Document:

EXECUTION COPY
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THIS NOTE HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY  STATE  SECURITIES  LAWS.  THIS NOTE MAY NOT BE SOLD,  OFFERED  FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THIS NOTE  UNDER  SAID ACT AND ANY  APPLICABLE  STATE  SECURITIES  LAWS OR AN
OPINION OF COUNSEL REASONABLY  SATISFACTORY TO RELIANT HOME WARRANTY CORPORATION
THAT SUCH REGISTRATION IS NOT REQUIRED.

                             SECURED REVOLVING NOTE

                  FOR VALUE  RECEIVED,  RELIANT  HOME  WARRANTY  CORPORATION,  a
Florida  corporation  (the  "Company"  or  "Parent"),  promises to pay to LAURUS
MASTER FUND, LTD., c/o M&C Corporate  Services Limited,  P.O. Box 309 GT, Ugland
House,  South Church Street,  George Town,  Grand Cayman,  Cayman Islands,  Fax:
345-949-8080 (the "Holder") or its registered assigns or successors in interest,
the  sum  of  up  to  Twenty  Five  Million  Dollars  (US$25,000,000),   without
duplication of any amounts owing by the Company to the Holder under the Note (as
defined in the  Security  and  Purchase  Agreement  referred  to below),  or, if
different,  the  aggregate  principal  amount of all Loans  (as  defined  in the
Security and Purchase  Agreement  referred to below),  together with any accrued
and unpaid interest hereon,  on June 1, 2009 (the "Maturity Date") if not sooner
paid in full.

                 Capitalized  terms used  herein without  definition  shall have
the meanings ascribed to such terms in the Security and Purchase Agreement among
the Company and the Eligible  Subsidiaries (as described therein) and the Holder
dated as of the date hereof (as amended,  modified and/or supplemented from time
to time, the "Security and Purchase Agreement").

                                   ARTICLE I
                           CONTRACT RATE AND THE NOTE

1.1      Availability.  The Company hereby acknowledges and agrees that with the
         exception of the Initial  Overadvance,  the Loans  contemplated  in the
         Security  and  Purchase  Agreement  shall not be made  available by the
         Holder to the Company  until all  conditions  precedent  in Section 3.1
         have been met to the satisfaction of the Holder in its sole discretion.

1.2      Contract Rate. Subject to Sections 3.2 and 4.9, interest payable on the
         outstanding  principal  amount of this Note  (the  "Principal  Amount")
         shall accrue at a rate per annum equal to the "prime rate" published in
         The Wall Street Journal from time to time (the "Prime Rate"),  plus two
         percent  (2.0%)  (the  "Contract  Rate").  The  Contract  Rate shall be
         increased or decreased as the case may be for each increase or decrease
         in the Prime Rate in an amount  equal to such  increase  or decrease in
         the Prime Rate; each change to be effective as of the day of the change
         in the Prime Rate.  Subject to Section 1.2, the Contract Rate shall not
         at any time be less  than  eight  percent  (8.0%).  Interest  shall (i)
         accrue as of the Closing Date, (ii) be calculated on the basis of a 360
         day year, and (iii) be payable monthly, in arrears,  commencing one (1)
         calendar  month from the Closing  Date (as defined  below) on the first
         business day of each consecutive  calendar month thereafter through and
         including  the  Maturity  Date,  and on the Maturity  Date,  whether by
         acceleration or otherwise.

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1.3      Contract  Rate  Adjustments  and  Payments.  The Contract Rate shall be
         calculated on the last business day of each  calendar  month  hereafter
         (other than for increases or decreases in the Prime Rate which shall be
         calculated and become effective in accordance with the terms of Section
         1.1) until the Maturity Date.

1.4      Taxes.

    (a)  Any and all payments by the Company  hereunder,  including  any amounts
         received  on  redemption  of the Note and any  amounts  on  account  of
         interest  or  deemed  interest,  shall be made  free  and  clear of and
         without  deduction  for any and all  present or future  taxes,  levies,
         imposts, deductions,  charges or withholdings, and all liabilities with
         respect  thereto,  excluding  taxes  imposed on net income or franchise
         taxes of the  Holder  by the  jurisdiction  in  which  such  person  is
         organized or has its  principal  office (all such  non-excluded  taxes,
         levies,  imposts,  deductions,  charges  withholdings  and liabilities,
         collectively  or  individually,  "Taxes").  If  the  Company  shall  be
         required  to deduct any Taxes  from or in  respect  of any sum  payable
         hereunder to the Holder,  (i) the sum payable shall be increased by the
         amount (an  "additional  amount")  necessary  so that after  making all
         required deductions (including deductions applicable to additional sums
         payable  under this  Section  1.4) the Holder  shall  receive an amount
         equal to the sum it would have  received  had no such  deductions  been
         made, (ii) the Company shall make such deductions and (iii) the Company
         shall  pay  the  full  amount  deducted  to the  relevant  governmental
         authority in accordance with applicable law.

   (b)   In  addition,  Company  agrees  to  pay to  the  relevant  governmental
         authority in accordance with applicable law any present or future stamp
         or documentary taxes or any other excise or property taxes,  charges or
         similar  levies that arise from any payment made  hereunder or from the
         execution,  delivery or registration  of, or otherwise with respect to,
         this Note  ("Other  Taxes").  The Company  shall  deliver to the Holder
         official  receipts,  if any,  in  respect  of any Taxes or Other  Taxes
         payable  hereunder  promptly after payment of such Taxes or Other Taxes
         or other evidence of payment reasonably acceptable to the Holder.

   (c)   The obligations of the Company under this Section 1.4 shall survive the
         termination  of this  Note and the  payment  of the Note and all  other
         amounts payable hereunder.

