Document:

Exhibit 10.33

 

MANDATORY REDEMPTION GUARANTY

 

This MANDATORY REDEMPTION
GUARANTY (this “Guaranty”) is executed as of February 27, 2015, by AMERICAN
REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, AMERICAN REALTY CAPITAL HOSPITALITY
TRUST, INC., a Maryland corporation, having an office at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022,
Nicholas S. Schorsch, an individual, William M. Kahane, an individual, Edward M. Weil, Jr., an individual, and Peter M. Budko,
an individual (each of the foregoing, a “Guarantor”,
and collectively, “Guarantors”), for the benefit of W2007 EQUITY INNS PARTNERSHIP, L.P., a Tennessee
limited partnership, and W2007 EQUITY INNS TRUST, a Maryland trust, each having an office at c/o Goldman Sachs Realty Management,
L.P., 6011 Connection Drive, Irving, Texas 75039 (collectively, and together with their respective successors and/or assigns, the
“Class A Member”).

 

WITNESSETH:

 

WHEREAS, the Class
A Member is prepared to make an investment (the “Investment”) in ARC Hospitality Portfolio II Holdco,
LLC, a Delaware limited liability company (the “Company”), in the amount of $99,799,180.00 as described
in the Amended and Restated Limited Liability Company Agreement of the Company, of even date herewith, among the Class A Member,
American Realty Capital Hospitality Portfolio Member, LP, a Delaware limited partnership (the “Class B Member”),
and William G. Popeo, as special member (as the same may be amended, modified or supplemented from time to time, the “Operating
Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms
in the Operating Agreement;

 

WHEREAS, each Guarantor
acknowledges receipt and approval of copies of the Operating Agreement and the other Transaction Documents;

 

WHEREAS, each Guarantor
acknowledges that it owns, either directly or indirectly, a beneficial interest in the Class B Member and, as a result of such
beneficial interest, will receive substantial economic and other benefits from the Class A Member making the Investment in the
Company; and

 

WHEREAS, the Class
A Member is unwilling to make the Investment or to enter into the Operating Agreement unless Guarantors agree to provide the indemnification,
representations, warranties, covenants and other matters described in this Guaranty for the benefit of the Class A Member.

 

NOW, THEREFORE, as
an inducement to the Class A Member to make the Investment, enter into the Operating Agreement and become a Member of the Company,
and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties
do hereby agree as follows:

 

    	 

    	 

    

 

ARTICLE
1 

NATURE AND SCOPE OF GUARANTY

 

Section
1.1          Guaranty of Obligation.

 

(a)          Each
Guarantor hereby irrevocably and unconditionally guarantees to the Class A Member and its successors and assigns the payment and
performance of the Guaranteed Obligations (as defined below) as and when the same shall be due and payable, whether by lapse of
time, by acceleration of maturity or otherwise. Each Guarantor hereby irrevocably and unconditionally covenants and agrees that
it is liable for the Guaranteed Obligations as a primary obligor.

 

(b)          As
used herein, the term “Guaranteed Obligations” means (i) the obligation of the Company to redeem or cause
to be redeemed the Class A Member’s Interest in full, and to pay in full the Redemption Price, upon the occurrence of a Prohibited
Transfer or upon the Class B Member ceasing to be Controlled, directly or indirectly, by ARC OP, or ARC OP ceasing to be Controlled,
directly or indirectly by the REIT, or the REIT ceasing to be Controlled, directly or indirectly, by AR Capital, LLC (excluding
any Prohibited Transfer or change in Control resulting from the foreclosure by any Senior Lender on any of the Properties or any
of the other collateral for the Senior Loans that is not consented to by the Company or any of its Subsidiaries); (ii) the obligation
of the Company to pay to the Class A Member the QCR Redemption Amount in respect of any Qualified Capital Raise upon the consummation
of such Qualified Capital Raise; and (iii) the obligation of the Company to pay to the Class A Member all of the Net Financing
Proceeds from the incurrence of any Additional Mezzanine Loan by the Company or any of its Subsidiaries upon such incurrence; provided,
however, that in no event shall the Guarantors be liable under this Agreement for an aggregate amount in excess of the sum
of (i) the Redemption Price plus (ii) all amounts due to the Class A Member pursuant to Section 1.7 hereof.

 

(c)          Notwithstanding
anything to the contrary in this Guaranty or in any of the other Transaction Documents, then Class A Member shall not be deemed
to have waived any right which the Class A Member may have under Section 506(a), 506(b), 1111(b) or any other provisions of the
Bankruptcy Code to file a claim for the full amount of the Redemption Price or to require that all collateral shall continue to
secure all of the obligations owed to the Class A Member in accordance with the Transaction Documents.

 

Section
1.2          Nature of Guaranty.
This Guaranty is an irrevocable, absolute, continuing guaranty of payment and performance and not a guaranty of collection. This
Guaranty may not be revoked by any Guarantor and shall continue to be effective with respect to any Guaranteed Obligations arising
or created after any attempted revocation by any Guarantor and after (if such Guarantor is a natural person) such Guarantor’s
death (in which event this Guaranty shall be binding upon such Guarantor’s estate and such Guarantor’s legal representatives
and heirs). The fact that at any time or from time to time the Guaranteed Obligations may be increased or reduced shall not release
or discharge the obligation of any Guarantor to the Class A Member with respect to the Guaranteed Obligations. This Guaranty may
be enforced by the Class A Member and any subsequent holder of the Class A Member’s Interest and shall not be discharged
by the assignment of all or part of such Interest.

 

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Section
1.3           Guaranteed Obligations Not Reduced by Offset.
The Guaranteed Obligations and the liabilities and obligations of Guarantors to the Class A Member hereunder shall not be reduced,
discharged or released because or by reason of any existing or future offset, claim or defense of the Class A Member, the Company,
any Subsidiary or any other party against the Class B Member or against payment of the Guaranteed Obligations, whether such offset,
claim or defense arises in connection with the Guaranteed Obligations (or the transactions creating the Guaranteed Obligations)
or otherwise.

 

Section
1.4           Payment By Guarantors.
If all or any part of the Guaranteed Obligations shall not be punctually paid when due, whether at demand, maturity, acceleration
or otherwise, Guarantors shall, immediately upon demand by the Class A Member and without presentment, protest, notice of protest,
notice of non-payment, notice of intention to accelerate the maturity, notice of acceleration of the maturity or any other notice
whatsoever, pay in lawful money of the United States of America, the amount due on the Guaranteed Obligations to the Class A Member
at the Class A Member’s address as set forth herein. Such demand(s) may be made at any time coincident with or after the
time for payment of all or part of the Guaranteed Obligations and may be made from time to time with respect to the same or different
items of Guaranteed Obligations. Such demand shall be deemed made, given and received in accordance with the notice provisions
hereof.

 

Section
1.5           No Duty To Pursue Others.
It shall not be necessary for the Class A Member (and each Guarantor hereby waives any rights which such Guarantor may have to
require the Class A Member), in order to enforce the obligations of Guarantors hereunder, first to (i) institute suit or exhaust
its remedies against the Company or others liable for the Guaranteed Obligations or any other Person, including, without limitation,
any general partner of any of the foregoing which is a partnership, (ii) declare a Changeover Event, (iii) enforce the
Class A Member’s rights against any collateral which shall ever have been given to secure the obligations owed to the Class
A Member under the Operating Agreement or the other Transaction Documents, (iv) enforce the Class A Member’s rights
against any other guarantors of the Guaranteed Obligations, including, without limitation, any general partner of any of the foregoing
which is a partnership, (v) join the Class B Member, the Company or any others liable on the Guaranteed Obligations in any
action seeking to enforce this Guaranty, (vi) exhaust any remedies available to the Class A Member under the Transaction Documents,
or (vii) resort to any other means of obtaining payment of the Guaranteed Obligations, including, to the extent California
law is deemed to apply notwithstanding the choice of law set forth herein, any of the foregoing which may be available to the Class
A Member by virtue of California Civil Code Sections 2845, 2849, and 2850. The Class A Member shall not be required to mitigate
damages or take any other action to reduce, collect or enforce the Guaranteed Obligations.

 

Section
1.6           Waivers. Each
Guarantor acknowledges receipt of copies of the Operating Agreement and the other Transaction Documents and hereby waives notice
of (i) any loans or advances (including advances of Protective Capital) made by the Class A Member to the Company, (ii) acceptance
of this Guaranty, (iii) any amendment of any Transaction Document or extension of the Mandatory Redemption Date, (iv) the
occurrence of any breach by the Class B Member or the Company under the Operating Agreement or the other Transaction Documents
or the declaration of a Changeover Event, (v) the Class A Member’s transfer or disposition of the Guaranteed Obligations,
or any part thereof, (vi) protest, proof of non-payment or default by the

 

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Class
B Member or the Company, or (vii) any other action at any time taken or omitted by the Class A Member and, generally, all
demands and notices of every kind in connection with this Guaranty, the Transaction Documents, any documents or agreements evidencing,
securing or relating to any of the Guaranteed Obligations and/or the obligations hereby guaranteed.

 

Section
1.7           Payment of Expenses.
In the event that any Guarantor shall breach or fail to timely perform any provisions of this Guaranty, Guarantors shall, immediately
upon demand by the Class A Member, pay the Class A Member all reasonable out-of-pocket costs and expenses (including court costs
and reasonable attorneys’ fees) incurred by the Class A Member in the enforcement hereof or the preservation of the Class
A Member’s rights hereunder. The covenant contained in this Section shall survive the payment and performance of the Guaranteed
Obligations.

