Document:

Exhibit 10.4

Exhibit 10.4

GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (this "Guaranty")
is executed as of March 6, 2006, by CORNERSTONE BUILDING AND
REMODELING, INC., a Florida corporation; FIBER-SEAL SYSTEMS, L.P., a
Texas limited partnership; HOME SOLUTIONS RESTORATION OF LOUISIANA,
INC., a Louisiana corporation; P.W. STEPHENS, INC, a California
corporation; and SOUTHERN EXPOSURE UNLIMITED OF FLORIDA, INC., a Florida
corporation; SE TOPS OF FLORIDA, INC., a Florida corporation; FSS
HOLDING CORP., a Texas corporation; and SOUTHERN EXPOSURE HOLDINGS, INC.,
a Florida corporation, and their permitted successors, and assigns (individually,
"Guarantor" and collectively, the "Guarantors"),
whose addresses for notice purposes are listed on the signature pages of this
Guaranty, for the benefit of TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, a
national banking association ("Lender"), and its Affiliates
(Lender and its Affiliates, together with their successors and assigns, herein
sometimes collectively called "Beneficiaries").  Unless
otherwise defined herein, all capitalized terms have the meanings given to such
terms in the Loan Agreement.

INTRODUCTORY
PROVISIONS:

A.        Borrower and Lender have, as of even date
hereof, executed a Loan Agreement. 

B.         It is expressly understood among Borrower, each
Guarantor, and Lender that the execution and delivery of this Guaranty is a
condition precedent to Lender's obligation to make loans or extend credit under
the Loan Agreement and is an integral part of the transactions contemplated
thereby.

C.        Each Guarantor is an Affiliate of Borrower and
the extension of credit to Borrower is a substantial and direct benefit to
Guarantor.

NOW, THEREFORE, for valuable consideration, the receipt
and adequacy of which are hereby acknowledged, each Guarantor hereby guarantees
to Beneficiaries the prompt payment and performance of the Guaranteed
Obligations, this Guaranty being upon the following terms and conditions:

Section 1.                 
Definitions.   As
used in this Guaranty, the following terms have the following meanings:

Additional Collateral:  Cash, certificates of
deposit, letter of credit rights, accounts, stocks, bonds or other highly
liquid investments acceptable in all respect to Lender in its sole and absolute
discretion. 

Affiliates:  When used with respect to any
Person, any other Person that, directly or indirectly, controls or is
controlled by or is under common control with such Person.  For purposes of
this definition "control" (including with correlative meanings, the
terms "controlled by" and under "common control with"),
with respect to any Person, means possession, directly or indirectly of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.

 

GUARANTY AGREEMENT - Page 1

 

Borrower:  Home Solutions of America, Inc. and
without limitation, Borrower's successors and assigns (regardless of whether
such successor or assign is formed by or results from any merger,
consolidation, conversion, sale or transfer of assets, reorganization, or
otherwise) including Borrower as a debtor-in-possession, and any receiver,
trustee, liquidator, conservator, custodian, or similar party hereafter
appointed for Borrower or all or substantially all of its assets pursuant to
any liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar Debtor Relief Laws
(hereinafter defined) from time to time in effect.

Debtor Relief Laws:  Title 11 of the United
States Code, as now or hereafter in effect, or any other applicable law,
domestic or foreign, as now or hereafter in effect, relating to bankruptcy,
insolvency, liquidation, receivership, reorganization, arrangement or
composition, extension or adjustment of debts, or similar laws affecting the
rights of creditors.

Dispute:  Any action,
dispute, claim or controversy of any kind, whether in contract or tort,
statutory or common law, legal or equitable, now existing or hereafter arising
under or in connection with, or in any way pertaining to, this Guaranty and
each other document, contract and instrument required hereby or now or
hereafter delivered to Lender in connection herewith, or any past, present or
future extensions of credit and other activities, transactions or obligations
of any kind related directly or indirectly to any of the foregoing documents,
including without limitation, any of the foregoing arising in connection with
the exercise of any self-help, ancillary or other remedies pursuant to any of
the foregoing documents. 

