Document:

Exhibit 10.4

 

FIRST AMENDMENT TO

2001 STOCK PLAN

This
First Amendment (the "First Amendment") to the 2001 Stock Plan
(the "Plan") of Home Solutions of America, Inc., a Delaware
corporation (the "Company"), is dated as of May 20, 2003.

WHEREAS,
on June 14, 2001, the Company's stockholders approved the Plan;

WHEREAS,
on May 20, 2003, at the Company's 2003 Annual Stockholders' Meeting, upon the
recommendation of the Company's Board of Directors, the Company's stockholders approved
amending the Plan to increase the number of shares available for grant thereunder, as evidenced by this First Amendment.

NOW
THEREFORE, the Company's stockholders have agreed as follows:

1.         In
Section 3 of the Plan, entitled "Stock Subject to the Plan", the number
"2,000,000" is hereby deleted and replaced with the number "3,000,000."

2.
        Except as expressly amended hereby, the Plan remains in full force and
effect.  Capitalized terms that are not defined herein shall have the same
meaning assigned to them in the Plan.

IN
WITNESS WHEREOF, the Secretary of the Company has set his hand hereto as of the date
set forth above, to evidence the approval by the Company's stockholders of this
First Amendment.

 

  	 	

/s/ R. ANDREW WHITE

      
	 	

R. Andrew White, SecretaryExhibit10.20

 

 EXECUTIVE
EMPLOYMENT AGREEMENT

This Executive
Employment Agreement (this "Agreement") is made and entered into as of
July 31, 2003 (the "Effective Date"), by and among  Fiber-Seal Systems,
L.P., a Texas limited partnership ("FIBER-SEAL"), , Home Solutions of
America, Inc., a Delaware corporation (the "Parent") (FIBER-SEAL and
Parent are referred to herein together as the "Employer"), and Rick J.
O'Brien, an individual resident of the State of Texas (the "Executive").

WITNESSETH

WHEREAS,
the Executive has certain skills, experience, and abilities that may be
valuable to the success of the Employer's operations and future profitability;

WHEREAS,
the Employer desires to employ and retain the services of the Executive as a
full-time employee in the positions of President of FIBER-SEAL and Vice
President of Parent, and the Executive desires to work for and be employed by
FIBER-SEAL and Parent in such positions; and

WHEREAS, the
Employer and the Executive desire to set forth the terms and conditions
pursuant to which the Executive will be employed by the Employer.

NOW,
THEREFORE, in consideration of the foregoing premises and of the mutual
covenants and undertakings contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties to this Agreement hereby agree as follows:

Article 1:          EMPLOYMENT
TERM AND DUTIES

1.01     Employment. 
The Employer hereby employs the Executive, and the Executive hereby accepts
employment by the Employer, upon the terms and conditions set forth in this
Agreement.

1.02     Term. 
Unless earlier terminated as herein provided, the Executive's employment with
the Employer pursuant to this Agreement shall commence on the Effective Date
and shall end on the final day of the Term (as defined in this Section 1.02). 
For purposes of this Agreement, the "Term" shall mean a period of time
commencing on the Effective Date and continuing until July 31, 2006 (the "Expiration Date").

1.03     Duties
and Services.  The Executive will be employed as the President of
FIBER-SEAL and Vice President of Parent in Dallas, Texas, and will have such
duties and perform such services as are customary with such positions, or as
otherwise requested by management officials senior in authority to the Executive. 
The Executive will devote at least 75% of his business time, attention, skill,
and energy exclusively to the business of the Employer.

Article 2:          COMPENSATION

2.01     Salary.
Subject to the provisions of Article 4 of this Agreement that relate to
compensation of the Executive following the termination of the Employment
Period (as defined in Article 8 of this Agreement), the Executive will be paid
an annual base salary of $120,000 (such amount, as it may be increased from
time to time, is hereinafter referred to as "Salary") for the duration
of the Term.  The Employer shall withhold from each installment of the Salary
all applicable federal, state, and local income and other payroll taxes.  The Board of Directors of the Parents will consider annually, whether or not to
increase the salary of the Executive.

2.02     Benefits. 
For the duration of the Employment Period and as otherwise set forth herein,
the Executive and his dependents (if applicable), will be permitted to participate
in such pension, bonus, health insurance, disability income insurance, and
other employee benefit plans of the Employer (collectively, "Benefits")
that may be in effect from time to time to the extent the Executive and his
dependents are eligible for participation under the terms of such plans.  

