Related Party Transactions and Outside Related Director Information

Home Solutions of America, Inc. (HOM)

5/12/2006 Proxy Information

In October 2002, the Company issued a note payable to an affiliate of Mr. Tyrrell L Garth, a stockholder who then held greater than 5% of the Company's outstanding common stock, for the purchase of the land and building for the Company's corporate headquarters, the unpaid balance of which was $750,000 at December 31, 2004. The note was secured by a deed of trust and accrued interest at 12% per annum. Interest expense on the note was $90,000, $90,000 and $90,000 for the years ended December 31, 2005, 2004 and 2003, respectively. The Company paid the note and accrued interest in December 2005 for a total of $757,500.

In 2005, the Company paid Sander Morris Harris Inc., of which Michael S. Chadwick, one of our directors, is a Senior Vice President, an aggregate of $1,981,437, consisting of $1,867,250 in fees for a series of investment banking services and $114,187 in reimbursed expenses. Mr. Chadwick personally received no payments from the Company in connection with the services provided by Sanders Morris Harris Inc.

During the fourth quarter of 2005, the Company's management committed to a plan to dispose of certain assets and liabilities of its building and remodeling division. In March 2006, the Company sold the net assets, consisting of $500,000 cash and a $3,000,000 seller note secured by assets of the buyer, to an affiliate of Anthony Leeber, Jr., a greater than 5% stockholder and the President of Cornerstone Building & Remodeling, Inc., a subsidiary of the Company.

In fiscal year 2005 and continuing through the first quarter of 2006, the Company paid Hallett & Perrin, P.C., its legal counsel, an aggregate of $302,372 in legal fees. A sibling of Rick O'Brien, who is our President and Chief Operating Officer, is a shareholder of Hallett & Perrin, P.C.