EXHIBIT 10.51

 

PROGRAM AGREEMENT

 

Between

 

HOME DEPOT U.S.A., INC.

 

And

 

U.S. HOME SYSTEMS, INC.

 

And

 

U.S. REMODELERS, INC.

 

Dated February 24, 2004

 

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PROGRAM AGREEMENT

 

This AGREEMENT (“Program Agreement”), is made and entered into as of February
24, 2004 (the “Effective Date”), among HOME DEPOT U.S.A., INC., a Delaware
corporation (“Home Depot”), U.S. HOME SYSTEMS, INC., a Delaware corporation
(“USHS”), and U.S. REMODELERS, INC.,1 a Delaware corporation (“USRI”) (Home
Depot, USHS, and USRI being sometimes referred to in this Program Agreement
collectively as the “Parties,” and individually as a “Party”).

 

W I T N E S S E T H:

 

WHEREAS, Home Depot, has established a program which will allow it to offer for
sale and sell products for in-home installation in select product/service
categories in which Home Depot plans to expand its product/service offerings;

 

WHEREAS, one of the central elements of this program is that the suppliers of
such products must be of superior quality and value and have a distribution
network which permits selected The Home Depot® stores and/or markets to have the
supplier presence necessary to undertake the selling, furnishing and installing
of products;

 

WHEREAS, Home Depot has determined, in reliance upon Service Provider’s
representations, that in the product category of custom designed and installed
bathtub liners and wall surrounds, Service Provider offers a potentially
suitable array of products and services and capabilities to service The Home
Depot customers;

 

WHEREAS, it is Home Depot’s intention to offer or market USRI products and
services in selected The Home Depot stores and/or markets, provided USRI has the
necessary qualifications, capabilities and resources to supply and service such
The Home Depot Stores;

 

WHEREAS, the purpose of this Program Agreement is, in part, to define the
aforementioned program and the Parties’ obligations and responsibilities
thereunder; and

 

WHEREAS, certain capitalized words and phrases used in this Program Agreement
are defined in Annex A to this Program Agreement.

 

NOW, THEREFORE, for and in consideration of the agreements set forth below, Home
Depot and USRI agree as follows:

 

ARTICLE 1

 

THE PROGRAM

 

.1. Scope of the Program. The sell, furnish and install program (the “Program”)
detailed herein shall refer to the relationship between Home Depot, on the one
hand, and USRI on the other, pursuant to which Home Depot markets for sale at
participating The Home Depot® stores (“Participating Home Depot Stores”), custom
designed, installed bathtub liners and wall surrounds offered and sold from time
to time by USRI and approved by Home Depot for inclusion in the Program (the
“USRI Products and Services”), in each case on the terms and subject to the
conditions set forth herein. A listing of current USRI Products and Services is
attached as Exhibit 1.1 to this Program Agreement. The Program shall apply only
to Participating Home Depot Stores and not to other Home Depot stores or other
Home Depot owned or affiliated retail locations, whether now existing or
hereafter established.

 

.2. Basic Obligations of the Parties.

 

(a) Home Depot will provide on behalf of the Program:

 

(i) dedicated space in Participating Home Depot Stores retail showrooms for
display of the USRI Products and Services to store customers who are potential
purchasers of the USRI Products and Services;

 

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1d/b/a “U.S. Home Services” in California

 

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(ii) services with respect to qualifying potential customers for the USRI
Products and Services, completing sales lead information forms and transmitting
sales leads to USRI in accordance with Program policies and procedures;

 

(iii) payment to USRI, as applicable, of an agreed-upon percentage of revenue
derived from sales of USRI Products and Services as provided herein.

 

(b) USRI will provide on behalf of the Program:

 

(i) design, construction, set-up and maintenance of USRI Products and Services
displays in the Participating Home Depot Store (“USRI Displays”);

 

(ii) authorized employees or agents of USRI to man the USRI Displays. USRI and
Home Depot shall mutually agree upon the days and times such employees and
agents must be present at the Participating Home Depot Store;

 

(iii) training to Participating Home Depot Store sales personnel to more
effectively market the USRI Products and Services and generate sales leads;

 

(iv) follow-up on all sales leads generated at Participating Home Depot Stores;

 

(v) in-person residential sales calls to potential customers, including design
consultation and price quotation;

 

(vi) procurement of final sales contracts for the USRI Products and Services
(all sales of USRI Products and Services will be memorialized in contracts
between the customers and Home Depot), the form of which contracts shall be
specified by Home Depot, and in each case subject to final review and approval
by authorized personnel at the applicable Participating Home Depot Store;

 

(vii) all labor and materials (as an independent contractor in relation to Home
Depot and at the sole expense of USRI) which are reasonably necessary to
complete all customer orders for USRI Products and Services;

 

(viii) all follow-up service to address any customer complaints and/or warranty
claims; and

 

(c) USHS will provide on behalf of the Program:

 

(i) such management, oversight, and operational support of or for USRI as may
reasonably be required by Home Depot to guarantee USRI’s fulfillment of its
obligations under this Program Agreement;

 

(ii) indemnification of Home Depot as further set forth under this Program
Agreement.

 

The foregoing is intended only as a general description and overview of the
Parties’ respective contributions to the Program, and is qualified in its
entirety by the specific provisions contained elsewhere in this Program
Agreement and in the detailed program guidelines set forth as Exhibit 1.2
(“Program Guidelines”). The Program Guidelines are subject to periodic review
and revision by Home Depot, provided, however, that (a) Home Depot shall provide
at least thirty (30) days’ advance written notice to USRI before such revisions
take effect and (b) such revisions shall not alter any material term of this
Program Agreement.

 

.3. Contractual Relationships. All sales to customers under the Program shall be
between Home Depot and the customer. Home Depot, through the Participating Home
Depot Store shall invoice the customer, and all checks, credit card payments and
other payments from customers shall be made payable solely to Home Depot. The
contractual role of USRI under the Program shall be that of independent
contractors in relation to Home Depot, in exchange for which Home Depot will pay
to USRI an agreed-upon percentage of all revenues collected from customers for
the USRI Products and Services, as provided in Section 2.1.

