Document:

form8k050108ex10-3.htm

    Exhibit
10.3

    

    GUARANTEE

    

    

    THIS GUARANTEE made as
of  May 1, 2008, by CHDT CORPORATION, a
Florida corporation, with
offices located at 350 Jim Moran Blvd., Deerfield Beach, Florida 33442 (the
"Guarantor" or the "Undersigned"), in favor of STERLING NATIONAL BANK, a
national banking association, having an office located at 500 Seventh Avenue,
New York, New York 10018 (hereinafter referred to as the "Bank");

    

    W I T N E S S E T
H:

    

    WHEREAS, CAPSTONE INDUSTRIES, INC.
(the "Borrower" or "Debtor") is or will be obligated to the Bank under any
number of documents, agreements and instruments (hereinafter referred to as the
"Obligation Documents" or "Loan Documents") requiring the payment of principal,
interest and other sums as well as the performance of obligations as more
specifically set forth therein (hereinafter referred to as the "Obligations");
and

    

    WHEREAS,
the Undersigned acknowledges that the Bank would not make extensions of credit
to the Borrower without the Undersigned guaranteeing, absolutely and
unconditionally, the payment and performance of all Obligations of the Borrower
owed or due to the Bank, and that this guarantee is a material inducement for
the Bank to make extensions of credit to the Borrower; and

    

    WHEREAS,
the Undersigned acknowledges that it will derive direct and indirect benefits
from extensions of credit by the Bank to the Borrower pursuant to the Loan
Documents;

    

    NOW,
THEREFORE, in consideration of the premises, and other good and valuable
consideration, the Undersigned hereby agrees as follows:

    

    1.           Each
Guarantor hereby absolutely, unconditionally, irrevocably, and without
limitation guarantees to the Bank the prompt and full payment and other
performance of all of the Obligations when each of such Obligations is due,
whether at a specific due date, at the stated maturity, by acceleration or
otherwise. The agreements and obligations of each Guarantor under this Guarantee
shall be continuing and shall remain in full force and effect until all of the
Borrower's Obligations to the Bank have been satisfied in full. The term
"Obligations" shall mean, in addition to the definition of Obligations in any of
the Loan Documents, all indebtedness, obligations and liabilities of Borrower to
Bank or any of its affiliates of every kind and description, direct or indirect,
secured or unsecured, joint or several, absolute or contingent, due or to become
due, including any overdraft, whether for payment or performance, now existing
or hereafter arising, whether presently contemplated or not, regardless of how
the same arise, or by what instrument, agreement or book account, including, but
not limited to, all loans (including any loan modification, renewal or
extension), all indebtedness including any arising from any derivative
transactions, all

    
      
         

      

      
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    undertakings
to take or refrain from taking any action, all indebtedness, liabilities or
obligations owing from Borrower to others which Bank may have obtained by
purchase, negotiation, discount, assignment or otherwise; and all interest,
taxes, fees, charges, expenses and reasonable attorney's fees (whether or not
such attorney is a regularly salaried employee of Bank, any parent corporation
or any subsidiary or affiliate thereof, whether now existing or hereafter
created) chargeable to Borrower or incurred by Bank under this Agreement, any of
the other Loan Documents, or any other document or instrument delivered in
connection herewith or otherwise, whether or not arising out of or related to
extensions of credit made pursuant to the Loan Documents.

    

    2.           The
agreements and obligations of each Guarantor under this Guarantee shall be
absolute, unconditional and irrevocable, irrespective, by way of example only,
of the validity, legality or enforceability of the Obligation Documents or any
other document, in whole or in part, or of the existence, value or condition of
any collateral or other security for any or all of the Obligations, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor.

    

    3.           
This guarantee is a primary obligation of the Guarantor. The Bank shall be under
no obligation to proceed against the Borrower before proceeding directly against
any Guarantor. The Bank shall be under no obligation to proceed against any or
all collateral heretofore or hereafter given or granted to the Bank to secure
payment or performance of the Obligations before proceeding directly against any
Guarantor.

