Document:

SUBSIDIARY GUARANTY

 Exhibit 10.3 
  
 SUBSIDIARY GUARANTY 
  
 This SUBSIDIARY GUARANTY (this “Guaranty”) is entered into as of May 1, 2004 by CRESA PARTNERS OF ORANGE COUNTY, LP, a
Delaware limited partnership (“Guarantor”), in favor of and for the benefit of KEVIN J. HAYES, as administrative agent for and representative of (in such capacity herein called “Guaranteed Party”) the
noteholders (“Noteholders”) of those certain promissory notes in an aggregate principal amount of up to $6,900,000, by ASDS Orange County, Inc., a Delaware corporation and the successor corporation of the merger of Orange County
Acquisition Corp. and CRESA Partners of Orange County, Inc. (“Company”), in favor of Noteholders (said Notes, as they may hereafter be amended, supplemented or otherwise modified from time to time, being the
“Notes”; capitalized terms defined therein and not otherwise defined herein being used herein as therein defined) and in favor of and for the benefit of the other Beneficiaries (as defined below). Guaranteed Party and Noteholders
are sometimes referred to herein as “Beneficiaries”. 
  
 1. Guaranty. (a) In order to induce Noteholders to extend credit to Company pursuant to the Notes, Guarantor irrevocably and unconditionally guaranties, as primary obligor and not merely as surety, the due and punctual payment in
full of all Guaranteed Obligations (as hereinafter defined) when the same shall become due, whether at stated maturity, by acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)). The term “Guaranteed Obligations” is used herein in its most comprehensive sense and includes any and all obligations of Company in respect of principal, interest,
fees, costs, expenses (including, without limitation, legal fees and expenses of counsel) and liabilities of whatsoever nature under the Notes, this Guaranty and the other Note Documents. 
  
 Guarantor acknowledges that the Guaranteed Obligations are being incurred for and will inure to the benefit of Guarantor.

  
 Any interest on any portion of the Guaranteed Obligations that
accrues after the commencement of any proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Company (or, if interest on any portion of the Guaranteed Obligations
ceases to accrue by operation of law by reason of the commencement of said proceeding, such interest as would have accrued on such portion of the Guaranteed Obligations if said proceeding had not been commenced) shall be included in the Guaranteed
Obligations. 
  
 In the event that all or any portion of the
Guaranteed Obligations is paid by Company, the obligations of Guarantor hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) is rescinded or recovered
directly or indirectly from Guaranteed Party or any other Beneficiary as a preference, fraudulent transfer or otherwise, and any such payments that are so rescinded or recovered shall constitute Guaranteed Obligations. 

 Subject to the other provisions of this Section 1, upon the failure of Company to pay any of the
Guaranteed Obligations when and as the same shall become due, Guarantor will upon demand pay, or cause to be paid, in cash, to Guaranteed Party for the ratable benefit of Beneficiaries, an amount equal to the aggregate of the unpaid Guaranteed
Obligations. 
  
 (b) Anything contained in this Guaranty to the
contrary notwithstanding, the obligations of Guarantor under this Guaranty and the other Note Documents shall be limited to a maximum aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance
as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any applicable provisions of comparable state law (collectively, the “Fraudulent Transfer Laws”), in each case after giving effect to
all other liabilities of Guarantor, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically excluding, however, any liabilities of Guarantor (x) in respect of intercompany indebtedness to Company or other
affiliates of Company to the extent that such indebtedness would be discharged in an amount equal to the amount paid by Guarantor hereunder and (y) under any guaranty of subordinated indebtedness which guaranty contains a limitation as to maximum
amount similar to that set forth in this Section 1(b), pursuant to which the liability of Guarantor hereunder is included in the liabilities taken into account in determining such maximum amount) and after giving effect as assets to the value (as
determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, reimbursement, indemnification or contribution of Guarantor pursuant to applicable law or pursuant to the terms of any agreement, including
Section 1(d) hereof. 
  
 (c) Notwithstanding anything in the
contrary contained in this Guaranty, Guaranteed Party hereby agrees that it shall not demand payment or otherwise exercise any claims, rights or remedies that Guaranteed Party now has or may have hereunder against Guarantor under this Guaranty until
the earlier to occur of (i) the passage of 30 days after the date Guaranteed Party’s makes demand for payment of the Guaranteed Obligations under the Parent Guaranty (as defined below), and (ii) the occurrence of a Proceeding with respect to
any Credit Party. For purposes hereof, a “Proceeding” shall mean any insolvency, bankruptcy, receivership, custodianship, liquidation, reorganization, assignment for the benefit of creditors or other proceeding for the liquidation,
dissolution or other winding up any Credit Party or any of their Subsidiaries or any of their respective properties. 
  