 

Section
1.8           Effect of Bankruptcy.
In the event that pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief law or any judgment,
order or decision thereunder, the Class A Member must rescind or restore any payment or any part thereof received by the Class
A Member in satisfaction of the Guaranteed Obligations, as set forth herein, any prior release or discharge from the terms of this
Guaranty given to Guarantors by the Class A Member shall be without effect and this Guaranty shall remain (or shall be reinstated
to be) in full force and effect. It is the intention of the Guarantors that Guarantors’ obligations hereunder shall not be
discharged (other than as expressly set forth herein) except by Guarantors’ performance of such obligations and then only
to the extent of such performance.

 

Section
1.9           Waiver and Postponement of Subrogation, Reimbursement
and Contribution. Notwithstanding anything to the contrary contained in this Guaranty, each
Guarantor hereby unconditionally and irrevocably agrees to postpone the exercise of and, until the Redemption Price has been paid
in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), does hereby irrevocably waive and
defer any and all rights it may now or hereafter have under any agreement, at law or in equity (including, without limitation,
any law subrogating Guarantors’ rights to the rights of the Class A Member), to assert any claim against or seek contribution,
indemnification or any other form of reimbursement from the Company or any of its Subsidiaries or any other party liable to the
Class A Member for the payment of any or all of the Guaranteed Obligations for any payment made by Guarantors under or in connection
with this Guaranty or otherwise; provided that, for clarity, such postponement and waiver shall only be in effect until the Redemption
Price has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty).

 

ARTICLE
2 

EVENTS AND CIRCUMSTANCES NOT REDUCING

OR DISCHARGING GUARANTORS’ OBLIGATIONS

 

To the extent permitted
by applicable law, each Guarantor hereby consents and agrees to each of the following and agrees that such Guarantor’s obligations
under this Guaranty shall not be released, diminished, impaired, reduced or adversely affected by any of the following and waives
any common law, equitable, statutory or other rights (including, without limitation, rights to notice) which such Guarantor might
otherwise have as a result of or in connection with any of the following:

 

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Section
2.1           Modifications.
Any renewal, extension, increase, modification, alteration or rearrangement of all or any part of the Guaranteed Obligations, the
Operating Agreement, the Transaction Documents or any other document, instrument, contract or understanding between Class B Member,
any Guarantor or the Company and the Class A Member or any other parties pertaining to the Guaranteed Obligations or any failure
of the Class A Member to notify Guarantors of any such action.

 

Section
2.2           Adjustment.
Any adjustment, indulgence, forbearance or compromise that might be granted or given by the Class A Member to the Class B Member,
the Company or any Guarantor.

 

Section
2.3           Condition of Relevant Entities.
The insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of the
Class B Member, the Company or any of its Subsidiaries, any Guarantor or any other Person at any time liable for the payment of
all or part of the Guaranteed Obligations; or any sale, lease or transfer of any or all of the assets of the Class B Member, any
Guarantor, the Company or any of the Subsidiaries, or any changes in the direct or indirect shareholders, partners or members,
as applicable, of the Class B Member, any Guarantor or the Company or any of its Subsidiaries; or any reorganization of the Class
B Member, any Guarantor or the Company or any of its Subsidiaries.

 

Section
2.4           Invalidity of Guaranteed Obligations.
The invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations or any document or agreement executed
in connection with the Guaranteed Obligations for any reason whatsoever, including, without limitation, the fact that (i) the
Guaranteed Obligations or any part thereof exceeds the amount permitted by law, (ii) the act of creating the Guaranteed Obligations
or any part thereof is ultra vires, (iii) the officers or representatives executing the Operating Agreement or the other Transaction
Documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, (iv) the Guaranteed Obligations
violate applicable usury laws, (v) the Class B Member, any Guarantor or the Company has valid defenses, claims or offsets
(whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially uncollectible from such
Persons, (vi) the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance
of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations
or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible or unenforceable, or (vii) the Operating
Agreement or any of the other Transaction Documents have been forged or otherwise are irregular or not genuine or authentic, it
being agreed that Guarantors shall remain liable hereon regardless of whether any the Class B Member, the Company or any other
Person be found not liable on the Guaranteed Obligations or any part thereof for any reason.

 

Section
2.5           Release of Obligors.
Any full or partial release of the liability of the Class B Member or the Company for the Guaranteed Obligations or any part thereof,
or of any co-guarantors, or of any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or
jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it
being recognized, acknowledged and agreed by each Guarantor that such Guarantor may be required to pay the Guaranteed Obligations
in full

 

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without
assistance or support from any other Person, and no Guarantor has been induced to enter into this Guaranty on the basis of a contemplation,
belief, understanding or agreement that other Persons will be liable to pay or perform the Guaranteed Obligations or that the Class
A Member will look to other Persons to pay or perform the Guaranteed Obligations.

 

Section
2.6           Other Collateral.
The taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the
Guaranteed Obligations.

 

Section
2.7           Release of Collateral.
Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including, without limitation, negligent,
willful, unreasonable or unjustifiable impairment) of any collateral, property or security at any time existing in connection with,
or assuring or securing payment of, all or any part of the Guaranteed Obligations.

 

Section
2.8           Care and Diligence.
The failure of the Class A Member or any other party to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of any collateral, property or security, including, but not
limited to, any neglect, delay, omission, failure or refusal of the Class A Member (i) to take or prosecute any action for
the collection of any of the Guaranteed Obligations, or (ii) to foreclose, or initiate any action to foreclose, or, once commenced,
prosecute to completion any action to foreclose upon any security therefor, or (iii) to take or prosecute any action in connection
with any instrument or agreement evidencing or securing all or any part of the Guaranteed Obligations.

 

Section
2.9           Unenforceability.
The fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security
for the repayment of the Guaranteed Obligations, or any part thereof, shall not be properly perfected or created, or shall prove
to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by each Guarantor that
such Guarantor is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability,
collectability or value of any of the collateral for the Guaranteed Obligations.

 

Section
2.10         Offset. Any existing
or future right of offset, claim or defense of the Class B Member or the Company against the Class A Member, or any other party,
or against payment of the Guaranteed Obligations, whether such right of offset, claim or defense arises in connection with the
Guaranteed Obligations (or the transactions creating the Guaranteed Obligations) or otherwise.

 

Section
2.11         Merger. The reorganization,
merger or consolidation of the Class B Member, the Company or any of the Subsidiaries into or with any other Person.

 

Section
2.12         Preference. Any payment
by the Class B Member, the Company or any Person to the Class A Member is held to constitute a preference under the Bankruptcy
Code or for any reason the Class A Member is required to refund such payment or pay such amount to the Class B Member, the Company
or such other Person.

 

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Section
2.13         Other Actions Taken or Omitted.
Any other action taken or omitted to be taken with respect to the Transaction Documents, the Guaranteed Obligations or the security
and collateral therefor, whether or not such action or omission prejudices Guarantors or increases the likelihood that Guarantors
will be required to pay the Guaranteed Obligations pursuant to the terms hereof, it being the unambiguous and unequivocal intention
of Guarantors that such Guarantors shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence,
circumstance, event, action or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, which obligation shall be deemed satisfied only upon the full and final payment and satisfaction of the Guaranteed
Obligations.

 

ARTICLE
3 

REPRESENTATIONS AND WARRANTIES

 

To induce the Class
A Member to enter into the Transaction Documents and to invest in the Company, each Guarantor represents and warrants to the Class
A Member as follows:

 

Section
3.1           Benefit. Each
Guarantor is an Affiliate of the Class B Member, is the owner of a direct or indirect interest in the Class B Member and has received,
or will receive, direct or indirect benefit from the making of this Guaranty with respect to the Guaranteed Obligations.

 

Section
3.2           Familiarity and Reliance.
Each Guarantor is familiar with, and has independently reviewed books and records regarding, the financial condition of the Class
B Member, the Company and the Subsidiaries and is familiar with the value of any and all collateral intended to be created as security
for the payment of the Guaranteed Obligations; however, such Guarantor is not relying on such financial condition or the collateral
as an inducement to enter into this Guaranty.

 

Section
3.3           No Representation By the Class A Member.
Neither the Class A Member nor any other party has made any representation, warranty or statement to any Guarantor in order to
induce such Guarantor to execute this Guaranty.

 

Section
3.4           Each Guarantor’s Financial Condition.
As of the date hereof, and after giving effect to this Guaranty and the contingent obligation evidenced hereby, each Guarantor
(a) is and intends to remain solvent, (b) has and intends to have assets which, fairly valued, exceed its obligations,
liabilities (including contingent liabilities) and debts, and (c) has and intends to have property and assets sufficient to
satisfy and repay its obligations and liabilities, including the Guaranteed Obligations.

 

Section
3.5           Legality.
The execution, delivery and performance by each Guarantor of this Guaranty and the consummation of the transactions contemplated
hereunder do not and will not contravene or conflict with any law, statute or regulation whatsoever to which such Guarantor is
subject, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or
result in the breach of, any indenture, mortgage, charge, lien, contract, agreement or other instrument to which such Guarantor
is a party or which may be applicable to such Guarantor. This Guaranty is a legal and binding obligation of each

 

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Guarantor
and is enforceable against such Guarantor in accordance with its terms, except as limited by bankruptcy, insolvency or other laws
of general application relating to the enforcement of creditors’ rights.

