1.           GUARANTY .  Guarantor hereby unconditionally and independently of any liability of Borrower guarantees and agrees as follows:

1.1            Payment Guaranty .  Subject to the provisions of Section 1.4 below, Guarantor hereby irrevocably, absolutely and unconditionally guarantees and promises to pay to or for the benefit of Lender, its successors and assigns, on demand after the occurrence or existence of an “ Event of Default ” (as defined in the Note), in lawful money of the United States of America, the Loan and all indebtedness and obligations that may now or hereafter be owing from Borrower to Lender thereunder (whether or not Borrower has any personal liability for the payment of such indebtedness or obligations because of the so-called “one-action” rule and the “anti-deficiency” statutes in California Code of Civil Procedure Sections 726 and 580), including not only debts voluntarily contracted, but also every debt, obligation or liability however arising, whether absolute or contingent, joint or several, matured or unmatured, direct or indirect, primary or secondary, and whether or not the same is represented by a writing, and any and all extensions, renewals or modifications of any such indebtedness or obligation, including, without limitation, interest at the rate provided in the Note as the “ Default Interest Rate ,” late charges, yield maintenance payments (if any), attorneys’ fees, expenses and court costs (whether incurred in connection with any enforcement activities by Lender or otherwise, in any appeal proceedings or in any bankruptcy proceedings involving Borrower or any Guarantor) (all of the foregoing shall be referred to as the “ Guaranteed Obligations ”).

1.2            Failure To Pay .  If Guarantor fails to pay all such Guaranteed Obligations within fifteen (15) days following Lender’s demand, Lender may elect, without having any obligation to do so, and without further notice to Guarantor, to take any action it reasonably believes necessary to protect its interests, but with the further right to suspend or terminate such actions at any time.  No such actions by Lender shall release or limit the liability of Guarantor, and Guarantor agrees to repay Lender all sums expended by it, including any sums expended in excess of the principal amount of the Loan.

1.3            No Waiver .  Nothing contained in this Section 1 shall be deemed to be a waiver of any right which Lender may have under Section 506(a), 506(b), 1111(b), or any other provisions of the U.S. Bankruptcy Code, or any other provision of applicable law (including without limitation California Civil Code Section 3054), as the same may be amended from time to time, to file a claim for the full amount of the Guaranteed Obligations or to require that the Property and all other collateral for the payment and performance of all of the Loan obligations shall continue to secure the payment and performance of all of the Loan obligations in accordance with the terms of the Loan Documents.

1.4            Recourse Limitations .

1.4.1         Notwithstanding any other provision of this Agreement to the contrary and subject to the provisions of Section 10 below, Lender and Guarantor

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agree that Guarantor’s total liability, jointly and severally, hereunder shall not exceed an amount in excess of One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) (“Reduced Repayment Guaranteed Obligations”).

1.4.2                 The provisions of this Section 1.4 concerning the Reduced Repayment Guaranteed Obligations shall not (a) impair the right of Lender to name Borrower or Guarantor as a party defendant in any action or suit for foreclosure and sale under the Loan Documents, (b) impair the right of Lender to obtain the appointment of a receiver for the Property, (c) impair the right of Lender to bring suit with respect to fraud or intentional misrepresentation by Borrower or Guarantor, (d) impair the right of Lender to obtain the rents and other income from the Property received by Borrower or Guarantor after the occurrence and during the continuance of an Event of Default which are not applied to the operation of the Property or the payment of the Loan, (e) impair the right of Lender to obtain insurance proceeds or condemnation awards due to Lender under the Loan Documents, (f) impair the right of Lender to enforce the provisions of the Loan Documents and the Environmental Indemnity relating to “Hazardous Substances” (as defined in said indemnity), against Borrower or any other person allegedly responsible therefor, or (g) impair the right to sue Borrower under the Loan Documents.

2.           PERFORMANCE BY GUARANTOR .

2.1            Failure to Perform .  If Borrower fails to perform the Guaranteed Obligations on or before the times such matters are to be done by Borrower, Guarantor shall do, at Guarantor’s expense, any such matter which Borrower has failed to do within the time periods set forth herein.

2.2            Failure To Take Action .  If Guarantor fads to take any such action within the time periods set forth herein, Lender may pursue any remedies at law or in equity against Guarantor, without having to proceed first against Borrower, and may itself take such action, and Guarantor shall be liable to Lender for all expenses, including attorneys’ fees incurred by Lender, and all amounts paid by Lender in taking any such action, subject to Section 1.4 above.