 (d) Guaranteed Party hereby acknowledges that in the event any payment is made on any date by Guarantor under this Guaranty, Guarantor shall be entitled
to reimbursement from Ascendant Solutions, Inc., a Delaware corporation (“Parent”), under its Parent Guaranty dated as of the date hereof (the “Parent Guaranty”) in the maximum amount permitted by law.
Notwithstanding the foregoing, Guarantor hereby confirms that the enforceability of this Guaranty is not dependent upon Parent’s ability to reimburse Guarantor, or Guarantor’s ability to collect from Parent, any amounts paid by Guarantor
under this Guaranty, and that Guarantor’s rights to obtain reimbursement are subject to Section 6 hereof. 
  

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 2. Guaranty Absolute; Continuing Guaranty. The obligations of Guarantor hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any circumstance which constitutes a legal or equitable discharge of a guarantor or surety other than payment in full of the Guaranteed Obligations. In furtherance of the foregoing
and without limiting the generality thereof, Guarantor agrees that: (a) this Guaranty is a guaranty of payment when due and not of collectibility; (b) Guaranteed Party may enforce this Guaranty upon the occurrence and during the continuance of
an Event of Default under the Notes; (c) a separate action or actions may be brought and prosecuted against Guarantor whether or not any action is brought against Company or any of such other guarantors and whether or not Company is joined in any
such action or actions; and (d) Guarantor’s payment of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge Guarantor’s liability for any portion of the Guaranteed Obligations that has not
been paid. This Guaranty is a continuing guaranty and shall be binding upon Guarantor and its successors and assigns, and Guarantor irrevocably waives any right (including without limitation any such right arising under California Civil Code Section
2815) to revoke this Guaranty as to future transactions giving rise to any Guaranteed Obligations. 
  
 3. Actions by Beneficiaries. Any Beneficiary may from time to time, without notice or demand and without affecting the validity or enforceability
of this Guaranty or giving rise to any limitation, impairment or discharge of Guarantor’s liability hereunder, (a) renew, extend, accelerate or otherwise change the time, place, manner or terms of payment of the Guaranteed Obligations,
(b) settle, compromise, release or discharge, or accept or refuse any offer of performance with respect to, or substitutions for, the Guaranteed Obligations or any agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations, (c) request and accept other guaranties of the Guaranteed Obligations and take and hold security for the payment of this Guaranty or the Guaranteed Obligations, (d) release, exchange, compromise, subordinate or
modify, with or without consideration, any security for payment of the Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other obligation of any Person with respect to the Guaranteed Obligations, (e) enforce and
apply any security now or hereafter held by or for the benefit of any Beneficiary in respect of this Guaranty or the Guaranteed Obligations and direct the order or manner of sale thereof, or exercise any other right or remedy that Guaranteed Party
or the other Beneficiaries, or any of them, may have against any such security, as Guaranteed Party in its discretion may determine consistent with the Notes, and any applicable security agreement, including foreclosure on any such security pursuant
to one or more judicial or nonjudicial sales, and (f) exercise any other rights available to Guaranteed Party or the other Beneficiaries, or any of them, under the Note Documents, at law or in equity. 
  
 4. No Discharge. This Guaranty and the obligations of Guarantor
hereunder shall be valid and enforceable and shall not be subject to any limitation, impairment or discharge for any reason (other than payment in full of the Guaranteed Obligations), including without limitation the occurrence of any of the
following, whether or not Guarantor shall have had notice or knowledge of any of them: (a) any failure to assert or enforce or agreement not to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the
exercise or enforcement of, any claim or 
  

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 demand or any right, power or remedy with respect to the Guaranteed Obligations or any agreement relating thereto, or
with respect to any other guaranty of or security for the payment of the Guaranteed Obligations, (b) any waiver or modification of, or any consent to departure from, any of the terms or provisions of the Notes, any of the other Note Documents or any
agreement or instrument executed pursuant thereto, or of any other guaranty or security for the Guaranteed Obligations, (c) the Guaranteed Obligations, or any agreement relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect, (d) the application of payments received from any source to the payment of indebtedness other than the Guaranteed Obligations, even though Guaranteed Party or the other Beneficiaries, or any of them, might have elected
to apply such payment to any part or all of the Guaranteed Obligations, (e) any failure to perfect or continue perfection of a security interest in any collateral which secures any of the Guaranteed Obligations, and (f) any defenses, set-offs or
counterclaims which Company may assert against Guaranteed Party or any Beneficiary in respect of the Guaranteed Obligations, including but not limited to failure of consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury, other than payment in full of the Guaranteed Obligations. 
  
