Document:

Exhibit 10.3

SECURITY
AGREEMENT

            THIS SECURITY AGREEMENT ("Agreement")
dated March ___, 2005, is made and entered into on the terms and conditions
hereinafter set forth, by and between HOME SOLUTIONS OF AMERICA, INC., a
Delaware corporation ("Borrower"), the Subsidiaries and other
Affiliates of the Borrower now or hereafter becoming a Guarantor under the Loan
Agreement (as hereinafter defined) (such Subsidiaries and Affiliates are
sometimes hereinafter referred to individually as a "Guarantor"
and individually and collectively as the "Guarantors"; the
Guarantors and the Borrower are sometimes herein referred individually and
collectively as the "Debtor" or "Debtors"),
and PETRA MEZZANINE FUND, L.P., a Delaware limited partnership, as
Administrative Agent (in such capacity, the "Administrative Agent").

RECITALS:

            1.         Pursuant to a Loan Agreement of even
date herewith, by and between the Lenders named therein, the Administrative
Agent and Borrower (together with any and all amendments, modifications,
supplements, extensions, renewals, substitutions and/or replacements thereof,
herein referred to as the "Loan Agreement"; capitalized terms
used but not otherwise defined herein shall have the same meanings as in the
Loan Agreement), Lenders have agreed to make a term loan in the aggregate
original principal amount of FOUR MILLION and No/100ths Dollars ($4,000,000.00)
(the "Loan") to Borrower.

            2.         The Loan is evidenced by one or more
promissory notes of even date with the Loan Agreement, in the Loan amount, made
and executed by Borrower, payable to the order of each Lender, respectively
(together with any and all amendments, modifications, supplements, extensions,
renewals, substitutions and/or replacements thereof, herein referred to
collectively as the "Notes").

            3.         As a condition to the making of the
Loan, Lenders have required that Debtors execute and deliver this Agreement to
the Administrative Agent.

AGREEMENTS:

            NOW, THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

            1.         Grant of Security Interest. 
Each Debtor hereby grants to and creates in favor of the Administrative Agent a
security interest in the following properties, assets and rights of such
Debtor, whether now owned or hereafter acquired or arising, and wherever
located (collectively the "Collateral"):

(a)        accounts,

 

 

 

  	(b)	chattel paper,
	(c) 	deposit accounts,
	(d)	documents,
	(e)	equipment,
	(f) 	fixtures,
	(g)	general intangibles,
	(h)	goods not otherwise described herein with greater particularity,
	(i)	instruments,
	(j)	inventory,
	(k)	investment property,
	(l)	letter-of-credit rights,
	(m)	money, and
	(n)	oil, gas and other minerals, including as-extracted collateral.

            2.         Secured Indebtedness.  This
Agreement secures the full and prompt payment and performance of (a)  the
indebtedness and other obligations of Debtors to Lenders pursuant to the Loan
Agreement, the Notes and the other Loan Documents, (b) any and all other
indebtedness and other obligations of Debtors to Lenders and the Administrative
Agent, direct or contingent (including but not limited to obligations incurred
as indorser, guarantor or surety), however evidenced or denominated, and
however and whenever incurred, including but not limited to indebtedness
incurred pursuant to any present or future commitment of Lenders to Debtors,
and (c) all future advances made by Lenders or the Administrative Agent for
taxes, levies, insurance and preservation of the Collateral and all attorney's
fees, court costs and expenses of whatever kind incident to the collection of
any of said indebtedness or other obligations and the enforcement and
protection of the security interest created hereby.

            3.         Representations, Warranties and
Agreements of Borrower.  Each Debtor represents, warrants and agrees as
follows:

                        (a)        The
location of Debtors' chief executive offices and other places of business, and
the locations of all tangible Collateral and of all records concerning the
Collateral, are identified on attached Schedule 3(a).  Except as set
forth on Schedule 3(a), during the five (5) years preceding the date of
this Agreement, Debtors have not had any other places of business or location
of assets.  Debtors will promptly notify the Administrative Agent, in writing,
of any new place or places of business and of any change in the location of the
Collateral or any records pertaining thereto.

                        (b)        Debtors
are the owner of the Collateral free and clear of any Liens other than
Permitted Liens.  Debtors will defend the Collateral against the claims and
demands of all persons other than those in respect of Permitted Liens.

                        (c)        Debtors
will at all times keep the Collateral insured against all insurable hazards in
amounts equal to the full insurable value of the Collateral.  Such insurance
shall be in such companies as are acceptable to the Administrative Agent, with
provisions satisfactory to the Administrative Agent for payment of all losses
thereunder to the Administrative Agent as its interests appear.  If required by
the Administrative Agent, Debtors shall deposit the policies (or duplicate
originals of such policies) with the Administrative Agent.  Any money received
by the Administrative Agent under said policies may be applied to the payment
of any indebtedness or obligation secured hereby, regardless of whether then
due and payable; or at the Administrative Agents' option may be delivered by
the Administrative Agent to Debtors for the purpose of repairing or restoring
the Collateral.  Debtors assign to the Administrative Agent all right to receive
proceeds of insurance not exceeding the amounts secured hereby, direct any
insurer to pay all proceeds directly to the Administrative Agent, and appoint
the Administrative Agent Debtors' attorney in fact to endorse any draft or
check made payable to any Debtor in order to collect the benefits of such
insurance.  If Debtors fail to keep the Collateral insured as required by the
Administrative Agent, the Administrative Agent shall have the right to obtain
such insurance at Debtors' expense and add the cost thereof to the other
amounts secured hereby.

 

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                        (d)        Borrower
shall, and shall cause each of the Guarantors to, at their sole cost and
expense, execute and deliver to the Administrative Agent all such further
documents, instruments and agreements and perform all such other acts that
reasonably may be required in the opinion of the Administrative Agent to enable
the Administrative Agent to exercise and enforce its rights as the secured
party under this Agreement and the other Security Documents and to carry out
the provisions or effectuate the purposes of this Agreement and the other
Security Documents.  To the extent permitted by applicable law, Debtors hereby
authorize the Administrative Agent to file financing statements and
continuation statements with respect to the security interests granted or
assigned under this Agreement and the other Security Documents, and to do all
other things it deems appropriate to perfect and continue perfection of the
security interests created hereby and to protect the Collateral.  

