Document:

Exhibit 4.4

 

PLACEMENT
AGENT AGREEMENT

November 18, 2005

Sanders Morris Harris Inc.

320 Park Avenue, 17th Floor

New York, NY 10022

Dear Sirs:

            1.         Introductory. 
Home Solutions of America, Inc., a Delaware corporation (the "Company"),
proposes to sell 4,850,000 units (the "Units"), each Unit consisting of
(i) one share of common stock, par value $.001 per share (the "Common Stock"),
of the Company and (ii) one Common Stock purchase warrant (the "Warrants"),
each entitling the holder thereof to purchase 0.20 shares of Common Stock
at $5.50 per share at a purchase price of $5.50 per Unit (the "Offering
Price").  The securities comprising the Units shall at times be referred to
as the "Securities" herein.

            2.         Representations
and Warranties of the Company.  The Company represents, warrants, and
agrees that: 

            (i)         The
representations and warranties of the Company set forth in Section 3 of each of
the Subscription Agreements (as defined below) are true and correct.

            (ii)        The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware, is duly qualified to do business as a
foreign corporation and in good standing in the State of Texas, and has all
requisite right, power, and authority to own or lease its properties, to
conduct its business as described in the Exchange Act Documents (as defined in
the Subscription Agreements), and to execute, deliver, and perform this
Agreement, the Subscription Agreements between the Company and the purchasers
of the Units in the form attached as Exhibit A hereto (the "Subscription
Agreements"), the Registration Rights Agreement in the form attached as Exhibit
B hereto (the "Registration Rights Agreement"), the Escrow Agreement
among the Company, you, and Sterling Bank (the "Escrow Agent") in the
form attached as Exhibit C hereto (the "Escrow Agreement" and
together with the Subscription Agreements and the Registration Rights Agreement,
the "Related Agreements"), to issue and sell the Units, and to carry out
the provisions of this Agreement and the Related Agreements and to carry on its
business as presently conducted. The Company is duly qualified to do business
and in good standing as a foreign corporation in all other jurisdictions in
which its ownership or leasing of properties, or the conduct of its business
requires or may require such qualification except where the failure to be so
qualified would not have a Material Adverse Effect (as defined in the
Subscription Agreements). The Company has complied in all material respects
with all material laws, rules, regulations, applicable to the Company's
business, operations, properties, assets, products, and services, and the
Company is in possession of and operating in compliance with all material
permits, licenses, and other authorization, required to conduct its business as
currently conducted.

            (iii)       All
action required to be taken by the Company necessary for the authorization of
this Agreement and the Related Agreements, the performance of all obligations
of the Company hereunder and thereunder at the Closing, and as a condition to
the due and proper authorization, issuance, sale, and delivery of the Units to
subscribers therefor in accordance with the terms of this Agreement has been,
or prior to the Closing Date will have been, taken. 

            (iv)       Except
as contemplated by this Agreement, or as described in the Exchange Act
Documents or the PPM (as defined in the Subscription Agreements), (a) there is
no commitment by the Company to issue any shares of capital stock,
subscriptions, warrants, options, convertible securities, or other similar
rights to purchase or receive Company securities or to distribute to the
holders of any of its equity securities any evidence of indebtedness, cash, or
other assets, (b) the Company is under no obligation (contingent or otherwise)
to purchase, redeem, or otherwise acquire any of its equity or debt securities
or any interest therein, and (c) to the Company's knowledge there are no voting
trusts or similar agreements, shareholders' agreements, pledge agreements,
buy-sell agreements, rights of first refusal, preemptive rights, or proxies
relating to any securities of the Company.  To the knowledge of the Company, except
as set forth in the Exchange Act Documents or filings with the Commission made
by third parties pursuant to Schedule 13D or 13G or Form 3 or 4, no person
holds of record or beneficially, 5% or more of the outstanding shares of the
capital stock of the Company. All outstanding securities of the Company were
issued in compliance in all material respects with applicable federal and state
securities laws.

            (v)        The
Company is not in violation of its certificate of incorporation or by-laws, or
in default, or with the giving of notice or lapse of time or both, would be in
default, in the performance of any material obligation, agreement, or condition
contained in any lease, license, material contract, indenture, or loan
agreement or in any bond, debenture, note, or any other evidence of
indebtedness, except for such defaults as would not have a Material Adverse Effect. 
The execution, delivery, and performance of this Agreement and the Related
Agreements, the incurrence of the obligations herein, the issuance, sale, and
delivery of the Units, and the consummation of the transactions contemplated
herein, have been duly authorized by all requisite corporate action on the part
of the Company and (a) do not and will not conflict with the Company's
certificate of incorporation or by-laws,  (b) do not and will not, with or
without the passage of time or the giving of notice, result in the breach of,
or constitute a default, cause the acceleration of performance, or require any
consent under, or result in the creation of any lien, charge or encumbrance
upon any property assets of the Company pursuant to, any material loan
agreement, mortgage, deed of trust, indenture, or other instrument or agreement
to which the Company is a party or by which the Company or its properties are
bound, except such consents as have been obtained as of the date hereof or to
the extent that the same have been, or prior to the Closing Date will be,
waived or cured, and as may be required by the American Stock Exchange, that the Company
undertakes to obtain as promptly as practicable, or
(c) do not and will not result in the violation of any law, statute, order,
rule, administrative regulation, or decree of any court, or governmental agency
or body having jurisdiction over the Company or its properties.

            (vi)       Except
as disclosed in the Exchange Act Documents, there are no preemptive rights or
other rights to subscribe for or to purchase, or any restriction upon the
voting or transfer of, the Units pursuant to the Company's certificate of
incorporation, by-laws, or any agreement or other instrument to which the
Company is a party.  The issuance of the Units is not subject to any preemptive
right of any shareholder of the Company or to any right of first refusal or
other right in favor of any person. 

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            (vii)      This
Agreement has been duly executed and delivered by or on behalf of the Company
and constitutes a legal, valid, and binding obligation of the Company
enforceable in accordance with its terms, except to the extent that its
enforceability is limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, or other laws of general application relating to or
affecting the enforcement of creditors' rights generally, and (b) laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies and except as enforceability of the indemnity and
contribution provisions contained in Section 7 may be limited by applicable law
or principles of public policy.

            (viii)      The
Escrow Agreement has been duly executed and delivered by or on behalf of the
Company and constitutes a legal, valid, and binding obligation of the Company
enforceable in accordance with its terms, except as such enforceability may be
limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium,
or other laws of general application relating to or affecting enforcement of
creditors' rights generally and (b) laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies.