 

Section
3.6           No Plan Assets.
No Guarantor sponsors, is obligated to contribute to, or is itself an “employee benefit plan,” as defined in Section
3(3) of ERISA, subject to Title I of ERISA, and none of the assets of any Guarantor constitutes or will, until the Redemption Price
has been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), constitute “plan
assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) no Guarantor is a
“governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions by or with Guarantor are not
subject to any state statute regulating investments of, or fiduciary obligations with respect to, governmental plans. As of the
date hereof, none of the Guarantors, nor any member of a “controlled group of corporations” (within the meaning of
Section 414 of the Code) maintains, sponsors or contributes to a “defined benefit plan” (within the meaning of Section
3(35) of ERISA) or a “multiemployer pension plan” (within the meaning of Section 3(37)(A) of ERISA).

 

Section
3.7           ERISA. No
Guarantor shall engage in any transaction, other than a transaction contemplated hereunder, which would cause any obligation, or
action taken or to be taken, hereunder (or the exercise by the Class A Member of any of its rights under the Operating Agreement
or the other Transaction Documents) to be a non-exempt prohibited transaction under ERISA.

 

Section
3.8           Survival.
All representations and warranties made by each Guarantor herein shall survive the execution hereof.

 

ARTICLE
4 

SUBORDINATION OF CERTAIN INDEBTEDNESS

 

Section
4.1           Subordination of All Guarantor Claims.
As used herein, the term “Guarantor Claims” shall mean all debts and
liabilities of the Class B Member, the Company or any of the Subsidiaries to any one or more of the Guarantors, whether such debts
and liabilities now exist or are hereafter incurred or arise, and whether the obligations of such Person thereon be direct, contingent,
primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced
by note, contract, open account, or otherwise, and irrespective of the Person or Persons in whose favor such debts or liabilities
may, at their inception, have been, or may hereafter be, created, or the manner in which they have been, or may hereafter be, acquired
by the applicable Guarantor or Guarantors. The Guarantor Claims shall include, without limitation, all rights and claims of any
one or both of the Guarantors against the Class B Member, the Company or any of the Subsidiaries (arising as a result of subrogation
or otherwise) as a result of payment of all or a portion of the Guaranteed Obligations by any Guarantor or the Guarantors. Until
the Redemption Price shall have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this
Guaranty), no Guarantor shall receive or collect, directly or indirectly, from e Class B Member, the Company, any of the Subsidiaries
or any other Person obligated to the Class A Member any amount upon the Guarantor Claims.

 

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Section
4.2           Claims in Bankruptcy.
In the event of any receivership, bankruptcy, reorganization, arrangement, debtor’s relief or other insolvency proceeding
involving any Guarantor as a debtor, the Class A Member shall have the right to prove its claim in any such proceeding so as to
establish its rights hereunder and receive directly from the receiver, trustee or other court custodian dividends and payments
which would otherwise be payable upon Guarantor Claims. Each Guarantor hereby assigns such dividends and payments to the Class
A Member. Should the Class A Member receive, for application against the Guaranteed Obligations, any dividend or payment which
is otherwise payable to any Guarantor and which, as between any the Class B Member or the Company and any one or both of the Guarantors,
shall constitute a credit against the Guarantor Claims, then, upon payment to the Class A Member in full of the Guaranteed Obligations,
such Guarantor shall become subrogated to the rights of the Class A Member to the extent that such payments to the Class A Member
on the Guarantor Claims have contributed toward the liquidation of the Guaranteed Obligations, and such subrogation shall be with
respect to that proportion of the Guaranteed Obligations which would have been unpaid if the Class A Member had not received dividends
or payments upon the Guarantor Claims.

 

Section
4.3           Payments Held in Trust.
Notwithstanding anything to the contrary contained in this Guaranty, in the event that any Guarantor should receive any funds,
payments, claims and/or distributions which are prohibited by this Guaranty, such Guarantor agrees to hold in trust for the Class
A Member an amount equal to the amount of all funds, payments, claims and/or distributions so received and not previously paid
to the Class A Member, and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims and/or
distributions so received except to pay such funds, payments, claims and/or distributions promptly to the Class A Member, and such
Guarantor covenants promptly to pay the same to the Class A Member.

 

Section
4.4           Liens Subordinate.
Each Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon the assets of the
Class B Member, the Company or any of the Subsidiaries securing payment of the Guarantor Claims shall be and remain inferior and
subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon such Person’s assets securing
payment of the Guaranteed Obligations, regardless of whether such encumbrances in favor of any Guarantor or the Class A Member
presently exist or are hereafter created or attach. Without the prior written consent of the Class A Member, until the Redemption
Price shall have been paid in full (subject to the terms of Section 6.14 regarding reinstatement of this Guaranty), no Guarantor
shall (i) exercise or enforce any creditor’s rights it may have against the Class B Member, the Company or any of the Subsidiaries,
or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise,
including, without limitation, the commencement of, or the joinder in, any liquidation, bankruptcy, rearrangement, debtor’s
relief or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interests, collateral rights, judgments
or other encumbrances on the assets of the Class B Member, the Company or any of the Subsidiaries held by any Guarantor. 

 

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ARTICLE
5 

COVENANTS

 

Section
5.1          Definitions.
As used in this Article 5, the following terms shall have the respective meanings set forth below:

 

(a)          “GAAP”
shall mean generally accepted accounting principles, consistently applied.

 

(b)          “IFRS”
shall mean the International Financial Reporting Standards.

 

(c)          “Liquid
Assets” shall mean any of the following, but only to the extent owned individually, free of all security interests,
liens, pledges, charges or any other encumbrance: (a) cash (excluding proceeds of the Properties that have not been distributed
by the Company), (b) certificates of deposit (with a maturity of two years or less) issued by, or savings account with, any Approved
Bank or other bank or other financial institution reasonably acceptable to the Class A Member, (c) marketable securities listed
on a national or international exchange reasonably acceptable to the Class A Member (it being understood, without limitation of
the foregoing, that the New York Stock Exchange and NASDAQ shall be deemed acceptable to the Class A Member), marked to market,
(d) U.S. Obligations or (e) aggregate availability under unencumbered, unfunded capital commitments that any Guarantor may unconditionally
draw from any of its partners.

 

(d)          “Net Worth” shall mean, as of a given date, (i) a Person’s total assets
as of such date (without regard to the Properties or any equity therein) less (ii) such Person’s total liabilities as of
such date (exclusive of any liability under the Mortgage Loan Documents), determined in accordance with GAAP or IFRS.

 

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Section
5.2          Covenants.
Until the Redemption Price and the Guaranteed Obligations have been paid in full (subject to the terms of Section 6.14 regarding
reinstatement of this Guaranty), Guarantors shall collectively and not individually maintain (x) an aggregate Net Worth of not
less than $250,000,000.00 (the “Net Worth Threshold”) and (y) aggregate
Liquid Assets of not less than $20,000,000.00 (the “Liquid Assets Threshold”).

 

Section
5.3          Release of Guarantors.
At any time prior to the declaration of a Changeover Event, Guarantors shall be entitled to request and the Class A Member agrees
to grant the release of any Guarantor from its obligations hereunder so long as, following such release, the remaining Guarantor(s)
collectively and not individually continue(s) to satisfy the Net Worth Threshold and Liquid Assets Threshold requirements set forth
in Section 5.2 hereof (for the avoidance of doubt excluding the Net Worth and Liquid Assets of the Guarantor being released).
In connection with any release of a Guarantor pursuant to this Section 5.3, the Class A Member shall execute and deliver
a release of such Guarantor from all liability in respect of the Guaranteed Obligations.

 

Section
5.4          Financial Statements. Each
Guarantor shall deliver to the Class A Member:

 

(a)          within
120 days after the end of each fiscal year of such Guarantor, a complete copy of such Guarantor’s annual financial statements
in the form delivered to such guarantor’s limited partners, together with a certificate of the general partner of such Guarantor
certifying that, to the best of the signer’s knowledge, such annual financial statements fairly present the financial condition
and results of the operations of such Guarantor;

 

(b)          within
90 days after the end of each fiscal quarter of such Guarantor, financial statements in the form delivered to such Guarantor’s
limited partners, together with a certificate of the general partner of such Guarantor certifying that, to the best of the signer’s
knowledge, such quarterly financial statements fairly present the financial condition and results of the operations of such Guarantor
in a manner consistent with GAAP (subject to year-end adjustments) or IFRS; and

 

(c)          20
days after request by the Class A Member, such other financial information with respect to such Guarantor as the Class A Member
may reasonably request.

 

(d)          No
individual Guarantor shall have any obligation to deliver financial statements under this Guaranty.

 

ARTICLE
6 

MISCELLANEOUS

 

Section
6.1          Waiver. No
failure to exercise, and no delay in exercising, on the part of the Class A Member, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any
other right. The rights of the Class A Member hereunder shall be in addition to all other rights provided by law. No modification
or waiver of any provision of this Guaranty, nor any consent to any departure therefrom, shall be effective unless in writing and
no such consent or waiver shall extend beyond the particular case and purpose involved. No notice or demand given in any

 

    	-11-

    	 

    

 

case
shall constitute a waiver of the right to take other action in the same, similar or other instances without such notice or demand.

