Exhibit 10.3



MINIMUM BORROWING NOTE REGISTRATION RIGHTS AGREEMENT  


This Registration Rights Agreement (this "Agreement") is made
and entered into as of January 22, 2004, by and between Home Solutions of
America, Inc., a Delaware corporation (the "Company"), and Laurus Master Fund,
Ltd. (the "Purchaser"). 


This Agreement is made pursuant to the Security Agreement, dated
as of the date hereof, by and between the Purchaser and the Company (the
"Security Agreement"), and pursuant to the Notes and the Warrants referred to
therein.


The Company and the Purchaser hereby agree as follows: 


1.                 
Definitions.  Capitalized terms used and not otherwise defined
herein that are defined in the Security Agreement shall have the meanings given
such terms in the Security Agreement.  As used in this Agreement, the following
terms shall have the following meanings: 


"Commission" means the Securities and Exchange
Commission.


"Common Stock" means shares of the Company's common
stock, par value $0.001 per share. 


"Effectiveness Date" means the 105th day following the
applicable Filing Date. 


"Effectiveness Period" shall have the meaning set forth
in Section 2(a). 


"Exchange Act" means the Securities Exchange Act of 1934,
as amended, and any successor statute.


 "Filing Date" means, with respect to (1) the
Registration Statement which is required to be filed with respect to the Loans
made on the initial funding date, the date which is thirty (30)  days after
such initial funding date, and (2) with respect to each $1,500,000 tranche of
Loans funded after the initial funding date, the date which is forty five (45)
days after such funding of such additional $1,500,000 of Loans evidenced by a
Minimum Borrowing Note thereafter.


"Holder" or "Holders" means the Purchaser or any
of its affiliates or transferees to the extent any of them hold Registrable
Securities.


 






 


 


"Indemnified Party" shall have the meaning set forth in
Section 5(c).


"Indemnifying Party" shall have the meaning set forth in
Section 5(c).


"Notes" has the meaning set forth in the Security Agreement.


"Proceeding" means an action, claim, suit, investigation
or proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened. 


"Prospectus" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus. 


"Registrable Securities" means the shares of Common Stock
issued upon the conversion of the each Note and issuable upon exercise of the
Warrants.


"Registration Statement" means each registration
statement required to be filed hereunder, including the Prospectus therein,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement. 


"Rule 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.


"Rule 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.


 






 


 


"Rule 424" means Rule 424 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.


"Securities Act" means the Securities Act of 1933, as
amended, and any successor statute.


"Trading Market" means any of the NASD OTC Bulletin
Board, NASDAQ SmallCap Market, the Nasdaq National Market, the American Stock
Exchange or the New York Stock Exchange 


"Warrants" means the Common Stock purchase warrants
issued pursuant to the Security Agreement.


2.                 
Registration.


(a)               
On or prior to each Filing Date, the Company shall use its best efforts
to prepare and file with the Commission a Registration Statement covering the
Registrable Securities for an offering to be made on a continuous basis
pursuant to Rule 415.  Each Registration Statement shall be on Form S-3 (except
if the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on another
appropriate form in accordance herewith).  The Company shall cause each
Registration Statement to become effective and remain effective as provided
herein.  The Company shall use its reasonable commercial efforts to cause the
first such Registration Statement to be declared effective under the Securities
Act as promptly as possible after the filing thereof, but in any event no later
than the Effectiveness Date.  The Company shall use its reasonable commercial
efforts to cause any subsequent such Registration Statement to be declared
effective under the Securities Act as promptly as possible after the filing
thereof, but in any event no later than sixty (60) days after the filing
thereof.  The Company shall use its reasonable commercial efforts to keep each
Registration Statement continuously effective under the Securities Act until
the date which is the earlier date of when (i) all Registrable Securities
covered by such Registration Statement have been sold or (ii) all Registrable
Securities covered by such Registration Statement may be sold immediately
without registration under the Securities Act and without volume restrictions
pursuant to Rule 144(k), as determined by the counsel to the Company pursuant
to a written opinion letter to such effect, addressed and acceptable to the
Company's transfer agent and the affected Holders (each, an "Effectiveness
Period").


