Document:

EXHIBIT 10.1

SUBSCRIPTION AGREEMENT

August 4, 2006

Wave Systems Corp.

480 Pleasant
Street

Lee, MA 01238

The undersigned (the “Investor”) hereby
confirms its agreement with you as follows:

1.             This
Subscription Agreement (this “Agreement”) is made as of the date set
forth below between Wave Systems Corp., a Delaware corporation (the “Company”),
and the Investor.

2.             The
Company has authorized the sale and issuance to certain investors of up to                   
shares of Class A Common Stock (the “Total Shares”), par value $0.01 per
share (the “Common Stock”), subject to adjustment by the Company’s Board
of Directors, for a purchase price of $2.05 per share (the “Purchase
Price”).

3.             The
offering and sale of the Total Shares (the “Offering”) are being made
pursuant to the Company’s registration statement including a base prospectus
(the “U.S. Base Prospectus”) on Form S-3 (Registration No. 333-130409)
filed with the United States Securities and Exchange Commission (the “Commission”)
(which, together with all amendments or supplements thereto is referred to
herein as the “Registration
Statement”) and a Prospectus Supplement containing certain
supplemental information regarding the Total Shares and terms of the Offering
that will be filed with the Commission (the “Prospectus Supplement”).

4.             The
Company and the Investor agree that the Investor will purchase from the Company
and the Company will issue and sell to the Investor that portion of the Total
Shares set forth below (the “Shares”) for the aggregate purchase price
set forth below.  The Shares shall be
purchased pursuant to the Terms and Conditions for Purchase of Shares attached
hereto as Annex I and incorporated herein by this reference as if fully
set forth herein.

5.               The transaction will to settle via DVP (as
defined below) UNLESS you have a
cash account with Security Research Associates, Inc. (“SRA”) with
sufficient cash to fund the Purchase Price and you elect to settle through such
account by initialing on the following line:

            
(Initial Here For  Settlement through
account with SRA).

“DVP” means delivery
versus payment  through DTC (i.e., the
Company shall deliver Shares registered in the Investor’s name and address as
set forth below and released by American Stock Transfer

 

 

Corporation, the Company’s
transfer agent (the “Transfer Agent”) to the Investor at the Closing
directly to the account(s) at Security Research Associates, Inc. through DTC
and simultaneously therewith payment shall be made from such account(s) by
Security Research Associates, Inc. to the Company).

If you do not have an
existing account at Security Research Associates for settlement by DVP, we will
need the following information to be faxed to us along with your signature page
to this agreement. Please fax your clearing information to Security Research
Associates at 415-925-0264 to establish an account with our clearing broker
Wedbush Morgan Securities. Below is what we will need to open your
account.  A “New Account form” is
attached in Annex B for your convenience:

·                  The exact registration name of the account

·                  Tax ID or Social Security number of
registered holder

·                  Investor’s Clearing firm Prime Broker &
contact information (contact name, phone number, email address)

·                  Internal Account number at Prime Broker

·                  Institutional & Agent ID

6.             The
Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years
with the Company or any of its affiliates and (b) it has no direct or indirect
affiliation or association with any NASD member.  Exceptions:

(If no exceptions, write “none.”
If left blank, response will be deemed to be “none.”)

7.             The
Investor represents that, prior to or in connection with the receipt of this
Agreement, it has received the final U.S. Base Prospectus, dated January 13,
2006, which is a part of the Company’s Registration Statement, and has received
the Prospectus Supplement.  THIS AGREEMENT SHALL NOT CONSTITUTE A BINDING
COMMITMENT ON THE PART OF THE COMPANY UNTIL (A) THE COMPANY HAS TIMELY RECEIVED
AN EXECUTED COPY OF THE COMPLETED SUBSCRIPTION AGREEMENT FROM THE INVESTOR AND
(B) THE COMPANY HAS DELIVERED TO THE INVESTOR AN EXECUTED COUNTERPART SIGNATURE
PAGE HERETO.  THE INVESTOR ACKNOWLEDGES
THAT, AT ANY TIME PRIOR TO THE DELIVERY OF ITS EXECUTED COUNTERPART SIGNATURE
PAGE, THE COMPANY MAY ELECT TO NOT ENTER INTO THIS SUBSCRIPTION AGREEMENT FOR
ANY REASON.

 

 2

 

SIGNATURE PAGE

Number of Shares:

Purchase Price Per Share:
$2.05

Aggregate Purchase Price:
$

Please confirm
that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose.

	
   

  	
  Dated as of: August 4, 2006

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INVESTOR

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Phone #:

  	
   

  
	
   

  	
  Email:

  	
   

  
								

 

Agreed and
Accepted

August 4, 2006:

WAVE SYSTEMS CORP.

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

[Signature — Subscription Agreement]

 

 

EXHIBIT A

WAVE
SYSTEMS CORP.

INVESTOR QUESTIONNAIRE

Pursuant
to Section 3 of Annex I to this Agreement, please provide us with
the following information:

 

	
  1.

  	
  The exact name
  that your Shares are to be registered in. You may use a nominee name if
  appropriate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  The relationship
  between the Investor and the registered holder listed in response to item 1
  above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  The mailing
  address of the registered holder listed in response to item 1 above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  The Social
  Security Number or Tax Identification Number of the registered holder listed
  in response to item 1 above:

  	
   

  	
   

  

 

 

EXHIBIT
B

Institutional
DVP/RVP New Account Form.

If settling via DVP, and
the Investor does not have an existing account with Security Research
Associates, Inc., please fill out the below New Account Form and fax back to
SRA with your signature page to the Subscription Agreement.