            (ix)       Except
as would not have a Material Adverse Effect, the Company has filed, or caused
to be filed, on a timely basis, all tax returns (including payroll,
unemployment, and other taxes related to its employees and independent
contractors) required to be filed with any Governmental Body and has paid or
caused to be paid all taxes, levies, assessments, tariffs, duties or other fees
imposed, assessed, or collected by any federal, state, municipal, or other
governmental department, commission, board, bureau, agency, authority or
instrumentality, domestic or foreign (each, a "Governmental Body"), that
have become due and payable pursuant to those tax returns or otherwise except
taxes being disputed by the Company in good faith or with respect to which the
Company has set aside sufficient reserves and that are not delinquent. No
deficiency assessment with respect to or proposed adjustment of any of the
Company's Federal, state, municipal, or local tax returns has occurred or is
threatened. There has been no tax lien imposed by any Governmental Body
outstanding against the Company's assets or properties, except the lien for
current taxes not yet due. The charges, accruals, and reserves on the books of
the Company with respect to taxes for all fiscal periods are adequate, in the
opinion of the Company, and the Company does not know of any actual or proposed
tax assessment for any fiscal period or of any basis therefor against which
adequate reserves have not been set up.  The Company has not been advised that
any Federal income tax return of the Company has been, or will be, examined or
audited by the Internal Revenue Service.

            (x)        The
Common Stock is registered pursuant to Section 12(b) of the Securities Exchange
Act of 1934, amended (the "Exchange Act") and is quoted with the symbol "HOM"
on the American Stock Exchange.

(xi)       The Company has not during the past six months offered or
sold any security by or for the Company that is of the same or a similar class
as the Units, other than offers of securities made solely to accredited
investors or otherwise under an employee benefit plan as defined in Rule 405
under the Securities Act of 1933, as amended (the "Act"), securities
issued in connection with acquisitions, or other securities that will not
invalidate the exemption from registration relied on to offer and sell the Units.

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(xii)      Neither the Company nor any
of its subsidiaries, executive officers or directors is or has been subject to
any order, judgment, or decree of any court of competent jurisdiction
temporarily, preliminarily, or permanently enjoining such person for failure to
comply with Rule 503 under Regulation D.

                        (xiii)      (i)
The execution, delivery, and performance by the Company of this Agreement and
the Related Agreements and (ii) the offer and sale of the Units require no
consent of, action by or in respect of, or filing with, any person or
Governmental Body other than those consents that have been obtained and filings
that have been made pursuant to applicable state securities laws and post-sale
filings pursuant to applicable state and federal securities laws, which the
Company undertakes to file within the applicable time periods.

                        (xiv)     There
are no brokers, representatives or other persons who have an interest in
commissions or compensation payable by the Company in connection with the
transactions contemplated hereby other than you.

            3.         Representations
and Warranties of the Placement Agent.   You represent and warrant to, and
agree with, the Company that: 

            (i)         You
have been duly organized and are validly existing and in good standing as a
corporation under the laws of the State of Texas, with power and authority
(corporate and other) to perform your obligations under this Agreement and the
Escrow Agreement; you are a broker-dealer registered and in good standing under
the Exchange Act and under the securities or Blue Sky laws of each state in which
the Units are being offered or sold by you, and you are a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD");
you are in possession of and operating in compliance with all authorizations,
licenses, permits, consents, certificates, and orders required for the
performance of your duties under this Agreement and the Escrow Agreement, and
your performance of your duties hereunder and thereunder will be in compliance
with all applicable laws, including state securities and Blue Sky laws. 

            (ii)        There
are no legal or governmental proceedings pending to which you are a party or of
which any of your properties is the subject or, to your knowledge, threatened, that,
if determined adversely to you, would individually or in the aggregate
materially and adversely affect your ability to perform your obligations under
this Agreement or the Escrow Agreement. 

            (iii)       No
consent, approval, authorization or order of any court or governmental
authority or agency is required for the performance by you of your obligations
under this Agreement, except such as may be required by the NASD or under
Regulation D or state securities or Blue Sky laws.

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            (iv)       This
Agreement has been duly and validly executed and delivered by or on behalf of
you and constitutes a legal, valid, and binding obligation of you enforceable
in accordance with its terms, except to the extent that its enforceability is
limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium,
or other laws of general application relating to or affecting the enforcement
of creditors' rights generally, and (b) laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies and except
as enforceability of the indemnity and contribution provisions contained in
Section 7 may be limited by applicable law or principles of public policy.

            (v)        The
Escrow Agreement has been duly and validly executed and delivered by or on
behalf of you and constitutes a legal, valid, and binding obligation of you
enforceable in accordance with its terms, except as such enforceability may be
limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium,
or other laws of general application relating to or affecting enforcement of
creditors' rights generally and (b) laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies.

            4.         Offering
and Sale of the Units.  (a) On the basis of the representations,
warranties, and covenants herein contained, but subject to the terms and upon
the conditions herein set forth, you are hereby appointed placement agent of
the Company on an exclusive basis during the term herein specified (the "Offering
Period") for the purpose of finding subscribers for the Units on a best-efforts
basis for the account of the Company at the Offering Price through a private
offering (the "Offering") to an unlimited number of "accredited
investors" (as such term is defined in Rule 501 of Regulation D) ("Accredited
Investors") pursuant to and in accordance with the Act. Subject to the
performance by the Company of all its obligations to be performed hereunder,
and to the completeness and accuracy of all the representations and warranties
contained herein, you hereby accept such agency and agree on the terms and
conditions herein set forth to use your best efforts during the Offering Period
to find subscribers for Units at the Offering Price.  Your agency hereunder,
which is terminable as provided in Section 11, shall terminate at 11:59 p.m., New
York time, on December 16,
2005; provided, however, that such termination
date (the "Termination Date") may be extended by mutual written
agreement of the parties until December 30, 2005. 

            (b)        Each Investor desiring
to purchase Shares will be required to: (i) complete, execute, and deliver to
you an executed copy of (a) a Subscription Agreement between such Investor and
the Company, and (b) an Investor Questionnaire, in the form attached as Exhibit
D hereto, and (ii) deliver to the Escrow Agent payment for such
subscription in the form of a check payable to the order of "Home Solutions of
America - Escrow Account" or a wire transfer of immediately available funds in
the amount that such Investor desires to purchase as provided in the Escrow
Agreement or as otherwise directed by you.  Any payment you receive that does
not conform to this requirement will be returned to an Investor by the end of
the next business day following receipt.  In the event funds are received by
you, you shall hold all such Subscription Agreements and Investor
Questionnaires for safekeeping and immediately forward all funds delivered to
you to the Escrow Agent. The Escrow Agent, upon receipt of such funds, will
hold the funds in an escrow account pursuant to the Escrow Agreement. You shall
promptly forward each executed Subscription Agreement received to the Company
for acceptance or rejection together with a schedule setting forth the name and
address of each subscriber and the amount received from each subscriber. The
Company shall notify you of such acceptance or rejection within ten days of
receipt of a Subscription Agreement.

            (c)        In the event
that acceptable subscriptions for 4,850,000 Units at the Offering Price (the "Minimum
Units") shall not have been received and accepted by the Company by the
Termination Date, all funds received from subscribers (if any) shall be
returned in full, and your agency and this Agreement shall terminate without
obligation on your part or on the part of the Company.

