Document:

AMENDED LOAN AGREEMENT

 Exhibit 10.54 
  

					
	[GRAPHIC]	  	THIRD AMENDMENT TO LOAN AGREEMENT	  	 

  
 THIS THIRD AMENDMENT
TO LOAN AGREEMENT (herein called this “Third Amendment”) made as of the 24th day of May, 2004, by and between U.S. HOME SYSTEMS, INC., a Delaware corporation (“Borrower”), and THE FROST NATIONAL BANK, a national banking
association (“Lender”). 
  
 W I T N E S S E T H:

  
 WHEREAS, Borrower and Lender have entered into that certain
Loan Agreement dated as of May 30, 2003 (as from time to time amended, modified or restated, the “Original Agreement”) for the purposes and consideration therein expressed, pursuant to which Lender became obligated to make loans to
Borrower as therein provided; and 
  
 WHEREAS, Borrower and Lender
desire to amend the Original Agreement for the purposes expressed herein; 
  
 NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and in the Original Agreement, in consideration of the loans which may hereafter be made by Lender to Borrower,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: 
  
 ARTICLE I. 
  
 Definitions and References 
  
 §1.1 Terms Defined in the Original Agreement. Unless the context otherwise requires or unless otherwise expressly defined herein, the terms defined in the Original Agreement shall have the same meanings
whenever used in this Amendment. 
  
 § 1.2. Other Defined
Terms. Unless the context otherwise requires, the following terms when used in this Third Amendment shall have the meanings assigned to them in this § 1.2. 
  
 “Loan Agreement” means the Original Agreement as amended hereby. 
  
 “Third Amendment” means this Third
Amendment to Loan Agreement. 
  

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 ARTICLE II. 
  
 Amendments to Original Agreement 
  
 §2.1. Revolving Line of Credit. The first sentence of Section 1 (a) of the Original Agreement is hereby amended in its entirety to read as
follows: 
  
 Subject to the terms and conditions
set forth herein, Lender agrees to lend to Borrower, on a revolving basis from time to time during the Revolving Period, such amounts as Borrower may request hereunder; provided, however, the total principal amount outstanding at any
time shall not exceed the lesser of (i) the Collateral Value of the Eligible Installment Contracts (as defined below) or (ii) $5,000,000 (the “Revolving Line of Credit”). 
  
 §2.2. Borrowing Base Line of Credit. The first sentence of Section l(b) of the Original Agreement is hereby
amended in its entirety to read as follows: 
  
 Subject to the terms and conditions set forth herein, Lender agrees to lend to Borrower, on a revolving basis from time to time during the period commencing on the date hereof and continuing through the maturity date of the promissory note
evidencing this Credit Facility from time to time, such amounts as Borrower may request hereunder; provided, however, the total principal amount outstanding at any time shall not exceed the lesser of (i) an amount equal to the
Borrowing Base (as defined below), or (ii) $3,000,000 (the “Borrowing Base Line of Credit”). 
  
 § 2.3. Term B Loan. The following new subsection (d) is hereby added to Section 1 of the Original Agreement: 
  
 (d) Term B Loan. Subject to the terms and conditions
set forth herein, Lender agrees to lend to Borrower, and Borrower agrees to borrow from Lender, $2,500,000 in a single advance (the “Term B Loan”) on or before May 28, 2004. The sums advanced under the Term B Loan shall be used to
payoff Borrower’s existing credit facility with First Savings Bank (FSB) in full. 
  
 § 2.4. Definitions. The following definition of “Revolving Period” is hereby added in the correct alphabetical order to Section 2 of the Original Agreement: 
  
 “Revolving Period” means the period
commencing on May 30, 2003, and continuing through the earlier to occur of (i) the maturity date of the promissory note evidencing the Revolving Line of Credit from time to time, and (ii) the first Business Day on which the Receivables Agreement
provides that the calculation of the borrowing base thereunder will include Installment Contracts for which Borrower has not yet received the first scheduled monthly installment. 
  

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 § 2.5. Financial Covenant. Sections 1 l(a) and 1 l(b) of the Original Agreement are hereby
amended in their entirety to read as follows: 
  
 (a) Tangible Net Worth. Borrower will maintain, at all times, its Tangible Net Worth at not less than the sum of (i) $6,000,000 plus (ii) 75% of the net proceeds received by Borrower from any equity offering completed after
May 24, 2004. 
  
 (b) Debt to Worth Ratio.
Borrower will maintain, as of the end of each fiscal quarter, a ratio of (a) total liabilities (excluding any Subordinated Debt, all indebtedness of FCC Acceptance Corp. under the Receivables Agreement and all amounts outstanding under the Term B
Loan), to (b) Tangible Net Worth of not greater than 3.5 to 1.0 at all times. 
  
 ARTICLE III. 
  