 

Section
6.2           Notices. All
notices, demands, requests, consents, approvals or other communications (any of the foregoing, a “Notice”)
required, permitted or desired to be given hereunder shall be in writing and shall be sent by telefax (with answer back acknowledged)
or by registered or certified mail, postage prepaid, return receipt requested, or delivered by hand or by reputable overnight courier,
addressed to the party to be so notified at its address hereinafter set forth, or to such other address as such party may hereafter
specify in accordance with the provisions of this Section 6.2. Any Notice shall be deemed to have been received: (a) three
(3) days after the date such Notice is mailed, (b) on the date of sending by telefax if sent during business hours on a Business
Day (otherwise on the next Business Day), (c) on the date of delivery by hand if delivered during business hours on a Business
Day (otherwise on the next Business Day), and (d) on the next Business Day if sent by an overnight commercial courier, in
each case addressed to the parties as follows:

 

	If to the Class A	 
	Member:	c/o Goldman Sachs Realty Management, L.P.
	 	6011 Connection Drive
	 	Irving, Texas 75039
	 	Attn:  Greg Fay
	 	Facsimile No.:  (972) 368-3699
	 	Telephone No.:  (972) 368-2743
	 	 
	with copies to:	Whitehall Street Global Real Estate Limited Partnership 2007
	 	c/o Goldman, Sachs & Co.
	 	200 West Street
	 	New York, New York 10282
	 	Attn:  Chief Financial Officer
	 	Facsimile No.:  (212) 357-5505
	 	Telephone No.: (212) 902-5520
	 	 
	and:	Sullivan & Cromwell LLP
	 	125 Broad Street
	 	New York, New York 10004
	 	Attention:  Anthony J. Colletta, Esq.
	 	Facsimile No. (212) 291-9029
	 	Telephone No.:  (212) 558-4608
	 	 
	If to Guarantors:	c/o American Realty Capital
	 	405 Park Avenue
	 	New York, New York 10022
	 	Attn: Jon Mehlman
	 	Facsimile No.:  (212) 421-5799  
	 	Telephone No.: (646) 626-8857 

 

    	-12-

    	 

    

 

	with a copy to:	c/o American Realty Capital
	 	405 Park Avenue
	 	New York, New York 10022
	 	Attn: Michael Ead
	 	Facsimile No.:  (212) 421-5799
	 	Telephone No.: (646) 381-0604

 

Any party may change the address to which
any such Notice is to be delivered by furnishing ten (10) days’ written notice of such change to the other parties in accordance
with the provisions of this Section 6.2. Notices shall be deemed to have been given on the date set forth above, even if there
is an inability to actually deliver any Notice because of a changed address of which no Notice was given or there is a rejection
or refusal to accept any Notice offered for delivery. Notice for any party may be given by its respective counsel.

 

Section
6.3           Governing Law; Jurisdiction; Service of Process.
(a) THIS GUARANTY WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY EACH GUARANTOR AND ACCEPTED BY THE CLASS A MEMBER IN THE
STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
RELATED HERETO, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH GUARANTOR HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS GUARANTY AND/OR
THE OTHER TRANSACTION DOCUMENTS, AND THIS GUARANTY AND THE OTHER TRANSACTION DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

(b) ANY LEGAL SUIT,
ACTION OR PROCEEDING AGAINST THE CLASS A MEMBER OR ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY MAY AT THE CLASS A
MEMBER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND EACH GUARANTOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED
ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.

 

    	-13-

    	 

    

 

EACH GUARANTOR AGREES
THAT SERVICE OF PROCESS UPON SUCH GUARANTOR AT THE ADDRESS FOR SUCH GUARANTOR SET FORTH HEREIN AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO SUCH GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS
UPON SUCH GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. EACH GUARANTOR (I) SHALL GIVE PROMPT NOTICE
TO THE CLASS A MEMBER OF ANY CHANGE IN THE ADDRESS FOR SUCH GUARANTOR SET FORTH HEREIN, (II) MAY AT ANY TIME AND FROM TIME
TO TIME DESIGNATE AN AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON
AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE AN AUTHORIZED AGENT IF SUCH GUARANTOR CEASES TO HAVE
AN OFFICE IN NEW YORK, NEW YORK. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE CLASS A MEMBER TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR IN ANY OTHER JURISDICTION.

 

Section
6.4           Invalid Provisions.
If any provision of this Guaranty is held to be illegal, invalid, or unenforceable under present or future laws effective during
the term of this Guaranty, such provision shall be fully severable and this Guaranty shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part of this Guaranty, and the remaining provisions of this Guaranty
shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance
from this Guaranty, unless such continued effectiveness of this Guaranty, as modified, would be contrary to the basic understandings
and intentions of the parties as expressed herein.

 

Section
6.5           Amendments.
This Guaranty may be amended only by an instrument in writing executed by the party(ies) against whom such amendment is sought
to be enforced.

 

Section
6.6           Parties Bound; Assignment.
This Guaranty shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, permitted
assigns, heirs and legal representatives. Any assignee or transferee of the Class A Member shall be entitled to all the benefits
afforded to the Class A Member under this Guaranty. No Guarantor shall have the right to assign or transfer its rights or obligations
under this Guaranty without the prior written consent of the Class A Member, and any attempted assignment without such consent
shall be null and void.

 

Section
6.7           Headings.
Section headings are for convenience of reference only and shall in no way affect the interpretation of this Guaranty.

 

Section
6.8           Recitals.
The recitals and introductory paragraphs hereof are a part hereof, form a basis for this Guaranty and shall be considered prima
facie evidence of the facts and documents referred to therein.

 

    	-14-

    	 

    

 

Section
6.9           Counterparts.
To facilitate execution, this Guaranty may be executed in as many counterparts as may be convenient or required. It shall not be
necessary that the signature of, or on behalf of, each party, or that the signature of all persons required to bind any party,
appear on each counterpart. All counterparts shall collectively constitute a single instrument. It shall not be necessary in making
proof of this Guaranty to produce or account for more than a single counterpart containing the respective signatures of, or on
behalf of, each of the parties hereto. Any signature page to any counterpart may be detached from such counterpart without impairing
the legal effect of the signatures thereon and thereafter attached to another counterpart identical thereto except having attached
to it additional signature pages.

 

Section
6.10         Rights and Remedies.
If any Guarantor becomes liable for any indebtedness owing by any the Class B Member or the Company to the Class A Member, by endorsement
or otherwise, other than under this Guaranty, such liability shall not be in any manner impaired or affected hereby and the rights
of the Class A Member hereunder shall be cumulative of any and all other rights that the Class A Member may ever have against Guarantor.
The exercise by the Class A Member of any right or remedy hereunder or under any other instrument, or at law or in equity, shall
not preclude the concurrent or subsequent exercise of any other right or remedy.

 

Section
6.11         Entirety. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT
OF GUARANTORS AND THE CLASS A MEMBER WITH RESPECT TO GUARANTORS’ GUARANTY OF THE GUARANTEED OBLIGATIONS AND SUPERSEDES ANY
AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER
HEREOF. THIS GUARANTY IS INTENDED BY GUARANTORS AND THE CLASS A MEMBER AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY,
AND NO COURSE OF DEALING BETWEEN GUARANTORS AND THE CLASS A MEMBER, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES AND NO EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED
TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTORS AND THE CLASS
A MEMBER.

 

Section
6.12         Waiver of Right To Trial By Jury. EACH GUARANTOR AND THE
CLASS A MEMBER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL
BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE OPERATING AGREEMENT
OR THE OTHER TRANSACTION DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH GUARANTOR AND THE CLASS A MEMBER AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH

 

    	-15-

    	 

    

 

IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER PARTIES.

 

Section
6.13         Cooperation. Each Guarantor
acknowledges that the Class A Member and its successors and assigns may (subject to Section 9.2 of the Operating Agreement) (i) sell
this Guaranty and the other Transaction Documents and/or the Class A Member’s Interest to one or more investors, (ii) deposit
this Guaranty and the other Transaction Documents with a trust, which trust may sell certificates to investors evidencing an ownership
interest in the trust assets, or (iii) otherwise sell the Class A Member’s Interest or one or more interests therein
to investors (the transactions referred to in clauses (i) through (iii) are hereinafter each referred to as “Secondary
Market Transaction”). Each Guarantor shall
at no cost to any Guarantor, cooperate with the Class A Member in effecting any such Secondary Market Transaction and shall provide
(or cause the Class B Member, the Company and/or the Subsidiaries to provide) such information and materials as may be reasonably
requested by the Class A Member in connection with such Secondary Market Transaction.

 

Section
6.14         Reinstatement in Certain Circumstances.
If at any time any payment of the Class A Return, the Unrecovered Capital or any other amount payable by the Company or the Class
B Member under the Operating Agreement or the other Transaction Documents is rescinded or must be otherwise restored or returned
upon the insolvency, bankruptcy or reorganization of the Company or the Class B Member or otherwise, Guarantors’ obligations
hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time.

