing which might otherwise,
at
law or in equity, release the liability of such Guarantor as a guarantor or
surety in whole or in part, and in no case shall Buyers or Collateral Agent
be
responsible or shall any Guarantor be released either in whole or in part for
any act or omission in connection with Buyers or Collateral Agent having sold
any security at less than its value.
(b) Following
the occurrence of an Event of Default, and upon demand by Collateral Agent,
each
Guarantor, jointly and severally, hereby agrees to pay the Obligations to the
extent hereinafter provided:
(i) without
deduction by reason of any setoff, defense (other than payment) or counterclaim
of the Company or any other Guarantor;
(ii) without
requiring presentment, protest or notice of nonpayment or notice of default
to
any Guarantor, to the Company or to any other person or entity;
(iii) without
demand for payment or proof of such demand or filing of claims with a court
in
the event of receivership, bankruptcy or reorganization of the Company or any
other Guarantor;
(iv) without
requiring Buyers or Collateral Agent to resort first to the Company (this being
a guaranty of payment and not of collection), to any other Guarantor, or to
any
other guaranty or any collateral which Buyers or Collateral Agent may
hold;
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(v) without
requiring notice of acceptance hereof or assent hereto by any Buyer or
Collateral Agent; and
(vi) without
requiring notice that any of the Obligations has been incurred, extended or
continued or of the reliance by any Buyer or Collateral Agent upon this
Guaranty;
all
of
which each Guarantor hereby waives.
(c) Each
Guarantor’s obligation hereunder shall not be affected by any of the following,
all of which such Guarantor hereby waives:
(i) any
failure to perfect or continue the perfection of any security interest in or
other lien on any collateral securing payment of any of the Obligations or
any
Guarantor’s obligation hereunder;
(ii) the
invalidity, unenforceability, propriety of manner of enforcement of, or loss
or
change in priority of any document or any such security interest or other lien
or guaranty of the Obligations;
(iii) any
failure to protect, preserve or insure any such collateral;
(iv) failure
of a Guarantor to receive notice of any intended disposition of such
collateral;
(v) any
defense arising by reason of the cessation from any cause whatsoever of
liability of the Company including, without limitation, any failure, negligence
or omission by any Buyer or Collateral Agent in enforcing its claims against
the
Company;
(vi) any
release, settlement or compromise of any obligation of the Company, any other
Guarantor or any other guarantor of the Obligations;
(vii) the
invalidity or unenforceability of any of the Obligations;
(viii) any
change of ownership of the Company, any other Guarantor or any other guarantor
of the Obligations or the insolvency, bankruptcy or any other change in the
legal status of the Company, any other Guarantor or any other guarantor of
the
Obligations;
(ix) any
change in, or the imposition of, any law, decree, regulation or other
governmental act which does or might impair, delay or in any way affect the
validity, enforceability or the payment when due of the
Obligations;
(x) the
existence of any claim, setoff or other rights which the Guarantor, Company,
any
other Guarantor or guarantor of the Obligations or any other person or entity
may have at any time against any Buyer, Collateral Agent or the Company in
connection herewith or any unrelated transaction;
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(xi) any
Buyer’s or Collateral Agent’s election in any case instituted under chapter 11
of the Bankruptcy Code, of the application of section 1111(b)(2) of the
Bankruptcy Code;
(xii) any
use
of cash collateral, or grant of a security interest by the Company, as debtor
in
possession, under sections 363 or 364 of the Bankruptcy Code;
(xiii) the
disallowance of all or any portion of any of any Buyer’s or Collateral Agent’s
claims for repayment of the Obligations under sections 502 or 506 of the
Bankruptcy Code; or
(xiv) any
other
fact or circumstance which might otherwise constitute grounds at law or equity
for the discharge or release of a Guarantor from its obligations hereunder,
all
whether or not such Guarantor shall have had notice or knowledge of any act
or
omission referred to in the foregoing clauses (i) through (xiii) of this Section
5(c).