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            (d)        If, by the
Termination Date or such earlier time as may be agreed upon by you and the
Company, you have received subscriptions for the Minimum Units and such
subscriptions have been accepted by the Company (in its sole discretion) and
the other conditions to Closing the Offering of Units have been satisfied, you
shall promptly notify the Company in writing of the aggregate amount of Units
for which you have received subscriptions (the "Notice Date").  Payment
of the purchase price for the Units for which you have found subscribers, and
delivery, with respect to each subscriber for Units, of a copy of a
Subscription Agreement signed by such subscriber (the "Closing"), shall
then be made at such place and time as shall be agreed upon between you and the
Company, no later than the fifth full business day after the Notice Date (the "Closing
Date").

            (e)        As
compensation for your services, the Company shall pay you a cash commission
with respect to subscriptions received by you as to which the payments and
deliveries provided for in this Section 4 are made at the Closing Date equal to
7.0% of the purchase price of each Unit purchased at the Closing.  Such
commission shall be paid to you on the Closing Date by bank wire transfer
payable in immediately available funds.  In addition, the Company agrees to
reimburse you for your reasonable expenses in accordance with Section 6. 

            (f)        Neither you,
the Company, nor any Additional Agent (as hereinafter defined) shall, directly
or indirectly, pay or award any finder's fees, commissions or other compensation
to any person engaged by a potential investor for investment advice as an
inducement to such advisor to advise the purchase of the Units; provided,
however, that normal sales commissions payable to a registered
broker-dealer or other properly licensed person for selling the Units shall not
be prohibited hereby.

            (g)        You will
prepare and file such statements and reports as are or may be required to
enable the Units to be qualified for sale under the securities laws of such
jurisdictions as you may designate.

            (h)        As additional
compensation, the Company will issue to you on the Closing Date a Common Stock
purchase warrant (the "Placement Agent Warrant") in substantially the
form attached hereto as Exhibit E granting you the right to purchase from
the Company for a period commencing on the Closing Date and ending five years
after the Closing Date, a number of shares of Common Stock equal to .00625
shares of Common Stock for each $1 of gross proceeds from the sale of Units in
the Offering (but in no event more than 125,000 shares), at a per share
purchase price equal to the Offering Price.

            (i)         In
connection with the Offering you will, to the extent within your control,
conduct the Offering in accordance with the applicable provisions of the Act and
Regulation D so as to preserve for the Company the exemption provided by Rule
506 of Regulation D. You agree not to offer or sell the Units by means of (a)
any means of general solicitation, including any advertisement, article,
notice, or other communication published in any newspaper, magazine, or similar
media or broadcast over television or radio or (b) any seminar or meeting,
whose attendees have been invited by any general solicitation or general
advertising.  Prior to the sale of any of the Units, you will have reasonable
grounds to believe, and in fact believe, that each subscriber for Units is an
Accredited Investor. You agree not to disclose any material nonpublic
information regarding the Company to any subscriber except as such disclosure
may be permitted pursuant to Regulation FD and is agreed to in advance by the
Company.

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            (j)         In
connection with the performance of your obligations under this Agreement, you
may engage, for the account of the Company, the services of one or more broker‐dealers
("Additional Agents"), who are members of the NASD and who are
acceptable to the Company, and, as compensation for their services, shall pay
to such Additional Agents an amount to be negotiated between you and such
Additional Agents.  Such amount will be paid to the Additional Agents by you
only out of the commissions received by you in respect of sales of Units as
described in paragraph (e) of this Section 4, and the Company shall have no
obligation to any Additional Agents respecting any such payment.  The
arrangements, if any, between the Company, you, and any Additional Agent shall
be set forth in an Additional Agent Agreement ("Additional Agent Agreement"),
which shall provide, among other things, that such Additional Agent shall be
deemed to have agreed to the matters set forth herein as if the Additional
Agent were a signatory hereof.  Nothing contained in this Agreement or in the
Additional Agent Agreement shall be deemed to constitute the Additional Agents,
if any, as your agents, and you shall not be liable to the Company in respect
of the performance by the Additional Agents, if any, of any representations,
warranties or covenants of such Additional Agents contained herein or in the
Additional Agent Agreement.

            5.         Covenants
and Agreements of the Company.  The Company covenants and agrees with you
that:

            (a)        Except as
contemplated or described in this Agreement or in a public disclosure made
prior to the date hereof, it will not, prior to the Closing Date, incur any
material liability or obligation, direct or contingent, or enter into any
material transaction, in each case, other than in the ordinary course of
business. It will not, prior to the Closing Date, declare or pay any dividend
on the Common Stock or make any distribution on the Common Stock payable to
shareholders of record on a date prior to the Closing Date.

            (b)        It will
cooperate with you to enable the Securities to be qualified for sale under the
securities laws of such jurisdictions as you may designate, subject to approval
by the Company, and at your request will make such applications and furnish
such information as may be required of it for that purpose; provided,
however, that you and the Company shall first determine whether an
exemption from registration other than the Uniform Limited Offering Exemption
(ULOE) or a similar exemption is available in each such jurisdiction and the
Company shall not be required to qualify to do business or to file a general
consent to service of process in any such jurisdiction.  It will, from time to
time, prepare and file such statements and reports as are or may be required to
continue such qualifications in effect for so long a period as you may
reasonably request for the distribution of the Securities.

            (c)        It will make
available to you and each purchaser of Units at a reasonable time prior to the
Closing Date the opportunity to ask questions and receive answers concerning
the terms and conditions of the Offering and to obtain any additional
information that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to verify the accuracy of any information
in the Exchange Act Documents or otherwise furnished by the Company to you or
any purchaser of Units; provided, however, that the Company shall not be
required to disclose any material nonpublic information to any purchaser of Units.

            (d)        It will file
all reports required by Regulation D with regard to sales of the Securities and
use of the proceeds therefrom; provided, however, that you provide all
relevant information to the Company in writing as to purchasers of the Securities
required for such filings.

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            (e)        It will not
offer or sell any securities of the Company that are of the same or a similar
class as the Units during the Offering Period or for a period of six months
after the Closing Date, other than those offers or sales of securities under an
employee benefit plan as defined in Rule 405 under the Act, in connection with
options, warrants, or convertible securities outstanding as of the Closing
Date, or in connection with an acquisition of assets or another business by the
Company if such offering will be integrated with the Offering of the Units
pursuant to this Agreement for purposes of the exemptions under Regulation D,
so as to invalidate the exemption from registration relied on to offer and sell
the Units.

            (f)        For a period
of at least 18 months following the Closing Date, the Company will maintain
the registration of its Common Stock under Section 12 of the Exchange Act so
long as the Exchange Act requires it to be so registered, will comply in all
respects with its reporting and filing obligations under the Exchange Act, and
will not take any action or file any document (whether or not permitted by the
Exchange Act or the rules thereunder) to terminate or suspend such registration
or to terminate or suspend its reporting and filing obligations under said Act
unless required to do so by the Exchange Act.

