Document:

Cognovit Promissory Note

 EXHIBIT 10.23 
  
 
	 General Electric Capital Business
 	 	 EXECUTION COPY
 
	 Asset Funding Corporation
 	 	  
	 Loan No. 050-0010706-001
 	 	  

 
  
 IMPORTANT NOTICE: THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH
CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE. 
  
 COGNOVIT PROMISSORY NOTE 
  
 (1041-1043 Cannons Court, Woodbridge,
Prince William County, Virginia) 
  
 
	 $2,125,000.00
 	 	 December 4, 2002
 

 
  
 FOR VALUE RECEIVED, REMODELERS CREDIT CORPORATION, a
Delaware corporation (“Borrower”), promises to pay to the order of GENERAL ELECTRIC CAPITAL BUSINESS ASSET FUNDING CORPORATION (“Payee”; Payee and any subsequent holder of this Note being referred to herein as
“Holder”) at Payee’s office at 10900 NE 4th Street, Suite 500, Bellevue, Washington 98004,
attention: Real Estate Department, or at such other address as Holder may from time to time designate in writing, the principal sum of Two Million One Hundred Twenty-Five Thousand and no hundredths Dollars ($2,125,000.00) together with interest from
the date the proceeds of the loan (the “Loan”) evidenced by this Promissory Note (this “Note”) are initially disbursed (including, without limitation, disbursement into an escrow for the benefit of Borrower) until maturity on the
principal balance from time to time remaining unpaid hereon at the rate of seven and twenty-five hundredths percent (7.25%) per annum (computed on the basis of a 360-day year consisting of twelve (12) consecutive thirty (30)-day months) in
installments as follows: (i) interest only in advance at the rate of $427.95 per day shall be due and payable on the date the proceeds of the Loan are initially disbursed to or for the benefit of Borrower for the period from the date of such
disbursement to and including the last day of the month during which such disbursement occurs, and (ii) one-hundred and seventy-nine (179) installments of principal and interest in the amount of $19,398.34 each shall be payable commencing on the
first day of the second month following the month in which funds are advanced and continuing on the first day of each and every succeeding month until January 1, 2018 (“Maturity”), at which time all then unpaid principal and interest
hereon shall be due and payable. 
  
 If any payment shall not be received by Holder within ten (10) days after its
due date, Borrower shall pay an additional charge equal to five percent (5.00%) of the delinquent payment or the highest additional charge permitted by law, whichever is less. 
  
 Upon not less than fifteen (15) days’ advance written notice to Holder and upon payment of a prepayment premium as set forth below (the “Prepayment
Premium”), Borrower shall have the right to prepay all, but not less than all, of the outstanding balance of this Note on any regularly scheduled principal and interest payment date. The “Prepayment Premium” shall be equal to the sum
of the Base Premium (defined below) and the Variable Premium (defined below). 

  
 The “Base Premium” shall be determined by multiplying the following
described applicable base premium factor (the “Base Premium Factor”) by the principal balance to be prepaid. The “Variable Premium” shall be determined by (i) calculating the decrease (expressed in basis points) in the current
weekly average yield of ten (10)-year U.S. Dollar Interest Rate Swaps as published in Federal Reserve Statistical Release H.15 (519) (the “Index”) from Friday, September 20, 2002, to the Friday immediately preceding the week in which the
prepayment is made, (11) dividing the decrease by 100, (iii) multiplying the result by the following described applicable variable premium factor (the “Variable Premium Factor”), and (iv) multiplying the product by the principal balance to
be prepaid. If the Index is unchanged or has increased from Friday, September 20, 2002, to the Friday immediately preceding the prepayment date, the Variable Premium Factor shall be equal to Zero Dollars ($0.00). The Base Premium Factor and the
Variable Premium Factor shall be the amounts shown on the following chart for the month in which prepayment occurs: 
  
 
	 No. Mos.
 Remaining
 
	    	 Years
 Remaining
 
	  	 Base
 Premium Factor
 
	  	 Variable
 Premium Factor
 

	 180—169
 	    	 15
 	  	 .05
 	  	 0.073
 
	 168—157
 	    	 14
 	  	 .04
 	  	 0.069
 
	 156—145
 	    	 13
 	  	 .03
 	  	 0.064
 
	 144—133
 	    	 12
 	  	 .02
 	  	 0.059
 
	 132—121
 	    	 11
 	  	 0
 	  	 0.054
 
	 120—109
 	    	 10
 	  	 0
 	  	 0.049
 
	 108—97
 	    	 9
 	  	 0
 	  	 0.044
 
	 96—85
 	    	 8
 	  	 0
 	  	 0.039
 
	 84—73
 	    	 7
 	  	 0
 	  	 0.035
 
	 72—61
 	    	 6
 	  	 0
 	  	 0.030
 
	 60—49
 	    	 5
 	  	 0
 	  	 0.025
 
	 48—37
 	    	 4
 	  	 0
 	  	 0.020
 
	 36—25
 	    	 3
 	  	 0
 	  	 0.015
 
	 24—13
 	    	 2
 	  	 0
 	  	 0.010
 
	 12—1
 	    	 1
 	  	 0
 	  	 0.005
 

 
  
 If the Federal Reserve Board ceases to publish Statistical
Release H.15 [519], then the decrease in the weekly average yield of ten (10)-year U.S. Dollar Interest Rate Swaps will be determined from another source designated by Holder. 
  
