Exhibit 10.01



 


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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