 






 


(b)              
If: (i) any Registration Statement is not filed on or prior to the
applicable Filing Date for such Registration Statement; (ii) a Registration
Statement filed hereunder is not declared effective by the Commission by the
date required hereby with respect to such Registration Statement; (iii) after a
Registration Statement is filed with and declared effective by the Commission,
such Registration Statement ceases to be effective (by suspension or otherwise)
as to all Registrable Securities to which it is required to relate at any time
prior to the expiration of the Effectiveness Period applicable to such
Registration Statement (without being succeeded immediately by an additional
Registration Statement filed and declared effective) for a period of time which
shall exceed 30 days in the aggregate per year or more than 20 consecutive
calendar days (defined as a period of 365 days commencing on the date such
Registration Statement is declared effective); or (iv) the Common Stock is not
listed or quoted, or is suspended from trading on any Trading Market for a
period of three (3) consecutive Trading Days (provided the Company shall not
have been able to cure such trading suspension within 30 days of the notice
thereof or list the Common Stock on another Trading Market); (any such failure
or breach being referred to as an "Event," and for purposes of clause (i) or
(ii) the date on which such Event occurs, or for purposes of clause (iii) the
date which such 30 day or 20 consecutive day period (as the case may be) is
exceeded, or for purposes of clause (iv) the date on which such three (3)
Trading Day period is exceeded, being referred to as "Event Date"), then until
the applicable Event is cured, the Company shall pay to each Holder an amount
in cash, as liquidated damages and not as a penalty, equal to 2.0% for each
thirty (30) day period (prorated for partial periods) on a daily basis of the
original principal amount of each applicable Note.  While such Event continues,
such liquidated damages shall be paid not less often than each thirty (30)
days.  Any unpaid liquidated damages as of the date when an Event has been
cured by the Company shall be paid within three (3) days following the date on
which such Event has been cured by the Company.




(c)        Within
three business days of the Effectiveness Date, the Company shall cause its
counsel to issue a blanket opinion in the form attached hereto as Exhibit A, to
the transfer agent stating that the shares are subject to an effective
registration statement and can be reissued free of restrictive legend upon
notice of a sale by Laurus and confirmation by Laurus that it has complied with
the prospectus delivery requirements, provided that the Company has not advised
the transfer agent orally or in writing that the opinion has been withdrawn.
Copies of the blanket opinion required by this Section  2(c) shall be delivered
to Laurus within the time frame set forth above. 








 




 




3.                 
Registration Procedures.  If and whenever the Company is required
by the provisions hereof to effect the registration of any Registrable
Securities under the Securities Act, the Company will, as expeditiously as
possible: 


(a)               
prepare and file with the Commission a registration statement with
respect to such Registrable Securities, respond as promptly as possible to any
comments received from the Commission, and use its best efforts to cause such
Registration Statement to become and remain effective for the Effectiveness
Period with respect thereto, and promptly provide to the Purchaser copies of
all filings and Commission letters of comment relating thereto;


(b)              
prepare and file with the Commission such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
Registration Statement and to keep such Registration Statement effective until
the expiration of the Effectiveness Period applicable to such Registration
Statement;


(c)               
furnish to the Purchaser such number of copies of the Registration
Statement and the Prospectus included therein (including each preliminary
Prospectus) as the Purchaser reasonably may request to facilitate the public sale
or disposition of the Registrable Securities covered by such Registration
Statement;


(d)              
use its commercially reasonable efforts to register or qualify the
Purchaser's Registrable Securities covered by such Registration Statement under
the securities or "blue sky" laws of such jurisdictions within the United
States as the Purchaser may reasonably request, provided, however, that
the Company shall not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such
jurisdiction;


(e)               
list the Registrable Securities covered by such Registration Statement
with any securities exchange on which the Common Stock of the Company is then
listed; 






 


 


(f)                
immediately notify the Purchaser at any time when a Prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event of which the Company has knowledge as a result of which the
Prospectus contained in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing; and


(g)               
make available for inspection by the Purchaser and any attorney,
accountant or other agent retained by the Purchaser, all publicly available,
non-confidential financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all publicly available, non-confidential information
reasonably requested by the attorney, accountant or agent of the Purchaser.


4.                 
Registration Expenses.  All expenses relating to the Company's
compliance with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders are called "Registration Expenses". All selling
commissions applicable to the sale of Registrable Securities, including any
fees and disbursements of any special counsel to the Holders beyond those
included in Registration Expenses, are called "Selling Expenses."  The Company
shall only be responsible for Registration Expenses.