6. Representations
and Warranties. Each
Guarantor further represents and warrants to Buyers and Collateral Agent that:
(a) such Guarantor is a corporation or other entity duly incorporated or
organized, as applicable, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation, as applicable, 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) such Guarantor has full power,
authority and legal right to execute and deliver, and to perform its obligations
under, this Guaranty, and has taken all necessary action to authorize the
guarantee hereunder on the terms and conditions of this Guaranty and to
authorize the execution, delivery and performance of this Guaranty; (c) this
Guaranty has been duly executed and delivered by such Guarantor and constitutes
a legal, valid and binding obligation of such Guarantor enforceable against
such
Guarantor in accordance with its terms, except to the extent that such
enforceability is subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance and moratorium laws and other laws of general application
affecting enforcement of creditors’ rights generally, or the availability of
equitable remedies, which are subject to the discretion of the court before
which an action may be brought; and (d) the execution, delivery and performance
by each Guarantor of this Guaranty do not require any action by or in respect
of, or filing with, any governmental body, agency or official and do not
violate, conflict with or cause a breach or a default under any provision of
applicable law or regulation or of the organizational documents of any Guarantor
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon it.
7. Negative
Covenants. MRU
ABS
covenants with Buyers and Collateral Agent that MRU ABS shall not grant any
security interest in or permit any lien, claim or encumbrance upon any of its
assets in favor of any person or entity other than liens and security interests
in favor of Buyers and Collateral Agent and other Permitted Liens.
8. Termination. This
Guaranty shall not terminate until such
time, if any, as (i) all Indebtedness under the Notes secured hereby shall
be
finally and irrevocably paid in full in cash, (ii) no Notes shall remain
outstanding, (iii) all commitments to lend under the Purchase Agreement shall
have terminated and (iv) there shall exist no other outstanding payment or
reimbursement obligations (other than contingent indemnification obligations
for
which no claims shall have been asserted) of the Company or the Guarantors
to
the Collateral Agent under any of the Transaction Documents. Thereafter, but
subject to the following, Collateral Agent, on its behalf and as agent for
Buyers, shall take such action and execute such documents as the Guarantors
may
request (and at the Guarantors’ cost and expense) in order to evidence the
termination of this Guaranty. Each Guarantor further agrees that, to the extent
that the Company makes a payment or payments to Buyers or Collateral Agent
on
the Obligations, or Buyers or Collateral Agent receive any proceeds of
collateral securing the Obligations or any other payments with respect to the
Obligations, which payment or receipt of proceeds or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be returned or repaid to the Company, its estate, trustee,
receiver, debtor in possession or any other person or entity, including, without
limitation, the Guarantors, under any insolvency or bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment,
return or repayment, the obligation or part thereof which has been paid, reduced
or satisfied by such amount shall be reinstated and continued in full force
and
effect as of the date when such initial payment, reduction or satisfaction
occurred, and this Guaranty shall continue in full force notwithstanding any
contrary action which may have been taken by any Buyer or Collateral Agent
in
reliance upon such payment, and any such contrary action so taken shall be
without prejudice to any Buyer’s or Collateral Agent’s rights under this
Guaranty and shall be deemed to have been conditioned upon such payment having
become final and irrevocable.
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9. Guaranty
of Performance. Each
Guarantor also guaranties the full, prompt and unconditional performance of
all
obligations and agreements of every kind owed or hereafter to be owed by the
Company to Buyers and Collateral Agent under the Purchase Agreement, Security
Documents and the Notes. Every provision for the benefit of Buyers and
Collateral Agent contained in this Guaranty shall apply to the guaranty of
performance given in this paragraph.
10. [Reserved].
11. Miscellaneous.
(a) The
terms
“Company” and “Guarantor” as used in this Guaranty shall include: (i) any
successor individual or individuals, association, partnership, limited liability
company or corporation to which all or substantially all of the business or
assets of the Company or such Guarantor shall have been transferred and (ii)
any
other association, partnership, limited liability company, corporation or entity
into or with which the Company or such Guarantor shall have been merged,
consolidated, reorganized, or absorbed.
(b) Without
limiting any other right of any Buyer or Collateral Agent, whenever any Buyer
or
Collateral Agent has the right to declare any of the Obligations to be
immediately due and payable (whether or not it has been so declared), Collateral
Agent, on its behalf and in its capacity as agent for the benefit of Buyers,
at
its sole election without notice to the undersigned may appropriate and set
off
against the Obligations:
(i) any
and
all indebtedness or other moneys due or to become due to any Guarantor by any
Buyer or Collateral Agent in any capacity; and
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(ii) any
credits or other property belonging to any Guarantor (including all account
balances, whether provisional or final and whether or not collected or
available) at any time held by or coming into the possession of any Buyer or
Collateral Agent, or any affiliate of any Buyer or Collateral Agent, whether
for
deposit or otherwise;
whether
or not the Obligations or the obligation to pay such moneys owed by any Buyer
or
Collateral Agent is then due, and the applicable Buyer or Collateral Agent
shall
be deemed to have exercised such right of set off immediately at the time of
such election even though any charge therefor is made or entered on such Buyer’s
or Collateral Agent’s records subsequent thereto. Collateral Agent agrees to
notify such Guarantor in a reasonably practicable time of any such set-off;
however, failure to so notify such Guarantor shall not affect the validity
of
any set-off.