                                   ARTICLE II
                               OPTIONAL PREPAYMENT

2.1      Optional  Redemption  in Cash.  The  Company  will  have the  option of
         prepaying this Note ("Optional Redemption") by paying to the Holder the
         Prepayment  Premium (as hereinafter  defined) together with accrued but
         unpaid interest thereon to the Redemption  Payment Date (as hereinafter
         defined)  and any and all  other  unpaid  amounts  then  due,  accrued,
         payable  or owing to the  Holder  under this  Note,  the  Security  and

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         Purchase   Agreement  or  any  Ancillary   Agreement  (the  "Redemption
         Amount"). The "Prepayment Premium" (i) for the period commencing on the
         date hereof up to and including the six month  anniversary  of the date
         hereof  shall  be 5% of the  Principal  Amount,  (ii)  for  the  period
         commencing  after the 6 month  anniversary of the date hereof up to and
         including the 18 month  anniversary of the date hereof,  shall be equal
         to 4% of the Principal Amount and (iii) for the period commencing after
         the 18 month  anniversary  of the date hereof up to and  including  the
         Maturity  Date shall be 3% of the Principal  Amount.  The Company shall
         deliver to the Holder a written  notice of  redemption  (the "Notice of
         Redemption")  specifying  the date for such  Optional  Redemption  (the
         "Redemption Payment Date"),  which date shall be ten (10) business days
         after the date of the Notice of Redemption (the  "Redemption  Period").
         On the Redemption  Payment Date, the Redemption  Amount must be paid in
         good funds to the  Holder.  In the event the  Company  fails to pay the
         Redemption  Amount on the Redemption  Payment Date as set forth herein,
         then such Redemption Notice will be null and void.

2.2      Maturity;  Surrender,  Etc.  In the case of a  repayment  of this  Note
         pursuant to this  Article II, the  Principal  Amount of this Note to be
         repaid  shall  mature  and become  due and  payable  on the  applicable
         Redemption Payment Date together with interest on such Principal Amount
         accrued to such date and any other  amount due and  payable  under this
         Note, the Purchase  Agreement or any Ancillary  Agreement to the extent
         that such  amounts  are  outstanding  as of the  applicable  Redemption
         Payment Date.  From and after such date,  unless the Company shall fail
         to pay such Principal  Amount when so due and payable together with the
         interest and other  amounts as  aforesaid,  interest on such  Principal
         Amount  shall cease to accrue.  The Holder  shall make the  appropriate
         reduction to the Principal  Amount,  accrued interest and other amounts
         due,  accrued,  payable or owing as entered  in its  records  and shall
         provide  written  notice thereof to the Company within one (1) Business
         Day of the  applicable  Payment  Date. If this Note is paid in full, it
         shall be  surrendered  to the  Company and  cancelled  and shall not be
         reissued  and no note  shall be  issued  in lieu of any paid  Principal
         Amount of this Note.

                                  ARTICLE III
                              CONDITIONS PRECEDENT

3.1      Conditions  Precedent.  The Company shall meet the conditions precedent
         set forth in Section 9 of the Security and Purchase  Agreement prior to
         the date upon which any and all Advances shall be made by the Holder to
         the Company.

3.2      Conditions  Precedent  to First  Advance.  The  Company  shall meet the
         conditions  precedent  set  forth in  Section  10 of the  Security  and
         Purchase Agreement prior to the First Advance Date.

                                   ARTICLE IV
                EVENTS OF DEFAULT AND DEFAULT RELATED PROVISIONS

4.1      Events of  Default.  The  occurrence  of an Event of Default  under the
         Security and Purchase  Agreement  shall  constitute an event of default
         ("Event of Default") hereunder.

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4.2      Default  Interest.  Following the occurrence and during the continuance
         of an Event of Default, the Company shall,  jointly and severally,  pay
         additional  interest on the outstanding  principal balance of this Note
         in an amount equal to two percent (2%) per month,  and all  outstanding
         Obligations,  including  unpaid  interest,  shall  continue  to  accrue
         interest at such  additional  interest rate from the date of such Event
         of Default until the date such Event of Default is cured or waived.

4.3      Default Payment. Following the occurrence and during the continuance of
         an Event of Default,  the  Holder,  at its  option,  may elect,  acting
         reasonably and in good faith, in addition to all rights and remedies of
         the Holder  under the Security  and  Purchase  Agreement  and the other
         Ancillary Agreements and all obligations and liabilities of the Company
         under the  Security  and  Purchase  Agreement  and the other  Ancillary
         Agreements,  to require the Company to make a Default Payment ("Default
         Payment").  The Default  Payment  shall be one hundred  thirty  percent
         (130%) of the  outstanding  principal  amount of the Note, plus accrued
         but unpaid  interest,  all other fees then  remaining  unpaid,  and all
         other amounts payable  hereunder.  The Default Payment shall be applied
         first to any fees due and payable to the Holder  pursuant to the Notes,
         the Security and Purchase  Agreement  and/or the Ancillary  Agreements,
         then to accrued  and unpaid  interest  due on the Notes and then to the
         outstanding  principal  balance of the Notes. The Default Payment shall
         be due  and  payable  immediately  on the  date  that  the  Holder  has
         exercised its rights pursuant to this Section 4.3.

                                   ARTICLE V
                                  MISCELLANEOUS

5.1      Cumulative Remedies. The remedies under this Note shall be cumulative.

5.2      Failure or  Indulgence  Not Waiver.  No failure or delay on the part of
         the Holder  hereof in the  exercise  of any power,  right or  privilege
         hereunder  shall operate as a waiver  thereof,  nor shall any single or
         partial exercise of any such power,  right or privilege  preclude other
         or further exercise thereof or of any other right,  power or privilege.
         All rights and remedies  existing  hereunder are cumulative to, and not
         exclusive of, any rights or remedies otherwise available.