5.                 
Indemnification.


(a)               
In the event of a registration of any Registrable Securities under the
Securities Act pursuant to this Agreement, the Company will indemnify and hold
harmless the Purchaser, and its officers, directors and each other person, if
any, who controls the Purchaser within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Purchaser, or such persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any Registration Statement
under which such Registrable Securities were registered under the Securities
Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Purchaser, and each such person for any
reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case if and to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by or on behalf of
the Purchaser or any such person in writing specifically for use in any such document.


 






 


(b)              
In the event of a registration of the Registrable Securities under the
Securities Act pursuant to this Agreement, the Purchaser will indemnify and
hold harmless the Company, and its officers, directors and each other person,
if any, who controls the Company within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact which was furnished in writing by
the Purchaser to the Company expressly for use in (and such information is
contained in) the Registration Statement under which such Registrable
Securities were registered under the Securities Act pursuant to this Agreement,
any preliminary Prospectus or final Prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and each such person for any reasonable legal or other
expenses incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action, provided, however, that
the Purchaser will be liable in any such case if and only to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished in writing to the Company by or
on behalf of the Purchaser specifically for use in any such document. 
Notwithstanding the provisions of this paragraph, the Purchaser shall not be
required to indemnify any person or entity in excess of the amount of the
aggregate net proceeds received by the Purchaser in respect of Registrable
Securities in connection with any such registration under the Securities Act.


 






 


 


(c)               
Promptly after receipt by a party entitled to claim indemnification
hereunder (an "Indemnified Party") of notice of the commencement of any action,
such Indemnified Party shall, if a claim for indemnification in respect thereof
is to be made against a party hereto obligated to indemnify such Indemnified
Party (an "Indemnifying Party"), notify the Indemnifying Party in writing
thereof, but the omission so to notify the Indemnifying Party shall not relieve
it from any liability which it may have to such Indemnified Party other than
under this Section 5(c) and shall only relieve it from any liability which it
may have to such Indemnified Party under this Section 5(c) if and to the extent
the Indemnifying Party is prejudiced by such omission. In case any such action
shall be brought against any Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such Indemnified
Party, and, after notice from the Indemnifying Party to such Indemnified Party
of its election so to assume and undertake the defense thereof, the
Indemnifying Party shall not be liable to such Indemnified Party under this
Section 5(c) for any legal expenses subsequently incurred by such Indemnified
Party in connection with the defense thereof; if the Indemnified Party retains
its own counsel, then the Indemnified Party shall pay all fees, costs and
expenses of such counsel, provided, however, that, if the defendants in
any such action include both the indemnified party and the Indemnifying Party
and the Indemnified Party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional to
those available to the Indemnifying Party or if the interests of the
Indemnified Party reasonably may be deemed to conflict with the interests of
the Indemnifying Party, the Indemnified Party shall have the right to select
one separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the reasonable expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the Indemnifying Party as incurred. 


(d)              
In order to provide for just and equitable contribution in the event of
joint liability under the Securities Act in any case in which either (i) the
Purchaser, or any officer, director or controlling person of the Purchaser,
makes a claim for indemnification pursuant to this Section 5 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 5 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required on
the part of the Purchaser or such officer, director or controlling person of
the Purchaser in circumstances for which indemnification is provided under this
Section 5; then, and in each such case, the Company and the Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion so that
the Purchaser is responsible only for the portion represented by the percentage
that the public offering price of its securities offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, provided, however, that, in any such case, (A)
the Purchaser will not be required to contribute any amount in excess of the
public offering price of all such securities offered by it pursuant to such Fegistration
Statement; and (B) no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 10(f) of the Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.


 






 


 


6.                 
Representations and Warranties.


(a)               
The Common Stock of the Company is registered pursuant to Section 12(b)
or 12(g) of the Exchange Act and, except with respect to certain matters which
the Company has disclosed to the Purchaser on Exhibit 12(j) to the
Security Agreement, the Company has timely filed all proxy statements, reports,
schedules, forms, statements and other documents required to be filed by it
under the Exchange Act.  The Company has filed (i) its Annual Report on Form
10-K for the fiscal year ended December 31, 2002 and (ii) its Quarterly Report
on Form 10-Q for the fiscal quarters ended March 31, 2003, June 30, 2003 and September
30, 2003 (collectively, the "SEC Reports").  Each SEC Report was, at the time
of its filing, in substantial compliance with the requirements of its
respective form and none of the SEC Reports, nor the financial statements (and
the notes thereto) included in the SEC Reports, as of their respective filing
dates, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  The financial statements of the Company included in the SEC
Reports comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed) and fairly present
in all material respects the financial condition, the results of operations and
the cash flows of the Company and its subsidiaries, on a consolidated basis, as
of, and for, the periods presented in each such SEC Report.


