Document:

EXECUTIVE EMPLOYMENT AGREEMENT

JAMES G. MCCLINTON

This Executive Employment Agreement ("Agreement") is made and entered into as of February 5th, 2018 by and between Capstone Companies, Inc. ("Company") and James Gerald McClinton, a natural person (the "Executive").  The Company and the Executive may also hereinafter be referred to individually as a "party" and collectively as the "parties."

RECITALS:

WHEREAS, the Company desires to employ Executive on a full-time basis and Executive wishes to be employed by the Company on the terms and conditions set forth in this Agreement; and

WHEREAS, the parties wish this Agreement to supersede all prior employment agreements between the parties.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Executive agree as follows:

	
1.

	
Term of Employment.

 1.1 Initial Employment Period.  The Company agrees to employ the Executive as the Chief Financial Officer and the Chief Operating Officer of the Company, and the Executive accepts employment with the Company, upon the terms set forth in this Agreement, for the period beginning on 12:01 a.m., local Miami, Florida time, on February 5, 2018, and ending on 11:59 p.m., local Miami, Florida time, on February 5, 2020 (the "Employment Period"), during which time Executive will devote his full business time to providing services hereunder.  During the Employment Period, this Agreement shall remain in force unless sooner terminated in accordance with the provisions of this Agreement pursuant to Section 5 below.  The Executive agrees that the consideration provided hereunder is fair and adequate consideration for all services provided in each of the aforesaid capacities.  Executive further agrees that this Agreement shall not constitute an employment agreement for services rendered to any company other than the Company.  Any employment agreement with any other company shall be and must be a separate written agreement with such other company or companies.

 1.2 Extension of the Employment Period.  The parties may extend the Employment Period of this Agreement by mutual agreement, provided that such agreement must be approved by the Company Board of Directors in writing and no extension may exceed one (1) year in length. In the event of a non-renewal of the agreement, the Company will provide written notification, no less than 3 months prior to the expiration of the Employment Period of the Company's intent not to renew.

 1.3 Termination of all Prior Employment Agreement.  Executive hereby knowingly, intentionally and voluntarily terminates any and all prior employment agreements between the Company or any of its subsidiaries and the Executive.  Executive agrees and understands that this Agreement sets forth all of the terms and conditions of his employment by the Company and that all rights, benefits and claims under any prior employment agreement, whether written or oral, are expressly waived and terminated by this Agreement.

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

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2.

	
Employment.

 2.1 Position and Duties.  During the Employment Period, the Company hereby agrees to employ Executive as Chief Financial Officer (CFO) and the Chief Operating Officer (COO) on the terms set forth herein.  In CFO capacity, Executive is accountable for the administrative, financial and risk management operations of the Company, to include the development of a financial and operational strategy, metrics tied to that strategy and the ongoing development and monitoring of control systems designed to preserve Company assets and report accurate financial results.  In COO capacity, Executive has responsibility for manufacturing and logistical support for the Company and its subsidiaries, especially in terms of supporting the Company's and its subsidiaries' strategic marketing and sales plan and strategic business development plan.  The Company may also assign Executive to other duties commensurate with Executive's skills and experience. Executive reports to the CEO, and the Board of Directors of the Company.  Executive agrees to devote his business time, ability, knowledge and attention solely to the Company's business affairs and interests and to faithfully and diligently perform such services and assume such duties and responsibilities as are assigned to the best of Executive's abilities, skills and efforts and to abide by applicable Company policies and directives as they exist from time to time.

 2.2 Location.  The Executive shall render his services under this Agreement in the principal executive offices of the Company which shall be in the greater Fort Lauderdale-Miami consolidated metropolitan area.  Under no circumstances shall the Executive be required to relocate from more than fifty (50) miles from said metropolitan area or provide services under this Agreement in any other location other than in connection with reasonable and customary business travel.  The Company reserves the right to make a temporary reassignment of the location for the performance of Executive's services hereunder for a period not to exceed forty five (45) days, which relocation shall not constitute a breach of this Agreement.

                2.3 Limitations on Outside Activities.  Nothing in this Agreement shall preclude the Executive from devoting reasonable time and attention to (i) serving, with the approval of the Company's Board of Directors, which shall not be unreasonably withheld, as a director, trustee or member of any committee of any organization, (ii) engaging in charitable and community activities and (iii) managing his personal investments and affairs; provided that such activities do not involve any material conflict of interest with the interests of the Company or, individually or collectively, interfere materially with the performance by the Executive of his duties and responsibilities under this Agreement.  Notwithstanding the foregoing and except as expressly provided herein, during the Employment Period, the Executive may not accept employment with any other individual or entity, or engage in any other venture which is directly or indirectly in conflict or competition with the business of the Company.

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

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3.

	
Compensation.

 Base Salary.  In consideration of Executive's services to the Company, the Company will pay Executive a gross base salary of ONE HUNDRED NINETY ONE THOUSAND, FOUR HUNDRED AND FORTY FOUR DOLLARS AND NINETY SIX CENTS ($191,441.96) per annum.  The Executive's base salary will be paid in equal installments in accordance with the Company's standard payroll schedule, and the Company will withhold from such salary all applicable federal, state and local taxes as required by applicable laws.  The Executive may elect to accept additional cash compensation awards in Company "restricted" (as defined in Rule 144 under the Securities Act of 1933, as amended) shares of Company Common Stock, $0.0001 par value, ("Shares"), which payments shall be made in semi-annual installments.  The Company hereby grants "piggy-back" registration rights to the Executive for all such Shares that are issued hereunder (expressly excepting any registration on Form S-8 or Form S-4, or any successor form to those two forms).  The value of the Shares in respect of the cash compensation being replaced by such Shares shall be determined by the average closing BID price for the Shares (as quoted on www.bloomberg.com) for the first twenty (20) consecutive trading days for each month in which Shares will be substituted for cash compensation hereunder.

 Bonus.  In addition, any bonus program adopted by the Company for senior office(s), shall  be determined solely at the discretion of the compensation committee, and in accordance with its terms as they exist from time to time.

	
4.

	
Benefits and Reimbursements.

 4.1 Insurance.  Executive shall be entitled to participate in the following benefit programs which would include; health insurance, dental insurance and vision insurance, as well as any similar insurance programs offered by the Company to individuals employed by the Company as executives or in otherwise similar positions.