 

.4. Designation of Participating Home Depot Stores. Attached to this Agreement
as Exhibit 1.4 is a list of Participating Home Depot Stores as of the Effective
Date. Home Depot intends, from time to time, to designate additional
Participating Home Depot Stores as the term is defined below, provided, among
other things, that USRI is ready, willing and able to offer and sell the USRI
Products and Services at such additional Participating Home Depot Stores and has
the necessary qualifications, capabilities, financial resources and

 

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reputation (both national and local) to operate the Program at such additional
Participating Home Depot Stores. Home Depot will communicate regularly with USRI
regarding its intended roll-out of the Program to additional Participating Home
Depot Stores and solicit USRI’s evaluation regarding the markets in which USRI
is qualified to establish and operate the Program in order to justify the
further designation of The Home Depot stores as Participating Home Depot Stores.
The term “Participating Home Depot Store” shall refer exclusively to
Participating Home Depot Stores that have been designated by Home Depot as
Program participants; Participating Home Depot Stores that are not Program
participants shall be referred to herein as “Non-Participating Stores.”

 

.5. Designation of Home Depot Stores by Home Depot. For each Participating Home
Depot Store designated by Home Depot following the Effective Date, Home Depot
shall notify USRI of the designation of such Participating Home Depot Store.
Each such designation shall require specific approval by Home Depot as described
in more detail in the Program Guidelines, Section 1.6 below and elsewhere in
this Program Agreement.

 

.6. Approval of USRI Requests for Designation of Home Depot Stores by Home
Depot. In each case in which USRI requests that Home Depot designate a
particular The Home Depot store as a Participating Home Depot Store, such
designation shall be subject to approval by Home Depot in Home Depot’s sole
discretion. Upon receipt of USRI’s request to designate a particular The Home
Depot store as a Participating Home Depot Store, Home Depot may, at its option,
arrange an interview with the local managers of USRI or its subcontractors and
may request an inspection of its facilities, interviews with employees and
review of financial and other records that Home Depot deems relevant to the
approval process. All local managers of USRI will be required to submit to
background checks as described in more detail in the Program Guidelines. Home
Depot’s approval or rejection of USRI’s request may be based upon any criteria
Home Depot deems relevant in its discretion, and may include, among other
criteria: a USRI’s capitalization and ability to expand to meet demand for USRI
Products and Services anticipated to be generated by the Program; ability to
deliver USRI Products and Services in accordance with Program standards;
proximity to the pertinent Home Depot store; evidence of compliance with
relevant legal requirements; and cooperation with Home Depot in the
investigation and approval process. Home Depot will notify USRI of its approval
or rejection of USRI’s request.

 

ARTICLE 2

 

FINANCIAL MATTERS

 

.1. USRI Commission. Home Depot shall pay USRI 85% of gross revenues (excluding
sales taxes) actually collected from a customer (“Lead Fulfillment Incentive” or
“LFI”) in consideration for the sale, furnishing, and installation of Service
Provider of USRI Products and Services under the Program. Additional details
pertaining to financial matters associated with the Program are detailed in the
Program Guidelines.

 

.2. Costs and Expenses.

 

(a) Home Depot will be responsible for transmitting customer leads it receives
to USRI, processing customer payments and fulfilling the other obligations of
Home Depot hereunder and under the Program Guidelines. Provided, however, that
USRI shall be responsible-, at its sole expense, for obtaining a dedicated
toll-free telephone number for use by prospective Home Depot customers inquiring
about USRI’s product offerings under the Program.

 

(b) USRI will be responsible for all costs associated with designing, building,
installing and maintaining the USRI Displays, other than as specified in Section
2.2(a); manning the USRI Displays in each Participating Home Depot Store as
required by Section 1.2(b)(ii); educating Home Depot employees about the USRI
Products and Services and training Home Depot employees on sales techniques to
help generate interest in the USRI Products and Services at each Participating
Home Depot Store; responding to customer leads, including initial telephone
response and in-person sales calls, design consultation, providing price
quotations and procuring signed purchase orders; all labor, material, delivery
and installation costs relating to the provision of the USRI Products and
Services and fulfillment of the customer contracts; all labor, material,
delivery, refund or other costs associated with customer complaints and/or
warranty claims following the sale of the USRI Products and Services; and all
other cost or expenses incurred in connection with the fulfillment of the USRI’s
obligations under this Program Agreement, including the Program Guidelines.
Provided, however, that the

 

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foregoing is not intended to be used by Home Depot as a mechanism to undertake
activities outside the scope of the Program the cost of which, under the terms
hereof, would be borne by the USRI.

 

.3. Reporting. USRI shall provide Home Depot with regular reports analyzing
USRI’s performance in generating leads and closing sales and such other reports
as shall be mutually agreed upon by the Parties. Home Depot shall provide USRI
with certain financial and operating reports as described in the Program
Guidelines.

 

.4. Customer Invoicing and Payment. USRI shall prepare and present to the
customer for payment all invoices for USRI Products and Services, including
sales taxes where applicable. All invoices shall be in a form created by Home
Depot from time to time for use in the Program. USRI shall also collect and
remit to Home Depot customer deposits at the times and in the amounts prescribed
by Home Depot from time to time. All invoices shall be in the name of Home Depot
and all payments shall be made directly to Home Depot in accordance with
procedures prescribed by Home Depot.

 

.5. Pricing. USRI shall be responsible for quoting prices to customers and
securing signed customer purchase orders in the name of Home Depot and subject
to final acceptance by Home Depot. The prices quoted by USRI shall be
competitive with the prices charged by USRI for comparable goods and services
offered by the USRI to its own customers outside the Program.

 

.6. Audit Rights. Home Depot or its designees shall have the right at all times
while this Program Agreement is in effect and for a period of three (3) years
following any expiration or termination of this Program Agreement, to inspect,
audit and copy all relevant books and records of USRI as it may reasonably
request solely for the purpose of verifying its compliance with its obligations
under this Program Agreement. Information in such books and records that are not
related to the foregoing may be redacted.

 

.7. Promotions. From time to time, Home Depot may implement various store-wide
or targeted promotions or purchase incentives applicable to the USRI Products
and Services. Such promotions or purchase incentives may apply nationally,
regionally, or only with respect to particular Participating Home Depot Stores.
Home Depot will notify USRI in advance of promotions and purchase incentives
applicable to the USRI Products and Services. USRI shall participate in such
promotions and purchase incentives to the extent consistent with this Program
Agreement.

 

ARTICLE 3

 

RESTRICTIONS ON CERTAIN ACTIVITIES

 

.1. Obligations of Home Depot. Nothing herein shall restrict in any way the
right of Home Depot or any Home Depot Affiliates to offer products and services
from USRI Competitors, or to contract with any third party to offer products and
services that compete with the USRI Products and Services, through channels
other than Participating Home Depot Stores, including, without limitation, Home
Depot warehouse outlets, catalogs and via the Internet.