            (g)        The Company shall prepare
and file with the American Stock Exchange an additional shares listing
application covering the Common Stock and take all steps necessary to cause
such shares to be approved for listing as soon as possible.

            (h)        For a period
of at least 18 months following the Closing Date, the Company will use its commercially
reasonable best efforts (i) to timely file all reports required to be filed by
the Company after the date hereof under the Securities Act and the Exchange Act
(including the reports pursuant to Section 13(a) or 15(d) of the Exchange Act
referred to in subparagraph (c)(1) of Rule 144) and the rules and regulations
adopted by the Commission thereunder), (ii) if the Company is not required to
file reports pursuant to such sections, it will prepare and furnish to the
purchasers of Units and make publicly available in accordance with Rule 144(c)
such information as is required for the purchasers to sell the Securities under
Rule 144, and (iii) to take such further action as any holder of Units may
reasonably request, all to the extent required from time to time to enable the
purchasers to sell Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144, including causing
its attorneys to issue and deliver any appropriate legal opinion required to
permit a purchaser to sell Securities under Rule 144 upon receipt of
appropriate documentation relating to such sale. 

            (i)         No later than the fourth
trading day following the Closing Date, the Company shall file a Current Report
on Form 8-K disclosing the consummation of the transactions contemplated by
this Agreement and attaching copies of the related agreements, and disclosing
all material non-public information that has been communicated to the Investors
by or on behalf of the Company in connection with the transactions contemplated
by this Agreement and the Related Agreements.  In addition, the Company shall
make such other filings and notices in the manner and time required by the Securities
and Exchange Commission in connection with the consummation of the transactions
contemplated by this Agreement and the Related Agreements.  

            6.         Payment of
Expenses.  If this Agreement becomes effective and the transactions
contemplated by this Agreement are consummated, the Company will pay (a) all
reasonable expenses incident to the performance of the obligations of the
Company under this Agreement and (b) all of your reasonable out-of-pocket
expenses (including fees and disbursements of your counsel, travel, and related
expenses incurred in connection with this Agreement and the Offering) incurred
in connection with this Agreement, preparing to market, and marketing the Units.

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            7.         Indemnification
and Contribution.  (a) The Company agrees to indemnify and hold harmless
you, each Additional Agent, and each person, if any, who controls you or such
Additional Agent within the meaning of the Act, against any losses, claims,
damages, liabilities, or expenses (including, unless the Company elects to
assume the defense as hereinafter provided, the reasonable cost of
investigating and defending against any claims therefor and counsel fees
incurred in connection therewith), joint or several, that (1) are based on the
ground or alleged ground that any information furnished to you by the Company
or its agents and furnished by you to purchasers of the Units includes or
allegedly includes an untrue statement of material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (2) arise out of the
Company's breach of a representation or warranty or covenant or agreement
contained in this Agreement; provided, however, that in no case is the
Company to be liable with respect to any claims made against you, such
Additional Agent, or any such controlling person unless you, such Additional
Agent, or such controlling person shall have notified the Company in writing within
a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon you or such
controlling person, but failure to notify the Company of any such claim shall
not relieve it from any liability that it may have to you, such Additional
Agent, or such controlling person otherwise than on account of the indemnity
agreement contained in this paragraph.  The Company will be entitled to
participate at its own expense in the defense, or if it so elects, to assume
the defense of any suit brought to enforce any such liability, but, if the
Company elects to assume the defense, such defense shall be conducted by
counsel chosen by it and reasonably acceptable to you.  In the event the
Company elects to assume the defense of any such suit and retain such counsel,
you, such Additional Agent, or such controlling person or persons, defendant or
defendants in the suit, may retain additional counsel but shall bear the fees
and expenses of such counsel unless (i) the Company shall have specifically
authorized the retaining of such counsel or (ii) the parties to such suit
include you, such Additional Agent, or such controlling person or persons, and
the Company and you, such Additional Agent, or such controlling person or
persons have been advised by counsel that one or more material legal defenses
may be available to you, such Additional Agent, or them that may not be
available to the Company in which case the Company shall not be entitled to
assume the defense of such suit notwithstanding its obligation to bear the
reasonable fees and expenses of such counsel.  In no event shall the Company be
liable for the fees and expenses of more than one counsel for all indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances.  The Company shall not be required to indemnify any person for
any settlement of any such claim effected without the Company's consent, which
shall not be unreasonably withheld. The Company shall not, without your
consent, consent to the entry of any judgment or enter into any settlement that
does not include as an unconditional term thereof, the giving by the claimant
or plaintiff to such indemnified party of a release from all liability in
respect of such claim or litigation.  This indemnification obligation will be
in addition to any primary liability that the Company might otherwise have.

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            (b)        You and each Additional
Agent agree to indemnify and hold harmless the Company, each of the Company's
officers, directors, and each other person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages,
liabilities, or expenses (including, unless you or such Additional Agent elect
to assume the defense, the reasonable cost of investigating and defending
against any claims therefor and counsel fees incurred in connection therewith),
joint or several, that (i) arise out of any acts or omissions by you or any Additional
Agent, or any purchaser of Units that cause the offering to involve a public
offering under the Act or your failure to be properly licensed to sell the Units
or (ii) arise out of your breach of a representation or warranty or covenant or
agreement contained in this Agreement; provided, however, that in no
case are you or any Additional Agent to be liable with respect to any claims
made against the Company or any such person against whom the action is brought
unless the Company or such person shall have notified you or such Additional
Agent in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon the Company or such person, but failure to notify you or such Additional
Agent of such claim shall not relieve you or such Additional Agent from any
liability that you or such Additional Agent may have to the Company or such
person otherwise than on account of the indemnity agreement contained in this
paragraph.  You or such Additional Agent shall be entitled to participate at
each of their expense in the defense, or if you or such Additional Agent so
elect, to assume the defense of any suit brought to enforce any such liability,
but, if you or such Additional Agent elect to assume the defense, counsel
chosen by you or such Additional Agent and reasonably acceptable to the Company
shall conduct such defense.  In the event that you or such Additional Agent
elect to assume the defense of any such suit and retain such counsel, the
Company, said officers and directors and any person or persons, defendant or
defendants in the suit, may retain additional counsel but shall bear the fees
and expenses of such counsel unless (i) you shall have specifically authorized
the retaining of such counsel or (ii) the parties to such suit include you,
such Additional Agent, or such controlling person or persons, and the Company
and you, such Additional Agent, or such controlling person or persons have been
advised by counsel that one or more material legal defenses may be available to
the Company that may not be available to you or them in which case you shall
not be entitled to assume the defense of such suit notwithstanding its
obligation to bear the reasonable fees and expenses of such counsel.  You or
such Additional Agent shall not be liable to indemnify any person for any
settlement of any such claim effected without your or such Additional Agent's
consent which consent shall not be unreasonably withheld.  This indemnification
obligation will be in addition to any primary liability that you or any Additional
Agent might otherwise have.