 

Section
6.15         Exculpation of Certain Persons.
Notwithstanding anything to the contrary contained in this Guaranty or any other Transaction Document, no direct or indirect shareholder,
partner, member, principal, Affiliate (other than the Class B Member and the Company), employee, officer, trustee, director, agent
or other representative of a Guarantor and/or of any of its Affiliates (each, a “Related Party”)
shall have any personal liability for, nor be joined as party to, any action with respect to payment, performance or discharge
of any covenants, obligations, or undertakings of any Guarantor under this Guaranty, and by acceptance hereof, the Class A Member
for itself and its successors and assigns irrevocably waives any and all right to sue for, seek or demand any such damages, money
judgment, deficiency judgment or personal judgment against any Related Party under or by reason of or in connection with this Guaranty;
except that any Related Party that is a party to any Transaction Document or any other separate written guaranty, indemnity or
other agreement given by such Related Party in connection with the Investment shall remain fully liable therefor and the foregoing
provisions shall not operate to limit or impair the liabilities and obligations of such Related Parties or the rights and remedies
of the Class A Member thereunder.

 

Section
6.16         Gender; Number; General Definitions.
Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, (a) words used in
this Guaranty may be used interchangeably in the singular or plural form, (b) any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, (c) the word “the Class A Member”
shall mean “the Class A Member and any subsequent holder of the Class A Member’s Interest”, (d) the word
“Properties” shall include any portion of any of the Properties and
any interest therein, and (e) the phrases “attorneys’ fees”, “legal fees” and “counsel
fees”

 

    	-16-

    	 

    

 

shall
include any and all attorneys’, paralegal and law clerk fees and disbursements, including, but not limited to, fees and disbursements
at the pre-trial, trial and appellate levels, incurred or paid by the Class A Member in protecting its interest in the Company
(including any Protective Capital advances by the Class A Member) and/or in enforcing its rights hereunder.

 

Section
6.17        Joint and Several. The
obligations of each Guarantor hereunder are joint and several.

 

Section
6.18        Certain California State Specific Provisions.

 

(a)          To
the extent California law applies, nothing herein shall be deemed to limit the right of the Class A Member to recover in accordance
with California Code of Civil Procedure Section 736 (as such Section may be amended from time to time), any costs, expenses,
liabilities or damages, including reasonable attorneys’ fees and costs, incurred by the Class A Member and arising from any
covenant, obligation, liability, representation or warranty contained in any indemnity agreement given to the Class A Member, or
any order, consent decree or settlement relating to the cleanup of Hazardous Substances (as defined in the Environmental Indemnity
Agreement) or any other “environmental provision” (as defined in such Section 736) relating to any Property or
any portion thereof.

 

(b)          To
the extent California law applies, in addition to and not in lieu of any other provisions of this Guaranty (provided, however,
that in the case of any conflict or inconsistency between the provisions of this Section 6.18(b) and the other provisions
of this Guaranty as to any subject matter described in this Section 6.18(b), such other provisions shall control), each
Guarantor represents, warrants and covenants as follows:

 

(c)          The
obligations of each Guarantor under this Guaranty shall be performed without demand by the Class A Member and shall be unconditional
irrespective of the genuineness, validity, regularity or enforceability of any of the Operating Agreement or any of the other Transaction
Documents, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety
or a guarantor. Each Guarantor hereby waives any and all benefits and defenses under California Civil Code Section 2810 and
agrees that by doing so such Guarantor shall be liable even if neither the Company nor the Class B Member had no liability at the
time of execution of the Transaction Documents, or thereafter ceases to be liable. Each Guarantor hereby waives any and all benefits
and defenses under California Civil Code Section 2809 and agrees that by doing so such Guarantor’s liability may be
larger in amount and more burdensome than that of the Company or any of its Subsidiaries. Each Guarantor hereby waives the benefit
of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty
and agrees that such Guarantor’s obligations shall not be affected by any circumstances, whether or not referred to in this
Guaranty which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Each Guarantor hereby waives
the benefits of any right of discharge under any and all statutes or other laws relating to guarantors or sureties and any other
rights of sureties and guarantors thereunder.

 

(d)          In
accordance with Section 2856 of the California Civil Code, each Guarantor hereby waives all rights and defenses arising out
of an election of remedies by the

 

    	-17-

    	 

    

 

Class A Member even though
that election of remedies, such as a nonjudicial foreclosure with respect to security for guaranteed obligations, has destroyed
or otherwise impaired such Guarantor’s rights of subrogation and reimbursement against the principal by the operation of
Section 580d of the California Code of Civil Procedure or otherwise. Each Guarantor hereby authorizes and empowers the Class A
Member to exercise, in its sole and absolute discretion, any right or remedy, or any combination thereof, which may then be available,
since it is the intent and purpose of each Guarantor that the obligations under this Guaranty shall be absolute, independent and
unconditional under any and all circumstances. Specifically, and without in any way limiting the foregoing, each Guarantor hereby
waives any rights of subrogation, indemnification, contribution or reimbursement arising under Sections 2846, 2847, 2848 and
2849 of the California Civil Code or any other right of recourse to or with respect to the Company or any of its Subsidiaries,
any general partner, member or other constituent of the Company or any of its Subsidiaries, any other person obligated to the Class
A Member with respect to the matters set forth herein, or the assets or property of any of the foregoing until the Redemption Price
has been paid in full and all obligations of the Company and its Affiliates under the Transaction Documents have been fully performed,
and there has expired the maximum possible period thereafter during which any payment made by the Company or others to the Class
A Member with respect to such obligations could be deemed a preference under the United States Bankruptcy Code. In connection with
the foregoing, subject to the foregoing limitations, each Guarantor expressly waives any and all rights of subrogation against
the Company and each of its Subsidiaries, and each Guarantor hereby waives any rights to enforce any remedy which the Class A Member
may have against the Company or any of its Subsidiaries.

 

(e)          In
addition to and without in any way limiting the foregoing, each Guarantor hereby subordinates any and all indebtedness of the Company
and each Subsidiary now or hereafter owed to any Guarantor to all the indebtedness of the Company or any Subsidiary to the Class
A Member and agrees with the Class A Member that until the Redemption Price has been paid in full and all obligations owed to the
Class A Member under the Transaction Documents have been fully performed, and there has expired the maximum possible period thereafter
during which any payment made by the Company or others to the Class A Member with respect to such obligations could be deemed a
preference under the United States Bankruptcy Code, no Guarantor shall demand or accept any payment of principal or interest from
the Company or any of its Subsidiaries or claim any offset or other reduction of any Guarantor’s obligations hereunder because
of any such indebtedness. If any amount shall nevertheless be paid to an Guarantor by the Company or any Subsidiary or another
guarantor prior to payment in full of the Redemption Price, such amount shall be held in trust for the benefit of the Class A Member
and shall forthwith be paid to the Class A Member to be credited and applied to the Unrecovered Capital. Further, no Guarantor
shall have any right of recourse against the Class A Member by reason of any action the Class A Member may take or omit to take
under the provisions of this Guaranty or under the provisions of any of the Transaction Documents. Without limiting the generality
of the foregoing, each Guarantor hereby waives, to the fullest extent permitted by law, diligence in collecting the obligations
owed to the Class A Member under the Transaction Documents, presentment, demand for payment, protest, all notices with respect
to the Operating Agreement, this Guaranty, or any other Transaction Document which may be required by statute, rule of law or otherwise
to preserve the Class A Member’s rights against such Guarantor under this Guaranty, including, but not limited to, notice

 

    	-18-

    	 

    

 

of acceptance, notice
of any amendment of the Transaction Documents, notice of the occurrence of any default, notice of intent to accelerate, notice
of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by the Company or any
of its Subsidiaries of any obligation or indebtedness.

 

(f)          Without
limiting the foregoing, but subject to the same limitations set forth above, each Guarantor waives (i) all rights of subrogation,
reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to any Guarantor
by reason of California Civil Code Sections 2787 to 2855, inclusive, including any and all rights or defenses such Guarantor may
have by reason of protection afforded to the Company or any of its Subsidiaries with respect to any of the obligations of any Guarantor
under this Guaranty by reason of a nonjudicial foreclosure or pursuant to the antideficiency or other laws of the State of California
limiting or discharging the obligations of the Company or any of its Subsidiaries. Without limiting the generality of the foregoing,
each Guarantor hereby expressly waives any and all benefits under California Code of Civil Procedure Section 726 (which Section,
if such Guarantor had not given this waiver, among other things, would otherwise require the Class A Member to exhaust all of its
security before a personal judgment could be obtained for a deficiency).

 

(g)          Likewise,
each Guarantor waives (i) any and all rights and defenses available to such Guarantor under California Civil Code Sections 2899
and 3433; and (ii) any rights or defenses such Guarantor may have with respect to its obligations as a guarantor by reason
of any election of remedies by the Class A Member. These rights and defenses include, but are not limited to, any rights or defenses
based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

 

[NO FURTHER TEXT ON THIS PAGE.]

 

    	-19-

    	 

    

 

IN WITNESS WHEREOF,
each Guarantor has executed this Guaranty as of the day and year first above written.

 

	 	GUARANTORS:
	 	 
	 	AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P.
	 	 	 	 
	 	By:	American Realty Capital Hospitality Trust, Inc., its general partner
	 	 	 	 
	 	 	By:	 
	 	 	 	Name:  Jonathan Mehlman
	 	 	 	Title: CEO and President
	 	 	 	 
	 	American Realty Capital Hospitality Trust, Inc.
	 	 	 	 
