PROMISSORY NOTE




 Exhibit 10.55 
  

					
	[GRAPHIC]	  	PROMISSORY NOTE	  	 
	 	  	(Floating Rate)	  	 

  

			
	 $2,500,000.00
	  	May 24, 2004

  
 For value received,
U.S. HOME SYSTEMS, INC., as principal (“Borrower”), promises to pay to the order of THE FROST NATIONAL BANK, a national banking association (“Lender”) at P.O. Box 1600, San Antonio, Texas 78296, or at
such other address as Lender shall from time to time specify in writing, the principal sum of TWO MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($2,500,000), in legal and lawful money of the United States of America, with interest on the
outstanding principal from the date advanced until paid at the rate set out below. Interest shall be computed on a per annum basis of a year of 360 days and for the actual number of days elapsed, unless such calculation would result in a rate
greater than the highest rate permitted by applicable law, in which case interest shall be computed on a per annum basis of a year of 365 days or 366 days in a leap year, as the case may be. 
  
 1. Payment Terms. Interest only on amounts outstanding
hereunder shall be due and payable monthly as it accrues, on the 30th day of each and every calendar month, beginning June 30, 2004, and continuing regularly and monthly thereafter until August 30, 2004, when the entire amount hereof, principal and
interest then remaining unpaid, shall be then due and payable; interest being calculated on the unpaid principal each day principal is outstanding and all payments made credited to any collection costs and late charges, to the discharge of the
interest accrued and to the reduction of the principal, in such order as Lender shall determine. 
  
 2. Late Charge. If a payment is made 10 days or more late, Borrower will be charged, in addition to interest, a delinquency charge of (i) 5%
of the unpaid portion of the regularly scheduled payment, or (ii) $250.00, whichever is less. Additionally, upon maturity of this Note, if the outstanding principal balance (plus all accrued but unpaid interest) is not paid within 10 days of the
maturity date, Borrower will be charged a delinquency charge of (i) 5% of the sum of the outstanding principal balance (plus all accrued but unpaid interest), or (ii) $250.00, whichever is less. Borrower agrees with Lender that the charges set forth
herein are reasonable compensation to Lender for the handling of such late payments. 
  
 3. Interest Rate. Interest on the outstanding and unpaid principal balance hereof shall be computed at a per annum rate equal to the lesser of (a) a rate equal to the Wall Street Journal London Interbank
Offered Rate (as defined below) plus the Applicable Margin (as defined below), with said rate to be adjusted to reflect any change in The Wall Street Journal London Interbank Offered Rate at the time of any such change or (b) the highest rate
permitted by applicable law, but in no event shall interest contracted for, charged or received hereunder plus any other charges in connection herewith which constitute interest exceed the maximum interest permitted by applicable law, said rate to
be effective prior to maturity (however such maturity is brought about). The “Wall Street Journal London Interbank Offered Rate” shall mean the London Interbank Offered Rate (LIBOR) for three (3) months quoted in the most recently
published issue of The Wall Street Journal (Central Edition) in the “Money Rates” 

  










 
column. If the Wall Street Jounral London Interbank Offered Rate ceases to be made available by the publisher, or any successor to the publisher of The
Wall Street Journal (Central Edition), the interest rate will be determined by using a comparable index. If more than one Wall Street Journal London Interbank Offered Rate for three (3) months is quoted, the higher rate shall apply. The Wall
Street Journal London Interbank Offered Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. The term “Applicable Margin” means (a) 3.5% per annum on each day during the
period beginning on the date hereof through but not including June 24, 2004, (b) 4.5% per annum on each day during the period beginning on June 24, 2004, through but not including July 24, 2004, and (c) 5.5% per annum on each day thereafter.

  
 4. Default Rate. Matured unpaid principal and
interest shall bear interest from date of maturity until paid at (a) the highest rate permitted by applicable law, or (b) if no such maximum rate is established by applicable law, at the rate stated above plus five percent (5%) per annum.

  
 5. Prepayment. Borrower reserves the right to
prepay, prior to maturity, all or any part of the principal of this Note without penalty. Any prepayments shall be applied first to accrued interest and then to principal. Borrower will provide written notice to the holder of this Note of any such
prepayment of all or any part of the principal at the time thereof. All payments and prepayments of principal or interest on this Note shall be made in lawful money of the United States of America in immediately available funds, at the address of
Lender indicated above, or such other place as the holder of this Note shall designate in writing to Borrower. All partial prepayments of principal shall be applied to the last installments payable in their inverse order of maturity. 
  