 






 


 


(b)              
The Common Stock is listed for trading on the American Stock Exchange
and satisfies all requirements for the continuation of such listing.  The
Company has not received any notice that its Common Stock will be delisted from
the American Stock Exchange or that the Common Stock does not meet all
requirements for the continuation of such listing.


(c)               
Neither the Company, nor any of its affiliates, nor any person acting on
its or their behalf, has directly or indirectly made any offers or sales of any
security or solicited any offers to buy any security under circumstances that
would cause the offering of the Securities pursuant to the Security Agreement
to be integrated with prior offerings by the Company for purposes of the
Securities Act which would prevent the Company from selling the Common Stock
pursuant to Rule 506 under the Securities Act, or any applicable
exchange-related stockholder approval provisions, nor will the Company or any
of its affiliates or subsidiaries take any action or steps that would cause the
offering of the Common Stock to be integrated with other offerings (other than such
concurrent offering to the Purchaser).


(d)              
The Warrants, the Notes and the shares of Common Stock which the
Purchaser may acquire pursuant to the Warrants and the Notes are all restricted
securities under the Securities Act as of the date of this Agreement.  The
Company will not issue any stop transfer order or other order impeding the sale
and delivery of any of the Registrable Securities at such time as such Registrable
Securities are registered for public sale or an exemption from registration is
available, except as required by federal or state securities laws.


(e)               
The Company understands the nature of the Registrable Securities
issuable upon the conversion of each Note and the exercise of each Warrant and
recognizes that the issuance of such Registrable Securities may have a
potential dilutive effect.  The Company specifically acknowledges that its
obligation to issue the Registrable Securities is binding upon the Company and
enforceable regardless of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.


(f)                
Except for agreements made in the ordinary course of business, there is
no agreement that has not been filed with the Commission as an exhibit to a
registration statement or to a form required to be filed by the Company under
the Exchange Act, the breach of which could reasonably be expected to have a
material and adverse effect on the Company and its subsidiaries, or would
prohibit or otherwise interfere with the ability of the Company to enter into
and perform any of its obligations under this Agreement in any material
respect.






 


 


(g)               
The Company will at all times have authorized and reserved a sufficient
number of shares of Common Stock for the full conversion of each Note and
exercise of the Warrants.


7.                 
Miscellaneous.


(a)               
Remedies.  In the event of a breach by the Company or by a
Holder, of any of their respective obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this
Agreement.


(b)              
No Piggyback on Registrations.  Except as set forth on Schedule
7(b) hereto, neither the Company nor any of its security holders (other than
the Holders in such capacity pursuant hereto) may include securities of the
Company in any Registration Statement other than the Registrable Securities,
and the Company shall not after the date hereof enter into any agreement
providing any such right for inclusion of shares in the Registration Statement
to any of its security holders. Except as and to the extent specified in Schedule
7(b) hereto, the Company has not previously entered into any agreement
granting any registration rights with respect to any of its securities to any
Person that have not been fully satisfied. 


(c)               
Compliance.  Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable
to it in connection with sales of Registrable Securities pursuant to any
Registration Statement. 


(d)              
Discontinued Disposition.  Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the Company
of the occurrence of a Discontinuation Event (as defined below), such Holder
will forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it
is advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement.  The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph.  For purposes of this Section 7(d), a "Discontinuation Event" shall
mean (i) when the Commission notifies the Company whether there will be a
"review" of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); (ii) any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by
the Commission of any stop order suspending the effectiveness of such
Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iv) the receipt by the Company
of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and/or (v) the occurrence of any event or passage of time that makes
the financial statements included in such Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.






 


 


(e)               
Piggy-Back Registrations.  If at any time during any
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities required to be covered during such
Effectiveness Period and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of
such determination and, if within fifteen (15) days after receipt of such
notice, any such Holder shall so request in writing, the Company shall include
in such registration statement all or any part of such Registrable Securities
such holder requests to be registered, to the extent the Company may do so
without violating registration rights of others which exist as of the date of
this Agreement, subject to customary underwriter cutbacks applicable to all
holders of registration rights and subject to obtaining any required the
consent of any selling stockholder(s) to such inclusion under such registration
statement.