(c) Each
Guarantor’s obligation hereunder is to pay the Obligations in full in cash when
due according to the Notes, the Security Documents, the other Transaction
Documents and the other agreements, documents and instruments governing the
Obligations to the extent provided herein, and shall not be affected by any
stay
or extension of time for payment by the Company or any other Guarantor resulting
from any proceeding under the Bankruptcy Code or any similar law.
(d) No
course
of dealing between the Company or any Guarantor and Buyers or Collateral Agent
and no act, delay or omission by Buyers or Collateral Agent in exercising any
right or remedy hereunder or with respect to any of the Obligations shall
operate as a waiver thereof or of any other right or remedy, and no single
or
partial exercise thereof shall preclude any other or further exercise thereof
or
the exercise of any other right or remedy. Any Buyer or Collateral Agent may
remedy any default by the Company under any agreement with the Company or with
respect to any of the Obligations in any reasonable manner without waiving
the
default remedied and without waiving any other prior or subsequent default
by
the Company. All rights and remedies of Buyers and Collateral Agent hereunder
are cumulative.
(e) This
Guaranty shall inure to the benefit of each Buyer and Collateral Agent, and
each
such entity’s successors and assigns.
(f) Collateral
Agent may assign its rights hereunder without the consent of Guarantors, in
which event such assignee shall be deemed to be Collateral Agent hereunder
with
respect to such assigned rights.
(g) Captions
of the sections of this Guaranty are solely for the convenience of the parties
hereto, and are not an aid in the interpretation of this Guaranty and do not
constitute part of the agreement of the parties set forth herein.
(h) If
any
provision of this Guaranty is unenforceable in whole or in part for any reason,
the remaining provisions shall continue to be effective.
(i) All
questions concerning the construction, validity, enforcement and interpretation
of this Guaranty shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State
of
New York. Each Guarantor hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding
is
improper. Each Guarantor hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding
by
mailing a copy thereof to such party at the address for such notices to it
under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
The parties acknowledge that each of the Buyers has executed each of the
Transaction Documents to be executed by it in the State of New York and will
have made the payment of the Purchase Price (as defined in the Purchase
Agreement) from its bank account located in the State of New York.
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(j) Notices.
All
notices, approvals, requests, demands and other communications hereunder shall
be delivered or made in the manner set forth in, and shall be effective in
accordance with the terms of, the Purchase Agreement or, in the case of
communications to the Collateral Agent, directed to the notice address set
forth
in the Pledge and Security Agreement; provided, that any communication shall
be
effective as to any Guarantor if made or sent to the Company in accordance
with
the foregoing.
12. WAIVERS.
(a) EACH
GUARANTOR WAIVES THE BENEFIT OF ALL VALUATION, APPRAISAL AND EXEMPTION
LAWS.
(b) UPON
THE OCCURRENCE OF A DEFAULT OR EVENT OF DEFAULT, EACH GUARANTOR HEREBY WAIVES
ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY ANY BUYER
OR COLLATERAL AGENT, ON ITS BEHALF AND IN ITS CAPACITY AS AGENT FOR THE BENEFIT
OF BUYERS, OF ITS RIGHTS TO REPOSSESS THE COLLATERAL WITHOUT JUDICIAL PROCESS
OR
TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR NOTICE OR HEARING.
EACH GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE
WITH RESPECT TO THIS TRANSACTION AND THIS GUARANTY.
(c) EACH
GUARANTOR WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY, OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY BUYER OR COLLATERAL AGENT. EACH GUARANTOR AGREES THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, EACH GUARANTOR FURTHER AGREES THAT ITS RIGHT TO A TRIAL
BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM
OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY
OR
ENFORCEABILITY OF THIS GUARANTY OR ANY PROVISION HEREOF. THIS WAIVER SHALL
APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
GUARANTY.
10
13. Collateral
Agent.
The
terms and provisions of Section 30 of the Pledge and Security Agreement which
set forth the appointment of the Collateral Agent and the indemnifications
to
which the Collateral Agent is entitled are hereby incorporated by reference
herein as if fully set forth therein.