	 	By:	 
	 	 	Name:  Jonathan Mehlman
	 	 	Title: CEO and President

 

[Signatures continue on next page]

 

Signature Page to Mandatory Redemption
Guaranty – Portfolio II

 

    	 

    	 

    

 

	 	NICHOLAS S. SCHORCSH
	 	 
	 	 
	 	Name: Nicholas S. Schorsch  

 

[Signatures continue on next page]

 

Signature Page to Mandatory Redemption
Guaranty – Portfolio II

 

    	 

    	 

    

 

	 	WILLIAM M. KAHANE
	 	 
	 	 
	 	Name: William M. Kahane  

 

[Signatures continue on next page]

 

Signature Page to Mandatory Redemption
Guaranty – Portfolio II

 

    	 

    	 

    

 

	 	EDWARD M. WEIL, JR.
	 	 
	 	 
	 	Name:  Edward M. Weil, Jr.

 

[Signatures continue on next page]

 

Signature Page to Mandatory Redemption
Guaranty – Portfolio II

 

    	 

    	 

    

 

	 	PETER M. BUDKO
	 	 
	 	 
	 	Name:  Peter M. Budko

 

Signature Page to Mandatory Redemption
Guaranty – Portfolio IIperseonexh1018.htm

Exhibit 10.18

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into effective as of February 16, 2015 (the “Effective Date”), by and between Perseon Corporation, a Delaware corporation (“Perseon” or the “Company”) and Benjamin C. Beckham, an individual and resident of the state of Texas (the “Executive”). The Company and the Executive are referred to herein collectively as the “Parties” and may be referred to herein individually as a “Party”.

 

BACKGROUND

 

The Company made an offer of employment to the Executive pursuant to a written offer of employment dated January 21, 2015. The Executive accepted the offer of employment. The written offer of employment contemplated that the Parties would enter into an employment agreement, which employment agreement shall be subject to the approval of the Company’s Board of Directors.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the premises, the agreements, and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1. Term. The Executive’s employment hereunder shall continue from and after the Effective Date until terminated in accordance with the applicable provisions of this Agreement (the “Term”).

 

2. Position and Responsibilities. The Company currently employs and shall continue to employ the Executive as the Vice President of North America Sales or such other position as the Parties may agree from time to time. The Executive shall report to the President and Chief Executive Office of the Company (hereinafter, the “President”) or his designee. The Executive will devote substantially all of his skill, knowledge, and working time to the conscientious performance of such duties except for reasonable vacation time, absence for sickness or similar disability, and authorized leaves of absence. To the extent that it does not significantly interfere with the performance of the Executive's duties hereunder, it shall not be a violation of this Agreement for the Executive to (i) serve on corporate, civic, or charitable boards or committees; provided, however, that the Executive shall obtain the written permission of the President prior to rendering such service, (ii) deliver lectures or fulfill speaking engagements, or (iii) manage personal investments. The Executive represents that he is entering into this Agreement voluntarily and that, to the best of his knowledge, his employment hereunder and compliance by him with the terms and conditions of this Agreement will not conflict with or result in the breach of any agreement to which he is a party or by which he may be bound. Any fees or other compensation received by the Executive for services as a director, as a trustee, or in a similar position with another entity shall be retained by the Executive.

 

3. Place of Performance. The principal place of the Executive’s employment shall be Perseon’s principal executive offices, currently located at 2188 West 2200 South, Salt Lake City, Utah. Notwithstanding the foregoing, because of the nature of his position and the extensive travel required for that position, the Company understands and agrees that the Executive will work primarily from his home office; provided, however, that the Executive understands that he reports to Perseon’s principal executive offices and will be required to travel to the executive offices at the direction of the President or as otherwise necessary to the performance of his job duties and that he may be required to spend extended periods of time at the principal executive offices as necessary to perform his job duties.

 

4. Compensation.

 

4.1 Base Salary. The Company shall pay the Executive an annual base salary at the rate of two hundred thirty one thousand and no/100 dollars ($231,000.00) (the “Base Salary”), which Base Salary shall be paid to the Executive in periodic installments in accordance with the Company’s customary payroll practices, as modified from time to time, but no less frequently than monthly. During the Term, beginning in February 16, 2016, the Company will review the Executive's Base Salary annually and, in the discretion of the President, in consultation with the Company’s Board of Directors (hereinafter, the “Board” or “Board of Directors”), may modify such Base Salary from time to time based on the performance of the Executive, the financial condition of the Company, prevailing industry salary scales, and such other factors as the Company's President shall consider relevant; provided, that the Company may not decrease Executive’s Base Salary by more than 10%, calculated based on the Base Salary in effect just prior to any such decrease, and then only by the unanimous vote of the Board after a finding by the Board that such reduction is reasonably necessary to address either a projected or actual significant financial shortfall in the Company’s financial performance or as otherwise agreed between the Company and the Executive. Any increase or decrease in the Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement.

 

  

  

  

 

4.2 Award of Common Stock Options or Restricted Stock Units. The Executive will be awarded an option to purchase 200,000 shares of the Company’s common stock. The exercise price per share will be equal to the fair market value per share on the date the option is granted, which date will be on or near the Effective Date. The option will be subject to the terms and conditions applicable to options granted under the Company’s long term equity-based incentive compensation plan and the applicable notice of grant of stock option or agreement thereunder. Subject to the Executive’s continued employment, the options will vest in accordance with the notice of grant of stock option or agreement.

 

If the Company awards restricted stock or restricted stock units to its executive-level employees or to employees generally, then the Executive will be eligible to participate in any such plan, subject to the terms, conditions, limitations, and eligibility requirements set forth in the applicable plan documents. Nothing in this paragraph requires the Company to adopt a plan with respect to the grant of restricted stock or restricted stock units for restricted stock units.

 

4.3 Commissions. The Company will pay the Executive commissions based on the sales revenue earned by the Company in North America in accordance with a written commission plan to be developed and/or approved by the Company’s President, in his sole discretion, after consultation with the Executive, which commission plan shall be developed and/or approved by the Company’s President no later than 60 days after the Effective Date and shall apply to all sales that occur from and after the Effective Date. The terms of any North American sales commission plan may be modified by the Company from time to time, as determined by the Company’s President, in his sole discretion; provided, however, that the Company shall provide the Executive with 30-days’ advance notice of any modification to the commission plan and any such modification to the commission plan will apply only to sales that occur after the expiration of the 30-day advance notice period.

 

4.4 Employee Benefits. During the Term, the Executive shall be entitled to participate in all employee benefit plans, practices, and programs maintained by the Company for its employees, as in effect from time to time (collectively the “Employee Benefit Plans”), subject to the terms, conditions, and limitations and eligibility requirements of any applicable plan documents. The Company reserves the right to amend or terminate any Employee Benefit Plan(s) so as to eliminate, reduce, or otherwise change any benefit payable thereunder, so long as such change complies with the terms of such Employee Benefit Plan(s), and applicable law, and so long as such change similarly affects all of the Company’s executive level employees.

 

4.5 Vacation or Other Leave of Absence. During the Term, the Executive shall be entitled to such vacation, sick leave, personal time off, or other leave policy as is available under the prevailing policies of the Company, as modified from time to time.

 

4.6 Communication Equipment. During the Term, the Company shall provide the Executive with such communication equipment as the Company deems appropriate, from time to time, for the Executive’s use in performing his duties under this Agreement and shall pay the monthly service costs associated with such communication equipment or, at the Company’s option, the Company shall reimburse the Executive for monthly service costs arising from the Executive’s use of his own personal communication equipment for the performance of his duties under this Agreement, as determined by the President.

 

4.7 Business Expenses. The Executive shall be entitled to reimbursement for all reasonable and necessary out-of-pocket business, entertainment, and travel expenses incurred by the Executive in connection with the performance of the Executive’s duties hereunder in accordance with the Company’s expense reimbursement policies and procedures in effect from time to time.

 

4.8 Indemnification. To the maximum extent permitted by law, and in the manner required by the laws of the State of Utah, the Company shall indemnify the Executive against any and all applicable claims, judgments, fines, amounts paid in settlement, and other costs actually and reasonably incurred in any Action, as defined in Section 4.8(a) below, giving rise to the Executive’s claim for indemnification; provided, however, that nothing contained herein shall require the Company to indemnify the Executive from and against Actions initiated by the Executive or the Company related to any contest or dispute between the Executive and the Company with respect to this Agreement or the Executive’s employment hereunder or arising from the Executive’s willful misconduct or gross negligence or the Executive’s violation of the Company’s policies against unlawful harassment and discrimination, as modified from time to time.

 

  

  

  

 

(a) For purposes of this Section 4, “Action” means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative.

 

(b) The Company may not indemnify the Executive under this Section 4 unless a determination has been made in the specific case that indemnification of the Executive is permissible under the circumstances and under the law of the State of Utah. Such determination shall be made (a) by the President, (b) by the majority vote of the Board, or 

(c) by special legal counsel selected by the President.

 

(c) Expenses, including attorney’s fees, or some part of such expenses, incurred by the Executive in defending any Action shall be paid by the Company in advance of the final disposition of such Action upon the receipt of written undertaking by or on behalf of the Executive to repay the amount advanced if it ultimately is determined that the Executive is not entitled to be indemnified by the Company as authorized under applicable law or the provisions of this Section 4.