5.3      Notices.  Any notice herein  required or permitted to be given shall be
         in  writing  and shall be  deemed  effective  given  (a) upon  personal
         delivery to the party  notified,  (b) when sent by  confirmed  telex or
         facsimile if sent during normal  business  hours of the  recipient,  if
         not,  then on the next  business  day,  (c) five days after having been
         sent by registered or certified mail, return receipt requested, postage
         prepaid,  or (d) one day after  deposit  with a  nationally  recognized
         overnight   courier,   specifying  next  day  delivery,   with  written
         verification  of  receipt.  All  communications  shall  be  sent to the
         Company at the address  provided  for the Company in the  Security  and
         Purchase Agreement executed in connection  herewith,  and to the Holder
         at the address provided in the Security and Purchase  Agreement for the

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         Holder,  with a copy to John E. Tucker,  Esq.,  825 Third Avenue,  14th
         Floor, New York, New York 10022, facsimile number (212) 541-4434, or at
         such other  address as the Company or the Holder may  designate  by ten
         days advance written notice to the other parties hereto.

5.4      Amendment  Provision.  The term "Note" and all references  thereto,  as
         used  throughout  this  instrument,   shall  mean  this  instrument  as
         originally  executed,  or if later amended or supplemented,  then as so
         amended or supplemented, and any successor instrument as such successor
         instrument may be amended or supplemented.

5.5      Assignability.  This Note shall be  binding  upon the  Company  and its
         successors  and  assigns,  and shall inure to the benefit of the Holder
         and its  successors  and assigns,  and may be assigned by the Holder in
         accordance   with  the   requirements  of  the  Security  and  Purchase
         Agreement. The Company may not assign any of its obligations under this
         Note without the prior  written  consent of the Holder,  which  consent
         shall  not be  unreasonably  withheld,  any such  purported  assignment
         without such consent being null and void.

5.6      Cost of  Collection.  In case of any Event of Default  under this Note,
         the  Company  shall pay the Holder  the  Holder's  reasonable  costs of
         collection, including reasonable attorneys' fees.

5.7      Governing Law, Jurisdiction and Waiver of Jury Trial.

   (a)   THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
         WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
         CONFLICTS OF LAW.

   (b)   THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
         LOCATED  IN THE  COUNTY  OF NEW  YORK,  STATE  OF NEW YORK  SHALL  HAVE
         EXCLUSIVE  JURISDICTION  TO HEAR AND  DETERMINE  ANY CLAIMS OR DISPUTES
         BETWEEN THE  COMPANY,  ON THE ONE HAND,  AND THE  HOLDER,  ON THE OTHER
         HAND,  PERTAINING TO THIS NOTE, THE SECURITY AND PURCHASE  AGREEMENT OR
         ANY OF THE OTHER  ANCILLARY  AGREEMENTS OR TO ANY MATTER ARISING OUT OF
         OR RELATED TO THIS NOTE, THE SECURITY AND PURCHASE  AGREEMENT OR ANY OF
         THE OTHER ANCILLARY AGREEMENTS PROVIDED,  THAT THE COMPANY ACKNOWLEDGES
         THAT ANY  APPEALS  FROM  THOSE  COURTS  MAY HAVE TO BE HEARD BY A COURT
         LOCATED  OUTSIDE  OF THE  COUNTY  OF NEW YORK,  STATE OF NEW YORK;  AND
         FURTHER PROVIDED,  THAT NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE
         TO PRECLUDE THE HOLDER FROM  BRINGING SUIT OR TAKING OTHER LEGAL ACTION
         IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE
         COLLATERAL OR ANY OTHER SECURITY FOR THE  OBLIGATIONS,  OR TO ENFORCE A

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         JUDGMENT  OR OTHER  COURT  ORDER IN FAVOR OF THE  HOLDER.  THE  COMPANY
         EXPRESSLY  SUBMITS AND CONSENTS IN ADVANCE TO SUCH  JURISDICTION IN ANY
         ACTION OR SUIT  COMMENCED  IN ANY SUCH COURT,  AND THE  COMPANY  HEREBY
         WAIVES ANY  OBJECTION  WHICH IT MAY HAVE  BASED  UPON LACK OF  PERSONAL
         JURISDICTION,  IMPROPER  VENUE OR FORUM  NON  CONVENIENS.  THE  COMPANY
         HEREBY  WAIVES  PERSONAL  SERVICE OF THE SUMMONS,  COMPLAINT  AND OTHER
         PROCESS  ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES  THAT  SERVICE OF
         SUCH SUMMONS,  COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR
         CERTIFIED MAIL ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN THE
         SECURITY  AND  PURCHASE  AGREEMENT  AND THAT  SERVICE  SO MADE SHALL BE
         DEEMED  COMPLETED  UPON THE  EARLIER OF THE  COMPANY'S  ACTUAL  RECEIPT
         THEREOF  OR TEN (10)  DAYS  AFTER  DEPOSIT  IN THE U.S.  MAILS,  PROPER
         POSTAGE PREPAID

   (c)   THE COMPANY  DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE  APPLYING
         SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
         BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION,  THE COMPANY HERETO
         WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,  SUIT,  OR PROCEEDING
         BROUGHT TO RESOLVE ANY DISPUTE,  WHETHER ARISING IN CONTRACT,  TORT, OR
         OTHERWISE  BETWEEN  THE  HOLDER,  AND/OR THE  COMPANY  ARISING  OUT OF,
         CONNECTED WITH,  RELATED OR INCIDENTAL TO THE RELATIONSHIP  ESTABLISHED
         BETWEEN THEM IN  CONNECTION  WITH THIS NOTE,  THE SECURITY AND PURCHASE
         AGREEMENT,  ANY OTHER ANCILLARY  AGREEMENT OR THE TRANSACTIONS  RELATED
         HERETO OR THERETO.