2.03     Stock
Options.  Upon the execution of this Agreement and the stock option
agreement in the form attached hereto as Exhibit A (the "Stock Option
Agreement"), the Executive shall receive a stock option to purchase 250,000
shares of common stock, $.001 par value, of the Parent, at an exercise price of
$2.00 per share, vested over a three-year period, subject to the terms and
conditions contained within the Stock Option Agreement.  

Article
3:          FACILITIES AND EXPENSES

The
Executive will use the office space, equipment, supplies, and such other
facilities, property, and personnel as are currently being provided by the
Employer for such purposes to perform his duties under this Agreement.  The
Employer will reimburse the Executive for reasonable expenses incurred by the
Executive in the performance of his duties in accordance with the Employer's
employment policies in effect from time to time; provided, however, that the
Executive must file written expense reports with respect to such expenses, in
accordance with the Employer's employment policies, before the Executive may
receive such reimbursement.

Article
4:          TERMINATION

4.01     Termination of Employment Period.

(a)        Death of the Executive.  The Employment
Period shall terminate immediately and automatically upon the death of the
Executive.

(b)        Termination by the Employer.  The
Employer may terminate the Employment Period (i) immediately upon the delivery
of a Notice of Termination (as defined in Section 4.01(d) of this Agreement) by
the Employer to the Executive setting forth the facts that indicate that a
determination has been made that the Executive has a Disability in accordance
with Section 4.02 of this Agreement; (ii) immediately upon delivery of a Notice
of Termination by the Employer to the Executive setting forth the facts that
indicate that an event constituting Cause (as defined in Section 4.03 of this
Agreement) has occurred, or on such later date as may be set forth in such
Notice of Termination; or (iii) at any time without Cause effective as of the
30th day following the delivery of a Notice of Termination by the Employer to
the Executive, or on such later date as may be set forth in such Notice of
Termination.

 

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(c)        Termination by the Executive.  The
Executive may terminate the Employment Period (i) immediately upon delivery of
a Notice of Termination by the Executive to the Employer setting forth facts
that indicate that an event constituting Good Reason (as defined in Section
4.04 of this Agreement) has occurred within the 30 days immediately prior to
the date of delivery of such Notice of Termination, or (ii) immediately upon
his resignation for any reason other than Good Reason.

                        (d)        Notice
of Termination.  For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice (delivered in accordance with
Section 7.06 herein) that indicates the specific termination provision in this
Agreement upon which the person intending to terminate the Employment Period is
relying and sets forth in reasonable detail the facts and circumstances that
provide a basis for termination of the Employment Period under such termination
provision. 

4.02     Definition of "Disability."  For purposes
of this Agreement, the Executive will be deemed to have a "Disability"
under any of the following conditions: (a) for physical or mental reasons, the
Executive is unable to render and perform substantially and continuously the
Executive's duties and services as required by this Agreement for 12
consecutive weeks, or for 16 nonconsecutive weeks during any 12-month period,
or (b) the prognosis or recommendations of the Examining Doctor (as defined in
this Section 4.02) are such that the Executive would be unable to render and
perform substantially and continuously the Executive's duties and services
under this Agreement for 12 consecutive weeks, or for 16 nonconsecutive weeks
during any 12-month period.  Upon the request of either party hereto following
written notice to the other, the Disability of the Executive will be determined
by a medical doctor (the "Examining Doctor") who shall be selected as
follows: the Employer and the Executive shall each select a medical doctor, and
those two medical doctors will select a third medical doctor who will be the
Examining Doctor.  The determination of the Examining Doctor as to whether or
not the Executive has a Disability will be binding on both parties hereto.  The
Executive must submit to a reasonable number of examinations by the Examining
Doctor, and the Executive hereby authorizes the disclosure and release to the
Employer of such determination and the results of such examinations.  If the
Executive is not legally competent, the Executive's legal guardian or duly
authorized attorney-in-fact will act in the Executive's stead under this
Section 4.02 for the purposes of submitting the Executive to examinations and
providing any such authorizations of disclosure.