 


 


 


(f)                
Amendments and Waivers.  The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of the then outstanding Registrable Securities. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of certain Holders
and that does not directly or indirectly affect the rights of other Holders may
be given by Holders of at least a majority of the Registrable Securities to
which such waiver or consent relates; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence.


(g)               
Notices.  Any notice or request hereunder may be given to the
Company or the Purchaser at the respective addresses set forth below or as may
hereafter be specified in a notice designated as a change of address under this
Section 7(g).  Any notice or request hereunder shall be given by registered or
certified mail, return receipt requested, hand delivery, overnight mail or
telecopy (confirmed by mail).  Notices and requests shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party
to whom it is addressed, in the case of those by mail or overnight mail, deemed
to have been given three (3) business days after the date when deposited in the
mail or with the overnight mail carrier, and, in the case of a telecopy, when
confirmed.  The address for such notices and communications shall be as
follows:


	If to the Company: 	

Home Solutions of America,
Inc. 


    
	 	

11850 Jones Road


    
	 	

Harris, TX 
77070


    
	 	

Attention: 
Chief Financial Officer 


    
	 	

Facsimile: 
(281)970-9854


    
	 	

With a copy to: 


    
	 	

Facsimile:  


    



 






 


If to a Purchaser:          To the address set forth
under

                                               
such Purchaser name on the

                                               
signature pages hereto.


If to any other Person who is then the registered
Holder:


To the address of such Holder as it

appears in the stock transfer books

of the Company


or such other address as may be designated in writing
hereafter in accordance with this Section 7(g) by such Person.


(h)               
Successors and Assigns.  This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Each Holder may assign their respective rights hereunder in the
manner and to the Persons as permitted under the Notes and the Securities
Purchase Agreement with the prior written consent of the Company, which consent
shall not be unreasonably withheld.. 


(i)                 
Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the party
executing (or on whose behalf such signature is executed) the same with the
same force and effect as if such facsimile signature were the original thereof.


(j)                
Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement shall be
commenced exclusively in the state and federal courts sitting in the City of
New York, Borough of Manhattan. Each party hereto hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in
any Proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such Proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby. If either party
shall commence a Proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such Proceeding shall be reimbursed by
the other party for its reasonable attorneys fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such Proceeding.






 


 


 


(k)              
Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.


(l)                 
Severability.  If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.


(m)             
Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.


[Balance of page intentionally left
blank; signature page follows.]




 




 




 








 


 




 




IN WITNESS WHEREOF, the parties have
executed this Registration Rights Agreement as of the date first written above.


HOME SOLUTIONS OF AMERICA, INC. 


By:______________________________

Name:___________________________

Title:_____________________________


LAURUS MASTER FUND, LTD. 


By:______________________________

Name:____________________________

Title:_____________________________


Address for Notices:


825 Third Avenue, 14th
Floor

New York, New York 10022

Attention: 
David Grin

Facsimile: 
212-541-4434











EXHIBIT A


[Month  __, 2004]




	
  [Continental
  Stock Transfer

     & Trust Company

  Two Broadway

  New York, NY  10004

  Attn:  William Seegraber]

   

  	

  

  








	
  Re:

  	
  
  [Company Name]. Registration Statement on Form [S-3]

  

  






Ladies and Gentlemen:


As counsel to[company name] , a Delaware
corporation (the "Company"), we have been requested to render our opinion to
you in connection with the resale by the individuals or entitles listed on
Schedule A attached hereto (the "Selling Stockholders"), of an aggregate of
[amount]shares (the "Shares") of the Company's Common Stock.


A Registration Statement on Form [S-3] under the Securities Act
of 1933, as amended (the "Act"), with respect to the resale of the Shares was
declared effective by the Securities and Exchange Commission on [date]. 
Enclosed is the Prospectus dated [date].  We understand that the Shares are to
be offered and sold in the manner described in the Prospectus.


Based upon the foregoing, upon request by the Selling
Stockholders at any time while the registration statement remains effective, it
is our opinion that the Shares have been registered for resale under the Act
and new certificates evidencing the Shares upon their transfer or
re-registration by the Selling Stockholders may be issued without restrictive
legend.  We will advise you if the registration statement is not available or
effective at any point in the future.


Very truly yours,






[Company counsel]











Schedule A


	
  Selling Stockholder

  	
  R/N/O

  	
  Shares

  Being Offered