5.8      Severability.  In the event that any  provision of this Note is invalid
         or unenforceable under any applicable statute or rule of law, then such
         provision  shall  be  deemed  inoperative  to the  extent  that  it may
         conflict  therewith  and shall be deemed  modified to conform with such
         statute or rule of law. Any such  provision  which may prove invalid or
         unenforceable   under  any  law  shall  not  affect  the   validity  or
         enforceability of any other provision of this Note.

5.9      Maximum Payments. Nothing contained herein shall be deemed to establish
         or require the payment of a rate of interest or other charges in excess
         of the maximum  permitted by applicable law. In the event that the rate
         of interest  required to be paid or other charges  hereunder exceed the
         maximum  rate  permitted  by such law,  any  payments in excess of such
         maximum rate shall be credited  against  amounts owed by the Company to
         the Holder and thus refunded to the Company.

5.10     Security Interest and Guarantee. The Holder has been granted a security
         interest  (i) in all assets of the Company as more fully  described  in
         the Security and Purchase Agreement,  and (ii) in certain assets of the

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         Company and its  Subsidiaries  pursuant to the Share  Pledge  Agreement
         dated as of the date hereof.  The obligations of the Company under this
         Note are guaranteed by certain  Subsidiaries of the Company pursuant to
         the Subsidiary  Guaranty dated as of the date hereof and are guaranteed
         by Hamilton  pursuant  to the  Hamilton  Guaranty  dated as of the date
         hereof.

5.11     Construction.   Each  party   acknowledges   that  its  legal   counsel
         participated in the preparation of this Note and, therefore, stipulates
         that the  rule of  construction  that  ambiguities  are to be  resolved
         against the drafting  party shall not be applied in the  interpretation
         of this Note to favor any party against the other.

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IN WITNESS  WHEREOF,  the Company has caused this Secured  Revolving  Note to be
signed in its name effective as of this 8th day of June 2006.

                                 RELIANT HOME WARRANTY CORPORATION
                                    By:
                                         ---------------------------------------
                                         Name:
                                         Title:

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         THIS WARRANT AND THE SHARES OF COMMON STOCK  ISSUABLE  UPON EXERCISE OF
         THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
         AS AMENDED,  OR ANY STATE  SECURITIES LAWS. THIS WARRANT AND THE COMMON
         STOCK  ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,  OFFERED
         FOR SALE,  PLEDGED  OR  HYPOTHECATED  IN THE  ABSENCE  OF AN  EFFECTIVE
         REGISTRATION  STATEMENT  AS TO  THIS  WARRANT  UNDER  SAID  ACT AND ANY
         APPLICABLE  STATE  SECURITIES LAWS OR AN OPINION OF COUNSEL  REASONABLY
         SATISFACTORY TO RELIANT HOME WARRANTY CORP.  THAT SUCH  REGISTRATION IS
         NOT REQUIRED.

                       Right to Purchase up to 36,128,286
                            Shares of Common Stock of
                        Reliant Home Warranty Corporation
                   (subject to adjustment as provided herein)

                          COMMON STOCK PURCHASE WARRANT

No. _________________                                  Issue Date:  June 8, 2006

         RELIANT HOME WARRANTY  CORPORATION,  a corporation  organized under the
laws of the State of Florida (the  "Company"),  hereby certifies that, for value
received,  LAURUS  MASTER FUND,  LTD., or assigns (the  "Holder"),  is entitled,
subject to the terms set forth below,  to purchase  from the Company (as defined
herein) from and after the Issue Date of this Warrant,  up to  36,128,286  fully
paid and nonassessable shares of Common Stock (as hereinafter  defined),  $0.001
par value per share,  at the  applicable  Exercise  Price per share (as  defined
below).  The  number  and  character  of such  shares  of  Common  Stock and the
applicable  Exercise  Price per share are  subject  to  adjustment  as  provided
herein.

         As used  herein  the  following  terms,  unless the  context  otherwise
requires, have the following respective meanings:

         (a)  The term "Company" shall include Reliant Home Warranty Corporation
              and any  person or  entity  which  shall  succeed,  or assume  the
              obligations of, Reliant Home Warranty Corporation hereunder.

         (b)  The term "Common Stock"  includes (i) the Company's  Common Stock,
              par value  $0.001 per share;  and (ii) any other  securities  into
              which  or  for  which  any  of  the  securities  described  in the
              preceding  clause (i) may be converted or exchanged  pursuant to a
              plan of recapitalization,  reorganization,  merger, sale of assets
              or otherwise.

         (c)  The term "Other Securities" refers to any stock (other than Common
              Stock) and other  securities  of the  Company or any other  person
              (corporate  or  otherwise)  which the holder of the Warrant at any
              time shall be entitled to receive, or shall have received,  on the
              exercise  of the  Warrant,  in lieu of or in  addition  to  Common
              Stock,  or which at any time shall be  issuable or shall have been
              issued in exchange for or in  replacement of Common Stock or Other
              Securities pursuant to Section 4 or otherwise.

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         (d)  The "Exercise Price" applicable under this Warrant shall be $0.001
              per share.