4.03     Definition of "Cause."  For purposes of
this Agreement, "Cause" shall mean: (a) the Executive's material and
persistent failure to perform his duties and services in accordance with this
Agreement, unless such failure is due to the Executive's Disability, or the
Executive's material violation of this Agreement or any material inaccuracy of
any representation or warranty of the Executive contained herein, unless, for
any such failure, violation, or inaccuracy that is capable of being cured, the
Executive cures such failure, violation, or inaccuracy within 10 days of the
Employer providing written notice to the Executive of such failure, violation,
or inaccuracy; (b) the appropriation (or attempted appropriation) of a material
business opportunity of the Employer, including attempting to secure or
securing any personal profit in connection with any transaction entered into on
behalf of the Employer; (c) the theft, fraud, or embezzlement of any of the
real or personal property, tangible or intangible, of the Employer or any of
its Affiliates; (d) the commission of an act of fraud upon, or bad faith or
willful misconduct toward, the Employer or any of its Affiliates; (e) conduct
constituting gross negligence or recklessness, as determined by the  Employer
in its sole but reasonable discretion, that is materially injurious to the
Employer, a customer of the Employer, or any of the Employer's Affiliates; or
(f) the conviction of, the indictment for (or its procedural equivalent), or
the entering of a guilty plea or plea of no contest with respect to, a felony,
the equivalent thereof, or any other crime with respect to which imprisonment
is a possible punishment.  The Board of Directors of Parent shall determine on
behalf of Employer whether "Cause" exists.  "Cause" relating to FIBER-SEAL or
Parent shall constitute "Cause" as to the other company as well.

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4.04     Definition of "Good Reason."  For the
purposes of this Agreement, the phrase "Good Reason" means (i) the
Employer's material breach of this Agreement and the Employer's failure to
remedy such breach within 10 days following the delivery of written notice of
such breach by the Executive to the Employer; (ii) the assignment by the
Employer to the Executive, without the prior written consent of the Executive,
of responsibilities or duties that are substantially different from the duties
and services set forth in Section 1.03 of this Agreement; (iii) the relocation
of the Executive from Dallas, Texas, (iv) demotion in rank, title or duties
(with regard to either FIBER-SEAL or Parent), or (v) the failure of Parent to
secure the capital for the Employer to be reasonably agreed upon by Parent and
the Executive.

4.05     Effect of Termination of Employment Period;
Post-Termination Benefits.  Upon the termination of the Employment Period
in accordance with Section 4.01 of this Agreement, the Executive's obligation
to render to the Employer the services described in Section 1.03 of this
Agreement shall cease (although the Term shall not terminate), and the Employer
shall pay the Executive or, in the event of his death while amounts remain
payable hereunder, his Designated Beneficiary (as defined in this Section
4.05), if at all, as follows:

                       (a)        Termination
by the Employer with Cause or by the Executive without Good Reason. 
If the Employment Period is terminated in accordance with Section 4.01(b)(ii)
or Section 4.01(c)(ii) of this Agreement, the Executive will be entitled to
receive solely that portion of his Salary, payable in accordance with the
Employer's normal payroll practices, accrued by the Executive as of the date of
the termination of the Employment Period; provided, however, that the Executive
shall not receive, and shall not be entitled to receive, any Salary or Benefits
(except for Salary and Benefits accrued prior to the date of the termination of
the Employment Period) during the remainder of the Term following such termination,
or thereafter, except as otherwise required in accordance with federal or state
law or the terms of the plans governing the benefits provided hereunder.

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                       (b)        Termination
by the Employer without Cause or by the Executive with Good Reason.  If the
Employment Period is terminated in accordance with Section 4.01(b)(iii) or
Section 4.01(c)(i) of this Agreement, the Employer shall pay the Executive the
Salary and the Benefits for the lesser of (i) the remainder of the Term, or
(ii) six months from the date of termination.  In addition, Articles 5 and 6 of
this Agreement shall immediately become null and void upon a termination by the
Employer without Cause or by the Executive with Good Reason.

