**Home Solutions ofAmerica, Inc.**

**2001 Stock Plan**

**Stock Option Agreement**

Unless otherwise defined in this Stock OptionAgreement (this "***Stock Option Agreement***"), the capitalized termsherein shall have the same meaning as defined in the Plan (defined below). This Stock Option Agreement is executed to be effective as of July 31, 2003.

**I.          NOTICEOF STOCK OPTION GRANT**

           Theundersigned Optionee (the "***Optionee***") has been granted an Optionto purchase Common Stock of Home Solutions of America, Inc., a Delaware corporation(the "***Company***"), subject to the terms and conditions of theCompany's 2001 Stock Plan (the "***Plan***") and this Stock OptionAgreement, as follows:

|   | Optionee                        | **Rick  J. O'Brien**                                                  | ** ** |
|--------|---------------------------------|-----------------------------------------------------------------------|------------|
|   | ** **                      | ** **                                                            | ** ** |
|   | Date  of Grant                  | July 31, 2003                                                         |            |
|   |                                 |                                                                       |            |
|   | Vesting  Commencement Date      | July 31, 2003                                                         |            |
|   |                                 |                                                                       |            |
|   | Exercise  Price per Share       | $2.00                                                                 |            |
|   |                                 |                                                                       |            |
|   | Total  Number of Shares Granted | 250,000                                                               |            |
|   |                                 |                                                                       |            |
|   | Total  Exercise Price           | $500,000                                                              |       |
|   |                                 |                                                                       |            |
|   | Type  of Option:                |    X   Incentive Stock Option                          |            |
|   |                            |         Non-Qualified Stock Option |            |
|   |                                 |                                                                       |            |
|   | Term/Expiration  Date:          | Tenth  Anniversary of Date of Grant                                   |            |

            VestingSchedule:         The Option shall become exercisable as to 1/36thof the Shares subject to the Option on the last day of each month following theDate of the Grant, subject to Optionee's continued status as a Service Provideron each such date.  The Shares shall vest immediately (i) if a Change ofControl of the Company shall occur, or (ii) if the Optionee's employment underhis Executive Employment Agreement of even date herewith is terminated without"Cause" or with "Good Reason", as such terms are defined under the ExecutiveEmployment Agreement.

 

----

Termination Period:  The vested portion of this Option shall be exercisable for 90 daysafter Optionee ceases to be a Service Provider.  Upon Optionee's death ordisability, the vested portion of this Option shall be exercisable for theduration of the time period provided for in the Plan.  In no event may Optioneeexercise this Option after the Term/Expiration Date as provided above.

** **

**II.               AGREEMENT**

            1.         Grantof Option.

                        (a)        TheAdministrator hereby grants to the Optionee an option (the "***Option***")to purchase the number of Shares set forth herein, at the per Share exerciseprice set forth herein (the "***Exercise Price***"), and subject to theterms and conditions of the Plan, which is incorporated herein by reference. In the event of a conflict between the terms and conditions of the Plan andthis Stock Option Agreement, the terms and conditions of the Plan shallprevail. 

                        (b)        Ifdesignated as an Incentive Stock Option ("***ISO***"), the Option is intendedto qualify as an Incentive Stock Option as defined in Section 422 of theCode.  Nevertheless, to the extent that it exceeds the $100,000 rule of CodeSection 422(d), the Option shall be treated as a Non-Qualified Stock Option ("***NSO***").

            2.         Exerciseof Option.

                        (a)        Rightto Exercise.  The Option shall be exercisable for the duration of its termand in accordance with the Vesting Schedule set forth herein, subject to anyapplicable provisions of the Plan and any other applicable provisions of this StockOption Agreement.

                        (b)        Methodof Exercise.  The Option shall be exercisable by delivery of an exercisenotice in the form attached as Exhibit A (the "***Exercise Notice***"),which shall state the Optionee's election to exercise the Option, the number ofShares with respect to which the Option is being exercised (the "***ExercisedShares***"), and such other representations and agreements as may berequired by the Company. The Exercise Notice shall be accompanied by payment ofthe aggregate Exercise Price as to all Exercised Shares.  The Option shall bedeemed exercised upon receipt by the Company of such fully executed ExerciseNotice accompanied by the aggregate Exercise Price.

