Exhibit 10.5
FORM OF UNCONDITIONAL GUARANTY
AGREEMENT
THIS
UNCONDITIONAL GUARANTY AGREEMENT (this “ Guaranty ”), dated as
of the __ TH day of September 2008, is made by LEGACY
MEDIA LLC , a California limited liability company (“
Legacy ”), and CONSUMER LOYALTY GROUP LLC , a
California limited liability company (“ Consumer
”), each having an address at c/o COMMERCE PLANET,
INC. , a Utah corporation (the “ Company ”)
with an address at 30 S. La Patera Lane, Goleta, CA 93117, for the
benefit of MORLEX, INC. , a Colorado corporation
(hereinafter referred to as “ Morlex
”). Legacy and Consumer are hereinafter referred
to individually as a “ Guarantor ” and
collectively as the “ Guarantors .”
W I T N E S S E T H :
WHEREAS, the Guarantors are each wholly-owned
subsidiaries of the Company;
WHEREAS, the parties hereto are parties to the
Asset Purchase Agreement (the “ Purchase Agreement
”) dated as of the 16 th day of September 2008, by
and among the Company, the Guarantors, Morlex and Superfly
Advertising, Inc., an Indiana corporation and wholly-owned
subsidiary of Morlex (the “ Purchaser
”). Pursuant to the Purchase Agreement, the
Guarantors have agreed to sell and Purchaser has agreed to purchase
certain of the assets used or held for use by the Guarantors in the
conduct of the Business in consideration of the Purchase Price and
the Assumed Liabilities (the “ Acquisition
”).
WHEREAS, in connection with the Purchase
Agreement, Morlex has agreed to make a loan to the Company in the
original principal amount of $200,000 as evidenced by a secured
convertible promissory note dated of even date herewith (the
“ Note ”) made by the Company (the “
Maker ”) in favor of Morlex or any subsequent holder
of such Note (the “ Payee ”);
WHEREAS, as an inducement and a condition to the
willingness of Morlex and the Purchaser to make the Loan and enter
into the Purchase Agreement, as applicable, Morlex desires the
Guarantors to agree, and the Guarantors are willing to agree, to
execute and deliver this Guaranty and jointly and severally
guarantee payment to Morlex of the Guaranteed Amount (as herein
defined) at the time and in the manner hereinafter
provided;
WHEREAS, each Guarantor agrees that it is in its
best interest to guaranty the Guaranteed Amount, and is delivering
this Guaranty with the intent that Morlex and the Purchaser rely
hereon, and acknowledging that Morlex and the Purchaser are so
relying and that it is reasonable for them to do so.
NOW, THEREFORE, in consideration of the premises
and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each Guarantor, and
in order to induce Morlex to make the loan evidenced by the Note,
each Guarantor intending to be legally bound hereby covenants and
agrees as follows:
1. (a) Unless
otherwise separately defined herein, all capitalized terms, when
used in this Guaranty shall have the same meaning as is defined in
the Note.
(b) Each
Guarantor hereby absolutely and unconditionally jointly and
severally guarantees to Morlex the payment in full of the Note, of
the sum of (i) the entire (US) $200,000 principal amount of the
Note, (ii) all accrued interest due thereon, and (iii) any Penalty
Interest that may be due and payable, in each case in accordance
with the terms of the Note (such aggregate sum is referred to as
the “ Guaranteed Amount
”).
2. Each
Guarantor covenants to and shall, with or without notice or demand,
(i) reimburse Morlex for all costs and expenses (including, without
limitation, reasonable attorney’s fees) paid or incurred by
Morlex in connection with Morlex’s review and analysis of the
Loan and viability thereof for Morlex’s purposes, negotiation
of the terms thereof and of this Guaranty, documentation of this
Guaranty and related matters, and the collection of the Guaranteed
Amount or any portion thereof (whether or not an action is brought
for such collection) or in any action or proceeding brought by
Morlex to enforce any of the covenants, indemnities and obligations
of each Guarantor under this Guaranty.
3. All
moneys available to Morlex for application in payment of the
Guaranteed Amount may be applied by Morlex in such manner and in
such amounts and at such time or times and in such order, priority
and proportions as Morlex may to the payment or reduction of such
portion of the Guaranteed Amount Morlex may elect.
4. Each
Guarantor hereby waives (a) notice of acceptance of this Guaranty;
(b) presentment and demand for payment of the Guaranteed Amount or
any portion thereof; (c) protest and notice of dishonor or default
to him or to any other person or party with respect to the
Guaranteed Amount or any portion thereof; (d) all other notices to
which he undersigned might otherwise be entitled; and (e) any
demand for payment under this Guaranty.
5. This
is a Guaranty of payment and not of collection and each Guarantor
further waives any right to require that any action be brought
against the Maker or any other person or party or to require that
resort be had to any security or to any balance of any deposit
account or credit on the books of Morlex in favor of or any other
person or party. The obligations hereunder are
independent of the obligations of the Partnership or any other
person or entity to Morlex, and a separate action or actions may be
brought and prosecuted against each Guarantor whether action is
brought against the Maker or any other person or entity or whether
any other person or entity be joined in any such action or actions;
and each Guarantor waives the benefit of any statute of limitations
affecting his covenants, obligations and liabilities hereunder or
the enforcement thereof.
6. Each
reference herein to Morlex shall be deemed to include his
successors and assigns or any other Payee of the Note, in whose
favor the provisions of this Guaranty shall also inure. Each
reference herein to each Guarantor shall be deemed to include the
heirs, executors, administrators, legal representatives, successors
and assigns of each Guarantor, all of whom shall be bound by the
provisions of this Guaranty, provided, however, that each Guarantor
shall in no event or under any circumstance have the right without
obtaining the prior written consent of Morlex to assign or transfer
the obligations and liabilities of each Guarantor under this
Guaranty, in whole or in part, to any other person, party or
entity.
7. No
delay on the part of Morlex in exercising any right or remedy under
this Guaranty or failure to exercise the same shall operate as a
waiver in whole or in part of any such right or remedy. No notice
to or demand on each Guarantor shall be deemed to be a waiver of
the obligation of each Guarantor or of the right of Morlex to take
further action without notice or demand as provided in this
Guaranty.
8. This
Guaranty may be modified, amended, changed or terminated only by an
agreement in writing signed by Morlex and each
Guarantor. No waiver of any term, covenant or provision
of this Guaranty shall be effective unless given in writing by
Morlex and if so given by Morlex shall be effective only in the
specific instance in which given.
9. Each
Guarantor acknowledges that this Guaranty and his and its
obligations under this Guaranty are and shall at all times continue
to be absolute and unconditional in all respects, and shall at all
times be valid and enforceable irrespective of any other agreements
or circumstances of any nature whatsoever which might otherwise
constitute a defense to this Guaranty and the obligations of each
Guarantor under this Guaranty or the obligations of any other
person or party (including, without limitation, the Partnership)
relating to this Guaranty or otherwise with respect to the
Guaranteed Amount.
10. &nb