            4.         Special Agreements With Respect to
Tangible Collateral.  Debtors additionally agree and warrant as follows:

                        (a)        Debtors
will not permit any of the Collateral to be removed from the location(s)
specified herein, except for temporary periods in the normal and customary use
thereof, without the prior written consent of the Administrative Agent, and
will permit the Administrative Agent to inspect the Collateral at any time.

                        (b)        If
any of the Collateral is equipment or goods of a type normally used in more
than one jurisdiction (regardless of whether actually so used), Debtors will
contemporaneously with the execution and delivery of this Agreement furnish to
the Administrative Agent a list of the jurisdictions wherein such equipment or
goods are or will be used, and hereafter will notify the Administrative Agent
promptly in writing (1) of any other jurisdictions in which such equipment or
goods are so used, and (2) of any change in the location of any Debtor's chief
executive office.

                        (c)        Except
as permitted by the Loan Agreement, Debtors will not sell, exchange, lease or
otherwise dispose of any of the Collateral or any interest therein without the
prior written consent of the Administrative Agent.

 

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                        (d)        Debtors
will keep the Collateral in good condition and repair and will pay and
discharge all taxes, levies and other impositions levied thereon as well as the
cost of repairs to or maintenance of same, and will not permit anything to be
done that may impair the value of any of the Collateral.  If Debtors fail to
pay such sums, the Administrative Agent may do so for Debtors' account and add
the amount thereof to the other amounts secured hereby.

                        (e)        Prior
to the occurrence of an Event of Default, Debtors shall be entitled to
possession of the Collateral and to use the same in any lawful manner, provided
that such use does not cause excessive wear and tear to the Collateral, cause
it to decline in value at an excessive rate, or violate the terms of any policy
of insurance thereon.

                        (f)         Debtors
will not allow the Collateral to be attached to real estate in such manner as
to become a fixture or a part of any real estate.

            5.         Special Agreements With Respect to
Intangible and Certain Tangible Collateral.  Debtors additionally warrants
and agrees as follows:

                        (a)        Prior
to the occurrence of an Event of Default, Debtors shall have the right to
process and sell Debtors' inventory in the regular course of business.  The
Administrative Agent's security interest hereunder shall attach to all proceeds
of all sales or other dispositions of the Collateral.  If at any time any such
proceeds shall be represented by any instruments, chattel paper or documents of
title, then such instruments, chattel paper or documents of title shall be
promptly delivered to the Administrative Agent and subject to the security
interest granted hereby.  If at any time any of Debtors' inventory is
represented by any document of title, such document of title will be delivered
promptly to the Administrative Agent and subject to the security interest
granted hereby.

                        (b)        By
the execution of this Agreement, the Administrative Agent shall not be
obligated to do or perform any of the acts or things provided in any contracts
covered hereby that are to be done or performed by Debtors, but upon the
occurrence and during the continuance of an Event of Default, the
Administrative Agent may, at its election, perform some or all of the
obligations provided in said contracts to be performed by Debtors, and if the
Administrative Agent incurs any liability or expenses by reason thereof, the
same shall be payable by Debtors upon demand and shall also be secured by this
Agreement.

                        (c)        Upon
the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have the right to notify the account debtors
obligated on any or all of Debtors' accounts to make payment thereof directly
to the Administrative Agent, and to take control of all proceeds of any such
accounts.  Until such time as the Administrative Agent elects to exercise such
right by notice to Debtors, Debtors are authorized, as agent of the
Administrative Agent, to collect and enforce said accounts.

 

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            6.         Protection of Collateral. 
Except for Permitted Liens, Debtors will not permit any liens or security interests
other than those created by this Agreement to attach to any of the Collateral,
nor permit any of the Collateral to be levied upon under any legal process, nor
permit anything to be done that may impair the security intended to be afforded
by this Agreement, nor permit any tangible Collateral to become attached to or
commingled with other goods without the prior written consent of the
Administrative Agent.

            7.         Inspection and Verification of
Collateral.  The Administrative Agent shall have the right, at any time, by
its own auditors, accountants or other agents, to examine or audit any of the
books and records of Debtors, or the Collateral, all of which will be made
available upon request.  Such auditors, accountants or other representatives of
the Administrative Agent will be permitted to make any verification of the
existence of the Collateral or accuracy of the records that the Administrative
Agent deems necessary or proper.  Any reasonable expenses incurred by the
Administrative Agent in making such examination, inspection, verification or
audit shall be paid by Debtors promptly on demand and shall be secured by the
security interest granted hereby.

            8.         Default and Remedies.  Upon
the occurrence of an Event of Default, the Administrative Agent may proceed to
exercise any and all rights and remedies provided by the Tennessee Uniform
Commercial Code or other applicable law, as well as all other rights and
remedies possessed by the Administrative Agent, all of which shall be
cumulative.  Upon the occurrence of an Event of Default, and upon demand by the
Administrative Agent, Debtors shall assemble the Collateral and make it
available to the Administrative Agent at a place reasonably convenient to the
Administrative Agent and Debtors.  Any notice of sale, lease or other intended
disposition of the Collateral by the Administrative Agent sent to Debtors at
the address set forth for the Borrower in the Loan Agreement, or at such other
address of Borrower as may be shown on the Administrative Agent's records, at
least five (5) days prior to such action, shall constitute reasonable notice to
Debtors.

            The Administrative Agent may waive any default
before or after the same has been declared without impairing its right to
declare a subsequent default hereunder, this right being a continuing one.

            9.         Power of Attorney.  Each
Debtor hereby constitutes the Administrative Agent or its designee, as such
Debtor's attorney-in-fact with power, upon the occurrence and during the
continuance of an Event of Default, to endorse such Debtor's name upon any
notes, acceptances, checks, drafts, money orders or other evidences of payment
or Collateral that may come into either its or the Administrative Agent's
possession; to sign the name of such Borrower on any invoice or bill of lading
relating to any of the accounts receivable, drafts against customers,
assignments and verifications of accounts receivable and notices to customers;
to send verifications of accounts receivable; to notify the Post Office
authorities to change the address for delivery of mail addressed to such Debtor
to such address as the Administrative Agent may designate; to execute any of
the documents referred to in subsection 3(d) hereof in order to perfect and/or
maintain the security interests and liens granted herein by Debtors to the
Administrative Agent; and to do all other acts and things necessary to carry
out this Security Agreement.  All acts of said attorney or designee are hereby
ratified and approved, and said attorney or designee shall not be liable for
any acts of commission or omission (other than acts of gross negligence or
willful misconduct), nor for any error of judgment or mistake of fact or law. 
This power, being coupled with an interest, is irrevocable until all of the
indebtedness and other obligations secured hereby have been fully paid or
performed.

