PROMISSORY NOTE

$21,650,000.00

Dallas, Texas

July 1, 2006

Home Solutions of America, Inc., a Delaware corporation ("Maker"), for value
received, hereby promises to pay to Brian Marshall, an individual domiciled in
Florida (the "Payee"), or his permitted assigns, at the time and in the manner
hereinafter provided, the aggregate principal sum of Twenty-One Million Six
Hundred Fifty Thousand and NO/100 DOLLARS ($21,650,000.00), together with
interest computed thereon, from and after the date hereof until paid, at the
rate and compounded as hereinafter provided.  This Note shall be payable in U.S.
dollars at the office of Payee at 3018 Horatio Street, Tampa, Florida 33609, or
at such other address as Payee may from time to time otherwise designate.

            1.         This Note is being executed and delivered in connection
with that certain Stock Purchase Agreement, dated July 31, 2006 but effective
for all purposes as of July 1, 2006, by and among Maker, Payee and Fireline
Restoration, Inc., a Florida corporation  (the "Purchase Agreement"). Unless
otherwise defined herein, all defined terms in this Note shall have the meanings
given them in the Purchase Agreement.

            2.         Payments of principal and interest on this Note shall be
due as follows:

            (a)        accrued interest on the outstanding principal balance of
this Note shall be due on the first day of each month, commencing on September
1, 2006;

            (b)        if after the Closing Date, Fireline receives any
payment(s) on the Acquired Contracts referred to as "Vista" and//or "Delmar"
(each, a "Vista/Del Mar Payment"), then in each such instance, a payment on this
Note equal to the amount of the Vista/Del Mar Payment so received (up to but not
exceeding not to exceed the then-outstanding principal balance of the Note
together with unpaid accrued interest thereon) shall be due and payable on the
fifth business day following Maker's receipt of such Vista/Del Mar Payment, to
be credited against amounts outstanding hereunder, as provided below; and

            (c)        the remaining outstanding principal balance of this Note,
together with accrued and unpaid interest thereon, shall be due and payable on
November 17, 2006; provided, however, that if the remaining outstanding
principal balance of this Note, together with accrued and unpaid interest
thereon, is not paid on November 17, 2006, then such remaining outstanding
principal balance of this Note, together with accrued and unpaid interest
thereon, shall be due and payable on January 31, 2007 (in either case, the
"Maturity Date").

            3.         All payments on this Note shall be applied first, unpaid
accrued interest, and next, to principal outstanding under this Note. 

           

 

 

 

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            4.         The outstanding principal amount of this Note, together
with unpaid accrued interest that has become due and payable pursuant to the
terms hereof, shall bear interest from the date hereof until paid at a rate,
accrued and compounded monthly, equal to (i) the "prime rate" as quoted in the
The Wall Street Journal from time to time, until November 17, 2006, and (ii) if
the Maturity Date extends automatically to January 31, 2007 pursuant to Section
2(c), twelve percent (12%) thereafter. 

5.         Notwithstanding anything contained in this Note to the contrary,
after compliance with the applicable provisions of the Purchase Agreement and
the Escrow Agreement, Maker shall have the right to set off and apply against
all sums owing to Payee hereunder, any amounts that Payee owes Maker pursuant to
the terms of the Purchase Agreement (including, without limitation, any
indemnity claims that Maker may have from time to time against Payee under the
Purchase Agreement) after final resolution pursuant to the provisions of Section
11.04 of the Purchase Agreement.  Any amounts which Maker has the right to set
off and apply against amounts outstanding under this Note shall be applied
first, against unpaid accrued interest, and next, against outstanding principal
and any amount(s) set off and applied pursuant to this paragraph shall be
considered a payment on the Note in such amount(s). 

6.         This Note may be prepaid in whole or in part from time to time,
without premium or penalty.  Each prepayment of principal shall be accompanied
by an amount equal to the unpaid accrued interest on the principal amount
prepaid to the date of such prepayment.

            7.         The following events shall be Events of Default (herein
so called) hereunder:

            (a)        if Maker shall fail to pay when due any amounts due in
accordance with the terms of this Note, and such failure continues for a period
of ten (10) days thereafter; provided, that if Maker has made a claim against
Payee pursuant to the applicable provisions of the Purchase Agreement and the
Escrow Agreement, then Maker may withhold payment hereunder in an amount equal
to (but not exceeding) the amount of such claim (the "Abated Payment"), unless
and until such claim has been finally resolved in favor of Payee, and the Abated
Payment shall not be considered an Event of Default hereunder; or

            (b)        Maker shall have failed to have Payee released as a
guarantor of the BB&T Indebtedness on or before November 17, 2006, unless Payee
shall have consented in writing to an extension of such guaranty beyond November
17, 2006. 