Please Fax to SRA at: 
415-925-0264

Send “Attention Devon Wygaerts”

(Devon can be reached at
415-925-0346 or Devon@sracap.com)

	
  ACCOUNT #

  	
   

  	
  REP #

  	
   

  	
  TAX ID#

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

DVP
INSTRUCTIONS:

	
  DTC #

  	
   

  	
  INSTITUTION #

  	
   

  	
  AGENT BANK #

  	
   

  	
  INTERNAL A/C #

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

SHORT NAME: 

ORIGINAL CONFIRMATION:  

 

DUPLICATE
INSTRUCTIONS: 

INSTITUTION
OR I/P #  

TRIPLICATE
INSTRUCTIONS:  

SENT BY:                                                                 
DATE:                                                       

CONTACT
INFORMATION:

Name (Printed):                                                   

Telephone #:                                                    Email Address:                                                       

 2
 

 

ANNEX I

 

TERMS AND CONDITIONS FOR
PURCHASE OF SHARES

All capitalized terms not otherwise
defined in this Annex I shall have the meanings ascribed thereto in the
Subscription Agreement to which this Annex I is attached.

1.             Authorization
and Sale of the Shares. 
Subject to the terms and conditions of this Agreement, the Company has
authorized the sale of the Shares.

2.             Agreement
to Sell and Purchase the Shares; Placement Agents.

2.1.         At the Closing (as defined in Section 3.1),
the Company will sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions set forth herein, the number of Shares
set forth on the last page of this Agreement to which these Terms and
Conditions for Purchase of Shares are attached as Annex I (the “Signature
Page”) for the aggregate purchase price therefor set forth on the Signature
Page.

2.2.         The Company proposes to enter into
substantially this same form of Subscription Agreement with certain other
investors (the “Other Investors”) and expects to complete sales of some
or all of the remaining Total Shares to them as part of the Offering.  The Investor and the Other Investors are
hereinafter sometimes collectively referred to as the “Investors”.  The Company may complete sales of the
remaining Total Shares in this Offering to certain of the Other Investors
without requiring such Other Investors to enter into a Subscription Agreement;
such sales shall nevertheless be on the same price terms as the price terms for
all of the other sales in the Offering.

2.3.         The Investor acknowledges that the Company
intends to pay Security Research Associates, Inc. (the “Placement Agent”)
a fee (the “Placement Fee”) in respect of the sale of Shares to the
Investor pursuant to a Placement Agency Agreement (the “Placement Agreement”)
with the Placement Agent.  A copy
of the Placement Agreement is available to the Investor upon request.

3.             Closings
and Delivery of the Shares and Funds.

3.1.         Closing.  The completion of the purchase and sale of
the Shares (the “Closing”) will occur on or before August 9, 2006 (the “Closing
Date”).  At the Closing and in
accordance with paragraph 5 of the Subscription Agreement: (a) the Company will
cause the Transfer Agent to deliver to the Investor the number of Shares set
forth on the Signature Page registered in the name of the Investor or, if so
indicated on the Investor Questionnaire attached to the Subscription Agreement
as Exhibit A, in the name of a nominee designated by the Investor; and
(b) the aggregate purchase price for the Shares being purchased by the Investor
will be paid by or on behalf of the Investor to the Company in the manner set
forth in Section 3.3 below.

3.2.         (a)           Conditions to the
Company’s Obligations.  The Company’s obligation to issue
the Shares to the Investor will be subject to the receipt by the Company of the
aggregate purchase price for the Shares being purchased hereunder as set forth
on the Signature 

 3
 

 

 

Page, (b) the
accuracy of the representations and warranties made by the Investor in this
Agreement, (c) the fulfillment of those undertakings of the Investor to be
fulfilled prior to the Closing Date, (d) the Registration Statement remaining
in effect and no stop order proceedings with respect thereto being pending or
threatened, and (e) there being no objections raised by the staff of the NASDAQ
Stock Market to the consummation of the sale without the approval of the
Company’s stockholders.

(b)           Conditions to the
Investor’s Obligations.  The Investor’s obligation to
purchase the Shares will be subject to the accuracy in all material respects on
the Closing Date of the representations and warranties made by the Company in
Section 4.1 below and the fulfillment of those undertakings of the Company with
respect to the Shares and/or the Investor to be fulfilled prior to the Closing
Date (collectively, the “Company Closing Conditions”).  The Investor’s obligations are expressly not
conditioned on the purchase by any or all of the Other Investors of the
remaining Total Shares that they have agreed to purchase from the Company.

3.3.         Delivery
of Funds; Delivery of Shares.

Subject to all of the provisions set forth in Section
5 of the Subscription Agreement:  Unless
the Investor elects to settle the Shares purchased by such Investor by means of
the cash account option set forth in Section 5 of the Subscription Agreement, no later than three (3) business days after the
execution of this Agreement by the Investor and the Company, (i)
the Investor shall confirm that the account or accounts at SRA to be credited
with the Shares being purchased by the Investor have a minimum balance equal to
the aggregate purchase price for the Shares being purchased by the Investor
(ii) authorize and instruct SRA to execute a trade for the Shares, (an
electronic confirmation will be generated to the clearing firm which will then
affirm the trade) and  (iii) the Company
shall deliver the Shares to the Investor directly to the account(s) at SRA
identified by Investor and 
simultaneously therewith payment shall be made from such account(s) by
SRA to the Company.

If the Investor elects to settle the Shares purchased
by such Investor by means of the cash account option set forth in Section 5 of
the Subscription Agreement no later than
three (3) business days after the execution of this Agreement by the Investor
and the Company,the Company shall deliver the Shares to the
Investor directly to the account(s) at SRA identified by Investor and
simultaneously therewith payment shall be made from such account(s) by SRA to
the Company.

