Unassociated Document


     

    SUBSIDIARY
GUARANTY

     

    THIS SUBSIDIARY GUARANTY (this
“Subsidiary
Guaranty”), dated as of October ___, 2010, among CommerceTel Corporation,
a Nevada corporation (the “Company”),
CommerceTel, Inc., a Nevada corporation (the “Subsidiary
Guarantor”), for the benefit of the secured parties signatory hereto and
their respective endorsees, transferees and assigns (individually a “Secured Party” and
collectively, the “Secured
Parties”).

     

    W I T N E S S E T
H:

     

    WHEREAS,
the Company has agreed to issue to the Secured Parties and the Secured Parties
have agreed to purchase from the Company certain of the Company’s 10% Senior
Secured Convertible Bridge Note due one year from the date of issue (the “Notes”);
and

     

    WHEREAS, the Company
through its Subsidiary Guarantor is a provider of mobile marketing and
advertising solutions that enable brands, enterprises and political campaigns to
implement highly targeted, interactive and measurable campaigns by communicating
with and engaging consumers via their mobile devices;
and  

     

    WHEREAS,
the Subsidiary Guarantor constitutes the only subsidiary of the Company and it
is in the best interest of the Subsidiary Guarantor as subsidiary of the Company
and the indirect beneficiary of the Notes, that the Secured Parties purchase the
Notes from the Company; and

     

    WHEREAS,
as a material inducement to the Secured Parties to purchase the Notes, the
Secured Parties have required and the Subsidiary Guarantor has agreed to
unconditionally guarantee the timely and full satisfaction of all obligations of
the Company, whether matured or unmatured, now or hereafter existing or created
and becoming due and payable (the “Obligations”) to the
Secured Parties, their successors, endorsees, transferees or assigns under the
Note and the Security Agreement (the “Transaction
Documents”); and

     

    WHEREAS,
in light of the foregoing, the Subsidiary Guarantor expects to derive
substantial benefit from the sale of the Notes and the transactions contemplated
thereby and, in furtherance thereof, has agreed to execute and deliver this
Subsidiary Guaranty.

     

    NOW,
THEREFORE, in consideration of the foregoing recitals, and the mutual covenants
contained herein, the parties hereby agree as follows:

     

    1. Guaranty.  The
Subsidiary Guarantor hereby absolutely, unconditionally and irrevocably
guarantees to the Secured Parties, their successors, endorsees, transferees and
assigns the due and punctual performance and payment of the Obligations owing to
the Secured Parties, their successors, endorsees, transferees or assigns when
due, all at the time and place and in the amount and manner prescribed in, and
otherwise in accordance with, the Transaction Documents, regardless of any
defense or set-off counterclaim which the Company or any other person may have
or assert, and regardless of whether or not the Secured Parties or anyone on
behalf of the Secured Parties shall have instituted any suit, action or
proceeding or exhausted its remedies or taken any steps to enforce any rights
against the Company or any other person to compel any such performance or
observance or to collect all or part of any such amount, either pursuant to the
provisions of the Transaction Documents or at law or in equity, and regardless
of any other condition or contingency.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    2. Waiver of
Demand.  The Subsidiary Guarantor hereby
unconditionally:  (i) waives any requirement that the Secured Parties,
in the event of a breach in any material respect by the Company of any of its
representations or warranties in the Transaction Documents, first make demand
upon, or seek to enforce remedies against, the Company or any other person
before demanding payment of enforcement hereunder; (ii) covenants that this
Subsidiary Guaranty will not be discharged except by complete performance of all
the Obligations; (iii) agrees that this Subsidiary Guaranty shall remain in full
force and effect without regard to, and shall not be affected or impaired,
without limitation, by, any invalidity, irregularity or unenforceability in
whole or in part of the Transaction Documents or any limitation on the liability
of the Company thereunder, or any limitation on the method or terms of payment
thereunder which may now or hereafter be caused or imposed in any manner
whatsoever; and (iv) waives diligence, presentment and protest with respect to,
and notice of default in the performance or payment of any Obligation by the
Company under or in connection with the Transaction Documents.

     

