Document:

EXHIBIT B 1

EXHIBIT 10.1

PHYTOMEDICAL TECHNOLOGIES, INC.

NONSTATUTORY STOCK OPTION AGREEMENT

THIS NONSTATUTORY STOCK OPTION AGREEMENT (“Agreement”) is made and entered into as of the date set forth below, by and between PhytoMedical Technologies, Inc., a Nevada corporation (the “Company”), and the following employee of the Company (“Optionee”):

In consideration of the covenants herein set forth, the parties hereto agree as follows:

1. 

Option Information.

(a)  

Date of Option:

August 1, 2006

(b)  

Optionee:

Greg Wujek

(c)  

Number of Shares: 

2,000,000

(d)  

Exercise Price: 

$0.52

2.  

Acknowledgements.

(a)  

Optionee is an employee of the Company.

(b)  

The Board of Directors (the “Board” which term shall include an authorized committee of the Board of Directors) and shareholders of the Company have heretofore adopted a 2005 Incentive Stock Plan (the “Plan”), pursuant to which this Option is being granted; and

(c)  

The Board has authorized the granting to Optionee of a nonstatutory stock option (“Option”) to purchase shares of common stock of the Company (“Stock”) upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”) provided by Rule 701 thereunder.

3.  

Shares; Price.  

Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) above (the “Shares”) for cash (or other consideration as is authorized under the Plan and acceptable to the Board of Directors of the Company, in their sole and absolute discretion) at the price per Share set forth in Section 1(d) above (the “Exercise Price”), such price being not less than [e.g., 85%] of the fair market value per share of the Shares covered by this Option as of the date hereof.

4.

Term of Option; Continuation of Service.  This Option shall expire, and all rights hereunder to purchase the Shares shall terminate 10 years from the date hereof. This Option shall earlier terminate subject to Sections 7 hereof upon, and as of the date of, the termination of Optionee’s employment if such termination occurs prior to the end of such 10 year period. Following the termination of the Optionee’s employment, if the Optionee continues to serve as a director of the Company, this Option shall nevertheless be terminated as of the date of the termination of  the Optionee’s employment. Nothing contained herein shall confer upon Optionee the right to the continuation of his or her employment by the Company or to interfere with the right of the Company to terminate such employment or to increase or decrease the compensation of Optionee from the rate in existence at the date hereof.

5.

Vesting of Option.  Subject to the provisions of Sections 7 hereof, this Option shall vest and become exercisable during the term of Optionee’s employment as follows: 

(i) 250,000 shall vest if and when an IND is filed for any current or future compounds; 

(ii) 250,000 shall vest if and when a phase I clinical trial is commenced for any current or future compounds; and 

(iii) 1,500,000 options shall vest if and when PhytoMedical or a wholly owned subsidiary or any one current or future compound is acquired, in whole or in part, or when either through PhytoMedical or a subsidiary, enters into a strategic collaborative agreement for any one current or future compound, provided that the Company’s Board of Directors has approved, by written resolution, any such acquisition, sale or agreement.

. The installments shall be cumulative (i.e., this option may be exercised, as to any or all shares covered by an installment, at any time or times after an installment becomes exercisable and until expiration or termination of this option).

6.

Exercise.  This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for in Section 12 hereof. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifetime. 

7.

Termination of Employment.  If Optionee shall cease to be employed by the Company for any reason whatsoever, whether voluntarily or involuntarily, Optionee, this Option shall terminate as of the date of the termination of such employment and shall be null and void. No options, including those previously vested but not exercised, may be exercised after the date of Optionee’s termination of employment with or by the Company

Unless earlier terminated, all rights under this Option shall terminate in any event on the expiration date of this Option as defined in Section 4 hereof.

8.

No Rights as Shareholder.  Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the effective date of issuance of the Shares following exercise of this Option, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in Section 9 hereof.

9.

Recapitalization.  Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible securities of the Company shall not be deemed having been “effected without receipt of consideration by the Company”.

In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a “Reorganization”), unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board, which date shall be no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving entity does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option a stock option or capital stock of such surviving of such surviving entity, as applicable, which on an equitable basis shall provide the Optionee with substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee, in its sole and absolute discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending immediately prior to the date determined by the Board pursuant hereto for termination of the Option or during the remaining term of the Option, whichever is the lesser, to exercise any unexpired Option or Options without regard to the installment provisions of Section 5; provided, however, that such exercise shall be subject to the consummation of such Reorganization.

Subject to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation, this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5 shall continue to apply.

In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall be deemed to be the Shares within the meaning of this Option.

To the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided, Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.

The grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or any part of its business or assets.

10.

Taxation upon Exercise of Option.  Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of the date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Optionee’s then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability as a condition of the exercise of this Option.

11.