1.       Exercise of Warrant.
         --------------------

1.1      Number of Shares Issuable upon Exercise. From and after the date hereof
through and  including  the  Expiration  Date,  the Holder  shall be entitled to
receive,  upon  exercise of this Warrant in whole or in part,  by delivery of an
original  or fax copy of an  exercise  notice  in the form  attached  hereto  as
Exhibit  A (the  "Exercise  Notice"),  shares of  Common  Stock of the  Company,
subject to adjustment pursuant to Section 4.

1.2      Fair Market Value.  For purposes  hereof,  the "Fair Market Value" of a
share of Common Stock as of a particular date (the  "Determination  Date") shall
mean:

         (a)  If the  Company's  Common  Stock is traded on the  American  Stock
              Exchange or another national exchange or is quoted on the National
              or Capital  Market of The Nasdaq Stock  Market,  Inc.  ("Nasdaq"),
              then the closing or last sale price,  respectively,  reported  for
              the last  business day  immediately  preceding  the  Determination
              Date.

         (b)  If the Company's  Common Stock is not traded on the American Stock
              Exchange  or  another  national  exchange  or on the Nasdaq but is
              traded on the NASD Over The Counter Bulletin Board,  then the mean
              of the average of the closing bid and asked  prices  reported  for
              the last  business day  immediately  preceding  the  Determination
              Date.

         (c)  Except as provided in clause (d) below,  if the  Company's  Common
              Stock is not publicly  traded,  then as the Holder and the Company
              agree or in the absence of agreement by  arbitration in accordance
              with  the  rules  then  in  effect  of  the  American  Arbitration
              Association,  before a single arbitrator to be chosen from a panel
              of persons  qualified  by  education  and  training to pass on the
              matter to be decided.

         (d)  If  the   Determination   Date  is  the  date  of  a  liquidation,
              dissolution   or  winding  up,  or  any  event   deemed  to  be  a
              liquidation,  dissolution  or winding up pursuant to the Company's
              charter,  then all  amounts to be payable  per share to holders of
              the  Common  Stock  pursuant  to the  charter in the event of such
              liquidation,  dissolution or winding up, plus all other amounts to
              be payable per share in respect of the Common Stock in liquidation
              under the  charter,  assuming  for the purposes of this clause (d)
              that all of the shares of Common Stock then issuable upon exercise
              of the Warrant are outstanding at the Determination Date.

1.3      Company  Acknowledgment.  The Company will, at the time of the exercise
of this Warrant,  upon the request of the holder hereof  acknowledge  in writing
its  continuing  obligation  to afford to such  holder  any rights to which such
holder shall continue to be entitled after such exercise in accordance  with the

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provisions of this  Warrant.  If the holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such holder any such rights.

1.4      Trustee for Warrant Holders.  In the event that a bank or trust company
shall have been appointed as trustee for the holders of this Warrant pursuant to
Subsection  3.2, such bank or trust company shall have all the powers and duties
of a warrant agent (as hereinafter  described) and shall accept, in its own name
for the  account of the  Company  or such  successor  person as may be  entitled
thereto, all amounts otherwise payable to the Company or such successor,  as the
case may be, on exercise of this Warrant pursuant to this Section 1.

2.      Procedure for Exercise.
        -----------------------

2.1      Delivery of Stock Certificates,  Etc., on Exercise.  The Company agrees
that the shares of Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the Holder as the record  owner of such  shares as of the
close of business on the date on which this Warrant shall have been  surrendered
and payment made for such shares in accordance herewith.  As soon as practicable
after the exercise of this  Warrant in full or in part,  and in any event within
three (3) business days  thereafter,  the Company at its expense  (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and  delivered to the Holder,  or as such Holder (upon payment by such Holder
of any  applicable  transfer  taxes) may direct in  compliance  with  applicable
securities  laws,  a  certificate  or  certificates  for the  number of duly and
validly issued,  fully paid and  nonassessable  shares of Common Stock (or Other
Securities)  to which such Holder shall be entitled on such  exercise,  plus, in
lieu of any fractional  share to which such holder would  otherwise be entitled,
cash equal to such fraction multiplied by the then Fair Market Value of one full
share, together with any other stock or other securities and property (including
cash,  where  applicable)  to which such Holder is entitled  upon such  exercise
pursuant to Section 1 or otherwise.

2.2      Exercise.
         --------

         (a)  Payment may be made either (i) in cash or by certified or official
              bank  check  payable  to the  order  of the  Company  equal to the
              applicable  aggregate  Exercise  Price,  (ii) by  delivery of this
              Warrant,  or shares of Common Stock and/or Common Stock receivable
              upon exercise of this Warrant in  accordance  with the formula set
              forth in subsection (b) below, or (iii) by a combination of any of
              the foregoing  methods,  for the number of Common Shares specified
              in such Exercise Notice (as such exercise number shall be adjusted
              to reflect any  adjustment in the total number of shares of Common
              Stock  issuable to the Holder per the terms of this  Warrant)  and
              the Holder  shall  thereupon  be entitled to receive the number of
              duly  authorized,  validly issued,  fully-paid and  non-assessable
              shares  of  Common  Stock  (or  Other  Securities)  determined  as
              provided herein.