    

    4.           The
Bank may have received or may hereafter receive an interest or lien in
collateral as security for the Obligations of the Borrower. However, the Bank
shall not be required to proceed against the collateral before enforcing this
Guarantee. The Guarantor grants to the Bank full power, in its absolute and
uncontrolled discretion and without notice to the Guarantor, to deal in any
manner with the Obligations and the collateral, including, but without limiting
the generality of the foregoing, the following powers: (a) to consent to the
substitution, exchange, or release of all or any part of the collateral, whether
or not other collateral, other property or payment, if any, received by the Bank
upon such substitution, exchange, or release shall be of the same or different
character or value than the collateral so substituted, exchanged or released;
(b) in the event of the nonpayment when due, whether by acceleration or
otherwise, of any of the Obligations, or in the event of default in the
performance of any Obligation, to realize on the collateral or any part thereof,
as a whole or in such parcels or sub-divided interests or parts as the Bank may
elect, at any public or private sale or sales, without demand, advertisement or
notice of the time or place of sale or any adjournment thereof,
each  Guarantor hereby waiving any such demand, advertisement and
notice to the fullest extent permitted by law, or by foreclosure or otherwise,
all as the Bank in its absolute and uncontrolled discretion may deem proper, and
to purchase all or any part of the collateral for its own account at any such
sale or foreclosure. The Undersigned shall have no right of subrogation
whatsoever with respect to the Obligations or the collateral unless and until
the Bank shall have received full payment and performance of all the
Obligations. The

    
      
         

      

      
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    obligations
of the Guarantor hereunder, and the rights of the Bank in the collateral, shall
not be released, discharged or in any way affected, nor shall the Guarantor have
any rights or defenses against the Bank, by reason of the fact that any of the
collateral may be subject to equities or defenses or claims in favor of others
or may be invalid or defective in any way, nor by reason of the fact of the
value or change therein of any of the collateral at any time, nor by reason of
the Bank taking or failing to take any action with respect to the collateral
including, but not limited to, preserving or protecting same, or perfecting or
maintaining perfection of any security interest or lien therein, nor by reason
of the  financial condition of the Borrower or any other
party.

    

    5.           Except
as otherwise expressly set forth in this section, each Guarantor hereby waives
any and all notice of any kind or nature including, but not limited to, the
creation, renewal, extension or accrual of any of the Obligations; notice of or
proof of reliance by the Bank upon this Guarantee or acceptance of this
Guarantee; presentment for payment, demand, notice of non-payment, notice of
protest, protest, default by the Borrower of its Obligations to the Bank or of
the Obligation Documents, and all other notices to which guarantors might
otherwise be entitled, or which might be required by law and required to be
given by the Bank. Each Guarantor hereby waives any right to seek from any court
or authority the posting of a bond or security prior to the exercise by the Bank
of any remedy described herein or in the Obligation Documents, the benefit of
all valuation, appraisement and exemption laws, and any right to demand or to
have any marshaling of assets upon any power of sale granted herein or by the
Obligation Documents or pursuant to judicial proceedings or upon any foreclosure
or any enforcement of this Guarantee.

    

    6.           The
Bank may, without notice to or consent from any Guarantor (a) extend the time
for payment or otherwise modify the terms of payment or performance of any
Obligation guaranteed hereby; (b) release, settle or compromise with any other
Guarantor; (c) exercise or refrain from exercising any rights with respect to
the Borrower, any Guarantor or any collateral; (d) apply any sums received by
the Bank in connection with the Obligations in such manner as shall be
determined by the Bank; and (e) take or refrain from taking any action
authorized by the Obligation Documents or by law.

    

    7.           Any
one or more of the following acts or occurrences shall constitute a Default
under this Guarantee: (a) any representation or warranty made by or on behalf of
any Guarantor, or in any report, certificate, financial statement or other
instrument furnished to the Bank in connection with this Guarantee or the
Obligation Documents shall prove to be inaccurate, false or misleading in any
material respect as of the date with respect to which it was made or deemed to
be made; (b) if any Guarantor shall have failed to pay or discharge the
Obligations guaranteed hereby after the Borrower shall have defaulted under the
terms of the Obligation Documents and such default shall continue beyond any
cure period prescribed therein; (c) the Borrower or any Guarantor shall have
failed to duly observe or perform any covenant, condition or agreement on the
part of the Borrower or such Guarantor to be observed or performed pursuant to
the terms of the Obligation Documents beyond any applicable cure period; (d) if
an Event of Default as defined in the Obligation Documents shall occur and
continue beyond any

    
      
         

      