8.         Upon the occurrence and during the continuance of an Event of
Default, the outstanding principal amount of this Note, together with unpaid
accrued interest that has become due and payable pursuant to the terms hereof,
shall bear interest from the date of such Event of Default until the date such
Event of Default is cured or such Event of Default is waived in writing by Payee
at a rate, accrued and compounded monthly, equal to twelve percent (12%).  Upon
the occurrence and during the continuance of an Event of Default, Payee may
declare the principal of this Note together with all accrued and unpaid interest
thereon to be due and payable immediately, and the same shall become and be due
and payable, without notices, demands for payment, presentations for payment,
notices of payment default, notices of intention to accelerate maturity, protest
and notice of protest, and any other notices of any kind, all of which are
expressly waived by Maker and any and all sureties, guarantors and endorsers of
this Note. 

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9.         If an Event of Default occurs and this Note is placed in the hands of
an attorney for collection (whether or not suit is filed), or if all or any
portion of this Note is required to be collected by suit or legal proceedings or
through bankruptcy proceedings, Maker agrees to pay in addition to all sums then
due hereon, including principal and interest, all expenses of collection,
including, without limitation, reasonable attorneys' fees.

10.       Notwithstanding anything contained in this Note to the contrary, after
final resolution of any dispute pursuant to the provisions of Section 11.04 of
the Purchase Agreement, if the transactions contemplated by the Purchase
Agreement are terminated or otherwise unwound for any reason, then concurrently
therewith, this Note shall immediately be deemed null and void and of no legal
force or effect, all amounts then due and owing under the Note shall be forever
forgiven and cancelled, and Payee shall immediately deliver the Note to Maker
marked or stamped "cancelled". 

11.       Maker and any and all sureties, guarantors and endorsers of this Note
and all other parties now or hereafter liable hereon, severally waive grace,
demand, presentment for payment, notice of dishonor, protest and notice of
protest, notice of intention to accelerate, notice of acceleration, any other
notice and diligence in collecting and bringing suit against any party hereto
and agree (i) to all extensions and partial payments, with or without notice,
before or after the Maturity Date, (ii) to any substitution, exchange or release
of any security now or hereafter given for this Note, (iii) to the release of
any party primarily or secondarily liable hereon, and (iv) that it will not be
necessary for the holder hereof, in order to enforce payment of this Note, to
first institute or exhaust such holder's remedies against Maker or any other
party liable therefor or against any security for this Note.  No delay on the
part of Payee in exercising any power or right under this Note shall operate as
a waiver of such power or right, nor shall any single or partial exercise of any
power of right preclude further exercise of that power or right.

 

 

 

 

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12.       All agreements between Maker and the holder hereof, whether now
existing or hereafter arising and whether written or oral, are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
acceleration of the Maturity Date hereof, or otherwise, shall the amount paid,
or agreed to be paid, to the holder hereof for the use, forbearance or detention
of the funds advanced pursuant to this Note, or otherwise, or for the payment of
performance of any covenant or obligation contained herein or in any other
document or instrument evidencing, securing or pertaining to this Note exceed
the maximum amount permissible under applicable law.  If from any circumstances
whatsoever fulfillment of any provision hereof or any other document or
instrument exceeds the maximum amount of interest prescribed by law, then ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the holder hereof shall ever
receive anything of value deemed interest by applicable law, which would exceed
interest at the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the unpaid principal balance of
this Note or on account of any other principal indebtedness of Maker to the
holder hereof, and not to the payment of interest, or if such excessive interest
exceeds the unpaid principal balance of this Note and such other indebtedness,
such excess shall be refunded to Maker.  All sums paid, or agreed to be paid, by
Maker for the use, forbearance or detention of the indebtedness of Maker to the
holder of this Note shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the actual rate of interest on
account of such indebtedness is uniform throughout the term hereof.  The terms
and provisions of this paragraph shall control and supersede every other
provision of all agreements between Maker and the holder hereof.

13.       Payee may not assign, endorse, hypothecate, pledge or otherwise
transfer this Note without the express prior written consent of the Maker, which
consent shall not be unreasonably withheld, and any such endorsement,
hypothecation, pledge or transfer without Maker's prior written consent shall be
null and void and of no legal force or effect.

14.       This Note shall be governed by and construed in accordance with the
laws of the State of Florida, without regard to its principles of conflicts of
laws.

MAKER:

 

 

HOME SOLUTIONS OF AMERICA, INC.

/s/ Frank J. Fradella                                    
By:  Frank Fradella
Its:   Chief Executive Officer

 

 

 

 

 

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