 

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            10.       Notices.  Any and all notices,
elections or demands permitted or required to be made under this Agreement
shall be given as provided in the Loan Agreement, with the address of each
Guarantor being the same as the address set forth for the Borrower in the Loan
Agreement, or at such other address of Borrower as may be shown on the
Administrative Agent's records.

            11.       Severability.  If any
provision(s) of this Agreement or the application thereof to any person or
circumstance shall be invalid or unenforceable to any extent, the remainder of
this Agreement and the application of such provisions to other persons or
circumstances shall not be affected thereby and shall be enforced to the greatest
extent permitted by law.

            12.       Binding Effect.  This Agreement
shall inure to the benefit of the Administrative Agent's successors and assigns
and shall bind Borrower's heirs, representatives, successors and assigns.  If
Debtors are composed of more than one Person, their obligations hereunder shall
be joint and several.

            13.       Termination Statement. 
Borrower agrees that, notwithstanding the payment in full of all indebtedness
secured hereby and whether or not there is any outstanding obligation of the Lenders
to make future advances, the Administrative Agent shall not be required to send
Debtors termination statements with respect to any financing statement filed to
perfect the Administrative Agent's security interest(s) in any of the
Collateral, unless and until Debtors shall have made written demand therefor. 
Upon receipt of proper written demand, the Administrative Agent may at its
option, in lieu of sending a termination statement to Debtors, cause said
termination statement to be filed with the appropriate filing officer(s).

            14.       Governing Law.  This Agreement
shall be construed and enforced under the law of the State of Tennessee.

            15.       General Construction.  All
terms used but not otherwise defined herein that are defined or used in Article
9 of the Tennessee Uniform Commercial Code shall have the respective meanings
assigned to them in such Article.  As used in this Agreement, the masculine,
feminine and neuter genders and the plural and singular numbers shall be deemed
to include the others in all cases in which they would so apply. 
"Includes" and "including" are not limiting, and shall be
deemed to be followed by "without limitation" regardless of whether
such words or words of like import in fact follow same.  The word
"or" is not intended and shall not be construed to be exclusive.

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            IN WITNESS WHEREOF,
the parties hereto have executed this Security Agreement, or have caused this
Security Agreement to be executed by their duly authorized officers or other
representatives, as of the date first above written.

                                                                       

  	 DEBTORS:
	  
	HOME
SOLUTIONS OF AMERICA, INC.
	  
	By:_______________________________________
	              Title:_______________________________
	  
	  
	CORNERSTONE BUILDING AND

      REMODELING, INC.
	   
	By:_______________________________________
	              Title:_______________________________
	   
	P.W.
STEPHENS, INC.
	  
	By:_______________________________________
	              Title:_______________________________
	   
	   
	 ADMINISTRATIVE
AGENT:
	  
	PETRA
MEZZANINE FUND, L.P.
	  
	By: 
Petra Partners, LLC, its general partner
	  
	     By:___________________________ 
	           Michael W.
Blackburn,
	           Managing Member

 

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SCHEDULE 3(a)

[Places of
Business; Locations of Collateral and Records]

8Exhibit 10.4

NEITHER THIS STOCK
PURCHASE WARRANT NOR THE SECURITIES ISSUABLE UPON ITS EXERCISE OR CONVERSION
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE
TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER THE ACT OR SUCH APPLICABLE
STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (II)
IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, REGISTRATION UNDER SUCH
SECURITIES ACTS OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN
CONNECTION WITH SUCH PROPOSED TRANSFER.

STOCK PURCHASE WARRANT

            This STOCK
PURCHASE WARRANT (the "Warrant") is issued as of this 31st
day of March, 2005 by Home Solutions of America, Inc., a Delaware corporation
(the "Company"), to PETRA MEZZANINE FUND, L.P., a Delaware limited
partnership (Petra Mezzanine Fund, L.P. and any subsequent assignee or
transferee hereof are hereinafter referred to collectively as
"Holder" or "Holders").

AGREEMENT:

            1.         Issuance
of Warrant; Term.

                        (a)        For
and in consideration of Petra Mezzanine Fund, L.P. ("Petra") making a
loan (the "Petra Loan") to the Company, in an amount of Four Million
Dollars ($4,000,000) pursuant to the terms of a secured promissory note of even
date herewith (together with any and all extensions, replacements and renewals
thereof, the "Note") and related loan and security agreement of even
date herewith (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement"), and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company
hereby grants to Holder the right to purchase 533,333 shares of the Company's
common stock, $0.001 par value per share (the "Common Stock").

                        (b)        The
shares of Common Stock issuable upon exercise of this Warrant are hereinafter
referred to as the "Shares."  This Warrant shall be exercisable at
any time and from time to time from the date hereof until seven (7) years from
the date hereof (the "Expiration Date").  If this Warrant is not
exercised prior to the Expiration Date, it will expire and all rights hereunder
shall be rendered void.

            2.         Exercise
Price.  The exercise price per share for which all or any of the Shares may
be purchased pursuant to the terms of this Warrant shall be one cent ($.01) (as
adjusted from time to time pursuant to Section 5, the "Exercise
Price").

