Document:

Exhibit
10.12

 

THIRD AMENDED AND RESTATED STOCK PLEDGE AGREEMENT

 

 

 

                This THIRD AMENDED
AND RESTATED STOCK PLEDGE AGREEMENT (“Agreement”) is entered into as of the 29th
day of June 2007 by and between John Fife (the “Secured Party”), and the person
identified on the signature page hereof (the “Pledgor”).

 

RECITALS

 

                A.            The Pledgor previously entered into
that certain Second Amended and Restated Stock Pledge Agreement dated as of May
17, 2007, pursuant to which the Pledgor agreed to pledge the Pledged Shares
(defined below) as security for: (i) the performance by National Storm
Management, Inc., a Nevada corporation (“NSMG”), of its obligations
under its Original Issue Discount Secured Note dated as of July 24, 2006 in an
aggregate face amount of up to One Million Six Hundred Fifty Thousand and
00/100 Dollars ($1,650,000.00) payable to the Secured Party (the “2006 Note”)
and (ii) the performance by the Pledgor of its Guaranty delivered to Secured
Party of even date therewith. 
Capitalized terms in this Agreement which are not identified herein will
have the meanings given such terms in the 2006 Note.

 

                B.            Pursuant to this Agreement, the Pledgor has agreed to
pledge the Pledged Shares as security to secure (i) the performance by NSMG of
any and all other obligations it may owe to the Secured Party as the same may
then exist or arise from time to time, including without limitation under its Fourth
Amended and Restated Original Issue Discount Secured Note dated as of the date
hereof and issued to the Secured Party in an aggregate original face amount of
Two Million Four Hundred Eighty One Thousand 
and 00/100 Dollars ($2,481,000) (the “2007 Note”) and (ii) the
performance by the Pledgor of that certain Second Amended Guaranty delivered to
Secured Party on the date hereof (the “Third Amended Guaranty”).

 

                C.            The Secured Party is willing to
accept the 2006 Note and the 2007 Note from the Company only upon receiving the
Second Amended Guaranty and pledge of certain stock as set forth in this
Agreement.

 

                NOW, THEREFORE, in
consideration of the premises, the mutual covenants and conditions contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:

 

                1.             Grant of Security Interest; True-Up.

 

(a)             The Pledgor hereby pledges to the Secured
Party as collateral and security for the Secured Obligations (as defined in Section
2) the securities initially set forth on the attached Schedule 1 of
this Agreement, (the “Pledged Shares”), as well as all securities
pledged as collateral to secure the obligations of the Pledgor as more fully
set forth in the 2006 Note.  On or prior
to the date of this Agreement, the Pledgor has delivered to the Secured Party
certificate(s) representing the Pledged Shares, along with a stock transfer
power duly executed in blank by the Pledgor and stamped with a bank medallion
guarantee, and an irrevocable letter of instruction to the Pledgor’s transfer
agent, instructing the transfer agent to register the Pledged Shares in the
name of the Holder in the event of a default under the 2006 Note, the 2007 Note
or otherwise under one or more of the Secured Obligations (an “Irrevocable
Letter of Instruction”).  In

 

 

calculating the value of Pledged Shares delivered as part of a True-Up, the
common stock of the Company (the “Common Stock”), including the shares
being delivered to the Secured Party, shall be deemed to have the market value
that it had on the date on which the deficiency in collateral was calculated,
without giving effect to any subsequent increase or decrease in the value of
the Common Stock in the market.

 

(b)           True-up.  The Pledgor shall be required to increase the
number of Pledged Shares (a “True-Up”) if (A) on any monthly anniversary
during the term of the 2006 Note, the market value of the Pledged Shares then
held by the Pledgor does not equal or exceed 300% of the Maturity Amount of the
2006 Note.  A True-Up shall not be deemed
to be made until the following steps have been taken:

 

(i)            Within
five (5) business days after receipt of notice from the Secured Party of a
deficiency in the value of the Pledged Shares, the Pledgor shall deliver to the
Secured Party (A) a certificate or certificates for additional shares and
necessary stock powers equal to not less than 300% of the principal amount of
the 2006 Note (the “True-up Shares”), together with (B) necessary stock
powers, signed in blank and medallion-guaranteed, (C) an irrevocable Letter of
Instruction and (D) an amendment to this Agreement (the certificates, stock
powers, Irrevocable Letter of Instruction and amendment to this Agreement are
collectively referred to as the “True-Up Documents”).  In calculating the number of Pledged Shares
delivered as part of a True-Up, the Common Stock shall be valued at the Market
Value (as defined in Section 1(b)(ii) below) based upon which the
deficiency was calculated (e.g., the average closing bid price for the ten (10)
trading days prior to the date on which the Collateral is valued).

 

(ii)          
If the Pledgor fails to deliver the True-up Documents to the Secured Party
within five (5) business days after receipt of notice by the Secured Party
therefor, the Pledgor shall pay to the Secured Party, in cash, Two Hundred and
Fifty ($250) Dollars per business day until such certificates are
delivered.  Unless otherwise set forth on
Schedule 1 of this Agreement, the Pledgor is the beneficial and record
owner of the Pledged Shares set forth opposite the Pledgor’s name on such Schedule
1.  The Pledged Shares, together with
any additions, replacements, accessions and substitutes therefor, or proceeds
thereof, are hereinafter referred to collectively as the “Collateral” or
the Pledged Shares”.  Market Value
means the average closing bid price for the ten (10) trading days prior to the
date on which the Collateral is valued for purposes of this Section 1.

 

                2.             Secured Obligations.  During the term hereof, the Collateral shall
secure the performance by the Company of its obligations, covenants, and
agreements under (a) the 2006 Note, (b) the 2007 Note and (c) derived from any
other circumstance, whether or not reduced to writing, and whether currently in
existence or subsequently created, to the Secured Party, and the performance by
the Pledgor of its obligations, covenants, and agreements under the Third Amended
Guaranty.

 

The obligations, covenants and agreements described in this Section
2 are the “Secured Obligations.”

 

                3.             Perfection of Security Interests.  (a) 
Prior to execution of this Agreement by the Pledgor, the Pledgor has
delivered the Pledged Shares, together with stock powers with medallion
guarantees annexed thereto and an Irrevocable Letter of Instruction.