 If Holder at any time accelerates this Note after an Event of Default (defined below), then Borrower shall be obligated to pay the Prepayment Premium in accordance with the
foregoing schedule. The Prepayment Premium shall not be payable in the case of an assumption of the Loan (if permitted by Holder pursuant to the terms of the Security Instrument (as hereinafter defined)), nor with respect to condemnation awards or
insurance proceeds from fire or other casualty which Holder applies to prepayment, nor with respect to acceleration of the indebtedness as a result of condemnation or casualty, nor with respect to Borrower’s prepayment of the Note in full
during the last three (3) months of the term of this Note unless an Event of Default has occurred and is continuing. Borrower expressly acknowledges that such Prepayment Premium is not a penalty but is intended solely to compensate Holder for the
loss of its bargain 

 
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 and the reimbursement of internal expenses and administrative fees and expenses incurred by Holder.

  
 Holder shall have full recourse against Borrower for all sums due under this Note and for all the
representations, warranties, indemnities and covenants in the Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing (“Security Instrument”) covering the property (the “Property”) securing this Note
and all other documents executed or delivered in connection herewith (the “Loan Documents”). 
  
 Each of
the following shall constitute an Event of Default (“Event of Default”) hereunder and under the Security Instrument: 
  
 (a) Failure of Holder to receive any payment of principal, interest, or Prepayment Premium upon this Note when due, and such failure shall continue for ten (10) days after written notice is given by
Holder to Borrower of the same; or 
  
 (b) Failure of Borrower to observe or perform any other
obligation under any Loan Document (other than this Note) when such observance or performance is due, and such failure shall continue beyond the applicable cure period set forth in such Loan Document, or if the default cannot be cured within such
applicable cure period, Borrower fails within such time to commence and pursue curative action with reasonable diligence or fails at any time after expiration of such applicable cure period to continue with reasonable diligence all necessary
curative actions. 
  
 Upon the occurrence of any Event of Default, Holder shall have the option to declare the entire
amount of principal and interest due under this Note immediately due and payable without notice or demand, and Holder may exercise any of its rights under this Note and any document executed or delivered herewith. After acceleration or maturity,
Borrower shall pay interest on the outstanding principal balance of this Note at the rate of five percent (5.00%) per annum. above Wall Street Journal’s prime interest rate in effect from time to time, or fifteen percent (15.00%) per annum,
whichever is higher, provided that such interest rate shall not exceed the maximum interest rate permitted by law (the “Default Rate”). 
  
 All payments of the principal and interest on this Note shall be made in coin or currency of the United States of America which at the time shall be the legal tender for the payment of public and
private debts. 
  
 If this Note is placed in the hands of an attorney for collection, Borrower shall pay reasonable
attorneys’ fees and costs incurred by Holder in connection therewith, and in the event suit or action is instituted to enforce or interpret this Note (including without limitation efforts to modify or vacate any automatic stay or injunction),
the prevailing party shall be entitled to recover all expenses reasonably incurred at, before or after trial and on appeal, whether or not taxable as costs, or in any bankruptcy proceeding, or in connection with post-judgment collection efforts,
including, without limitation, reasonable attorneys’ fees, witness fees (expert and otherwise), deposition costs, copying charges and other expenses. 
  
 This Note shall be governed and construed in accordance with the laws of the Commonwealth of Virginia applicable to contracts made and to be performed therein (excluding 

 
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 choice-of-law principles), Borrower hereby irrevocably submit, to the Jurisdiction of any state or
federal court sitting in Virginia in any action or proceeding brought to enforce or otherwise arising out of or relating to this Note, and hereby waives any objection to venue in any such court and any claim that such forum is an inconvenient forum.

  
 This Note is given in a commercial transaction for business purposes. 
  
 This Note may be declared due prior to its expressed maturity date, all in the events, on the terms, and in the manner provided for in the
Security Instrument. 
  
 Borrower and all sureties, endorsers, guarantors and other parties now or hereafter liable
for the payment of this Note, in whole or in part, hereby severally (i) waive demand, notice of demand, presentment for payment, notice of nonpayment, notice of default, protest, notice of protest, notice of intent to accelerate, notice of
acceleration and all other notices except those for which the Loan Documents expressly, provide, and further waive diligence in collecting this Note or in enforcing any of the security for this Note; (ii) agree to any substitution, subordination,
exchange or release of any security for this Note or the release of any party primarily or secondarily liable for the payment of this Note; (iii) agree that Holder shall not be required to first institute suit or exhaust its remedies hereon against
Borrower or others liable or to become liable for the payment of this Note or to enforce its rights against any security for the payment of this Note; and (iv) consent to any extension of time for the payment of this Note, or any installment hereof,
made by agreement by Holder with any person now or hereafter liable for the payment of this Note, even if Borrower is not a party to such agreement. 
  