            (c)        If the
indemnification provided for in this Section 7 is unavailable, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate
to reflect not only the relative benefits received by the Company on one hand
and you and the Additional Agents, if any, on the other from the offering, but
also the relative fault of the Company on the one hand and you and the
Additional Agents, if any, on the other in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities, or
expenses (or actions in respect thereof), as well as any other relevant
equitable considerations.  The relative benefits received by the Company on the
one hand and you and the Additional Agents, if any, on the other, shall be
deemed to be in the same proportion as the total net proceeds from the Offering
(before deducting expenses) received by the Company, bear to the total selling
commissions received by you.  The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, you, or an
Additional Agent, the party's relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and whether a
party breached a representation or warranty or covenant or agreement contained
in this Agreement.  The Company and you agree that it would not be just and
equitable if contribution were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to above.  The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to above shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such claim.  Notwithstanding the
provisions of this paragraph (c), you shall not be required to contribute any
amount in excess the commissions that you receive pursuant to Section 4(d) less
the amount of any damages that you have otherwise been required to pay by
reason of an untrue or alleged untrue statement or omission or alleged omission
by the Company.  No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

10

 

            8.         Survival
of Indemnities, Representations, Warranties, etc.  The respective
representations and warranties of you and the Company as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of you, the Company, or any of the officers or directors of the Company
or any controlling person, and shall survive delivery of and payment for the Units.

            9.         Conditions
of Your Obligations.  Your obligations hereunder are subject to the
accuracy in all material respects at and (except as otherwise stated herein) as
of the date hereof and at and as of the Closing Date, of the representations
and warranties made herein by the Company, to the compliance in all material
respects at and as of the Closing Date by the Company with its covenants and
agreements herein contained and other provisions hereof to be satisfied at or
prior to the Closing Date and to the following additional conditions:

            (a)        You shall not
have stated in writing prior to the Closing Date to the Company that any
Exchange Act Document, or any amendment or supplement thereto contains an
untrue statement of fact that, in your opinion, is material, or omits to state
a fact that, in your opinion, is necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

            (b)        You shall
have received a certificate, dated the Closing Date, on behalf of the Company
by the Chief Executive Officer and the Chief Financial Officer of the Company
to the effect that:

            (i)         The
representations and warranties of the Company in this Agreement are true and
correct in all material respects at and as of the Closing Date, and the Company
has complied in all material respects with all the agreements and satisfied in
all material respects all the conditions on its part to be performed or
satisfied at or prior to the Closing Date; 

            (ii)        Between
the date of this Agreement and the Closing Date, no litigation has been
instituted or, to the knowledge of the Company, threatened against the Company
of a character required to be disclosed in an Exchange Act Document under Item
103 of Regulation S-K that has not been so disclosed to you; and

            (iii)       Between
the date of this Agreement and the Closing Date, there has not been any Material
Adverse Effect.

            (c)        The Company shall have
entered into the Related Agreements.

            (d)        You shall have received from Hallett &
Perrin, P.C., counsel to the Company, an
opinion, dated the Closing Date, with respect to such matters as you may
reasonably request.

            (e)        You
shall have received such other documentation reasonably requested by you to
effect the transactions contemplated herein.

11

            If any of the conditions
provided for in this Section 9 shall not have been satisfied when and as
required by this Agreement, this Agreement may be terminated by you by
notifying the Company of such termination in writing at or prior to the Closing
Date, but you shall be entitled to waive any of such conditions.

            10.       Effective
Date.  This Agreement shall become effective at 11:00 A.M., New York time, on the date hereof (the "Effective Time").

           
11.      Termination. 
In the event of any termination of this Agreement under this or any other
provision of this Agreement, there shall be no liability of any party to this
Agreement to any other party, other than as provided in Sections 6, 7, and 8
and this Section 11. 

                This Agreement may be terminated after the Effective
Time (a) by the Company for any reason by notice to you and (b) by you by
notice to the Company (i) if at or prior to the Closing Date trading in
securities on the New York Stock Exchange, the American Stock Exchange, or the
Nasdaq Stock Market (collectively, the "Exchanges") shall have been
suspended for longer than four consecutive hours or minimum or maximum prices shall
have been established on either such exchange or stock market, or a banking
moratorium shall have been declared by Texas, New York or United States
authorities (unless such suspension is made pending completion of the sale of
the Units, at which time, such suspension will be lifted); (ii) if at or prior
to the Closing Date there shall have been a material escalation of hostilities
between the United States and any foreign country (other than Iraq), or any
other material insurrection or armed conflict involving the United States that,
in your judgment, after consultation with the Company, makes it impracticable
or inadvisable to offer or sell the Units; or (iii) if there shall be any
litigation or regulatory action, pending or threatened against or involving the
Company, that, in your judgment, makes it impracticable or inadvisable to offer
or deliver the Units on the terms contemplated by this Agreement.

            If, and only if, the Company
terminates this Agreement after it becomes effective for any reason (other than
your material failure to comply with your obligations under this Agreement or
material breach of your representations and warranties) or the Offering fails
to close because of the Company's breach of any representations or warranties
contained in this Agreement or the Company's failure to fulfill its covenants
and agreements contained in this Agreement, the Company shall pay you your
actual out-of-pocket expenses incurred as provided in Section 6.

            12.        Agreement
Concerning Disclosure of Information. You agree to treat confidentially any
material nonpublic information that is furnished to you (or to parties acting
on your behalf) by or on behalf of the Company (the "Information").  You
agree that you will use the Information only for the purposes related to a
determination of your willingness to act as exclusive selling agent pursuant to
this Agreement, and that the Information will be kept confidential by you and
your partners, members, managers, officers, directors, employees, agents, and
other affiliates (collectively, the "Affiliates"), and your attorneys
and accountants (collectively, the "Professionals"), and that you, such
Affiliates, or Professionals will not disclose the Information to any investor
or other person; provided, however, that the Information may be
disclosed to (a) Affiliates and Professionals who need to know such Information
for the purpose of evaluating or providing services in connection with the your
and your clients' investment in the Company; provided, however, such persons
are advised of and agree to maintain the confidential nature of such
information, (b) to any federal or state regulatory agency and their employees,
agents, and attorneys (collectively, "Regulators") for the purpose of
making any filings with Regulators if  disclosure of such Information is
required by law (provided, however, that you advise  the Company in
writing of the Information to be so disclosed prior to such filing), (c) any
other person to which the Company consents in writing prior to any such disclosure.