 

 

 

                                (b)           At their expense, jointly and
severally, the Company and the Pledgor shall cause the public records to be
searched with respect to the Collateral and will execute, deliver, file and
record (in such manner and form as the Secured Party may require), or permit
the Secured Party to file and record, as its attorney in fact, any financing
statements, any carbon, photographic or other reproduction of a financing
statement or this Agreement (which shall be sufficient as a financing statement
hereunder), any specific assignments or other paper that may be reasonably
necessary or desirable, or that such Secured 
Party may request, in order to create, preserve, perfect or validate any
Security Interest or to enable the Secured Party to exercise and enforce his
rights hereunder with respect to any of the Collateral.  The Company and the Pledgor hereby appoint
the Secured Party as the Company’s or Pledgor’s attorney-in-fact, as the case
may be, to execute in the name and behalf of the Company or Pledgor, as the
case may be, such additional financing statements as such Secured Party may
request.

 

                4.             Assignment.  In connection with the transfer of the 2006
Note in accordance with their terms, the Secured Party may assign or transfer
the whole or any part of his security interest granted hereunder, and may
transfer as collateral security the whole or any part of his security interest
in the Collateral.  Any transferee of the
Collateral shall be vested with all of the rights and powers of the Secured
Party hereunder with respect to the Collateral.

 

                5.             Pledgor’s Warranty.  On the date hereof, and at the time of any
True-Up (as described in Section 1(b), the Pledgor represents and
warrants hereby to the Secured Party as follows with respect to the Pledged
Shares and the transactions contemplated by the 2006 Note and this Agreement:

 

                                (a)
          The Collateral is free and clear
of any encumbrances of every nature whatsoever, and such Pledgor is the sole
owner of the Pledged Shares;

 

                                (b)
          The Pledgor further agrees not
to grant or create, any security interest, claim, lien, pledge or other
encumbrance with respect to the Collateral or attempt to sell, transfer or
otherwise dispose of the Collateral, until the Secured Obligations have been
paid in full or this Agreement terminates;

 

                                (c)           This Agreement constitutes the legal,
valid and binding obligation of the Pledgor enforceable in accordance with its
terms (except as the enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, and similar
laws, now or hereafter in effect);,

 

                                (d)           The Pledgor has made necessary inquiries
of the Company and believes that the Company fully intends to fulfill and has
the capability of fulfilling the Secured Obligations to be performed by the
Company in accordance with the terms of the 2006 Note;

 

                                (e)           The Pledgor is not acting, and has
not agreed to act, in any plan to sell or dispose of any Shares in a manner
intended to circumvent the registration requirements of the Securities Act of
1933, as amended, or any applicable state law.; and

 

                                (f)            Pledgor has been advised by counsel
of the elements of a bona-fide pledge for purposes of Rule 144(d)(3)(iv) under
the Securities Act of 1933, as amended, including the relevant SEC
interpretations, and affirm that its pledge of shares pursuant to this Pledge
Agreement will constitute a bona-fide pledge of such shares for purposes of
such rule.

 

 

 

                6.             Collection of Dividends and
Interest.  During the term of this
Agreement and so long as the Pledgor is not in default under the 2006 Note, the
Pledgor is authorized to collect all dividends, distributions, interest
payments, and other amounts that may be, or may become, due on any of the
Collateral.

 

                7.             Voting Rights.  During the term of this Agreement and until
such time as this Agreement has terminated or the Secured Party has exercised
his rights under this Agreement to foreclose its security interest in the
Collateral, the Pledgor shall have the right to exercise any voting rights
evidenced by, or relating to, the Collateral.

 

                8.             Warrants and Options.  In the event that, during the term of this
Agreement, subscription, spin-off, warrants, dividends, or any other rights or
option shall be issued in connection with 
the Collateral, such warrants, dividends, rights and options shall be
immediately delivered to Secured Party to be held under the terms hereof in the
same manner as the Collateral.

 

                9.             Preservation of the Value of the
Collateral.  Pledgor shall pay all
taxes, charges, and assessments against the Collateral and do all acts
necessary to preserve and maintain the value thereof.

 

                10.           Secured Party as Pledgor’s
Attorney-in-Fact.

 

                (a)           The Pledgor hereby irrevocably
appoints the Secured Party as the Pledgor’s attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor,
the Secured Party or otherwise, from time to time at the Secured Party’s
discretion, to take any action and to execute any instrument that the Secured
Party may reasonably deem necessary or advisable to accomplish the purposes of
this Agreement, including: (i) upon the occurrence and during the continuance
of an Event of Default, to receive, indorse, and collect all instruments made
payable to the Pledgor representing any dividend, interest payment or other
distribution in respect of the Collateral or any part thereof to the extent
permitted hereunder and to give full discharge for the same and to execute and
file governmental notifications and reporting forms; and (ii) to arrange for
the transfer of the Collateral on the books of the Company or any other Person
to the name of the Secured Party or to the name of the Secured Party’s nominee.

 

                (b)           In addition to the designation of the
Secured Party as the Pledgor’s attorney-in-fact in subsection (a), the
Pledgor hereby irrevocably appoints the Secured Party as the Pledgor’s agent
and attorney-in-fact to make, execute and deliver any and all documents and
writings which may be necessary or appropriate for approval of, or be required
by, any regulatory authority located in any city, county, state or country
where the Pledgor or the Company engages in business, in order to transfer or
to more effectively transfer any of the Pledged Shares or otherwise enforce the
Secured Party’s rights hereunder.

 

                11.           Remedies upon Default.      Upon the occurrence and during the
continuance of an Event of Default under the 2006 Note or the Second Amended
Guaranty (each, an “Event of Default”):

 

                (a)           The Secured Party may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code (the “Code”) (irrespective of
whether the Code applies to the affected items of Collateral), and the Secured
Party may also

 

 

 

without
notice (except as specified below) sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange, broker’s board
or at any of the Secured Party’s offices or elsewhere, for cash, on credit or
for future delivery, at such time or times and at such price or prices and upon
such other terms as the Secured Party may deem commercially reasonable,
irrespective of the impact of any such sales on the market price of the
Collateral.  To the maximum extent
permitted by applicable law, the Secured Party may be the purchaser of any or
all of the Collateral at any such sale and shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price for all or
any portion of the Collateral sold at any such public sale, to use and apply all
or any part of the Secured Obligations as a credit on account of the purchase
price of any Collateral payable at such sale. 
Each purchaser at any such sale shall hold the property sold absolutely
free from any claim or right on the part of the Pledgor, and the Pledgor hereby
waives (to the extent permitted by law) all rights of redemption, stay, or
appraisal that it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted.  Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten (10) calendar days notice to
Pledgor of the time and place of any public sale or the time after which a
private sale is to be made shall constitute reasonable notification.  The Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of sale having been
given.  The Secured Party may adjourn any
public or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.  To
the maximum extent permitted by law, the Pledgor hereby waives any claims
against the Secured Party arising because the price at which any Collateral may
have been sold at such a private sale was less than the price that might have
been obtained at a public sale, even if the Secured Party accepts the first
offer received and does not offer such Collateral to more than one offeree.