Guaranteed Indebtedness:  All (i) "Obligations",
as defined in the Loan Documents, including without limitation any and all pre-
and post-maturity interest thereon, including without limitation post-petition
interest and expenses (including attorneys' fees), if the Borrower is the
debtor in a bankruptcy proceeding under the Debtor Relief Laws, whether or not
allowed under any Debtor Relief Law, (ii)  indebtedness, obligations and
liabilities of Borrower to Beneficiaries, or any or some of them, of any kind
or character, now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several
or joint and several, and regardless of whether such indebtedness, obligations
and liabilities may, prior to their acquisitions by Beneficiaries, or any or
some of them, be or have been payable to or in favor of a third-party and
subsequently acquired by Beneficiaries, or any or some of them (it being
contemplated that Beneficiaries, or any or some of them, may make such
acquisitions from third-parties), including without limitation all
indebtedness, obligations and liabilities of Borrower to Beneficiaries, or any
or some of them, now existing or hereafter arising by note, draft, acceptance,
guaranty, endorsement, letter of credit, assignment, purchase, overdraft,
discount, indemnity agreement or otherwise, (iii) obligations of Borrower
to any Beneficiary under any documents evidencing, securing, governing and/or
pertaining to all or any part of the indebtedness described in (i) and (ii) above,
(iv) costs and expenses incurred by any Beneficiary in connection with the
collection and administration of all or any part of the indebtedness and
obligations described in (i), (ii) and (iii) above or the protection or
preservation of, or realization upon, the collateral securing all or any part
of such indebtedness and obligations, including without limitation all
reasonable attorneys' fees, and (v)  renewals, extensions, modifications
and rearrangements of the indebtedness and obligations described in (i), (ii),
(iii) and (iv) above.

 

GUARANTY AGREEMENT - Page 2

Guaranteed Obligations:  The Guaranteed
Indebtedness and the Guaranteed Performance Obligations.

Guaranteed Performance Obligations:  All of the
obligations of Borrower and any Guarantor under the Loan Documents other than
an obligation to pay money.

Loan Agreement:   That certain Loan Agreement dated as
of even date herewith, as renewed, extended, restated, amended, supplemented,
waived or replaced from time to time.

Person:  Any individual, corporation,
partnership, joint venture, limited liability company or partnership (general
or limited) association, trust, unincorporated association, joint stock
company, government, municipality, political subdivision or agency, or other
entity.

Section 2.                 
Payment.  Each
Guarantor hereby unconditionally and irrevocably guarantees to Beneficiaries
the punctual payment when due, whether by lapse of time, by acceleration of
maturity, or otherwise, and at all times thereafter, of the Guaranteed
Indebtedness.  This Guaranty covers the Guaranteed Indebtedness, whether
presently outstanding or arising subsequent to the date hereof, including all
amounts advanced by any Beneficiary in stages or installments.  The guaranty of
each Guarantor as set forth in this Section 2 is a continuing
guaranty of payment and not a guaranty of collection.  Each Guarantor
acknowledges and agrees that such Guarantor may be required to pay and perform
the Guaranteed Indebtedness in full without assistance or support from Borrower
or any other party.  Each Guarantor agrees that if all or any part of the
Guaranteed Indebtedness shall not be punctually paid when due, whether on the
scheduled payment date, by lapse of time, by acceleration of maturity or
otherwise, such Guarantor shall, immediately upon demand by a Beneficiary, pay
the amount due on the Guaranteed Indebtedness to such Beneficiary at
Beneficiary's address as set forth herein.  Such demand(s) may be made at any
time coincident with or after the time for payment of all or part of the
Guaranteed Indebtedness, and may be made from time to time with respect to the
same or different items of Guaranteed Indebtedness.  Such demand shall be made,
given and received in accordance with the notice provisions hereof.