 6. Default. It is expressly provided that upon default in the
punctual payment of this Note or any part hereof, principal or interest, within five (5) days of the date the same shall become due and payable, or upon the occurrence of an event of default specified in any of the other Loan Documents (as defined
below), the holder of this Note may, at its option, without further notice or demand, (i) declare the outstanding principal balance of and accrued but unpaid interest on this Note at once due and payable, (ii) refuse to advance any additional
amounts under this Note, (iii) foreclose all liens securing payment hereof, (iv) pursue any and all other rights, remedies and recourses available to the holder hereof, including but not limited to any such rights, remedies or recourses under the
Loan Documents, at law or in equity, or (v) pursue any combination of the foregoing; and in the event default is made in the prompt payment of this Note when due or declared due, and the same is placed in the hands of an attorney for collection, or
suit is brought on same, or the same is collected through probate, bankruptcy or other judicial proceedings, then the Borrower agrees and promises to pay all costs of collection, including reasonable attorney’s fees. 
  
 7. Joint and Several Liability; Waiver. Each maker, signer,
surety and endorser hereof, as well as all heirs, successors and legal representatives of said parties, shall be directly and primarily, jointly and severally, liable for the payment of all indebtedness hereunder. Lender may release or modify the
obligations of any of the foregoing persons or entities, or guarantors hereof, in connection with this loan without affecting the obligations of the others. All such persons or entities expressly waive presentment and demand for payment, notice of
default, notice of intent to accelerate maturity, notice of acceleration of maturity, protest, notice of protest, notice of dishonor, and all other notices and demands for which waiver is not prohibited by law, and diligence in the collection
hereof; and agree to all renewals, 

  

 2 









 
extensions, indulgences, partial payments, releases or exchanges of collateral, or taking of additional collateral, with or without notice, before or after
maturity. No delay or omission of Lender in exercising any right hereunder shall be a waiver of such right or any other right under this Note. 
  
 8. No Usury Intended; Usury Savings Clause. In no event shall interest contracted for, charged or received hereunder, plus any other charges
in connection herewith which constitute interest, exceed the maximum interest permitted by applicable law. The amounts of such interest or other charges previously paid to the holder of the Note in excess of the amounts permitted by applicable law
shall be applied by the holder of the Note to reduce the principal of the indebtedness evidenced by the Note, or, at the option of the holder of the Note, be refunded. To the extent permitted by applicable law, determination of the legal maximum
amount of interest shall at all times be made by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of the loan and indebtedness, all interest at any time contracted for, charged or received from
the Borrower hereof in connection with the loan and indebtedness evidenced hereby, so that the actual rate of interest on account of such indebtedness is uniform throughout the term hereof. 
  
 9. Security. This Note has been executed and delivered pursuant
to that certain Loan Agreement dated as of May 30, 2003, by and between Borrower and Lender ( as from time to time amended, modified or restated, “Loan Agreement”), and is secured by, inter alia, the following: 
  
 (a) a Security Agreement dated as of May 30, 2003, by and
between Borrower and Lender, covering certain collateral as more particularly described therein. 
  
 (b) Security Agreements dated as of May 30, 2003, by and between each Guarantor (as defined in the Loan Agreement) and Lender, covering
certain collateral as more particularly described therein. 
  
 This Note, the Loan Agreement and all other documents evidencing, securing, governing, guaranteeing and/or pertaining to this Note, including but not limited to those documents described above, are hereinafter collectively referred to as
the “Loan Documents.” The holder of this Note is entitled to the benefits and security provided in the Loan Documents. 
  
 10. Texas Finance Code. In no event shall Chapter 346 of the Texas Finance Code (which regulates certain revolving loan accounts and
revolving tri-party accounts) apply to this Note. To the extent that Chapter 303 of the Texas Finance Code is applicable to this Note, the “weekly ceiling” specified in such article is the applicable ceiling; provided that, if any
applicable law permits greater interest, the law permitting the greatest interest shall apply. 
  
 11. Governing Law, Venue. This Note is being executed and delivered, and is intended to be performed in the State of Texas. Except to the extent that the laws of the United States may apply to the terms
hereof, the substantive laws of the State of Texas shall govern the validity, construction, enforcement and interpretation of this Note. In the event of a dispute involving this Note or any other instruments executed in connection herewith, the
undersigned irrevocably agrees that venue for such dispute shall lie in any court of competent jurisdiction in Bexar County, Texas. 
  

 3 









 12. Purpose of Loan. Borrower agrees that no advances under this Note shall be used for
personal, family or household purposes, and that all advances hereunder shall be used solely for business, commercial, investment, or other similar purposes. 
  
 13. Captions. The captions in this Note are inserted for convenience only and are not to be used to limit the terms herein. 
  
 14. Financial Information. Borrower agrees to promptly furnish
such financial information and statements, including financial statements in a format acceptable to Lender, lists of assets and liabilities, agings of receivables and payables, inventory schedules, budgets, forecasts, tax returns, and other reports
with respect to Borrower’s financial condition and business operations as Lender may request from time to time. This provision shall not alter the obligation of Borrower to deliver to Lender any other financial statements or reports pursuant to
the terms of any other loan documents executed in connection with this Note. 
  

							
	BORROWER:
		
	 	 	U.S. HOME SYSTEMS, INC.
			
	 	 	 By:
	 	 /s/

	 	 	 	 	

	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	

	 	 	 	 	 Title:
	 	 
	 	 	 	 	 	 	



  

 4