 

                (b)           Notwithstanding the foregoing, the Secured
Party hereby acknowledges that the total number of shares of stock that may be
sold pursuant to Section 11(a) shall not exceed, on any given trading
day, the greater of:  (i) 3% of the
aggregate trading volume during the previous five (5) trading days, including
that day; (ii) 15% of the trading volume on that day; or (iii) such number of
shares as yield proceeds (net of commissions) of $50,000.

 

                (c)           The Secured Party hereby agrees that,
upon delivery of an opinion of counsel stating that the rights of the Secured
Party will not be affected thereby, other shares of the Common Stock may at any
time be substituted for all or a portion of the Pledged Shares;

 

                (d)           The Pledgor hereby agrees that any
sale or other disposition of the Collateral conducted in conformity with
reasonable commercial practices of banks, insurance companies, or other
financial institutions in the city and state where Secured Party or the Pledgor
is located in disposing of property similar to the Collateral shall be deemed
to be commercially reasonable.

 

                (e)           The Pledgor hereby acknowledges that
the sale by the Secured Party of any Collateral pursuant to the terms hereof in
compliance with the Securities Act of 1933 as now in effect or as hereafter
amended, or any similar statute hereafter adopted with similar purpose or
effect (the “Securities Act”), as well as applicable “Blue Sky” or other
state securities laws, may require strict limitations as to the manner in which
Secured Party or any subsequent transferee of the Collateral may dispose
thereof.  The Pledgor acknowledges and
agrees that in order to protect the Secured Party’s interest it may be
necessary to sell the Collateral at a price less than the maximum price
attainable if a sale were delayed or were made in another manner, such as a
public offering under the Securities Act. 
The Pledgor has no objection to sale in such a manner and agrees that
the Secured Party shall have no obligation to obtain the maximum possible price

 

 

 

for the Collateral.  Without
limiting the generality of the foregoing, the Pledgor agrees that, upon the
occurrence and during the continuation of an Event of Default, the Secured
Party, subject to applicable law, from time to time may attempt to sell all or
any part of the Collateral by a private placement, restricting the bidders and
prospective purchasers to those who will represent and agree that they are
purchasing for investment only and not for distribution.  In so doing, the Secured Party may solicit
offers to buy the Collateral or any part thereof for cash, from a limited
number of investors reasonably believed by Secured Party to be institutional
investors or other accredited investors who might be interested in purchasing
the Collateral.  If the Secured Party
shall solicit such offers, then the acceptance by the Secured Party of one of
the offers shall be deemed to be a commercially reasonable method of
disposition of the Collateral.

 

                (f)            If the Secured Party shall determine
to exercise its right to sell all or any portion of the Collateral pursuant to
this Section 11, the Pledgor agrees that, upon request of the Secured
Party, the Pledgor will, at his own expense:

 

                                (i)            Execute and deliver, or cause the
officers and directors of the Company to execute and deliver, to any person,
entity or governmental authority as the Secured Party may choose, any and all
documents and writings which, in the Secured Party’s reasonable judgment, may
be necessary or appropriate for approval, or be required by, any regulatory
authority located in any city, county, state or country where the Pledgor or
the the Company engages in business, in order to transfer or to more
effectively transfer the Pledged Shares or otherwise enforce the Secured Party’s
rights hereunder; and

 

                                (ii)           do or cause to be done all such other
acts and things as may be necessary to make such sale of the Collateral or any
part thereof valid and binding and in compliance with applicable law; and

 

                                (iii)          Cause the Company to timely file all
periodic reports required to be filed by the Company under the Securities
Exchange Act of 1934.

 

                (g)           THE PLEDGOR EXPRESSLY WAIVES, TO THE
MAXIMUM EXTENT PERMITTED BY LAW:  (i) ANY
CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE TIME THE
SECURED PARTY DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS PROVIDED IN THIS
SECTION 11; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT IT
NOW HAS OR MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE
NOW EXISTING OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION
(a) OF THIS SECTION 11, ANY REQUIREMENT OF NOTICE, DEMAND, OR
ADVERTISEMENT FOR SALE.

 

                (h)           Anything to the contrary contained in this Agreement or
otherwise notwithstanding, if and to the extent that, on any date, the
foreclosure by a Holder on any of the Pledged Shares would result in the
Secured Party or such designee being deemed the beneficial owner of more than
9.99% of the then-outstanding shares of Common Stock or any other class of
Capital Shares (as defined below), then the Secured Party shall not have the
right, and the Pledgor shall not have the obligation, to permit the re-issuance
of any Pledged Shares in the name or at the direction of such Holder as shall
cause such Holder to be deemed the beneficial owner of more than 9.99% of the
then Outstanding (as defined below) Common Stock or any other class of Capital
Shares (as defined below).  “Outstanding”,
when used with reference to the Capital Shares, means, on any date of
determination, all issued and outstanding Capital Shares, and includes all such
shares issuable in respect of outstanding scrip or any certificates

 

 

 

representing
fractional interests in such shares; provided, however, that any
Capital Shares directly or indirectly owned or held by or for the account of
the Company or any Subsidiary (as defined below) of the Company shall not be
deemed “Outstanding” for purposes hereof. 
“Capital Shares” means the Common Stock and any other shares of any
other class or series of capital stock, whether now or hereafter authorized and
however designated, which have the right to participate in the distribution of
earnings and assets (upon dissolution, liquidation or winding-up) of the
Company.  “Subsidiary” means any entity
of which the securities or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons performing
similar functions are owned directly or indirectly by the Company.

 

                (i)            The Pledgor acknowledges that there is no adequate remedy
at law for failure by it to comply with the provisions of this Section 11
and that such failure would not be adequately compensable in damages, and
therefore agrees that its agreements contained in this Section 11 may be
specifically enforced.