            3.         Optionee'sRepresentations.  In the event the Shares have not been registered underthe Securities Act of 1933, as amended (the "***Securities Act***"), atthe time this Option is exercised, the Optionee shall, if required by theCompany, concurrently with the exercise of all or any portion of this Option,deliver to the Company his or her Investment Representation Statement in theform attached hereto as Exhibit B.

            4.         Lock-Up Period.  Optionee herebyagrees that, if so requested by the Company or any representative of theunderwriters (the "***Managing Underwriter***") in connection with anyregistration of the offering of any securities of the Company under theSecurities Act, Optionee shall not sell or otherwise transfer any Sharesor other securities of the Company during the 180-day period (or such othershorter or longer period as may be requested in writing by the ManagingUnderwriter and agreed to in writing by the Company) (the "***MarketStandoff Period***") following the effective date of a registrationstatement of the Company filed under the Securities Act (excluding aregistration of securities on Form S-8 or a successor form).  The Company mayimpose stop-transfer instructions with respect to securities subject to theforegoing restrictions until the end of such Market Standoff Period.

2

            5.         Methodof Payment.  Payment of the aggregate Exercise Price shall be by any of thefollowing, or a combination thereof, at the election of the Optionee

                        (a)        cashor check;

                        (b)        Sharessurrendered to the Company in a Cashless Exercise; or

                        (c)        surrenderof other Shares that, (i) in the case of Shares acquired upon exercise of anoption, have been owned by the Optionee for more than six months on the date ofsurrender, and (ii) have an aggregate Fair Market Value as of the date ofsurrender equal to the aggregate Exercise Price of the Exercised Shares.

            6.         Restrictionson Exercise.  The Option may not be exercised unless the issuance of suchShares upon such exercise or the method of payment of consideration for suchshares would constitute a violation of any Applicable Law.

            7.         Non-Transferabilityof Option.  The Option may not be transferred in any manner other than bywill or by the laws of descent or distribution and may be exercised during thelifetime of Optionee only by Optionee.  The terms of the Plan and this StockOption Agreement shall be binding upon the executors, administrators, heirs,successors and assigns of the Optionee.

            8.         Termof Option.  The Option may be exercised only within the term set forthherein, and may be exercised during such term only in accordance with the Planand the terms of this Stock Option Agreement.

            9.         EntireAgreement; Governing Law.  The Plan is incorporated herein by reference.The Plan and this Stock Option Agreement constitute the entire agreement of theparties with respect to the subject matter hereof, and supersede in theirentirety all prior undertakings and agreements of the Company and Optionee withrespect to the subject matter hereof, and may not be modified adversely to theOptionee's interest except by a writing signed by the Company and Optionee.  ThisStock Option Agreement is governed by the internal substantive laws but not thechoice of law rules of the State of Delaware.  Venue for all disputes arising hereunder shall beproper exclusively in Harris County, Texas.

3

            10.       NoGuarantee of Continued Service.  **OPTIONEE ACKNOWLEDGES AND AGREES THATTHE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BYCONTINUING AS A SERVICE PROVIDER IN ACCORDANCE WITH THE OPTIONEE'S EMPLOYMENTAGREEMENT, IF ANY, OR OTHERWISE (NOT THROUGH THE ACT OF BEING HIRED, BEINGGRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).  OPTIONEE FURTHERACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATEDHEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE ANEXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FORTHE VESTING PERIOD, FOR ANY PERIOD, OR AT  ALL, AND SHALL NOTINTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATEOPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME IN ACCORDANCE WITHTHE OPTIONEE'S EMPLOYMENT AGREEMENT, IF ANY, OR OTHERWISE, AT ANY TIME, WITH ORWITHOUT CAUSE.**

            11.       Optioneeacknowledges receipt of a copy of the Plan and represents that he or she isfamiliar with the terms and provisions thereof, and hereby accepts the Optionand agrees to all of the terms and provisions hereof related thereto.  Optioneehas reviewed the Plan and this Stock Option Agreement in their entirety, hashad an opportunity to obtain the advice of counsel prior to executing thisStock Option Agreement and fully understands all provisions of this StockOption Agreement.  Optionee hereby agrees to accept as binding, conclusive andfinal all decisions or interpretations of the Administrator upon any questionsarising under the Plan or this Stock Option Agreement.  Optionee further agreesto notify the Company upon any change in the residence address indicated below.