 5. Waivers. Guarantor waives, for the benefit of Beneficiaries: (a) any right to require Guaranteed Party or the other Beneficiaries, as a
condition of payment or performance by Guarantor, to (i) proceed against Company, any other guarantor of the Guaranteed Obligations (except as provided in Section 1(c) hereof) or any other Person, (ii) proceed against or exhaust any security held
from Company, any other guarantor of the Guaranteed Obligations or any other Person, (iii) proceed against or have resort to any balance of any deposit account or credit on the books of any Beneficiary in favor of Company or any other Person, or
(iv) pursue any other remedy in the power of any Beneficiary; (b) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of Company including, without limitation, any defense based on or arising out of
the lack of validity or the unenforceability of the Guaranteed Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of Company from any cause other than payment in full of the Guaranteed
Obligations; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (d) any defense based upon
Guaranteed Party’s or any other Beneficiary’s errors or omissions in the administration of the Guaranteed Obligations, except behavior that amounts to bad faith; (e) (i) any principles or provisions of law, statutory or otherwise, that are
or might be in conflict with the terms of this Guaranty and any legal or equitable discharge of Guarantor’s obligations hereunder, other than payment in full of the Guaranteed Obligations, (ii) the benefit of any statute of limitations
affecting Guarantor’s liability hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any requirement that any Beneficiary protect, secure, perfect or insure any
Lien or any property subject thereto; and (f) notices, demands, presentments, protests, notices of protest, notices of dishonor and notices of any action or inaction, including acceptance of this Guaranty, notices of default under the Notes, or any
agreement or instrument related thereto, notices of any renewal, extension or modification of the Guaranteed Obligations or any agreement related thereto, notices of 
  

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 any extension of credit to Company and notices of any of the matters referred to in Sections 3 and 4 and any right to
consent to any thereof. 
  
 In accordance with Section 2856 of the
California Civil Code Guarantor waives any and all rights and defenses available to Guarantor by reason of Sections 2787 to 2855, inclusive, of the California Civil Code. 
  
 6. Guarantor’s Rights of Subrogation, Contribution, Etc.; Subordination of Other Obligations. Until the
Guaranteed Obligations shall have been paid in full, Guarantor shall withhold exercise of (a) any claim, right or remedy, direct or indirect, that Guarantor now has or may hereafter have against Company or any of its assets in connection with this
Guaranty or the performance by Guarantor of its obligations hereunder, in each case whether such claim, right or remedy arises in equity, under contract, by statute (including without limitation under California Civil Code Section 2847, 2848 or
2849), under common law or otherwise and including without limitation (i) any right of subrogation, reimbursement or indemnification that Guarantor now has or may hereafter have against Company, (ii) any right to enforce, or to participate in, any
claim, right or remedy that any Beneficiary now has or may hereafter have against Company, and (iii) any benefit of, and any right to participate in, any collateral or security now or hereafter held by any Beneficiary and (b) any right of
contribution Guarantor now has or may hereafter have against any other guarantor of any of the Guaranteed Obligations. Guarantor further agrees that, to the extent the agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation, reimbursement or indemnification Guarantor may have against Company or against any
collateral or security, and any rights of contribution Guarantor may have against any such other guarantor, shall be junior and subordinate to any rights Guaranteed Party or the other Beneficiaries may have against Company, to all right, title and
interest Guaranteed Party or the other Beneficiaries may have in any such collateral or security, and to any right Guaranteed Party or the other Beneficiaries may have against such other guarantor. 
  
 Any indebtedness or other payment obligations of Company now or hereafter
held by Guarantor is subordinated in right of payment to the Guaranteed Obligations, and any such indebtedness of Company to Guarantor collected or received by Guarantor after an Event of Default has occurred and is continuing, and any amount paid
to Guarantor on account of any subrogation, reimbursement, indemnification or contribution rights referred to in the preceding paragraph when all Guaranteed Obligations have not been paid in full, shall be held in trust for Guaranteed Party on
behalf of Beneficiaries and shall forthwith be paid over to Guaranteed Party for the benefit of Beneficiaries to be credited and applied against the Guaranteed Obligations. 
  
 7. Expenses. Guarantor agrees to pay, or cause to be paid, on demand, and to save Guaranteed Party and the other
Beneficiaries harmless against liability for, (i) any and all costs and expenses (including fees, costs of settlement and disbursements of counsel) incurred or expended by Guaranteed Party or any other Beneficiary in connection with the enforcement
of or preservation of any rights under this Guaranty, provided that 
  

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 such costs shall not be payable hereunder unless there is an Event of Default under Sections 7(a), (h) or (i) of the
Notes, and (ii) any and all costs and expenses required to be paid by Guarantor under the provisions of any other Note Document. 
  
