**CONSULTING AGREEMENT**

             This Agreement (this "***Agreement***") is executedas of March 15, 2003 (the "***Effective Date***"), by and between **Home Solutions of America, Inc.**, aDelaware corporation (the "***Company***"), and **Frank J. Fradella**, an individual and resident of the State of Texas(the "***Consultant***").

**WITNESSETH**

**            WHEREAS**, the Consultant, having resigned from the positionsof President and Chief Executive Officer of the Company, and the Company desirefor the Consultant to perform certain consulting services for the Company; and

            **WHEREAS**, theCompany and the Consultant desire to set forth the terms and conditionspursuant to which the Consultant will be engaged to perform such consultingservices;

            **NOW, THEREFORE**,for and in consideration of the foregoing premises and of the mutual covenantsand undertakings contained herein, and for such other good and valuableconsideration the receipt and sufficiency of which are hereby acknowledged, theparties to this Agreement hereby agree as follows:

**ARTICLE I**

** PERFORMANCE OF THE SERVICES**

            1.01     **Engagement and Duties**.  The Company and the Consultant hereby agreethat during the Term (defined below), the Consultant shall provide consultingservices to the Company in the nature of the identification and due diligencereview of acquisition candidates (the "***Services***").  Duringthe term of this Agreement, the Consultant shall report to the Chief ExecutiveOfficer of the Company.

            1.02     **Term**.  This Agreement shall continue and be in effect from the EffectiveDate until the three-year anniversary of the Effective Date, or until earlierterminated by either the Consultant or the Company in accordance with ArticleII of this Agreement (the "***Term***").          

           1.03     **Consideration**.  In consideration for performance of theServices, the Consultant shall be paid a fee of $10,000 per month during theTerm, payable on the last day of the month for such month.  The first such payment shall be due on April1, 2003.

            1.04     **Benefits**.  For the duration of the Term, the Consultantand his dependents (if applicable), will be permitted to participate in suchhealth insurance, disability income insurance, and other employee benefit plansof the Company, which may be in effect from time to time to the extent theConsultant and his dependents are eligible for participation under the terms ofsuch plans.  In addition, each monthduring the Term the Consultant shall receive a company-owned vehicle or avehicle allowance of $1,000, payable on the last day of the month for such month.

 

 

 

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1.05     **Expenses**.  During the term of this Agreement, theConsultant shall be entitled to reimbursement of all reasonable businessexpenses incurred by the Consultant on behalf of the Company or in furtheranceof his provision of the Services; provided, however, that the Consultant mustobtain the prior approval of the Chief Executive Officer of the Company beforeincurring any individual expense exceeding $1,000, or aggregate expenses duringany one month of the Term of more than $2,000.

1.06     **IndependentContractor Status**.  The Companyand the Consultant hereby agree that the Company is retaining the Consultant inthe capacity of an independent contractor and not as an employee or agent ofthe Company. The Company and the Consultant further agree that nothing in thisAgreement shall create, or shall be construed as creating, any form ofpartnership, joint venture, employer-employee relationship, or otheraffiliation that would operate to permit the Consultant to bind the Companywith respect to any matter or would cause the Company to be liable for anyaction of the Consultant, and each party hereto agrees that it will notrepresent to any third party that the Consultant's engagement by the Companyhereunder is in any capacity other than as an independent contractor.

1.07    **Taxes and Withholding. **TheConsultant hereby acknowledges and agrees that, as an independent contractor,she is legally required to determine and pay his own estimated federal incometaxes, FICA (including FICA-matching), and all applicable federal and statepayroll, excise, workman's compensation, and other withholdings. The Consultantfurther acknowledges that the Company is legally obligated, and shall endeavorto issue timely, a yearly Form 1099 to the Consultant, and a Form 1096 to theInternal Revenue Service, reporting the full amount of fees paid to theConsultant during the reporting period.