Section 3.                 
Performance.  Each Guarantor
hereby unconditionally and irrevocably guarantees to Beneficiaries the timely
performance of the Guaranteed Performance Obligations.  If any of the
Guaranteed Performance Obligations of Borrower are not satisfied or complied
with in any respect whatsoever, and without the necessity of any notice from a
Beneficiary to any Guarantor, such Guarantor agrees to indemnify and hold
Beneficiaries harmless from any and all loss, cost, liability or expense that
Beneficiaries may suffer by any reason of any such non-performance or
non-compliance.  The obligations and liability of each Guarantor under this Section 3
shall not be limited or restricted by the existence of, or any terms of, the
guaranty of payment under Section 2 of this Guaranty.

GUARANTY AGREEMENT - Page 3

 

Section 4.                 
Primary Liability of Guarantors.  

(a)               
This Guaranty is an absolute, irrevocable and unconditional guaranty of
payment and performance.  Each Guarantor is and shall be jointly and severally
liable for the payment and performance of the Guaranteed Obligations, as set
forth in this Guaranty, as a primary, and not secondary, obligor.

(b)              
In the event of default in payment or performance of the Guaranteed
Obligations, or any part thereof, when such Guaranteed Obligations become due,
whether by its terms, by acceleration, or otherwise, each Guarantor shall
promptly pay the amount due thereon to Beneficiaries without notice or demand,
of any kind or nature, in lawful money of the United States of America or
perform the obligations to be performed hereunder, and it shall not be
necessary for any Beneficiary in order to enforce such payment and performance
by such Guarantor first, or contemporaneously, to institute suit or exhaust
remedies against Borrower or others liable on the Guaranteed Obligations, or to
enforce any rights, remedies, powers, privileges or benefits of any Beneficiary
against any Collateral, any Additional Collateral or any other security or
collateral which shall ever have been given to secure the Guaranteed
Obligations.

(c)               
Suit may be brought or demand may be made against all parties who have
signed this Guaranty or any other guaranty in favor of Beneficiaries covering
all or any part of the Guaranteed Obligations, or against any one or more of
them, separately or together, without impairing the rights of any Beneficiary
against any party hereto.  Any time that a Beneficiary is entitled to exercise
its rights or remedies hereunder, such Beneficiary may in its discretion elect
to demand payment and/or performance.  If a Beneficiary elects to demand
performance, it shall at all times thereafter have the right to demand payment
until all of the Guaranteed Obligations have been paid and performed in full. 
If a Beneficiary elects to demand payment, it shall at all times thereafter
have the right to demand performance until all of the Guaranteed Obligations
have been paid and performed in full.

Section 5.                 
Other Guaranteed Debt. 
If any Guarantor becomes liable for any indebtedness owing by Borrower to
Beneficiaries, or any or some of them, by endorsement or otherwise, other than
under this Guaranty, such liability shall not be in any manner impaired or
affected hereby, and the rights and remedies hereunder shall be cumulative of
any and all other rights and remedies that Beneficiaries may ever have against such
Guarantor.  The exercise by Beneficiary of any right or remedy hereunder or
under any other instrument, or at law or in equity, shall not preclude the
concurrent or subsequent exercise of any other right or remedy by such
Beneficiary or any other Beneficiary.

GUARANTY AGREEMENT - Page 4

Section 6.                 
Subrogation.  Until
the Guaranteed Obligations have been paid, in full, each Guarantor hereby
covenants and agrees that it shall not assert, enforce, or otherwise exercise
(a) any right of subrogation to any of the rights, remedies or liens of
Beneficiaries or any other beneficiary against Borrower or its Affiliates or any
other guarantor of the Guaranteed Obligations or any collateral or other
security, or (b) unless such rights are expressly made subordinate to the
Guaranteed Obligations (in form and upon terms acceptable to Lender) and the
rights or remedies of Beneficiaries under this Guaranty and the Loan Documents,
any right of recourse, reimbursement, contribution, indemnification, or similar
right against Borrower or its Affiliates or any other guarantor of all or any
part of the Guaranteed Obligations.