 

3.         Exercise.

                        (a)        This
Warrant may be exercised by the Holder hereof (but only on the conditions
hereafter set forth) as to all or any increment or increments of one thousand
(1,000) Shares (or the balance of the Shares if less than such number) upon
delivery of written notice of intent to exercise to the Company during normal
business hours on any business day at the address set forth in Section 16
hereof or such other address as the Company shall designate in a written notice
to the Holder hereof, together with this Warrant and payment to the Company of
the aggregate Exercise Price of the Shares so purchased.  The Exercise Price
shall be payable, at the option of the Holder, (i) by certified or bank check
or (ii) by wire transfer of immediately available funds to an account
designated by the Company to the Holder. Upon exercise of this Warrant as
aforesaid, the Company shall as promptly as practicable, and in any event
within five (5) business days thereafter, execute and deliver to the Holder of
this Warrant a certificate or certificates for the total number of whole Shares
for which this Warrant is being exercised in such names and denominations as
are requested by such Holder.  If this Warrant shall be exercised with respect
to less than all of the Shares, the Holder shall be entitled to receive a new
Warrant covering the number of Shares in respect of which this Warrant shall
not have been exercised, which new Warrant shall in all other respects be
identical to this Warrant.  The Company covenants and agrees that it will pay
when due any and all state and federal issue taxes which may be payable in
respect of the issuance of this Warrant or the issuance of any Shares upon
exercise of this Warrant.

                        (b)        In
lieu of exercising this Warrant pursuant to Section 3(a) above, the Holder
shall have the right to require the Company to convert this Warrant, in whole
or in part and at any time or times into Shares (the "Conversion
Right"), upon delivery of written notice of intent to convert to the
Company at its address in Section 3(a) or such other address as the Company
shall designate in a written notice to the Holder hereof, together with this
Warrant.  Upon exercise of the Conversion Right, the Company shall deliver to
the Holder (without payment by the Holder of any Exercise Price) that
number of Shares which is equal to the quotient obtained by dividing (x) the
value of the number of Shares with respect to which the Conversion Right is
being exercised (determined by subtracting the aggregate Exercise Price for the
Shares with respect to which the Conversion Right is being exercised from a
number equal to the product of (i) the Fair Market Value per Share (as such
term is defined in Section 10(c)) as at such time, multiplied by (ii)
the number of Shares with respect to which the Conversion Right is being
exercised), by (y) such Fair Market Value per Share. Any references in this
Warrant to the "exercise" of this Warrant, and the use of the term exercise
herein, shall be deemed to include (without limitation) any exercise of the
Conversion Right. 

(c)               
No fractional Shares shall be
issuable upon the exercise of this Warrant, and the Company shall in lieu of issuing
fractional Shares pay the holder hereof an amount of cash equal to the
fractional Share that otherwise would be issuable multiplied by the Fair Market
Value per Share (as defined in Section 10(c)) at the time of exercise.  

 

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            4.         Covenants
and Conditions.  The above provisions are subject to the following:

                        (a)        Neither
this Warrant nor the Shares have been registered under the Securities Act of
1933, as amended ("Securities Act") or any state securities laws
("Blue Sky Laws").  The Holder represents that it is an "accredited
investor", as defined under Regulation D of the Securities Act, 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 investments, and has the ability to bear the economic risks of its
investments.  This Warrant has been acquired for investment purposes and not
with a view to distribution or resale and may not be sold or otherwise
transferred (i) without an effective registration statement for such Warrant
under the Securities Act and such applicable Blue Sky Laws, (ii) unless Holder
shall have delivered to the Company an opinion of counsel acceptable to the
Company (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that the Warrant
or such portion of the Warrant to be sold or transferred may be sold or
transferred under an exemption from such registration, or (iii) unless sold
under Rule 144 promulgated under the Securities Act (or successor rule) and any
applicable Blue Sky Laws.    Transfer of Shares issued upon the exercise of
this Warrant shall be restricted in the same manner and to the same extent as
the Warrant and the certificates representing such Shares shall, until such
time as the Shares have been registered under the Securities Act as
contemplated pursuant to Section 12 hereof or otherwise may be sold by Holder
under Rule 144, bear substantially the following legend:

THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE
TRANSFERRED (I) UNTIL  A REGISTRATION STATEMENT UNDER THE ACT OR SUCH
APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR (II) UNLESS REGISTRATION UNDER SUCH SECURITIES ACTS OR SUCH
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH
PROPOSED TRANSFER.

The Holder hereof and the
Company agree to execute such other documents and instruments as counsel for
the Company reasonably deems necessary to effect the compliance of the issuance
of this Warrant and any shares of Common Stock issued upon exercise hereof with
applicable federal and state securities laws.

                        (b)        The
Company covenants and agrees that this Warrant and all Shares which may be
issued upon exercise of this Warrant will, upon issuance and payment therefor,
be legally and validly issued and outstanding, fully paid and nonassessable,
free from all taxes, liens, charges and preemptive rights, if any, with respect
thereto or to the issuance thereof.  The Company represents and warrants that
the issuance of this Warrant will not result in an adjustment in the number of
shares of Common Stock issuable upon the exercise or conversion of any
Convertible Securities or Option Securities (each as defined in Section 5(b)
below), as the case may be, pursuant to any anti-dilution or similar provisions
contained in such securities.  The Company shall at all times reserve and keep
available for issuance upon the exercise of this Warrant such number of
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of this Warrant. If any Shares which may be issued upon
exercise of this Warrant require registration or qualification with any
governmental authority under any federal or state law before such shares may be
so issued, the Company will in good faith use its reasonable best efforts as
expeditiously as possible at its expense to cause such Shares to be duly
registered or qualified.  If the Company shall list any shares of Common Stock
on any securities exchange or market it will, at its expense, list thereon,
maintain and increase when necessary such listing, of, all Shares to be issued
upon exercise of this Warrant.

 

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            5.         Adjustment
of Exercise Price and Number of Shares Issuable.

                        (a)        Common
Stock Reorganization.  If the Company shall (i) subdivide or consolidate
its outstanding shares of Common Stock (or any class thereof) into a greater or
smaller number of shares, (ii) pay a dividend or make a distribution on its
Common Stock (or any class thereof) in shares of its capital stock, or (iii)
issue by reclassification of its Common Stock (or any class thereof) any shares
of its Common Stock (any such event described in clauses (i), (ii) or (iii)
being called a "Common Stock Reorganization"), then the Exercise
Price and the number and type of securities for which this Warrant is
exercisable shall be adjusted immediately such that the Holder thereafter shall
be entitled to receive upon exercise of this Warrant the aggregate number and
type of securities that it would have received if this Warrant had been
exercised immediately prior to such Common Stock Reorganization.  