(c)        Termination upon Death or Disability. If
the Employment Period is terminated in accordance with Section 4.01(a) or
Section 4.01(b)(i), the Employer will pay to the disabled Executive or to the
Executive's Designated Beneficiary, as the case may be, in accordance with its
normal payroll practices, the customary installments of the Salary and the
Benefits that were provided to the Executive during the Employment Period, if
applicable, until the earlier of the Expiration Date or the 90th day
following the date of the Executive's death or the date of the determination by
the Examining Doctor that the Executive has a Disability, as the case may be. 
Following such date, the Executive or the Executive's Designated Beneficiary
shall have no right to receive, and the Employer shall have no further
obligation to pay to the Executive, further monthly installments of Salary or
Benefits; provided, however, that, in the event the Executive is determined to
have a Disability, the Employer has maintained the disability income insurance
referred to in Section 2.02 of this Agreement and the Executive is entitled to
benefits under that insurance.  In the event the Employer has not maintained
such disability income insurance, then the Employer shall continue to pay the
Salary and the Benefits to the Executive for the remainder of the Term.  For
the purposes of this Agreement, the Executive's "Designated Beneficiary"
means such individual beneficiary or trust, located at such address as the
Executive may designate by written notice to the Employer from time to time or,
if the Executive fails to give written notice to the Employer of such a
beneficiary, the Executive's estate; provided, however, that, notwithstanding
the preceding sentence, the Employer shall have no duty under any circumstances
to attempt to open an estate on behalf of the Executive, to determine whether
any beneficiary designated by the Executive is alive, to determine the
existence of any trust, to determine whether any person or entity purporting to
act as the Executive's personal representative (or the trustee of a trust
established by the Executive) is duly authorized to act in that capacity, or to
locate or attempt to locate any beneficiary, personal representative, or
trustee.

(d)        Accrued Benefits.  Unless otherwise
required by this Agreement, federal or state law, or the terms of the relevant
plans providing Benefits hereunder, the Executive's accrual of the Benefits
pursuant to Section 2.02 hereof will cease on the date of the termination of
the Employment Period, and the Executive will thereafter be entitled to accrued
Benefits pursuant to such plans only as provided in such plans. 

Article 5:          NON-DISCLOSURE COVENANT

5.01     Confidential Information Defined.  For the
purposes of this Article 5, the phrase "Confidential Information" means
any and all of the following: trade secrets concerning the business and affairs
of the Employer or its Affiliates, product specifications, data, know-how,
formulae, compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current, and planned research
and development, current and planned distribution methods and processes,
customer lists, current and anticipated customer requirements, price lists,
market studies, business plans, computer software and programs (including object
code, machine code, and source code), computer software and database
technologies, systems, structures, and architecture (and related formulae,
compositions, processes, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, and methods); information concerning the
business and affairs of the Employer or its Affiliates (which includes
historical financial statements, financial projections and budgets, historical
and projected sales, capital spending budgets and plans, the names and
backgrounds of key personnel, personnel training techniques and materials,
however documented); and notes, analysis, compilations, studies, summaries, and
other material prepared by or for the Employer or its Affiliates containing or
based, in whole or in part, on any information included in the foregoing. 
Notwithstanding the foregoing, Confidential Information shall not include any
information that the Executive demonstrates was or became generally available
to the public other than as a result of a disclosure of such information by the
Executive or any other person under a duty to keep such information
confidential.  

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5.02     Acknowledgment by the Executive.  The
Executive acknowledges that (a) during the Employment Period and as part of his
employment, the Executive will be afforded access to Confidential Information
that the Employer has devoted substantial time, effort, and resources to
develop and compile; (b) public disclosure of such Confidential Information
would have an adverse effect on the Employer and its business; (c) the Employer
would not disclose such information to the Executive, nor employ or continue to
employ the Executive without the agreements and covenants set forth in this
Article 5; and (d) the provisions of this Article 5 are reasonable and
necessary to prevent the improper use or disclosure of Confidential
Information. 

5.03     Maintaining Confidential Information.  In
consideration of the compensation and benefits to be paid or provided to the
Executive by the Employer under this Agreement and the acknowledgments set
forth above, the Executive, during the Employment Period, the Term, and at all
times thereafter, agrees and covenants as follows:

(a)        Employer Information.  The Executive will
hold in strictest confidence the Confidential Information and will not disclose
it to any Person (defined below) except with the specific prior written consent
of the Employer or as may be required by court order, law, government agencies
with which the Employer deals in the ordinary course of its business, or except
as otherwise expressly permitted by the terms of this Agreement.  Any trade
secrets of the Employer will be entitled to all of the protections and benefits
afforded under applicable laws.  If any information that the Employer deems to
be a trade secret is ruled by a court of competent jurisdiction not to be a
trade secret, such information will, nevertheless, be considered Confidential
Information for purposes of this Agreement.  The Executive hereby waives any
requirement that the Employer submit proof of the economic value of any trade
secret or post a bond or other security.  The Executive will not remove from
the Employer's premises or record (regardless of the media) any Confidential
Information of the Employer or its Affiliates, except to the extent such
removal or recording is necessary for the performance of the Executive's
duties.  The Executive acknowledges and agrees that all Confidential
Information, and physical embodiments thereof, whether or not developed by the
Executive, are the exclusive property of the Employer or its Affiliates, as the
case may be. 