 4.2 Leave.  Executive shall be entitled to twenty (20) days of paid vacation and seven (7) days of paid personal leave each year (during which time his compensation shall continue to be paid in full).  Executive shall also be entitled to five (5) days of sick leave, during which time his compensation shall continue to be paid in full.  Executive may carry over up to ten (10) days of unused vacation/personal leave from contract year to contract year provided the company requests the Executive not take vacation due to required work.  For purposes of this Agreement, "contract year" means from January 1st to December 31st each year.

 4.3 Stock Option, Savings or Retirement Plans.  Executive shall be entitled to participate in any pension, profit-sharing, deferred compensation plans, "merit" bonuses, stock option or other incentive compensation plans as are offered by the Company to individuals employed by the Company as full-time executive and subject to the same qualifications as other full-time executive employees.

 4.4 Expenses.  The Company shall reimburse Executive for the reasonable amount of hotel, travel, entertainment and other expenses necessarily incurred by Executive in the discharge of his duties to the Company, subject to the Company's expense policy.

 4.5 Technology.  The Company shall provide Executive with a laptop computer and a cellular phone for his use during the Employment Period.  These shall remain the property of the Company, and shall be returned to the Company upon the termination of the Executive's employment.

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

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5.

	
Termination.

The employment of Executive by Company and the Employment Period shall terminate upon the occurrence of any of the following conditions:

 5.1 Expiration.  Immediately upon the expiration of the Employment Period set forth in Section 1 above, including any extension of the Employment Period as agreed upon in writing pursuant to Section 1.

 5.2 Death.  Immediately upon the death of Executive.

 5.3 Disability.  Immediately upon the Disability of Executive.  Immediately upon the death or disability of the Executive.  As used herein, the term "Disability" shall mean either (i) the Executive's inability, by reason of physical or mental incapacity or impairment, to perform his duties and responsibilities under this Agreement for a period of more than sixty (60) consecutive days, or for more than ninety (90) days, whether or not consecutive, within the preceding 365-day period, or (ii) the receipt by the Executive of disability benefits for permanent and total disability under any long-term disability income policy held by or on behalf of the Executive.

 5.4 By the Company for Cause.  Immediately upon provision of written notice to the Executive by the Company that his employment is being terminated for Cause, as defined below.  "Cause" for termination means:

(i) Executive's willful and intentional refusal to perform or observe any of his material duties, responsibilities or obligations set forth in this Agreement; provided, however, that the Company shall not be deemed to have Cause pursuant to this clause (i) unless the Company gives the Executive written notice that the specified conduct has occurred and making specific reference to this Section 5.4 (i) and the Executive fails to cure the conduct within thirty (30) days after receipt of such notice;

(ii) Any willful and intentional act of the Executive involving fraud, theft, misappropriation of funds, or embezzlement affecting the Company or its subsidiaries;

(iii) Executive's conviction of, or a plea of guilty or nolo contendere to, an offense which is a felony or a misdemeanor evincing moral turpitude;

(iv) Executive's material breach of this Agreement which is not remedied within fifteen (15) days after receipt of a written demand to remedy from the Company; or

(v) Gross misconduct by Executive that is of such a serious or substantial nature that a substantial likelihood exists that such misconduct would injure the public business reputation of the Company if the Executive were to remain employed by the Company; or

(vi) Issuance of any prohibition by the U.S. Securities and Exchange  Commission or "SEC" against the Executive serving as an officer or director of a public company and the period for appeal of such prohibition has expired without the Executive filing an appeal; or

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

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(vii)   the Company files for Chapter 7 protection from creditors and the bankruptcy petition is not withdrawn or dismissed within sixty days after the filing date; or

(viii)   Executive intentionally refuses to follow a lawful, commercially reasonable directive of the Company Board of Directors, such directive concerns an action or matter within the purview of the Executive's customary and usual duties and the refusal of the Executive results in the Company or any of its subsidiaries suffering a material liability or loss (for purposes of this Agreement, "material" shall mean an amount equal to or exceeding One Hundred Thousand Dollars and No Cents ($100,000.00).

5.5 Termination of the Executive for Cause shall be communicated by a Notice of Termination.  For purposes of this Agreement, a "Notice of Termination" shall mean delivery to the Executive of written notice from duly authorized officers of the Company stating that in the good faith determination of the Company the Executive was guilty of conduct constituting Cause and failed to cure such conduct within the applicable time period. For purposes of this Agreement, no such purported termination of the Executive's employment shall be effective without such Notice of Termination.

5.6 By Company Without Cause.  At the election of the Company after serving the Executive with at least three (3) months notice of the Company's intent to termination his employment Without Cause. The Company shall have the right to pay the Executive the notice period in lieu of notice.

5.7 By Executive for Good Reason.  As used herein, the term "Good Reason" means the occurrence of any of the following, without the prior written consent of the Executive:

(i) assignment to the Executive of duties materially inconsistent with the Executive's positions as described in Section 2.1 hereof, or any significant diminution in the Executive's duties or responsibilities, other than in connection with the termination of the Executive's employment for Cause, Disability or as a result of the Executive's death or by the Executive other than for Good Reason;

(ii) the change in the location of the Company's principal executive offices or of the Executive's principal place of employment to a location outside the greater Fort Lauderdale-Miami, Florida metropolitan area/more than fifty (50) fifty miles from the current location. The Executive will have the option to transfer to the new location, in the same or equivalent position at a reasonable expense to the Company.

(iii) any material breach of this Agreement by the Company which is continuing;

(iv) a Change in Control, provided that a Change of Control shall only constitute Good Reason if the Executive terminates his employment within six (6) months following a Change of Control; provided, however, that the Executive shall not be deemed to have Good Reason pursuant to clauses (i) or (iii) above unless the Executive gives the Company written notice that the specified conduct or event has occurred and the Company fails to cure such conduct or event within thirty (30) days of the receipt of such notice. A "Change of Control" shall be deemed to have occurred when any person, other than Executive or his respective affiliates, associates, or estate, becomes, after the date of grant, the beneficial owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company's then-outstanding securities;

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

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6.

	
 Effect of Termination and Severance.

 6.1 If the Employment Period is terminated by the Company for Cause, the Company will pay to the Executive his accrued and unpaid base salary as well as all accrued but unused vacation through the date of such termination;

 6.2 If the Employment Period is terminated by the Executive other than because of death, Disability or for Good Reason, the Company will pay to the Executive his accrued and unpaid base salary as well as all accrued but unused vacation through the date of such termination;

  6.3 If the Employment Period is terminated upon the Executive's death or Disability,

(i) the Company will pay to the Executive's designated beneficiary, or, in the absence of such designation, to the estate or legal representative of the Executive, as the case may be, his accrued and unpaid base salary as well as all accrued but unused vacation through the date of such termination.