(b)              
Common Stock Distribution.  If the Company shall issue, sell,
distribute or otherwise grant any shares of Common Stock, other than (i)
pursuant to a Common Stock Reorganization, (ii) shares issued pursuant to the exercise
of options or warrants for the purchase of Common Stock outstanding on the date
hereof or as reserved and ungranted as of the date hereof pursuant to the
Company's 1998 Stock Option Plan, as amended, or the Company's 2001 Stock Plan
(collectively, the "Stock Plan"), (iii) up to 920,000 shares of Common Stock
issued upon the conversion of the convertible notes held by Laurus Master Fund,
up to 1,360,000 shares of Common Stock issued upon the conversion of the
Company's Series A Convertible Preferred Stock and up to 666,667 shares of
Common Stock issued upon the conversion of the Company's Series B Convertible
Preferred Stock, (iv) warrants to purchase Common Stock issued to an Additional
Investor (as defined in the Investors' Rights Agreement (the "Investors' Rights
Agreement"), dated as of the date hereof, by and between the Company, the
Holder and Frank J. Fadella and Rick J. O'Brien), if any, provided such
warrants are exercisable for no more than 400,000 shares of Common Stock and
are on terms reasonably acceptable to Holder (the "Additional Warrants"), or
(v) shares of Common Stock issued upon the conversion or exercise of this
Warrant or up to 400,000 shares of Common Stock issued upon conversion or
exercise of the Additional Warrants (any such issuance, sale, distribution or
grant being herein called a "Common Stock Distribution"), for a consideration
per share less than $1.25 per share (the "Investment Price") then the Exercise
Price shall be adjusted as follows: the Exercise Price immediately prior to
such Common Stock Distribution shall be multiplied by a fraction, the numerator
of which shall be the sum of (1) the number of fully-diluted shares of Common
Stock outstanding (assuming the conversion or exercise of all outstanding
securities convertible into or exercisable for shares of Common Stock) prior to
such Common Stock Distribution, plus (2) the number of shares of Common Stock
that the aggregate consideration received by the Company for such Common Stock
Distribution would purchase at the Investment Price, and the denominator of
which shall be the sum of (1) the number of fully-diluted shares of Common
Stock outstanding (assuming the conversion or exercise of all outstanding
securities convertible into or exercisable for shares of Common Stock) prior to
Common Stock Distribution, plus (2) the number of shares of Common Stock issued
in such Common Stock Distribution.

 

4

(c)               
Consideration Received.  In the case of the issuance, sale,
distribution or grant of Common Stock for cash, the consideration shall be
deemed to be the amount of cash paid therefor before deducting any reasonable
discounts, commissions or other expenses allowed, paid or incurred by this
corporation for any underwriting or otherwise in connection with the issuance
and sale thereof.  In the case of the issuance, sale, distribution or grant of
the Common Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair value thereof at
the time of such issuance or sale as determined in good faith by the Board of
Directors irrespective of any accounting treatment.

(d)              
Convertible Securities and Option Securities.  If the Company
shall issue, sell, distribute or otherwise grant (including by assumption):

                                    (i)         any
stock or other securities convertible into or exchangeable for Common Stock,
whether or not the rights to exchange or convert thereunder are immediately
exercisable (such convertible or exchangeable stock or securities being herein
called "Convertible Securities"), or

                                    (ii)        any
rights to subscribe for or to purchase, or any warrants or options (other than
options to purchase shares of Common Stock outstanding on the date hereof as
reserved as of the date hereof and ungranted pursuant to the Stock Option Plan)
for the purchase of, Common Stock or Convertible Securities, whether or not
immediately exercisable, (such rights, warrants or options being herein called
"Option Securities"),

and the lowest aggregate
consideration per share for which Common Stock is issuable upon the conversion
or exercise of such Convertible Securities or Option Securities (and, if
applicable, upon conversion or exchange of Convertible Securities issuable upon
exercise of Option Securities) shall be less than the Investment Price, then
the Exercise Price shall be reduced to the price determined in accordance with
the formula provided above in Section 5(b).  In the case of the issuance, sale,
distribution or grant of Convertible Securities or Option Securities (i) the
aggregate maximum number of shares of Common Stock deliverable upon exercise of
Option Securities (assuming the satisfaction of any conditions to
exercisability, including without limitation, the passage of time, but without
taking into account potential antidilution adjustments) shall be deemed to have
been issued at the time such Option Securities were issued or granted and for a
consideration equal to the consideration (determined in the manner provided in
Section 5(c)), if any, received by the Company upon the issuance of such Option
Securities plus the minimum exercise price provided in such Option Securities
(without taking into account potential antidilution adjustments) for the Common
Stock covered thereby, and (ii) the aggregate maximum number of shares of
Common Stock deliverable upon conversion of, or in exchange (assuming the
satisfaction of any conditions or convertibility or exchangeability, including,
without limitation, the passage of time, but without taking into account
potential antidilution adjustments) for, any such Convertible Securities or
upon the exercise of options to purchase or rights to subscribe for such
Convertible Securities and subsequent conversion or exchange thereof shall be
deemed to have been issued at the time such securities were issued or such options
or rights were issued and for a consideration equal to the consideration, if
any, received by the Company for any such securities and related options or
rights (excluding any cash received on account of accrued interest or accrued
dividends), plus the minimum additional consideration, if any, to be received
by the Company (without taking into account potential antidilution adjustments)
upon the conversion or exchange of such securities or the exercise of any
related options or rights (the consideration in each case to be determined in
the manner provided in Section 5(c)).  If any of such Convertible Securities or
Option Securities shall have terminated, lapsed or expired prior to exercise,
exchange or conversion, the Exercise Price then in effect shall forthwith be
readjusted (effective only with respect to any exercise of this Warrant after
such readjustment) to the Exercise Price which would then be in effect had the
adjustment not been made upon the issuance, sale, distribution or grant of such
Convertible Securities or Option Securities.  Nothing provided in this
paragraph 5(d), however, shall cause any adjustment in the Exercise Price
solely due to the vesting of any Option Securities that are outstanding on the
date hereof.

