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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, mul
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