4.             Representations,
Warranties and Covenants.

4.1.         Representations,
Warranties and Covenants of the Investor

(a)           The Investor
represents and warrants to, and covenants with, the Company that: (a) the
Investor is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in shares presenting
an investment decision like that involved in the purchase of the Shares,
including investments in securities 

 4
 

 

 

issued by the
Company and investments in comparable companies, and has requested, received,
reviewed and considered all information it deemed relevant in making an
informed decision to purchase the Shares; (b) the Investor has answered all
questions on the Signature Page for use in the Prospectus Supplement and the
answers thereto are true and correct as of the date hereof and will be true and
correct as of the Closing Date; and (c) the Investor, in connection with its
decision to purchase the number of Shares set forth on the Signature Page,
is  relying only upon the U.S. Base
Prospectus, the Prospectus Supplement and the documents incorporated by
reference therein.

(b)           The Investor
acknowledges, represents and agrees that no action has been or will be taken in
any jurisdiction outside the United States by the Company or the Placement
Agent that would permit an offering of the Shares, or possession or
distribution of offering materials in connection with the issue of the Shares
in any jurisdiction outside the United States where action for that purpose is
required.  The Investor, if outside the
United States, will comply with all applicable laws and regulations in each
foreign jurisdiction in which it purchases, offers, sells or delivers Shares or
has in its possession or distributes any offering material, in all cases at its
own expense.  The Placement Agents are
not authorized to make and have not made any representation or use of any
information in connection with the issue, placement, purchase and sale of the
Shares, except as set forth or incorporated by reference in the U.S. Base
Prospectus or the Prospectus Supplement.

(c)           The Investor further
represents and warrants to, and covenants with, the Company that: (a) the
Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement; and (b) this Agreement constitutes a valid and binding
obligation of the Investor enforceable against the Investor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
the indemnification agreements of the Investor herein may be legally
unenforceable.

(d)           The Investor
understands that nothing in this Agreement or any other materials presented to
the Investor in connection with the purchase and sale of the Shares constitutes
legal, tax or investment advice.  The
Investor has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of Shares.

(e)           The Investor
represents, warrants and agrees that, since the earlier to occur of (i) the
date on which the Placement Agent first contacted the Investor about the
Offering and (ii) the date that is the tenth (10th) trading day prior to the date of this
Agreement, it has not directly or indirectly (a) engaged in any short
selling, (b) established or increased any “put equivalent position” as
defined in Rule 16(a)-1(h) under the Securities Exchange Act of 1934 or (c)
granted any option for the purchase of or entered into any hedging or similar 

 5
 

 

 

transaction with
the same economic effect as a short sale, in each case with respect to the
Company’s securities.

5.             Survival
of Representations, Warranties and Agreements.  Notwithstanding any investigation made by any
party to this Agreement, all covenants, agreements, representations and
warranties made by the Company and the Investor herein will survive the
execution of this Agreement, the delivery to the Investor of the Shares being
purchased and the payment therefor.

6.             Notices.  All notices, requests, consents and other
communications hereunder will be in writing, will be mailed (a) if within the
domestic United States by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by International
Federal Express or facsimile, and will be deemed given (i) if delivered by first-class
registered or certified mail domestic, three business days after so mailed,
(ii) if delivered by nationally recognized overnight carrier, one business day
after so mailed, (iii) if delivered by International Federal Express, two
business days after so mailed, and (iv) if delivered by facsimile, upon
electric confirmation of receipt and will be delivered and addressed as
follows:

(a)           if to the Company, to:

 

Wave Systems Corp.

480 Pleasant Street

Lee, MA 01238

Fax: (413) 243-0391

ATTN: Gerard Feeney, CFO

 

with copies to:

 

Bingham McCutchen LLP

399 Park Avenue

New York, NY 10022

Fax: (212) 752-5378

ATTN: Neil W. Townsend

(b)           if
to the Investor, at its address on the Signature Page hereto, or at such other
address or addresses as may have been furnished to the Company in writing.

7.             Changes.  This Agreement shall not be modified or
amended except pursuant to an instrument in writing signed by the Company and
the Investor.

8.             Headings.  The headings of the various sections of this
Agreement have been inserted for convenience of reference only and will not be
deemed to be part of this Agreement.

 6
 

 

 

9.             Severability.  In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby.

10.          Governing
Law; Jurisdiction. 
This Agreement will be governed by, and construed in accordance with,
the internal laws of the State of New York, without giving effect to the
principles of conflicts of law that would require the application of the laws
of any other jurisdiction.  Any legal
action, suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby shall only be instituted, heard and
adjudicated (excluding appeals) only in a state or federal court located in New
York, and each party hereto knowingly, voluntarily and intentionally waives any
objection which such party may now or hereafter have to the laying of the venue
of any such action, suit or proceeding, and irrevocably submits to the
exclusive personal jurisdiction of any such court in any such action, suit or
proceeding.  Service of process in
connection with any such action, suit or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the
giving of notices under this Agreement.

11.          Counterparts.  This Agreement may be executed in two or more
counterparts, each of which will constitute an original, but all of which, when
taken together, will constitute but one instrument, and will become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.

12.          Confirmation
of Sale.  The Investor acknowledges and agrees that
such Investor’s receipt of the Company’s counterpart to this Agreement shall
constitute written confirmation of the Company’s sale of Shares to such
Investor.

13.          Entire
Agreement.  This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings between such parties
with respect to such subject matter.

14.          No
Assignment.  This
Agreement shall not be assigned by any party hereto, without the express prior
written consent of the Company or the Investor.

