**SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS**

This Settlement Agreement and MutualRelease of Claims ("***Release***"), executed to beeffective as of October 14, 2003 ("***Effective Date***") is made and entered into by andamong **Home Solutions ofAmerica, Inc.**, a Delaware corporation ("***HSOA***"), on the one side, and Jeff Hawkins, an individualresident of the State of Texas ("***Hawkins***"), and **CTRS Holding****Corp.**, a Texas corporation ("***HOLDCO***"), on the other side, on March 29, 2004 thisRelease was fully executed by all parties ("***Execution Date***").

**I.  OPERATIVE FACTS**

A.        On July 10, 2003, HSOAacquired 1,000 shares of common stock (the "***CTRS Shares***"),constituting 100% of the outstanding stock, of Central Texas ResidentialServices, Inc., a Texas corporation ("***CTRS***"), from Hawkins andHOLDCO (together, the "***Shareholders***"), pursuant to a StockPurchase Agreement and Plan of Reorganization dated July 10, 2004 (the "***SPA***")

B.         On July 10, 2003, HSOA andthe Shareholders also entered into an Escrow Agreement (so called herein), HSOAand each Shareholder entered into a Registration Rights Agreement (so calledherein), and CTRS and Hawkins entered into an Executive Employment Agreement(so called herein);

C.         In exchange for the CTRSShares of CTRS, Hawkins received 250,000 shares of the common stock, $.001 parvalue ("***Common Stock***"), of HSOA (the "***Hawkins Shares***"),and HOLDCO received 600,000 shares of Common Stock (the "***HOLDCO Shares***");

C.         In exchange for the consideration exchangedbelow, the receipt and sufficiency of which are hereby acknowledged, HSOA, onthe one side, and Hawkins and HOLDCO, on the other side, agree and covenant asfollows:

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**II.               TERMS OFSETTLEMENT**

**1.         Releases by Hawkins and HOLDCO.**  Inconsideration for the transfer from HSOA of the CTRS Shares and HSOA's release ofHawkins and HOLDCO set forth below, Hawkins and HOLDCO, together with anyperson or entity claiming through either of Hawkins or HOLDCO, hereby release,acquit, and forever discharge HSOA, and its officers, directors, stockholders,employees, agents, attorneys, and representatives (such persons and entitiesbeing hereinafter referred to as a "***HSOA Released Party***"), from any and all debts, claims,obligations, liabilities, demands, damages, actions, or causes of every natureand kind whatsoever, monetary or otherwise, whether known or unknown, in law orin equity, now existing or arising in the future, for, in connection with,attributable to, or arising out of any action, omission, occurrence, event, ordealings, directly or indirectly, with, between, or among the parties heretoand/or any HSOA Released Party prior to the date of this Release.

**2.         Releases by HSOA.**  In consideration for the transfer of theHawkins Shares to HSOA from Hawkins, and the transfer of the HOLDCO Shares toHSOA from HOLDCO, and Hawkins's and HOLDCO's release of HSOA set forth inSection 1 above, HSOA, together with any person or entity claiming throughHSOA, hereby releases, acquits, and forever discharges Hawkins and HOLDCO andhis or its respective heirs, officers, directors, stockholders, employees,agents, attorneys, and representatives (such persons and entities beinghereinafter referred to as a "***Shareholder Released Party***"), from any and all debts, claims,obligations, liabilities, demands, damages, actions, or causes of every natureand kind whatsoever, monetary or otherwise, whether known or unknown, in law orin equity, now existing or arising in the future, for, in connection with,attributable to, or arising out of any action, omission, occurrence, event, ordealings, directly or indirectly, with, between, or among the parties heretoand/or any Shareholder Released Party prior to the date of this Release.

**3.         Covenant Not to Sue.**  Each party, by executing this Release,hereby covenants that he or it will not bring any action or proceeding, orcause any entity owned, affiliated, or controlled by him or it to bring anyaction or proceeding, or assist in the prosecution of any action or proceedingby any person purporting to claim through him or it in any court or tribunal seekingany kind of relief, either monetary or equitable, with respect to any claimreleased herein.

 

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**4.         Payment and Consideration.**  The parties further that, uponthe execution of this Release:

(a) HSOA herebytransfers the CTRS Shares to Hawkins and HOLDCO, as evidenced by its deliveryof one or more stock certificates for such shares, together with a stock powerexecuted in blank therefor.

(b) Hawkins herebytransfers the Hawkins Shares to HSOA, as evidenced by his delivery of one ormore stock certificates for such shares, together with an executed stock poweragreement.

(c) HOLDCO herebytransfers the HOLDCO Shares to HSOA, as evidenced by its delivery of one ormore stock certificates for such shares, together with a stock power executedin blank therefor.

**5.         Termination ofAgreements.**  The parties further agree as follows:

(a) CTRS is no longerowned by HSOA upon the execution of this Release, and, as such, HSOA has nofurther employment duties or responsibilities to Hawkins hereafter, under theExecutive Employment Agreement or otherwise.

(b) HSOA, Hawkins andHOLDCO agree that the SPA, the Escrow Agreement, and each Registration RightsAgreement shall hereafter be null and void, and have no legal effect.