            12.       TheCompany hereby agrees that, on or before March 31, 2004, the Company will either (i) registerall shares available for issuance under the Plan, or (ii) enter into aregistration rights agreement with Optionee under the same terms as thatRegistration Rights Agreement between the Company and Merritt ComputerProducts, L.P. dated July 31, 2003.  
**"COMPANY"  **
**"OPTIONEE"**
** ** **HOMESOLUTIONS OF AMERICA, INC.  **
 
 
**   **
By:                                           
                                          
Name:                                     
RickJ. O'Brien
Title:                                        
 
 
   
 
Address:
   
5565 Red Bird Center Drive
 
Suite 150
 
Dallas, TX 75237

4

**EXHIBIT A**

 

**2001 STOCK PLANEXERCISE NOTICE**

** **

HomeSolutions of America, Inc.11850  Jones RoadHouston, Texas 77070ATTN:  Secretary

1.   Exercise of Option.  Effective as oftoday, _______________, 20___, the undersigned ("***Optionee***")hereby elects to exercise Optionee's option to purchase ________________ shares(the "***Shares***") of the Common Stock of Home Solutions of America,Inc. (the "***Company***") under and pursuant to the 2001 Stock Plan(the "***Plan***") and the Stock Option Agreement dated _________, 2003(the "***Stock Option Agreement***") with the execution of thisExercise Notice (this "***Exercise Notice***").

2.   Delivery of Payment.  Optionee herewithdelivers to the Company the full purchase price of the Shares, as set forth inthe Stock Option Agreement.

3.   Representations of Optionee.  Optioneeacknowledges that Optionee has received, read and understood the Plan and theStock Option Agreement and agrees to abide by and be bound by their terms andconditions.

4.   Rights as Stockholder.  Until the issuanceof the Shares (as evidenced by the appropriate entry on the books of theCompany or of a duly authorized transfer agent of the Company), no right tovote or receive dividends or any other rights as a stockholder shall exist withrespect to the Shares, notwithstanding the exercise of the Option.  The Sharesshall be issued to the Optionee as soon as practicable after the Option isexercised.  No adjustment shall be made for a dividend or other right for whichthe record date is prior to the date of issuance except as provided in Section12****of the Plan.

5.   Tax Consultation.  Optionee understandsthat Optionee may suffer adverse tax consequences as a result of Optionee'spurchase or disposition of the Shares.  Optionee represents that Optionee hasconsulted with any tax consultants Optionee deems advisable in connection withthe purchase or disposition of the Shares and that Optionee is not relying onthe Company for any tax advice.

A-1

6.   Restrictive Legends and Stop-Transfer Orders.

(a)  Legends.  Optionee understands and agreesthat the Company shall cause the legends set forth below or legendssubstantially equivalent thereto, to be placed upon any certificate(s)evidencing ownership of the Shares together with any other legends that may berequired by the Company or by state or federal securities laws:

**THE SECURITIES REPRESENTED HEREBY HAVE NOT BEENREGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTILREGISTERED UNDER THE ACT OR, IN THE OPINION OF COMPANY COUNSEL SATISFACTORY TO THEISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE ORHYPOTHECATION IS IN COMPLIANCE THEREWITH.**

** **

(b)  Stop-Transfer Notices.  Optionee agreesthat, in order to ensure compliance with the restrictions referred to herein,the Company may issue appropriate "stop transfer" instructions to its transferagent, if any, and that, if the Company transfers its own securities, it maymake appropriate notations to the same effect in its own records.

7.   Successors and Assigns.  This ExerciseNotice shall be binding upon Optionee and his or her heirs, executors,administrators, successors and assigns.