 7Exhibit 10.63

 

Loan No. V_ 47898

GUARANTY

 

 

 

THIS GUARANTY (“Guaranty”) is executed as of December 20, 2004, by STEVEN D. ALVIS, KYLE D.
LIPPMAN, DAVID R. KLEIN and JAY K. SEARS, each individuals (singularly and
collectively referred to as “Guarantor”), for the benefit of JPMORGAN CHASE BANK,
N.A., a banking association chartered under the laws of the United States of
America (“Lender”).

 

A.        A-K-S 75 NEC SPRING TOWN CENTER, L.P., a
Texas limited partnership (“Borrower”), is indebted to Lender with respect to a loan
(“Loan”) evidenced
by that certain Promissory Note dated of even date herewith, executed by
Borrower and payable to the order of Lender in the original principal amount of
$8,200,000.00 (together with all renewals, modifications, increases and extensions
thereof, the “Note”), which Note is secured by the liens and security interests in and
to the Property created by and granted under that certain Deed of Trust and
Security Agreement, of even date herewith (the “Security Instrument”), executed
by Borrower for the benefit of Lender and further evidenced, secured or
governed by the other Loan Documents (as defined in the Note); and

 

B.         Lender is not willing to make the Loan,
or otherwise extend credit, to Borrower unless Guarantor unconditionally guarantees
payment and performance to Lender of the Guaranteed Obligations (as hereinafter
defined); and

 

C.         Guarantor is the owner of a direct or
indirect interest in Borrower, and Guarantor will directly benefit from Lender’s
making the Loan to Borrower.

 

NOW, THEREFORE, as an
inducement to Lender to make the Loan to Borrower thereunder, and to extend
such additional credit as Lender may from time to time agree to extend under
the Loan Documents, 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 OBLIGATIONS.
Guarantor hereby absolutely, irrevocably and unconditionally guarantees to
Lender (and its successors and assigns), jointly and severally, the payment and
performance of the Guaranteed Obligations as and when the same shall be due and
payable, whether by lapse of time, by acceleration of maturity of the Note or
otherwise. Guarantor hereby absolutely, irrevocably and unconditionally
covenants and agrees that it is liable, jointly and severally, for the
Guaranteed Obligations as a primary obligor, and that each Guarantor shall
fully perform, jointly and severally, each and every term and provision hereof.

 

Section 1.2.        DEFINITION OF GUARANTEED OBLIGATIONS.
As used herein, the term “Guaranteed
Obligations” shall (i)
mean each of the obligations of Borrower under the

 

 

Environmental Indemnity (as
defined in the Security Instrument), including without limitation the
indemnification provisions contained therein, and (ii) be deemed to include,
and Guarantor shall also be liable for, and shall indemnify, defend and hold
Lender harmless from and against, any and all Losses (as hereinafter defined) incurred
or suffered by Lender to the extent, but only the extent, such Losses arise out
of or in connection with the matters listed below:

 

(a)        the misapplication or misappropriation of Rents (as defined
in the Security Instrument) by Borrower or Guarantor;

 

(b)       the misapplication or misappropriation of insurance proceeds
or condemnation awards by Borrower or Guarantor;

 

(c)        Borrower’s failure to return or to reimburse Lender for all
Personal Property (as defined in the Security Instrument) taken from the Property
(as defined in the Security Instrument) by or on behalf of Borrower and not
replaced with Personal Property of substantially the same utility and of
substantially the same or greater value;

 

(d)       any act of intentional waste or arson by Borrower, any
principal, general partner or member thereof or by any Indemnitor (as defined
in the Security Instrument) or any Guarantor;

 

(e)        any fees or commissions paid by Borrower to any principal,
general partner or member of Borrower, any Indemnitor or any Guarantor in
violation of the terms of this Guaranty, the Security Instrument or the other
Loan Documents; or

 

(f)        Borrower’s failure to comply with the environmental
indemnification provisions of Section 11 of the Security Instrument.

 

In addition, in the event
(i) of any fraud, willful misconduct or material misrepresentation by Borrower,
its general partners, if any, its members, if any, its principals, if any or by
any Guarantor or Indemnitor in connection with the Loan, (ii) of a breach or
default under Section 4.3 or Section 8.2 of the Security
Instrument, or (iii) the Property or any part thereof becomes an asset in a
voluntary bankruptcy or insolvency proceeding, then the Guaranteed Obligations
shall also include the then unpaid principal balance of the Debt (as defined in
the Security Instrument).

 

For purposes of this
Guaranty, the term “Losses”
includes any and all claims, suits, liabilities (including, without limitation,
strict liabilities), actions, proceedings, obligations, debts, actual damages,
losses, costs, expenses, diminutions in value, fines, penalties, charges, fees,
judgments, awards, amounts paid in settlement, litigation costs and reasonable
attorneys’ fees of whatever kind or nature, and whether or not incurred in
connection with any judicial or administrative proceedings.

 

Section 1.3.        NATURE OF GUARANTY. This Guaranty
is an irrevocable, absolute, continuing guaranty of payment and performance, is
joint and several and is not a guaranty of collection. This Guaranty shall
continue to be effective with respect to any Guaranteed Obligations arising or
created after any attempted revocation by Guarantor and after (if Guarantor is
a natural person) Guarantor’s death (in which event this Guaranty shall be
binding upon Guarantor’s estate and Guarantor’s legal representatives and
heirs). The fact that at any

 

2

 

time, or from time to time,
the Guaranteed Obligations may be increased or reduced shall not release or
discharge the obligation of Guarantor to Lender with respect to the Guaranteed
Obligations. This Guaranty may be enforced by Lender and any subsequent holder
of the Note and shall not be discharged by the assignment or negotiation of all
or part of the Note.