Section 7.                 
Subordinated Debt. 
All principal of and interest on all indebtedness, liabilities, and obligations
of Borrower or its Affiliates to any Guarantor (the "Subordinated Debt")
now or hereafter existing, due or to become due to such Guarantor, or held or
to be held by such Guarantor, whether created directly or acquired by
assignment or otherwise, and whether evidenced by written instrument or not,
shall be expressly subordinated to the Guaranteed Obligations.  Until such time
as the Guaranteed Obligations is paid and performed in full and all commitments
to lend under the Loan Documents have terminated, such Guarantor agrees not to
receive or accept any payment from Borrower with respect to the Subordinated
Debt at any time an Event of Default has occurred and is continuing; and, in
the event such Guarantor receives any payment on the Subordinated Debt in
violation of the foregoing, such Guarantor will hold any such payment in trust
for Beneficiaries and forthwith turn it over to Beneficiaries in the form
received, to be applied to the Guaranteed Obligations.

Section 8.                 
Obligations Not to be
Diminished.  Each Guarantor hereby agrees that its obligations under
this Guaranty shall not be released, discharged, diminished, impaired, reduced,
or affected for any reason or by the occurrence of any event, including,
without limitation, one or more of the following events, whether or not with
notice to or the consent of such Guarantor:  (a) the taking or accepting of
collateral as security for any or all of the Guaranteed Obligations or the release,
surrender, exchange, or subordination of any collateral now or hereafter
securing any or all of the Guaranteed Obligations; (b) any partial release of
the liability of Borrower, any Guarantor hereunder, or the full or partial
release of any other guarantor or obligor from liability for any or all of the
Guaranteed Obligations; (c) any disability of Borrower, or the dissolution,
insolvency, or bankruptcy of Borrower, or any other guarantor, or any other
party at any time liable for the payment of any or all of the Guaranteed
Obligations; (d) any renewal, extension, modification, waiver, amendment, or
rearrangement of any or all of the Guaranteed Obligations or any instrument,
document, or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Obligations; (e) any adjustment, indulgence, forbearance,
waiver, or compromise that may be granted or given by any Beneficiary to
Borrower, any Guarantor, or any other party ever liable for any or all of the
Guaranteed Obligations; (f) any neglect, delay, omission, failure, or refusal
of any Beneficiary 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 instrument, document, or agreement evidencing, securing, or
otherwise relating to any or all of the Guaranteed Obligations; (g) the
unenforceability or invalidity of any or all of the Guaranteed Obligations or
of any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Obligations; (h) any payment by
Borrower or any other party to any Beneficiary is held to constitute a
preference under applicable bankruptcy or insolvency law or if for any other
reason any Beneficiary is required to refund any payment or pay the amount
thereof to someone else; (i) the settlement or compromise of any of the
Guaranteed Obligations; (j) the non-perfection of any security interest or lien
securing any or all of the Guaranteed Obligations; (k) any impairment of any
collateral securing any or all of the Guaranteed Obligations; (l) the failure
of any Beneficiary to sell any collateral securing any or all of the Guaranteed
Obligations in a commercially reasonable manner or as otherwise required by law;
(m) any change in the corporate existence, structure, or ownership of Borrower;
or (n) any other circumstance which might otherwise constitute a defense
available to, or discharge of, Borrower or any Guarantor.

 

 

GUARANTY AGREEMENT - Page 5

 

Section 9.                 
Waivers.  Each Guarantor
waives (a) any right to revoke this Guaranty with respect to future
indebtedness; (b) any right to require any Beneficiary to do any of the
following before such Guarantor is obligated to pay the Guaranteed Obligations
or before any Beneficiary may proceed against such Guarantor: (i) sue or
exhaust remedies against Borrower and other guarantors or obligors, (ii) sue on
an accrued right of action in respect of any of the Guaranteed Obligations or
bring any other action, exercise any other right, or exhaust all other remedies,
or (iii) enforce rights against Borrower's assets or the collateral pledged by
Borrower to secure the Guaranteed Obligations; (c) any right relating to the
timing, manner, or conduct of such Beneficiary's enforcement of rights against
Borrower's assets or the collateral pledged by Borrower to secure the
Guaranteed Obligations; (d) if such Guarantor and Borrower (or a third-party)
have each pledged assets to secure the Guaranteed Obligations, any right to
require any Beneficiary to proceed first against the other collateral before
proceeding against collateral pledged by such Guarantor; (e) except as
expressly required hereby, promptness, diligence, notice of any default under
the Guaranteed Obligations, notice of acceleration or intent to accelerate,
demand for payment, notice of acceptance of this Guaranty, presentment, notice
of protest, notice of dishonor, notice of the incurring by Borrower of
additional indebtedness, notice of any suit or other action by any Beneficiary
against Borrower or any other Person, any notice to any party liable for the
obligation which is the subject of the suit or action, and all other notices
and demands with respect to the Guaranteed Obligations and this Guaranty,  (f)
each of the foregoing rights or defenses regardless whether they arise under
(i) Section 34.01 et seq. of the Texas Business and Commerce Code, as amended,
(ii) Section 17.001 of the Texas Civil Practice and Remedies Code, as amended,
(iii) Rule 31 of the Texas Rules of Civil Procedure, as amended, (iv) common law,
in equity, under contract, by statute, or otherwise, and (g) any and all rights
under Sections 51.003, 51.004 and 51.005 of the Texas Property Code, as
amended.