 Borrower authorizes Holder or its agent to insert in the spaces provided herein the appropriate interest rate and the payment amounts as of the date of the initial advance hereunder. 

 
 All agreements between Borrower and Holder, whether now existing or hereafter arising and whether written or oral, are hereby
limited so that in no contingency, whether by reason of demand or acceleration of the final maturity of this Note or otherwise, shall the interest contracted for, charged, received, paid or agreed to be paid to Holder exceed the maximum amount
permissible under the applicable law. If, from any circumstance whatsoever, interest would otherwise be payable to Holder in excess of the maximum amount permissible under applicable law, the interest payable to Holder shall be reduced to the
maximum amount permissible under applicable law; and if from any circumstance Holder shall ever receive anything of value deemed interest by applicable law, in excess of the maximum amount permissible under applicable law, an amount equal to the
excessive interest shall be applied to the outstanding principal balance hereof, or if such excessive amount of interest exceeds the unpaid balance of principal hereof, such excess shall be refunded to Borrower. All interest paid or agreed to be
paid to Holder shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full period (including any renewal or extension) until payment in full of the principal so that the interest, hereon for
such full period shall not exceed the maximum amount permissible under applicable law. Holder expressly disavows any intent to contract for, charge or receive interest in an amount which exceeds the maximum amount permissible under applicable law.
This paragraph shall control all agreements between Borrower and Holder. 

 
 4 

  
 WAIVER OF JURY TRIAL. BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTELLIGENTLY WAIVES,, ANY AND ALL RIGHTS THAT EACH PARTY TO THIS NOTE MAY NOW OR HEREAFTER HAVE UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR THE COMMONWEALTH OF VIRGINIA, TO A TRIAL BY JURY OF ANY AND ALL ISSUES ARISING DIRECTLY OR INDIRECTLY
IN ANY ACTION OR PROCEEDING RELATING TO THIS NOTE, THE LOAN DOCUMENTS OR ANY TRANSACTIONS CONTEMPLATED THEREBY OR RELATED THERETO. IT IS INTENDED THAT THIS WAIVER SHALL APPLY TO ANY AND ALL DEFENSES, RIGHTS, CLAIMS AND/OR COUNTERCLAIMS IN ANY SUCH
ACTION OR PROCEEDING. 
  
 BORROWER UNDERSTANDS THAT THIS WAIVER IS A WAIVER OF A CONSTITUTIONAL SAFEGUARD, AND
EACH PARTY INDIVIDUALLY BELIEVES THAT THERE ARE SUFFICIENT ALTERNATE PROCEDURAL AND SUBSTANTIVE SAFEGUARDS, INCLUDING, A TRIAL BY AN IMPARTIAL JUDGE, THAT ADEQUATELY OFFSET THE WAIVER CONTAINED HEREIN. 
  
 UPON THE OCCURRENCE OF AN EVENT OF DEFAULT HEREUNDER OR UNDER THE DEED OF TRUST, HOLDER MAY CONFESS JUDGMENT AGAINST BORROWER AS
PROVIDED HEREIN. FOR THE PURPOSE OF OBTAINING POSSESSION OF THE PROPERTY UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT HEREUNDER, BORROWER HEREBY AUTHORIZES AND EMPOWERS THE CLERK OF ANY COURT OF RECORD IN THE COMMONWEALTH OF VIRGINIA, INCLUDING BUT
NOT LIMITED TO THE CLERK OF THE CIRCUIT COURT FOR THE COUNTY OF PRINCE WILLIAM TO ENTER JUDGMENT BY CONFESSION AGAINST BORROWER IN FAVOR OF HOLDER FOR THE FULL AMOUNT OF THE INDEBTEDNESS EVIDENCED BY THIS NOTE AND SECURED BY THE DEED OF TRUST,
EXPRESSLY WAIVING SUMMONS AND OTHER PROCESS, AND DOES HEREBY CONSENT TO THE IMMEDIATE EXECUTION OF SUCH JUDGMENT, EXPRESSLY WAIVING THE BENEFIT OF ALL EXEMPTION OR HOMESTEAD LAWS. BORROWER HEREBY CONSTITUTES AND APPOINTS MICHAEL CURRY, KEVIN
HUENNEKENS, PETER BARRETT OR ANY ATTORNEY ACTING ON BEHALF OF HOLDER IN ANY FEDERAL COURT OR ANY STATE COURT OF RECORD IN THE UNITED STATES OF AMERICA, AS ATTORNEY-IN-FACT FOR BORROWER AND ALL PERSONS CLAIMING THROUGH OR UNDER BORROWER, TO SIGN AN
AGREEMENT FOR ENTERING IN ANY COMPETENT COURT AN AMICABLE ACTION IN EJECTMENT FOR POSSESSION OF THE PROPERTY AND TO APPEAR FOR AND CONFESS JUDGMENT AGAINST BORROWER, AND ALL PERSONS CLAIMING UNDER OR THROUGH BORROWER, IN FAVOR OF HOLDER, FOR
RECOVERY BY HOLDER OF POSSESSION THEREOF, FOR WHICH THIS NOTE, OR A COPY THEREOF VERIFIED BY AFFIDAVIT, SHALL BE SUFFICIENT WARRANT; WHEREUPON A WRIT OF POSSESSION MAY IMMEDIATELY ISSUE FOR POSSESSION OF THE PROPERTY, WITHOUT ANY PRIOR WRIT OR
PROCEEDING WHATSOEVER AND WITHOUT ANY STAY OF EXECUTION. HOLDER MAY BRING AN AMICABLE ACTION IN EJECTMENT AND CONFESS JUDGMENT THEREIN EITHER BEFORE OR AFTER THE INSTITUTION OF PROCEEDINGS TO FORECLOSE THIS 