      
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    applicable
cure period prescribed therein; (e) if any Guarantor shall fail to comply with
any agreement or covenant of such Guarantor under the provisions of this
Guarantee; or (f) if the Bank shall not be satisfied, in its sole and absolute
discretion, with any financial reporting documents required to be furnished to
the Bank by any Guarantor. The obligations of the Undersigned hereunder shall
not be released, discharged or impaired or otherwise affected by any
circumstance or condition whatsoever which might in any manner or to any extent
vary the risk of the Guarantor or otherwise operate as a discharge of the
Guarantor as a matter of law or equity (other than the indefeasible payment in
full of all the Obligations) including, but not limited to, any occurrence,
circumstance, happening or event whatsoever, whether foreseen or unforeseen, and
any other circumstance which might otherwise constitute a legal or equitable
defense, release or discharge, including the release or discharge of the
liabilities of a guarantor or surety or which might otherwise limit recourse
against the Borrower or such Guarantor.

    

    8.           In
the event of a Default hereunder, all property of any Guarantor in the
possession of the Bank shall be held by the Bank subject to a lien and a
security interest in favor of the Bank for the Obligations. The term "property
of the Guarantor" shall include all property of every description, now or
hereafter in the possession or custody of, or in transit to, the Bank for any
purpose, including safekeeping, collection or pledge, for the account of any
Guarantor or as to which any Guarantor may have any right or power. The balance
of every account of a Guarantor with, and each claim of a Guarantor against, the
Bank existing from time to time shall be subject to a lien and subject to be set
off against any and all Obligations of the Borrower to the Bank, and the Bank
may at any time, or from time to time, at its option and without notice,
appropriate and apply toward the payment of any of the Obligations the balance
of each such account of a Guarantor with, and each claim of such Guarantor
against, the Bank. After Default, the Bank may at any time, and from time to
time, transfer into its own name or that of its nominee any of the property of a
Guarantor. Each Guarantor hereby grants to Bank a continuing lien, security
interest and right of setoff as security for all liabilities and obligations to
Bank from Guarantor or Borrower whether now existing or hereafter arising, upon
and against all deposits, credits, collateral and property, now or hereafter in
the possession, custody safekeeping or control of Bank or any entity under the
control of Bank and its successors and assigns or in transit to any of them. At
any time, without demand or notice (any such notice being expressly waived by
Borrower), Bank may setoff the same or any part thereof and apply the same to
any liability or obligation of Borrower and any Guarantor even though unmatured
and regardless of the adequacy of any other collateral securing the loan. ANY
AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT
TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER OR
ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.

    

    
      
         

      

      
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    9.           Each
Guarantor represents and warrants that all financial statements heretofore
delivered by such Guarantor to the Bank, if any, (i) are true, correct and
complete in all material respects, fairly represents said Guarantor's financial
condition as of the date thereof, and no material adverse change has occurred in
said Guarantor's financial condition reflected therein since the date(s)
thereof, and (ii) no information has been omitted which would make the
information previously furnished in such reports and financial statements
misleading or incorrect in any material respect. Each Guarantor agrees to
promptly notify the Bank in writing of the occurrence of any material adverse
change in such Guarantor's financial condition. Each Guarantor agrees to provide
to the Bank such financial information, data and documents as may be reasonably
requested from time to time by the Bank.

    

    10.   Each
Guarantor represents and warrants that neither the execution and delivery of
this Guarantee nor any other document, agreement, certificate or instrument to
which such Guarantor is a party or by which such Guarantor is bound in
connection with the Obligations, nor the consummation of the transactions
contemplated hereunder or thereunder or the compliance with or performance of
the terms and conditions herein or therein, will result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the property or assets of said Guarantor, except as permitted in or
anticipated by this Guarantee, or is prevented by, limited by, conflicts with or
will result in the breach or violation of, or a default under, the terms,
conditions or provisions of (i) any indenture, evidence of indebtedness, loan or
financing agreement, or other agreement or instrument of whatever nature to
which such Guarantor is a party or by which such Guarantor is bound, or (ii) any
provision of any existing law, rule, regulation, order, writ, injunction or
decree of any court or governmental authority to which said Guarantor is
subject.