**ARTICLE II**

**TERMINATION**

            2.01     ** TerminationFor Cause**.  The Company mayterminate the Consultant's engagement hereunder for Cause (as defined below).For purposes of this Agreement, "***Cause***" shall mean any of thefollowing:  (i) any act of personaldishonesty, fraud or misrepresentation by the Consultant that was intended toresult in gain or personal enrichment of the Consultant at the expense of theCompany; (ii) the Consultant's violation of a federal or state law orregulation applicable to the Company's business which violation was or isreasonably likely to be injurious to the Company; or (iii) the Consultant'sconviction of, or a plea of nolo contendere or its equivalent to, a felonyunder the laws of the United States or any State.

            2.02     ** Other Termination Events**.  In addition to the Company's terminationrights set forth in Section 2.01 of this Agreement, the parties may mutuallyagree to terminate this Agreement effective at such time as agreed upon inwriting.

 

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**ARTICLE III**

**CONFIDENTIALITY**

            Other than such actions as are required in discharginghis obligations under this Agreement in the ordinary course of business, theConsultant and his Affiliates (defined below) hereby agree that they will not,either during the Term or at any time following the termination hereof for anyreason, do or cause to have done any of the following:  (i) use for their own purposes, disclose toany Person (defined below), or use for or on behalf of another Person, otherthan pursuant to a final judicial order, any Confidential Information of theCompany, provided, that in the event of possible disclosure by judicial order,the Consultant shall provide the Company with sufficient notice (meaning enoughnotice to allow the Company to move for a protective order or stay ofdisclosure) of such proceedings at which a determination shall be madeconcerning disclosure of the Confidential Information; or (ii) disparage theCompany, any officer or employee of the Company, any Affiliate of any of theforegoing, or any business practice employed by the Company or any officer,employee, or Affiliate thereof. For purposes of this Article III, "***ConfidentialInformation***" of the Company shall mean all information relating to orarising out of the business of the Company or any of its affiliates, includingwithout limitation, all financial and accounting information, information aboutproposed acquisition candidates, customer lists and data, personnel records, pricinginformation, technical information, trade secrets, and sales/marketinginformation, obtained by or furnished, disclosed, or disseminated to theCompany, or any of its Affiliates, or obtained, assembled, or complied by it,and all physical embodiments of the foregoing, all of which are hereby agreedto be confidential, but the Consultant shall not be required to treat asConfidential Information any of the foregoing to the extent such information isor becomes publicly known through no fault or breach of this Agreement or otherduty by the Consultant. For purposes of this Agreement, the term "***Affiliate***"shall mean any Person in which the Consultant has an equity interest equal to5% or more of the outstanding equity interests of such Person, or any Personthat employs or retains the services of the Consultant or is involved in anyform of joint venture with the Consultant. For purposes of this Agreement, theterm "***Person***" shall mean any individual, corporation, Company,limited liability Company, partnership, trust, estate, or other entity.

**ARTICLE IV**

**RELEASE**

            4.01     **Releaseby the Company**.  Inconsideration for the execution of, and the covenants contained within, thisAgreement, the Company, together with any person or entity claiming through theCompany, hereby releases, acquits, and forever discharges the Consultant, andhis heirs, assigns, devisees, legatees, executors, attorneys, andrepresentatives (such persons and entities being hereinafter referred to as a "***ConsultantReleased Party***"), from any and all debts, claims, obligations(excluding the obligations of the Consultant under any stock option agreement,restricted stock purchase agreement, or registration rights agreement with theCompany that are in effect as of the date hereof), liabilities, demands,damages, actions, or causes of every nature and kind whatsoever, monetary orotherwise, whether known or unknown, in law or inequity, now existing orarising in the future, for, in connection with, attributable to, or arising outof any action, omission, occurrence, event, or dealings, directly orindirectly, with, between, or among the parties hereto and/or any ConsultantReleased Party prior to the date of this Agreement.

