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** CODE OF BUSINESSCONDUCT AND ETHICS **

This policy applies to alldirectors, officers and employees of Home Solutions of America, Inc. ("TheCompany") or any of its subsidiaries.

**Introduction**

            The Company's reputation for honesty andintegrity is the sum of the personal reputations of our directors, officers andemployees.  To protect this reputation and to promote compliance with laws,rules and regulations, this Code of Business Conduct and Ethics (the "Code")has been adopted by the Board of Directors. This Code is only one aspect of ourcommitment. Persons covered by this Code must also be familiar with and complywith all other Company policies.

            This Code sets out the basic standards of ethicsand conduct to which all of our directors, officers and employees are held. These standards are designed to deter wrongdoing and to promote honest andethical conduct, but will not cover all situations. If a law conflicts with apolicy in this Code, you must comply with the law; however, if a local customor policy conflicts with this Code, you must comply with the Code.  

If you have any doubts whatsoeveras to the propriety of a particular situation, you should submit it in writingto the Chief Financial Officer ("CFO")who will review the situation and take appropriateaction in keeping with this Code, our other corporate policies and theapplicable law.  If your concern relates to the CFO, you should submit yourconcern, in writing, to the Chief Executive Officer.  The contact informationfor each of those individuals is included at the end of this Code.  If you area director, you will submit any concerns directly to the Board of Directors.

            Those who violate the standards set out in thisCode will be subject to disciplinary action including immediate termination orother action of the Board of Directors.

**1.           Scope**

As is evident from the wording of this Policy, somerestrictions such as regarding outside business commitments, apply only to fulltime employees. 

**2.           Honest and Ethical Conduct**

We, as a Company, require honest and ethical conductfrom everyone.  Each person has a responsibility to all other directors,officers and employees of the Company, and to the Company itself, to act ingood faith, responsibly, with due care, competence and diligence, without misrepresentingmaterial facts or allowing your independent judgment to be subordinated.  Eachperson must otherwise conduct themselves in a manner that meets with ethicaland legal standards.  

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**3.         Compliance with Laws, Rules and Regulations**

            You are required to comply with all applicablegovernmental laws, rules and regulations, both in letter and in spirit. Although you are not expected to know the details of all the applicable laws,rules and regulations, we expect you to seek advice from the Chief FinancialOfficer if you have any questions about whether the requirement applies to thesituation or what conduct may be required to comply with any law, rule orregulation.

**4.         Conflicts ofInterest**

            You must handle, in an ethical manner, anyactual or apparent conflict of interest between your personal and businessrelationships.   A "conflict of interest" exists when a person'sprivate interests interferes in any material way with the interests of theCompany and are prohibited by this policy.  For example, a conflict situationarises if you take actions or have interests that interfere with your abilityto perform your work for the Company objectively and effectively.  Conflicts ofinterest also may arise if you, or a member of your family, receive an improperpersonal benefit as a result of your position with our Company.  

If you become aware of any materialtransaction or relationship that reasonably could be expected to give rise to aconflict of interest, you should report it promptly to the Chief FinancialOfficer or Chief Executive Officer.

            Conflicts of interest are prohibited as a matterof Company policy, except under guidelines approved by the Board of Directors.The following standards apply to certain common situations where potentialconflicts of interest may arise:

**A.        Gifts andEntertainment**

Personal gifts and entertainmentoffered by persons doing business with the Company may be accepted when offeredin the ordinary and normal course of the business relationship and the value ofsuch gifts and entertainment is immaterial.  However, the frequency and cost ofany such gifts or entertainment may not be so excessive that your ability toexercise independent judgment on behalf of our Company is or may appear to becompromised. 

**B.        Financial Interests InOther Organizations**

The determination whether anyoutside investment, financial arrangement or other interest in anotherorganization is improper depends on the facts and circumstances of each case. Your ownership of an interest in another organization may be inappropriate ifthe other organization has a material business relationship with, or is adirect competitor of our Company and your financial interest is of such a sizethat your ability to exercise independent judgment on behalf of our Company isor may appear to be compromised.  As a general rule, a passive investment wouldnot likely be considered improper if it: (1) is in publicly traded shares;(2) represents less than 1% of the outstanding equity of the organizationin question; and (3) represents less than 5% of your net worth.  Otherinterests also may not be improper, depending on the circumstances.  