 
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 INSTRUMENT OR TO ENFORCE THIS NOTE OR AFTER ENTRY OF JUDGMENT THEREIN OR ON THE NOTE, OR AFTER A
PUBLIC SALE OF THE PROPERTY IN WHICH HOLDER IS THE SUCCESSFUL BIDDER. THE FOREGOING AUTHORIZATION TO PURSUE PROCEEDINGS FOR OBTAINING POSSESSION OF THE PROPERTY AND CONFESSING JUDGMENT THEREIN IS AN ESSENTIAL PART OF HOLDER’S REMEDIES FOR
ENFORCEMENT OF THIS NOTE AND THE DEED OF TRUST AND SHALL SURVIVE ANY FORECLOSURE SALE BY OR TO HOLDER. 
  
 [REMAINDER OF
PAGE INTENTIONALLY BLANK; 
 EXECUTION PAGE FOLLOWS] 

 
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 IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.

  
 TIME IS OF THE ESSENCE HEREOF. 
  
 IN WITNESS WHEREOF, Borrower has executed or caused this Note to be executed by its duly authorized representative as of the year and day first written above. 

 
 
	  	 	 BORROWER:
 
	 
	  	 	 REMODELERS, CREDIT CORPORATION,
 a Delaware corporation
 
	 
	  	 	 By:
 	 	  
 

	  	 	 Print:
 	 	  
 

	  	 	 Its:
 	 	  
 

 
  
  
  
  
 [EXECUTION PAGE OF COGNOVIT PROMISSORY NOTE] 

 
 7Guaranty Agreement

  
 EXHIBIT 10.24 
  
 
	 General Electric Capital Business
 	  	 EXECUTION COPY
 
	 Asset Funding Corporation
 	  	  
	 Loan No.: 050-0010706-001
 	  	  

 
  
 GUARANTY AGREEMENT 
  
 (1041-1043 Cannons Court, Woodbridge, Prince William County, Virginia) 
  
 THIS GUARANTY (“Guaranty”) is made as of December 4, 2002 by U.S. HOME SYSTEMS, INC., a Delaware corporation (“Guarantor”), whose mailing address
is 750 State Highway, 121 Bypass #170, Lewisville, Texas 75067, in favor of GENERAL ELECTRIC CAPITAL BUSINESS ASSET FUNDING CORPORATION, a Delaware corporation, its successors and assigns (“Lender”), whose address is 10900 NE 4th
Street, Suite 500, Bellevue, Washington 98004, with reference to the recitals set forth below. 
  
 R E C I T A L S:

  
 A.    Lender has agreed to lend to Remodelers Credit Corporation, a Delaware corporation
(“Borrower”), the sum of Two Million One Hundred Twenty-Five Thousand Dollars ($2,125,000.00) (the “Loan”) in accordance with the terms and provisions of a Cognovit Promissory Note of even date herewith (the “Note”), to
be secured by a Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing (the “Security Instrument”) and other security instruments of even date herewith (the Note, the Security Instrument and all other
documents executed by Borrower in connection with the Loan including, without limitation, a certain Environmental Indemnity Agreement, are collectively called the “Loan Documents”). 
  

B.    As a condition precedent to making the Loan, Lender requires that Borrower obtain the execution of this Guaranty by Guarantor and Lender will
be relying on the terms hereof in making the Loan. Guarantor’s obligations hereunder are independent of those it has as a principal of Borrower. 
  
 C.    The making of the Loan by Lender to Borrower is of value to Guarantor, is reasonably expected to benefit Guarantor, directly or indirectly, and is in furtherance of
Guarantor’s personal and business interests. 
  