 

                12.             Term of Agreement; Application of Proceeds.

 

(a) This Agreement shall continue in full force and effect until the
payment in full of the Secured Obligations. 
If the Secured Obligations are paid in full, the security interests in
the relevant Collateral shall be deemed released, and any portion of the Collateral
not transferred to or sold by any one or more Secured Parties shall be returned
to the Pledgor.  Within five (5) trading
days of the termination of this Pledge Agreement, (i) the relevant Collateral,
along with any relevant stock powers, shall be returned to the Pledgor, as
contemplated above; (ii) the Secured Party shall notify the transfer agent of
the termination of the Irrevocable Letter of Direction; and (iii) if any of the
returned Collateral has been registered in the name of the Secured Party pursuant
to the Irrevocable Letter of Instruction, such notice to the transfer agent by
the Secured Party shall instruct the transfer agent to register such Collateral
in the name of the Pledgor..

 

                                (b)
Upon the occurrence and during the continuance of an Event of Default, any cash
held by the Secured Party as Collateral and all cash Proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral pursuant to the exercise by Secured Party
of its remedies as a secured creditor as provided in Section 11 shall be
applied from time to time by the Secured Party as provided in the 2006 Note.

 

                13.           Indemnity and Expenses.    The Pledgor agrees:

 

                (a)           To indemnify and hold harmless the
Secured Party and each of its directors, officers, employees, agents and
affiliates from and against any and all claims, damages, demands, losses,
obligations, judgments and liabilities (including, without limitation,
reasonable attorneys’ fees and expenses) in any way arising out of or in
connection with this Agreement or the Secured Obligations, except to the extent
the same shall arise as a result of the gross negligence or willful misconduct
of the party seeking to be indemnified; and

 

                (b)           To pay and reimburse the Secured
Party upon demand for all reasonable costs and expenses (including, without
limitation, reasonable attorneys’ fees and expenses) that the Secured Party may
incur in connection with (i) the custody, use or preservation of, or the sale
of, collection from or other realization upon, any of the Collateral, including
the reasonable expenses of re-taking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, (ii) the
exercise or enforcement of any rights or remedies granted

 

 

 

hereunder, under the Secured Obligations or otherwise available to it
(whether at law, in equity or otherwise), or (iii) the failure by the Pledgor
to perform or observe any of the provisions hereof.  The provisions of this Section 13
shall survive the execution and delivery of this Agreement, the repayment of
any of the Secured Obligations, the termination of the commitments of Secured
Party under the Secured Obligations and the termination of this Agreement.

 

                14.           Duties of Secured Party.     The powers conferred on Secured Party
hereunder are solely to protect its interests in the Collateral and shall not
impose on it any duty to exercise such powers. 
Except as provided in Section 9-207 of the Code, the Secured Party shall
have no duty with respect to the Collateral or any responsibility for taking
any necessary steps to preserve rights against any persons with respect to any
Collateral.

 

                15.           Choice of Law and Venue;
Submission to Jurisdiction; Service of Process.

 

                (a)           THE VALIDITY OF THIS AGREEMENT, ITS
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES
HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ILLINOIS (WITHOUT REFERENCE TO THE CHOICE OF LAW PRINCIPLES
THEREOF).  THE PARTIES AGREE THAT ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN COOK COUNTY,
STATE OF ILLINOIS OR, AT THE SOLE OPTION OF THE SECURED PARTY, IN ANY OTHER
COURT IN WHICH THE SECURED PARTY SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS
AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.

 

                (b)           THE PLEDGOR HEREBY SUBMITS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION.

 

                (c)           THE PLEDGOR HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT, OR OTHER PROCESS ISSUED IN ANY ACTION OR
PROCEEDING AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT, OR OTHER PROCESS
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE PLEDGOR AT ITS
ADDRESS FOR NOTICES IN ACCORDANCE WITH THIS AGREEMENT AND THAT SERVICE SO MADE
SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE PLEDGOR’S ACTUAL RECEIPT
THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER
POSTAGE PREPAID.

 

                (d)           NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO AFFECT THE RIGHT OF THE SECURED PARTY TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY
THE SECURED PARTY OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING
OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE
FORUM OR JURISDICTION.

 

 

 

                16.           Amendments; etc.                No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Pledgor
herefrom shall in any event be effective unless the same shall be in writing
and signed by the Secured Party, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.  No failure on the part of the
Secured Party to exercise, and no delay in exercising any right under this
Agreement, the 2006 Note, the 2007 Note or otherwise with respect to any of the
Secured Obligations, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement, the 2006 Note, the 2007
Note or otherwise with respect to any of the Secured Obligations preclude any
other or further exercise thereof or the exercise of any other right.  The remedies provided for in this Agreement
or otherwise with respect to any of the Secured Obligations are cumulative and
not exclusive of any remedies provided by law.

 

                17.           Notices. Unless otherwise specifically provided herein,
all notices shall be in writing addressed to the respective party as set forth
below: and may be personally served, faxed, telecopied or sent by overnight
courier service or United States mail:

 

                                If
to the Pledgor:

 

                                Terry
Kiefer

                                2062
Azalea

                                Irving,
TX 75063

 

                                With
copies to:

 

                                Ungaretti &
Harris

                                3500 Three First
National Plaza

                                70 West Madison
Street

                                Chicago, IL  60602

                                Attention:  Michael Black, Esq.

                                Tel.:  (312)977-4400

                                Fax:  (312)977-4405

 

                                If to the
Secured Party:

 

                                John Fife

                                303 East Wacker
Drive

                                Suite
301

                                Chicago, IL
60601

 

                                With copies to:

 

                                Merrill Weber,
Esq.

                                303 East Wacker
Drive, Suite 301

                                Chicago, IL  60601

                                Tel.:  (773)406-2386

                                Fax:  (312)819-9701

 

Any notice given pursuant to this section shall be deemed to have been
given:  (a) if delivered in person, when
delivered; (b) if delivered by fax, on the date of transmission if transmitted
on a

 

 

 

Business Day before 4:00 p.m. at the place of receipt or, if not, on
the next succeeding Business Day; (c) if delivered by overnight courier, two
(2) days after delivery to such courier properly addressed; or (d) if by United
States mail, four (4) Business Days after depositing in the United States mail,
with postage prepaid and properly addressed. 
Any party hereto may change the address or fax number at which it is to
receive notices hereunder by notice to the other party in writing in the
foregoing manner.