12

            In the event that you
are requested or required (by oral questions, documents, subpoena, civil
investigation, demand, interrogatories, request for information, or other
similar process) to disclose to any person or entity any information supplied
to you, your Affiliates, or your Professionals in the course of their dealings
with the Company or their respective representatives, you agree that you will
provide the Company with prompt notice of such request(s) within a reasonable
time prior to such disclosure so that the Company may seek an appropriate
protective order and/or waiver of compliance with the provisions of this
Agreement.  It is further agreed that, if a protective order is not obtained,
or a waiver is not granted hereunder, and you are nonetheless, in the written
opinion of counsel, compelled to disclose information concerning the Company to
any tribunal or else stand liable for contempt or suffer the censure or
penalty, you may disclose such information to such tribunal without liability
hereunder.  Prior to making such disclosure, you shall deliver a written
opinion of your counsel to the Company's counsel that disclosure is compelled
by law.  You will exercise your best efforts to obtain a protective order or
other reliable assurance that confidential treatment will be accorded the
Information.

            13.        Notices.  All notices or other communications that are required or permitted under this Agreement shall be in writing and sufficient if delivered by hand, by facsimile transmission, by registered or certified mail, postage pre-paid, by electronic mail, or by courier or overnight carrier, to the persons at the addresses set forth below (or at such other address as may be provided hereunder), and shall be deemed to have been delivered as of the date so delivered:

 

	 	If to the Company: 	

Home Solutions of America, Inc.

1500 Dragon, Suite B

Dallas, Texas 75207

Attention: Rick J. O'Brien,
Chief Financial Officer

Facsimile:  (214) 333-9435

e-mail:
Rick@HomCorp.com

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 	

With a copy to:

Hallett & Perrin, P.C.

2001 Bryan Street,
Suite 3900

Dallas, Texas 
75201

Attention: Melissa
H. Youngblood, Esq.

Facsimile: 
(214) 922-4142

e-mail: myoungblood@hallettperrin.com

		
	 	 	

 

		
	 	If to you:	

Sanders Morris Harris Inc.

320 Park Avenue, 17th Floor

New York, NY  10022

Attention:  Michael Fitzgerald, Managing
Director

Facsimile:  (212) 317-2710

e-mail: Michael.Fitzgerald@smhgroup.com

                                   

13

	 	With a copy to: 	

Day, Berry & Howard LLP

One East Putnam Avenue

Greenwich, CT 06830

Attention: R. Scott Beach

Facsimile:  (203) 862-7801

e-mail: rsbeach@dbh.com

 

or at such other address as any party shall have
furnished to the other parties in writing.

            14.        Successors. 
This Agreement shall inure to the benefit of and be binding upon you, and Additional
Agents, the Company, and their respective successors and legal representatives,
except that neither the Company nor you may assign or transfer any of its or
your rights or obligations under this Agreement without the prior written
consent of the other. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person other than the persons
mentioned in the preceding sentence any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company contained in
this Agreement shall also be for the benefit of the person or persons, if any,
who control you or any Additional agents within the meaning of Section 15 of
the Act, and your and any Additional Agent's indemnities shall also be for the
benefit of each officer and director of the Company and the person or persons,
if any, who control the Company within the meaning of Section 15 of the Act.

            15.        Applicable
Law.  This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.  Any judicial proceeding brought against
either of the parties to this agreement or any dispute arising out of this
Agreement or any matter related hereto shall be brought in the courts of the
State of New York, New York County, or the State of Texas, Harris County, or in the
United States District Court for the Southern District of New York or the
Southern District of Texas and, by its execution and delivery of this
agreement, each party to this Agreement accepts the exclusive jurisdiction of
such courts. The foregoing consent to jurisdiction shall not be deemed to
confer rights on any person other than the parties to this Agreement. The
prevailing party in any such litigation shall be entitled to receive from the
losing party or parties all costs and expenses, including reasonable attorney
fees, incurred by the prevailing party. 

[Signatures
on the following page]

 

 

14

If the
foregoing correctly sets forth our understanding please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
letter and your acceptance shall constitute a binding agreement between us.

Very
truly yours,

HOME
SOLUTIONS OF AMERICA, INC.

By_________________________________

Name:______________________________

Title:_______________________________

Accepted and delivered in New York, New York

as of the date first above written.

SANDERS MORRIS HARRIS INC.

By:____________________________

Name:_________________________

Title:__________________________

                                                                                                

 

 

 

 

15

Exhibit A

 

[Form of
Subscription Agreement]

 

 

 

 

 

 

 

 

Exhibit B

 

[Form of
Registration Rights Agreement]

 

 

   

 

 

 

Exhibit C

 

[Form of
Escrow Agreement]

 

 

 

 

 

 

 

 

Exhibit D

 

[Form of Investor
Questionnaire]

 

 

 

 

 

Exhibit E

 

[Form of Placement
Agent Warrant]Exhibit 4.5

 

 

THIS
WARRANT AND THE SECURITIES ISSUABLE UPON ANY EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS (1) EITHER (A) A
REGISTRATION WITH RESPECT THERETO SHALL BE EFFECTIVE UNDER THE SECURITIES ACT,
OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT IS
AVAILABLE, AND (2) THERE SHALL HAVE BEEN COMPLIANCE WITH ALL APPLICABLE STATE
SECURITIES LAWS OR "BLUE SKY" LAWS. 

 

W-P1

 WARRANT TO PURCHASE 125,000 SHARES 

OF 

COMMON STOCK 

OF

HOME SOLUTIONS OF AMERICA, INC.

Void after November
30, 2010

This Warrant is issued to Sanders Morris
Harris Inc., or its registered assigns (the "Holder"), by Home Solutions
of America, Inc., a Delaware corporation (the "Company"), on
November 30,
2005 (the "Warrant Issue Date").  This Warrant is issued pursuant to the
terms of a Placement Agent Agreement, dated November 18, 2005 (the "Placement
Agent Agreement"), by and among the Company and the Holder.  All
capitalized terms not otherwise defined herein shall have the meaning ascribed
thereto in the Placement Agent Agreement.

1.                              
Number of Shares Subject to
Warrant; Exercise Price.  Subject to
the terms and conditions hereinafter set forth, the Holder is entitled, upon
surrender of this Warrant at the principal office of the Company, to purchase
from the Company, at a per share price equal to the Exercise Price, the Warrant
Stock.  

For purposes of this Warrant: (A) "Warrant Stock"
shall mean the number of Shares purchasable upon exercise of this Warrant, as
reflected on the face of this Warrant, subject to adjustment as described in Section
7; (B) "Shares" shall mean fully paid and non-assessable Common Stock of
the Company; and (C) "Exercise Price" means $5.50 per share, subject to
change as described in Section 7. 

2.                              
Exercise Period.  Except as otherwise provided for herein, this
Warrant shall be exercisable, in whole or in part, at any time and from time to
time after the Warrant Issue Date and ending at 5:00 p.m. Eastern time on the
fifth anniversary of the Warrant Issue Date (the "Expiration Date"). 
Notwithstanding the foregoing, if this Warrant is outstanding and exercisable
for any Shares as of the time of a Sale (as defined below), unless otherwise
agreed to in writing by the Holder, this Warrant shall be deemed automatically
exercised immediately prior to such Sale in accordance with the net exercise
provisions of this Warrant set forth in Section 4(b).