(ii) the Company will continue to pay to the Executive's designated beneficiary, or, in the absence of such designation, to the estate or legal representative of  the Executive, as the case may be,  the base salary as in effect at the time of termination for  a period of 1 year  on the first Eligible Payment Date  (the "Pay-out Period"), in accordance with the Company's customary payroll practices,; a pro-rated "merit" bonus, if earned during the previous calendar year, if  applicable to the Executive during the calendar year of Termination;

 6.4 If the Employment Period is terminated by the Company without Cause or is caused by the Company  through Non-Renewal  of this Agreement or if the  Executive terminates for Good Reason,

(i) the Company shall pay the Executive sum payments equal to: (A) the sum of twelve (12) months base salary rate the Executive was earning as of the date of termination; and (B) the sum of any "merit" based bonuses earned by the Executive during the prior calendar year of his/her Termination.  Any payments owed by the Company to the Executive, as a result of Death, Disability, or Termination, shall be paid from a normal payroll account on a weekly or bi-weekly basis in accordance with the normal payroll policies of the Company.  The amount owed by the Company to the Executive, from the Termination effective date, will be divided by the remaining number of weeks in the calendar year of the Termination, and will continue until company obligation is fully paid but at no time will be no more than twenty six (26) installments.

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

6

(ii) the Company shall also continue in effect the Executive's health and dental benefits (or similar health and dental benefits paid to senior executives noted in Section 4.1) for a period of twelve (12) months commensurate with the Company's "approved" Health Plan & Benefits Package at the time of termination.  If Executive, participated in family health insurance coverage at the time of termination, that obligation would remain theirs and the Company would continue to pay installments to keep insurance active for a twelve (12) month period and reduce the family's monthly premium against the Executive's severance package.  If Executive is eligible for continued health insurance benefits under the federal law known as COBRA and Executive timely elects COBRA coverage and makes timely payment of required premiums, the Company will reimburse Executive the cost of such COBRA coverage, not to exceed amount being paid at the time of termination, for twelve (12) months (commensurate with Executives' severance package) from the termination date or the date on which the Executive obtains health coverage from a subsequent employer.  If Executive is not eligible for COBRA benefits, the Company will reimburse Executive the cost of similar coverage Executive obtains for twelve (12) months from the termination date or the date on which the Executive obtains health insurance coverage from subsequent employer.  If contract is terminated due to death, Company would not be required to keep any coverage in effect.

7. Confidential Information.

Executive acknowledges that he will occupy a position of trust and confidence with respect to the Company's affairs and business and that, in connection with the performance of his services on behalf of the Company, Executive will be provided access to the Company's confidential and proprietary information and trade secrets ("Company Confidential Information") and confidential and proprietary information of third parties ("Third Party Information").

 7.1 Confidential Information Defined.  The term "Company Confidential Information" shall mean any and all confidential and/or proprietary information of the Company.  By way of illustration but not limitation, Company Confidential Information includes: information and materials related to proprietary computer software, hardware, including hard drives, electronic files and websites, research, business procedures and strategies, marketing plans and strategies, member lists and business histories, analyses of member information, employee or prospective employee information, financial data of the Company or its customers or employees, and any other information that is not generally known to the public or within the industry in which the Company competes.  Executive further acknowledges that the Company has and in the future will receive from third parties confidential and proprietary information ("Third Party Information"), including but not limited to confidential and proprietary information of the Company's customers, subject to a duty on the Company's part to maintain the confidentiality of such information and to use it for certain limited purposes for a period of two (2) years thereafter.

 7.2 Executive's Obligations.

(i) Non-Disclosure.  Executive agrees that during Executive's employment with the Company and thereafter, Executive will not use, disclose, lecture upon, publish or transfer directly or indirectly any Company Confidential Information or Third Party Information other than as authorized by the Company, nor will Executive accept any employment or other professional engagement that likely will result in the use or disclosure, even if inadvertent, of Company Confidential Information or Third Party Information.  Executive agrees that he will not use in any way other than in furtherance of the Company's business any Company Confidential Information or Third Party Information.  Executive will obtain the Company's written approval before publishing or submitting for publication any material (written, verbal, or otherwise) that relates to Executive's work at the Company and/or incorporates any Confidential Information.  Executive hereby assigns to the Company any rights Executive may have or acquire in such Confidential Information and recognizes that all Confidential Information shall be the sole property of the Company and its/their assigns.

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

7

(ii) Disclosure Prevention.  Executive agrees to take all reasonable steps to preserve the confidential and proprietary nature of Company Confidential Information and Third Party Information and to prevent the inadvertent or accidental disclosure of Company Confidential Information and Third Party Information.

(iii) Removal of Materials.  Executive agrees that Executive will not remove any Company Confidential Information or Third Party information from the Company's premises or make copies of such materials except for use in the Company's business.

(iv) Return of Materials.  Executive agrees not to retain and further agrees to return to the Company any tangible or intangible originals or copies of any Company Confidential Information or Third Party Information after termination of Executive's employment, or earlier at the Company's request for any reason.  Executive further agrees to provide the Company with access to any personal computer equipment and/or devices that Executive has used during the term of this Agreement, so that the Company may verify that all of its Company Confidential Information or Third Party Information has been deleted from this equipment.

(v) Copying.  Executive agrees that copying of Company Confidential Information or Third Party Information shall be done only as needed in furtherance of and for use in the Company's business.  Executive further agrees that copies of Company Confidential Information and Third Party Information shall be treated with the same degree of confidentiality as the original information and shall be subject to the same restrictions herein.

(vi) Continuation of Obligations.  Executive agrees that the obligations of this Section shall continue after termination or Executive's employment.

(vii) Computer Security.  Executive agrees that, during his employment with the Company, he will use computer resources (both on and off of the Company's premises) for which Executive has been granted access and then only to the extent authorized. Executive agrees to comply with the Company's policies and procedures concerning computer security. Executive further acknowledges that Executive will not alter, remove or destroy any Company Confidential Information or Third Party Information stored on any electronic storage devices, including, but not limited to, electronic media stored on servers, local hard drives, lap-tops, "PDAs" or any other similar devices except in accordance with the Company's record retention and destruction policy.