8.   Interpretation.  Any dispute regarding theinterpretation of this Agreement shall be submitted by Optionee or by theCompany forthwith to the Administrator, which shall review such dispute at itsnext regular meeting.  The resolution of such a dispute by the Administratorshall be final and binding on all parties.

      
Submittedby: 
Acceptedby:
  **OPTIONEE:**
**HOMESOLUTIONS OF AMERICA, INC.**
  _____________________________                               
By:                                                       
RickJ. O'Brien
Name:                                                  
 
Title:                                                     

A-2

**EXHIBIT B**

**INVESTMENT REPRESENTATIONSTATEMENT**

** **
OPTIONEE:   **Rick J. O'Brien**   
COMPANY:   

HomeSolutions of America, Inc.

SECURITY:   

CommonStock

AMOUNT:   

$__________________________

DATE:   

 __________________________ 

            Inconnection with the purchase of the above-listed Securities, the undersignedOptionee represents to the Company the following:

1.   Optionee is aware of the Company's businessaffairs and financial condition and has acquired sufficient information aboutthe Company to reach an informed and knowledgeable decision to acquire theSecurities.  Optionee is acquiring these Securities for investment forOptionee's own account only and not with a view to, or for resale in connectionwith, any "distribution" thereof within the meaning of the Securities Act of1933, as amended (the "***Securities Act***").

2.   Optionee acknowledges and understands that theSecurities constitute "restricted securities" under the Securities Act and havenot been registered under the Securities Act in reliance upon a specificexemption therefrom, which exemption depends upon, among other things, the bonafide nature of Optionee's investment intent as expressed herein.  In thisconnection, Optionee understands that, in the view of the Securities andExchange Commission, the statutory basis for such exemption may be unavailableif Optionee's representation was predicated solely upon a present intention tohold these Securities for the minimum capital gains period specified under taxstatutes, for a deferred sale, for or until an increase or decrease in themarket price of the Securities, or for a period of one year or any other fixedperiod in the future.  Optionee further understands that the Securities must beheld indefinitely unless they are subsequently registered under the SecuritiesAct or an exemption from such registration is available.  Optionee furtheracknowledges and understands that the Company is under no obligation toregister the Securities.  Optionee understands that the certificate evidencingthe Securities will be imprinted with a legend that prohibits the transfer ofthe Securities unless they are registered or such registration is not requiredin the opinion of counsel satisfactory to the Company and any other legendrequired under applicable state securities laws.

B-1

3.   Optionee is familiar with the provisions ofRule 144, promulgated under the Securities Act, which, in substance,permits limited public resale of "restricted securities" acquired, directly orindirectly from the issuer thereof, in a non-public offering subject to thesatisfaction of certain conditions.  The Securities may be resold in certainlimited circumstances subject to the provisions of Rule 144, which requires theresale to occur not less than one year after the later of the date theSecurities were sold by the Company or the date the Securities were sold by anaffiliate of the Company, within the meaning of Rule 144, and the resalemust take place in a manner described in (1) below; and, in the case ofacquisition of the Securities by an affiliate, or by a non-affiliate whosubsequently holds the Securities less than two years, the satisfaction of thefollowing conditions: (1) the resale is made through a broker in an unsolicited"broker's transaction" or in transactions directly with a market maker (assaid term is defined under the Securities Exchange Act of 1934), (2) theavailability of certain public information about the Company, (3) the amount ofSecurities being sold during any three-month period not exceeding thelimitations specified in Rule 144(e), and (4) the timely filing of a Form 144.

4.   Optionee further understands that in the eventall of the applicable requirements of Rule 144 are not satisfied,registration under the Securities Act or some other registration exemption willbe required; and that the Staff of the Securities and Exchange Commission hasexpressed its opinion that persons proposing to sell private placementsecurities other than in a registered offering and otherwise than pursuant toRules 144 will have a substantial burden of proof in establishing that anexemption from registration is available for such offers or sales, and thatsuch persons and their respective brokers who participate in such transactionsdo so at their own risk.  Optionee understands that no assurances can be giventhat any such other registration exemption will be available in such event.
 
**"Optionee"**
   
___________________________________
**Rick J. O'Brien**   
Date:______________________________

B-2