Section 10.             
Insolvency.  Should
any Guarantor become insolvent, or fail to pay such Guarantor's debts generally
as they become due, or voluntarily seek, consent to, or acquiesce in the
benefit or benefits of any Debtor Relief Law, or become a party to (or be made
the subject of) any proceeding provided for by any Debtor Relief Law (other
than as a creditor or claimant) that could suspend or otherwise adversely
affect the rights and remedies of Beneficiaries granted hereunder, then, in any
such event, the Guaranteed Obligations shall be, as between such Guarantor and
Beneficiaries, a fully matured, due, and payable obligation of such Guarantor
to Beneficiaries (without regard to whether Borrower is then in default under
the Loan Agreement or whether the Obligations, or any part thereof is then due
and owing by Borrower to Beneficiaries), payable in full by such Guarantor to
Beneficiaries upon demand, which shall be the estimated amount owing in respect
of the contingent claim created hereunder.

 

 

GUARANTY AGREEMENT - Page 6

Section 11.             
Termination.  Each Guarantor's
obligations hereunder shall remain in full force and effect until all
commitments to lend under the Loan Documents have terminated, and the
Guaranteed Obligations have been paid in full.  If at any time any payment of
the principal of or interest or any other amount payable by Borrower under the
Loan Documents is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy, or reorganization of Borrower or otherwise, such Guarantor's
obligations hereunder with respect to such payment shall be reinstated as
though such payment had been due but not made at such time.

Section 12.             
Representations and Warranties. 
Each Guarantor represents and warrants as follows:

(a)               
Each Guarantor has the power and authority and legal right to execute,
deliver, and perform its obligations under this Guaranty and this Guaranty
constitutes the legal, valid, and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as
limited by bankruptcy, insolvency, or other laws of general application
relating to the enforcement of creditor's rights.

(b)              
The execution, delivery, and performance by each Guarantor of this
Guaranty do not and will not violate or conflict with any law, rule, or
regulation or any order, writ, injunction, or decree of any court, governmental
authority or agency, or arbitrator and do not and will not conflict with,
result in a breach of, or constitute a default under, or result in the
imposition of any lien upon any assets of such Guarantor pursuant to the
provisions of any indenture, mortgage, deed of trust, security agreement,
franchise, permit, license, or other instrument or agreement to which such Guarantor
or its properties are bound.

(c)               
No authorization, approval, or consent of, and no filing or registration
with, any court, governmental authority, or third party is necessary for the
execution, delivery, or performance by any Guarantor of this Guaranty or the
validity or enforceability thereof.

(d)              
Each Guarantor has, independently and without reliance upon any
Beneficiary and based upon such documents and information as such Guarantor has
deemed appropriate, made its own analysis and decision to enter into this
Guaranty, and such Guarantor has adequate means to obtain from Borrower on a
continuing basis information concerning the financial condition and assets of
Borrower, and such Guarantor is not relying upon any Beneficiary to provide
(and no Beneficiary shall have duty to provide) any such information to such Guarantor
either now or in the future.

(e)               
The value of the consideration received and to be received by each Guarantor
is reasonably worth at least as much as the liability and obligation of such Guarantor
hereunder, and such liability and obligation may reasonably be expected to
benefit such Guarantor directly or indirectly. 