 

.2. Obligations of USRI. During the term of this Program Agreement, USRI shall
not enter into any agreement with any of the parties listed on Exhibit 3.2 (the
“Home Depot Competitors”) to market, sell or provide any USRI Products and
Services or any competing products and services to, or to customers in
association with, such Home Depot Competitor. USRI represents to Home Depot that
USRI is not a party to any such agreement with a Home Depot Competitor as of the
Effective Date.

 

.3. No Diversion of Business. All sales leads and Customer Information (as
defined in Section 4.3) generated in connection with the Program shall be used
by USRI solely to solicit and make sales of USRI Products and Services under the
Program. Under no circumstances shall USRI nor any of its Affiliates (i) use any
sales leads or Customer Information generated through the Program to solicit or
sell, or assist any third party in assisting or selling any products or services
(including USRI Products and Services) outside the Program; or (ii) otherwise
divert any business opportunity which is rightfully a Program opportunity. Home
Depot’s audit rights under Section 2.6 shall include the right to confirm
compliance with this Section 3.3.

 

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ARTICLE 4

 

INTELLECTUAL PROPERTY RIGHTS

 

.1. Use of Trademarks.

 

(a) Pursuant to a Trademark and Service Mark License Agreement in the form of
Exhibit 4.1(a) (the “Trademark and Service Mark License Agreement”) executed
among Home Depot, Homer TLC, Inc., and USRI as of the date of this Program
Agreement, each Party shall receive a nonexclusive license to use specific
trademarks and service marks (the “Marks”) of the other Party for the sole
purpose of fulfilling their respective obligations under the Program. The terms
and conditions of the Trademark and Service Mark License Agreement are hereby
incorporated by reference into this Program Agreement.

 

(b) All advertising, promotional, marketing materials and telephone scripts
(collectively, the “Materials”) created or produced by a Party relating to the
Program or the USRI Products and Services must be pre-approved in writing by the
other Party. Materials, signage or documents bearing trademarks, artwork or
designs of the other Party that have not been approved by such Party must be
destroyed promptly at the request of such other Party.

 

(c) From time to time, each Party may provide the other Party with certain
promotional materials related to the Program and/or the USRI Products and
Services. The other Party shall use commercially reasonable efforts to use such
promotional materials in a manner consistent with the terms and conditions of
this Program Agreement.

 

.2. Ownership Rights. Except as explicitly set forth in this Program Agreement,
each Party shall at all times maintain all right, title and interest in the
intellectual property rights owned by such Party relating to the Materials used
in the Program. Each Party hereby expressly disclaims all right, title and
interest in and to intellectual property rights in the Materials provided by the
other Party under the Program, and agrees that it will not take any action or
suffer or permit any condition to exist that gives rise to any claim adverse to
the other Party’s title in or right to possess the intellectual property rights
in such Materials.

 

.3. Customer Information. USRI shall be responsible for developing and
maintaining an information database relating to all sales leads and customer
information pertaining to the Program, and customer and transaction tracking
information. Except as otherwise set forth in this Section 4.3, Home Depot shall
own all right, title and interest to all information and data collected or
stored in any medium relating to customers or potential customers of the Program
(collectively, the “Customer Information”), and USRI may use the Customer
Information during the term of this Program Agreement solely for purposes
related to the Program. Home Depot shall not be restricted from using the
Customer Information in any manner, including uses outside the Program. In no
event shall USRI disclose, or permit any third party to use, the Customer
Information; provided, that USRI may permit its employees and suppliers to use
relevant Customer Information solely to the extent necessary to properly provide
USRI Products and Services to a Program customer, and provided they have been
advised of and acknowledged the foregoing restrictions on use of the Customer
Information. During the term of this Program Agreement and in accordance with
the reporting requirements of this Program Agreement and the Program Guidelines,
USRI shall provide Home Depot with copies of all Customer Information in a form
or medium agreed upon by the Parties. Upon termination of this Program
Agreement, USRI shall deliver (a) a copy of the Customer Information to Home
Depot in a form and medium agreed upon by the Parties and (b) remove from all
files and copies of the Customer Information all references to the fact that
such information was obtained from Home Depot or as a result of the Program.

 

ARTICLE 5

 

CONFIDENTIALITY

 

.1. USRI shall hold all Home Depot Confidential Information in the strictest
confidence and shall not, without Home Depot’s prior written consent, directly
or indirectly use such Confidential Information or disclose such Confidential
Information to any third parties except as required by law or governmental
regulation or for the performance of USRI’s obligations under this Program
Agreement. USRI shall take appropriate measures to safeguard Home Depot
Confidential Information from disclosure by USRI’s employees and others. USRI
agrees that any disclosure of Home Depot Confidential Information in

 

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contravention of this Article 5 would result in irreparable injury to Horne
Depot and agrees that injunctive relief would be an appropriate remedy in the
event of any breach of this Article 5 by USRI.

 

.2. USRI acknowledges that Home Depot does not want to receive from USRI any
information, data, material or documents that USRI deems to be its confidential,
proprietary or trade secret information. Accordingly, any information, data,
material or documentation that USRI transmits, discloses or disseminates to Home
Depot shall not under any circumstances constitute any confidential information
or trade secrets of USRI or its Affiliates.

 

ARTICLE 6

 

PERFORMANCE COVENANTS OF USRI PROGRAM PARTICIPANTS

 

.1. Warranty, Quality Standards. USRI warrants and guarantees that all USRI
Products and Services furnished or installed by USRI shall be free from defects
in workmanship for a period of one (1) year, or as otherwise mutually agreed in
writing by the Parties, from completion of said USRI Products and Services by
USRI, which completion shall be dated as of the customer’s acceptance of the
work and execution of any required lien, waiver or release, or for an additional
warranty as may be agreed upon in writing with a customer. USRI warrants and
guarantees that all USRI Products and Services furnished or installed by USRI
shall be free from material defects for the greater of (i) a period of five
years, or as otherwise mutually agreed in writing by the Parties, from
completion of said USRI Products and Services by USRI as defined above or (ii)
the applicable period contained in the manufacturer’s warranty. If any claim is
made that a defect developed or was revealed during the warranty period, USRI
agrees to promptly investigate such claim and if such claim is accurate, remedy
said defect promptly without cost to Home Depot or the customer. If USRI fails
to remedy such defect promptly, Home Depot shall have the right to have the
defect corrected at USRI’s expense in accordance with Section 6.2. Home Depot
may, at its sole cost and expense, use customer surveys to measure each USRI’s
adherence to quality standards. From time to time, Home Depot may, at its sole
cost and expense, use other methods to measure such USRI’s adherence to quality
standards. USRI shall, upon request, fully cooperate with Home Depot to help
ensure the success of any such efforts to measure customer satisfaction or
verify USRI’s adherence to quality standards. Notwithstanding any provision
herein to the contrary, USRI acknowledges that it may incur incidental expenses
in providing such cooperation. USRI must maintain a minimum level of service
that is reasonably acceptable to Home Depot and that meets or exceeds the
standards set forth in the Program Guidelines. Home Depot shall have the right
to visit each USRI’s field offices, worksites and/or other places of business at
any reasonable time, and with reasonable notice to the responsible branch
manager, for the purpose of verifying such USRI’s compliance with said standards
of quality and/or performance.