(viii) Email and Internet.  Executive understands that the Company maintains an electronic mail and Internet/World Wide Web ("Internet") system, and related facilities, for the purpose of business communications.  Executive acknowledges that the Company owns such a system and facilities, and that the Company retains the right to review any and all electronic mail and Internet communications, and to review his use of the Internet, with or without notice, at any time. Executive further acknowledges that he has no right to privacy to any e-mail or Internet communications, or to his use of the Internet.  Executive further agrees to comply with the Company's procedures concerning the use of e-mail and the Internet, including compliance with any destruction and/or retention policies for e-mail communications.

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

8

Known Knowledge.  Subject to the foregoing obligations, it is understood that Executive is free at all times to use information which is generally known in the trade or industry (except such information which becomes so because of a breach of this Agreement by Executive) and further that Executive's general knowledge, skill and experience shall not be deemed to be Confidential Information.

8.  Assignment of Inventions.

8.1 Definitions.  The term "Proprietary Rights" shall mean all trade secret, patent, copyright, mask work and other intellectual property rights or "moral rights" throughout the world. "Moral rights" refers to any rights to claim authorship of an Invention or to object to or prevent the modification of any Invention, or to withdraw from circulation or control the publication or distribution of any Invention, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty, regardless of whether or not such right is denominated or generally referred to as a "moral right."

8.2 Assignment of Inventions.  Executive hereby assigns and agrees to assign in the future (when any such Inventions or Proprietary Rights are first reduced to practice or first fixed in a tangible medium, as applicable) to the Company all his or her right, title and interest in and to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes, made or conceived or reduced to practice or learned by the Executive, either alone or jointly with others, during the period of his or her employment with the Company. Inventions assigned to the Company, or to a third party as directed by the Company, are hereinafter referred to as "Company Inventions."

8.3 Unassigned Inventions.  This Agreement will not be deemed to require assignment of any invention that was (1) developed entirely on the Executive's own time without using the Company's equipment, supplies, facilities, or Proprietary Information and (2) is not related to the Company's actual or anticipated business, research or development and (3) has not resulted from work performed by Executive for the Company.  Attached as Exhibit One hereto is a complete list of all Inventions that the Executive has conceived, developed or reduced to practice prior to the Effective Date of this Agreement, alone or jointly with others, that are the Executive's sole property or the property of third parties and which are excluded from the scope of this Agreement.

8.4 Works for Hire.  Executive acknowledges that all original works of authorship which are made by the Executive (solely or jointly with others) within the scope of Executive's employment and which are protectable by copyright are "works made for hire," pursuant to United States Copyright Act (17 U.S.C., Section 101).

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

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8.5 Enforcement of Proprietary Rights.  Executive agrees to assist the Company in every proper way to obtain, and from time to time enforce, United States and foreign Proprietary Rights relating to Company Inventions in any and all countries.  To that end Executive agrees to execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the assignment thereof.  In addition, Executive will execute, verify and deliver assignments of such Proprietary Rights to the Company or its designee.  Executive's obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries shall continue beyond the termination of his or her employment, but the Company shall compensate Executive at a reasonable rate after Executive's termination for the time actually spent by Executive at the Company's request on such assistance.

9. Restrictive Covenants.

9.1 Acknowledgements.  Executive acknowledges that (i) his services to the Company will be special and unique and that he will occupy a position of trust and confidence with respect to the business affairs of the Company; (ii) that his engagement for the Company will allow him access to the Company's Confidential Information; (iii) that he will have access to the customers and clients of the Company and will be working to develop business relationships for the Company; (iv) that the Company would not have entered into this Agreement with Executive, or engaged Executive, but for the covenants and agreements contained in this Section; and (v) that the agreements and covenants contained in this Section are essential to protect the business, good will, and confidential information of the Company.

9.2 Non-Competition. During the Employment Period and for eighteen (18) months thereafter, Executive shall not, directly or indirectly, in any geographic area in which the Company operates compete with the Company in the development, marketing, or sale of products that compete with those developed, marketed, or sold by the Company.

9.3 Non-Solicitation of Employees. During the Employment Period and for eighteen (18) months thereafter, Executive shall not, directly or indirectly, on his own behalf or on behalf of any other person or entity, solicit for employment, hire, or engage, whether on a full-time, part-time, consulting, advising, or any other basis, any persons who were employees or Executives of the Company during the Employment Period.

9.4 Non-Solicitation of Customers. During the Employment Period and for [twelve (12) months] thereafter, Executive shall not, in competition with the Company, directly or indirectly, on his own behalf or on behalf of any other person or entity, solicit, accept business from, or conduct business with, (i) any customer or client served by the Company prior to or during the Employment Period with which Executive had contact or about which Executive received information or knowledge during the Employment Period, or (ii) any prospective customer or client of the Company with which Executive had contact or about which Executive received information or knowledge during the Employment Period.

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

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9.5 Independent Covenants. The Restrictive Covenants set forth herein are each to be construed as a separate agreement, independent of any other provisions of this Agreement.  Therefore, the Executive agrees that the existence of any claim or cause of action that Executive may have against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any provision of this Section 9 against the Executive.

	
7.

	
10. Enforcement.

10.1 Equitable Relief Authorized.  Executive acknowledges that in the event of a violation of the provisions of Sections 7, 8 or 9 of this Agreement, Company's business interests will be irreparably injured, the full extent of Company's damages will be impossible to ascertain, monetary damages will not be an adequate remedy for Company, and Company will be entitled to enforce this Agreement to prevent a breach or threatened breach of the Agreement by temporary, preliminary or permanent injunction or other equitable relief without the necessity of proving actual damage and without the necessity of posting bond or security, which Executive expressly waives. Executive also agrees that Company may, in addition to injunctive relief, seek monetary damages for any breach of the provisions contained in this Agreement in addition to equitable relief and that the granting of equitable relief shall not preclude Company from recovering monetary damages.

10.2 Modification.  Company and Executive represent that in entering into this Agreement it is their intent to enter into an agreement that contains reasonable employment and post-employment restrictions and that such restrictions be enforceable under law.  In the event that any court or other enforcement authority determines that any provision of this Agreement is overbroad or unenforceable by reason of the geographic scope, scope of prohibited activities, time frame, or any other reason, the parties authorize such court or other enforcement authority to modify the scope of the restriction so that it is enforceable to the greatest extent permissible.

10.3 Severability.  If any provision of the Agreement is held to be invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

10.4 Notification of New Employer.  In the event that Executive leaves the employ of the Company for any reason, Executive agrees to inform any subsequent employer of his rights and obligations under this Agreement.  Executive further hereby authorizes the Company to notify his new employer about Executive's rights and obligations under this Agreement, including by delivering a copy of this Agreement, and any written modifications thereto, to any subsequent employer.