Modification, Extension and Renewal of Options.  The Board or Committee, as described in the Plan, may modify, extend or renew this Option or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution therefore (to the extent not theretofore exercised), subject at all times to the Plan, the Code and the corporate securities rules of Nevada. Notwithstanding the foregoing provisions of this Section 11, no modification shall, without the consent of the Optionee, alter to the Optionee’s detriment or impair any rights of Optionee hereunder.

12.

Investment Intent; Restrictions on Transfer.

(a)  

Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee  shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.

(b)  

Optionee further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information reasonably necessary to verify the accuracy of such information

(c)  

Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:

THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE ‘SECURITIES ACT’) OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED AUGUST 1, 2006, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.

and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company’s transfer agent.

13.

Stand-off Agreement.  Optionee agrees that, in connection with any registration of the Company’s securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company’s securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of at least one year following the effective date of registration of such offering.

14.

 Restriction Upon Transfer.  The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by the Optionee except as hereinafter provided.

(a)

Repurchase Right on Termination Other Than for Cause. For the purposes of this Section, a “Repurchase Event” shall mean an occurrence of one of (i) termination of Optionee’s employment by the Company, voluntary or involuntary and with or without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall be deemed to have occurred as of the date on which a voluntary or involuntary petition in bankruptcy is filed with a court of competent jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that any of the Shares are allocated as the sole and separate property of Optionee’s spouse pursuant thereto (in which case, this Section shall only apply to the Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to repurchase all or any portion of the Shares of Optionee at a price equal to the fair value of the Shares as of the date of the Repurchase Event.

(b)

Repurchase Right on Termination for Cause. In the event Optionee’s employment is terminated by the Company “for cause”, then the Company shall have the right (but not an obligation) to repurchase Shares of Optionee at a price equal to the Exercise Price. Such right of the Company to repurchase Shares shall apply to 100% of the Shares for one (1) year from the date of this Agreement; and shall thereafter lapse at the rate of twenty percent (20%) of the Shares on each anniversary of the date of this Agreement. In addition, the Company shall have the right, in the sole discretion of the Board and without obligation, to repurchase upon termination for cause all or any portion of the Shares of Optionee, at a price equal to the fair value of the Shares as of the date of termination, which right is not subject to the foregoing lapsing of rights. In the event the Company elects to repurchase the Shares, the stock certificates representing the same shall forthwith be returned to the Company for cancellation.

(c)

Exercise of Repurchase Right. Any Repurchase Right under Paragraphs 14(a) or 14(b) shall be exercised by giving notice of exercise as provided herein to Optionee or the estate of Optionee, as applicable. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment or retirement, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds) or cancellation of purchase money indebtedness of the Optionee for the Shares. If the Company can not purchase all such Shares because it is unable to meet the financial tests set forth in the Nevada corporation law, the Company shall have the right to purchase as many Shares as it is permitted to purchase under such sections. Any Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 14.

(d)  

Right of First Refusal. In the event Optionee desires to transfer any Shares during his or her lifetime, Optionee shall first offer to sell such Shares to the Company. Optionee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Optionee within the thirty (30) day notice period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Optionee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Optionee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.

(e)

Acceptance of Restrictions. Acceptance of the Shares shall constitute the Optionee’s agreement to such restrictions and the legending of his certificates with respect thereto. Notwithstanding such restrictions, however, so long as the Optionee is the holder of the Shares, or any portion thereof, he shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.

(f)  

Permitted Transfers. Notwithstanding any provisions in this Section 14 to the contrary, the Optionee may transfer Shares subject to this Agreement to his or her parents, spouse, children, or grandchildren, or a trust for the benefit of the Optionee or any such transferee(s); provided, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to the Optionee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 14(a) wherein the permitted transfer shall be deemed to be rescinded); and provided further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the Optionee and the Company.

(g)  

Release of Restrictions on Shares. All other restrictions under this Section 14 shall terminate five (5) years following the date of this Agreement, or when the Company’s securities are publicly traded, whichever occurs earlier.

15.  

Notices.  Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Optionee at the address last provided by Optionee for his or her employee records.

16.

Agreement Subject to Plan; Applicable Law.  This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been granted, executed and delivered in the State of Nevada, and the interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein.

17.

For purposes of this Option a termination of employment for "for cause" occurs if  the Optionee’s employment is terminated for any of the following reasons: 

(i) theft, dishonesty, or falsification of any employment or Company records; 

(ii) improper disclosure of the Company’s confidential or proprietary information; 

(iii) any intentional act by the Optionee which has a material detrimental effect on the Company’s reputation or business; 

(v) the Optionee’s failure or inability to perform any reasonable assigned duties after written notice from the Company of, and a reasonable opportunity to cure, such failure or inability; and 

(vi) any material breach by the Optionee of an agreement, including this Option, between the Company and the Optionee,  which breach is not cured within 10 days following written notice of such breach from the Company. 

IN WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.

PhytoMedical Technologies, Inc.