 

Section 1.4.        GUARANTEED OBLIGATIONS NOT REDUCED BY
OFFSET. The Note, the Guaranteed Obligations, and the liabilities and
obligations of Guarantor to Lender hereunder shall not be reduced, discharged
or released because or by reason of any existing or future offset, claim or
defense of Borrower, or any other party, against Lender 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 1.5.        PAYMENT BY GUARANTOR. If all or
any part of the Guaranteed Obligations shall not be punctually paid when due,
whether at maturity or earlier by acceleration or otherwise, Guarantor shall,
immediately upon demand by Lender, 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 unpaid amount due on the
Guaranteed Obligations to Lender at Lender’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 1.6.        NO DUTY TO PURSUE OTHERS. It
shall not be necessary for Lender (and Guarantor hereby waives any rights which
Guarantor may have to require Lender), in order to enforce this Guaranty
against Guarantor, first to (i) institute suit or exhaust its remedies against
Borrower or others liable on the Loan or the Guaranteed Obligations or against
any other person, (ii) enforce Lender’s rights against any collateral which
shall ever have been given to secure the Loan, (iii) enforce Lender’s rights
against any other guarantors of the Guaranteed Obligations, (iv) join Borrower
or any others liable on the Guaranteed Obligations in any action seeking to
enforce this Guaranty, (v) exhaust any remedies available to Lender against any
collateral which shall ever have been given to secure the Loan, or (vi) resort
to any other means of obtaining payment of the Guaranteed Obligations. Lender
shall not be required to mitigate damages or take any other action to reduce,
collect or enforce the Guaranteed Obligations.

 

Section 1.7.        WAIVERS. Guarantor agrees to the
provisions of the Loan Documents, and hereby waives notice of (i) any other
loans or additional advances made by Lender to Borrower, (ii) acceptance of
this Guaranty, (iii) any amendment or extension of the Note or of any other
Loan Documents, (iv) the execution and delivery by Borrower and Lender of any
other loan or credit agreement or of Borrower’s execution and delivery of any
promissory notes or other documents arising under the Loan Documents or in
connection with the Property, (v) the occurrence of any breach by Borrower or
Event of Default (as defined in the Security Instrument), (vi) Lender’s
transfer or disposition of the Guaranteed Obligations, or any part thereof,
(vii) sale or foreclosure (or posting or advertising for sale or foreclosure)
of any collateral for the Guaranteed Obligations, except as otherwise required
under applicable law,

 

3

 

(viii) protest, proof of
non-payment or default by Borrower, or (ix) any other action at any time taken
or omitted by Lender.

 

Section 1.8.        PAYMENT OF EXPENSES. In the event
that Guarantor should breach or fail to timely perform any provisions of this
Guaranty, Guarantor shall, immediately upon demand by Lender, pay Lender all
reasonable costs and expenses (including court costs and reasonable attorneys’
fees) incurred by Lender in the enforcement hereof or the preservation of
Lender’s rights hereunder. The covenant contained in this section shall survive
the payment and performance of the Guaranteed Obligations.

 

Section 1.9.        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, Lender must rescind or restore any payment, or any part thereof,
received by Lender in satisfaction of the Guaranteed Obligations, as set forth
herein, any prior release or discharge from the terms of this Guaranty given to
Guarantor by Lender shall be without effect, and this Guaranty shall remain in
full force and effect. It is the intention of Borrower and Guarantor that
Guarantor’s obligations hereunder shall not be discharged except by Guarantor’s
performance of such obligations and then only to the extent of such
performance.

 

Section 1.10.      DEFERMENT
OF RIGHTS OF SUBROGATION, REIMBURSEMENT AND CONTRIBUTION.

 

(a)        Notwithstanding any
payment or payments made by any Guarantor hereunder, no Guarantor will assert
or exercise any right of Lender or of such Guarantor against Borrower to
recover the amount of any payment made by such Guarantor to Lender by way of
subrogation, reimbursement, contribution, indemnity, or otherwise arising by
contract or operation of law, and such Guarantor shall not have any right of
recourse to or any claim against assets or property of Borrower, whether or not
the obligations of Borrower have been satisfied, all of such rights being
herein expressly waived by such Guarantor until the Obligations (as hereinafter
defined) have been paid in full. Each Guarantor agrees not to seek contribution
or indemnity or other recourse from any other Guarantor hereunder. If any
amount shall nevertheless be paid to a Guarantor by Borrower or another
Guarantor prior to payment in full of the Obligations, such amount shall be
held in trust for the benefit of Lender and shall forthwith be paid to Lender
to be credited and applied to the Obligations, whether matured or unmatured.
Until the Obligations have been paid in full, the provisions of this paragraph
shall survive the termination of this Guaranty, and any satisfaction and
discharge of Borrower by virtue of any payment, court order or any applicable
law.

 

(b)       Notwithstanding the
provisions of Section l.l0(a), each Guarantor shall have and be entitled
to (1) all rights of subrogation otherwise provided by applicable law in
respect of any payment it may make or be obligated to make under this Guaranty
and (2) all claims it would have against any other Guarantor in the absence of Section
l.l0(a) and to assert and enforce same, in each case on and after, but at
no time prior to, the date (the “Subrogation
Trigger Date”) which is 91 days after the date on which all sums
owed to Lender under the Loan Documents (the “Obligations”)
have been paid in full, if and only if (x) no Event of Default of the type
described in Section 9.1(d) or Section 9.1(e) of the Security
Instrument with respect to Borrower or any other Guarantor has existed at any
time on and after the date of this Guaranty up

 

4

 

to and including
the Subrogation Trigger Date and (y) the existence of each Guarantor’s rights
under this Section l.l0(b) would not make such Guarantor a creditor (as
defined in the Bankruptcy Code, as such term is hereinafter defined) of
Borrower or any other Guarantor in any insolvency, bankruptcy, reorganization
or similar proceeding commenced on or prior to the Subrogation Trigger Date.