 

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**C.        Outside BusinessActivities**

The determination of whether anyoutside position an employee may hold is improper will depend on the facts andcircumstances of each case.  Your involvement in trade associations,professional societies, and charitable and similar organizations will notnormally be viewed as improper.  However, if those activities are likely totake substantial time from or otherwise conflict with an employee'sresponsibilities to the Company, you should obtain prior approval from theChief Financial Officer or the Chief Executive Officer.  Other outsideassociations or activities in which you may be involved are likely to be viewedas improper only if they would interfere with your ability to devote propertime and attention to your responsibilities to the Company or if yourinvolvement is with another company with which the Company does business orcompetes.  For a director, employment or affiliation with a company with whichthe Company does business or competes must be fully disclosed to the Company'sBoard of Directors and must satisfy any other standards established byapplicable law, rule (including rule of any applicable stock exchange) orregulation and any other corporate governance guidelines that our Company mayestablish.

**D.        Indirect Violations**

You should not indirectly, througha spouse, family member, affiliate, friend, partner, or associate, have any interestor engage in any activity that would violate this Code if such same interest oractivity would violate this Code if held or untaken directly by you.  Any suchrelationship should be fully disclosed to our Company's Chief Financial Officeror Chief Executive Officer (or the Board of Directors if you are a director ofour Company), who will make a determination whether the relationship isinappropriate, based upon the standards set forth in this Code.

**5.         CorporateOpportunities**

            You are prohibited from taking for yourself,personally, opportunities that are discovered through the use of corporateproperty, information or position, unless the Company through the Board ofDirectors has declined to pursue the opportunity.  You may not use corporateproperty, information, or position for personal gain, or to compete with theCompany directly.  You owe a duty to the Company to advance its legitimateinterests whenever the opportunity to do so arises.  Additional duties andresponsibilities may be established in other Policies and or employeeagreements. 

**6.         Fair Dealing**

            You should endeavor to deal fairly with theCompany's suppliers, competitors and employees and with other persons with whomthe Company does business.  You should not take unfair advantage of anyonethrough manipulation, concealment, abuse of privileged information,misrepresentation of material facts, or any other unfair-dealing practice.

 

 

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**7.         PublicDisclosures**

            It is the Company's policy to provide full,fair, accurate, timely, and understandable disclosure in all reports anddocuments that we file with, or submit to, the Securities and ExchangeCommission and in all other public communications made by the Company asrequired by law. 

**8.         Confidentiality**

            You should maintain the confidentiality of allconfidential information entrusted to you by the Company or by persons withwhom the Company does business, except when disclosure is authorized or legallymandated.  Confidential information includes all non-public information thatmight be of use to competitors of, or harmful to, our Company or persons withwhom the Company does business, if disclosed.

**9.         Insider Trading**

            If you have access to material, non-publicinformation concerning the Company, you are not permitted to use or share thatinformation for stock trading purposes, or for any other purpose except theconduct of the Company's business.  All non-public information about ourCompany should be considered confidential information.  Insider trading, whichis the use of material, non-public information for personal financial benefitor to "tip" others who might make an investment decision on the basisof this information, is not only unethical but also illegal.  The prohibitionon insider trading applies not only to our Company's securities, but also tosecurities of other companies if you learn of material non-public informationabout these companies in the course of your duties to the Company.  Violationsof this prohibition against "insider trading" may subject you tocriminal or civil liability, in addition to disciplinary action by ourCompany.   Additional requirements are enumerated in the separate InsiderTrading Policy.

**10.       Protection andProper Use of Company Assets**

Each person has an obligation totake reasonable care to protect the Company's assets and promote theirefficient use.  Theft, carelessness, and waste have a direct impact on theCompany's profitability.  All corporate assets should be used for legitimatebusiness purposes. The obligation of employees to protect the Company's assetsincludes its proprietary information.  Proprietary information includesintellectual property such as trade secrets, patents, trademarks, andcopyrights, as well as business, marketing and service plans, engineering andmanufacturing ideas, designs, databases, records, salary information and anyunpublished financial data and reports.  Unauthorized use or distribution ofthis information violates this policy and could also be illegal and result incivil or criminal penalties.

**11.       Interpretationsand Waivers of the Code of Business Conduct and Ethics**

            If you are uncertain whether a particularactivity or relationship is improper under this Code or requires a waiver ofthis Code, you should disclose it to the Chief Financial Officer or ChiefExecutive Officer (or the Board of Directors if you are a director), who willmake a determination first, whether a waiver of this Code is required andsecond, if required, determine whether a waiver will be recommended.  You maybe required to agree to conditions before a waiver or a continuing waiver isgranted.  However, any waiver of this Code for an executive officer or directormay be made only by the Company's Board of Directors and will be promptlydisclosed to the extent required by applicable law, rule (including any rule ofany applicable stock exchange) or regulation.

