Exhibit 10.4
July 1, 2008
Home
Solutions of America, Inc.
1500 Dragon St.
Suite B
Dallas, TX 75207
Gentlemen:
We refer
to (i) the Credit Agreement dated as of November 1, 2006,
(ii) the Forbearance Agreement dated as of February 6,
2008 (iii) Amendment No. 1 to Forbearance Agreement dated
on or about June 3, 2008 and (iv) proposed Amendment
No. 2 to Forbearance Agreement (the “Second
Amendment”), each of which is among Home Solutions of
America, Inc. (“HSOA”), the guarantors named therein,
the lenders party thereto (the “Lenders”) and Texas
Capital Bank, National Association, as administrative agent (the
“Agent”).
All
terms used herein that are defined in the Second Amendment shall
have the same meanings herein.
In
satisfaction of the requirements of paragraph 3 (i) of the
Second Amendment:
(a) EvenFlow Funding, LLC (“EvenFlow”) has
previously purchased for an aggregate purchase price of
$3.5 million, 350,000 shares of Series C Convertible
Preferred Stock at a purchase price of $10 per share, convertible
into 3,500,000 shares of common stock of HSOA at a conversion price
of $1.00 per share, which such Series C Convertible Preferred
Stock was subsequently re-designated as Series C1 Convertible
Preferred Stock (the “Initial Investment”).
(b) Subsequent to the Initial Investment, EvenFlow purchased,
for an aggregate purchase price of $1.5 million, 150,000
shares of Series C2 Convertible Preferred Stock at a purchase
price of $10 per share, convertible into 1,500,000 shares of common
stock of HSOA at a conversion price of $1.00 per share (the
“Subsequent Investment”).
(c) In connection with the sale by HSOA of substantially all
of the assets (the “Asset Sale”) of P.W. Stephens,
Inc., a California corporation (“PWS”), Michael J.
McGrath, Jr. (“McGrath”), has provided a certain
guaranty (the “McGrath Guaranty”) in favor of PWS, of a
certain Promissory Note (the “Note”) in the original
principal amount of Five Hundred Thousand Dollars ($500,000.00),
which such Note was issued by Home Solutions Restoration of
Louisiana, Inc., a Louisiana corporation, in favor of PWS, and
which such Note and McGrath Guaranty were assigned by PWS to P.W.
Stephens Environmental, Inc., a Delaware corporation, in connection
with such Asset Sale.