 8. Financial Condition of Company. No Beneficiary shall have any obligation, and Guarantor waives any duty on the part of any Beneficiary, to
disclose or discuss with Guarantor its assessment, or Guarantor’s assessment, of the financial condition of Company or any matter or fact relating to the business, operations or condition of Company. Guarantor has adequate means to obtain
information from Company on a continuing basis concerning the financial condition of Company and its ability to perform its obligations under the Note Documents, and Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Company and of all circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations. 
  
 9. Representations and Warranties. The representations and warranties contained in Section 4 of that certain Security Agreement, dated as of the
date hereof, by and among Company, Guarantor and Kevin J. Hayes as Secured Party, are incorporated herein by this reference as they relate to this Guaranty, and are and will be true, correct and complete in all material respects on and as of the
date hereof. 
  
 10. Covenants. Guarantor agrees that, so
long as any part of the Guaranteed Obligations shall remain unpaid, Guarantor will, unless Requisite Noteholders shall otherwise consent in writing, perform or observe, all of the terms, covenants and agreements that the Note Documents state that
Company is to cause Guarantor to perform or observe. 
  
 11.
Set Off. In addition to any other rights any Beneficiary may have under law or in equity, if any amount shall at any time be due and owing by Guarantor to any Beneficiary under this Guaranty, such Beneficiary is authorized at any time or from
time to time, without notice (any such notice being expressly waived), to set off and to appropriate and to apply any and all deposits (general or special, including but not limited to indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness of such Beneficiary owing to Guarantor and any other property of Guarantor held by a Beneficiary to or for the credit or the account of Guarantor against and on account of the Guaranteed Obligations
and liabilities of Guarantor to any Beneficiary under this Guaranty. 
  
 12. Amendments and Waivers. No amendment, modification, termination or waiver of any provision of this Guaranty, and no consent to any departure by Guarantor therefrom, shall in any event be effective without the written concurrence
of Guaranteed Party and, in the case of any such amendment or modification, Guarantor. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. 
  
 13. Miscellaneous. It is not necessary for Beneficiaries to inquire
into the capacity or powers of Guarantor or Company or the officers, directors or any agents acting or purporting to act on behalf of any of them. 
  

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 The rights, powers and remedies given to Beneficiaries by this Guaranty are cumulative and shall be in
addition to and independent of all rights, powers and remedies given to Beneficiaries by virtue of any statute or rule of law or in any of the Note Documents or any agreement between Guarantor and one or more Beneficiaries or between Company and one
or more Beneficiaries. Any forbearance or failure to exercise, and any delay by any Beneficiary in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy. 
  
 In case any provision in or obligation under this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. 
  
 THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTOR, GUARANTEED PARTY AND THE OTHER BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. 
  
 This Guaranty shall inure to the benefit of Beneficiaries and their respective successors and assigns. 
  
 ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF CALIFORNIA. WITH RESPECT TO SUCH PROCEEDINGS, GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY. Guarantor agrees that service of all process in any such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to Guarantor at its address set forth below its signature hereto (or at such other address as Guarantor may from time to time designate (in writing) as its address for service of process), such service being
acknowledged by Guarantor to be sufficient for personal jurisdiction in any action against Guarantor in any such court and to be otherwise effective and binding service in every respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of Guaranteed Party or any Beneficiary to bring proceedings against Guarantor in the courts of any other jurisdiction. 
  
 GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, GUARANTEED PARTY EACH AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. THE SCOPE OF THIS WAIVER IS 
  

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 INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, GUARANTEED PARTY EACH (I)
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR GUARANTOR AND GUARANTEED PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT GUARANTOR AND GUARANTEED PARTY HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS GUARANTY OR ACCEPTING THE
BENEFITS THEREOF, AS THE CASE MAY BE, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS, AND (II) FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS OF THIS GUARANTY. In the event of litigation, this Guaranty may be filed as a written consent to a trial by the court. 
  
 14. Counterparts. This Guaranty may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original for all purposes; but all such counterparts together shall constitute but one and the same instrument. 
  
 15. Guaranteed Party as Administrative Agent. 
  
 (a) Guaranteed Party has been appointed to act as Guaranteed Party as provided in the Notes. Guaranteed Party shall be
obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking any action, solely in accordance with this Guaranty and the Notes; provided that
Guaranteed Party shall exercise, or refrain from exercising, any remedies under or with respect to this Guaranty in accordance with the instructions of Requisite Noteholders. 
  