    

    11.           Each
Guarantor represents and warrants that such Guarantor is not a party to any
action, suit, proceeding, inquiry, hearing or investigation pending, or within
the best of its knowledge, after due inquiry and investigation, threatened, in
any court of law or in equity, or before or by any governmental authority
wherein there is a reasonable probability that an unfavorable determination,
decision, decree, ruling or finding would (i) result in any material adverse
change in the business, assets, liabilities, financial condition, properties or
operations of such Guarantor, (ii) materially adversely affect the transactions
contemplated by this Guarantee and its ability to perform its respective
obligations hereunder, or (iii) adversely affect the validity or enforceability
of this  Guarantee. Each Guarantor represents and warrants that to the
best of its knowledge, after due inquiry and investigation, it is not in
violation of or in default with respect to any order, writ, injunction, decree
or demand of any such court or governmental authority.

    

    12.    Each
Guarantor represents and warrants that (i) all consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, any
governmental authority which are required in connection with the valid execution
and delivery of this Guarantee by such Guarantor, and (ii) the carrying out or
performance of any of the transactions required or contemplated hereunder to be
performed by it, have been obtained or accomplished and are in full force and
effect.

    
      
         

      

      
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    13.           Each
Guarantor acknowledges, represents and warrants that (i) the Borrower's
financial well being and operations are material to the welfare of the
Undersigned, (ii) the Undersigned derives direct and indirect benefits from
extensions of credit by the Bank to the Borrower pursuant to the Loan Documents,
(iii) the assumption by the Undersigned of the obligations hereunder will result
in material benefits to each of the Undersigned, (iv) the Undersigned
voluntarily offered to give its guarantee in order to induce the Bank to enter
into the Loan Documents and make extensions of credit to the Borrower, (v) the
Bank is relying upon the financial condition of the Undersigned in proceeding
with the Loan Documents and extending credit to the Borrower, and (iv) this
Guarantee constitutes a legal, valid and binding obligation on the part of such
Guarantor, enforceable against it in accordance with its terms.

    

    14.           Each
Guarantor represents and warrants that such Guarantor has duly filed or caused
to be filed all federal and state tax returns which are required to be filed and
has paid or made adequate provision for the payment of all taxes, assessments,
fees and other governmental charges which have become due pursuant to said
returns or otherwise pursuant to any assessment.

    

    15.           Each
Guarantor represents and warrants that (i) such Guarantor is not in violation of
or in default in any material respect with regard to any applicable laws and/or
regulations which materially and adversely affect such Guarantor's business,
financial condition, property or operations, and (ii) such Guarantor is not in
violation of or default in any material respect under any indenture, evidence of
indebtedness, loan or financing agreement or other agreement or instrument of
whatever nature to which such Guarantor is party or by which it is bound, a
default under which might have consequences that would materially affect such
Guarantor's business, financial condition, properties or
operations.

    

    16.           Each
Guarantor's liability hereunder shall in no way be affected, diminished or
released by (i) any amendment, change or modification of the provisions of the
Obligation Documents, (ii) any extensions of time for performance required
thereby, (iii) the release of the Borrower from performance or observation of
any of the agreements, covenants, terms or conditions contained in any of the
Obligation Documents by the Bank or by operation of law, whether made with or
without notice to said Guarantor, (iv) acceptance by the Bank of additional
security or any increase, substitution, change or release of any security, (v)
waiver by the Bank of any of its rights under the Obligation Documents, or (vi)
any actions taken or not taken by the Bank.

    17.           If
not prohibited by any applicable law, the Undersigned agrees to pay reasonable
attorney's fees, other costs, and charges necessary for the enforcement of the
terms, conditions and intent of this Guarantee.

    

    18.           No
modification, amendment or waiver of any provision of this Guarantee, nor
consent to any departure by any Guarantor from the terms hereof, shall in any
event be effective unless the same shall be in writing and signed by the party
granting such modification, amendment or waiver, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Guarantor

    
      
         

      

      
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    in any
case shall entitle any Guarantor to any other or further notice or demand in the
same circumstances.

    

    19.           Neither
any failure nor any delay on the part of the Bank in exercising any right, power
or privilege under this Guarantee shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
other right, power or privilege.

    

    20.           This
Guarantee may be assigned by the Bank without any notice to or consent from any
Guarantor.

    

    21.           THE
UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A
TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS DOCUMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING,
WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF BANK RELATING TO THE ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE
LOAN DOCUMENTS, AND AGREE THAT NO SUCH PARTY WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. EXCEPT AS PROHIBITED BY LAW, THE UNDERSIGNED HEREBY WAIVES ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE
OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE UNDERSIGNED CERTIFIES THAT NO REPRESENTATIVE AGENT OR ATTORNEY OF
BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT, IN THE EVENT
OF LITIGATION SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES a
MATERIAL INDUCEMENT FOR BANK TO ACCEPT THIS DOCUMENT AND MAKE ANY LOAN TO
BORROWER. THE UNDERSIGNED CONSENTS TO AND CONFERS PERSONAL JURISDICTION OVER
SUCH PARTY ON THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF NEW YORK; EXPRESSLY WAIVES ANY OBJECTIONS AS TO VENUE
IN ANY OF SUCH STATE COURTS; EXPRESSLY WAIVES ANY RIGHT OF REMOVAL FROM SUCH
STATE COURTS.