Section 13.             
Covenants.  So long
as this Guaranty remains in full force and effect, each Guarantor shall, unless
Beneficiaries shall otherwise consent in writing:

GUARANTY AGREEMENT - Page 7

(a)               
Furnish to Beneficiaries as soon as available, and in any event within 150 days
after the end of each fiscal year of each Guarantor, beginning with the fiscal
year ending December 31, 2004, in such detail as required by
Beneficiaries, (i) a copy of the financial statements of such Guarantor
for such fiscal year and (ii) a certificate of such Guarantor to Beneficiaries
(A) stating that no Default or Event of Default has occurred and is continuing,
or if in such Guarantor's opinion a Default or an Event of Default has occurred
and is continuing, a statement as to the nature thereof and (B) disclosing and
certifying as to all material changes in such Guarantor's debt or net worth or
otherwise certifying that there has been no material change in such Guarantor's
personal debt or net worth since the previous financial statement delivered to
Beneficiaries; and 

(b)              
Furnish to Beneficiaries written notice of the occurrence of any Default
or Event of Default promptly upon obtaining knowledge thereof.

(c)               
Furnish to Beneficiaries such additional information concerning any
Guarantor as Beneficiaries may reasonably request.

Section 14.             
No Fraudulent Transfer. 
It is the intention of each Guarantor and Beneficiaries that the amount of the
Guaranteed Obligations guaranteed by such Guarantor by this Guaranty shall be
in, but not in excess of, the maximum amount permitted by fraudulent
conveyance, fraudulent transfer, or similar laws applicable to such Guarantor. 
Accordingly, notwithstanding anything to the contrary contained in this
Guaranty or any other agreement or instrument executed in connection with the
payment of any of the Guaranteed Obligations, the amount of the Guaranteed
Obligations guaranteed by such Guarantor by this Guaranty shall be limited to
that amount which after giving effect thereto would not (a) render such Guarantor
insolvent, (b) result in the fair saleable value of the assets of such Guarantor
being less than the amount required to pay its debts and other liabilities
(including contingent liabilities) as they mature, or (c) leave such Guarantor
with unreasonably small capital to carry out its business as now conducted and
as proposed to be conducted, including its capital needs, as such concepts
described in clauses (a), (b) and (c) of this Section 14,  are
determined under applicable law, if the obligations of such Guarantor hereunder
would otherwise be set aside, terminated, annulled or avoided for such reason
by a court of competent jurisdiction in a proceeding actually pending before
such court.  For purposes of this Guaranty, the term "applicable law"
means as to each Guarantor each statute, law, ordinance, regulation, order,
judgment, injunction or decree of the United States or any state or
commonwealth, any municipality, any foreign country, or any territory,
possession or tribunal applicable to such Guarantor.

Section 15.             
Successors and Assigns. 
This Guaranty is for the benefit of Beneficiaries and their successors and
assigns, and, in the event of an assignment of the Guaranteed Obligations in
accordance with the provisions of the Loan Agreement, or any part thereof, the
rights and remedies hereunder, to the extent applicable to the indebtedness so
assigned, may be transferred with such indebtedness.  This Guaranty is binding
on each Guarantor, and its successors and permitted assigns; provided that,
any Guarantor may not assign its obligations under this Guaranty without
obtaining the prior written consent of Beneficiaries, and any assignment purported
to be made without the prior written consent of Beneficiaries shall be null and
void.

 

GUARANTY AGREEMENT - Page 8

Section 16.             
Loan Agreement. 
The Loan Agreement, and all of the terms thereof, are incorporated herein by
reference, the same as if stated verbatim herein, and each Guarantor agrees
that Beneficiaries may exercise any and all rights granted to it under the Loan
Agreement and the other Loan Documents without affecting the validity or
enforceability of this Guaranty.

Section 17.             
Amendments.  No
amendment or waiver of any provision herein nor consent to any departure
therefrom by any Guarantor shall be effective unless the same shall be in
writing and signed by Beneficiaries, and then, such amendment, waiver, or
consent shall be effective only in the specific instance and for the specific
purpose for which given.