         (b)  Notwithstanding any provisions herein to the contrary, if the Fair
              Market  Value of one share of  Common  Stock is  greater  than the
              Exercise Price (at the date of calculation as set forth below), in
              lieu of exercising  this Warrant for cash, the Holder may elect to
              receive  shares equal to the value (as  determined  below) of this
              Warrant (or the portion  thereof being  exercised) by surrender of

                                      -3-
<PAGE>
                                                                  EXECUTION COPY
                                                                  --------------

              this Warrant at the principal  office of the Company together with
              the properly  endorsed  Exercise Notice in which event the Company
              shall  issue to the  Holder a number of  shares  of  Common  Stock
              computed using the following formula:

                  X =      Y(A-B)
                           ------
                              A

                  Where

                  X =      the number of shares of Common Stock to be issued  to
                           the Holder

                  Y        = the  number of shares of Common  Stock  purchasable
                           under  this  Warrant  or, if only a  portion  of this
                           Warrant  is  being  exercised,  the  portion  of this
                           Warrant   being   exercised  (at  the  date  of  such
                           calculation)

                  A        = the Fair Market Value of one share of the Company's
                           Common Stock (at the date of such calculation)

                  B =      the Exercise Price per share (as adjusted to the date
                           of such calculation)

3.       Effect of Reorganization, Etc.; Adjustment of Exercise Price.

3.1      Reorganization, Consolidation, Merger, Etc. In case at any time or from
time to time,  the Company shall (a) effect a  reorganization,  (b)  consolidate
with or merge into any other person, or (c) transfer all or substantially all of
its  properties  or  assets to any other  person  under any plan or  arrangement
contemplating  the  dissolution  of the Company,  then,  in each such case, as a
condition  to the  consummation  of  such a  transaction,  proper  and  adequate
provision  shall be made by the  Company  whereby the  Holder,  on the  exercise
hereof as  provided  in  Section 1 at any time  after the  consummation  of such
reorganization,   consolidation   or  merger  or  the  effective  date  of  such
dissolution,  as the case may be, shall receive, in lieu of the Common Stock (or
Other  Securities)  issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property  (including cash) to
which  such  Holder  would  have  been  entitled  upon such  consummation  or in
connection  with such  dissolution,  as the case may be, if such  Holder  had so
exercised  this  Warrant,  immediately  prior  thereto,  all  subject to further
adjustment thereafter as provided in Section 4.

3.2      Dissolution.  In the event of any dissolution of the Company  following
the  transfer  of all or  substantially  all of its  properties  or assets,  the
Company,  concurrently  with any  distributions  made to  holders  of its Common
Stock,  shall at its expense  deliver or cause to be delivered to the Holder the
stock and other  securities  and property  (including  cash,  where  applicable)
receivable  by the Holder  pursuant to Section  3.1,  or, if the Holder shall so
instruct the  Company,  to a bank or trust  company  specified by the Holder and
having its principal office in New York, NY as trustee for the Holder.

3.3      Continuation of Terms. Upon any reorganization,  consolidation,  merger
or transfer (and any  dissolution  following  any transfer)  referred to in this
Section 3, this  Warrant  shall  continue in full force and effect and the terms
hereof  shall be  applicable  to the  shares of stock and other  securities  and
property  receivable on the exercise of this Warrant after the  consummation  of
such   reorganization,   consolidation  or  merger  or  the  effective  date  of

                                      -4-
<PAGE>
                                                                  EXECUTION COPY
                                                                  --------------

dissolution  following  any such  transfer,  as the case  may be,  and  shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer,  the person acquiring all or substantially all of the
properties  or assets of the  Company,  whether  or not such  person  shall have
expressly  assumed  the terms of this  Warrant as  provided in Section 4. In the
event  this  Warrant  does not  continue  in full  force  and  effect  after the
consummation of the transactions described in this Section 3, then the Company's
securities and property  (including  cash, where  applicable)  receivable by the
Holder will be delivered to the Holder or the Trustee as contemplated by Section
3.2.

4.       Extraordinary  Events  Regarding  Common  Stock.  In the event that the
Company shall (a) issue  additional  shares of the Common Stock as a dividend or
other  distribution on outstanding Common Stock or any preferred stock issued by
the Company,  (b) subdivide its outstanding  shares of Common Stock, (c) combine
its  outstanding  shares of the Common Stock into a smaller  number of shares of
the  Common  Stock,  then,  in  each  such  event,  the  Exercise  Price  shall,
simultaneously  with the happening of such event, be adjusted by multiplying the
then Exercise Price by a fraction, the numerator of which shall be the number of
shares of  Common  Stock  outstanding  immediately  prior to such  event and the
denominator  of which shall be the number of shares of Common Stock  outstanding
immediately  after such event,  and the product so obtained shall  thereafter be
the Exercise Price then in effect. The Exercise Price, as so adjusted,  shall be
readjusted  in the same manner upon the  happening  of any  successive  event or
events  described herein in this Section 4. The number of shares of Common Stock
that the holder shall thereafter,  on the exercise hereof as provided in Section
1,  be  entitled  to  receive  shall  be  adjusted  to a  number  determined  by
multiplying  the number of shares of Common Stock that would  otherwise (but for
the  provisions of this Section 4) be issuable on such exercise by a fraction of
which (a) the numerator is the Exercise Price that would  otherwise (but for the
provisions  of this  Section 4) be in  effect,  and (b) the  denominator  is the
Exercise  Price in effect on the date of such exercise  (taking into account the
provisions of this Section 4). Notwithstanding the foregoing,  in no event shall
the Exercise Price be less than the par value of the Common Stock.

5.       Certificate  as to  Adjustments.  In  each  case of any  adjustment  or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of this  Warrant,  the Company at its expense will  promptly  cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or  readjustment  in  accordance  with the terms of this  Warrant  and prepare a
certificate  setting forth such adjustment or readjustment and showing in detail
the facts upon which such  adjustment  or  readjustment  is based,  including  a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold,  (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding,  and (c) the Exercise Price
and the number of shares of Common  Stock to be received  upon  exercise of this
Warrant,  in effect  immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant.  The Company will  forthwith
mail a copy of each such  certificate to the holder and any warrant agent of the
Company (appointed pursuant to Section 11 hereof).