 

.2. Customer Adjustments/Satisfaction. All USRI shall at all times maintain the
general policy of satisfaction of customers and shall adjust all complaints of,
and controversies with customers, with respect to said sales made under the
Program. In any case in which such adjustment is unsatisfactory to the customer
and where Home Depot has provided USRI with reasonable time and opportunity to
satisfy the customer and, in Home Depot’s reasonable judgment, the customer is
being fair and reasonable, Home Depot reserves and shall have the right, at
USRI’s expense, to make such further adjustment as Home Depot may reasonably
deem necessary under the circumstances and such adjustment made by Home Depot,
even when in excess of the sales price of the USRI Products and Services in
question, shall be conclusive and binding upon USRI. USRI shall maintain and
provide to Home Depot files pertaining to customer complaints and their
adjustment, which files shall be deemed Customer Information. Home Depot agrees
to promptly forward to USRI information received by Home Depot with respect to
customer complaints to assist such USRI in its efforts to respond to customer
complaints in a timely manner. If USRI should fail to resolve satisfactorily
each such complaint promptly, Home Depot shall have the right to have the
complaint resolved in its reasonable discretion at the USRI’s expense, provided
such expense is reasonable under the circumstances. USRI shall pay Home Depot
for such amount and/or Home Depot will be authorized to deduct such amount from
any sums then due or thereafter becoming due to USRI from Home Depot. In the
event customer adjustments are made, LFIs shall be based on the adjusted
contract price (original contract price less adjustments).

 

.3. Quotations, Orders. All quotations for USRI Products and Services made to a
customer by USRI shall be in accordance with the Program Guidelines. Forms for
making quotations and taking orders shall be provided in the Program Guidelines.

 

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.4. Taxes. USRI shall pay, accrue, and/or remit all ad valorem, license,
franchise, occupation, income, sales, use, and any other taxes or imposts of
every nature or description whatsoever, presently or hereinafter imposed by any
governmental authority upon the operation of USRI’s business and USRI shall file
all reports, make all returns, and secure all licenses and permits with respect
thereto. USRI shall know the tax consequences of providing USRI Products and
Services to Home Depot. The USRI Products and Services sold to Home Depot are
generally not for resale and no resale certificate will be issued. The only time
said resale certificate will be issued is upon review by Home Depot where the
services provided by law do not qualify as a real property improvement or are
taxable to the property owner by law. Home Depot shall collect all retail sales
taxes if and when applicable, from customers and shall remit such taxes and file
all reports with the appropriate governmental agencies. Should the present
system of handling such retail sales tax returns and payments be changed for any
reason whatsoever, USRI shall make their own returns and shall make payments of
such taxes in the manner required by law.

 

.5. Insurance Policies.

 

(a) USRI, at its expense, shall obtain and maintain during the term of this
Program Agreement the following policies of insurance with insurers rated at
least [A:VIII] or better by A.M. Best Company that are satisfactory to Home
Depot and containing provisions and being in amounts satisfactory to Home Depot
and adequate to fully protect Home Depot as well as USRI from and against any
and all expenses, costs, demands, claims, actions, liabilities, damages and
losses arising out of the subjects covered by such policies of insurance:

 

(i) Workers’ Compensation insurance for statutory limits and Employers Liability
limits for not less than $1,000,000.

 

(ii) Commercial General Liability insurance, including Bodily Injury and
Property Damage Liability insurance, Broad Form Property Damage and personal and
advertising injury, including Contractual Liability coverage (either blanket or
applying specifically to this Program Agreement) with limits of not less than
$5,000,000 per occurrence. The general and products/completed operations
aggregate limit shall apply separately to each project/location or the aggregate
should be twice the required per occurrence limit.

 

(iii) Commercial Automobile Liability insurance, code I “any auto,” including
owned, non-owned and hired automobile for limits of not less than $1,000,000 per
occurrence.

 

(b) Each insurance policy obtained by USRI shall name Home Depot as an
additional insured with respect to insurance described in clauses (ii) and (iii)
above and provide coverage for expenses, costs, demands, claims, actions,
liabilities, damages and losses arising out of the acts or omissions of any USRI
or its contractors, employees or agents. Each such insurance policy shall
further provide that it shall not be subject to change or cancellation without
at least thirty (30) days’ prior written notice to Home Depot. USRI shall
furnish Home Depot with copies of the policies required to be maintained by USRI
and certificates thereof concurrently with the execution and delivery of this
Program Agreement. If USRI obtains additional insurance, then USRI shall have
Home Depot named as additional insureds on each of said insurance policies
without charge to Home Depot. In order to avoid conflicts between insurance
companies, USRI shall use its best efforts to have all policies of insurance
obtained by USRI issued by one (1) insurance company (except umbrella coverage
which may be obtained by a separate insurance company). USRI shall furnish or
cause to be furnished to Home Depot copies of such policies and certificates of
insurance, in each case concurrently with the execution and delivery of this
Program Agreement.

 

(c) Acceptance by Home Depot of any insurance policies shall not relieve USRI of
any responsibility hereunder including claims in excess of limits described
above.

 

.6. Permits, Licenses, Compliance With Laws. USRI shall obtain all permits and
licenses which may be required under any Law by virtue of any acts performed by
such USRI in the performance of this Program Agreement or any USRI Program
Participation Agreement to which it is a party. USRI shall in the conduct of its
business and in the performance of this Program Agreement comply fully with all
Laws.

 

.7. Credit Sales. All USRI shall refer all requests for customer financing to
Home Depot, and that Home Depot shall have a right of first refusal to provide
financing to customers through Home Depot or its selected financing entity,
subject to standard procedures for approval and on terms and conditions to be
determined by

 

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Home Depot. In the event Home Depot or its selected financing entity declines to
provide financing or the terms offered are not accepted by the customer, the
USRI shall, if directed to do so by Home Depot, refer the customer to secondary
financing entities to be designated and pre-approved by Home Depot. No part of
the finance charge shall be payable to or credited in any way to the USRI, and
the USRI shall not be responsible for losses sustained as a result of credit
losses on such credit sales. However, in the event the USRI advises customers of
terms to be offered by Home Depot, or its selected financing entities, the USRI
will comply with all provisions of Law governing credit sales, including but not
‘limited to provisions dealing with proper disclosures to customers, finance
charges and, the like, with respect to credit sales or their solicitation and
the right of rescission.