14. Payments
Free of Taxes.
(a) Definitions.
In this
Section
14:
(i) “Excluded
Taxes”
means,
with respect to the Collateral Agent or the Buyers, or any other recipient
of
any payment to be made by or on account of any obligations of any Guarantor
under this Guaranty, or under any other Security Document, income or franchise
taxes imposed on (or measured by) its net income by the United States of America
or such other jurisdiction under the laws of which such recipient is organized
or in which its principal office is located.
(ii) “Governmental
Authority”
means
the government of the United States of America or any other nation, or any
political subdivision thereof, whether state or local, or any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers
or
functions of or pertaining to government over the Company or any of its
Subsidiaries, or any of their respective properties, assets or
undertakings.
(iii) “Indemnified
Taxes”
means
Taxes other than Excluded Taxes.
(iv) “Taxes”
means
any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.
(b) Any
and
all payments by or on account of any obligation of any of the Guarantors under
this Guaranty or any other Security Document shall be made without any set-off,
counterclaim or deduction and free and clear of and without deduction for any
Indemnified Taxes; provided that if any Guarantor shall be required to deduct
any Indemnified Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
14(b)),
the
Collateral Agent or Buyers, as applicable, receives an amount equal to the
sum
it would have received had no such deductions been made, (ii) such Guarantor
shall make such deductions and (iii) such Guarantor shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(c) Indemnification
by the Guarantors.
Each
Guarantor shall indemnify the Collateral Agent and the Buyers, within ten (10)
days after written demand therefor, for the full amount of any Indemnified
Taxes
paid by the Collateral Agent or Buyers, as applicable, on or with respect to
any
payment by or on account of any obligation of such Guarantor under this Guaranty
and the other Security Documents (including Indemnified Taxes or imposed or
asserted on or attributable to amounts payable under this Section
14)
and any
penalties, interest and expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate of the Collateral
Agent or any Buyer as to the amount of such payment or liability under this
Section
14
shall be
delivered to such Guarantor and shall be conclusive absent manifest
error.
11
15. Counterparts;
Headings.
This
Guaranty may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to each other party;
provided that a facsimile, .pdf or similar electronically transmitted signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original
signature.
The
headings in this Agreement are for convenience of reference only and shall
not
alter or otherwise affect the meaning hereof.
[rest
of
page intentionally left blank; signature page follows]
12
IN
WITNESS WHEREOF, Guarantors have executed this Guaranty as of the date first
written above.
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GUARANTORS:
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Embark
Corp., a Delaware corporation
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By:
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Name:
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Title:
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Embark
Online, Inc, a Delaware corporation
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By:
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|
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Name:
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|
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Title:
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Goto
College Holdings Inc., a Delaware corporation
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By:
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Name:
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|
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Title:
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iempower,
inc., a Delaware corporation
|
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By:
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|
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Name:
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|
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Title:
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MRU
Originations, Inc., a Delaware corporation
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By:
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Name:
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Title:
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MRU
Universal Guaranty Agency, Inc., a Delaware
corporation
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By:
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Title:
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Guaranty
EXHIBIT
A
Form
of Joinder
Joinder
to Guaranty
The
undersigned, [__________] a [__________], hereby joins in the execution of
that
certain Guaranty dated as of October 19, 2007 (the “Guaranty”),
by
each of Embark Corp., a Delaware corporation, Embark Online, Inc, a Delaware
corporation, Goto College Holdings Inc., a Delaware corporation, iempower,
inc.,
a Delaware corporation, MRU Originations, Inc., a Delaware corporation, MRU
Universal Guaranty Agency, Inc., a Delaware corporation, and each other person
or entity that becomes a Guarantor thereunder after the date and pursuant to
the
terms thereof, to and in favor of Viking Asset Management L.L.C., a California
limited liability company, as collateral agent. By executing this Joinder,
the
undersigned hereby agrees that it is a Guarantor thereunder with the same force
and effect as if originally named therein as a Guarantor. The undersigned agrees
to be bound by all of the terms and provisions of the Guaranty and represents
and warrants that the representations and warranties set forth in Section
6
of the
Guaranty are, with respect to the undersigned, true and correct as of the date
hereof. Each reference to a Guarantor in the Guaranty shall be deemed to include
the undersigned.
In
Witness Whereof, the undersigned has executed this Joinder this ___ day of
_________, 200_.
_______________________