6.       Reservation  of Stock,  Etc.,  Issuable on  Exercise  of  Warrant.  The
Company will at all times  reserve and keep  available,  solely for issuance and
delivery  on the  exercise  of this  Warrant,  shares of Common  Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.

                                      -5-
<PAGE>
                                                                  EXECUTION COPY
                                                                  --------------

7.       Assignment;  Exchange of Warrant. Subject to compliance with applicable
securities  laws,  this  Warrant,  and  the  rights  evidenced  hereby,  may  be
transferred  by any  registered  holder hereof (a  "Transferor")  in whole or in
part.  On the  surrender  for exchange of this  Warrant,  with the  Transferor's
endorsement  in  the  form  of  Exhibit  B  attached  hereto  (the   "Transferor
Endorsement  Form") and together with evidence  reasonably  satisfactory  to the
Company  demonstrating  compliance with applicable  securities laws, which shall
include,  without limitation,  a legal opinion from the Transferor's counsel (at
the  Company's  expense)  that such  transfer  is exempt  from the  registration
requirements of applicable securities laws, the Company at its expense (but with
payment by the  Transferor  of any  applicable  transfer  taxes)  will issue and
deliver  to or on the  order of the  Transferor  thereof a new  Warrant  of like
tenor, in the name of the Transferor and/or the transferee(s)  specified in such
Transferor  Endorsement Form (each a "Transferee"),  calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant so surrendered by the Transferor.

8.       Replacement of Warrant. On receipt of evidence reasonably  satisfactory
to the Company of the loss,  theft,  destruction  or  mutilation of this Warrant
and, in the case of any such loss,  theft or  destruction  of this  Warrant,  on
delivery of an indemnity agreement or security  reasonably  satisfactory in form
and amount to the Company or, in the case of any such  mutilation,  on surrender
and  cancellation  of this Warrant,  the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

9.       Registration  Rights. The Holder has been granted certain  registration
rights by the Company. These registration rights are set forth in a Registration
Rights  Agreement  entered  into by the Company and Holder  dated as of the date
hereof,  as the same may be amended,  modified and/or  supplemented from time to
time.

10.      Maximum  Exercise.  Notwithstanding  anything  contained  herein to the
contrary,  the  Holder  shall  not be  entitled  to  exercise  this  Warrant  in
connection  with that number of shares of Common  Stock  which would  exceed the
difference  between  (i) 4.99% of the  issued and  outstanding  shares of Common
Stock and (ii) the number of shares of Common  Stock  beneficially  owned by the
Holder. For purposes of the immediately preceding sentence, beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities  Exchange
Act of 1934,  as  amended,  and  Regulation  13d-3  thereunder.  The  limitation
described in the first  sentence of this Section 10 shall  automatically  become
null and void following notice to the Company upon the occurrence and during the
continuance  of an Event of Default (as  defined in the  Security  and  Purchase
Agreement dated as of the date hereof among the Holder,  the Company and various
subsidiaries of the Company (as amended, modified,  restated and/or supplemented
from time to time, the "Security  Agreement")),  or upon 75 days prior notice to
the Company.

11.      Warrant Agent. The Company may, by written notice to the each Holder of
the Warrant,  appoint an agent for the purpose of issuing Common Stock (or Other
Securities)  on the exercise of this Warrant  pursuant to Section 1,  exchanging
this  Warrant  pursuant to Section 7, and  replacing  this  Warrant  pursuant to
Section 8, or any of the foregoing,  and thereafter any such issuance,  exchange
or replacement, as the case may be, shall be made at such office by such agent.

                                      -6-
<PAGE>
                                                                  EXECUTION COPY
                                                                  --------------

12.      Transfer on the Company's  Books.  Until this Warrant is transferred on
the books of the Company,  the Company may treat the registered holder hereof as
the absolute  owner hereof for all purposes,  notwithstanding  any notice to the
contrary.

13.      Notices,  Etc. All notices and other communications from the Company to
the Holder shall be mailed by first class registered or certified mail,  postage
prepaid, at such address as may have been furnished to the Company in writing by
such Holder or, until any such Holder furnishes to the Company an address,  then
to, and at the address of, the last  Holder who has so  furnished  an address to
the Company.

14.      Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged  or terminated  only by an instrument in writing  signed by the party
against which  enforcement of such change,  waiver,  discharge or termination is
sought.  THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
ANY ACTION BROUGHT  CONCERNING  THE  TRANSACTIONS  CONTEMPLATED  BY THIS WARRANT
SHALL BE  BROUGHT  ONLY IN STATE  COURTS  OF NEW YORK OR IN THE  FEDERAL  COURTS
LOCATED IN THE STATE OF NEW YORK; PROVIDED,  HOWEVER, THAT THE HOLDER MAY CHOOSE
TO WAIVE THIS  PROVISION AND BRING AN ACTION  OUTSIDE THE STATE OF NEW YORK. The
individuals  executing  this Warrant on behalf of the Company agree to submit to
the  jurisdiction  of such courts and waive trial by jury. The prevailing  party
shall be entitled to recover from the other party its reasonable attorneys' fees
and  costs.  In the event  that any  provision  of this  Warrant  is  invalid or
unenforceable  under any applicable  statute or rule of law, then such provision
shall be deemed  inoperative  to the extent that it may conflict  therewith  and
shall be deemed  modified to conform  with such statute or rule of law. Any such
provision  which  may prove  invalid  or  unenforceable  under any law shall not
affect the validity or  enforceability  of any other  provision of this Warrant.
The headings in this Warrant are for purposes of reference  only,  and shall not
limit  or  otherwise  affect  any  of  the  terms  hereof.   The  invalidity  or
unenforceability  of any provision hereof shall in no way affect the validity or
enforceability  of any other provision  hereof.  The Company  acknowledges  that
legal counsel  participated in the  preparation of this Warrant and,  therefore,
stipulates  that the rule of  construction  that  ambiguities are to be resolved
against the drafting  party shall not be applied in the  interpretation  of this
Warrant to favor any party against the other party.