(b)        Third Party Information.  The Executive
recognizes that the Employer and its Affiliates have received and in the future
will receive from third parties their confidential or proprietary information
subject to a duty on their parts to maintain the confidentiality of such
information and to use it only for certain limited purposes.  The Executive
agrees that he owes the Employer, its Affiliates, and such third parties,
during the Employment Period and thereafter, a duty to hold all such
confidential or proprietary information in the strictest confidence and not to
disclose it to any Person (except as necessary in carrying out his duties for
the Employer consistent with the Employer's agreement with such third party) or
to use it for the benefit of anyone other than for the Employer or such third
party (consistent with the Employer's agreement with such third party) without
the express written authorization of the Employer or its Affiliate, as the case
may be.

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(c)        Returning Employer Documents.  The
Executive agrees that, at the time of the termination of the Employment Period,
he will deliver to the Employer  (and will not keep in his possession or
deliver to any other Person) any and all devices, records, data, notes,
reports, proposals, lists, correspondence, specifications, drawings,
blueprints, sketches, materials, equipment, other documents or property, or
reproductions of any of the aforementioned items belonging to the Employer or
any of its Affiliates, and their respective successors or assigns, regardless
of whether such items are represented in tangible, electronic, digital,
magnetic or any other media.  In the event of the termination of the Employment
Period, the Executive agrees to sign and deliver the "Termination
Certification" attached hereto as Exhibit B.

5.04     Disputes or Controversies.  The Executive
recognizes that should a dispute or controversy arising from or relating to
this Agreement be submitted for adjudication to any court or other third party,
the preservation of the secrecy of Confidential Information may be
jeopardized.  All pleadings, documents, testimony, and records relating to any
such adjudication will be maintained in secrecy and will be available for
inspection by the Employer, the Executive, and their respective attorneys and
experts, who will agree, in advance and in writing, to receive and maintain all
such information in secrecy, except as may be limited by them in writing.

Article
6:          NON-COMPETITION AND NON-INTERFERENCE

6.01     Covenants Regarding Competitive Protection.
The Employer and the Executive hereby mutually agree that the nature of the
Employer's business and the Executive's employment hereunder are based on the
Employer's goodwill, public perception, and customer relations.  Therefore, in
consideration of the acknowledgments set forth in Section 5.02 herein and the
compensation and benefits to be paid to the Executive pursuant to this
Agreement, the Executive hereby agrees and covenants to each and all of the
following:

(a)        Noncompete.  For the duration of the
Restricted Period, the Executive will not, directly or indirectly, in any
capacity whatsoever, individually or on behalf of any other person or entity,
engage or invest in, own, manage, operate, finance, control, or participate in
the ownership, management, operation, financing, or control of, be employed by,
associated with, or in any manner connected with, lend the Executive's name or
any similar name to, lend the Executive's credit to or render services or
advice to, any business engaged or about to become engaged in the Business of
the Employer, or any of its Affiliates, in the Market Area.  For purposes of
this Agreement, the "Business" of the Employer is licensing,
franchising, and providing fabric protection systems.

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(b)        Solicitation of Customers.  For the
duration of the Restricted Period, the Executive hereby covenants and agrees
that he will not, either directly or through an Affiliate, solicit any Person
that is a Current Customer (defined below) of the Employer or its Affiliates
for purposes of selling products or services to such Person that are in
competition with the products and services offered or sold by the Employer or
its Affiliates. 

(c)        Solicitation of Employees.  For the
duration of the Restricted Period, the Executive hereby agrees not to employ,
either directly or through an Affiliate, any current employee of the Employer
or its Affiliates or any individual who was an employee of the Employer or its
Affiliates at any time during Term, and agrees not to solicit, or contact in
any manner that could reasonably be construed as a solicitation, either
directly or through an Affiliate, any employee of the Employer or its
Affiliates for the purpose of encouraging such employee to leave or terminate
his or her employment with the Employer or its Affiliates.