 

3.                              
Notice of Sale.  The Company shall provide written notice to the
Holder not less than ten days prior to the consummation of a Sale.  A "Sale"
shall mean a sale of all or substantially all of the assets or shares of the
Company or a merger, reorganization or consolidation of the Company in which
the owners of the outstanding voting power of the Company, immediately prior to
such transaction own, directly or indirectly, less than 51% of the voting power
of the resulting or surviving entity immediately upon completion of such
transaction.

4.                              
Method of Exercise.

(a)                           
Cash Exercise.  While this Warrant remains outstanding and
exercisable in accordance with Section 2, the purchase rights hereby
represented may be exercised in whole or in part, at the election of the
Holder, by the tender of the Notice of Exercise in substantially the form
attached hereto as Exhibit A and the surrender of this Warrant at the
principal office of the Company and by the payment to the Company in cash, by
check, cancellation of indebtedness or other form of payment acceptable to the
Company, of an amount equal to the then applicable Exercise Price multiplied by
the number of Shares then being purchased.

(b)                           
Net Exercise.  In lieu of exercising this Warrant pursuant to Section
4(a), the Holder may elect to receive, without the payment by the Holder of any
additional consideration, Shares equal to the value of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with an executed Notice of Exercise, in
substantially the form attached hereto, in which event the Company shall issue
to the holder hereof a number of Shares computed using the following formula:

                                                                        Y (A - B)

                                                            X =              A

            Where:             X =       The
number of Shares to be issued to the Holder pursuant to this net exercise;

                                    Y =      The
number of Shares in respect of which the net exercise election under this Section
4(b) is made;

                                    A =      The fair
market value of one Share at the time the net exercise election is made; and

                                    B =       The
Exercise Price.

For purposes of this Section 4(b), the fair market
value of a Share as of a particular date shall be the closing sale price of the
Shares on the trading date immediately prior to the date of exercise as quoted
on the American Stock Exchange or any United States automated quotation system
or national securities exchange on which the Shares are then quoted or traded,
as applicable; provided, however, that if the Shares are not then so
quoted or traded, the fair market value of the Shares shall be determined by
the Board of Directors of the Company in its reasonable good faith discretion. 

5.                              
Certificates for Shares.  Upon the exercise of the purchase rights evidenced
by this Warrant, one or more certificates for the number of Shares so purchased
shall be issued as soon as practicable thereafter (with appropriate restrictive
legends, as applicable).  In the event of a partial exercise of the Warrant, a
new warrant or warrants (dated the date hereof) of like tenor shall be issued,
calling in the aggregate on the face or faces thereof for the number of Shares
equal (without giving effect to any adjustment therein) to the number of Shares
called for on the face of this Warrant minus the number of such Shares
purchased by the Holder upon such exercise as provided in Sections 4(a) and 4(b).

2

6.                              
Issuance of Shares.  The Company hereby covenants that it will take all necessary
actions to duly and validly reserve the necessary number of Shares for issuance
hereunder.  The Company covenants that the Shares, when issued pursuant to the
exercise of this Warrant, will be duly and validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issuance thereof.  

7.                              
Adjustment of Exercise Price
and Number of Shares.  The number of
and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:

(a)                           
Subdivisions, Combinations and
Other Issuances.  If the Company
shall at any time after the date hereof and prior to the exercise or expiration
of this Warrant subdivide the Shares by split-up or otherwise, or combine or
issue additional Shares as a dividend with respect to its Shares, the number of
Shares issuable on the exercise of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or stock dividend, or
proportionately decreased in the case of a combination.  Appropriate
adjustments shall also be made to the Exercise Price, provided, however,
that the aggregate exercise price payable hereunder for the total number of
Shares purchasable under this Warrant (as adjusted) shall remain the same.  Any
adjustment under this Section 7(a) shall become effective at the close of
business on the date the subdivision or combination becomes effective, or as of
the record date of such dividend, or in the event that no record date is fixed,
upon the making of such dividend.

(b)                           
Reclassification,
Reorganization and Consolidation.  In
the event of any corporate reclassification, capital reorganization,
consolidation, spin-off or change in the Shares of the Company, other than as a
result of a subdivision, combination or dividend provided for in Section 7(a),
then, as a condition of such event, lawful provision shall be made, and duly
executed documents evidencing the same from the Company or its successor shall
be delivered, to the Holder, so that the Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a total price
equal to that payable upon the exercise of this Warrant, the kind and amount of
shares of stock and/or other securities and property receivable in connection
with such event by a holder holding the same number of shares for which this
Warrant could have been exercised immediately prior to such event.  In any such
case appropriate provisions shall be made with respect to the rights and
interest of the Holder so that the provisions hereof shall thereafter be
applicable with respect to any shares of stock or other securities and property
deliverable upon exercise hereof, and appropriate adjustments shall be made to
the Exercise Price, provided, however, that the aggregate exercise price
payable hereunder for the total number of Shares purchasable under this Warrant
(as adjusted) shall remain the same. 

(c)                           
Notice of Adjustment.  When any adjustment is required to be made to the
Exercise Price or in the number or kind of Shares purchasable upon exercise of
the Warrant, the Company shall promptly notify the Holder of such event and of
the adjusted Exercise Price or number of Shares or other securities or property
thereafter purchasable upon exercise of this Warrant.

8.                              
Assumption of Warrant.  If at any time while this Warrant, or any portion
thereof, is outstanding and unexpired there shall be a merger, reorganization
or consolidation of the Company or any other similar transaction that does not
constitute a Sale, then, as a part of such transaction, lawful provision shall
be made so that the Holder shall thereafter be entitled to receive upon
exercise of this Warrant, during the period specified herein and upon payment
of the aggregate Exercise Price then in effect, the number of shares of stock
or other securities or property of the successor corporation resulting from
such transaction that a holder holding the Shares deliverable upon exercise of
this Warrant would have been entitled to receive in such transaction if this
Warrant had been exercised immediately before such transaction.

3

9.                            
No Fractional Shares.  No fractional Shares shall be issued upon the
exercise of this Warrant, but in lieu of such fractional Shares the Company
shall make a cash payment therefor on the basis of the fair market value of a
Share determined in accordance with Section 4.

10.                          
No Stockholder Rights.  Prior to exercise of this Warrant, the Holder shall
not be entitled to any rights of a stockholder with respect to the Shares,
including (without limitation) the right to vote such Shares, receive dividends
or other distributions thereon, exercise preemptive rights or be notified of stockholder
meetings, and such Holder shall not be entitled to any notice or other
communication concerning the business or affairs of the Company.  However,
nothing in this Section 10 shall limit the right of the Holder to be provided
the notices required under this Warrant.