15.      Grant of Irrevocable Proxy.
         ---------------------------

         For good  and  valuable  consideration,  receipt  of  which  is  hereby
acknowledged,  Laurus Master Fund, Ltd., hereby appoints the Company (the "Proxy
Holder"),  with a mailing address at 350 Bay Street, Suite 250, Toronto, ON, M5H
2S6,  with full power of  substitution,  as proxy,  to vote all shares of Common
Stock of the Company,  now or in the future owned by Laurus  Master Fund,  Ltd.,
but solely to the extent issuable upon exercise of this Warrant (the "Shares").

         This proxy is irrevocable  and coupled with an interest.  Upon the sale
or other transfer of the Shares,  in whole or in part, or the assignment of this
Warrant, this proxy shall automatically  terminate (x) with respect to such sold
or  transferred  Shares at the time of such sale  and/or  transfer,  or (y) with
respect to all Shares in the case of an assignment of this Warrant,  at the time
of such  assignment,  in each case,  without any further action  required by any
person.

                                      -7-
<PAGE>
                                                                  EXECUTION COPY
                                                                  --------------

         Laurus Master Fund, Ltd. shall use its best efforts to forward to Proxy
Holder within two (2) business days following Laurus Master Fund, Ltd.'s receipt
thereof,  at the  address  for  Proxy  Holder  set  forth  above,  copies of all
materials  received by Laurus Master Fund, Ltd.  relating,  in each case, to the
solicitation of the vote of shareholders of the Company.

         This proxy  shall  remain in effect  with  respect to the Shares of the
Company during the period commencing on the date hereof and continuing until the
payment  in full of all  obligations  and  liabilities  owing by the  Company to
Laurus  Master  Fund,  Ltd. (as the same may be amended,  restated,  extended or
modified from time to time).

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                             SIGNATURE PAGE FOLLOWS]

                                      -8-
<PAGE>
                                                                  EXECUTION COPY
                                                                  --------------

         IN WITNESS  WHEREOF,  the Company has  executed  this Warrant as of the
date first written above.

                                             RELIANT HOME WARRANTY CORPORATION
WITNESS:                                     By:

                                             Name:

                                             Title:
--------------------------------

                                      -9-
<PAGE>
                                                                  EXECUTION COPY
                                                                  --------------

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise Of Warrant)

TO:      Reliant Home Warranty Corporation

         ---------------------

         ---------------------

Attention:        Chief Financial Officer

         The  undersigned,  pursuant to the provisions set forth in the attached
Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

________          ________ shares of the common stock covered by such warrant;

or

________          the maximum  number of shares of common stock  covered by such
                  warrant pursuant to the cashless exercise  procedure set forth
                  in Section 2.

         The  undersigned  herewith makes payment of the full Exercise Price for
such  shares  at the  price per share  provided  for in such  Warrant,  which is
$___________. Such payment takes the form of (check applicable box or boxes):

________          $__________ in lawful money of the United States; and/or

________          the cancellation of such portion of the attached Warrant as is
                  exercisable  for a total of  _______  shares of  Common  Stock
                  (using a Fair Market  Value of $_______ per share for purposes
                  of this calculation); and/or

________          the  cancellation  of such number of shares of Common Stock as
                  is  necessary,  in  accordance  with the  formula set forth in
                  Section  2.2, to exercise  this  Warrant  with  respect to the
                  maximum number of shares of Common Stock purchasable  pursuant
                  to the cashless exercise procedure set forth in Section 2.

         The  undersigned  requests  that the  certificates  for such  shares be
issued in  the  name of, and delivered to ______________________________________

______________________________________________ whose address is ________________

_______________________________________________________________________________.

         The  undersigned  represents  and warrants that all offers and sales by
the  undersigned of the securities  issuable upon exercise of the within Warrant
shall be made pursuant to  registration of the Common Stock under the Securities
Act of 1933, as amended (the "Securities  Act") or pursuant to an exemption from
registration under the Securities Act.

Dated:     ________________  ___________________________________________________
                             (Signature  must  conform  to  name of   holder  as
                             specified on the face of the Warrant)

                             Address:___________________________________________

                                      -10-
<PAGE>
                                                                  EXECUTION COPY
                                                                  --------------

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                   (To Be Signed Only On Transfer Of Warrant)

         For  value  received,   the  undersigned  hereby  sells,  assigns,  and
transfers  unto the person(s)  named below under the heading  "Transferees"  the
right represented by the within Warrant to purchase the percentage and number of
shares of Common  Stock of  Reliant  Home  Warranty  Corporation  into which the
within Warrant relates specified under the headings "Percentage Transferred" and
"Number Transferred,"  respectively,  opposite the name(s) of such person(s) and
appoints each such person Attorney to transfer its respective right on the books
of Reliant Home  Warranty  Corporation  with full power of  substitution  in the
premises.

<TABLE>
<CAPTION>

<S>                            <C>                  <C>                            <C>
Transferees                    Address              Percentage Transferred         Number Transferred
-----------                    -------              ----------------------         ------------------
</TABLE>

Dated:     ________________  ___________________________________________________
                             (Signature  must  conform  to  name of   holder  as
                             specified on the face of the Warrant)

                             Address:___________________________________________

                             SIGNED IN THE PRESENCE OF:

                             ___________________________________________________
                             (Name)

ACCEPTED AND AGREED:

[TRANSFEREE]

_________________________________________
(Name)

                                      -11-
<PAGE>

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