 (b) Guaranteed Party shall at all times be the same Person that is Administrative Agent under the Notes. Written notice of
resignation by Administrative Agent pursuant to Section 10 of the Notes shall also constitute notice of resignation as Guaranteed Party under this Guaranty; removal of Administrative Agent pursuant to Section 10 of the Notes shall also constitute
removal as Guaranteed Party under this Guaranty; and appointment of a successor Administrative Agent pursuant to Section 10 of the Notes shall also constitute appointment of a successor Guaranteed Party under this Guaranty. Upon the acceptance of
any appointment as Administrative Agent under Section 10 of the Notes by successor Administrative Agent, that successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges 
  

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 and duties of the retiring or removed Guaranteed Party under this Guaranty, and the retiring or removed Guaranteed Party
under this Guaranty shall promptly (i) transfer to such successor Guaranteed Party all sums held hereunder, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor
Guaranteed Party under this Guaranty, and (ii) take such other actions as may be necessary or appropriate in connection with the assignment to such successor Guaranteed Party of the rights created hereunder, whereupon such retiring or removed
Guaranteed Party shall be discharged from its duties and obligations under this Guaranty. After any retiring or removed Guaranteed Party’s resignation or removal hereunder as Guaranteed Party, the provisions of this Guaranty shall inure to its
benefits as to any actions taken or omitted to be taken by it under this Guaranty while it was Guaranteed Party hereunder. 
  
 [remainder of page intentionally left blank] 
  

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 IN WITNESS WHEREOF, Guarantor and, solely for purposes of the waiver of the right to jury trial
contained in Section 13, Guaranteed Party have caused this Guaranty to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above. 
  

			
	CRESA PARTNERS OF ORANGE
COUNTY, LP
		
	 By:
	 	     CRESA Partners-Hayes, Inc., its
     General Partner

		
	 By:
	 	 /s/ Kevin J. Hayes

	 Name: Kevin J. Hayes

	 Title: President & CFO

	
	 Address:

	
	 16250 Dallas Parkway

	 Suite 102

	 Dallas, TX 75248

	 Attn: David Bowe

	 Telecopy: (972) 250-0934

	
	 with a copy (which shall not constitute notice) to:

	
	 Winstead Sechrest & Minick P.C.

	 5400 Renaissance Tower

	 1201 Elm Street

	 Dallas, Texas 75270

	 Attn: Thomas R. Helfand

	 Telecopy: (214) 745-5390

  

 S-1 

			
	KEVIN J. HAYES, as Guaranteed Party
		
	 By:
	 	 /s/ Kevin J. Hayes

	 	 	     Kevin J. Hayes

	
	 Address:

	
	 Kevin J. Hayes

	 610 Newport Center Drive

	 5th Floor

	 Newport Beach, CA 92660

	
	 with a copy (which shall not constitute notice) to:

	
	 Gary J. Singer, Esq.

	 O’Melveny & Myers LLP

	 610 Newport Center Drive

	 Suite 1700

	 Newport Beach, CA 92660

	 Telecopy: (949) 823-6994

  

 S-2Confidential Mutual Settlement

 Exhibit 10.37 
  
 CONFIDENTIAL MUTUAL SETTLEMENT AGREEMENT 
 AND 
 MUTUAL GENERAL RELEASE OF ALL CLAIMS 
  
 THIS CONFIDENTIAL MUTUAL
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE OF ALL CLAIMS (“Agreement”) is made and
entered into between ROBERT L. THOMASON on behalf of himself, his spouse (past, current or future), his beneficiaries, his agents, heirs, executors and assigns (collectively
“THOMASON”), CR TECHNOLOGY, INC., on behalf of itself and its past and present officers, owners, directors, stockholders, agents, employees,
successors, predecessors, assigns, representatives, attorneys, parent corporation, divisions, subsidiaries, affiliates (and agents, directors, officers, employees, representatives and attorneys of such parent corporation, divisions, subsidiaries and
affiliates), 1991 Stock Option Plan, and its past and present sponsors, administrators, and fiduciaries (collectively “CRT”), and defendant PHOTON DYNAMICS, INC., on
behalf of itself and its past and present officers, owners, directors, stockholders, agents, employees, successors, predecessors, assigns, representatives, attorneys, parent corporations, divisions, subsidiaries, affiliates (and agents, directors,
officers, employees, representatives and attorneys of such parent corporations, divisions, subsidiaries and affiliates), the 1991 Stock Option Plan assumed by Photon Dynamics, Inc., and its past and present sponsors, administrators, and fiduciaries
(collectively “PHOTON”). 
  
 RECITALS 
  
 A. A dispute
has arisen between THOMASON and Defendants CRT and PHOTON regarding THOMASON’s attempts to exercise options in 19,253 shares of PHOTON stock in late 2001, under the terms of a Nonqualified Stock Option Agreement entered into by THOMASON and CRT
in 1991. THOMASON has filed a lawsuit entitled Robert L. Thomason v. Photon Dynamics, Inc., and CR Technology, Inc. in Superior Court of the State of California in and for the County of Orange, Case Number 02CCO3568 (the
“Lawsuit”). PHOTON and CRT cross-complained against THOMASON for breach of contract. 
  