 

5

                        (e)        Adjustment
in Number of Shares.  Upon each adjustment to the Exercise Price pursuant
to subsection (a), (b) or (d) of this Section 5, this Warrant shall thereafter
evidence the right to receive upon payment of the adjusted Exercise Price that
number of Shares obtained by multiplying the number of Shares previously
issuable upon exercise of this Warrant by a fraction the numerator of which is
the Exercise Price prior to adjustment and the denominator of which is the
adjusted Exercise Price; provided, however, that in no event, after taking into
account any adjustments required pursuant to this subsection (e), shall the
aggregate number of Shares issuable under this Warrant or the Additional
Warrants, if any, exceed an amount equal to the difference of (x) and (y),
where (x) equals twenty percent (20%) of the outstanding shares of the
Company's Common Stock and (y) equals 1.

                        (f)         Capital
Reorganizations.  If there shall be any consolidation, merger or
amalgamation of the Company with another person or entity or any acquisition of
capital stock of the Company by means of a share exchange, other than a
consolidation, merger or share exchange in which the Company is the continuing
corporation or any sale or conveyance of the property of the Company as an
entirety or substantially as an entirety, or any reorganization or
recapitalization of the Company (any such event being called a "Capital
Reorganization"), then simultaneously with the consummation of such
Capital Reorganization the Holder of this Warrant shall be entitled to receive
warrants to purchase, on the same terms and conditions as are set forth in this
Warrant, the kind and amount of shares of stock and other securities and
property (including cash) which a holder of the number of Shares for which this
Warrant is exercisable immediately prior to such Capital Reorganization would
be entitled to receive pursuant to such Capital Reorganization; provided,
however, that if so required by the acquirer in connection with any Capital
Reorganization described above, this Warrant shall be deemed exercised pursuant
to Section 3(b), or if the Exercise Price is greater than the fair market value
of each Share as determined by reference to the consideration paid per share of
Common Stock in such Capital Reorganization, shall be deemed cancelled, in each
case immediately prior to the consummation of such Capital Reorganization. 
Subject to the immediately preceding proviso, as a condition to effecting any
Capital Reorganization, the Company or the successor or surviving corporation,
as the case may be, shall assume by a supplemental agreement, satisfactory in
form, scope and substance to the Holder (which shall be mailed or delivered to
the Holder of this Warrant at the last address of such Holder appearing on the
books of the Company), the obligation to deliver to such Holder such shares of
stock, securities, cash or property as, in accordance with the foregoing
provisions, such Holder may be entitled to purchase, and all other obligations
of the Company set forth in this Warrant.

 

6

                        (g)        Adjustment
Rules.  Any adjustments pursuant to this Section 5 shall be made
successively whenever an event referred to herein shall occur.  No adjustment
shall be made pursuant to this Section 5 in respect of the issuance from time
to time of shares of Common Stock upon the exercise of this Warrant.

                        (h)        Proceedings
Prior to Any Action Requiring Adjustment.  As a condition precedent to the
taking of any action which would require an adjustment pursuant to this Section
5, the Company shall take any action which may be necessary, including
obtaining regulatory approvals or exemptions, in order that the Company may
thereafter validly and legally issue as fully paid and nonassessable all shares
of Common Stock which the Holder of this Warrant is entitled to receive upon
exercise thereof.

                        (i)         Notice
of Adjustment.  Not less than five (5) business days prior to the record
date or effective date, as the case may be, of any action which requires or
might require an adjustment or readjustment pursuant to this Section 5, the
Company shall give notice to the Holder of such event, describing such event in
reasonable detail and specifying the record date or effective date, as the case
may be, and, if determinable, the required adjustment and the computation
thereof.  If the required adjustment is not determinable at the time of such
notice, the Company shall give notice to the Holder of such adjustment and
computation promptly after such adjustment becomes determinable.

            6.         Transfer
of Warrant.  Subject to the provisions of Section 4 hereof, this Warrant
may be transferred, in whole or in part, to any person or business entity, by
presentation of the Warrant to the Company with written instructions for such
transfer; provided, however that the transfer shall be made in compliance with
all applicable state and federal securities laws and that Holder shall give the
Company not less than five (5) business days prior written notice of such
transfer.  Upon such presentation for transfer, the Company shall promptly
execute and deliver a new Warrant or Warrants in the form hereof in the name of
the assignee or assignees and in the denominations specified in such
instructions.  The Company shall pay all expenses incurred by it in connection
with the preparation, issuance and delivery of Warrants under this Section. 

 

7

            7.         Warrant
Holder Not Stockholder; Rights Offering; Preemptive Rights.  Except as
otherwise provided herein, this Warrant does not confer upon the Holder, as
such, any right whatsoever as a stockholder of the Company.  Notwithstanding
the foregoing, the Holder shall be entitled to the rights set forth in the
Investors' Rights Agreement (as defined below).  The Company shall not grant
any preemptive rights with respect to any of its capital stock if such
preemptive rights are exercisable upon exercise of this Warrant. 

            8.         Interim
Dividends.  If the Company pays a dividend or makes a distribution to the
holders of its capital stock of any securities (other than its capital stock)
or property (including cash and securities of other companies) of the Company,
or any rights, options or warrants to purchase securities (other than its
capital stock) or property (including securities of other companies) of the
Company, then, simultaneously with the payment of such dividend or the making
of such distribution, and as a condition precedent to its right to do so, it
will pay or distribute to the Holder of this Warrant an amount of property
(including without limitation cash) and securities (including without
limitation securities of other companies) of the Company as would have been
received by such Holder had it exercised this Warrant and received all of the
Shares of Common Stock issuable upon the exercise of this Warrant immediately
prior to the record date (or other applicable date) used for determining
stockholders of the Company entitled to receive such dividend or distribution.

            9.         Certain
Notices.  In case at any time the Company shall propose to:

                        (a)        declare
any cash dividend upon its Common Stock;

                        (b)        declare
any dividend upon its Common Stock payable in stock or make any special
dividend or other distribution to the holders of its Common Stock;

                        (c)        offer
generally for subscription to the holders of any of its Common Stock any
additional shares of stock of any class or other rights;

                        (d)        reorganize,
or reclassify the capital stock of the Company, or consolidate, merge or
otherwise combine with, or sell all or substantially all of its assets to,
another corporation; 

                        (e)        voluntarily
or involuntarily dissolve, liquidate or wind up of the affairs of the Company;
or

                        (f)         redeem
or purchase any shares of its capital stock or securities convertible into its
capital stock;

then, in any one or more of
said cases, the Company shall give to the Holder, by certified or registered
mail, (i) at least ten (10) business days' prior written notice of  the date on
which the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to vote
in respect of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up, and (ii) in the case of such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, at least ten (10) business days' prior written
notice of the date when the same shall take place.  Any notice required by
clause (i) shall also specify, in the case of any such dividend, distribution
or subscription rights, the date on which the holders of Common Stock shall be
entitled thereto, and any notice required by clause (ii) shall specify the date
on which the holders of Common Stock shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be.