 

(d) By action of the President or by majority vote of the Board, notwithstanding any interest of the Company or any individual member of the Board in such Action, the Company may purchase and maintain insurance in such amounts as the President or the majority vote of the Board may deem appropriate on behalf of the Executive against any liability asserted against the Executive and incurred by the Executive, whether or not the Company would have the power to indemnify the Executive against such liability under applicable provisions of law.

 

(e) The Company shall have the right to impose, as conditions to any indemnification provided by the Company, such reasonable requirements and conditions as may appear appropriate to the President of the Company in each specific case and circumstance, including but not limited to any one or more of the following: (a) that any counsel representing the Executive in connection with the defense or settlement of any Action shall be counsel mutually agreeable to the Executive and the Company, (b) that the Company shall have the right, at the Company’s option, to assume and control the defense or settlement of any Action made, initiated, or threatened against the Executive, and (c) that the Company shall be subrogated, to the extent of any payments made by way of indemnification, to all of the Executive’s right of recovery and that the Executive shall execute all writings and do everything necessary to assure such rights of subrogation to the Company.

 

4.9 Claw Back Provisions. Notwithstanding any other provision in this Agreement to the contrary, any incentive-based compensation, or any other compensation other than the Base Salary, paid to the Executive pursuant to this Agreement or any other Agreement or arrangement with the Company which is subject to recovery under any law, government regulation, or stock exchange listing requirement will be subject to such deductions and claw back as may be required to be made pursuant to such law, government regulation, or stock exchange listing requirement (or any policy adopted by the Company as required pursuant to such law, government regulation, or stock exchange listing requirement).

 

5. Termination and Termination Payments and Rights.

 

5.1 Termination Upon Death. If the Executive dies during the Term of his employment with the Company, this Agreement shall terminate as of the date of his death. On termination upon the Executive’s death, the Executive’s estate shall be entitled to be paid that portion of the Executive’s Base Salary that would otherwise have been payable to the Executive through and including the final day of the month in which the Executive’s death occurs, together with all benefits due to the Executive under the Employee Benefit Plans through and including such date to the extent allowed by law and the terms, conditions, and limitations of the applicable plan documents.

 

5.2 Termination By the Company for Cause. The Company may, at any time, by written notice to the Executive terminate the Executive’s employment under this Agreement immediately for Cause, as defined below, and the Executive shall have no right to receive any compensation or benefit hereunder on or after the date of such notice.

 

For purposes of this Agreement, "Cause" means (i) a violation of the Employer’s illegal drug policy and/or a material violation of the Employer’s alcohol abuse policy; (ii) a material violation of the Employer’s policy against unlawful harassment or discrimination; (iii) the Executive’s material breach of this Agreement, including without limitation a material failure to perform or an habitual neglect of his job duties, as set forth in this Agreement, to the satisfaction of the Company or a material failure to follow the Company’s material policies and procedures; (iv) insubordination or other willful refusal to comply with any lawful request of the Company, including without limitation failure to cooperate in any investigation conducted and/or undertaken by the Company that has reasonable and legitimate objectives; (v) violation of any confidentiality, non-competition, non-solicitation, employee invention, or similar agreement that the Company may require the Executive to sign as a condition of his employment or continued employment with the Company except as required in performing the Executive’s job duties and responsibilities; (vi) material breach of fiduciary duty; (vii) conduct that reasonably could discredit the goodwill, good name, or reputation of the Employer; (viii) fraud, misappropriation of any money, assets, or other property of the Employer, or other act of material dishonesty; (ix) material misfeasance, malfeasance, or nonfeasance in the performance of the Executive’s duties for the Employer; or (x) the Executive is convicted of a felony or other serious crime or is convicted of a misdemeanor involving moral turpitude or a crime of dishonesty by any governmental authority or the Executive is charged with a felony and pleads guilty or nolo contendre to a reduced charge.

 

  

  

  

 

Prior to the Company’s termination of the Executive’s employment pursuant to any of the provisions of Section 5.2(i) (as it relates to alcohol only), (iii), (iv), (vii), or (ix) (hereinafter, the “Prior Notice Cause/s”), the Company shall give the Executive written notice of the “Cause” event and shall give the Executive thirty (30) days, or such greater period of time as determined reasonable by the Company, in its sole business judgment, in which to cure the breach or event giving the Company the right to terminate this Agreement or to provide information and documentation, in writing, which, in the reasonable business judgment of the Company, demonstrates that the Executive has not engaged in conduct that constitutes Cause under the Prior Notice Cause/s (the “Cure Period”). If the Executive shall correct or cure the event giving rise to the Company’s right to terminate for Cause under the provisions of the Prior Notice Cause/s within such Cure Period, then this Agreement shall not be terminated as a result of such event. The Company shall only be obligated to give the Executive one right to cure period for any similar type or kind of conduct that gives rise to a right to cure under any of the Prior Notice Cause/s during the Term of this Agreement. If a second event of a similar type or kind of conduct shall occur during the Term that gives the Company a right to terminate for cause under any Prior Notice Cause/s, the Company may immediately terminate the Executive without any additional notice or right to cure. The Company is not obligated to give any advance notice or right to cure period for any termination under the provisions of Section 5.2(i) (as it relates to violation of the Employer’s illegal drug policy), (ii), (v), (vi), (viii), or (x).

 

5.3 Termination Without Cause.

 

(a) The Company may terminate the Executive’s employment under this Agreement without Cause by giving thirty (30) days written notice to the Executive. In such event, and subject to the Executive’s signing, without revocation, of a separation agreement and release of all claims in a form acceptable to the Company (the “Release”), the Executive shall have the right to receive an amount equal to his Base Salary for a period of six (6) months (such amount, the “Separation Payment”), payable in accordance with the terms of the Release, in addition to all portions of the Executive’s Base Salary due as of the effective date of such termination of employment.

 

(b) If the Executive properly elects continuation coverage under the Company’s group medical insurance plan pursuant to Sections 601 through 607 of the Employee Retirement Income Security Act of 1974, as amended (“COBRA”), the Company will pay that portion of the premium which the Company paid on behalf of the Executive and his enrolled family members immediately prior to the termination of Executive’s employment through the earlier of (a) six (6) months from the Executive’s termination date; (b) the date Executive first becomes eligible for coverage under any group health plan maintained by another employer of Executive or his spouse, if any; or (c) the date such COBRA continuation coverage otherwise terminates as to Executive under the provisions of the Company’s group medical insurance plan (the “COBRA Period”); provided that such Company-subsidized COBRA continuation coverage does not violate federal non-discrimination laws or rules applicable to the Company’s group health plans in a manner that adversely affects the Company. Nothing herein shall be deemed to extend the otherwise applicable maximum period in which COBRA continuation coverage is provided or supersede the plan provisions relating to early termination of such COBRA continuation coverage. The Executive agrees that he is responsible to pay that portion of the premium for such coverage as the Executive would be required to pay had he remained an active employee of the Company during such COBRA Period.

 

5.4 Termination by the Executive With Good Reason.

 

(a) The Executive may at any time and upon thirty (30) days written notice to the Company with Good Reason terminate his employment under this Agreement, in which case the Executive will have the right to receive the Separation Payment, subject to his execution and delivery to the Company of the Release and payable in accordance with the terms of the Release; provided, however, that such notice must be given within ninety (90) days of the date of the occurrence of an event or circumstance giving rise to Good Reason.

 

  

  

  

 

(b) For purposes of this Agreement “Good Reason” shall mean one of the reasons set forth below which remains uncured for a period of fifteen (15) days following receipt of notice thereof from the Executive to the Company:

 

(i) A demotion by the Company or its successor from the Executive’s position as VP of North America Sales or a material diminution in the Executive’s job duties and responsibilities;

 

(ii) A reduction by the Company or its successor of the Executive’s Base Salary except as allowed under Section 4.1 of this Agreement;

 

(iii) The Company’s requirement, without his consent, that the Employee primarily perform the duties of his employment at the Company’s principal executive offices, which currently are located at 2188 West 2200 South, Salt Lake City, Utah.

 

5.5 Termination by the Employee Without Good Reason. The Executive may terminate his employment under this Agreement without Good Reason upon thirty (30) days prior written notice to the Company, and upon the effective date of such termination the Executive will be entitled to receive only that portion of his Base Salary which is due and owing upon such effective date of termination.

 

5.6 Termination by the Executive Following a Change of Control.

 

(a) If a "Change Control" (as herein defined) occurs during the Term, and if during the six (6) month period immediately following the effective date of such Change in Control (i) the Company terminates the employment of the Executive hereunder without Cause or (ii) the Executive terminates his employment hereunder with Good Reason, then, in addition to the Separation Payment, all options or other equity-based incentive awards granted to the Executive by the Company shall immediately vest and become fully exercisable on the effective date of such termination, notwithstanding any provision of this Agreement or of any Employee Benefit Plans pursuant to which such options or awards were granted.

 

(b) For purposes of this Agreement, the term "Change in Control" shall mean the occurrence of any of the following:

 

(i) One person (or more than one person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such person or group prior to such acquisition, constitutes more than fifty-percent (50%) of the total voting power of all of the issued and outstanding stock of the Company; or

 

(ii) A majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by 2/3 of the members of the Board as constituted before the date of such appointment or election; or

 

(iii) The sale of all or substantially of the Company's assets.

 

5.7 Mitigation. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and any amounts payable to the Executive pursuant to this Section 5 shall not be reduced by any compensation earned by the Executive on account of employment with another employer following the termination of his employment hereunder.