 B. The parties hereto have negotiated a settlement of all disputed claims between them, the terms of which are set forth below 
  
 COVENANTS 
  
 1. (a) For and in consideration of the Settlement Payment PHOTON is
obligated to make under Section 4 of this Agreement, THOMASON does hereby irrevocably and unconditionally release, acquit, and forever discharge PHOTON and CRT from any and all claims, charges, complaints, rights, demands, actions, causes of action,
obligations, liabilities, promises, agreements, controversies, damages, suits, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any and every kind, nature and character whatsoever (including, but not
limited to, any and all causes of action contained in the lawsuit filed by THOMASON), state law causes of action, including but not limited to actions for breach of contract, conversion, possession of personal property, and any other state or
federal law (including the Age Discrimination in Employment Act as amended by the Older Workers Benefit Protection Act), code provision, constitution, judicial decision, order, or regulation which 
  
 Confidential Mutual Settlement Agreement and Mutual General Release

  

 1. 

 THOMASON, individually, and/or on behalf of his heirs, successors or assigns, ever had, now has or may have, whether
known or unknown, or whether asserted or which could have been asserted, or which were asserted in the Lawsuit, and any other acts or omissions by PHOTON or CRT before the Effective Date of this Agreement as defined by Section 15. 
  
 (b) For and in consideration of the Settlement Payment PHOTON is
obligated to make under Section 4 of this Agreement, THOMASON does hereby irrevocably and unconditionally release, acquit and forever discharge each and every insurer of PHOTON or CRT of and from any and all claims, charges, complaints, rights,
demands, actions, causes of action, obligations, liabilities, promises, agreements, controversies, damages, suits, costs, losses, debts, and expenses of any kind or character which were asserted in the Lawsuit or which could have been asserted in
the Lawsuit. 
  
 2. For and in consideration of the
covenants made by THOMASON in this Agreement PHOTON and CRT, and each of them, hereby irrevocably and unconditionally release, acquit, and forever discharge THOMASON, from any and all claims, charges, complaints, rights, demands, actions, causes of
action, obligations, liabilities, promises, agreements, controversies, damages, suits, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any and every kind, nature and character whatsoever, (including,
but not limited to, any and all causes of action contained in the cross-complaint filed by PHOTON and CRT), state law causes of action, including but not limited to actions for breach of contracts, fraud, and any other state or federal law, code
provision, constitution, judicial decision, order, or regulation which PHOTON or CRT, on behalf of themselves, or their successors or assigns, ever had, now has or may have, whether known or unknown and whether asserted or which could have been
asserted, or which were asserted in the Lawsuit, and any other acts or omissions by THOMASON before the Effective Date of this Agreement as defined by Section 15. 
  
 3. THOMASON, PHOTON, and CRT each agree to execute and file a stipulation requesting dismissal of his/its lawsuit
with prejudice within one business day after tender of the Settlement Payment to THOMASON. Each party shall bear its own costs and attorneys’ fees in the Action. 
  
 4. PHOTON agrees to pay THOMASON the total sum of seven hundred fifty thousand dollars and no cents ($750,000.00),
which amount represents the total amount owed under the terms of this Agreement (“Settlement Payment”). THOMASON acknowledges and agrees that he is solely responsible for the payment of any taxes, interest or penalties assessed against him
that arise from his receiving the Settlement Payment. PHOTON and CRT each makes no representation as to the taxability of the Settlement Payment, but PHOTON shall report the payment on an IRS Form 1099. THOMASON agrees to indemnify and hold harmless
PHOTON and CRT in the event that the Internal Revenue Service or any other taxing authority assesses any taxes, excise taxes, penalties, fees, or interest against PHOTON or CRT as a result of non-withholding of taxes from the Settlement Payment by
PHOTON or CRT, or any failure or refusal by THOMASON to pay any taxes, interest or penalties he owes that arise from his receipt of the Settlement Payment. At Photon’s or CRT’s option, the Settlement Payment shall be made by either 1)
delivering a certified check in the amount of the Settlement Payment made payable to Robert L. Thomason to THOMASON’s attorneys or 2) by completing a wire transfer of the 
  
 Confidential Mutual Settlement Agreement and Mutual General Release 
  

 2. 

 Settlement Payment to THOMASON’s account (wire instructions: Chase Manhattan Bank, New York, New York; ABA
#021000021; Acct #06619803 8; Name: Solomon Smith Barney, Further Credit to: R & M Thomason Rev. Tr. A-C 6470128213499). PHOTON or CRT shall make the Settlement Payment to THOMASON within five (5) business days of the Effective Date of this
Agreement. Upon receipt of the Settlement Payment, Thomason shall within one business day file the stipulated dismissal with prejudice. 
  