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

11

	
8.

	
11. General Terms.

11.1 No Prior Agreements.  Executive hereby represents and warrants to the Company that the execution of this Agreement by Executive and his/her employment by the Company and the performance of his/her duties hereunder will not violate or be a breach of any agreement with or obligation to a former employer, client or any other person or entity, and Executive agrees to indemnify the Company for any costs and expenses arising out of a claim by any such third party has against the Company based upon or arising out of any non-competition agreement or other restrictive covenant, invention or confidentiality agreement between Executive and such third party which was in existence as of the date of this Agreement and which Executive is alleged to be in violation of.

11.2 Indemnification; Insurance Against Liability.  Executive will be entitled to such prevailing rights and entitlements to indemnification, defense of claims and insurance against liability as are generally provided to executives of the Company, consistent with Company bylaws, insurance policies and contracts, and applicable law.

11.3 Governing Law; Interpretation.  This Agreement will be governed by the substantive laws of the State of Florida, without regard to the principles of conflicts of laws.  This Agreement will be construed as a whole, according to its fair meaning, and not in favor of or against any party, regardless of which party may have initially drafted certain provisions set forth herein.

11.4 Choice of Law and Forum:  This Agreement shall be construed according to the laws of the United States of America and the State of Florida, without regard to its conflict of law's provisions.  Executive hereby expressly consent to the personal jurisdiction of the state and federal courts for Broward County, Florida in any lawsuit filed there against the Executive by the Company arising from or related to this Agreement, including any claims for infringement of the Company's Confidential Information, Inventions or Works for Hire or any update thereto.  Executive agrees that if Executive is not a resident of the State of Florida, USA, at the time of such action, then Executive hereby irrevocably appoints the Secretary of the State of Florida, as agent for the purpose of accepting service of process in Florida and the United States. Executive waives trial by jury in any action, proceeding, claim, or counterclaim brought by any party in connection with any matter arising out of or in any way connected with this Agreement, the relationship of Executive to the Company and /or any claim of injury or damage arising in any way between and among the Company and Executive.  Provided, however, that Executive agrees that nothing in this Section shall prohibit the Company from initiating legal action in any court which has personal and subject matter jurisdiction over me in the event that it is necessary for the Company to pursue equitable relief against me for a breach of this Agreement.

11.5 Assignment.  This Agreement is personal to Executive and he may not assign it without prior written consent of the Company.  The Company may, without Executive's consent, assign the Agreement to any successor entity, including the Restrictive Covenants of Section 9.

11.6 Notices.  Any notice required or permitted hereunder will be in writing and will be deemed to have been duly given if delivered by hand or if sent by certified mail, postage and certification prepaid, to Executive at his residence (as noted in the Company's records), or to the Company address, or to such other address or addresses as either party may have furnished to the other in writing.

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

12

11.7 Entire Agreement; Amendments.  This Agreement and any other exhibits and attachments hereto constitutes the final and complete expression of all of the terms of the understanding and agreement between the parties hereto with respect to the subject matter hereof, and this Agreement replaces and supersedes any and all prior or contemporaneous negotiations, communications, understandings, obligations, commitments, agreements or contracts, whether written or oral, between the parties respecting the subject matter hereof.  This Agreement may not be modified, amended, altered or supplemented except by means of the execution and delivery of a written instrument mutually executed by both parties.  No action or omission by the Company shall be deemed to be a waiver of any of its rights under this Agreement unless such waiver is set forth in writing and identified as a waiver.  Any waiver by the Company of any rights under this Agreement shall not be deemed to be a waiver of any other right.

11.8 Counterparts.  This Agreement may be executed simultaneously in two (2) counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.

11. 9 Survival.  The provisions of the various sections of this Agreement which by their terms call for performance subsequent to the expiration or termination of this Agreement or the Employment Period shall survive such expiration or termination.

11.10 Withholdings.  The parties agree that all payments to be made to the Executive by the Company pursuant to this Agreement shall be subject to all applicable withholdings.

11.11 Headings.  The Section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

11.12 No Contra Proferentum.  The parties agree that they have been represented by counsel during the negotiation and execution of this Agreement, and, therefore, waive the application of any law, regulation or holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

11.13 Capacity.  Each of the parties hereto warrants that they are legally competent to execute this Agreement and accepts full responsibility therefor.

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

13

12. Resolution of Disputes.

12.1 Except as provided, herein, and in the event of any claim, cause of action, dispute or controversy arising under this Agreement or otherwise related to the parties' employment relationship, the parties shall negotiate in good faith for the purpose of resolving such dispute. In the event that the parties cannot resolve the claim, cause of action, dispute or controversy informally within fifteen (15) days, then such claim, cause of action, dispute or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by a mandatory arbitration in Miami, Florida before one (1) arbitrator.  The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures (Streamlined Arbitration Rules and Procedures). Judgment on the Award may be entered in any court having jurisdiction.  This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. Each party shall bear its own costs in the arbitration and shall share equally the costs of the arbitration itself.  Notwithstanding the foregoing, and without undermining the agreement to arbitrate on any other claim, cause of action, dispute or controversy, the Company shall at all times have and retain the exclusive and unilateral right to seek immediate temporary and preliminary injunctive relief in a court of law in the event of a violation or alleged violation by the Executive of Sections 7, 8, or 9 of this Agreement. In the event such judicial relief is granted, such relief shall remain binding on the parties pending the outcome of arbitration.  THE COMPANY AND EXECUTIVE ACKNOWLEDGE THAT EACH HAD THE OPPORTUNITY TO CONSULT WITH LEGAL AND FINANCIAL COUNSEL CONCERNING THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS AGREEMENT, THAT EACH HAS READ AND UNDERSTANDS THIS AGREEMENT, AND THAT EACH ENTERS INTO IT WILLINGLY.

This Agreement is duly executed as of the day and year of the last signature below.

Capstone Companies, Inc. James Gerald McClinton

By:  Sign: 

Title:  Title: 

Date:  Date: 

Capstone Companies, Inc.

350 Jim Moran Blvd. Suite 120 Deerfield Beach, FL 33442

Ph: (954)252-3440 | Fax: (954)252-3442 | Email: info@capstonecompaniesinc.com

www.capstonecompaniesinc.com

14PE(Product/Service)

Sterling Capital Funding TM

A Division of Sterling Factors Corporation

500 Seventh Avenue

New York, New York 10018 Financing Agreement

 

August 27, 2010

Capstone Industries, Inc.