(d)        Solicitation of Vendors.  For the
duration of the Restricted Period, the Executive hereby agrees not to solicit,
either directly or through an Affiliate, a current vendor or supplier of the
Employer or its Affiliates for purposes of encouraging such vendor or supplier
to cease or diminish providing products or services to the Employer or its
Affiliates, or to change adversely the terms under which such vendor or
supplier provides such products or services to the Employer or its Affiliates.

(e)        Interference.  For the duration of the
Restricted Period, the Executive hereby agrees not to interfere with the
Employer's relationship with any person who at the relevant time is an
employee, contractor, supplier, or customer of the Employer or its Affiliates. 

(f)         Restricted Period.  For purposes of this
Section 6.01, the term "Restricted Period" means the period commencing
with the Effective Date and terminating on the earliest to occur of (i) July 31, 2008, (ii) the date Grassmere Computer Products, Inc., a Texas
corporation and/or Merritt Computer Products, L.P., a Texas limited
partnership, exercise their rights under either that certain Repurchase Option
Agreement or that certain Pledge Agreement, each dated July 31, 2003, and
reacquire the ownership interests in FIBER-SEAL, (iii) the date the Executive
terminates his employment for Good Reason, or (iv) the date the Employer
terminates the Executive without Cause.

(g)        Market Area.  For purposes of this
Section 6.01, the term "Market Area" means the State of Texas and any other
state or province in which the Employer has provided goods or services within
the twelve months prior to the earlier of (i) the last day of the Employment
Period or (ii) the Expiration Date.

6.02     Scope.  The Executive acknowledges and
agrees that the geographic area, length and scope of the restrictions contained
in Section 6.01 are reasonable and necessary to protect the legitimate business
interests of the Employer.  The duration of the agreements contained in Section
6.01 shall be extended for the amount of any time of any violation thereof and
the time, if greater, necessary to enforce such provisions or obtain any relief
or damages for such violation through the court system.  The Employer may, at
any time on written notice approved by its Board of Directors, reduce the
geographic area, length or scope of any restrictions contained in Section 6.01
and, thereafter, the Executive shall comply with the restriction as so reduced,
subject to subsequent reductions.  If any covenant in Section 6.01 of this
Agreement is held to be unreasonable, arbitrary, or against public policy, such
covenant will be considered to be divisible with respect to scope, time, and
geographic area, and such lesser scope, time, or geographic area, or all of
them, as an arbitrator or a court of competent jurisdiction may determine to be
reasonable, not arbitrary, and not against public policy, will be effective,
binding, and enforceable against the Executive.  In the event of termination of
the Executive's employment with the Employer for any reason, the Executive
consents to the Employer communicating with the Executive's new employer, any
entity in the Business or through or in connection with which the Executive is
restricted hereunder, or any other party about the restrictions and obligations
imposed on the Executive under this Agreement.

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Article
7:          GENERAL PROVISIONS

7.01     Injunctive Relief and Additional Remedy. 
The Executive acknowledges that the injury that would be suffered by the
Employer as a result of a breach of the provisions of Articles 5 and 6 hereof
might be irreparable and that an award of monetary damages to the Employer for
such a breach would be an inadequate remedy.  Consequently, the Employer will
have the right, in addition to any other rights it may have, to obtain
injunctive relief to restrain any breach or threatened breach or otherwise to specifically
enforce the provisions of Articles 5 and 6 hereof.

7.02     Covenants of Articles 5 and 6 are Essential and
Independent Covenants.  The covenants by the Executive in Articles 5 and 6
are essential elements of this Agreement, and without the Executive's agreement
to comply with such covenants, the Employer would not have entered into this
Agreement or employed or continued the employment of the Executive.  The
Employer and the Executive have independently consulted their respective
counsel and have been advised in all respects concerning the reasonableness and
propriety of such covenants, with specific regard to the nature of the business
conducted by the Employer.  If the Executive's employment hereunder expires or
is terminated, this Agreement will continue in full force and effect as is
necessary or appropriate to enforce the covenants and agreements of the
Executive in Articles 5 and 6.