 5. To effect a full and complete release as described in Sections 1 and 2 herein above, THOMASON, PHOTON, and CRT each expressly waives and
relinquishes all rights and benefits afforded him/it by Section 1542 of the Civil Code of the State of California, and does so understanding and acknowledging the significance and consequence of such specific waiver of Section 1542. Section 1542 of
the Civil Code of the State of California states as follows: 
  

	
	“A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.”

  
 Thus, notwithstanding the provisions
of Section 1542, and for the purpose of implementing a full and complete release and discharge, THOMASON, PHOTON, and CRT each expressly acknowledges that this Agreement is intended to include in its effect, without limitation, all claims not known
or suspected to exist in his/its favor at the time of signing this Agreement, and that this Agreement contemplates the extinguishment of any such claim or claims. THOMASON, PHOTON, and CRT each knows of no actions at law or in equity nor
administrative proceedings currently pending (other than the Lawsuit) that concern allegations based on or related to and of the claims asserted by THOMASON, PHOTON, or CRT in the Lawsuit. THOMASON, PHOTON, and CRT each warrants that he/it has read
this Agreement, including this waiver of California Civil Code section 1542, and that he/it has consulted counsel about this Agreement and specifically about the waiver of section 1542, and that he/it understands the Agreement and the section 1542
waiver, and so freely and knowingly enters into this Agreement THOMASON, PHOTON, and CRT each acknowledge that he/it may hereafter discover facts different from or in addition to those he/it now knows or believes to be true regarding the matters
released or described in this Agreement, and he/it agrees that the releases and agreements contained in this Agreement shall be and will remain effective in all respects notwithstanding any later discovery of any such different or additional facts.

  
 6. THOMASON, PHOTON, and CRT each agrees and
Understands that this is a full and final release covering all known and unknown and anticipated and unanticipated injuries, debts, claims, or damages which may have arisen, or which may arise, connected with all matters from the beginning of time
to the date hereof, as well as those injuries, debts, claims, or damages now known or disclosed which may have arisen, or which may arise, from the Nonqualified Stock Option Agreement signed by THOMASON in 1991, and the General Release signed by
THOMASON in 1999. The furnishing of the consideration for this Agreement shall not at any time, for any purpose be deemed or construed by any party hereto or by anyone else, as an admission of liability or responsibility by any party or any of them
for any acts alleged in the lawsuit. Any liability for any and all claims is expressly denied and disclaimed by the parties and each of them. 
  
 Confidential Mutual Settlement Agreement and Mutual General Release 
  

 3. 

 7.  (a) THOMASON agrees to keep the fact and terms of this Agreement, and amount of the
settlement payment confidential. This confidentiality provision is material to the Agreement. In the event of any inquiry as to settlement, THOMASON shall respond that the matter has been resolved on a confidential basis. 
  
 (b) Except as compelled by law, THOMASON may discuss the Agreement
only with his attorneys, accountants and tax professionals, and immediate family (defined as parent(s), natural children and spouse). THOMASON agrees and understands that each and any such permissible disclosure may be made only on the condition
that such persons to whom information has been disclosed also agree not to disclose or publicize any information concerning the Agreement. 
  
 (c) THOMASON agrees to refrain from contacting others, instigating, or participating in any legal action against PHOTON or CRT related to, arising
from, or with respect to any act, omission, or claim that occurred or arose before the Effective Date of this Agreement, except as required by law. 
  
 8. THOMASON, PHOTON, and CRT each represents and agrees that he/it has in fact thoroughly discussed all aspects of this Agreement with his/its
attorneys. THOMASON, PHOTON, and CRT has each carefully read and fully understands all of the provisions of this Agreement, and voluntarily and of his/its own free will enters into this Confidential Settlement Agreement and General Release

  
 9. THOMASON, PHOTON, and CRT each represents that he/it
has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity, any Claim or any portion thereof or any interest therein. THOMASON, PHOTON, and CRT each agrees to indemnify the other, and each of them, in the
event any person makes a claim of any kind or amount against a party release under this Confidential Settlement Agreement and General Release. 
  
 10. This Confidential Settlement Agreement and General Release is made and entered into in the State of California, and shall in all respects be
interpreted, enforced and governed under the laws of the State of California. The parties agree to meet and confer in good faith prior to bringing any actions to enforce the terms of this Agreement. 
  
 11. Should any provision of this Agreement be declared or be
determined by any court to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term, or provision shall be deemed not to be a part of this Agreement.

  
 12. This Agreement sets forth the entire agreement
between the parties hereto and fully supersedes any and all prior agreements or understandings between the parties hereto. Any modification or amendment to this Agreement must be in writing and must be signed and dated by all of the parties, and
must explicitly state that it is intended to be an amendment to or modification of this Agreement. 
  
 Confidential Mutual Settlement Agreement and Mutual General Release 
  

 4. 