 

8

            10.       Put
Right  

            (a)        Exercise
of Put Right.  If at any time on or after March 31, 2010 the Company's
Common Stock is not listed on at least one of The American Stock Exchange,
Inc., the Nasdaq National Market, the Nasdaq SmallCap Market, The New York
Stock Exchange, Inc. or the OTC Bulletin Board, each Holder shall have the
right (a "Put Right") beginning on March 31, 2010 and continuing for a period
of two (2) years thereafter, to require that the Company purchase all or any
portion of the Warrant or Shares then owned by such Holder in accordance with
this Section 10, by delivery of a written notice to the Company to the effect
that such Holder is exercising a Put Right under this Section 10 (a "Put
Exercise Notice").  Upon receipt by the Company of a Put Exercise Notice,
the Company will promptly (and in any event within five (5) business days) give
written notice (a "Company Notice") to each of the other Holders, if
any, and to the holders of the Additional Warrants, if any, that a Put Exercise
Notice has been received by the Company.  Each such other Holder will have the
right to exercise a Put Right and require the Company to purchase (on the same
Put Closing Date (as defined below) relating to the Put Exercise Notice) all or
any portion of the Warrant or Shares held by such Holder by delivering written
notice to the Company within ten (10) days following receipt of the Company
Notice.  All such notices delivered by such other Holders will be deemed to
have been delivered as of the date of the Put Exercise Notice and will be
deemed to be an exercise of a Put Right by each such other Holder as of such
date.  Upon the exercise of a Put Right by a Holder, the purchase price payable
by the Company to such Holder (a "Put Purchase Price") shall be as
follows:

                        (i)         in
the case of such Holder's Warrant, an amount determined by subtracting (A) the
aggregate Exercise Price then in effect for the portion of such Holder's
Warrant with respect to which the Put Right is being exercised from (B) the
product of (1) the Fair Market Value per Share as of the date of exercise of
the Put Right (i.e., the date of receipt of the Put Exercise Notice) multiplied
by (2) the number of Shares that would be received upon exercise of the
portion of the Holder's Warrant with respect to which the Put Right is being
exercised; and

                        (ii)        in
the case of Shares, an amount equal to the product of (A) the Fair Market Value
per Share as of the date of exercise of the Put Right, multiplied by (B)
the number of Shares with respect to which the Put Right is being exercised.

Promptly and in any event
within five (5) business days following the Company's receipt of a Put Exercise
Notice, the Company shall initiate the process for determination of the Fair
Market Value per Share, shall use its commercially reasonable best efforts to
cause such process to proceed expeditiously, and in any event, shall cause such
process to be completed within sixty (60) days of the receipt of the Put
Exercise Notice, and shall give prompt written notice of the determination
thereof to each Holder.  

 

9

                        (b)        Closing. 
Each closing of the purchase and sale of any Warrant or Shares pursuant to this
Section 10 shall take place on a date (a "Put Closing Date") which is
the later of (i) thirty (30) days after the giving of the Put Exercise Notice,
and (ii) ten (10) days after determination of the Fair Market Value per Share,
provided that if such day is not a Business Day such closing shall be on the
next succeeding Business Day.  Payment of the Put Purchase Price shall be due
and payable in full on the Put Closing Date to the extent the Company may then
legally pay such price pursuant to provisions of applicable law. To the extent
that all of the Put Purchase Price payable under this Warrant and the
Additional Warrants, if applicable, may not legally be paid under the
provisions of applicable law, the Put Purchase Price payable under this Warrant
and the Additional Warrants, if any, shall be paid ratably among the Holder and
the holder of the Additional Warrants, if any, based on the total number of
Shares held or issuable upon exercise of this Warrant or the Additional
Warrants, if any, as the case may be.  The portion of the Put Purchase Price
not paid in full on the Put Closing Date shall be evidenced by a promissory
note delivered to the Holder, the principal of which or such portion thereof as
may be paid shall be payable as and when the Company may legally pay it under
applicable law. Unpaid principal on such promissory note shall bear interest at
the maximum rate allowable under applicable law.  The closing shall take place
at 10:00 a.m. on the Put Closing Date at such location as the Holder(s) may
determine and notify the Company or at such other location as may be agreed to
by the Company and the Holder(s).  The Put Purchase Price as may be paid under
applicable law shall be paid in full at each such closing, by wire transfer of
immediately available federal funds.  