 

.8. Compliance With Laws and Regulations. USRI will comply, at its expense, with
all Laws regarding minimum compensation, overtime, immigration status and equal
opportunities for employment, including the Federal Civil Rights Act, Age
Discrimination in Employment Act, Occupational Safety and Health Act and the
Federal Fair Labor Standards Act whether or not such USRI may be legally exempt
from the aforesaid acts by . USRI will pay all federal, state and municipal
payroll, withholding, social security, Medicare, unemployment, and other taxes,
contributions, or premiums which are required by law to be paid and/or withheld
by any employer with respect to such employees and subcontractors and USRI shall
indemnify, defend and hold Home Depot harmless from and against any violation of
such acts and Laws by USRI or its employees, subcontractors, agents or
representatives. Should Home Depot pay any sum of money, whether by way of levy,
tax or interest, because of any rule, law, regulation, or ruling that Home Depot
shall be responsible for any payments to employees or subcontractors of USRI
covered hereunder including but not limited to payments because of Workers’
Compensation settlements, USRI shall promptly upon demand reimburse Home Depot.

 

.9. Liens. To the extent permissible under applicable Law, USRI shall be
prohibited from placing a lien on, or taking any other security interest in,
Home Depot’s property or any of its customer’s property without Home Depot’s
written consent. In the event that USRI or any affiliate, agent, employee or
subcontractor of USRI causes a lien to be attached to, or takes any other
security interest in, a customer’s property without Home Depot’s express written
consent, such USRI shall fully reimburse Home Depot and/or the customer for all
costs and expenses incurred to release such lien or security interest.

 

ARTICLE 7

 

REPRESENTATIONS AND WARRANTIES

 

.1. USHS and USRI. USHS and USRI represent and warrant to Home Depot that:

 

(a) USHS and USRI are corporations duly incorporated, validly existing and in
good standing under the Laws of the State of Delaware;

 

(b) USHS and USRI has all requisite corporate power and authority to execute,
deliver and perform their respective obligations under this Program Agreement;

 

(c) The execution, delivery and performance of this Program Agreement by USHS
and USRI has been duly authorized by all necessary corporate action on the part
of USHS and USRI;

 

(d) This Program Agreement has been duly executed and delivered by USHS and USRI
and constitutes a valid and binding agreement of USHS and USRI, enforceable
against them in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance and
transfers, and moratorium or similar laws of affecting the enforcement of
creditors’ rights;

 

(e) To the best of USRI’s knowledge, USRI is duly licensed, authorized or
qualified to do business and is in good standing in each jurisdiction in which a
license, authorization or qualification is required for the ownership or leasing
of its assets or the transaction of business of the character transacted by it,
except where the failure to be so licensed, authorized or qualified would not
have a material adverse effect on its ability to fulfill its obligations under
this Program Agreement;

 

(f) To the best of USRI’s knowledge, USRI is in material compliance with all
Laws and has obtained all applicable permits and licenses required of it in
connection with its obligations under this Program Agreement, except where such
non-compliance or failure to obtain such permits and licenses would not have a
material adverse effect on its ability to fulfill its obligations under this
Program Agreement;

 

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(g) There is no outstanding litigation, arbitrated matter or other dispute to
which USHS or USRI is a party which, if decided unfavorably to it, would
reasonably be expected to have a material adverse effect on USHS’s, USRI’s or
Home Depot’s ability to fulfill their respective obligations under this Program
Agreement;

 

(h) Neither USHS, USRI nor any of their respective Affiliates is a party to any
contract, agreement, mortgage, note, deed, lease or similar understanding with
any third party that would have a material adverse effect on USHS’s, USRI’s or
Home Depot’s ability to fulfill their respective obligations under this Program
Agreement; and

 

(i) To USHS’s and USRI’s knowledge, no non-public fact or circumstance exists
that would have a material adverse effect on the image of USHS, USRI or on the
brands of USHS, USRI and its Affiliates to be used in the Program.

 

.2. Home Depot. Home Depot represents and warrants to USHS and USRI that:

 

(a) Home Depot is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Delaware;

 

(b) Home Depot has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Program Agreement;

 

(c) The execution, delivery and performance of this Program Agreement by Home
Depot has been duly authorized by all necessary corporate action on the part of
Home Depot;

 

(d) This Program Agreement has been duly executed and delivered by Home Depot
and constitutes a valid and binding agreement of Home Depot, enforceable against
it in accordance with its terms.

 

ARTICLE 8

 

TERM AND TERMINATION

 

.1. Term. The term of this Program Agreement shall commence on the Effective
Date and continue for a period of one (1) year thereafter (the “Initial Term”),
or such earlier date upon which this Program Agreement may be terminated in
accordance with its terms.

 

.2. Renewal. Unless this Program Agreement is terminated earlier pursuant to
this Article 8, upon the expiration of the Initial Term, this Program Agreement
shall continue in effect on a month to month basis until otherwise terminated.

 

.3. Termination by Home Depot For Cause. Home Depot may by written notice to
USRI terminate this Program Agreement prior to the expiration of the Initial
Term or the Renewal Term, if applicable, for any of the following reasons:

 

(a) USHS or USRI breaches any obligation under this Program Agreement and fails
to remedy such breach within thirty (30) days following written notice of such
breach from Home Depot.

 

(b) USHS’s or USRI’s conduct in performance of this Program Agreement is a
material violation of any Law;

 

(c) There is a Change of Control of USHS or USRI; or

 

(d) If USHS or USRI shall (i) admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due; (ii) apply for or consent to
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner or liquidator of itself or of all or a substantial part of its
property or assets, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the United States Bankruptcy
Code, (v) file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or
winding-up, or composition or readjustment of debts, (vi) fail to controvert in
a timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the United States Bankruptcy Code; (vii)
take any

 

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corporate, partnership or other action for the purpose of effecting any of the
foregoing; or (viii) become insolvent under any legal definition.