    

    22.             If
this Guarantee is signed by more than one party, the word "Guarantor" or
"Undersigned", as used herein, shall be deemed to refer to each of them
individually, and their liability hereunder shall be joint and several.
References to the singular or plural, or to the masculine, feminine, or neuter,
shall be deemed to include the other where appropriate.

    

    23.             Notices
under this Guarantee shall be directed to the address set forth in this
Guarantee, or such other address as shall be furnished to the other party by
notice (hereafter, the "notice address"). Notices under this Guarantee shall be
effected in one or more of the following manners: (i) personal delivery to the
notice address, effective on delivery; (ii) mailing by certified or registered
mail, return receipt requested, by the U.S. Postal Service to the notice
address, effective on the second business day after the day on which mailed;
(iii) delivery by recognized overnight delivery service to the notice address,
effective on the second day after given to the delivery service by the
sender.

    

    
      
         

      

      
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    24.           All
covenants, agreements, representations and warranties made herein shall continue
in full force and effect so long as any part of the Obligations of Borrower is
outstanding. Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors, assigns, heirs,
executors, administrators and representatives of such party; and all covenants,
promises and agreements by or on behalf of a Guarantor which are contained in
this Agreement shall bind the successors, assigns, heirs, executors,
administrators, and representatives of each, and shall inure to the benefit of
the Bank, its successors and assigns.

    

    25.           This
Guarantee shall be construed in accordance with and governed by the laws of the
State of New York and irrespective of any conflicts of laws.

    

    26.           The
Undersigned agree that they will, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such supplements
hereto and such further documents and instruments as may reasonably be required
for carrying out the intention of or facilitating the performance of this
Guarantee.

    

    27.   In
the event any provision of this Guarantee shall be held invalid or unenforceable
by any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any other provision hereof or thereof.

    

    28.           This
Guarantee may be signed in any number of counterparts with the same effect as if
the signatures thereto and hereto were upon the same instrument.

    

    IN
WITNESS WHEREOF, the parties hereto have duly executed this document as of the
day and year first above written.

    

    WITNESS
OR ATTEST:

    CHDT
CORPORATION

    

    

    

    ____________________________        By:
___________________________

    Name:                      Name:

    Title:                              Title:form8k050108ex10-4.htm

    Exhibit
10.4

    

    

    SUBORDINATION
AGREEMENT

    

    THIS SUBORDINATION AGREEMENT
made as of ___________, 2008, by HOWARD ULLMAN, residing at
5000 Thoroughbred Land, Southwest Ranches, Florida 33330, and with offices
located at 350 Jim Moran Blvd., Deerfield Beach, Florida 33442 (hereinafter
designated the "Undersigned" or "Subordinator"), in favor of STERLING NATIONAL BANK, a
national banking association, having an office located at 500 Seventh Avenue,
New York, New York 10018 (hereinafter designated the "Bank");

    

    For and
in consideration of the extension of credit and other financial accommodations
given, to be given or continued by the Bank to CAPSTONE INDUSTRIES, INC.
(hereinafter designated the "Borrower"), the Undersigned and CHDT Corporation (“CHDT”)
hereby agree as follows:

    

    1.           That
the Borrower is or will be indebted to the Bank as a result of instruments,
agreements, and/or documents (hereinafter referred to as the "Loan Documents")
executed or to be executed by the Borrower in favor of the Bank and/or by an
extension of credit made or to be made by the Bank to the Borrower (hereinafter
referred to as "Borrower's Bank Obligations").

    

    2.           That
CHDT is indebted to the Undersigned in the amount of $546,025.00 (together with
all accrued and future interest thereon) (hereinafter referred to as the
"Subordinated Debt"); that the Undersigned has not subordinated all or any
portion of the Subordinated Debt to the debts or claims of any other creditor of
the Borrower by any agreement presently effective; and that the Undersigned has
not assigned the Subordinated Debt, or any part thereof, by any assignment
presently effective.