                        (c)        Fair
Market Value per Share.  "Fair Market Value per Share" as of any
date shall mean an amount per Share issued or issuable pursuant to this Warrant
determined as follows: (i) if the Common Stock is traded on the American Stock
Exchange or another registered national stock exchange or through the Nasdaq
National Market, the Fair Market Value per Share shall be deemed to be the
average of the closing prices of the Common Stock on such exchange over the ten
(10) trading day period ending two (2) trading days prior to the delivery of
the Put Exercise Notice; (ii) if the Common Stock is actively traded on the
over-the-counter market, as reported by the OTC Bulletin Board or the National
Quotation Bureau Incorporated (or similar organization or agency succeeding to
its functions of reporting prices), the Fair Market Value per Share shall be
deemed to be the average of the closing bid prices over the ten (10) trading
day period ending two (2) trading days prior to the delivery of the Put
Exercise Notice and (iii) if there is no active public market for the Common
Stock, the Fair Market Value per Share shall be determined by an independent
competent appraiser mutually agreed to by the Company and the Holders of at
least a majority of the shares of Common Stock issued or issuable pursuant to
this Warrant and the Additional Warrants, if any, requesting redemption (the
"Requisite Majority").  In the event the Company and the Requisite Majority
cannot mutually agree upon an independent appraiser within fifteen (15) days of
receipt by the Company of a Put Exercise Notice, the Company and the Requisite
Majority will each select an independent competent appraiser of national
reputation to determine the Fair Market Value per Share.  The respective
appraisals will be provided to the Company and the Holders requesting
redemption promptly upon completion.  If the Fair Market Value per Share
appraisals are within 10% of one another, the Fair Market Value per Share shall
be the average of the two appraisals.  In the event the appraisal valuations
differ by more than ten percent (10%), the two appraisers chosen by the Company
and the Requisite Majority, respectively, shall choose a third independent
competent appraiser of national reputation and the third appraiser shall conduct
an appraisal to determine the Fair Market Value per Share (the "Third
Appraisal").  Upon completion, the Third Appraisal shall be promptly
delivered to the Company and the Holders requesting redemption.  The Third
Appraisal valuation shall be averaged with the prior appraisal that is closer
in value to the Third Appraisal.  The average of these two appraisals shall be
the Fair Market Value per Share and shall be binding on the Company and the
Holders requesting redemption.  All appraisals required herein shall be paid
for by the Company.  In determining the Fair Market Value per Share, each of
the appraisers shall evaluate the Company as a whole, on a going concern basis,
without application of any discount whatsoever, including any discount for a minority
ownership interest and/or lack of marketability of such interest.  In
determining the Fair Market Value per Share pursuant to this Section 10(c),
none of the appraisers shall take into account or otherwise make any discount
in respect of (i) any restriction on the transfer of the Shares, any other
shares of Common Stock of the Company or this Warrant, (ii) the fact that this
Warrant and the Shares represent a minority interest in the Company, (iii) any
lack of liquidity of the Shares, any other shares of Common Stock of the
Company or this Warrant due to the fact that there may not be a public or
private market therefor, (iv) any rights of the Company set forth in this
Warrant or (v) the voting rights or status of the Shares, any other shares of
Common Stock of the Company or this Warrant, whether under the certificate of
incorporation or bylaws of the Company, by agreement or otherwise.

 

10

                        (d)        The
Company agrees and acknowledges that the rights set forth in Section 10 shall
expressly survive the exercise of all or any portion of this Warrant and shall
inure to the Holder of any Shares issued upon exercise of the Warrant. 

11.       Registration
Rights.  As set forth in the Investors' Rights Agreement, each of the
Holders shall have certain rights to require the Company to register the Shares
under the Securities Act pursuant to an effective registration statement.

12.       Co-Sale
Rights.  As set forth in the Investors' Rights Agreement, each of the
Holders shall have certain rights of co-sale with respect to any transfer of
Common Stock by any of the Management Stockholders.

            13.       Successors. 
All the covenants and provisions of this Warrant by or for the benefit of the
Company or the Holder shall bind and inure to the benefit of their respective
successors and assigns, including those by operation of law, merger,
consolidation or as otherwise provided in Section 5(e).

            14.       Survival. 
The rights of the Holder under the Warrant, and the covenants and agreements of
the Company set forth in this Warrant for the benefit of the Holder, other than
Sections 5 and 8 shall survive exercise of all or any portion of this Warrant
and shall inure to the Holder of any Shares issued upon exercise of this
Warrant.  Notwithstanding the foregoing, following exercise of all shares exerciseable
under the Warrant, Sections 5 and 8 shall become null and void with no further
force or effect.

 

11

            15.       Article
and Section Headings.  Numbered and titled article and section headings are
for convenience only and shall not be construed as amplifying or limiting any
of the provisions of this Warrant.

            16.       Notice. 
Any and all notices, elections or demands permitted or required to be made
under this Warrant shall be in writing signed by the party giving such notice,
election or demand and shall be delivered personally, by telecopy or sent by
certified mail or overnight via nationally recognized courier service (such as
FedEx), to the other party at the address set forth below, or at such other
address as may be supplied in writing and of which receipt has been
acknowledged in writing.  The date of personal delivery or telecopy or two (2)
business days after the date of mailing (or the next business day after
delivery to such courier service), as the case may be, shall be the date of
such notice, election or demand.  For the purposes of this Warrant:

  	The Address of Holder is:	c/o
Petra Capital Partners
	 	172
Second Avenue North, Suite 112
	 	Nashville,
TN 37201
	 	Attention:
Michael W. Blackburn

      Telecopy
No.: (615) 313-5990
	 	  
	with a copy to:	Bass,
Berry & Sims PLC
	 	315 Deaderick Street, Suite 2700
	 	Nashville,
Tennessee 37238
	 	Attention:
Howard H. Lamar III
	 	Telecopy
No.:(615) 742-2709
	 	  
	The Address of Company is:	Home
Solutions of America, Inc.

      5565
Red Bird Center Dr., Suite 900
	 	Dallas,
Texas 75237
	 	Attention: Rick
J. O'Brien 
	 	Telecopy No.: (214) _______________
	 	

  

      
	with a copy to:	

Patton Boggs LLP

      
	 	

2001
Ross, Suite 3000

      
	 	

Dallas,
TX  75201

      
	 	Attn:
David P. McLean
	 	Telecopy
No.: (214) 758 - 1550

            17.       Severability. 
If any provision(s) of this Warrant or the application thereof to any person or
circumstances shall be invalid or unenforceable to any extent, the remainder of
this Warrant and the application of such provisions to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.

 

12

            18.       Governing
Law and Amendments.  This Warrant shall be construed and enforced under the
laws of the State of Delaware applicable to contracts to be wholly performed in
such State.  No amendment or modification hereof shall be effective except in a
writing executed by each of the parties hereto.

            19.       Counterparts. 
This Warrant may be executed in any number of counterparts and by different
parties to this Warrant in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same Warrant.

            20.       Waiver
of Trial by Jury.  HOLDER AND THE COMPANY HEREBY KNOWINGLY AND VOLUNTARILY
WITH THE BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS,
CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE, AT LAW OR
IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS WARRANT.  THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS WARRANT.

[Remainder of page intentionally left blank]

 

 

13

            IN WITNESS
WHEREOF, the parties hereto have set
their hands as of the date first above written.

                                                            

  	 HOME
SOLUTIONS OF AMERICA, INC.
	By:________________________________
	

        Rick J. O'Brien, Chief Financial Officer

      
	  
	 PETRA
MEZZANINE FUND, L.P.,
	   
	By:       Petra
Partners, LLC, its general partner
	            By:___________________________
	                    Michael W.
Blackburn
	                    Managing
Member

 

 

 

14

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