SECURITY AGREEMENT

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,

            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 Collate