 

.4. Termination by USRI For Cause. USRI may by written notice to Home Depot
terminate this Program Agreement prior to the expiration of the Initial Term or
the Renewal Term, if applicable, for any of the following reasons:

 

(a) Home Depot breaches any obligation of Home Depot under this Program
Agreement or the Program Guidelines and fails to remedy such breach within
thirty (30) days following written notice of such breach from Home Depot;

 

(b) Home Depot’s conduct in performance of this Program Agreement is a material
violation of any Law; or

 

(c) If Home Depot shall (i) admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due; (ii) apply for or consent to
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner or liquidator of itself or of all or a substantial part of its
property or assets; (iii) make a general assignment for the benefit of its
creditors; (iv) commence a voluntary case under the United States Bankruptcy
Code; (v) file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or
winding-up, or composition or readjustment of debts; (vi) fail to controvert in
a timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the United States Bankruptcy Code; (vii)
take any corporate, partnership or other action for the purpose of effecting any
of the foregoing; or (viii) become insolvent under any legal definition.

 

.5. Termination Without Cause By Either Party. At any time after the expiration
of the Initial Term a Party may terminate this Program Agreement in its sole
discretion and without cause, upon one hundred and twenty (120) days’ prior
written notice to the other Party.

 

.6. Post-Termination Obligations.

 

(a) Upon termination of this Program Agreement, USRI (and, to the extent
applicable, USHS) shall:

 

(i) deliver to Home Depot all Customer Information in accordance with Section
4.3;

 

(ii) return to Home Depot all forms, stationery or other materials bearing Home
Depot’s name or the trade or service marks of Home Deport or its Affiliates
(including The Participating Home Depot Stores) or provide and affidavit that
such forms or materials have been destroyed;

 

(iii) otherwise comply with all provisions of this Program Agreement relating to
USRI’s post-termination obligations; and

 

(iv) cease to hold itself out or represent in any way that it is associated or
affiliated with Home Depot.

 

(b) Upon termination of this Program Agreement, Home Depot shall:

 

(i) return to USRI all materials owned by USRI which were provided to Home Depot
pursuant to Section 4.1 and which materials USRI has notified Home Depot in
writing are to be returned to USRI; and

 

(ii) otherwise comply with all provisions of this Program Agreement relating to
Home Depot’s post-termination obligations.

 

.7. No Payment on Termination. USHS and USRI acknowledge and agree that in the
event of any termination, expiration or non-renewal of this Program Agreement in
accordance with the terms hereof, Home Depot will have no liability or
obligation to compensate USHS or USRI in any way with respect to such
termination, expiration or non-renewal, other than to pay any LFIs to USRI, if
any, earned prior to the date of such termination, expiration or nonrenewal.
Without limiting the generality of the foregoing, Home Depot shall not
compensate USHS or USRI for any actual or alleged loss of future profits or
goodwill, recoupment of overhead or capital expenses dedicated to the Program,
employee wages or severance claims or any lease obligations.

 

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ARTICLE 9

 

INDEMNIFICATION

 

.1. Indemnity by USHS and USRI. USHS and USRI shall indemnify Home Depot and its
Affiliates from, and defend and hold Home Depot and its Affiliates harmless from
and against, any Losses suffered, incurred or sustained by Home Depot or any of
its Affiliates or to which Home Depot or any of its Affiliates becomes subject,
resulting from, arising out of or relating to any Claim:

 

(a) that the intellectual property of USHS and USRI infringes upon the
proprietary or other rights of any third party (except as may have been caused
by a modification by Home Depot or any of its Affiliates, that was not
authorized by USHS and/or USRI);

 

(b) relating to the inaccuracy, untruthfulness or breach of any representation,
covenant, or warranty made by USHS or USRI under this Program Agreement;

 

(c) relating to actual or alleged personal injury (including death) to any
person other than an employee or agent of Home Depot, a Home Depot Affiliate or
any Home Depot Agent, or property loss or damage, resulting from an act or
omission of USHS/USRI or any USHS/USRI Agent (or any of their respective
employees);

 

(d) relating to any act or omission of USRI, any of its Affiliates or any
USHS/USRI Agent (or any of their respective employees) in connection with the
marketing of any USRI Products and Services (whether before or after termination
of this Program Agreement) to any Program customer;

 

(e) relating to any non-compliance with any Laws by USHS or USRI including,
without imitation, consumer protection and privacy laws; or

 

(f) asserted by or on behalf of any employee of Home Depot, USHS, USRI or their
respective Affiliates and Agents, to the extent arising out of or relating to
any act or omission by USHS or USRI, any of their Affiliates or any USHS or USRI
Agent with respect to any alleged violation of any Law protecting persons or
members of a protected class or category, including Laws prohibiting
discrimination or harassment on the basis of a protected characteristic.

 

USHS and USRI shall indemnify Home Depot and its Affiliates from any costs and
expenses incurred in connection with the enforcement of this Section 9.1.

 

ARTICLE 10

 

DISPUTE RESOLUTION

 

.1. Required Mediation.

 

(a) In the event that any dispute arises under this Program Agreement, no Party
shall be entitled to commence litigation under this Program Agreement until
after the mediation obligations in Section 10.1(b) have been satisfied. Each
Party shall cause each of its Affiliates to be bound by the provisions of this
Article 10.

 

(b) Upon the delivery of written notice by one Party to the other of a request
for mediation of a dispute under this Program Agreement, the Parties shall have
ten (10) days to mutually agree upon a professional mediator to mediate the
dispute. The mediation shall be held in Atlanta, Georgia and shall be conducted
over a period of time not to exceed three (3) consecutive business days If the
Parties cannot agree upon the professional mediator to conduct such mediation
within such ten (10) day period, the provisions of this Section 10.1 (b) shall
be deemed to have been satisfied, and either Party may elect to proceed with
litigation in accordance with Section 10.2 and 10.3.

 

.2. Jurisdiction; Venue. Any litigation between or among the Parties or their
Affiliates in any way relating to this Program Agreement, the Program or the
relationship between the Parties hereunder, shall be brought exclusively in the
courts of the State of Georgia sitting in Cobb County, Georgia or in the United

 

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States District Court for the Northern District of Georgia. Each of the parties
hereby irrevocably consents to the jurisdiction of such courts and irrevocably
waives any objection to venue in such courts.

 

.3. Litigation. Notwithstanding anything herein to the contrary, the Parties
acknowledge and agree that, subject to fulfillment of the obligations set forth
in Section 10.1, either Party may seek (a) specific performance, injunctive or
other equitable relief in connection with any breach or alleged breach of the
provisions of this Program Agreement, and (b) any available rights or remedies
in the event of a breach or alleged breach of Article 4, Article 5 or the
Trademark and Service Mark License Agreement.