 

Section 1.11.      BANKRUPTCY
CODE WAIVER. It is the intention of the parties that the Guarantor shall
not be deemed to be a “creditor” or “creditors” (as defined in Section 101 of
the United States Bankruptcy Code) of Borrower, or any other guarantor, by
reason of the existence of this Guaranty, in the event that Borrower or any
other guarantor, becomes a debtor in any proceeding under the Bankruptcy Code,
and in connection herewith, Guarantor hereby waives any such right as a “creditor”
under the Bankruptcy Code. This waiver is given to induce Lender to make the
Loan evidenced by the Note to Borrower. After the Loan is paid in full and
there shall be no obligations or liabilities under this Guaranty outstanding,
this waiver shall be deemed to be terminated.

 

Section 1.12.      “BORROWER.”
The term “Borrower” as used herein shall include any new or
successor corporation, association, partnership (general or limited), joint
venture, trust or other individual or organization formed as a result of any
merger, reorganization, sale, transfer, devise, gift or bequest of Borrower or
any interest in Borrower.

 

ARTICLE 2

EVENTS AND CIRCUMSTANCES NOT REDUCING

OR DISCHARGING GUARANTOR’S OBLIGATIONS

 

Guarantor hereby consents and agrees to each of the following, and
agrees that 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 Guarantor might otherwise have as a
result of or in connection with any of the following:

 

Section 2.1.        MODIFICATIONS.
Any renewal, extension, increase, modification, alteration or rearrangement of
all or any part of the Guaranteed Obligations, Note, Loan Documents, or other
document, instrument, contract or understanding between Borrower, Lender, or
any other parties with respect to the Guaranteed Obligations.

 

Section 2.2.        ADJUSTMENT.
Any adjustment, indulgence, forbearance or compromise that might be granted or
given by Lender to Borrower or any Guarantor in connection with the Guaranteed
Obligations.

 

Section 2.3.        CONDITION
OF BORROWER OR GUARANTOR. The insolvency, bankruptcy, arrangement,
adjustment, composition, liquidation, disability, dissolution or lack of power
of Borrower, Guarantor or any other party at any time liable for the payment of
all or part of the Guaranteed Obligations; or any dissolution of Borrower or
Guarantor, or any sale, lease or transfer of any or all of the assets of
Borrower or Guarantor, or any changes in the shareholders, partners or members
of Borrower or Guarantor; or any reorganization of Borrower or Guarantor.

 

5

 

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, exceed 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 Note or the other Loan Documents or
otherwise creating the Guaranteed Obligations acted in excess of their
authority, (iv) the Guaranteed Obligations violate applicable usury laws, (v)
Borrower has valid defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Guaranteed Obligations wholly or partially
uncollectible from Borrower, (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 Note or any of the other Loan Documents have been
forged or otherwise are irregular or not genuine or authentic, it being agreed
that Guarantor shall remain liable hereon regardless of whether Borrower or any
other person may 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 Borrower on
the Guaranteed Obligations, or any part thereof, or of any co-guarantors, or
any other person or entity 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 Guarantor that
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other party, and Guarantor has not been induced to
enter into this Guaranty on the basis of a contemplation, belief, understanding
or agreement that other parties will be liable to pay or perform the Guaranteed
Obligations, or that Lender will look to other parties 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 Lender 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 such collateral, property or
security, including but not limited to any neglect, delay, omission, failure or
refusal of Lender (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

 

6

 

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 Guarantor
that Guarantor is not entering into this Guaranty in reliance on, or in
contemplation of the benefits of, the validity, enforceability, collectibility
or value of any of the collateral for the Guaranteed Obligations.

 

Section 2.10.      MERGER.
The reorganization, merger or consolidation of Borrower into or with any other
corporation or entity.

 

Section 2.11.      PREFERENCE.
Any payment by Borrower to Lender is held to constitute a preference under
bankruptcy laws, or for any reason Lender is required to refund such payment or
pay such amount to Borrower or someone else.

 

Section 2.12.      OTHER
ACTIONS TAKEN OR OMITTED. Any other action taken or omitted to be taken
with respect to the Loan Documents, the Guaranteed Obligations, or the security
and collateral therefor, whether or not such action or omission prejudices
Guarantor or increases the likelihood that Guarantor will be required to pay
the Guaranteed Obligations pursuant to the terms hereof, it is the unambiguous
and unequivocal intention of Guarantor that Guarantor shall be obligated to pay
the Guaranteed Obligations when due, notwithstanding any occurrence,
circumstance, event, action, or omission whatsoever, whether or not
contemplated, 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 Lender to enter into the Loan Documents and extend credit to
Borrower, Guarantor represents and warrants to Lender as follows:

 

Section 3.1.        BENEFIT.
Guarantor is the owner of an indirect interest in Borrower 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. Guarantor is familiar with, and has independently reviewed
books and records regarding, the financial condition of Borrower and is
familiar with the value of any and all collateral intended to be created as
security for the payment of the Note or Guaranteed Obligations; provided,
however, 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 LENDER. Neither Lender nor any other party has made any
representation, warranty or statement to Guarantor in order to induce Guarantor
to execute this Guaranty.