 Conditions of
Effectiveness 
  
 § 3.1. Effective Date. This
Third Amendment shall become effective as of the date first written above, when and only when Lender shall have received, at Lender’s office, in form and substance satisfactory to Lender: 
  

	 	(a)	this Third Amendment duly executed and delivered by Borrower; 

  

	 	(b)	the Consent and Agreement duly executed and delivered by each Guarantor; 

  

	 	(c)	a Revolving Promissory Note dated of even date herewith in the stated principal amount of $5,000,000, duly executed and delivered by Borrower and payable to the order of Lender,
which note amends and restates (but does not extinguish) the Revolving Promissory Note dated as of May 30, 2003, in the stated principal amount of $5,000,000, executed by Borrower payable to the order of Lender; 

  

	 	(d)	a Revolving Promissory Note dated of even date herewith in the stated principal amount of $3,000,000, duly executed and delivered by Borrower and payable to the order of Lender,
which note amends and restates (but does not extinguish) the Revolving Promissory Note dated as of May 30, 2003, in the stated principal amount of $2,000,000, executed by Borrower payable to the order of Lender; 

  

	 	(e)	a Term Note dated of even date herewith in the stated principal amount of $2,500,000, duly executed and delivered by Borrower and payable to the order of Lender, which note
evidences the Term B Loan; 

  

	 	(f)	Certificate of Corporate Resolutions of Borrower; 

  

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	 	(g)	Certificate of Corporate Resolutions of each Guarantor; 

  

	 	(h)	First Amendment to Security Agreement duly executed and delivered by Borrower; 

  

	 	(i)	First Amendments to Security Agreements duly executed and delivered by each Guarantor; 

  

	 	(j)	First Amendments to Guaranty Agreements duly executed and delivered by each Guarantor; 

  

	 	(k)	Arbitration and Notice of Final Agreement duly executed and delivered by Borrower and each Guarantor; and 

  

	 	(l)	A payoff letter from First Savings Bank (FSB). 

  
 ARTICLE IV. 
  
 Representations and Warranties 
  
 § 4.1. Representations and Warranties of Borrower. In order to induce Lender to enter into this Amendment, Borrower represents and warrants to Lender that: 
  
 (a) The representations and warranties contained in Section
7 of the Original Agreement are true and correct at and as of the time of the effectiveness hereof. 
  
 (b) Borrower is duly authorized to execute and deliver this Third Amendment and is and will continue to be duly authorized to borrow and
to perform its obligations under the Loan Agreement. Borrower has duly taken all action necessary to authorize the execution and delivery of this Third Amendment and to authorize the performance of the obligations of Borrower hereunder. 

 
 (c) The execution and delivery by Borrower of this
Amendment, the performance by Borrower of its obligations hereunder and the consummation of the transactions contemplated hereby do not and will not conflict with any provision of law, statute, rule or regulation or of the partnership agreement of
Borrower, or of any material agreement, judgment, license, order or permit applicable to or binding upon Borrower, or result in the creation of any lien, charge or encumbrance upon any assets or properties of Borrower. Except for those which have
been duly obtained, no consent, approval, authorization or order of any court or governmental authority or third party is required in connection with the execution and delivery by Borrower of this Third Amendment or to consummate the transactions
contemplated hereby. 
  

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 (d) When duly executed and delivered, each of this Third Amendment and the Loan Agreement
will be a legal and binding instrument and agreement of Borrower, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency and similar laws applying to creditors’ rights generally and by principles of equity
applying to creditors’ rights generally. 
  
 ARTICLE V.

  
 Miscellaneous 
  
 § 5.1. Ratification of Agreements. The Original Agreement as
hereby amended is hereby ratified and confirmed in all respects. The execution, delivery and effectiveness of this Third Amendment shall not, except as expressly provided herein or therein, operate as a waiver of any right, power or remedy of Lender
under the Loan Agreement, the Note, or any other Loan Document nor constitute a waiver of any provision of the Loan Agreement, the Note or any other Loan Document. 
  
 § 5.2. Survival of Agreements. All representations, warranties, covenants and agreements of Borrower herein
shall survive the execution and delivery of this Third Amendment and the performance hereof, including without limitation the making or granting of the Loan and shall further survive until the Loan is paid in full. 
  
 § 5.3. Loan Documents. This Third Amendment is a Loan Document,
and all provisions in the Loan Agreement pertaining to Loan Documents apply hereto. 
  
 § 5.4. Governing Law. This Third Amendment shall be governed by and construed in accordance with the laws of the State of Texas and any applicable laws of the United States of America in all respects,
including construction, validity and performance. 
  
 § 5.5.
Counterparts. This Third Amendment may be separately executed in counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same Amendment. 

 
 THIS THIRD AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES. 
  

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 IN WITNESS WHEREOF, this Third Amendment is executed as of the date first above written. 
  

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

	 	 	

	 	 	 Name:
 Title:

  

			
	THE FROST NATIONAL BANK
		
	By:	 	 /s/

	 	 	

	 	 	 Name:
 Title:

  

 -6-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, 

  

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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. 
  

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 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:
	 	 
	 	 	 	 	 	 	

  

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