350 Jim Moran Boulevard —Suite 120, Deerfield Beach, Florida 33442

Gentlemen:

We are pleased to confirm the terms on which we are to act as your receivable manager/ financier for your sales and/or rendition of services and which are to be invoiced in your name and assigned to us.

	
1.

	
During the term of this agreement you hereby sell and assign to us as absolute owner thereof each and every accounts receivable, contract rights and all other proceeds resulting from or which may result from the sale of all  merchandise owned by you or the sale of which you may control or the rendition of services by you, net of any returns, claims, allowances, and discounts granted to cust01ners on the shortest selling terms indicated on each invoice, Such discounts, credits 01' allowances may be claimed only by the customer.

	
2.

	
Accounts receivable resulting from such shipments and/or services are referred to in this Agreement as Accounts. We will purchase Accounts in accordance with the terms of this Agreement and remit to you as herein provided,

	
3.

	
All Accounts and other evidences of indebtedness and  the proceeds thereof (including but without limitation, notes, trade acceptances, etc.) resulting from your shipments or rendition of services made during the duration of this Agreement, and all contract rights relating thereto and all of your rights as vendor as well as all of your rights and remedies as an unpaid seller (including without limitation, the right of replevin, stoppage in transit and reclamation under Section 2002 of the Uniform C01nmercial Code or otherwise) and any merchandise reclaimed or returned or any merchandise represented by invoices assigned to us regardless of whether or not it has been shipped, shall be and hereby are assigned to us as absolute owner thereof, and we shall have the right to bring suit to enforce our rights with respect to the same in your name or ours.

As security for any and all Obligations (as hereinafter defined), we shall be entitled to hold and you hereby grant to us a continuing general lien upon, security interest in and to, and right of set-off on or against any of the following, whether now or hereafter existing or acquired, and wherever located (collectively the "Collateral"): all accounts including those at client risk, all reserves, instruments, documents, notes, bills, and chattel paper, letter of credit rights, commercial tort claims, proceeds of insurance, other forms of obligations owing to us, bank and other deposit accounts, whether or not reposed with your affiliates, general intangibles (including without all tax refunds, contract rights, trade names, trademarks, trade secrets, customer lists, software and all other licenses, rights, privileges and franchises), all balances, stuns and other property at any time to your credit or in out possession or in the possession of any of our Affiliates, together with all merchandise, the sale of which resulted in (he creation of accounts receivable and in all such merchandise that may be returned by customers, and all books and records relating to any of the foregoing, including the cash and noncash proceeds of all of the foregoing.

"Obligations" shall mean and include all loans, advances, indebtedness, liabilities, debit balances, letters of credit, acceptances, airway and steamship guaranties, covenants, duties and obligations of whatever kind and nature at any time owing by you to us or' any of our' Affiliates, whether fixed or contingent, due or to become due, matured or unmatured, no matter how or when arising and whether under this Agreement or otherwise and including all obligations for purchases made by you from  any other concern factored or financed by us or any of our Affiliates. For the purpose hereof, "Affiliate" shall mean any person, firm or corporation directly or indirectly controlling, controlled by or in common control with us or any corporation the stock of which is owned or controlled directly or indirectly by Sterling Bancorp.

	
4.

	
Remittances received by you shall be held in trust for us segregated from your other assets and shall be turned over to us forthwith in the identical form in which received and you hereby grant to us full power and authority to execute and deliver to ourselves such evidences of title as we may deem desirable and to endorse your name upon all checks, notes and other instruments for the payment of money representing Accounts, contract rights or the proceeds thereof, such power being hereby declared to be coupled with an interest and irrevocable.

	
5.

	
By execution of this Agreement and also by each execution by you of a confirmatory assignment and listing of invoices representing Accounts, and contract rights to us, you represent and warrant that each such item is and shall be based on an actual bona fide sale and delivery of merchandise or rendition of service in the ordinary course of business, unencumbered title to which was in you at the time of sale or rendition of services, that the customer is and shall be unconditionally liable for the payment of the amounts stated in the invoice according to its terms, whether or not sold, without offset, defense or counterclaim; that none of your merchandise is or shall be subject to any pledge or security interest except as we may have approved in writing; that no such Accounts, and contract rights have been or will be assigned, sold, pledged, or hypothecated or otherwise  encumbered, except to us; that no other person has or shall have any claim thereto as proceeds of merchandise or otherwise; and that you are not in default to the United States or any state or local subdivision thereof in the payment or deposit of any taxes; that the original invoices bear notice of assignment to us, reading substantially as follows:

MAKE CHECKS PAYABLE ONLY TO STERLING RECEIVABLE MANAGEMENT, 500 Seventh Avenue, P,O, Box 742 Midtown Station, New York, New York 10018.

As used in this Agreement, the term "invoice" includes any and all lists or compilations of merchandise or descriptions of services rendered, and price information delivered or sent to customers in any form or format and by any means, including, without limitation, electronic data transfer.

You agree to execute and deliver to us such other and further instruments of assignment, financing statements and other instruments of further assurance as we may reasonably require, but even though you may fail to execute and deliver the same, this Agreement shall nevertheless operate as a complete assignment to us of all Accounts during the life of this Agreement, You will also furnish us a detailed listing of all invoices on assignment forms acceptable to us, and a copy of each original invoice. You represent and warrant to us that any electronic data transfer we receive from you or anyone acting on your behalf will correctly and completely represent the transactions and information set forth therein, You authorize us unilaterally to execute and file financing statements in accordance with this and any other agreement between you and us in any state permitting such filing.

You represent and warrant to us that you are solvent and will continue to remain so, that you are an entity organized under the laws of Florida, and that your records concerning Accounts, are and will be kept at the address shown at the head of this letter until you notify us otherwise in writing. You shall not change your state of organization without giving us at least 30 days prior written notice of such change.

If applicable, you represent and warrant to us that all inventory has been and will at all times hereafter be manufactured and produced in accordance with the Fair Labor Standards Act of 1938 and all rules, regulations, and orders promulgated there under.

6. We will, on your request and at our sole discretion, advance to you up to 85% of the net amount of undisputed Accounts after goods are shipped or services rendered, and the invoices and shipping documents are delivered to us, and after the merchandise or services have been finally accepted by the customer. The balance, as we may determine, is to be retained by us as a reserve. If in our judgment it should be necessary, we may retain an additional amount for customers' returns, allowances, deductions and/or disputes. We shall be entitled to hold all sums to your credit as security for outstanding claims and any and all obligations owing to us or our Affiliates by you, however arising. In our discreti011 we may at any time remit to you amounts standing to your credit, and subject to the provisions of this Agreement shall remit any amounts withheld after collection thereof by us. From time to time, at your request, we at our sole discretion.may make advances in excess of this contractual advance rate, which advances are deemed "Over advances." Any Over advances which we, in our sole discretion, make to you, shall bear interest at a rate equal to (2%) percent above the contractual rate of interest set forth in this Agreement, A calculation of the charges for such over advances will appear in your monthly statement.