 

ARTICLE 11

 

MISCELLANEOUS PROVISIONS

 

.1. Succession and Assignment. This Program Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Program Agreement or any
of its rights, interests, or obligations under this Program Agreement without
the prior written approval of the other Party; provided, that Home Depot may
assign this Program Agreement or any of its rights, interests or obligations
under this Program Agreement, in whole or in part, to any of its Affiliates
without such written approval of USHS or USRI; provided, further, that if Home
Depot assigns any such rights, interests or obligations under this Program
Agreement to any of its Affiliates, such assignment shall not release Home Depot
from any obligation or liability under this Program Agreement. Any purported
assignment in contravention of this Section 11.1 shall be void.

 

.2. Notices. Except as otherwise specified in this Program Agreement, all
notices, requests, consents, approvals, agreements, authorizations,
acknowledgements, waivers and other communications required or permitted under
this Program Agreement shall be in writing and shall be deemed given when sent
by telecopy to the telecopy number specified below or delivered by hand to the
address specified below. A copy of any such notice shall also be sent by express
air mail on the date such notice is transmitted by telecopy to the address
specified below:

 

If to Home Depot:

 

Home Depot U.S.A., Inc.

Building C.15

2455 Paces Ferry Road, N.W.

Atlanta, Georgia 30339

Attention: At-Home Services Program

Telecopy No.: (770) 384-2425

 

with a copy to:

 

Home Depot U.S.A., Inc.

Building C.20

2455 Paces Ferry Road, N.W.

Atlanta, Georgia 30339

Attention: Corporate Counsel At-Home Services/Installed Sales

Telecopy No.: (770) 384-3041

 

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If to USHS/USRI:

 

U.S. Remodelers, Inc.

c/o USHS

750 State HWY 21 Bypass

Suite 170

Lewisville, TX 75067

Attention: Murray Gross, President—USHS

Telecopy No. (972) 459-4800

 

With a copy to:

 

Richard B. Goodner, Esq.

c/o USHS

750 State HWY 21 Bypass

Suite 170

Lewisville, TX 75067

 

A Party may change its address or telecopy number for notification purposes by
giving the other Parties seven (7) days’ notice of the new address or telecopy
number and the date upon which it will become effective. Notice provided to an
individual that is required to receive a copy pursuant to this Section 11.2
shall not be deemed to be notice under this Program Agreement.

 

.3. Counterparts. This Program Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which taken
together shall constitute one single agreement between the Parties.

 

.4. Relationship. Nothing contained in this Program Agreement shall be construed
to create the relationship(s) of employer and employee or franchisor-franchisee
between or among Home Depot and USHS or USRI, or to make either Home Depot and
USHS/USRI partner, joint venturer, fiduciary or co-employer of the other. USHS’s
and USRI’s staff, employees or subcontractors assigned to provide the USRI
Products and Services are solely the employees of USHS and USRI, as applicable.
or their respective third-party contractors and are not the employees of Home
Depot. Neither USHS nor USRI shall have the authority to bind Home Depot, nor
shall Home Depot have the authority to bind USHS or USRI.

 

.5. Severability. If any provision of this Program Agreement is held by a court
of competent jurisdiction to be prohibited or unenforceable under applicable
Law, then the remaining provisions of this Program Agreement, if capable of
substantial performance, shall remain in full force and effect. To the extent
permitted by applicable Law, the Parties waive any provision of such Law, which
renders any such remaining provisions of this Program Agreement prohibited or
unenforceable in any respect.

 

.6. Waivers. No delay or omission by a Party to exercise any right or power it
has under this Program Agreement shall impair or be construed as a waiver of
such right or power. A waiver by any Party of any breach or covenant shall not
be construed to be a waiver of any succeeding breach or any other covenant. All
waivers must be signed by the Party waiving its rights.

 

.7. Remedies Cumulative. No right or remedy herein conferred upon or reserved to
either Party is intended to be exclusive of any other right or remedy, and each
and every right and remedy shall be cumulative and in addition to any other
right or remedy under this Program Agreement, or under applicable Law, whether
now or hereafter existing. The parties agree that irreparable damage would occur
in the event any provision of this Program Agreement was not performed in
accordance with its terms and that the Parties shall be entitled to specific
performance in addition to any other remedy to which they are entitled at law or
equity.

 

.8. Entire Agreement. This Program Agreement and the Exhibits to this Program
Agreement (including the Program Guidelines) and the Trademark and Service Mark
License Agreement, represent the entire agreement between the Parties with
respect to its subject matter, and there are no other representations,
understandings or agreements between the Parties relative to such subject
matter.

 

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.9. Amendments. No amendment to, or change, waiver or discharge of, any
provision of this Program Agreement shall be valid unless in writing and signed
by each Party.

 

.10. Survival. Any provision of this Agreement which contemplates performance or
observance subsequent to any termination or expiration of this Agreement shall
survive any termination or expiration of this Agreement and continue in full
force and effect.

 

.11. Third Party Beneficiaries. Each Party intends that this Program Agreement
shall not benefit, or create any right or cause of action in or on behalf of,
any person or entity other than the Parties.

 

.12. Governing Law. This Program Agreement and the rights and obligations of the
Parties under this Program Agreement shall be governed by and construed in
accordance with the Laws of the State of Georgia without giving effect to the
principles thereof relating to the conflicts of Laws.

 

.13. Covenant of Further Assurances. Home Depot, USHS, and USRI covenant and
agree that, subsequent to the execution and delivery of this Program Agreement
and, without any additional consideration, each of Home Depot and its applicable
Affiliates and USHS, USRI and their applicable Affiliates shall execute and
deliver any further legal instruments and perform any acts that are or may
become necessary to effectuate the purposes of this Program Agreement.

 

.14. Negotiated Terms. The Parties agree that the terms and conditions of this
Program Agreement are the result of negotiations between the Parties and that
this Program Agreement shall not be construed in favor of or against any Party
by reason of the extent to which any Party or its professional advisors
participated in the preparation of this Program Agreement.

 

.15. Consequential Damages; Limitation of Claims; Limitation of Liability.
Neither Home Depot or its Affiliates nor USHS/USRI or their Affiliates shall be
liable to the other for, nor will the measure of damages include, any indirect,
incidental, special or consequential damages arising out of or relating to its
performance or failure to perform under this Program Agreement; provided, that
this Section 11.15 will not be construed to limit a Party’s right to recover
under Section 9 any such damages that such Party is obligated to pay to any
third party; and provided further that this Section 11.15 shall not limit any
remedies otherwise available to a Party in the case of proven fraud by the other
Party. USHS and USRI agrees that their sole recourse for claims arising between
the Parties shall be against Home Depot or its successors and assigns. Each
Party agrees that the shareholders, directors, officers and employees and agents
of the other Party and its Affiliates shall not be personally liable nor named
as a party in any action between the Parties hereto. Home Depot’s maximum
liability relating to its performance under this Program Agreement (regardless
of form of action, whether in contract, negligence or otherwise) shall be
limited to the amounts received by Home Depot pursuant to the Program under this
Program Agreement. The allocation of liability in the preceding sentence,
represents the agreed and bargained-for understanding of the Parties and the
compensation exchanged between the Parties reflects such allocations.

