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GUARANTY
This
GUARANTY (as
amended, restated, supplemented, or otherwise modified and in
effect from time to time, this “ Guaranty ”)
is made as of this 23 rd
day of June, 2008 , by Options Acquisition Sub,, Inc., a
Delaware corporation (“the “ Guarantor ”)
in favor of CUSTOMER
ACQUISITION NETWORK HOLDINGS, INC. , a Delaware
corporation.(the “ Secured Party
”).
W I T N E S S E T H:
WHEREAS, as of the date
hereof, the Secured Party has made a loan and
certain other financial accommodations (collectively, the
“ Loan ”) to
OPTIONS
MEDIA GROUP HOLDINGS, INC., a
Nevada corporation (the “ Company ”),
as evidenced by those certain secured senior note in an
original aggregate principal amount of $1,000,000.00
(such
note, together with any promissory notes or other securities
issued in exchange or substitution therefor or replacement
thereof, and as any of the same may be amended, supplemented,
restated or modified and in effect from time to time, the
“ Note
”);
WHEREAS, pursuant to a
Pledge 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 Agreement
”) by the Company in favor of the Secured Party, the
Company has created a lien on and security interest in all of
the capital stock and other equity interests of the Guarantor
to the Secured Party, and pledged such capital stock and
equity interests to the Secured Party, for its
benefit;
WHEREAS, pursuant to a
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 “ Security
Agreement ”) by the “Debtors” (as
defined therein) in favor of the Secured Party, such Debtors
have granted the Secured Party , for its benefit, a first
priority security interest in, and lien upon and pledge of
each of their rights in the Collateral (as defined in the
Security Agreement); and
WHEREAS, the Guarantor is
a direct subsidiary 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 Note, 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 the Secured Party.
NOW, THEREFORE ,
for and in consideration of the premises and in order to
induce the Secured Party to make the Loans, and for other
good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Guarantor hereby agrees
as follows:
1.
Definitions . 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.
“
Event of
Default ” shall have the meaning ascribed to such
term in the Note.
“
Obligations
” shall mean (i) all obligations, liabilities and
indebtedness of every nature of the Company from time to time
owed or owing to the Secured Party, including, without
limitation, all obligations, liabilities and indebtedness of
every nature of the Company under the Loan, the Note, the
Security Agreement 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 Guarantor
from time to time owed or owing to the Secured
Party, including, without limitation, all obligations,
liabilities and indebtedness of every nature of the Guarantor
under or in respect of this Guaranty, the Loan, the Note, the
Pledge Agreement, the Security Agreement, and the other
documents executed in relation to the Loan (the “
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)
The Guarantor
hereby unconditionally and irrevocably guaranties the full and
prompt payment and performance to the Secured Party 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)
The 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 the Secured Party 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 the Secured Party; or any other
valuable consideration.
(c)
The 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.
(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 the 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, the Guarantor and the Secured Party
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 . The Guarantor agrees to
pay on demand, all costs and expenses of every kind incurred bythe
Secured Party: (a) in enforcing this Guaranty, (b) in collecting
any of the Obligations from the Company or the 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 the
Secured Party in retaining counsel for advice, suit, appeal, any
insolvency or other
proceedings
under the Bankruptcy Code or otherwise, or for any other 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 collection, and is intended to be
independent of and in addition to any other guaranty, indorsement,
collateral or other agreement held by the Secured Party therefor or
with respect thereto, whether or not furnished by
the Guarantor. The Secured Party shall not be
required to prosecute collection, enforcement or other remedies
against Company, the 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 the Guarantor for payment. The
obligations of the Guarantor to repay the Obligations hereunder
shall be unconditional. The Guarantor shall have no
right of subrogation with respect to any payments made by the
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 the Secured
Party to secure payment of the Obligations, and the Guarantor
agrees that it will not take any action to enforce any obligations
of the Company to the 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, the
Secured Party shall be entitled notwithstanding the foregoing, to
file in the name of the Guarantor or in its own name a claim for
any and all indebtedness owing to the Guarantor by the Company
(exclusive of this Guaranty), vote such claim and to apply the
proceeds of any such claim to the Obligations.
(b)
For
the further security of the Secured Party and without in any way
diminishing the liability of the Guarantor, following the
occurrence of an Event of Default, all debts and liabilities,
present or future of the Company to the Guarantor and all monies
received from the Company or for its account by the Guarantor in
respect thereof shall be received in trust for the Secured Party
and forthwith upon receipt shall be paid over to the Secured Party,
for its benefit, 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 the 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 Guarantor to be the final, complete and exclusive
expression of the guaranty agreement between the Guarantor and the
Secured Party. 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)
The
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 Guarantor is or would
at any time be entitled by virtue of its obligations hereunder, any
payment made pursuant hereto or the exercise by the
Secured Party of its rights with respect to the Collateral,
including any such claims to which the Guarantor may be
entitled as a result of any right of subrogation, exoneration or
reimbursement.
5.
Certain Rights and Obligations .
(a)
The Guarantor
acknowledges and agrees that the Secured Party may, without notice,
demand or any reservation of rights against
the Guarantor and without affecting
the 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;
(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 the 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 the Secured Party t 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 the Secured
Party 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 the Secured Party, 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
the Guarantor as a guarantor or surety in whole or in part,
and in no case shall the Secured Party be
responsible or shall the Guarantor be released
either in whole or in part for any act or omission in
connection with the Secured Party having sold any
security at less than its value.
(b)
Following
the occurrence of an Event of De
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