    

    3.           That,
until payment in full of Borrower's Bank Obligations, and subject to the
provisions of the Loan and Security Agreement executed by the Borrower, CHDT and
the Undersigned in favor of the Bank as well as all extensions, modifications
and renewals thereof, the Undersigned will not receive from CHDT any sum or
thing of value in full or partial satisfaction of, or as security for, the
Subordinated Debt regardless of the time when Borrower's Bank Obligations arose;
and all claims of the Undersigned against CHDT, of every nature, presently
existing and hereaf­ter arising, shall be subordinated to the Borrower's
Bank Obligations ­to the end that the Borrower's Bank Obligations shall be
paid and discharged in full before any payment or security is received by the
Undersigned in part or full payment of, or as security for, the Subordinated
Debt­.

    

    4.           Until
payment in full of Borrower's Bank Obligations, to assign to the Bank all the
Subordinated Debt as security for the payment by the Borrower of the Borrower's
Bank Obligations, with full right in favor of the Bank to receive payment of
said Subordinated Debt, and to enforce and collect said Subordinated Debt by
suit, or by filing proof in any proceeding in bankruptcy, reorganization,
insolvency or other proceeding under state or federal law for an
adjust­ment, settlement, extension or composition of or

    
      
         

      

      
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    other
relief from debts, or otherwise. If any payment is received by the Undersigned
for or on account of the Subordinated Debt, the Undersigned will hold it in
trust for the Bank, and will deliver it to the Bank in the form in which it is
received, with endorsement where required, for credit against the Borrower's
Bank Obligations.  Any security interest or other lien in any property
of CHDT granted to the Subordinator by CHDT, including all filings and
recordings, are subordinate and inferior to the security interests and liens
granted to the Bank pursuant to the Loan Documents, if any, irrespective of the
time or order of filing and/recording. Anything to the contrary notwithstanding,
so long as there are outstanding any obligations of the Borrower to the Bank in
connection with the Bank's Loan Documents or any extension of credit made by the
Bank to the Borrower however evidenced, the Undersigned (i) will not exercise
any rights with respect to any of the property and assets of CHDT in which the
Bank or the Undersigned has a security interest or lien of any kind, if any, all
agreements and filings to the contrary notwithstanding, (ii) will not exercise
any rights with respect to any other property or assets of CHDT, and (iii) will
not take any action against CHDT which would impair or adversely affect the
Bank's ability to collect all of Borrower's Bank Obligations.

    

    5.           In
the event of any receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, readjustment of indebtedness, composition, reorganization,
whether or not pursuant to bankruptcy laws, sale of all or substantially all of
the assets, dissolution, winding up, liquidation, or any other marshaling of the
assets and liabilities of CHDT, any payment or distribution of assets of CHDT of
any kind or character, whether in cash, securities or other property, which
would otherwise be payable to or deliverable upon or with respect to any or all
indebtedness of CHDT to the Undersigned up to the sum of the Subordinated Debt
shall be paid or delivered directly to Bank for application on Borrower's Bank
Obligations until same shall have been fully paid and satisfied. Bank shall have
the right to enforce, collect and receive every such payment or distribution and
give acquittance therefor, and Bank is hereby authorized, as
attor­ney-in-fact for the Undersigned, to vote and prove the Subordinated
Debt in any of the above described pro­ceedings or in any meeting of
creditors of CHDT relating thereto.

    

    6.           Not
to assign, transfer, hypothecate or dispose of any claim it has or may have
against CHDT while Borrower's Bank Obligations remain unpaid, without the
written consent of Bank.

    

    7.           Promptly
upon receipt, endorse and deliver to Bank all notes or other instruments now or
hereafter issued which evidence any indebtedness of CHDT to the Undersigned up
to the sum of the Subordinated Debt.

    

    8.           That
this is a continuing agreement of subordination and the Bank may, without notice
to the Undersigned, extend and continue to extend credit to the Borrower on the
faith hereof, until written notice of revocation hereof is received by the Bank.
Such revocation shall not affect this Subordination in respect to any of the
Borrower's Bank Obligations theretofore incurred, whether then due and payable
or thereafter to become due and payable, nor shall such revocation affect any
extensions or renewals of such Obligations, or any part thereof, after such
notice or revocation is

    
      
         

      

      
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    received
by the Bank, and, as to such Obligations, such revocation shall not become
effective until such Obligations are fully paid.