11.                          
Compliance With Securities Act;
Transferability of Warrant or Shares.

(a)                           
Compliance With Securities Act.  The Holder, by acceptance hereof, agrees that this
Warrant, and the Shares issuable upon exercise of this Warrant, are being
acquired for investment and that such Holder will not offer, sell or otherwise
dispose of this Warrant, or any Shares issuable upon exercise of this Warrant,
except under circumstances that will not result in a violation of the United
States Securities Act of 1933, as amended (the "Securities Act"), or any
applicable state securities laws.  This Warrant and all Shares issued upon
exercise of this Warrant (unless registered under the Securities Act and any
applicable state securities laws) shall be stamped or imprinted with a legend
in substantially the following form:

"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS (1)
EITHER (A) A REGISTRATION WITH RESPECT THERETO SHALL BE EFFECTIVE UNDER THE
SECURITIES ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT IS AVAILABLE, AND (2) THERE SHALL HAVE BEEN COMPLIANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS OR "BLUE SKY" LAWS.  

(b)                           
Transferability.  Subject to compliance with applicable federal and
state securities laws (and, with respect to the rights under the related Registration
Rights Agreement (as defined in the Placement Agent Agreement), subject to
Section 7 of the Registration Rights Agreement), this Warrant and all rights
hereunder are transferable in whole or in part by the Holder to any person or
entity upon written notice to the Company.  The transfer shall be recorded on
the books of the Company upon the surrender of this Warrant, properly endorsed
for transfer by delivery of an Assignment Form in substantially the form
attached hereto as Exhibit B, to the Company at the address set
forth in Section 15, and the payment to the Company of all transfer taxes
and other governmental charges imposed on such transfer.  In the event of a
partial transfer, the Company shall issue to the holders one or more
appropriate new warrants.

4

12.                          
Restricted Securities.  The Holder understands that this Warrant, and the
Shares issuable upon exercise of this Warrant, will not be registered at the
time of their issuance under the Securities Act for the reason that the sale
provided for in this Agreement is exempt pursuant to Section 4(2) of the
Securities Act based on the representations of the Holder set forth herein.  The
Holder represents that it is experienced in evaluating companies such as the
Company, has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its investment, and has the
ability to suffer the total loss of the investment.  The Holder further
represents that it has had the opportunity to ask questions of and receive
answers from the Company concerning the terms and conditions of this Warrant,
the business of the Company, and to obtain additional information to such
Holder's satisfaction.  The Holder further represents that it is an "accredited
investor" within the meaning of Regulation D under the Securities Act as
presently in effect.  The Holder further represents that this Warrant is being
acquired for the account of the Holder for investment only and not with a view
to, or with any intention of, a distribution or resale thereof, in whole or in
part, or the grant of any participation therein.

13.                          
Successors and Assigns.  The terms and provisions of this Warrant shall
inure to the benefit of, and be binding upon, the Company and the Holder hereof
and their respective successors and assigns, except as limited herein.

14.                          
Amendments and Waivers.  Any term of this Warrant may be amended, and the
observance of any term of this Warrant may be waived (either generally or in a
particular instance and either retroactively or prospectively), upon the
written consent of the Company and the Holder.

15.                          
Notices.  All notices required under this Warrant shall be
deemed to have been given or made for all purposes (i) upon personal delivery,
(ii) upon confirmation receipt that the communication was successfully sent to
the applicable number if sent by facsimile, (iii) one day after being sent,
when sent by professional overnight courier service, or (iv) five days after
posting when sent by registered or certified mail.  Notices to the Company
shall be sent to the address of the Company set forth below (or at such other
place as the Company shall notify the Holder hereof in writing) and notices to
the Holder shall be sent to the address of the Holder set forth on the
signature page hereto (or at such other place as the Holder shall notify the
Company hereof in writing):

            

	 	To the Company: 	

Home Solutions of America, Inc.

1500 Dragon, Suite B

Dallas, Texas 75207

Attention: Rick J. O'Brien,
Chief Financial Officer

Facsimile:  (214) 333-9435

e-mail:
Rick@HomCorp.com

	 	 
	 	 
	 	 
	 	 
	 	 
	 	With a Copy to: 	

Hallett & Perrin, P.C.

2001 Bryan Street,
Suite 3900

Dallas, Texas 
75201

Attention: Melissa
H. Youngblood, Esq.

Facsimile: 
(214) 922-4142

e-mail: myoungblood@hallettperrin.com

	 	 
	 	 

            16.        Captions. 
The section and subsection headings of this Warrant are inserted for
convenience only and shall not constitute a part of this Warrant in construing
or interpreting any provision hereof.

            17.          Governing Law.  This
Warrant shall be governed by the laws of the state of Delaware, without regard
to the choice or conflict of laws principles thereof.

[Signatures on following pages]

 

 

5

IN WITNESS WHEREOF, the undersigned have caused this Warrant to be duly
executed as of the date first set forth above.

                                                            HOME
SOLUTIONS OF AMERICA, INC.

                                                            By:                                                                              

                                                            Name: 

                                                            Title:  

 

                                                            HOLDER

                                                            SANDERS
MORRIS HARRIS INC.

In
the presence of :

 

 

_________________________                      By:                                                                              

Witness                                                            Name: 

                                                                        Title:

Address:

Sanders Morris Harris Inc.

320 Park Avenue, 17th Floor

New York, NY  10022

Attention:  Michael Fitzgerald,
Managing Director

Facsimile:  (212) 317-2710

e-mail:
Michael.Fitzgerald@smhgroup.com

 

 

 

 

 

6

Exhibit A

NOTICE OF EXERCISE

To: 
Home Solutions of America, Inc.

                                    The
undersigned hereby elects to [check applicable subsection]:

                                    (a)        Purchase                       Shares
(as defined in the attached Warrant) pursuant to the terms of the attached
Warrant and payment of the Exercise Price per Share required under such Warrant
accompanies this notice;

                                    OR

                                    (b)        Exercise the attached Warrant
for all of the Shares in whole but not in part purchasable under the Warrant
pursuant to the net exercise provisions of Section 4 of such Warrant.

The
undersigned hereby represents and warrants that the undersigned is acquiring
such shares for its own account for investment purposes only, and not for
resale or with a view to distribution of such shares or any part thereof.

Date:_______________________                  HOLDER:

                                                                        SANDERS
MORRIS HARRIS INC.

                                                                        By:                                                                              

                                                                              Name: 

                                                                              Title: 

                                                                              Address: 

Name
in which Shares should be registered:        _____________________________________________

7

Exhibit B

ASSIGNMENT FORM

TO:      Home Solutions of
America, Inc.

The
undersigned hereby assigns and transfers unto _____________________________ of
__________________________________________________________________________________
   

(Please
typewrite or print in block letters) the right to purchase ____________ Shares
(as defined in the attached Warrant) subject to the Warrant, dated as of ____________,
2005, by and between Home Solutions of America, Inc. and the undersigned (the
"Warrant").

This
assignment complies with the provisions of Section 11 of the Warrant and is
accompanied by funds sufficient to pay all applicable transfer taxes.

Date:_______________________                  SANDERS
MORRIS HARRIS INC.

                                                                        By:                                                                   

                                                                       

(Print
Name of Signatory)

                                                                       

(Title
of Signatory)

8

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