THIS MODIFICATION AGREEMENT (“ Agreement ”) is entered into as of January 1, 2007, by and between U.S. Home
Systems, Inc., a Delaware corporation (“ Borrower ”), and The Frost National Bank, a national banking association (“ Lender ”).
R E C I T A L S:
A. Borrower has executed and delivered to Lender that one certain Term Note (the “ Note ”) dated February 9, 2006, to be
effective as of February 10, 2006, payable to the order of Lender in the original principal amount of Eight Hundred Seventy Five
Thousand and No/100 Dollars ($875,000.00).
B. The Note was executed pursuant to that certain First Amended and Restated Loan Agreement (as from time to time
amended, the “ Loan Agreement ”) dated February 9, 2006, to be effective as of February 10, 2006, between Lender and
Borrower. Capitalized terms used and not otherwise defined herein have the meanings given them in the Loan Agreement.
C. Borrower has requested that Lender modify certain provisions of the Note, all as hereinafter provided, and Lender has
agreed to such requests, subject to the terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and agreed, Borrower and Lender hereby agree as follows:
1. Interest Rate . The first sentence of Paragraph 3 of the Note is hereby amended in its entirety to read as follows:
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 two percent
(2.0%) per annum, 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 cha