7.03     Representations and Warranties by the Executive. 
The Executive represents and warrants to the Employer that (a) the Executive
has never taken any action of the types set forth in Section 4.03(b) though (f)
and (b) the execution and delivery by the Executive of this Agreement does not,
and the performance by the Executive of the Executive's obligations hereunder
will not, with or without the giving of notice or the passage of time, or both:
(i) violate any judgment, writ, injunction, or order of any court, arbitrator,
or governmental agency applicable to the Executive; or (ii) conflict with,
result in the breach of any provisions of or the termination of, or constitute
a default under, any agreement to which the Executive is a party or by which
the Executive is or may be bound.

7.04     Obligations Contingent on Performance.  The
obligations of the Employer hereunder, including its obligation to pay the
compensation provided for herein, are contingent upon the Executive's
performance of the Executive's obligations hereunder.

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7.05     Binding Effect; Delegation of Duties Prohibited. 
This Agreement shall inure to the benefit of, and shall be binding upon, the
parties hereto and their respective successors, assigns, heirs, and legal
representatives, including any entity with which the Employer may merge or
consolidate or to which all or substantially all of its assets may be
transferred.  The covenants of the Executive under this Agreement, being
personal, may not be delegated.

7.06     Notices.  All notices, consents, waivers,
and other communications under this Agreement must be in writing and will be
deemed to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by facsimile (with written confirmation of
receipt), provided that a copy is mailed by registered mail, return receipt
requested, or (c) when received by the addressee, if sent by a nationally
recognized overnight delivery service (receipt requested) or, (d) mailed by
registered or certified mail, postage prepaid and return receipt requested, in
each case to the appropriate addresses and facsimile numbers set forth below (or
to such other addresses and facsimile numbers as a party may designate by
notice to the other parties):

  	

   

      	

If
to Employer:   

      	

Fiber-Seal Systems, L.P.

      
	

   

      	

   

      	

 c/o
Home Solutions of America, Inc.

      
	

   

      	

   

      	

 11850 Jones Road

      
	

   

      	

   

      	

 Houston, TX 77070

      
	

   

      	

   

      	

 Facsimile:
(281) 970-9854

      
	 	 	 
	

   

      	

With
a copy to:   

      	

J. Paul Caver, Esq.

      
	

   

      	

   

      	

 3102 Maple Avenue, Suite 220

      
	

   

      	

   

      	

 Dallas, Texas 75201

      
	

   

      	

   

      	

 Facsimile:
(214) 220-1288

      
	

 

      
	

   

      	

If
to the Executive:   

      	

Rick J. O'Brien

      
	

   

      	

   

      	

 5565
  Red Bird Center Drive

      
	

   

      	

   

      	

 Suite
 150

      
	

   

      	

   

      	

 Dallas,
 TX 75237

      
	

   

      	

   

      	

 Facsimile: (214) 339-1313

      
	 	 	 
	

   

      	

With
a copy to:   

      	

Scot O'Brien, Esq.

      
	

   

      	

   

      	

 Hallett
& Perrin, P.C.

      
	

   

      	

   

      	

 2001
  Bryan Street, Suite 3900

      
	

   

      	

   

      	

 Dallas, TX 75201

      
	

   

      	

   

      	

 Facsimile:
(214) 922-4144

      

7.07     Entire Agreement; Amendments.  This
Agreement contains the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral or written, between the parties hereto with respect to the subject matter
hereof.  This Agreement may not be amended orally; but only by an agreement in
writing signed by the parties hereto.

10

7.08     GOVERNING LAW; VENUE.  THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF  TEXAS WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS RULES OR CHOICE OF LAWS RULES THEREOF. 
VENUE FOR ANY ACTION BROUGHT HEREUNDER SHALL BE AS DETERMINED UNDER THAT CERTAIN PARTNERSHIP INTEREST
PURCHASE AGREEMENT BY, AMONG OTHERS, THE EMPLOYER AND MERRITT COMPUTER
PRODUCTS, L.P., A TEXAS LIMITED PARTNERSHIP DATED AS OF THE DATE OF THIS
AGREEMENT.

7.09     Headings; Construction.  The headings in
this Agreement are provided for convenience only and will not affect its
construction or interpretation.  All references to "Article,"  "Articles,"
"Section," or "Sections" refer to the corresponding Article, Articles, Section,
or Sections of this Agreement unless otherwise specified.  All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require. 

7.10     Severability.  If any provision of this
Agreement is held invalid or unenforceable by an arbitrator or any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect.  Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to
the extent not held invalid or unenforceable.

7.11     Counterparts.  This Agreement may be
executed in one or more counterparts, including by facsimile signature, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.

7.12     Survival of Obligations.  The obligations
of the Employer and the Executive under this Agreement which by their nature
may require either partial or total performance after the expiration of the
Term shall survive such expiration.

7.13     Withholding and Set Off.  All payments and
benefits made or provided under this Agreement shall be subject to withholding
as required under applicable law.  The Employer is further authorized to
withhold and setoff against any such payments and benefits any amounts that the
Executive may come to owe the Employer, whether as a result of any breach of
this Agreement or otherwise.

7.14     Arbitration. Any controversy or
claim arising out of or relating to this Agreement, or violation of this
Agreement, shall be settled by arbitration in accordance with the Rules of the
American Arbitration Association, and judgment rendered by the arbitrator may be
entered in any court having jurisdiction thereover. The arbitration shall be
conducted in either Houston, Texas or Dallas, Texas, unless otherwise agreed by
the parties thereto. The arbitrator shall be deemed to possess the power to
issue mandatory orders and restraining orders in connection with such
arbitration; provided, however, that nothing in this Section 7.14 shall be
construed as to deny the Employer the right and power to seek and obtain
injunctive relief in a court of competent jurisdiction for any breach or
threatened breach of the restrictive covenants contained in this Agreement.

11

Article
8:          CERTAIN DEFINITIONS

For purposes of this Agreement, the following terms shall
have the meanings indicated below:

"Affiliate" shall mean, as to any Person, any Person
controlled by, controlling, or under common control with such Person, and, in
the case of a Person who is an individual, a member of the family of such
individual consisting of a spouse, sibling, in-law, lineal descendant, or
ancestor (including by adoption), and the spouses of any such individuals.  For
purposes of this definition, "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, directly or indirectly, alone or in concert with others, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of securities, by contract or otherwise,
and no Person shall be deemed in control of another solely by virtue of being a
director, officer or holder of voting securities of any entity.  A Person shall
be presumed to control any partnership of which such Person is a general
partner.

"Current Customer" shall mean any Person who is
currently utilizing any product or service sold or provided by the Employer
through the facility managed by the Executive; any Person who utilized any such
product or service within the previous 12 months; and any Person with whom the
Employer or any of its Affiliates is currently conducting negotiations
concerning the utilization of such products or services.

"Employment
Period" shall mean the period during which the Executive
has an obligation to render to the Employer all or any portion of the services
described in Section 1.03 of this Agreement.  The Employment Period shall in no
event, however, extend past the Expiration Date.

"Person" shall have the meaning given in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended, as modified and
used in Sections 13(d)(3) and 14(d)(2) of such act.  

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

12

 

IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.

  	 	

EMPLOYER:

      
	 	

  

      
	 	

FIBER-SEAL SYSTEMS,
L.P.

      
	 	

  

      
	 	

By:  FSS Holding
Corp.

Its:  General Partner

      
	 	

  

      
	 	

By: ___________________________

      
	 	

Name:                                                  

      
	 	

Title:                                                          

 

      
	 	

HOME SOLUTIONS OF
AMERICA, INC.

      
	 	

  

      
	 	

By: ___________________________

      
	 	

Name:                                                  

      
	 	

Title:
                                                    

 

      
	 	

EXECUTIVE:

 

      
	 	

____________________________________

      
	 	

Rick
J. O'Brien

      

 

13

EXHIBIT A

 

FORM OF STOCK OPTION AGREEMENT

 

 

EXHIBIT B

 

TERMINATION CERTIFICATION

This is to certify that the undersigned has complied with
all the terms of the Employment Agreement (the "Employment Agreement")
signed by the undersigned with Fiber-Seal Systems, L.P. and Home Solutions of
America, Inc. (the "Employer").   It is further certified that the
undersigned does not possess, nor has the undersigned failed to return to the
Executive any Confidential Information (as defined in the Employment
Agreement).  It is further certified that the undersigned has destroyed all
tangible copies and have erased any electronic, digital, or magnetic
representations or manifestations of the foregoing.  The undersigned further
agrees that, in compliance with the Employment Agreement, the undersigned will
preserve as confidential all Confidential Information and information of third
parties as provided in the Employment Agreement.

Date:    ______________________

__________________________________________

                                                                        Rick J. O'Brien

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