    3. Absolute
Obligation.  The Subsidiary Guarantor acknowledges and agrees
that (i) no Secured Party has made any representation or warranty to such
Subsidiary Guarantor with respect to the Company, any Transaction Documents or
any agreement, instrument or document executed or delivered in connection
therewith, or any other matter whatsoever, and (ii) the Subsidiary Guarantor
shall be liable hereunder, and such liability shall not be affected or impaired,
irrespective of (A) the validity or enforceability of any Transaction Documents,
or any agreement, instrument or document executed or delivered in connection
therewith, or the collectability of any of the Obligations, (B) the preference
or priority ranking with respect to any of the Obligations, (C) the existence,
validity, enforceability or perfection of any security interest or collateral
security under any Transaction Documents, or the release, exchange, substitution
or loss or impairment of any such security interest or collateral security, (D)
any failure, delay, neglect or omission by any Secured Party to realize upon or
protect any direct or indirect collateral security, indebtedness, liability or
obligation, any Transaction Documents, or any agreement, instrument or document
executed or delivered in connection therewith, or any of the Obligations, (E)
the existence or exercise of any right of set-off by any Secured Party, (F) the
existence, validity or enforceability of any other guaranty with respect to any
of the Obligations, the liability of any other person in respect of any of the
Obligations, or the release of any such person or any other guarantor of any of
the Obligations, (G) any act or omission of any Secured Party in connection with
the administration of any Transaction Documents or any of the Obligations, (H)
the bankruptcy, insolvency, reorganization or receivership of, or any other
proceeding for the relief of debtors commenced by or against, any person, (I)
the disaffirmance or rejection, or the purported disaffirmance or purported
rejection, of any of the Obligations, any Transaction Documents, or any
agreement, instrument or document executed or delivered in connection therewith,
in any bankruptcy, insolvency, reorganization or receivership, or any other
proceeding for the relief of debtor, relating to any person, (J) any law,
regulation or decree now or hereafter in effect which might in any manner affect
any of the terms or provisions of any Transaction Documents, or any agreement,
instrument or document executed or delivered in connection therewith or any of
the Obligations, or which might cause or permit to be invoked any alteration in
the time, amount, manner or payment or performance of any of the Company’s
obligations and liabilities (including the Obligations), (K) the merger or
consolidation of the Company into or with any person, (L) the sale by the
Company of all or any part of its assets, (M) the fact that at any time and from
time to time none of the Obligations may be outstanding or owing to any Secured
Party, (N) any amendment or modification of, or supplement to, any Transaction
Documents, or (O) any other reason or circumstance which might otherwise
constitute a defense available to or a discharge of the Company in respect of
its obligations or liabilities (including the Obligations) or of such Subsidiary
Guarantor in respect of any of the Obligations (other than by the performance in
full thereof).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    4. Release.  The
obligations, covenants, agreements and duties of the Subsidiary Guarantors
hereunder shall not be released, affected or impaired by any assignment or
transfer, in whole or in part, of the Transaction Documents or any Obligation,
although made without notice to or the consent of the Subsidiary Guarantor, or
any waiver by the Secured Parties, or by any other person, of the performance or
observance by the Company or the Subsidiary Guarantor of any of the agreements,
covenants, terms or conditions contained in the Transaction Documents, or any
indulgence in or the extension of the time or renewal thereof, or the
modification or amendment (whether material or otherwise), or the voluntary or
involuntary liquidation, sale or other disposition of all or any portion of the
stock or assets of the Company or the Subsidiary Guarantor, or any receivership,
insolvency, bankruptcy, reorganization, or other similar proceedings, affecting
the Company or the Subsidiary Guarantor or any assets of the Company or the
Subsidiary Guarantor, or the release of any proper from any security for any
Obligation, or the impairment of any such property or security, or the release
or discharge of the Company or the Subsidiary Guarantor from the performance or
observance of any agreement, covenant, term or condition contained in or arising
out of the Transaction Documents by operation of law, or the merger or
consolidation of the Company, or any other cause, whether similar or dissimilar
to the foregoing.

     

    5. Subrogation.

     

    (a) Unless
and until complete performance of all the Obligations, the Subsidiary Guarantor
shall not be entitled to exercise any right of subrogation to any of the rights
of the Secured Parties against the Company or any collateral security or
guaranty held by the Secured Parties for the payment or performance of the
Obligations, nor shall the Subsidiary Guarantor seek any reimbursement from the
Company in respect of payments made by the Subsidiary Guarantor
hereunder.

     

    (b) In the
extent that the Subsidiary Guarantor shall become obligated to perform or pay
any sums hereunder, or in the event that for any reason the Company is now or
shall hereafter become indebted to the Subsidiary Guarantor, the amount of such
sum shall at all times be subordinate as to lien, time of payment and in all
other respects, to the amounts owing to the Secured Parties under the
Transaction Documents and the Subsidiary Guarantor shall not enforce or receive
payment thereof until all Obligations due to the Secured Parties under the
Transaction have been performed or paid.  Nothing herein contained is
intended or shall be construed to give to the Subsidiary Guarantor any right of
subrogation in or under the Transaction Documents, or any right to participate
in any way therein, or in any right, title or interest in the assets of the
Secured Parties.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    6. Application of Proceeds;
Release.  The proceeds of any sale or enforcement of or against
all or any part of the cash or collateral at the time held by the Secured
Parties hereunder, shall be applied by the Secured Parties first to the payment
of the reasonable costs of any such sale or enforcement, then to the payment of
the principal amount or stated valued (as applicable) of, and interest or
dividends (as applicable) and any other payments due in respect of, the
Obligations.  The remainder, if any, shall be paid to the Subsidiary
Guarantor.  As used in this Subsidiary Guaranty, “proceeds” shall mean
cash, securities and other property realized in respect of the sale of any
collateral.

     

    7. Representations and
Warranties.

     

    (a) The
Subsidiary Guarantor hereby represents and warrants to the Secured Parties
that:

     

    (i) this
Subsidiary Guaranty constitutes a legal, valid and binding obligation of the
Subsidiary Guarantor, enforceable in accordance with its terms.