 In consideration of Lender making the Loan, and, as an
inducement to Lender to do so, Guarantor hereby agrees, warrants and covenants as follows: 
  
 Section
1.    Guarantor hereby unconditionally, irrevocably and absolutely guarantees without demand by Lender the full and prompt payment when due, whether by acceleration or otherwise, of (a) the entire amount of principal and
accrued interest under the Note, and (b) all other indebtedness, obligations and liabilities of Borrower under the Loan Documents, including, without limitation, all costs of collection, attorneys’ fees, court costs, and other advances and
extensions thereunder whether such indebtedness, obligations or liabilities have been incurred prior to the date hereof or are incurred from time to time hereafter and all without set-off, counterclaim, recoupment, or deduction of any amounts owing
or alleged to be owing by Lender to Borrower. It is expressly understood that this Guaranty covers, without limitation, (y) any and 

  
 all amendments, extensions, modifications, rearrangements and renewals of the Loan or any of the Loan
Documents; and (z) all interest, default interest and other amounts that would have accrued under the Loan Documents but for the commencement of a case under the Federal Bankruptcy Code or any other similar federal or state law. Without limiting the
foregoing, Guarantor specifically guarantees payment of any judgment entered against the Borrower and any damages that may be awarded in any action brought against the Borrower by Lender arising out of or relating to the Loan or any Loan Document.
All of the indebtedness, obligations and liabilities described in this paragraph are referred to herein as the “Guaranteed Obligations.” This Guaranty is a guaranty of payment and not merely of collection. 
  
 Section 2.    This Guaranty shall take effect when received by Lender without the necessity of any acceptance
by Lender or of any notice to Guarantor or to Borrower, shall be continuing and irrevocable, and shall remain in full force and effect until the Guaranteed Obligations are fully and finally paid. If payment is made by Borrower, whether voluntarily
or otherwise, or by any third party, on the Guaranteed Obligations and thereafter Lender is forced to remit, rescind or restore the amount of that payment under any federal or state bankruptcy law or law for the relief of debtors, or for any other
reason, (a) the amount of such payment shall be considered to have been unpaid at all times for the purposes of enforcement of this Guaranty, (b) the obligations of Borrower guaranteed herein shall be automatically reinstated to the extent of such
payment, and (c) Guarantor will, on demand, indemnify for and hold Lender harmless from all losses and all reasonable costs and expenses, including legal fees, incurred by Lender in connection with such remission, rescission or restoration. In the
event this Guaranty is preceded or followed by any other agreement of suretyship or guaranty by the Guarantor or others, all shall be deemed to be cumulative, and the obligations of the Guarantor hereunder shall be in addition to those stated in any
other suretyship or guaranty agreement. 
  
 Section 3.    The obligations of Guarantor
hereunder are separate and independent of the obligations of Borrower. Guarantor expressly agrees that a separate action may be brought against Guarantor whether or not Borrower is joined in such action. 
  
 Section 4.    Guarantor represents, warrants, and covenants to Lender that (a) the financial statements of
Guarantor heretofore delivered to Lender are true and correct in all material respects and fairly present the financial condition of Guarantor as of the respective dates thereof, and no material adverse change has occurred in the financial condition
of Guarantor since the date of the most recent of such financial statements; (b) Guarantor has derived or expects to derive financial and other advantages and benefits, directly or indirectly, from the making of this Guaranty and the Guaranteed
Obligations; (c) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (d) this Guaranty is executed at Borrower’s request and not at the request of Lender;
(e) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; (f) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower’s financial condition; (g)
Guarantor will keep adequately informed of any facts, events or circumstances which might in any way affect Guarantor’s risks under this Guaranty; (h) Lender shall have no obligation to disclose to Guarantor any information or documents
(financial or otherwise) heretofore or hereafter acquired by Lender in the course of its relationship with Borrower; and (i) Guarantor will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or 

 
 2 

  
 substantially all of Guarantor’s assets, or take any other action which might reasonably be
expected to have a material adverse effect to Guarantor’s financial condition. 
  
 Section
5.    The Guarantor hereby consents to all terms and conditions of agreements heretofore or hereafter made between Lender and the Borrower (including without limitation the Note and other Loan Documents) and further agrees
that Lender may without further consent or disclosure and without affecting or releasing the obligations of Guarantor hereunder: (a) surrender, exchange, release, assign, or sell any collateral or waive, release, assign, sell, or subordinate any
security interest, in whole or in part; (b) waive, delay the exercise of, release, compromise, or grant indulgences in respect of any rights or remedies of Lender against the Borrower or any surety or guarantor (including, without limitation, rights
or remedies of Lender against Guarantor under this Guaranty); (c) waive or delay the exercise of any rights or remedies of Lender in respect of any collateral or security interest now or hereafter held; (d) renew, extend, waive, accelerate, or
modify the terms of any Guaranteed Obligation or the obligations of any surety or guarantor, including, without limitation, changes to the rate of interest, or any instrument or agreement (including, without limitation, the Loan Documents)
evidencing or relating to the same; (e) realize on any security interest, judicially or nonjudicially, with or without preservation of a deficiency judgment; (f) apply payments received from Borrower or any surety or guarantor (including Guarantor)
or from any collateral, to any indebtedness, liability, or obligations of Borrower or such sureties or guarantors whether or not a Guaranteed Obligation hereunder; or (g) adjust, compromise or receive less than the amount due upon any collateral or
the Guaranteed Obligations, and enter into any accord and satisfaction or novation agreement with respect to the same as Lender shall deem advisable. 
  
