Exhibit 10.1
THIS PROMISSORY NOTE AND THE COMMON STOCK ISSUABLE UPON THE
CONVERSION
OF THIS NOTE, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED,
HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION
IS
NOT REQUIRED UNDER SUCH ACT.
CONVERTIBLE PROMISSORY NOTE
Principal Amount: US$500,000
Dated: February 15, 2005
FOR VALUE RECEIVED, HomeNet Corporation, a Delaware corporation
("Company"), promises to pay to the order
of Murray Richards ("Lender"), in
accordance with the terms hereof, the
principal sum of Five Hundred Thousand and
no/100 U.S. Dollars (US $500,000.00),
together with interest thereon as set
forth herein.
The principal amount of this Note shall bear interest from the
date
hereof at a per annum variable rate,
adjusted quarterly ("Interest Rate"), equal
to the Prime Rate plus one percentage point
(prime + 1%). As used herein, "Prime
Rate" shall mean the per annum prime rate
of interest published from time to
time by the Wall Street Journal. If at any
time the Wall Street Journal ceases
to publish such a prime interest rate,
there shall be substituted therefor the
per annum prime rate publicly announced
from time to time by Bank of America or
its successor.
1. Payments.
1.1 Unless converted or accelerated pursuant to the terms of this
Note,
principal and interest hereunder shall be
due and payable to Lender 90 days from
the date hereof ("Maturity Date"). All
payments of principal and/or interest
under this Note will be made in lawful
money of the United States in immediately
available funds or the equivalent at such
address as Lender may designate in
writing.
1.2 The Company may not prepay this Note in full at any time.
All
payments made hereunder shall be in lawful
money of the United States and shall
be applied first to Lender's collection
costs and attorneys fees, if any, second
to accrued but unpaid interest, and then to
reduce the principal balance owing
on this Note. The acceptance by Lender of
any payment under this Note which is
less than payment in full of all amounts
due and payable at the time of such
payment shall not constitute a waiver of or
impair, reduce, release or
extinguish any remedy of Lender, at that
time or at any subsequent time.
1.3 Notwithstanding anything herein to the contrary, in no event
shall
the interest paid hereunder exceed the
maximum amount permissible under
applicable law. If interest would otherwise
be payable to Lender in excess of
the maximum lawful amount, the interest
payable to Lender shall be reduced to
the maximum amount permitted under
applicable law; and in the event that Lender
shall ever receive anything of value deemed
interest by applicable law in excess
of the maximum lawful amount, an amount
equal to any excessive interest shall be
applied to the reduction of the principal
hereof and not to the payment of
interest, or if such excessive interest
exceeds the unpaid balance of principal
hereof such excess shall be refunded to the
Company.
1.4 This Note is unsecured.
<PAGE>
2. Conversion Rights.
2.1 Optional Conversion. At any time prior to or following the
Maturity
Date, the entire unpaid principal balance
and all accrued and unpaid interest
may be converted, at Lender's election,
into fully paid and nonassessable shares
of Common Stock as provided herein. Lender
shall give written notice to Company
that Lender elects to convert the Note,
which conversion shall be effective
twenty (20) days after Company's receipt of
such notice ("Effective Date"). Upon
the Effective Date, the Company shall
promptly issue and deliver to Lender a
certificate or certificates for the number
of shares of Common Stock to which
Lender is entitled upon such conversion.
Such conversion shall be deemed to have
been made immediately prior to the close of
business on the Effective Date, and
the Lender shall be treated for all
purposes as the record holder of such shares
of Common Stock on the Effective Date.
2.2 Procedure Upon Conversion. No fractional shares of Common
Stock
shall be issued upon conversion of this
Note. In lieu of any fractional shares
to which the Lender would otherwise be
entitled, the Company shall pay cash
equal to (a) such fraction, multi