 

7

 

Section 3.4.        GUARANTOR’S
FINANCIAL CONDITION. As of the date hereof, and after giving effect to this
Guaranty and the contingent obligation evidenced hereby, Guarantor is, and will
be, solvent, and has and will have assets which, fairly valued, exceed its
obligations, liabilities (including contingent liabilities) and debts, and has
and will have property and assets sufficient to satisfy and repay its obligations
and liabilities.

 

Section 3.5.        LEGALITY.
The execution, delivery and performance by 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
Guarantor is subject or constitute a material default (or an event which with
notice or lapse of time or both would constitute a default) under, or result in
the material breach of, any indenture, mortgage, deed of trust, charge, lien,
or any contract, agreement or other instrument to which Guarantor is a party or
by which Guarantor is bound. This Guaranty is a legal and binding obligation of
Guarantor and is enforceable 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.        SURVIVAL.
All representations and warranties made by Guarantor herein shall survive the
execution hereof.

 

Section 3.7.        REVIEW OF
DOCUMENTS. Guarantor has examined the Note and all of the Loan Documents.

 

Section 3.8.        LITIGATION.
As of the date hereof and except as otherwise disclosed to Lender, there are no
proceedings against Guarantor pending or, to Guarantor’s current, actual
knowledge, threatened before any court or administrative agency which, if
decided adversely to Guarantor, would materially adversely affect the financial
condition of Guarantor or the authority of Guarantor to enter into this
Guaranty or the validity or enforceability of this Guaranty.

 

Section 3.9.        TAX RETURNS.
Guarantor has filed all required federal, state and local tax returns (or any
extensions thereof, if applicable) and has paid all taxes as shown on such
returns as they have become due. No claims have been assessed and are unpaid
with respect to such taxes.

 

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 Borrower to
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligations of Borrower thereon are direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by a 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 Guarantor. The Guarantor Claims shall include, without
limitation, all rights and claims of Guarantor against Borrower (arising as a
result of subrogation or otherwise) as a result of Guarantor’s payment of all
or a

 

8

 

portion of the
Guaranteed Obligations to the extent the provisions of Section 1.10
hereof are unenforceable. Any indebtedness of Borrower to Guarantor now or
hereafter existing (including, but not limited to, any rights to subrogation
Guarantor may have as a result of any payment by Guarantor under this
Guaranty), together with any interest thereon, shall be, and such indebtedness
is, hereby deferred, postponed and subordinated to the prior payment in full of
the Debt. Until payment in full of the Debt (and including interest accruing on
the Note after the commencement of a proceeding by or against Borrower under
the Bankruptcy Reform Act of 1978, as amended, 11 U.S.C. Sections 101 et
seq., and the regulations adopted and promulgated pursuant thereto
(collectively, the “Bankruptcy Code”)
which interest the parties agree shall remain a claim that is prior and
superior to any claim of Guarantor notwithstanding any contrary practice,
custom or ruling in cases under the Bankruptcy Code generally), Guarantor
agrees not to accept any payment or satisfaction of any kind of indebtedness of
Borrower to Guarantor and hereby assigns such indebtedness to Lender, including
the right to file proof of claim and to vote thereon in connection with any
such proceeding under the Bankruptcy Code, including the right to vote on any
plan of reorganization.

 

Section 4.2.        CLAIMS IN
BANKRUPTCY. In the event of receivership, bankruptcy, reorganization,
arrangement, debtor’s relief, or other insolvency proceedings involving
Guarantor as debtor, Lender 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. Guarantor hereby assigns such
dividends and payments to Lender. Should Lender receive, for application upon
the Guaranteed Obligations, any such dividend or payment which is otherwise
payable to Guarantor, and which, as between Borrower and Guarantor, shall
constitute a credit upon the Guarantor Claims, then upon payment to Lender in
full of the Guaranteed Obligations, Guarantor shall become subrogated to the
rights of Lender to the extent that such payments to Lender on the Guarantor
Claims have contributed toward the liquidation of the Guaranteed Obligations,
and such subrogation shall be with respect to that portion of the Guaranteed
Obligations which would have been unpaid if Lender had not received dividends
or payments upon the Guarantor Claims.

 

Section 4.3.        PAYMENTS
HELD IN TRUST. In the event that, notwithstanding anything to the contrary
in this Guaranty, Guarantor should receive any funds, payment, claim or
distribution which is prohibited by this Guaranty, Guarantor agrees to hold in
trust for Lender an amount equal to the amount of all funds, payments, claims
or distributions so received, and agrees that it shall have absolutely no
dominion over the amount of such funds, payments, claims or distributions so
received except to pay them promptly to Lender, and Guarantor covenants
promptly to pay the same to Lender.

 

Section 4.4.        LIENS
SUBORDINATE. Guarantor agrees that any liens, security interests, judgment
liens, charges or other encumbrances upon Borrower’s assets 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 Borrower’s
assets securing payment of the Guaranteed Obligations, regardless of whether
such encumbrances in favor of Guarantor or Lender presently exist or are
hereafter created or attach. Without the prior written consent of Lender,
Guarantor shall not (i) exercise or enforce any creditor’s right it may have against
Borrower, or (ii) foreclose, repossess, sequester or otherwise take steps or
institute

 

9

 

any action or
proceedings (judicial or otherwise, including without limitation the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor’s relief or insolvency proceeding) to enforce any liens, mortgages,
deeds of trust, security interest, collateral rights, judgments or other
encumbrances on assets of Borrower held by Guarantor.