 

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            4.02     **Releaseby the Consultant**.  Inconsideration for the execution of, and the covenants contained within, thisAgreement, the Consultant, together with any person or entity claiming throughthe Consultant, hereby releases, acquits, and forever discharges the Companyand its subsidiaries, and any predecessors or successors in interest thereof,its officers, directors, stockholders, employees, agents, attorneys, andrepresentatives (such persons and entities being hereinafter referred to as a "***CompanyReleased Party***"), from any and all debts, claims, obligations(excluding the obligations of the Company under any stock option agreement,restricted stock purchase agreement, or registration rights agreement with theConsultant that are in effect as of the date hereof), liabilities, demands,damages, actions, or causes of every nature and kind whatsoever, monetary orotherwise, whether known or unknown, in law or inequity, now existing orarising in the future, for, in connection with, attributable to, or arising outof any action, omission, occurrence, event, or dealings, directly orindirectly, with, between, or among the parties hereto and/or any CompanyReleased Party prior to the date of this Agreement.

            4.03     **CovenantNot to Sue**.  Each party, byexecuting this Agreement, hereby covenants that she or it will not bring anyaction or proceeding, or cause any entity owned, affiliated, or controlled byhim or it to bring any action or proceeding, or assist in the prosecution ofany action or proceeding by any person purporting to claim through her or it inany court or tribunal seeking any kind of relief, either monetary or equitable,with respect to any claim released herein.

**ARTICLE V**

** MISCELLANEOUS**

            5.01     ** Further Assurances**Each party hereto, withoutfurther consideration, shall, at the reasonable request of any other partyhereto after the consummation of the transactions contemplated by theAgreement, execute and deliver any instruments of conveyance, assignment,transfer, assumption, or other instrument or document and take such otheractions, as such other party may reasonably request to more effectivelyconsummate the transactions contemplated by this Agreement.

            5.02     **Severability**.  If any provision of this Agreement is heldto be illegal, invalid, or unenforceable under any present or future law, andif the rights or obligations of either of the parties hereto would not bematerially and adversely affected thereby, (a) such provisions shall be fullyseverable; (b) this Agreement shall be construed and enforced as if suchillegal, invalid, or unenforceable provisions had never comprised a parthereof; (c) the remaining provisions of this Agreement shall remain in fullforce and effect and shall not be affected by the illegal, invalid, orunenforceable provision or by its severance; (d) in lieu of such illegal,invalid, or unenforceable provision, there shall be added automatically as apart of this Agreement a legal, valid, and enforceable provision as similar interms to such illegal, invalid, or unenforceable provision as may be possible. 

 

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5.03     **Number and Gender ofWords**.  Any references herein tothe masculine gender, or to the masculine form of any noun, adjective, orpossessive, shall be construed to include the feminine or neuter gender andform, and vice versa. Additionally, whenever used herein, the singular numbershall include the plural, and the plural number shall include the singular.

5.04     **Headings**.  The headings contained in this Agreement arefor purposes of reference only and shall not limit or otherwise affect themeaning of any of the provisions contained herein.

5.05     **GOVERNING LAW; VENUE.  THIS AGREEMENT SHALL BE GOVERNED BY THE LAWSOF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO THE CHOICE OR CONFLICT OF LAWSRULES THEREOF OR OF ANY STATE. VENUE FOR ANY ACTION BROUGHT HEREUNDER SHALL BEPROPER EXCLUSIVELY IN HARRIS COUNTY, TEXAS.**

5.06      **Legal Remedies; Specific Performance**.  The parties to this Agreement understand andagree that it will be impossible to measure in money the damages that mayaccrue to a party to this Agreement or to its heirs, personal representatives,or assigns by reason of a failure to perform any of the obligations set forthin this Agreement, and that any such money damages would be an insufficientremedy for such failure of performance. Therefore, each party hereto herebyconsents to be subject to the remedy of specific performance of any provisionof this Agreement if such party shall have been found to be in violation ofsuch provision by any court of competent jurisdiction. If any party or itsheirs, personal representatives, or assigns institute any action or proceedingto specifically enforce the provisions of this Agreement, any person againstwhom such action or proceeding is brought hereby waives the claim or defense insuch action or proceeding that such party has an adequate remedy at law, andsuch person shall not urge in any such action or proceeding a claim or defensethat such remedy at law exists.