 

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**12.       Reporting anyIllegal or Unethical Behavior**

            The Company desires to promote ethicalbehavior.  Employees are encouraged to talk to any appropriate personnelincluding the Chief Financial Officer or the Chief Executive Officer when indoubt about the best course of action in a particular situation.  Additionally,employees should promptly report violations of laws, rules, regulations or thisCode to the Chief Financial Officer or Chief Executive Officer.  Any report orallegation of a violation of applicable laws, rules, regulations or this Codeneed not be signed and may be sent anonymously.  All reports of violations ofthis Code, including reports sent anonymously, will be promptly investigatedand, if found to be accurate, acted upon in a timely manner.  If any report ofwrongdoing relates to accounting or financial reporting matters, or relates topersons involved in the development or implementation of the Company's systemof internal controls, a copy of the report will be promptly provided to the Chairmanof the Audit Committee of the Board of Directors, which may participate in theinvestigation and resolution of the matter.  It is the policy of the Companynot to allow actual or threatened retaliation, harassment or discriminationagainst any employee as a result of allegations of misconduct by such employeeagainst others so long as such allegations are made in good faith.  Employeesare expected to cooperate in internal investigations of misconduct.  

**13.       ComplianceStandards and Procedures**

This Code is intended as a statement of basicprinciples and standards and does not include specific rules that apply toevery situation.  Its contents have to be viewed within the framework of theCompany's other policies, practices, instructions and the requirements of thelaw.  This Code is in addition to other policies, practices or instructions ofthe Company that must be observed.  Moreover, the absence of a specific corporatepolicy, practice or instruction covering a particular situation does notrelieve you of the responsibility for exercising the highest ethical standardsapplicable to the circumstances.

In somesituations, it is difficult to determine the correct course of action.  Becausethis Code does not anticipate every situation that will arise, it is importantthat each person approach a new question or problem in a deliberate fashion:

(a)               Determine if you know all the facts.

(b)              Identify exactly what it is that concerns you.

(c)               Discuss the problem with the Chief Financial Officer or Chief ExecutiveOfficer.

 

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(d)              Seek help from other resources such as other management personnel.

(e)               Seek guidance before taking any action that you believe might beconsidered unethical or dishonest.

            You will be governed by the following compliancestandards:

•        You are personallyresponsible for your own conduct and for complying with all provisions of thisCode and for properly reporting known or suspected violations;

•         You must use your reasonableefforts to ensure that other employees, with whom you deal, are aware of and complywith this Code;

•         No one has the authority orright to order, request or even influence you to violate this Code or the law;a request or order from another person will not be an excuse for your violationof this Code;

•         Any attempt by you toinduce another director, officer or employee of the Company to violate thisCode, whether successful or not, is itself a violation of this Code and may bea violation of law;

•         Any retaliation or threatof retaliation against any director, officer or employee of the Company forrefusing to violate this Code, or for reporting in good faith the violation orsuspected violation of this Code, is itself a violation of this Code and may bea violation of law; and

•         TheCompany requires that every reported violation of this Code be investigated.

Violation of any of the standardscontained in this Code, or in any other policy, practice or instruction of theCompany, can result in disciplinary action, including dismissal, and civil orcriminal action against the violator.  This Code should not be construed as acontract of employment and does not change any person's status as an at-willemployee.

This Code is for the benefit of theCompany, and no other person is entitled to enforce this Code.  This Code doesnot, and should not be construed to, create any private cause of action orremedy in any other person for a violation of the Code.

The contact information of theChief Financial Officer and Chief Executive Officer of the Company are setforth below:

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| Chief Executive Officer	Frank J. Fradella                                                                           | Chief Financial Officer	Rick J. O'Brien                                                                            |
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| 5565 Red Bird Center Drive	Suite 150	Dallas, Texas 75237	Tel: 214 623-8446 x 106	Fax: 214 333 9435frank@homcorp.com | 5565 Red Bird Center Drive	Suite 150	Dallas, Texas 75237	Tel: 214 623-8446 x 102	Fax: 214 333-9435rick@homcorp.com |

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*Adopted by Resolution of theBoard of Directors on December 2, 2004*

I hereby acknowledge receipt, review, understanding andacceptance of this Code of Business Conduct and Ethics Policy: 

_______________________________________      _____________________________Signature                                                                     Date

_______________________________________Print Name

 

 

 

 

 

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