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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 ")
.
SECTION
3.
Guaranty Absolute; Continuing Guaranty; Assignments
.
(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
.
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