 

6. Section 280G.

 

(a) If any of the payments or benefits received or to be received by the Executive (including, without limitation, any payment or benefits received in connection with a Change in Control or the termination of the Executive’s employment, whether pursuant to the terms of this Agreement or any other plan, arrangement, or agreement or otherwise) (all such payments collectively referred to herein as the "280G Payments") constitute "excess parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") and will be non-deductible under Section 280G of the Code, the amounts otherwise payable to the Executive in connection with the termination of his employment shall be reduced to the maximum amount of such payments that can be made without resulting in any “excess parachute payments” under Code Section 280G.

 

  

  

  

 

(b) All calculations and determinations under this Section 6 shall be made by an independent accounting firm or independent tax counsel appointed by the Company (the "Tax Counsel") whose determination shall be conclusive and binding on the Company and the Executive for all purposes. For purposes of making the calculations and determinations required by this Section 6(b), the Tax Counsel may rely on reasonable, good faith assumptions and approximations concerning the applicability of Section 280G of the Code. The Company and the Executive shall furnish the Tax Counsel with such information and documents as the Tax Counsel may reasonably request in order to make its determinations under this Section 6(b). The Company shall bear all costs of the Tax Counsel reasonably incurred in connection with the performance of its duties under this Section 6(b).

 

7. No Deferrals; Code Section 409A.

 

(a) It is intended that the provisions of the Agreement comply with Section 409A of the Code and the regulations promulgated thereunder (“Section 409A”), and all provisions of this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.

 

(b) Neither Executive nor any of his creditors or beneficiaries shall have the right to subject any deferred compensation (within the meaning of Section 409A) payable under this Agreement or under any other plan, policy, arrangement, or agreement of or with the Company or any of its affiliates (the Agreement and such other plans, policies, arrangements, and agreements, the “Company Plans”) to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment. Except as permitted under Section 409A, any deferred compensation (within the meaning of Section 409A) payable to Executive or for Executive’s benefit under any Company Plan may not be reduced by, or offset against, any amount owing by Executive to the Company or any of its affiliates.

 

(c) If, at the time of Executive’s separation from service (within the meaning of Section 409A), (i) Executive is a “specified employee” (within the meaning of Section 409A and using the identification methodology selected by the Company from time to time) and (ii) the Company shall make a good faith determination that an amount payable under the Company Plans constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then the Company shall not pay such amount on the otherwise scheduled payment date, but shall instead accumulate such amount and pay it, without interest, on the first business day after such six-month period. To the extent required by Section 409A, any payment or benefit that would be considered deferred compensation subject to, and not exempt from, Section 409A, payable or provided upon a termination of Executive’s employment, shall only be paid or provided to Executive upon his separation from service (within the meaning of Section 409A).

 

(d) For purposes of Section 409A, each payment under the Agreement will be deemed to be a separate payment as permitted under Treasury Regulation Section 1.409A-2(b)(2)(iii).

 

(e) Except as specifically permitted by Section 409A or as otherwise specifically set forth in the Agreement, the benefits and reimbursements provided to Executive under the Agreement and any Company Plan during any calendar year shall not affect the benefits and reimbursements to be provided to Executive under the relevant section of the Agreement or any Company Plan in any other calendar year, and the right to such benefits and reimbursements cannot be liquidated or exchanged for any other benefit and shall be provided in accordance with Treas. Reg. Section 1.409A-3(i)(1)(iv) or any successor thereto. Further, in the case of reimbursement payments, reimbursement payments shall be made to Executive as soon as practicable following the date that the applicable expense is incurred, but in no event later than the last day of the calendar year following the calendar year in which the underlying expense is incurred.

 

(f) The Company makes no representations concerning the tax consequences of Executive’s participation in this Agreement under Section 409A of the Code or any other federal, state or local tax law. Executive’s tax consequences shall depend, in part, upon the application of relevant tax law, including Section 409A, to the relevant facts and circumstances.

 

(g) Notwithstanding any provision in this Agreement to the contrary, if the 28-day or 52-day period for making and not revoking the Release described in Sections 5.3 and 5.4 of this Agreement ends in a calendar year commencing after the Executive’s effective date of termination, no separation benefit payable under Section 5.3 or 5.4 shall be payable earlier than the first day of the calendar year following such effective date of termination.

 

8. Taxation of Payments. All payments to be made to the Executive hereunder will be subject to all applicable required withholding of federal, state, local, and foreign taxes, including income and employment taxes. Notwithstanding any provision of this Agreement to the contrary, in no event shall the Company nor its directors, officers, agents, or employees be liable to the Executive or to any taxing authority or agency on account of the Company’s failure to withhold any tax of any kind that may be owed to any federal, state, or local government agency arising from or relating to any compensation paid by the Company to the Executive under this Agreement; provided, however, that the Company shall be liable for the employer’s portion of any payroll withholding taxes related to any compensation paid by the Company to the Executive under this Agreement.

 

  

  

  

 

9. Conflict of Interest. The Executive will not become involved in a situation which reasonably might create or appear to create a conflict of interest, including but not limited to being connected directly or indirectly with any business (as owner, officer, director, manager, participant, licensee, consultant, shareholder, or the recipient of wages) which is involved with any aspect of Executive’s duties hereunder or which is in direct or indirect competition with the Company. The Executive will report immediately any circumstances or situations arising in the future that might involve the Executive or appear to involve the Executive in a conflict of interest, including without limitation the reporting of gifts, entertainment, or any other personal favors given to or received from anyone with whom the Company has or is likely to have any business dealings which go beyond common courtesies usually associated with accepted business practices. The Executive shall fully comply with any code of conduct and/or code of ethics that the Company may adopt from time to time.

 

10. Additional Agreements. As a condition of his employment or continued employment with the Company, the Executive will sign such confidentiality, non-competition, non-solicitation, employee invention, or similar agreement that the Company may, from time to time, require be signed by its executive-level employees generally.

 

11. Miscellaneous.

 

(a) Company Policies. Executive shall comply with the Company’s lawful policies and rules as they may be in effect from time to time.

 

(b) Notices. Any notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally, or sent by certified, registered, or express mail, postage prepaid, to the Parties at the following addresses, or at such other addresses as shall be specified by the Parties by like notice, and shall be deemed given when so delivered personally or, if mailed, two days after the date of mailing, as follows:

 

If to Company to:

 

Perseon Corporation

2188 West 2200 South

Salt Lake City, Utah 84119

Attn: President and CEO

 

If to the Executive:

 

(c) Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior contracts and other agreements, written or oral, with respect thereto.

 

(d) Waivers and Amendments. This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance.

 

(e) Governing Law. This Agreement shall be governed by, and construed in accordance with and subject to, the laws of the State of Utah without regard to its conflicts of laws principles.

 

(f) Consent to Jurisdiction. The Parties irrevocably submit to the exclusive jurisdiction of any state or federal court in Salt Lake City, Utah, in any action, suit, or proceeding brought by or against such Party in connection with, arising from, or relating to this Agreement, and each Party hereby waives and further agrees not to assert as a defense in any such suit, action, or proceeding any claim that such Party is not personally subject to the jurisdiction of any such courts, that the venue of the suit, action or proceeding is brought in an inconvenient forum, or that this Agreement or the subject matter hereof may not be enforced in or by such courts.

 

  

  

  

 

(g) Assignment. This Agreement, and the Executive’s rights and obligations hereunder, may not be assigned by the Executive. The Company may assign this Agreement and its rights, together with its obligations, hereunder only in connection with any sale, transfer, or other disposition of all or substantially all of its assets or business, whether by merger, consolidation or otherwise. This Agreement will be binding upon the Company’s successors and assigns which shall be required to perform this Agreement in the same manner and to the same extent that Company would be required to perform if no sale, transfer, or other disposition of all or substantially all of its assets or business, whether by merger, consolidation or otherwise, had occurred. This Agreement shall inure to the benefit of and be binding upon the Parties hereto and any successors and permitted assigns.

 

(h) Counterparts; Execution. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by facsimile or e-mail is legal, valid, and binding execution and delivery for all purposes.

(i) Headings. The headings in this Agreement are for reference purposes only and shall in no way affect the meaning or interpretation of this Agreement.

 

(j) Survival. Sections 4.8, 4.9, 5, 6, 7, 8, 11, and any other provision of this Agreement which by its terms is intended to survive the termination of this Agreement, and Executive’s rights to the Separation Payment hereunder, shall survive termination of this Agreement.

 

(k) Severability. To the extent any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect.

 

(l) Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to either Party upon any breach or default of the other party hereto shall impair any such right, power, or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of a breach or default be deemed to be a waiver of any other breach or default.

 

(m) Expenses Incurred in Enforcing Rights. If any action at law or in equity or any arbitration proceeding is brought to enforce or interpret the terms of this Agreement, each Party shall bear its own attorney’s fees and costs, including expert fees, incurred therein, whether incurred before or after judgment or arbitration award.

 

IN WITNESS WHEREOF, the Parties have executed this Employment Agreement as of the Effective Date, as herein first written.

 

The Company:

 

PERSEON CORPORATION

By: /s/ Clinton E. Carnell, Jr. 

Its: Chief Executive Officer 

The Executive:

/s/ Benjamin C. Beckham 

Benjamin C. Beckham

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