            5.07     ** Court Costs and Attorneys' Fees**.  If any action at law or in equity, includingan action for declaratory relief or an action brought under Section 4.06hereof, is brought to enforce or interpret the provisions of this Agreement,the prevailing party shall be entitled to recover costs of court and reasonableattorneys' fees from the other party or parties to such action, which fees maybe set by the court in the trial of such action or may be enforced in aseparate action brought for that purpose, and which fees shall be in additionto any other relief that may be awarded.

            5.08     **Inurement**.  Subject to the restrictions against transferor assignment as herein contained, the provisions of this Agreement shall inureto the benefit of, and shall be binding on, the assigns, successors ininterest, personal representatives, estates, heirs, and legatees of each of theparties hereto.  

            5.09     **Notices**.  Any notice or other communication requiredor permitted to be given hereunder shall be in writing and shall be sent byfirst class U.S. mail or facsimile transmission, or delivered by hand or byovernight or similar delivery service, fees prepaid, to the party to whom it isto be given at the address of such party set forth below or to such otheraddress for notice as such party shall provide in accordance with the terms ofthis section. Except as otherwise specifically provided in this Agreement,notice so given shall, in the case of notice given by certified mail (or bysuch comparable method) be deemed to be given and received three business daysafter the time of certification thereof (or comparable act), in the case ofnotice so given by overnight delivery service, on the date of actual delivery,and, in the case of notice so given by facsimile transmission or personaldelivery, on the date of actual transmission or, as the case may be, personaldelivery.

 

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|   | If to the Company: HomeSolutions of America, Inc.    11850Jones Road  Houston,Texas 77070  Facsimile:(281) 970-9854     
If to the Consultant:FrankJ. Fradella                                                                                                      Facsimile:(281)                        
                                                                        

5.10     **Waivers**.  No waiver of any provision or condition ofthis Agreement shall be valid unless executed in writing and signed by theparty to be bound thereby, and then only to the extent specified in suchwaiver. No waiver of any provision or condition of this Agreement shall beconstrued as a waiver of any other provision or condition of this Agreement,and no present waiver of any provision or condition of this Agreement shall beconstrued as a future waiver of such provision or condition.

5.11     **Amendment**.  This Agreement may be amended only by theunanimous written consent of the parties hereto.

5.12     **Entire Agreement**.  This Agreement contains the entireunderstanding between the parties hereto concerning the subject mattercontained herein. There are no representations, agreements, arrangements, orunderstandings, oral or written, between or among the parties hereto relatingto the subject matter of this Agreement that are not fully expressed herein.

5.13     **Construction ofAgreement**.  Each party and itscounsel have participated fully in the review and revision of this Agreement.Any rule of construction to the effect that ambiguities are to be resolvedagainst the drafting party shall not apply in the interpretation of thisAgreement.

5.14     **Execution**.  Each party to this Agreement herebyrepresents and warrants to the other parties hereto that such party has fullpower and capacity to execute, deliver, and perform this Agreement, which hasbeen duly executed and delivered by, and which evidences the valid and bindingobligation of, such party enforceable in accordance with its terms subject toapplicable liquidation, conservatorship, bankruptcy, insolvency,reorganization, or similar laws affecting the enforcement of creditor's right'sfrom time to time in effect and to general principles of equity.

 

 

 

 

5.15     **Multiple Counterparts**.  This Agreement may be executed in multiplecounterparts, including by facsimile signature, each of which shall be deemedto be an original but all of which together shall constitute one and the sameinstrument.

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**IN WITNESS WHEREOF**, the parties to this Agreement have set their respective hands as ofthe Effective Date.

                                                                   **THE COMPANY:**

** **

**                                                                   HOMESOLUTIONS OF AMERICA, INC. **

                                                                   By:                                                                                                                                               R.Andrew White                                                                             ChiefExecutive Officer

 

                                                                   **THE CONSULTANT:**

 

                                                                    ____________________________________                                                                    FrankJ. Fradella |
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