    

    9.           The
Bank may, without notice to and without the consent of the Undersigned, and
without impairing or in any way affecting this Subordination
Agreement:

    

    (a)
Exchange or surrender all or any part of any property or interest in property
held by the Bank by way of pledge, assignment, security agreement, mortgage,
hypothecation or otherwise, as security for the payment of Borrower's Bank
Obligations;

    

    (b)
Release or settle or compromise with any other guarantor or guarantors of, or
surety or sureties on, any of Borrower's Bank Obligations.

    

    10.           To
waive notice of the making of any extension of credit by the Bank to the
Borrower, and of notice of default by the Borrower in the payment of Borrower's
Bank Obligations.

    

    11.           Bank's
delay in or failure to exercise any right or remedy shall not be deemed a waiver
of any obligation of the Undersigned or right of Bank. This Subordination
Agreement may be modified, and any of Bank's rights hereunder waived, only by
agreement in writing signed by Bank.

    

    12.           All
of Borrower's Bank Obligations shall be deemed to have been made or incurred at
the request of Undersigned and in reliance upon this Subordination Agreement;
provided, however, that neither the foregoing provision nor any other provision
contained in this Subordination Agreement shall be deemed or construed to
constitute, either directly or by implication, a guaranty by Undersigned of
Borrower's Bank Obligations.

    

    13.           For
the purposes hereof:

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (a) The
Bank will be deemed to have extended credit to the Borrower when it makes a loan
to the Borrower, or when it acquires an instrument for the payment of money upon
which the Borrower is liable as maker, drawer, endorser, surety, guarantor or
otherwise, or when it extends or renews any debt or instrument evidencing any
debt owing to it by the Borrower or any debt or instrument evidencing any debt
for the payment of which the Borrower is liable to the Bank as maker, drawer,
endorser, surety, guarantor or otherwise; and

    

    (b) The
"Borrower's Bank Obligations" includes every liability to the Bank which arises
when the Bank extends credit to the Borrower or otherwise including accrued
interest, and all expenses, fees and costs for which the Borrower is liable to
the Bank, or incurred by the Bank in connection with any indebtedness of the
Borrower to the Bank, or the collection thereof.

    

    14.           If
this document is signed by more than one person or entity, the word
"Undersigned," as used herein, includes all persons and entities so signing, and
the liability of each of them hereunder shall be joint and several.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    15.           THE
UNDERSIGNED AND CHDT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS DOCUMENT OR ANY OTHER LOAN DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF BANK RELATING TO THE ADMINISTRATION OF THE LOAN OR
ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NO SUCH PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, THE UNDERSIGNED AND CHDT
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN,
OR IN ADDITION TO, ACTUAL DAMAGES. THE UNDERSIGNED AND CHDT EACH CERTIFIES THAT
NO REPRESENTATIVE AGENT OR ATTORNEY OF BANK HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT BANK WOULD NOT, IN THE EVENT OF LITIGATION SEEK TO ENFORCE THE
FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR BANK TO
ACCEPT THIS DOCUMENT AND MAKE ANY LOAN TO BORROWER. THE UNDERSIGNED CONSENTS TO
AND CONFERS PERSONAL JURISDICTION OVER SUCH PARTY ON THE COURTS OF THE STATE OF
NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW YORK;
EXPRESSLY WAIVES ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS;
EXPRESSLY WAIVES ANY RIGHT OF REMOVAL FROM SUCH STATE COURTS; AND AGREES THAT
ANY ACTION ARISING FROM THIS AGREEMENT OR ANY TRANSACTION HEREUNDER MUST BE
BROUGHT ONLY IN THE STATE OF NEW YORK.

    

    16.           The
provisions hereof (1) shall be binding upon the Undersigned and CHDT, and all of
their heirs, executors, administrators, successors and assigns; (2) shall inure
to the benefit of the Bank, its successors and assigns; and (3) shall be
governed by and be construed according to the laws of the State of New
York.

    

    17.           As
used herein, the singular number includes the plural, and the masculine gender
includes the feminine and the neuter.

    

    

    
      
         

      

      
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    IN WITNESS WHEREOF, the
Undersigned has duly executed this document on the day and year first above
written.

    

    WITNESS/ATTEST:

    

    

    

    ________________________                    _________________________(L.S.)

                                                HOWARD
ULLMAN

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