You shall notify us. immediately in the event that any of your customers returns or desires. to return merchandise purchased from you or in any other way makes any alleged claim, defense or offset against merchandise, the services rendered, terms, prices, delivery, etc. even if you believe that the customer's allegations are without merit, The occurrence of any of the foregoing 01' any account that remains unpaid 90 days from invoice date, or of any dispute at any time or of any breach of warranty on your part in relation to such Accounts will render such Accounts and on any other Accounts owed by the Same customer as ineligible. The entire responsibility for collecting such Account or Accounts shall be assumed and borne by you and you shall account to us therefore. All disputes ate to be adjusted promptly by you at your expense and you are to advise us of adjustments. You shall indemnify and protect us against liability, loss or expense caused by or arising out of the rejection of goods or alleged claims, defenses or offsets of every kind and nature of customers, If you fail to do so we shall have the right at any time, if we so elect, to settle, compromise, adjust or litigate all such (disputes ox claims directly with your customer or any complainant on such terms and conditions as we deem advisable,

You shall hold returned merchandise subject to our order and at our request deliver possession of returned merchandise to us and pay to us any proceeds from the subsequent resale thereof, No return will be accepted by you and no discount, credit or allowance will be issued or granted by you to a customer without prior written notice to us, in each case.

8.  You agree to pay to us all unpaid Accounts on demand, but we shall have the right at any time to charge back to your account the face amount thereof if any amount has been credited to your account with respect thereto. The charge-back of such items shall not be deemed a reassignment thereof and title thereto shall remain in us, and our rights in the security represented thereby shall continue.

9. For our services hereunder, we shall charge a base management fee equal to .45 % of the gross invoice amount of each of your accounts receivable, which commission shall be due and payable by you and chargeable to your account with us; as at the day of the assignment to us, The minimum base management commission payable hereunder for each Contract Year (each twelve month period commencing from the date this Agreement is accepted by you) shall be $20,000, which to the extent of any deficiency shall be chargeable to your account with us at the end of such Contract Year. At our sole discretion, we may elect to charge the difference between the actual commission earned by us and the minimum commission to your account on a monthly basis and if so, the monthly minimum charge shall not be less than $1,667. Said base management fee shall be increased by .25% for each additional 30 days or portion thereof of extended terms, beyond 90 days maximum selling terms. The minimum base management fee on each invoice shall be $5.00.

10. If at any time you have obligations owing to us, such obligations shall be payable to us on demand and we shall not be required to have any recourse to any security or any other party liable thereon, and we may, in our discretion, charge your account with the amount thereof with the same force and effect as though it were a payment made to you hereunder. If we become liable to the United States on your account by virtue of the Internal Revenue Code (and or the Federal Tax Lien Act of 1966), we may charge the amount thereof to your account whether or not we have made payment, and you shall pay us the amount thereof on demand or present satisfactory proof that you have paid the amount involved to the United States.

l1.  We shall debit your account our charges set forth in Paragraph 9 and the interest as provided in this Paragraph 11 hereof and all other items properly chargeable   to you and any monies remitted or paid to you or otherwise advanced by us for your account. On or about the 15th day of each month we shall mail to you by ordinary mail an abstract of your account as of the last day of the preceding month. Such abstract shall be an account stated and shall be deemed correct unless written objection thereto is made within 30 days after our mailing thereof. Only that portion of the abstract specifically objected to by you in writing shall not be binding. Any charges pursuant to this Paragraph legally constituting interest shall not exceed the maximum contract rate permitted by law for an incorporated or for an unincorporated client, whichever is applicable. Interest as provided herein will be charged on the daily balances resulting from advances 01' other charges made pursuant hereto, less collections and other monies received hereunder, at the rate specified in this Paragraph. For purposes of calculating interest, collections shall be deemed credited to your account 10 banking days after receipt thereof by us.

All debits in your account shall bear interest daily at a rate equal to 1/4% above the Sterling National Bank Base Rate from time to time in effect (which shall not necessarily be the lowest rate charged to its customers) now or hereafter prevailing. Any change in the interest rate shall take effect on the first business day of the month following the month in which the Base Rate changes. In no event shall the interest rate charged be less than the Sterling Bank Base Rate in effect on the date of this agreement (5%).

	
12.

	
You will keep records of all transactions which may be pertinent to this Agreement and all such records shall be available to us. and our representatives for examination at any time. The expense of such examination shall be borne by you together with all reasonable out-of-pocket expenses and shall in no event be less than $800.00 per examination day. If at any time we shall be required to pay any State, City, Local or Federal sales, use, or excise tax on the purchase of any Accounts or contract rights hereunder, you will repay to us the amount of tax so paid.

	
13.

	
You agree to furnish us with balance sheets, statements of profit and loss, financial statements and such other information regarding your business affairs and financial conditions as we may from time to time require, and in any event, a statement of your financial position for each fiscal year prepared and reviewed by your regularly engaged certified public accountant.

	
14.

	
This Agreement expresses the entire understanding between the parties. Failure by us to insist upon strict performance shall not be deemed to be a waiver of our right to require strict performance, and any waiver by us must be in writing and shall then be for the particular instance only. A waiver by us of any right 01' remedy on any one occasion shall not be construed as a waiver of any such right or remedy which we would otherwise have on any future occasion, whether similar in kind or otherwise. The terms of this Agreement shall not be waived, modified or altered unless in writing by both parties hereto. Out' remedies hereunder shall be deemed to be cumulative and not exclusive. If any of the terms of this Agreement shall differ with the terms of any other agreement between you and us that which gives us greater rights shall prevail,

	
15.

	
All notices given under this Agreement shall be sent by certified mail to the business address of the party to whom notice shall be given,

	
16.