 Section 6.    Guarantor waives notice of (a) Lender’s acceptance of this Guaranty or its intention to act or its actions in reliance hereon; (b) the present existence or
future incurring of any Guaranteed Obligations or any terms or amounts thereof or any change therein; (c) any default by the Borrower or any surety or guarantor; (d) the obtaining of any guaranty or surety agreement (in addition to this Guaranty);
(e) the obtaining of any pledge, assignment or other security for any Guaranteed Obligations; (0 the release of the Borrower or any surety or guarantor; (g) the release of any collateral; (k) any change in Guarantor’s business or financial
condition; (i) any renewal, extension or modification of the terms of any Guaranteed Obligation or of the obligations or liabilities of any surety or guarantor or of any instruments or agreements evidencing the same; 0) any acts or omissions of
Lender consented to in Section 5 hereof; and (k) any other demands or notices whatsoever with respect to the Guaranteed Obligations or this Guaranty. The Guarantor further waives notice of presentment, demand, protest, notice of nonpayment, notice
of intent to accelerate, and notice of protest in relation to any instrument or agreement evidencing any Guaranteed Obligation. 
  
 Section 7.    Guarantor expressly waives any and all rights to defenses arising by reason of (a) any “one-action” or “anti-deficiency” law or any other law which may prevent Lender from
bringing any action, including a claim for deficiency against Guarantor, before or after Lender’s commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (b) any election of remedies by Lender
which destroys or otherwise adversely affects Guarantor’s subrogation rights or Guarantor’s rights to proceed against Borrower for reimbursement, including without limitation any loss of rights Guarantor may suffer by reason of any law
limiting, qualifying, or discharging the Guaranteed Obligations; (c) any disability or 

 
 3 

  
 other defense of Borrower, of any other Guarantor, or of any other person, or by reason of the cessation
of Borrower’s liability from any cause whatsoever, other than full and final payment in legal tender of the Guaranteed Obligations; or (d) any right to claim discharge of the Guaranteed Obligations on the basis of unjustified, impairment of any
collateral for the Guaranteed Obligations. Guarantor further waives (a) to the extent permitted by law, the defense of any statute of limitations in any action to enforce this Guaranty and agrees that any part payment by Borrower or other
circumstance which operates to toll any statute of limitations as to Borrower shall toll the statute of limitations as to Guarantor, (b) any right to cause a marshalling of Borrower’s assets, (c) all exemptions and homestead laws, and (d) all
rights of set-off and counterclaims. Guarantor agrees that Lender may proceed against any collateral securing the Guaranteed Obligations by way of either judicial or nonjudicial foreclosure. Guarantor understands that a nonjudicial foreclosure of
any deed of trust or mortgage securing the Guaranteed Obligations could impair or eliminate any subrogation or reimbursement rights Guarantor may have against Borrower, nevertheless Guarantor hereby waives and relinquishes any defense based upon the
loss of any such reimbursement or subrogation rights or any other defense which may otherwise arise therefrom and any defense that may arise out of election of remedies, discharge or satisfaction of the Guaranteed Obligations. In the event any such
deed of trust or mortgage is foreclosed judicially or nonjudicially, Guarantor’s liability under this Guaranty shall be that portion of the Guaranteed Obligations representing a deficiency resulting from a judicial or nonjudicial sale, i.e.,
the difference between the amount due and owing on the Guaranteed Obligations on the day of the foreclosure sale (including without limitation principal, accrued interest, attorneys’ fees, late payments, if any, and costs of foreclosure) and
the amount of the successful bid at any such judicial or nonjudicial foreclosure sale. Guarantor hereby waives the right to object to the amount which may be bid by Lender at such foreclosure sale. 
  
 GUARANTOR WAIVES ALL RIGHTS AND DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY LENDER OR ITS SUCCESSORS OR ASSIGNS,
EVEN THOUGH THAT ELECTION OF REMEDIES, SUCH AS NONJUDICIAL FORECLOSURE WITH RESPECT TO SECURITY FOR A GUARANTEED OBLIGATION, HAS DESTROYED THE, GUARANTOR’S RIGHTS OF SUBROGATION AND REIMBURSEMENT AGAINST THE PRINCIPAL BY STATUTE OR OTHERWISE.