 

                18.           Continuing Security Interest.             This Agreement shall create a
continuing security interest in the Collateral and shall: (a) remain in full
force and effect until the indefeasible payment in full of the Secured
Obligations, including the cash collateralization, expiration, or cancellation
of all Secured Obligations, and the full and final termination of any
commitment to extend any financial accommodations under the 2006 Note, the 2007
Note, this Agreement or otherwise with respect to the Secured Obligations; (b)
be binding upon the Pledgor and his successors and assigns; and (c) inure to
the benefit of the Secured Party and its successors, transferees, and
assigns.  Upon the indefeasible payment
in full of the Secured Obligations, including the cash collateralization,
expiration, or cancellation of all Secured Obligations, and the full and final
termination of any commitment to extend any financial accommodations under the 2006
Note, the 2007 Note, this Agreement or otherwise with respect to the Secured
Obligations the security interests granted herein shall automatically terminate
and all rights to the Collateral shall revert to the Pledgor.  Upon any such termination, the Secured Party,
at the Pledgor’s expense, shall execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such
termination.  Such documents shall be
prepared by the Pledgor and shall be in form and substance reasonably
satisfactory to the Secured Party.

 

                19.           Security Interest Absolute.                To the maximum extent permitted
by law, all rights of the Secured Party, all security interests hereunder, and
all obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:

 

                (a)           Any lack of validity or
enforceability of any of the Secured Obligations or any other agreement or
instrument relating thereto, including the 2006 Note, the 2007 Note or any
other thereof;

 

                (b)           Any change in the time, manner, or
place of payment of, or in any other term of, all or any of the Secured
Obligations, or any other amendment or waiver of or any consent to any
departure from the 2006 Note, the 2007 Note or any other thereof, or any other
agreement or instrument relating thereto;

 

                (c)           Any exchange, release, or
non-perfection of any other collateral, or any release or amendment or waiver
of or consent to departure from any guaranty for all or any of the Secured
Obligations; or

 

                (d)           Any other circumstances that might
otherwise constitute a defense available to, or a discharge of, the Pledgor.

 

                20.           Headings.              Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement or be given any substantive effect.

 

                21.           Severability.          In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of

 

 

 

the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

 

                22.           Counterparts; Telefacsimile
Execution.            This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same
Agreement.  Delivery of an executed
counterpart of this Agreement by telefacsimile shall be equally as effective as
delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart
of this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, or binding effect
hereof.

 

                23.           Waiver of Marshaling.        Each of the Pledgor and the Secured
Party acknowledges and agrees that in exercising any rights under or with
respect to the Collateral, the Secured Party: (a) Is under no obligation to
marshal any Collateral; (b) May, in its absolute discretion, realize upon the
Collateral in any order and in any manner it so elects; and (c) May, in its
absolute discretion, apply the proceeds of any or all of the Collateral to the
Secured Obligations in any order and in any manner it so elects.  The Pledgor and the Secured Party waive any
right to require the marshaling of any of the Collateral.

 

                24.           Waiver of Jury Trial.            THE PLEDGOR AND THE SECURED PARTY
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  THE PLEDGOR AND THE SECURED PARTY REPRESENTS
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT
OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

 

[signature page follows]

 

 

 

                IN WITNESS
WHEREOF, the Pledgor and the Secured Party have caused this Agreement to be
duly executed and delivered by themselves as of the date first written above.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Terry Kiefer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  TERRY
  KIEFER

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  John Fife

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  JOHN
  FIFE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

Schedule 1 — Pledged Shares

 

 

Pledged Shares: 17,000,000 shares of common stock of National Storm
Management, Inc.

 

Name
of Issuer: National Storm Management, Inc.

 

Jurisdiction of Organization: Nevada

 

Type
of Interest: Shares of common stock

 

Number of Shares/Units (if applicable): see above

 

Certificate Numbers: 322, 323, 324, 325, 326, 327, 328, 329, 330, 331,
332, 333, 334, 335, 336, 337, & 338

 

Date of Issuance: February 24, 2005

 

Percentage of Outstanding Interests in Issuer: approximately 55%

 

Date of certificates: July 18, 2006

 

 

 

 

Schedule 2 - Pledgor Information

 

 

For Pledgor That Is a Registered Organization

Jurisdiction of Organization:                                                                                                             

 

Type of Organization:                                                                                                                       

 

Organizational ID Number (if any):                                                                                                  

 

For Pledgor That Is An Individual: Terry Kiefer

 

Address of Principal Residence: See Notice section

 

For Pledgor That Is Neither a Registered Organization nor an Individual:

 

Type of Organization:Exhibit
10.13

 

THIRD
AMENDED AND RESTATED GUARANTY

 

 

                This THIRD AMENDED AND RESTATED GUARANTY (the “Guaranty”)
dated as of June 29, 2007 is made by Terry Kiefer, an individual residing in
the State of Texas (“Guarantor”), in favor of John Fife (“Lender”).

 

W  I  T  N  E  S
S  E  T  H

 

WHEREAS, National
Storm Management, Inc., a Nevada corporation (the “Borrower”), and the Lender
are parties to a Note, dated as of July 24th, 2006 (such note, as amended,
restated, supplemented or otherwise modified from time to time, being
hereinafter referred to as the “2006 Note”);

 

WHEREAS, pursuant
to the 2006 Note, the Guarantor is required to execute and deliver to the
Lender a guaranty guaranteeing the 2006 Note and all other obligations under
the 2006 Note and the other Guaranteed Obligations (defined below);

 

WHEREAS, since the
date of the 2006 Note, the Lender has made additional loans to the Borrower,
and has requested that the Guarantor guarantee the obligations of the Borrower
in connection with such additional loans, and the Guarantor has agreed to do so
upon the terms and subject to the conditions hereof;

 

WHEREAS, the
Guarantor executed that certain guaranty in favor of Lender dated July 24, 2006
(the “Original Guaranty”), which Original Guaranty was superseded and replaced
by that certain first amended guaranty executed by the Guarantor in favor of
the Lender dated April 11, 2007 (the “First Amended Guaranty”), which First
Amended Guaranty was superseded and replaced by that certain Second Amended and
Restated Guaranty dated May 17, 2007 (the “Second Amended Guaranty”), which
Second Amended Guaranty is superseded and replaced by this Guaranty; and

 

WHEREAS, the
Guarantor has determined that (i) it will derive substantial benefit and
advantage from the loan and other financial accommodations made available to
the Borrower under the 2006 Note and the other Guaranteed Obligations and (ii)
its execution, delivery and performance of this Guaranty directly benefit, and
are within the best interests of, the Guarantor.