2.3            Multiple Guarantors .  If there is more than one (1) Guarantor executing this Agreement, the obligations of all Guarantors hereunder shall be joint and several, and all words used herein in the singular shall be deemed to have been used in the plural when the context and construction so require.

3.           CERTAIN RIGHTS OF LENDER .  Lender may, without the consent of Guarantor, at any time and from time to time, either before or after the maturity of the Note:

3.1            amend any provision of the Note and the Deed of Trust or any other documents evidencing or securing the Loan from Lender, including any change in the interest rate therein or any change in the time or manner of payment thereunder,

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3.2            make any agreement with Borrower for the extension, payment, compounding, compromise, discharge or release of any provision of the Note, the Deed of Trust or any other terms thereof, without notice to or the consent of Guarantor, and

3.3            without limiting the generality of the foregoing, Lender is expressly authorized to surrender to Borrower or to deal with or modify the form of, any security which Lender may at any time hold to secure the performance of any obligation hereby guaranteed, and the guaranties herein made by Guarantor shall not be impaired or affected by any of the foregoing.

4.           WAIVERS BY GUARANTOR .

4.1            Legal Requirements .  Guarantor hereby waives any and all legal requirements that Lender shall institute any action or proceedings at law or in equity against Borrower or anyone else with respect to the breach of the Guaranteed Obligations or with respect to any other security held by Lender, as a condition precedent to bringing an action against Guarantor pursuant to this Agreement.  All remedies afforded to Lender by reason of this Agreement are separate and cumulative remedies and none of such remedies, whether exercised by Lender or not, shall be deemed to be in exclusion of any one of the other remedies available to Lender, and shall not in any way limit or prejudice any other legal or equitable remedy available to Lender.

4.2            Presentment For Payment .  Guarantor hereby waives presentment for payment, demand, protest, notice of protest and of dishonor, notice of acceptance hereof, notices of default and all other notices now or hereafter provided by law.

4.3            Requirement To Proceed .  Guarantor waives all right to require Lender to proceed against the Borrower or any other person, firm or corporation or to apply any security Lender may hold at any time or to pursue any judicial, nonjudicial and/or provisional remedy. Lender may proceed against Guarantor with respect to the Guaranteed Obligations without taking any action against Borrower or any other person, firm or corporation and without proceeding against or applying any security Lender holds.

4.4            Right of Subrogation .  Until the Guaranteed Obligations have been fully satisfied, Guarantor shall not have any right of subrogation.  Guarantor waives any benefit of and any right to participate in any collateral or security held by Lender for the performance of the Guaranteed Obligations.  Guarantor hereby authorizes and empowers Lender, at Lender’s sole discretion, without any notice to Guarantor whatsoever, to exercise any right or remedy which Lender may have, including without limitation judicial foreclosure, exercise of rights of power of sale, or taking of a deed or an assignment in lieu of foreclosure, as to any collateral or security in real property or personal property which Lender may hold for the performance of the Guaranteed Obligations.  Guarantor shall be liable to Lender for any deficiency resulting subject to Section 1.4 above from the exercise by Lender of any such judicial or nonjudicial remedy, even though any rights, including, without limitation, any rights of subrogation, contribution and/or indemnity, which the Guarantor may have against Borrower or other

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parties might be destroyed or dismissed by the exercise of any such judicial or nonjudicial remedy.

4.5            Release From Liability .  Guarantor specifically agrees that Guarantor shall not be released from liability hereunder by any action taken by Lender including, without limitation, a nonjudicial sale under the Deed of Trust, that would afford Borrower a defense based on California’s anti-deficiency laws, in general, and Code of Civil Procedure Section 580d, in specific.  Without limiting the foregoing, Guarantor expressly understands, acknowledges and agrees as follows:

4.5.1         In the event of a nonjudicial foreclosure (through the exercise of the power of sale under the Deed of Trust):

(a)            Borrower would not be liable for any deficiency on the Note under California Code of Civil Procedure Section 580d,

(b)            Guarantor’s subrogation rights against the Borrower would thereby be destroyed,

(c)            Guarantor would be solely liable for any deficiency to Lender (without recourse against Borrower) subject to Section 1.4 above, and

(d)            Guarantor would thereby be deprived of the anti-deficiency protections of said Section 580d.

4.5.2         Were it not for Guarantor’s knowing and intentional waivers contained herein, the destruction of Guarantor’s subrogation rights and anti-deficiency protections would afford Guarantor a defense to an action against Guarantor hereunder; and

4.5.3         Notwithstanding the foregoing, Guaranto