Section 18.             
Setoff Rights.  If
any Event of Default shall occur and be continuing, Beneficiaries shall have
the right to set off and apply against this Guaranty or the Guaranteed
Obligations or both, at any time and without notice to any Guarantor, any and
all deposits (general or special, time or demand, provisional or final) or
other sums at any time credited by or owing from any Beneficiary to any Guarantor
whether or not the Guaranteed Obligations is then due and irrespective of
whether or not such Beneficiary shall have made any demand under this
Guaranty.  As security for this Guaranty and the Guaranteed Obligations, each Guarantor
hereby grants Beneficiaries a security interest in all money, instruments,
certificates of deposit, and other property of such Guarantor now or hereafter
held by Beneficiaries, including, without limitation, property held in
safekeeping.  In addition to Beneficiaries' right of setoff and as further
security for this Guaranty and the Guaranteed Obligations, each Guarantor
hereby grants Beneficiaries a security interest in all deposits (general or
special, time or demand, provisional or final) and all other accounts of such Guarantor
now or hereafter on deposit with or held by Beneficiaries or any or some of
them and all other sums at any time credited by or owing from each Beneficiary
to such Guarantor.  The rights and remedies of Beneficiaries hereunder are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which Beneficiaries may have.

Section 19.             
Time of Essence. 
Time shall be of the essence in this Guaranty Agreement with respect to
all obligations of each Guarantor hereunder.

Section 20.             
Governing Law. This
Guaranty is executed and delivered as an incident to a lending transaction
negotiated and consummated in Dallas County, Texas, and shall be governed by
and construed in accordance with the laws of the State of Texas.  Borrower, for
itself and its successors and assigns, hereby irrevocably (a) submits to
the nonexclusive jurisdiction of the state and federal courts in Texas,
(b) waives, to the fullest extent permitted by law, and objection that it
may now or in the future have to the laying of venue of any litigation arising
out of or in connection with any Loan Document brought in the District Court of
Dallas County, Texas, or in the United States District Court for the Northern District
of Texas, (c) waives any objection it may now or hereafter have as to the
venue of any such action or proceeding brought in such court or that such court
is an inconvenient forum, and (d) agrees that any legal proceeding against
any party to this Guaranty arising out of or in connection with this Guaranty
may be brought in one of the foregoing courts.  Borrower agrees that service of
process upon it may be made by certified or registered mail, return receipt
requested, at its address specified herein.  Nothing herein shall affect the
right of Beneficiaries to serve process in any other manner permitted by law or
shall limit the right of Beneficiaries to bring any action or proceeding
against any Guarantor or with respect to any of such Guarantor's property in
courts in other jurisdictions.  The scope of each of the foregoing waivers is
intended to be all encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including,
without limitation, contract claims, tort claims, breach of duty claims, and
all other common law and statutory claims.  Each Guarantor acknowledges that
these waivers are a material inducement to Lender's agreement to enter into
agreements and obligations evidenced by the Loan Agreement, that Lender and
each other Beneficiary has already relied on these waivers and will continue to
rely on each of these waivers in related future dealings.  The waivers in this
section are irrevocable, meaning that they may not be modified either orally or
in writing, and these waivers apply to any future renewals, extensions,
amendments, modifications, or replacements in respect of the documents related
in any manner to the transactions evidenced by the Loan Agreement.  

GUARANTY AGREEMENT - Page 9

 

Section 21.             
Counterparts.  This Guaranty
may be executed in multiple counterparts, each of which, for all purposes,
shall be deemed an original, and all of which taken together shall constitute
but one and the same instrument.

Section 22.             
Waiver Of Right
To Trial By Jury.  EACH GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM THAT RELATES TO OR ARISES OUT OF THIS
GUARANTY OR ANY OF THE LOAN DOCUMENTS OR THE ACTS OR FAILURE TO ACT OF OR BY
ANY BENEFICIARY IN THE ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS
GUARANTY OR THE OTHER LOAN DOCUMENTS.