 

NOW, THEREFORE, in
consideration of $1,000 receipt of which is hereby acknowledged, the premises,
the agreements herein and in order to induce the Lender to make and maintain
the loan pursuant to the 2006 Note and the 2007 Note (defined below), the
Guarantor hereby agrees with the Lender, as follows:

 

Section 1.               Definitions. Reference is
hereby made to the 2006 Note for a statement of the terms thereof.  All terms used in this Guaranty which are
defined in the 2006 Note and not otherwise defined herein shall have the same
meanings herein as set forth therein.  As
used in this Guaranty, the following terms have the following meanings (terms
defined in the singular to have the same meaning when used in the plural and
vice versa):

 

                “Borrower” has the meaning
specified in the preamble above.

 

                “Guaranty” means this Guaranty.

 

                “Guaranty Documents” means any
document or agreement evidencing, related to or delivered in connection with
any or all of the Guaranteed Obligations, including without limitation the

 

1

2006 Note and that certain Fourth Amended and Restated Original Issue Discount
Secured Note dated as of the date hereof and issued to the Lender in an
aggregate original face amount of Two Million Four Hundred Eighty One Thousand
and 00/100 Dollars ($2,481,000.00) (the “2007 Note”).

 

                “Guaranteed
Obligations” means any and all present and future liabilities and obligations
of Borrower and Guarantor to Lender incurred by Borrower and Guarantor, and
whether due or to become due, secured or unsecured, absolute or contingent,
joint or several, direct or indirect, acquired outright, conditionally or as
collateral security by Lender from another, liquidated or unliquidated, arising
by operation of law or otherwise, together with all fees and expenses incurred
in collecting any or all of the items specified in this definition or enforcing
any rights under any of the Guaranty Documents, including all fees and expenses
of Lender’s counsel and of any experts and agents which may be paid or incurred
by Lender in collecting any such items or enforcing any such rights.

 

Section 2.               Rules of Interpretation.
When used in this Guaranty: (1) “or” is not exclusive, (2) a reference to a law
includes any amendment or modification to such law, and (3) a reference to an
agreement, instrument or document includes any amendment or modification of
such agreement, instrument or document.

 

Section 3.               Guaranty. Guarantor hereby
guarantees to Lender and its successors, endorsees, transferees and assigns the
prompt and complete payment, as and when due and payable (whether at stated
maturity or by required prepayment, acceleration, demand or otherwise), of all
of the Guaranteed Obligations now existing or hereafter incurred will be paid
strictly in accordance with their terms.

 

Section 4.               Limitation of Liability.  The obligation of Guarantor under this
Guaranty shall be limited to an aggregate amount equal to the largest amount
that would not render the obligation of Guarantor under this Guaranty subject
to avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provision of any applicable state law.

 

Section 5.               Type of Guaranty. This
Guaranty is absolute and unconditional and as such is not subject to any
conditions and Guarantor is fully liable to perform all of its duties and
obligations under this Guaranty as of the date of execution of this Guaranty.
This Guaranty is a continuing guaranty and applies to all future Guaranteed
Obligations. In addition, this Guaranty shall remain in full force and effect
even if at any time there are no outstanding Guaranteed Obligations. This
Guaranty is a guaranty of payment and not of collection. The obligations and
liabilities of Guarantor under this Guaranty shall not be conditioned or
contingent upon the pursuit by Lender of any right or remedy against Borrower,
Guarantor or any other person which may be or become liable in respect of all
or any part of the Guaranteed Obligations, or against any assets securing the
payment of the Guaranteed Obligations or guarantee for such Guaranteed
Obligations or right of setoff with respect to such Guaranteed Obligations.
This Guaranty is irrevocable and as such cannot be cancelled, terminated or
revoked by Guarantor.

 

Section 6.               Reinstatement of Guaranty.
This Guaranty shall continue to be effective or shall be reinstated, as the
case may be, if at any time any payment, or any part thereof, of any of the
Guaranteed Obligations are rescinded or must otherwise be returned by Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
Borrower, Guarantor or otherwise, all as though such payment had not been made.

 

Guarantor hereby
consents that, without the necessity of any reservation of rights against
Guarantor and without notice to or further assent by Guarantor, any demand for
payment of any of the Guaranteed Obligations made by Lender may be rescinded by
Lender and any of such Guaranteed Obligations continued after such rescission.

 

Section 7.               Security Interest. To
secure the payment of the obligations of Guarantor under this Guaranty,
Guarantor has contemporaneously executed a Third Amended and Restated Stock
Pledge Agreement (the “Stock Pledge Agreement”) in favor of Lender, which Stock
Pledge Agreement grants

 

2

Lender a pledge and security interest in the Pledged Shares listed in Schedule
1 to the Stock Pledge Agreement.

 

Section 8.               Waiver of Notices.
Guarantor hereby waives any and all notices including (1) notice of or proof of
reliance by Lender upon this Guaranty or acceptance of this Guaranty, (2)
notice of the incurrence of any Guaranteed Obligations or the renewal,
extension or accrual of any such Guaranteed Obligations, (3) notice of any
actions taken by Lender, Borrower, Guarantor or any other person under any
Guaranty Document, and (4) notices of nonpayment or nonperformance, protest,
notices of protest and notices of dishonor.