**6.         Hawkins's and HOLDCO's Warranty of Right to Settle. ** Hawkins andHOLDCO expressly warrant to HSOA that no claims, demands, causes of action,liabilities, debts, costs, liens, obligations, responsibilities, covenants,agreements, expenses, interest, controversies, damages, losses, or other rightsof Hawkins and/or HOLDCO that are mentioned in this Release have been assigned,conveyed, or in any manner whatsoever transferred to any other person or entityand that Hawkins and/or HOLDCO are the sole owners and holders of such claims,demands, causes of action, liabilities, debts, costs, liens, obligations,responsibilities, covenants, agreements, expenses, interest, controversies,damages, losses or other rights of Hawkins and/or HOLDCO.

 

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**7.         HSOA's Warranty of Right to Settle.**  HSOA expresslywarrants to Hawkins and HOLDCO that no claims, demands, causes of action,liabilities, debts, costs, liens, obligations, responsibilities, covenants,agreements, expenses, interest, controversies, damages, losses, or other rightsof HSOA that are mentioned in this Release have been assigned, conveyed, or inany manner whatsoever transferred to any other person or entity and that HSOAis the sole owner and holder of such claims, demands, causes of action,liabilities, debts, costs, liens, obligations, responsibilities, covenants,agreements, expenses, interest, controversies, damages, losses or other rightsof HSOA.  

**8.         No Adverse Interference From Settlement.**  This Releaseshall not be construed as an admission of liability, which liability isexpressly denied by all parties. 

**            9.         Severability.**  Should anypart, term, or provision of this Release be declared or be determined by anycourt to be illegal or invalid, the validity of the remaining parts, terms orprovisions shall not be affected thereby, and any part, term or provision, iffinally declared or determined by any court to be illegal or invalid, shall bedeemed not to be a part of this Release, and there shall be added automaticallyas part of this Release a provision as similar in its terms to such illegal orinvalid part, term or provision as may be possible and be legal, valid andenforceable.

**10.       Applicable Law; Jurisdiction and Venue.**  The validity,effect, and performance of this Release and the obligations and rights of theparties hereunder shall be determined, interpreted, resolved, and governed byreference to the laws of the State of Texas.  Further, all parties agree to submit tothe personal jurisdiction of a court having proper subject-matter jurisdictionthat sits in Harris County, Texas for resolution of any and all disputes thatmay arise between the parties related to this Release. 

**11.       Multiple Counterparts.**  This Release may be executed inmultiple counterparts, including by facsimile signature.

**12.       Headings. ** The headings contained in this Release are forconvenience only and are not intended to vary or supplement the terms of thesection that follows the heading.  The headings are not to be given any weightif an issue arises regarding the interpretation of this Release.

**13.       Parties in Interest.** This Release shall inure to the benefitof and shall be binding upon the undersigned parties and their respectiveheirs, executors, administrators, trustees, successors, and assigns.

 

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**14.       Attorneys' Fees. ** Each of the parties to this Release shallbear its own costs and attorneys' fees incurred in connection with this matter,including, but not limited to, all costs and fees incurred in connection withthe preparation and final execution of this Release, and the parties herebywaive any right to claim such costs or attorneys' fees against each other. However, any party to this Release bringing suit to enforce any right orobligation hereunder shall be entitled to its reasonable and necessaryattorney's fees, costs and expenses incurred in so doing, should that partyprevail. 

**15.       Mutual Efforts.**  The parties hereby agree that thisRelease was drafted through the mutual efforts of all parties.

**16.       Warranty of Authority. ** Each signatory of this Releasehereby represents and warrants that he has been duly authorized to execute thisRelease by the party(ies) for which he purports to act.

**17.       Further Assurances.**  At, and from time to time after, theExecution Date, at the request of any party, but without further consideration,each other party shall promptly execute and deliver such other documents andinstruments and take such other action as the requesting party may reasonablyrequest in order more effectively to consummate the transactions contemplatedhereby.

**18.       Entirety.**  This Release constitutes the entire agreement of the parties,it is contractual, and not mere recitals.

**19.       Modification.**  This Release cannot be amended, modifiedor supplemented except by a writing executed by all of the parties hereto.  Nowaiver of any of the provisions of this Release shall be deemed or shallconstitute a waiver of any other provisions, whether or not similar, nor shallany waiver constitute a continuing waiver, unless expressly stated in writingby the party to be charged.  No waiver of any provision of this Release shallbe binding in any event, unless executed in writing by the party making thewaiver.

 

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**20.       Integration.** This Release constitutes a singleintegrated written agreement that expresses the entire agreement between theparties hereto pertaining to the subject matters contained in the Release andsupersedes all prior and contemporaneous written or oral agreements orrepresentations of the parties, all of which have become merged and finallyintegrated into this Release.  No oral understanding, statements, promises orinducements contrary to the terms of this Release exist.  This Release cannotbe changed or terminated orally.

 

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To evidence his or its agreement with the terms of this Release, theparties hereto have executed this Release as of the date first set forth above.

**HOMESOLUTIONS OF AMERICA, INC.**

 

By:___________________________________       Rick J. O'Brien

       Chief Financial Officer

CTRSHOLDING CORP.

 

By:____________________________________

Name:                                                              

Title:                                                                 

 

 

                                                                       Jeff Hawkins

 

 

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