 13. Counsel for the respective parties have reviewed and participated in the drafting of this
Agreement. Consequently, the normal rule of construction that ambiguities shall be resolved against the drafter shall not be used or applied in the interpretation of this Agreement. 
  
 14. This Agreement shall be binding upon each party to it and upon each of such party’s heirs, administrators,
representatives, executors, successors and assigns, and shall inure to the benefit of the parties and each of them, and to their heirs, administrators, representatives, executors, successors and assigns 
  
 15. THOMASON understands and agrees that: 
  
 (a) He has been offered a full twenty-one (21) days within which to
consider this Agreement before executing it. 
  
 (b) He has
a full seven (7) days following his execution of this Agreement to revoke this Agreement and has been and hereby is advised in writing that this Agreement shall not become effective or enforceable before such revocation period has expired.

  
 (c) He understands that rights or claims under the Age
Discrimination In Employment Act of 1967 (29 U.S.C. § 621, et seq.) that may arise based on facts or events occurring after the effective date of this Agreement are not waived. 
  
 (d) The consideration provided for in Section 4, is in addition to
anything to which THOMASON is otherwise already entitled or has been paid. 
  
 (e) The Effective Date of this Agreement shall be the first day after all time periods in this Paragraph 15 have expired and this Agreement has been signed, and not revoked by THOMASON. 
  
 16. This Agreement may be executed in any number of counterparts, or
in different counterparts, any of which shall be deemed an original, but all of which together shall constitute one and the same agreement. 
  
 17. THOMASON agrees to promptly return to PHOTON all originals, copies and extracts of any documents that were produced during discovery, including
copies and extracts of all expert reports. PHOTON and CRT agree to promptly return to THOMASON all documents designated “confidential” that were produced during discovery. A document shall be considered produced during discovery whether it
was responsive to party discovery or secured through a third party subpoena. PHOTON and CRT’s obligation to return documents shall include all documents secured through subpoenas issued to RBC Dain Rauscher and Smith Barney. All items to be
returned under this Paragraph shall be returned within ten (10) business days of the Effective Date of this Agreement. 
  
 Confidential Mutual Settlement Agreement and Mutual General Release 
  

 5. 

 18. All notices and other communications hereunder shall be communicated to all parties in writing
and shall be delivered or mailed by registered or certified mail, postage prepaid and with return receipt requested. Hand-delivered notices shall be deemed communicated when received. Mailed notices shall be deemed communicated as of five (5) full
business days after mailing, if mailed to the following respective addresses: 
  
 PHOTON or CRT:  Margaret Hart Edwards 
 Littler Mendelson, PC 
 650 California Street, 20th Floor 
 San
Francisco CA 94108 
 Telephone: (415) 433-1940 
 Facsimile: (415) 399-8490 
  
 THOMASON:         James L. Poth 
 Jones Day 
 3 Park Plaza, Suite 1100 
 Irvine CA 92614

 Telephone: (949) 851-3939 
 Facsimile: (949) 553-7539 
  
 Confidential Mutual
Settlement Agreement and Mutual General Release 
  

 6. 

 PLEASE READ CAREFULLY. THIS CONFIDENTIAL SETTLEMENT AGREEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS. YOU GIVE UP ANY RIGHT TO SUE FOR ANY REASON, EVEN REASONS YOU DO NOT KNOW ABOUT, BY SIGNING THIS AGREEMENT. 
  

							
	ROBERT L. THOMASON	 	CR TECHNOLOGY, INC.
				
	 By:
	 	 /s/ Robert L. Thomason

	 	 By:
	 	 /s/ Richard Okumoto

	 	 	 Robert L. Thomason
	 	 	 	 Its

		
	 Dated:   April 22, 2004
	 	 Dated:   April 28, 2004

			
	 	 	 	 	PHOTON DYNAMICS, INC.
				
	 	 	 	 	 By:
	 	 /s/ Richard Okumoto

	 	 	 	 	 	 	 Its CFO

			
	 	 	 	 	 Dated:   April 28, 2004

  
 Confidential Mutual
Settlement Agreement and Mutual General Release 
  

 7. 

 Approved as to form: 
  

							
	JONES DAY	 	LITTLER MENDELSON, PC
				
	 By:
	 	 /s/ James L. Poth

	 	 By:
	 	 /s/ Margaret Hart Edwards

	 	 	 James L. Poth
 Attorneys for Plaintiff,
 ROBERT L. THOMASON
	 	 	 	 Margaret Hart Edwards
 Attorneys for Defendants,
 PHOTON DYNAMICS, INC. and CR TECHNOLOGY, INC.

		
	 Dated:   April 22, 2004
	 	 Dated:   April 26, 2004

  
 Confidential Mutual
Settlement Agreement and Mutual General Release 
  

 8.

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