 

Section 9.               Waiver of Defenses.
Guarantor hereby waives any and all defenses to the performance by Guarantor of
its duties and obligations under this Guaranty, including any defense based on
any of the following:

 

                (1)           any failure of Lender to disclose to
Guarantor any information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any party obligated to make
payment on any and all Guaranteed Obligations, whether as principal or
guarantor, now or hereafter known to Lender,

 

                (2)           any defense to the payment of any or all the Guaranteed
Obligations, including lack of validity or enforceability of any of the
Guaranteed Obligations or any Guaranty Documents,

 

                (3)           any change in the time, manner or
place of payment of, or in any other term in respect of, all or any of the
Guaranteed Obligations, or any other amendment or waiver of or consent to any
departure from any Guaranty Document,

 

                (4)           any exchange or release of, or
non-perfection of any security interest on or in any assets securing the
payment of the Guaranteed Obligations,

 

                (5)           any failure to execute any other
guaranty for all or any part of the Guaranteed Obligations, or any release or
amendment or waiver of, or consent to any departure from, any other guaranty
for any or all of the Guaranteed Obligations,

 

                (6)           any subordination of any or all of
the Guaranteed Obligations,

 

                (7)            any act or omission of Lender in connection with the
enforcement of, or the exercise of rights and remedies, including any election
of, or the order of exercising any, remedies, with respect to (a) the
Guaranteed Obligations, (b) any other guarantor of the Guaranteed Obligations,
or (c) any assets securing the payment of the Guaranteed Obligations,

 

                (8)           any manner of application of any funds received by Lender
to Guaranteed Obligations or any other obligations owed to Lender, whether from
the sale or disposition of any assets securing the Guaranteed Obligations, from
another guarantor of the Guaranteed Obligations or otherwise, and

 

                (9)           any failure to give or provide any notices, demands or
protests, including those specified under Section 8 herein, entitled “Waiver of
Notices”.

 

Section 10.             Subrogation. Guarantor may
not exercise any rights which Guarantor may acquire by way of subrogation or
contribution, whether acquired by any payment made under this Guaranty, by any
setoff or application of funds of Borrower, by Lender or otherwise, until (1)
the payment in full of the Guaranteed Obligations (after Lender no longer has
any obligation or arrangement to provide credit to Borrower, including under or
pursuant to a line of credit), and (2) the payment of all fees and expenses to
be paid by Guarantor pursuant to this Guaranty. 
If any amount shall be paid to Guarantor on

 

3

account of such subrogation or contribution rights at any time when all of the
Guaranteed Obligations and all such other expenses shall not have been paid in
full (after Lender no longer has any obligation or arrangement to provide
credit to Borrower, including under or pursuant to a line of credit), such
amount shall be held in trust for the benefit of Lender, shall be segregated
from the other funds of Guarantor and shall forthwith be paid over to Lender to
be credited and applied in whole or in part by Lender against the Guaranteed
Obligations, whether matured or unmatured, and all such other fees and expenses
in accordance with the terms of the Guaranty Documents.

 

Section 11.             Representations. At the time
of execution of this Guaranty and each time Lender provides credit as noted
above, Guarantor represents and warrants to Lender as follows:

 

                (1)           Name.  The
exact legal name of the Guarantor is the name specified in the preamble to this
Guaranty.  The Guarantor has not been
known by any other name during the five (5) years prior to the date of the
Guaranty.

 

                (2)           Location. 
The principal residence of the Guarantor is  2062 Azalea, Irving, TX 75063.

 

                (3)           No Contravention. 
The execution, delivery and performance by Guarantor of this Guaranty do
not and will not (a) violate any provision of any law, order, writ, judgment,
injunction, decree, determination, or award presently in effect applicable to
Guarantor, (b) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease, or
instrument to which Guarantor is a party or by which Guarantor or its
properties may be bound or affected, or (c) result in, or require, the creation
or imposition of any lien upon or with respect to any of the properties now
owned or hereafter acquired by Guarantor.

 

                (4)           Governmental Authority.  No authorization, approval or other action
by, and no notice to or filing with, any governmental authority is required for
the due execution, delivery and performance by Guarantor of this Guaranty.

 

                (5)           Legally Enforceable Guaranty.  This Guaranty is the legal, valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with its
terms, except to the extent that such enforcement may be limited by (a)
applicable bankruptcy, insolvency, and other similar laws affecting creditors’
rights generally, or (b) general equitable principles, regardless of whether
the issue of enforceability is considered in a proceeding in equity or at law.

 

Section 12.             Remedies.  Lender shall not, by any act, delay, omission
or otherwise, be deemed to have waived any of its rights or remedies under this
Guaranty or otherwise. A waiver by Lender of any right or remedy hereunder on
any one occasion, shall not be construed as a ban or waiver of any such right
or remedy which Lender would have had on any future occasion, nor shall Lender
be liable for exercising or failing to exercise any such right or remedy. The
rights and remedies of Lender under this Guaranty are cumulative and, as such,
are in addition to any other rights and remedies available to Lender under law
or any other agreements.

 

Section 13.             Appointment as Attorney-in-Fact.  Guarantor hereby appoints Lender as the
attorney-in-fact for Guarantor, with full authority in the place and stead of
Guarantor and in the name of Guarantor or otherwise, to exercise all rights and
remedies granted to Lender under this Guaranty and to take any action and to
execute any instrument which Lender may deem necessary or advisable to
accomplish the purposes of this Guaranty.

 

Section 14.             Indemnity and Expenses.
Guarantor hereby indemnifies Lender from and against any and all claims,
losses, damages and liabilities growing out of or resulting from this Guaranty
(including, without limitation, enforcement of this Guaranty), except claims,
losses, damages or liabilities resulting from Lender’s gross negligence and
willful misconduct.

 

4

 

Guarantor will
upon demand pay to Lender the amount of any and all expenses, including the
fees and expenses of its counsel and of any experts and agents, which Lender
may incur in connection with (1) any amendment to this Guaranty, (2) the
administration of this Guaranty, (3) the exercise or enforcement of any of the
rights of Lender under this Guaranty, or (4) the failure by Guarantor to
perform or observe any of the provisions of this Guaranty.

 

Section 15.             Amendments.  No amendment or waiver of any provision of
this Guaranty, nor consent to any departure by Guarantor from this Guaranty,
shall in any event be effective unless the same shall be in writing and signed
by Guarantor and Lender, and then such amendment or waiver shall be effective
only in the specific instance and for the specific purpose for which given.

 

Section 16.             Addresses for Notices. All
notices and other communications provided for under this Guaranty shall be in
writing and, mailed or delivered by messenger or overnight delivery service,
addressed, in the case of Guarantor at its address specified below its
signature, and in the case of Lender at the address specified below, or as to
any such party at such other address as shall be designated by such party in a
written notice to the other party complying as to delivery with the terms of this
Section.