Section 23.             
No Oral Agreements. 
THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BY THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

Section 24.             
Lender acts for Beneficiaries. 
Lender shall (absent written notification by a Beneficiary to the contrary) act
for all Beneficiaries for the purposes of making demands hereunder, obtaining
information, amending or waiving provisions hereof and otherwise taking action
on behalf of the Beneficiaries, and (absent written notice to the contrary)
Guarantor shall be entitled to rely on the authority of Lender to act for all
Beneficiaries without further investigation.

Upon the execution and delivery by any Person of a
guaranty agreement supplement in substantially the form of Exhibit A
attached hereto (each a "Guaranty Agreement Supplement"), such
Person shall be and become a Guarantor hereunder and each reference in this
Agreement and other Loan Documents to "Guarantor" shall also mean and
be a reference to such Person.

Remainder of page intentionally left blank.

Signature page to follow.

GUARANTY AGREEMENT - Page 10

EXECUTED as of the first date herein set forth.

 

GUARANTORS:

CORNERSTONE BUILDING AND 

REMODELING, INC.

By:                                                                       

             Name:

             Title:

Address for Notices:

1500 Dragon Street, Suite B

Dallas, Texas  75207

Attn:  Rick O'Brien

FIBER-SEAL SYSTEMS, L.P.

By:        FSS Holding Corp.,

             its general
partner

             By:                                                                                        

             Name:

             Title:

Address for Notices:

1500 Dragon Street, Suite B

Dallas, Texas  75207

Attn:  Rick O'Brien

HOME SOLUTIONS RESTORATION OF LOUISIANA, INC.

By:                                                                                                       

            Name:

            Title:

Address for Notices:

1500 Dragon Street, Suite B

Dallas, Texas  75207

Attn:  Rick O'Brien  

 

GUARANTY AGREEMENT

SIGNATURE PAGE

P.W.
STEPHENS, INC.

By:                                                                               

            Name:

            Title:

Address for Notices:

1500 Dragon Street, Suite B

Dallas, Texas  75207

Attn:  Rick O'Brien

SOUTHERN EXPOSURE UNLIMITED OF FLORIDA, INC. 

By:                                                                               

            Name:

            Title:

Address for Notices:

1500 Dragon Street, Suite B

Dallas, Texas  75207

Attn:  Rick O'Brien

SE TOPS OF FLORIDA, INC.

By:                                                                               

            Name:

            Title:

Address for Notices:

1500 Dragon Street, Suite B

Dallas, Texas  75207

Attn:  Rick O'Brien

 

 

GUARANTY AGREEMENT

SIGNATURE PAGE

 

FSS
HOLDING CORP.

By:                                                                               

            Name:

            Title:

Address for Notices:

1500 Dragon Street, Suite B

Dallas, Texas  75207

Attn:  Rick O'Brien

SOUTHERN EXPOSURE HOLDINGS, INC.

By:                                                                               

            Name:

            Title:

Address for Notices:

1500 Dragon Street, Suite B

Dallas, Texas  75207

Attn:  Rick O'Brien

 

GUARANTY AGREEMENT

SIGNATURE PAGEEXHIBIT 10.28
                                                                   -------------

                             Escalade, Incorporated
                        Schedule of Director Compensation

         Each director of Escalade, Incorporated currently receives an annual
cash retainer of $7,000, with the exception of the Chairman of the Board who
receives an annual cash retainer of $25,000. The Chairman of the Audit Committee
receives an additional fee of $2,000 and the Chairman of the Compensation
Committee receives an additional fee of $2,000, in consideration of the extra
services required by each of them, respectively, as the chairman of such
committees. In addition, all directors receive $4,000 for each meeting attended
and are reimbursed for their expenses in attending the meetings. Directors who
are employees of the Company receive the same retainer and fees as directors who
are not employees.

         In accordance with the Company's 1997 Director Stock Compensation and
Option Plan which was approved by the Company's shareholders, directors may
elect to defer their director compensation and receive shares of the Company's
common stock instead. Each director who elects to receive shares also is granted
stock options in an amount equal to one half of the shares issued. The exercise
price of those options is based on the closing share price on the first business
day following the Company's annual meeting of shareholders.

                                       55

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