 

ARTICLE
5

FINANCIAL REPORTS

 

(a)        Guarantor shall keep
adequate books and records of account in accordance with methods reasonably
acceptable to Lender, consistently applied, and furnish to Lender:

 

(i)     an annual
balance sheet and income statement of Guarantor in the form required by Lender,
prepared and certified by Guarantor, within one hundred twenty (120) days after
the end of each calendar year of Guarantor;

 

(ii)    copies of
all federal tax returns (or extensions thereof, if applicable) filed by
Guarantor, within ninety (90) days after the filing thereof; and

 

(iii)   such
other financial statements as may, from time to time, be reasonably required by
Lender.

 

(b)       Lender and its
accountants shall have the right to examine the records, books, management and
other papers of any Guarantor which reflect upon its financial condition, at
any office regularly maintained by any Guarantor where the books and records
are located. Lender and its accountants shall have the right to make copies and
extracts from the foregoing records and other papers. In addition, Lender and
its accountants shall have the right to examine and audit the books and records
of any Guarantor pertaining to the income, expenses and operation of the
Property during reasonable business hours at any office of Guarantor where the
books and records are located.

 

ARTICLE
6

MISCELLANEOUS

 

Section 6.1.        WAIVER.
No failure to exercise, and no delay in exercising, on the part of Lender, 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 Lender hereunder shall be in
addition to all other rights provided by law. No modification or waiver of any
provision of this Guaranty, nor consent to 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 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 or other written communications hereunder shall be deemed to have
been properly given (i) upon delivery, if delivered in person or by facsimile
transmission with receipt acknowledged, (ii) one (1) Business Day (hereinafter
defined) after having been deposited for overnight delivery with any reputable
overnight courier service, or (iii) three (3) Business Days after having been
deposited in any post office or mail depository

 

10

 

regularly
maintained by the U.S. Postal Service and sent by registered or certified mail,
postage prepaid, addressed as follows:

 

 

	
  If to Guarantor:

  	
   

  	
  c/o NewQuest Properties

  8807 W. Sam Houston Parkway N., Suite 200

  Houston, Texas 77040

  Attention: Steven D. Alvis

  Facsimile No.: (281) 477-4399

  
	
   

  	
   

  	
   

  
	
  If to Lender:

  	
   

  	
  ARCap Servicing, Inc.

  5605 N. MacArthur Blvd., Suite 950

  Irving, Texas 75038

  
	
   

  	
   

  	
  Attention:

  	
  Clyde Greenhouse

  
	
   

  	
   

  	
   

  	
  Director of Administration

  
	
   

  	
   

  	
  Facsimile No.: (972) 580-3888

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Kelley Drye & Warren LLP

  200 Kimball Drive

  Parsippany, New Jersey 07054

  Attention: Paul A. Keenan, Esq.

  Facsimile No.: (973) 503-5950

  

 

or addressed as
such party may from time to time designate by written notice to the other
parties. For purposes of this Section 6.2, the term “Business Day” shall mean a day on which commercial banks are not authorized
or required by law to close in New York, New York.

 

Any party by notice to the other parties may designate additional or
different addresses for subsequent notices or communications.

 

Section 6.3.        GOVERNING
LAW; JURISDICTION. This Guaranty shall be governed by and construed in
accordance with the laws of the State in which the real property encumbered by
the Security Instrument is located and the applicable laws of the United States
of America. Guarantor hereby irrevocably submits to the jurisdiction of any
court of competent jurisdiction located in the state in which the Property is
located in connection with any proceeding out of or relating to this Guaranty.

 

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.

 

11

 

Section 6.5.        AMENDMENTS.
This Guaranty may be amended only by an instrument in writing executed by the
party or an authorized representative of the party against whom such amendment
is sought to be enforced.

 

Section 6.6.        PARTIES
BOUND; ASSIGNMENT. This Guaranty shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
legal representatives; provided, however, that Guarantor may not, without the
prior written consent of Lender, assign any of its rights, powers, duties or
obligations hereunder.

 

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 recital 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.

 

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
or acknowledgment of, or on behalf of, each party, or that the signature of all
persons required to bind any party, or the acknowledgment of such 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, and the respective acknowledgments of, each of
the parties hereto. Any signature or acknowledgment page to any counterpart may
be detached from such counterpart without impairing the legal effect of the
signatures or acknowledgments thereon and thereafter attached to another
counterpart identical thereto except having attached to it additional signature
or acknowledgment pages.

 

Section 6.10.      RIGHTS AND
REMEDIES. If Guarantor becomes liable for any indebtedness owing by
Borrower to Lender under the Loan, 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 Lender hereunder shall be cumulative of any
and all other rights that Lender may ever have against Guarantor. The exercise
by Lender 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 GUARANTOR AND LENDER WITH
RESPECT TO GUARANTOR’S 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 GUARANTOR AND LENDER AS A FINAL AND COMPLETE EXPRESSION OF THE
TERMS OF THE GUARANTY, AND NO COURSE OF DEALING BETWEEN GUARANTOR AND LENDER,
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,

 

12

 

VARY, SUPPLEMENT
OR MODIFY ANY TERM OF THIS GUARANTY AGREEMENT. THERE ARE NO ORAL AGREEMENTS
BETWEEN GUARANTOR AND LENDER.

 

Section 6.12.      WAIVER OF RIGHT TO TRIAL BY JURY. GUARANTOR
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 MORTGAGE,
OR THE OTHER LOAN 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 GUARANTOR, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR.

 

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13

 

This Guaranty is
executed as of the day and year first above written.

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ STEVEN D. ALVIS

  	
   

  
	
   

  	
  STEVEN D. ALVIS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ JAY K. SEARS

  	
   

  
	
   

  	
  JAY K. SEARS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ KYLE D. LIPPMAN

  	
   

  
	
   

  	
  KYLE D. LIPPMAN

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ DAVID R. KLEIN

  	
   

  
	
   

  	
  DAVID R. KLEIN

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]