 

 

If to Lender:

 

John Fife

303 East Wacker
Drive

Suite 301

Chicago, IL 60601

 

If to Guarantor:

 

Terry Kiefer

202 Azalea

Irving, TX 75063

 

With Copies to:

 

Ungaretti &
Harris

3500 Three First
National Plaza

70 West Madison
Street

Chicago, IL  60602

Attention:  Michael Black, Esq.

Tel.:  (312)977-4400

Fax:  (312)977-4405

 

All such notices
and other communications shall, when mailed, be effective three (3) days after
being placed in the mails, or when delivered to a messenger or overnight
delivery service, be effective one (1) day after being delivered to the
messenger or overnight delivery service, in each case, addressed as specified
above.

 

Section 17.             Assignment and Transfer of
Obligations. This Guaranty will bind the estate of Guarantor as to Guaranteed
Obligations created or incurred both before and after the death or incapacity
of Guarantor, whether or not Lender receives notice of such death or
incapacity. This Guaranty shall inure to the benefit of Lender and its
successors, transferees and assigns. Guarantor may not transfer or assign its
obligations under this Guaranty. Lender may assign or otherwise transfer all or
a portion of its rights or obligations with respect to the Guaranteed
Obligations to any other party, and such other party shall then become vested
with all the benefits in respect of such transferred Guaranteed Obligations
granted to Lender

 

5

in this Guaranty or otherwise. Guarantor agrees that Lender can provide
information regarding Guarantor to any prospective or actual successor,
transferee or assign.

 

Section 18.             Setoff. Guarantor agrees
that, in addition to, and without limiting, any right of setoff, Lender’s lien
or counterclaim Lender may otherwise have, Lender shall be entitled, at its
option, to offset balances (general or special, time or demand, provisional or
final) held by it for the account of Guarantor, at any of the offices of
Lender, in Dollars or any other currency, against any amount payable by
Guarantor to Lender under this Guaranty which is not paid when demanded
(regardless of whether such balances are then due to Guarantor), in which case
Lender shall promptly notify Guarantor, provided that Lender’s failure to give
such notice shall not affect the validity of such offset.

 

Section 19.             Submission to Jurisdiction.
Guarantor hereby irrevocably submits to the jurisdiction of any federal or
state court sitting in Cook County in the State of Illinois over any action or
proceeding arising out of or related to this Guaranty and agrees with Lender
that personal jurisdiction over Guarantor rests with such courts for purposes
of any action on or related to this Guaranty. Guarantor hereby waives personal
service by manual delivery and agrees that service of process may be made by
prepaid certified mail directed to Guarantor at the address of Guarantor for
notices under this Guaranty or at such other address as may be designated in
writing by Guarantor to Lender, and that upon mailing of such process such
service will be effective as if Guarantor was personally served. Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any manner provided by law. Guarantor further waives any objection to
venue in any such action or proceeding on the basis of inconvenient forum.
Guarantor agrees that any action on or proceeding brought against Lender shall
only be brought in such courts.

 

Section 20.             Governing Law.  This Guaranty shall be governed by and
construed in accordance with the laws of the State of Illinois without regard
to its principles of conflicts of law.

 

Section 21.             Subordination. Once a demand
for payment is made on the Guarantor under this Guaranty, Guarantor will not
(1) make any demand for payment of, or take any action to accelerate, any
obligation owed to Guarantor by Borrower, (2) seek to collect payment of, or
enforce any right or remedies against Borrower, of any of the obligations owed
to Guarantor by Borrower or any guarantees, credit supports, collateral or
other security related to or supporting any of such obligations, or (3)
commence, or join with any other creditor in commencing, any bankruptcy or
similar proceeding against Borrower. Guarantor also agrees that the payment of
all obligations of Borrower to Guarantor shall be subordinate and junior in
time and right of payment in accordance with the terms of this Section to the
prior payment in full (in cash) of the Guaranteed Obligations. In furtherance of
such subordination, (1) to the extent possible, Guarantor will not take or
receive from Borrower any payments, in cash or any other property, by setoff or
any other means, of any or all of the obligations owed to Guarantor by
Borrower, or purchase, redeem, or otherwise acquire any of such obligations, or
change the terms or provisions of any such obligations and (2) if for any
reason and under any circumstance Guarantor receives a payment on such
obligation, whether in a bankruptcy or similar proceeding or otherwise, all
such payments or distributions upon or with respect to such obligations shall
be received in trust for the benefit of Lender, shall be segregated from other
funds and property held by Guarantor and shall be forthwith paid over to Lender
in the same form as so received (with any necessary endorsement) to be applied
(in the case of cash) to, or held as collateral (in the case of securities or
other non-cash property) for, the payment or prepayment of the Guaranteed
Obligations. Guarantor agrees that any subrogation rights Guarantor may acquire
as a result of a payment under this Section may not be exercised until (1) the
payment in full of the Guaranteed Obligations (after Lender no longer has any
obligation or arrangement to provide credit to Borrower, including under or
pursuant to a line of credit), and (2) the payment of all fees and expenses to
be paid by Guarantor pursuant to this Guaranty. Notwithstanding the foregoing,
once a demand for payment is made on the Guarantor under this Guaranty,
Guarantor shall continue to receive a salary that is reasonable and customary
for the chief executive of a publicly traded company.

 

6

 

Section 22.             Miscellaneous.  This Guaranty is in addition to and not in
limitation of any other rights and remedies Lender may have by virtue of any
other instrument or agreement previously, contemporaneously or hereafter
executed by Guarantor or any other party or by law or otherwise. If any
provision of this Guaranty is contrary to applicable law, such provision shall
be deemed ineffective without invalidating the remaining provisions of this
Guaranty. Titles in this Guaranty are for convenience of reference only and
shall not affect the interpretation or construction of this Guaranty. This
Guaranty constitutes the entire agreement between Guarantor and Lender with
respect to the matters covered by this Guaranty and supercedes all written or
oral agreements with respect to such matters.

 

Section 23.             WAIVER OF JURY TRIAL. GUARANTOR
EXPRESSLY WAIVES ANY AND EVERY RIGHT TO A TRIAL BY JURY IN ANY ACTION ON OR
RELATED TO THIS GUARANTY.

 

[signature page
attached]

 

7

 

                IN WITNESS
WHEREOF, Guarantor has duly executed and delivered this Guaranty as of the date
of this Guaranty.

 

 

 

	
   

  	
  By:

  	
   

  	
  /s/
  Terry Kiefer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:
  Terry Kiefer

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}]]