     

    (ii) the
execution, delivery and performance of this Subsidiary Guaranty and other
instruments contemplated herein will not violate any provision of any order or
decree of any court or governmental instrumentality or of any mortgage,
indenture, contract or other agreement to which the Subsidiary Guarantor is a
party or by which the Subsidiary Guarantor may be bound, and will not result in
the creation or imposition of any lien, charge or encumbrance on, or security
interest in, any of the Subsidiary Guarantor’s properties pursuant to the
provisions of such mortgage, indenture, contract or other
agreement.

     

    (iii) all
representations and warranties relating to it contained in the Purchase
Agreement are true and correct.

     

    (b) The
Company represents and warrants to the Secured Parties that it has no knowledge
that any of the representations or warranties of the Subsidiary Guarantor herein
are incorrect or false in any material respect.

     

    8. No Waiver; No Election of
Remedies.  No failure on the part of the Secured Parties to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise by the
Secured Parties of any right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or
remedy.  The remedies herein provided are cumulative and are not
exclusive of any remedies provided by law.  In addition, the exercise
of any right or remedy of the Secured Parties at law or equity or under this
Subsidiary Guaranty or any of the documents shall not be deemed to be an
election of the Secured Parties’ rights or remedies under such documents or at
law or equity.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    9. Termination.  This
Subsidiary Guaranty shall terminate on the date on which all Obligations have
been performed, satisfied, paid or discharged in full.

     

    10. Further
Assurances.  The parties hereto agree that, from time to time
upon the written request of any party hereto, they will execute and deliver such
further documents and do such other acts and things as such party may reasonably
request in order fully to effect the purposes of this Subsidiary
Guaranty.

     

    11. Miscellaneous.

     

    (a) Payment of
Fees.  The Subsidiary Guarantor and the Company jointly and
severally agree to pay all costs including all reasonable attorneys’ fees and
disbursements incurred by the Secured Parties in enforcing this Subsidiary
Guaranty in accordance with its terms.

     

    (b) Modification.  This
Subsidiary Guaranty contains the entire understanding between the parties with
respect to the subject matter hereof and specifically incorporates all prior
oral and written agreements relating to the subject matter hereof.  No
portion or provision of this Subsidiary Guaranty may be changed, modified,
amended, waived, supplemented, discharged, canceled or terminated orally or by
any course of dealing, or in any manner other than by an agreement in writing,
signed by the party to be charged.

     

    (c) Notice.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 6:30 p.m. PST on a day that banks are open
for business in the State of California (“Business Day”), (ii)
the Business Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified in this
Subsidiary Guaranty later than 6:30 p.m. PST on any date and earlier than 11:59
p.m. PST on such date, (iii) the Business Day following the date of mailing, if
sent by nationally recognized overnight courier services, or (iv) upon actual
receipt by the party to whom such notice is required to be given.  The
address for such notices and communications shall be as follows:

     

    If to the
Company or Subsidiary Guarantor:

    


    8929 Aero
Drive, Suite E

    San
Diego, CA 92123

    Attn.:
Dennis Becker

    Fax:
(619) 725-0958


     

    With
copies to:

    


    Louis A.
Brilleman, Esq.

    1140
Avenue of the Americas, 9th
Floor

    New York,
NY 10036

    Facsimile:
(646) 380-6899

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      If to the
Secured Parties:

    

    


    With
copies to:


     

    (d) Invalidity.  If
any part of this Subsidiary Guaranty is contrary to, prohibited by, or deemed
invalid under applicable laws or regulations, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.

     

    (e) Benefit of
Agreement.  This Subsidiary Guaranty shall be binding upon and
inure to the parties hereto and their respective successors and
assigns.

     

    (f) Mutual
Agreement.  This Subsidiary Guaranty embodies the arm’s length
negotiation and mutual agreement between the parties hereto and shall not be
construed against either party as having been drafted by it.

     

    (g) California Law to
Govern.  This Subsidiary Guaranty shall be governed by and
construed and enforced in accordance with the internal laws of the State of
California without regard to the principals of conflicts of law
thereof.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and Federal courts sitting in the city of San Diego
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 or that
such suit, action or proceeding is improper.  Each party 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 in effect for 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.

     

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    IN
WITNESS WHEREOF, the parties hereto have caused this Subsidiary Guaranty to be
duly executed by their respective authorized persons as of the date first
indicated above.

     

    
      
        	 	COMPANY	 
	 	 	 
	 	COMMERCETEL
      CORPORATION	 
	 	 	 	 
	 	      
                By:

              	 
      	 
	 	 	
              	 
	 	 	
              	 
	 	      
                SUBSIDIARY
      GUARANTOR:

              	 
	 	 	 	 
	 	      
                COMMERCETEL,
      INC.

              	 
	 	 	 	 
	 	      
                By: 
      

              	    
      	 


      

       

      
        
           

        

        
           

          
            

          

        

        
           

           

          
            
              	 	      
                      SECURED
      PARTIES:

                    	 
	 	 	 
	 	      
                      By:

                    	  	 
	 	 	
                    	 
	 	      
                      By: 
      

                    	  
      	 
	 	 	 	 
	 	      
                      By: