Document:

Home Solutions

 

SECOND AMENDMENT TO

STOCK OPTION
AGREEMENT

            This
Second Amendment to Stock Option Agreement (the "Second Amendment") is
dated as of March 15, 2003, by and between Home Solutions of America, Inc.
(formerly Nextgen Communications Corporation), a Delaware corporation (the "Company"),
and R. Andrew White (the "Optionee").

            WHEREAS,
the Company and the Optionee entered into that certain Stock Option Agreement
dated February 1, 2002 (the "Agreement"), as amended by that
certain First Amendment to Stock Option Agreement dated September 2, 2002 (the
"First
Amendment");

            WHEREAS,
the Optionee and the Company desire to amend the Agreement as set forth herein,
in order to modify the vesting period of certain stock options of the Company
that were granted to the Optionee in the Agreement;

            NOW
THEREFORE, the parties hereto agree as follows:

            1.         The first sentence of the "Vesting
Schedule" paragraph on the first page of the Agreement, as amended by the First
Amendment, is hereby deleted and replaced in its entirety with the following
sentence:

"Vesting Schedule:  This Option shall be exercisable as
follows:  50,000 of the Shares available
for purchase under the Option shall be exercisable on September 2, 2002; 50,000
of the Shares available for purchase under the Option shall be exercisable on
February 1, 2003; and the remaining 50,000 of the Shares available for purchase
under the Option shall be exercisable on February 1, 2004 (all share amounts
shall be adjusted accordingly for stock splits, reclassifications, and similar
events), subject to Optionee's continuing to be a Service Provider on such
dates; provided, however, in the event that an "Applicable Termination" occurs,
as defined in the Optionee's Executive Employment Agreement with the Company
dated March 15, 2003, this Option shall immediately become fully vested, and
all Shares available for purchase hereunder shall immediately become
exercisable on the date of the Applicable Termination."

            2.         Except as
expressly amended hereby, the Agreement remains in full force and effect.  Capitalized terms that are not defined
herein shall have the same meaning assigned to them in the Agreement.  This Second Amendment hereby supersedes and replaces
the First Amendment in its entirety.

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            IN
WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be
executed and delivered as of the date first above written.

            This Second Amendment
to Stock Option Agreement may be executed in one or more identical counterparts,
including by facsimile signature, each of which shall be deemed to be an
original and all of which together shall be deemed to be one instrument.

                                                            COMPANY:

                                                            HOME
SOLUTIONS OF AMERICA, INC.

                                                            By:
______________________________________           

                                                            Name:                                                                         

                                                            Title:                                                                             

                                                            OPTIONEE:

                                                           
_________________________________________

                                                            R. Andrew
White

 

 

 

2Home Solutions

CONSULTING AGREEMENT

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

WITNESSETH

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

            WHEREAS, the
Company and the Consultant desire to set forth the terms and conditions
pursuant to which the Consultant will be engaged to perform such consulting
services;

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

ARTICLE I

 PERFORMANCE OF THE SERVICES

            1.01     Engagement and Duties.  The Company and the Consultant hereby agree
that during the Term (defined below), the Consultant shall provide consulting
services to the Company in the nature of the identification and due diligence
review of acquisition candidates (the "Services").  During
the term of this Agreement, the Consultant shall report to the Chief Executive
Officer of the Company.

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

           1.03     Consideration.  In consideration for performance of the
Services, the Consultant shall be paid a fee of $10,000 per month during the
Term, payable on the last day of the month for such month.  The first such payment shall be due on April
1, 2003.

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

 

 

 

 

1.05     Expenses.  During the term of this Agreement, the
Consultant shall be entitled to reimbursement of all reasonable business
expenses incurred by the Consultant on behalf of the Company or in furtherance
of his provision of the Services; provided, however, that the Consultant must
obtain the prior approval of the Chief Executive Officer of the Company before
incurring any individual expense exceeding $1,000, or aggregate expenses during
any one month of the Term of more than $2,000.

1.06     Independent
Contractor Status.  The Company
and the Consultant hereby agree that the Company is retaining the Consultant in
the capacity of an independent contractor and not as an employee or agent of
the Company. The Company and the Consultant further agree that nothing in this
Agreement shall create, or shall be construed as creating, any form of
partnership, joint venture, employer-employee relationship, or other
affiliation that would operate to permit the Consultant to bind the Company
with respect to any matter or would cause the Company to be liable for any
action of the Consultant, and each party hereto agrees that it will not
represent to any third party that the Consultant's engagement by the Company
hereunder is in any capacity other than as an independent contractor.

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

ARTICLE II

TERMINATION

            2.01      Termination
For Cause.  The Company may
terminate the Consultant's engagement hereunder for Cause (as defined below).
For purposes of this Agreement, "Cause" shall mean any of the
following:  (i) any act of personal
dishonesty, fraud or misrepresentation by the Consultant that was intended to
result in gain or personal enrichment of the Consultant at the expense of the
Company; (ii) the Consultant's violation of a federal or state law or
regulation applicable to the Company's business which violation was or is
reasonably likely to be injurious to the Company; or (iii) the Consultant's
conviction of, or a plea of nolo contendere or its equivalent to, a felony
under the laws of the United States or any State.

            2.02      Other Termination Events.  In addition to the Company's termination
rights set forth in Section 2.01 of this Agreement, the parties may mutually
agree to terminate this Agreement effective at such time as agreed upon in
writing.

 

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ARTICLE III

CONFIDENTIALITY

            Other than such actions as are required in discharging
his obligations under this Agreement in the ordinary course of business, the
Consultant and his Affiliates (defined below) hereby agree that they will not,
either during the Term or at any time following the termination hereof for any
reason, do or cause to have done any of the following:  (i) use for their own purposes, disclose to
any Person (defined below), or use for or on behalf of another Person, other
than pursuant to a final judicial order, any Confidential Information of the
Company, provided, that in the event of possible disclosure by judicial order,
the Consultant shall provide the Company with sufficient notice (meaning enough
notice to allow the Company to move for a protective order or stay of
disclosure) of such proceedings at which a determination shall be made
concerning disclosure of the Confidential Information; or (ii) disparage the
Company, any officer or employee of the Company, any Affiliate of any of the
foregoing, or any business practice employed by the Company or any officer,
employee, or Affiliate thereof. For purposes of this Article III, "Confidential
Information" of the Company shall mean all information relating to or
arising out of the business of the Company or any of its affiliates, including
without limitation, all financial and accounting information, information about
proposed acquisition candidates, customer lists and data, personnel records, pricing
information, technical information, trade secrets, and sales/marketing
information, obtained by or furnished, disclosed, or disseminated to the
Company, or any of its Affiliates, or obtained, assembled, or complied by it,
and all physical embodiments of the foregoing, all of which are hereby agreed
to be confidential, but the Consultant shall not be required to treat as
Confidential Information any of the foregoing to the extent such information is
or becomes publicly known through no fault or breach of this Agreement or other
duty by the Consultant. For purposes of this Agreement, the term "Affiliate"
shall mean any Person in which the Consultant has an equity interest equal to
5% or more of the outstanding equity interests of such Person, or any Person
that employs or retains the services of the Consultant or is involved in any
form of joint venture with the Consultant. For purposes of this Agreement, the
term "Person" shall mean any individual, corporation, Company,
limited liability Company, partnership, trust, estate, or other entity.

ARTICLE IV

RELEASE

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

 

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

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

ARTICLE V

 MISCELLANEOUS

            5.01      Further AssurancesEach party hereto, without
further consideration, shall, at the reasonable request of any other party
hereto after the consummation of the transactions contemplated by the
Agreement, execute and deliver any instruments of conveyance, assignment,
transfer, assumption, or other instrument or document and take such other
actions, as such other party may reasonably request to more effectively
consummate the transactions contemplated by this Agreement.

            5.02     Severability.  If any provision of this Agreement is held
to be illegal, invalid, or unenforceable under any present or future law, and
if the rights or obligations of either of the parties hereto would not be
materially and adversely affected thereby, (a) such provisions shall be fully
severable; (b) this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provisions had never comprised a part
hereof; (c) the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance; (d) in lieu of such illegal,
invalid, or unenforceable provision, there shall be added automatically as a
part of this Agreement a legal, valid, and enforceable provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be possible. 

 

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

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

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

5.06      Legal Remedies; Specific Performance.  The parties to this Agreement understand and
agree that it will be impossible to measure in money the damages that may
accrue to a party to this Agreement or to its heirs, personal representatives,
or assigns by reason of a failure to perform any of the obligations set forth
in this Agreement, and that any such money damages would be an insufficient
remedy for such failure of performance. Therefore, each party hereto hereby
consents to be subject to the remedy of specific performance of any provision
of this Agreement if such party shall have been found to be in violation of
such provision by any court of competent jurisdiction. If any party or its
heirs, personal representatives, or assigns institute any action or proceeding
to specifically enforce the provisions of this Agreement, any person against
whom such action or proceeding is brought hereby waives the claim or defense in
such action or proceeding that such party has an adequate remedy at law, and
such person shall not urge in any such action or proceeding a claim or defense
that such remedy at law exists.

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

            5.08     Inurement.  Subject to the restrictions against transfer
or assignment as herein contained, the provisions of this Agreement shall inure
to the benefit of, and shall be binding on, the assigns, successors in
interest, personal representatives, estates, heirs, and legatees of each of the
parties hereto.  

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

 

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      If to the Company: 
	Home
Solutions of America, Inc.  
	 	 	11850
Jones Road
	 	 	Houston,
Texas 77070
	 	 	Facsimile:
(281) 970-9854
	 	 	  
	 	
      If to the Consultant:
	Frank
J. Fradella
	 	 	                                                 
      
	 	 	                                                 
      
	 	 	Facsimile:
(281)                        
      

                                                                        

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

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

5.12     Entire Agreement.  This Agreement contains the entire
understanding between the parties hereto concerning the subject matter
contained herein. There are no representations, agreements, arrangements, or
understandings, oral or written, between or among the parties hereto relating
to the subject matter of this Agreement that are not fully expressed herein.

5.13     Construction of
Agreement.  Each party and its
counsel have participated fully in the review and revision of this Agreement.
Any rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not apply in the interpretation of this
Agreement.

5.14     Execution.  Each party to this Agreement hereby
represents and warrants to the other parties hereto that such party has full
power and capacity to execute, deliver, and perform this Agreement, which has
been duly executed and delivered by, and which evidences the valid and binding
obligation of, such party enforceable in accordance with its terms subject to
applicable liquidation, conservatorship, bankruptcy, insolvency,
reorganization, or similar laws affecting the enforcement of creditor's right's
from time to time in effect and to general principles of equity.

 

 

 

 

5.15     Multiple Counterparts.  This Agreement may be executed in multiple
counterparts, including by facsimile signature, each of which shall be deemed
to be an original but all of which together shall constitute one and the same
instrument.

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

                                                                   THE COMPANY:

 

                                                                   HOME
SOLUTIONS OF AMERICA, INC. 

                                                                   By:                                                                  

                                                                             R.
Andrew White

                                                                             Chief
Executive Officer

 

                                                                   THE CONSULTANT:

 

                                                                    ____________________________________

                                                                    Frank
J. Fradella

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