 

.16. Incorporation and References. In this Program Agreement and the Exhibits
and Annexes to this Program Agreement:

 

(a) The Exhibits and Annexes to this Program Agreement are hereby incorporated
into and deemed part of this Program Agreement and all references to this
Program Agreement shall include the Exhibits and Annexes to this Program
Agreement;

 

(b) The capitalized words and phrases defined in this Program Agreement, and the
capitalized words and phrases set forth on Annex A, which is hereby incorporated
into and deemed part of this Program Agreement, have the indicated meaning for
purposes of this Program Agreement;

 

(c) References to an Exhibit, Annex, Section or Article shall be to such Exhibit
or Annex to, or Section or Article of, this Program Agreement unless otherwise
provided;

 

(d) References to any Law shall mean references to such Law in changed or
supplemented form or to a newly adopted Law replacing a previous Law; and

 

(e) References to and mention of the word “including” or the phrase “e.g.” shall
mean “including, without limitation.”

 

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.17. Headings. The Article and Section headings, Table of Contents and Table of
Annexes and Exhibits are for reference and convenience only and shall not be
considered in the interpretation of this Program Agreement.

 

IN WITNESS WHEREOF, each of Home Depot, USHS, and USRI has caused this Program
Agreement to be signed and delivered by its duly authorized representative.

 

HOME DEPOT U.S.A., INC. By:   s/    

--------------------------------------------------------------------------------

Name:        

--------------------------------------------------------------------------------

Title:        

--------------------------------------------------------------------------------

 

U.S. HOME SYSTEMS, INC. By:   s/    Murray H. Gross    

--------------------------------------------------------------------------------

Name:   Murray H. Gross    

--------------------------------------------------------------------------------

Title:   President    

--------------------------------------------------------------------------------

 

U.S. REMODELERS, INC. By:   s/    Murray H. Gross    

--------------------------------------------------------------------------------

Name:   Murray H. Gross    

--------------------------------------------------------------------------------

Title:   EVP    

--------------------------------------------------------------------------------

 

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ANNEX A

DEFINITIONS

 

The following defined terms used in this Program Agreement shall have the
meanings specified below:

 

“Affiliate” shall mean, as to any person or entity, any other entity that,
directly or indirectly, Controls, is Controlled by or is under common Control
with such entity.

 

“Agent” of a Party shall mean the agents, subcontractors, licensees, independent
contractors and representatives of such Party.

 

“Change of Control” shall mean the (i) combination or merger of a Party with or
into any entity pursuant to which the (A) members of the board of directors of
such Party immediately prior to such transaction constitute less than a majority
of the members of the board of directors of the surviving entity of such
combination or merger, or (B) stockholders of such Party immediately prior to
such transaction hold beneficial ownership (within the meaning of Rule l3d-3 of
the Securities Exchange Act of 1934, as amended) of less than fifty percent
(50%) of the voting securities of the surviving entity of such combination or
merger entitled to vote generally in the election of directors, (ii) sale,
transfer or other disposition of all or substantially all of the assets of a
Party, or (iii) acquisition by any person or party, or affiliated group of
persons or parties, of beneficial ownership of voting securities of a Party
entitled to vote generally in the election of directors with a number of votes
in excess of thirty five percent (35%)of the voting power of such Party.

 

“Claim” shall mean any claim of any kind by any customer, employee or other
third party, including any civil, criminal, administrative, arbitral or
investigative action, suit, proceeding or claim relating to a Party’s act or
omission under the Program Agreement.

 

“Confidential Information” of Home Depot or USHS/USRI shall mean all information
and documentation of Home Depot or its Affiliates, and USHS/USRI or their
Affiliates, respectively, whether disclosed to or accessed by Home Depot or its
Affiliates or USHS/USRI or their Affiliates in connection with this Program
Agreement, that is (i) identified in writing as “confidential” at the time of
disclosure, (ii) disclosed orally and identified at the time of disclosure as
“confidential” or (iii) treated by the disclosing Party as confidential or
proprietary, including (a) information that the disclosing Party receives from a
third party (including vendors, licensors, customers and Affiliates) and holds
subject to an obligation of confidentiality, (b) the terms of this Program
Agreement (c) any information developed by reference to or use of information of
Home Depot or its Affiliates, or USHS/USRI or their Affiliates, (d) training and
operating procedures and manuals, and (e) any information which a reasonable
person would believe to be the confidential information of the other Party;
provided, that except to the extent otherwise provided by Law, the term
“Confidential Information” shall not include information that (A) is
independently developed by the recipient, as demonstrated by the recipient’s
written records, without violating the disclosing party’s proprietary rights,
(B) is or becomes publicly known (other than through unauthorized disclosure),
(C) is already known by the recipient at the time of disclosure, as demonstrated
by the recipient’s written records, and the recipient has no obligation of
confidentiality other than pursuant to this Program Agreement or any
confidentiality agreements between Home Depot and USHS/USRI entered into before
the Effective Date, or (D) is rightfully received by a Party free of any
obligation of confidentiality; provide, that (x) such recipient has no knowledge
that such information is subject to a confidentiality agreement and (y) such
information is not of a type or character that a reasonable person would have
regarded it as confidential.

 

“Control” shall mean, with respect to any entity, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such entity, whether through the ownership of voting securities (or
other ownership interest), by contract or otherwise.

 

“Governmental Authority” shall mean any federal, state, municipal, local,
territorial, or other governmental department, regulatory authority, judicial or
administrative body, whether domestic, foreign or international.

 

“Homer TLC, Inc.” shall mean Homer TLC, Inc., a Delaware corporation.

 

“Law” shall mean any declaration, decree, directive, legislative enactment,
order, ordinance, regulation, rule or other binding restriction of or by any
Governmental Authority.

 

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“Losses” shall mean any and all damages, fines, penalties, deficiencies, losses,
liabilities (including settlements and judgments and excluding consequential and
incidental damages), costs and expenses of any kind, character or description
(including payments, refunds and delivery of additional goods and/or services,
interest, court costs, reasonable fees and expenses of attorneys, accountants
and other experts and professionals or other reasonable fees and expenses of
litigation or other proceedings or of any claim, default or assessment).

 

 

Page 18