	
This Agreement together with all assignments of Accounts and Contract Rights hereunder shall be deemed made in New York and subject to the laws of the State of New York. At our option, should any controversy arise out of this Agreement 01' in relation to or in connection with it or any actual or alleged breach thereof, said controversy may be submitted to the Supreme Court of the State of New York, County of New York for determination pursuant to "New York Simplified Procedure for Court Determination of Disputes" as provided for by the New York Civil Practice Law and Rules. You agree that any claim or cause of action by you against us or any of our directors, officers or employees arising out of or relating in any way to this Agreement shall be barred unless asserted by you by the commencement of an action or proceeding by you within one year after the first act, occurrence omission upon which such claim or cause of action is based. YOU HEREBY AGREE TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK ON ALL DISPUTES OR CONTROVERSIES ARISING UNDER OR RELATING TO THIS AGREEMENT AND DESIGNATE THE SECRETARY OF STATE OF NEW YORK STATE AS YOUR AGENT FOR SERVICE OF PROCESS. YOU FURTHER AGREE TO WAIVE TRIAL BY JURY IN ANY SUIT OR PROCEEDING ARISING UNDER OR RELATING TO THIS AGREEMENT.

	
17.

	
This Agreement shall commence as of the day 8th day of  September 2010 and shall continue in effect until one year(s) from the date hereof, and from year to year thereafter, unless either party hereto gives the other patty not less than sixty (60) days written notice of termination prior to the anniversary of this Agreement in any year. If terminated prior to the initial or any renewal term hereof, or if there is a default by you under the terms of this Agreement as set forth below, then and in such event all sums due from you, including but not limited to, the minimum base management commission for any Contract year, shall be immediately due and payable as set forth hereinafter in this Paragraph 17. Notice of termination by you or by us, as the case may be, shall be effected by hand delivery, courier service or the mailing of a certified letter by the terminating party. Notwithstanding the foregoing, should any of the following "Events of Default" occur: failure by you to pay or perform under the terms or conditions of this Agreement; you submit any information relating to Accounts, your operations or financial condition that is false in any material respect, or you Omit to provide material information relating to Accounts, your operations or financial condition; you become insolvent or are unable to meet your debts as they mature, fail, suspend business as a going concern, make an assignment for the benefit of creditors, apply for an extension from your creditors, or a receiver or trustee is appointed for you or your properly or a petition in bankruptcy or for reorganization under the Bankruptcy Code filed by or against you, or should you seek relief under any federal or state insolvency statute, then, we shall have the right to terminate this Agreement forthwith without prior notice. Notwithstanding any termination hereof, this Agreement shall nevertheless be in full force and effect and binding upon you until you have fully paid and performed all of the Obligations.

	
18.

	
Upon the occurrence of any Event of Default, we shall have all of the rights and remedies of a secured party under the Uniform Commercial Code and other applicable law with respect to all Collateral, such rights and remedies provided for herein. All proceeds of Collateral shall be first applied to all costs and expenses of liquidating the Collateral, including attorney's fees and disbursements and then to payment (in such order as we may elect) of all Obligations,

                                                               Very truly yours,

                                                               Sterling Capital Funding TM

 

                                                               A Division of Sterling Factors Corporation

                                                               By /s/

                                                               BY /s/

    ACCEPTED AND AGREED TO:

    Capstone Industries, Inc.

    /s/ Howard Ullman, COO

Rev. 7-29-08 ((WD)

 

CERTIFICATE CORPORATE RESOLUTIONS ̄-

I, Howard Ullman, do hereby certify that I am Secretary Capstone Industries, Inc., a Corporation organized under the laws of the State of Florida, and that a special  meeting of the Board of Directors of said corporation duly held at its office on  at which a quorum was present and acting throughout, the following resolutions were duly moved, seconded, and unanimously adopted:

RESOLVED: That at it is in the best interest of this corporation to enter into the agreement with STERLING CAPITAL FUNDING f a division of STERLING FACTORS CORPORATION, having an office 500 Seventh Avenue, New York, NY 10018,  referred as "Sterling", to be dated this day providing for: the sale, pledge, assignment, negotiation and guarantee to Sterling of accounts, notes, documents s, instruments, chattel paper and other forms of obligations; the pledge and assignment  of Inventory, goods and chattels now or hereafter owned by this corporation; the pledge of stock now or hereafter owned by this corporation; and such other and further  documentation as may be necessary to effectuate the financing arrangements contemplated between Sterling and this corporation; and it was further.

RESOLVED: That the President, Vice-President, Treasurer, Secretary or other officer of this corporation, or any one or more of them, be and the same are hereby authorized and empowered, on its behalf, to execute and deliver said agreements and any modifications thereof; and it was further.

RESOLVED: That any officer or  officers of this corporation and/or their nominees are hereby authorized and empowered, on Its behalf, to execute and deliver any and all schedules of assignments of accounts, transfer of instruments, sates, pledges, notes, financial, financing and other statements, and any and all further agreements, papers, documents and certificates, as may from time to time be required by said Sterling, upon any matters or transactions arising under said agreements or in connection with any further financial arrangements with this corporation; and it was further

RESOLVED: That all acts of the of this corporation and/ or their nominees and all agreements, modifications, transfers, assignments, certificates and statements, which they or any of them may do, execute or deliver in pursuance of said agreements and to facilitate transaction thereunder, and are hereby ratified and approved; and it was further

RESOLVED: That any officer, agent or nominee of Sterling is hereby authorized and empowered to endorse the name of this corporation to any and all checks, drafts and other Instruments or orders for the payment of money, payable to this corporation or its order, to deposit the same In any account or accounts of Sterling, with any BANK, BANKER OR TRUST COMPANY, and to deal with any and all such checks, drafts, and other instruments or orders for the payment of money and the proceeds thereof as the property of Sterling ; and it was further

RESOLVED: That any BANK. BANKER OR TRUST COMPANY be, and they hereby are, authorized and requested to receive for deposit to the credit of Sterling without further inquiry, all such checks, drafts and other orders or instruments for the payment or money, payable to this corporation or its order, and that said banks shall be under no liability to this corporation, with respect to the disposition which Sterling may or shall make of the same instruments or the proceeds thereof."

I further certify that the foregoing resolutions remain in force and have not been rescinded or modified.

I further certify that I am the custodian of and an) familiar with the books and records of said corporation and nothing contained in the Certificate of Incorporation, By-Laws or any other records prohibits the execution of the aforementioned  agreements by said corporation.

I further certify that the following are duty elected officers of this corporation:

President: Reid Goldstein

Treasurer: James G. McClinton

IN WITNESS WHEREOF, I haye hereunto set my hand as 

Secretary of corporation, and affixed its corporate seal, by order

of its Board of Directors,

 

This 8th day of September 2010

                                                                  /s/ Howard Ullman, Secretary (Seal)

Rev 52604

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