  
 Section 8.    No act of commission or omission of any kind or at any time on the part
of Lender with respect to any matter whatsoever shall in any way affect or impair this Guaranty. Without limiting the foregoing, the obligations, covenants, agreements and duties of Guarantor under this Guaranty shall not be released or impaired in:
any manner whatsoever, without the written consent of Lender, on account of any or all of the following: (a) any act or omission of Lender consented to in Section 5 hereof; (b) the failure to receive any notice, demand, presentment or protest waived
in Sections 4 and 6 hereof; (c) the occurrence of any event as to which Guarantor has provided its waiver under Section 7 hereof: (d) any failure by the Borrower or any other guarantor or surety to perform or comply with the Guaranteed Obligations
or the terms of any instrument or agreement relating thereto; (e) any change in the name, purpose, capital stock or constitution of the Borrower or any other guarantor or surety; (f) any irregularity, defect or unauthorized action by Lender,
Borrower or any other guarantor or surety or any of their respective officers, directors or other agents in executing and delivering any instrument or agreements relating to the Guaranteed Obligations or in carrying out or attempting to carry out

 
 4 

  
 the terms of any such agreements; (g) any receivership, insolvency, bankruptcy, reorganization or
similar proceeding by or against Borrower, Lender, Guarantor or any other surety or guarantor; (h) any setoff, counterclaim, recoupment, deduction, defense or other right which Guarantor may have against Lender, Borrower or any other person for any
reason whatsoever whether related to the Guaranteed Obligations or otherwise; (i) any assignment, endorsement or transfer, in whole or in part, of the Guaranteed Obligations, whether made with or without notice to or the consent of Guarantor; (j)
the voluntary or involuntary liquidation, sale or other disposition of all or substantially all of the assets of Borrower or any guarantor; (k) the acceptance of additional or substitute property as security for or any additional guaranty as surety
for any Guaranteed Obligation; (l) the operation of law or any other cause, whether similar or dissimilar to the foregoing; (m) the failure by Lender to file or enforce a claim against the estate (either in administration, bankruptcy or other
proceeding) of Borrower or any other person or entity (including, without limitation, any guarantor); (n) if the recovery from Borrower or any other person or entity (including, without limitation, any other guarantor) becomes barred by any statute
of limitations or is otherwise prevented; (o) any impairment, modification, change, release or limitation of liability of, or stay of actions of lien enforcement proceedings against Borrower, Borrower’s property, or its estate in bankruptcy
resulting from the operation of any present or future provision of the Federal Bankruptcy Code or any other similar federal or state statute, or from the decision of any court; or (p) any neglect, delay, omission, failure or refusal of Lender to
take or prosecute any action for the collection of any of the Guaranteed Obligations or to foreclose or take or prosecute any action in connection with any lien or right of security (including perfection thereof existing or to exist in connection
with, or as security for, any of the Guaranteed Obligations, it being the intention hereof that Guarantor shall remain liable as a principal on the Guaranteed Obligations notwithstanding any act, omission or event which might, but for the provisions
hereof, otherwise operate as a legal or equitable discharge of Guarantor. Guarantor hereby waives all defenses of a surety to which it may be entitled by statute or otherwise. 
  
 Section 9.    Guarantor acknowledges that Lender intends to obtain other guaranties and collateral to secure the repayment of the Guaranteed
Obligations. Guarantor represents and warrants to Lender, however, that in making this Guaranty it is not relying upon the Lender’s obtaining any guaranty agreements (other than this Guaranty) or any collateral pledged or assigned to secure
repayment of the Guaranteed Obligations. Guarantor specifically acknowledges that Lender’s obtaining any such guaranty agreements or collateral is not a condition to the enforcement of this Guaranty. If Lender should simultaneously or hereafter
elect to attempt to take additional guaranty agreements or collateral to secure repayment of the Guaranteed Obligations and if its efforts to do so should fail in any respect including, without limitation, a determination that the agreement
purporting to provide such additional guaranty or security interest is invalid or unenforceable for any reason, this Guaranty shall, nonetheless, remain in full force and effect. 
  
 Section 10.    Guarantor hereby irrevocably waives all claims it has or may acquire against Borrower in respect of the Guaranteed Obligations,
including rights of exoneration, reimbursement and subrogation. Guarantor has received no indemnification or other agreement of reimbursement from Borrower in connection with the execution and delivery of this Guaranty. 

 
 5 

  
 Section 11.    This Guaranty shall inure to the
benefit of Lender, and Lender’s successors and assigns, and shall be binding upon Guarantor and his heirs, personal or legal representatives, administrators, executors, successors and assigns. Lender may, without any notice whatsoever to
Guarantor, or to anyone else, sell, assign or transfer the Note, with or without any security therefor, and in that event each and every immediate and successive assignee, transferee or holder of all or any part of the Loan and the Note shall have
the right to enforce this Guaranty, by suit or otherwise, for the benefit of such assignee, transferee or holder as though such parties were herein by name specifically given those rights, powers and benefits. 
  
 Section 12.    Guarantor agrees to pay all costs and expenses which may be incurred by Lender in the
enforcement or interpretation of this Guaranty, including reasonable attorneys’ fees (to be determined by the court and not by a jury), and including all costs and reasonable attorneys’ fees incurred in any bankruptcy or insolvency
proceeding or on appeal to one or more appellate courts. 
  
 Section 13.    This Guaranty
shall be governed by and construed and enforced under the laws of the Commonwealth of Virginia. 
  
