Choice "C" is correct. Sorus and Ace have agreed to be guarantors of collection. Thus, Towns, the creditor, must pursue the debtor, Pepper, before Towns is entitled to recover from Sorus and/or Ace.
Choice "b" is incorrect. Towns, the creditor, will be entitled to recover from Sorus and Ace, the sureties, even if the sureties are in the process of exercising their rights against the debtor (i.e., "right of exoneration").
Choice "d" is incorrect. Insolvency of the debtor, either at the time the note was signed, or at the time of default, is not a defense of a surety.
Choice "a" is incorrect. Death of the debtor is not a defense of a surety.