 Section
14.    No delay on the part of Lender in exercising any right, power or privilege under this Guaranty shall operate as a waiver of any such right, power or privilege, nor shall any exercise or waiver of any privilege or right
preclude any other or further exercise of such privilege or right or the exercise of any other right, power or privilege. All of Lender’s rights and remedies shall be cumulative. In the event Lender in its sole discretion elects to give notice
of any action with respect to the sale of collateral, if any, securing the Guaranteed Obligations or any part thereof, Guarantor agrees that ten (10) days prior written notice shall be deemed reasonable notice of any matters contained in such
notice. 
  
 Section 15.    Any indebtedness of Borrower now or hereafter held by Guarantor
is hereby subordinated to the Guaranteed Obligations. If Lender so requests and an Event of Default (as defined in the Security Instrument) exists, such indebtedness of Borrower to Guarantor shall be collected, enforced and received by Guarantor in
trust for Lender, and be paid over to Lender on account of the Guaranteed Obligations, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty. Guarantor shall file all claims against
Borrower in any bankruptcy or other proceeding in which the filing of claims is required by law upon any indebtedness of Borrower to Guarantor and will assign to Lender all rights of Guarantor thereunder. If Guarantor does not file any such claim,
Guarantor hereby appoints and constitutes Lender as Guarantor’s Attorney-in-fact and hereby authorizes Lender to do so in the name of Guarantor or, in Lender’s discretion, to assign the claim and to cause the claim to be filed in the name
of Lender’s nominee. In all such cases, whether in administration, bankruptcy or otherwise, the person or persons authorized to pay such claim shall pay to Lender the full amount thereof, and Guarantor hereby assigns to Lender, to the full
extent necessary for that purpose, all of Guarantor’s rights to any such payments or distributions to which Guarantor would otherwise be entitled. Nothing in this paragraph shall be construed to create a duty in Lender to take any action
whatsoever to protect any right Guarantor may have as to Borrower. 
  
 Section 16.    If
any provision of this Guaranty or any portion of any provision of this Guaranty shall be deemed to be invalid, illegal or unenforceable, such invalidity, illegality or 

 
 6 

  
 unenforceability shall not alter the remaining portion of such provision, or any other provision hereof,
as each provision of this Guaranty shall be deemed severable from all other provisions hereof 
  
 Section
17.    This Guaranty shall be so construed that, wherever applicable, the use of the singular number shall include the plural number, the u se of the plural number shall include the singular number, and the use of any gender
shall be applicable to all genders, and shall likewise be so construed as applicable to and including a corporation, partnership, or other entity. Each married individual who executes this Guaranty intends to bind both his or her separate estate and
the jointly held or community estate of that married individual and his or her spouse. If this Guaranty is executed by more than one person or entity, the obligations of each Guarantor hereunder shall be joint and several and this Guaranty shall
apply to each of the individuals or entities comprising Guarantor as if each had executed a separate guaranty. Each Guarantor agrees that Lender, in its discretion, may (i) bring suit against all Guarantors jointly and severally or against any one
or more of them, (ii) compromise or settle with any one or more of Guarantors for such consideration as Lender may deem proper, and (iii) release any one or more of Guarantors from liability hereunder, and that no such action shall impair the rights
of Lender to collect the Guaranteed Obligations (or the unpaid balance thereof) from the other Guarantors not so sued, settled with or released. 
  
 Section 18.    All agreements between Guarantor and Lender, whether now existing or hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of demand or acceleration of the final maturity of the Loan or otherwise, shall the interest contracted for, charged, received, paid or agreed to be paid to Lender under or in connection with the Loan exceed the
maximum amount permissible under applicable law. All interest paid or agreed to be paid to Lender shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full period (including any renewal or
extension) until payment in full of the principal balance of the Loan so that the interest hereon for such full period shall not exceed the maximum amount permissible under applicable law. Lender expressly disavows any intent to contract for, charge
or receive interest in an amount which exceeds the maximum amount permissible under applicable law. This paragraph shall control all agreements between Guarantor and Lender. 
  
 [REMAINDER OF PAGE INTENTIONALLY BLANK; 
 EXECUTION PAGE FOLLOWS] 

 
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 IN WITNESS WHEREOF, Guarantor has executed or has caused this Guaranty to be
executed by its duly authorized representative as of the date written above. 
  
  
 
	  	 	 GUARANTOR:
 
	 
	  	 	  	 	 U.S. HOME SYSTEMS, INC.,
 a Delaware corporation
 
	 
	  	 	  	 	 By:
 	 	  	 	  
	  	 	  	 	  	 	 

	  	 	  	 	 Print:
 	 	  
	  	 	  	 	  	 	 

	  	 	  	 	 Its:
 	 	  	 	  
	  	 	  	 	  	 	 

	 
	  	 	  	 	 Attest:
 	 	  	 	  
	  	 	  	 	  	 	 

	 
	  	 	  	 	 By:
 	 	  	 	  
	  	 	  	 	  	 	 

	  	 	  	 	 Attest:
 	 	  	 	  
	  	 	  	 	  	 	 

	  	 	  	 	 Its:
 	 	  	 	  
	  	 	  	 	  	 	 

 
  
  
 [EXECUTION PAGE OF GUARANTY
AGREEMENT] 

 
 8

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