 By: 

/s/ Harmel S. Rayat

        

Harmel S. Rayat, Chief Financial Officer and Authorized Signatory

/s/ Greg Wujek

Greg Wujek, Optionee

(one of the following, as appropriate, shall be signed)

I certify that as of the date

By his or her signature, the

hereof I am unmarried

spouse of Optionee hereby agrees

to be bound by the provisions of

the foregoing NONSTATUTORY STOCK

OPTION AGREEMENT

____________________________

/s/  Ronda Wujek

Optionee

Spouse of Optionee

Appendix A

NOTICE OF EXERCISE

PhytoMedical Technologies, Inc.

Suite 216 1628 West 1st Avenue

Vancouver, BC

V6J 1G1

Attention: Chief Financial Officer

Re: 

Nonstatutory Stock Option

Notice is hereby given pursuant to Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the number of shares set forth below at the exercise price set forth in my option agreement:

Nonstatutory Stock Option Agreement dated: ____________

Number of shares being purchased: ____________

Exercise Price: $____________

A check in the amount of the aggregate price of the shares being purchased is attached.

I hereby confirm that such shares are being acquired by me for my own account for investment purposes, and not with a view to, or for resale in connection with, any distribution thereof. I will not sell or dispose of my Shares in violation of the Securities Act of 1933, as amended, or any applicable federal or state securities laws.

I understand that the certificate representing the Option Shares will bear a restrictive legend within the contemplation of the Securities Act and as required by such other state or federal law or regulation applicable to the issuance or delivery of the Option Shares.

Further, I understand that, as a result of this exercise of rights, I will recognize income in an amount equal to the amount by which the fair market value of the Shares exceeds the exercise price. I agree to report such income in accordance with then applicable law and to cooperate with Company in establishing the withholding and corresponding deduction to the Company for its income tax purposes.

I agree to provide to the Company such additional documents or information as may be required pursuant to the Company’s 2005 Incentive Stock Plan.

_______________________________

(signature)

_______________________________

(print name of Optionee)Exhibit 10.01

 

PROMISSORY NOTE

	

$21,650,000.00

			
		Dallas, Texas
	
		July 1, 2006

Home Solutions
of America, Inc., a Delaware corporation ("Maker"), for value received,
hereby promises to pay to Brian Marshall, an individual domiciled in Florida (the
"Payee"), or his permitted assigns, at the time and in the manner
hereinafter provided, the aggregate principal sum of Twenty-One Million Six
Hundred Fifty Thousand and NO/100 DOLLARS ($21,650,000.00), together with
interest computed thereon, from and after the date hereof until paid, at the
rate and compounded as hereinafter provided.  This Note shall be payable in
U.S. dollars at the office of Payee at 3018 Horatio Street, Tampa, Florida 33609,
or at such other address as Payee may from time to time otherwise designate.

            1.         This Note
is being executed and delivered in connection with that certain Stock Purchase
Agreement, dated July 31, 2006 but effective for all purposes as of July 1, 2006, by and among Maker, Payee and Fireline
Restoration, Inc., a Florida corporation  (the "Purchase Agreement"). Unless
otherwise defined herein, all defined terms in this Note shall have the
meanings given them in the Purchase Agreement.

            2.         Payments of
principal and interest on this Note shall be due as follows:

            (a)        accrued interest
on the outstanding principal balance of this Note shall be due on the first day
of each month, commencing on September 1, 2006;

            (b)        if after
the Closing Date, Fireline receives any payment(s) on the Acquired Contracts
referred to as "Vista" and//or "Delmar" (each, a "Vista/Del Mar Payment"),
then in each such instance, a payment on this Note equal to the amount of the
Vista/Del Mar Payment so received (up to but not exceeding not to exceed the
then-outstanding principal balance of the Note together with unpaid accrued
interest thereon) shall be due and payable on the fifth business day following
Maker's receipt of such Vista/Del Mar Payment, to be credited against amounts
outstanding hereunder, as provided below; and

            (c)        the
remaining outstanding principal balance of this Note, together with accrued and
unpaid interest thereon, shall be due and payable on November 17, 2006;
provided, however, that if the remaining outstanding principal balance of this
Note, together with accrued and unpaid interest thereon, is not paid on
November 17, 2006, then such remaining outstanding principal balance of this
Note, together with accrued and unpaid interest thereon, shall be due and
payable on January 31, 2007 (in either case, the "Maturity Date").

            3.         All
payments on this Note shall be applied first, unpaid accrued interest, and next,
to principal outstanding under this Note.  

            

 

 

 

1

            4.         The
outstanding principal amount of this Note, together with unpaid accrued
interest that has become due and payable pursuant to the terms hereof, shall
bear interest from the date hereof until paid at a rate, accrued and compounded
monthly, equal to (i) the "prime rate" as quoted in the The Wall Street
Journal from time to time, until November 17, 2006, and (ii) if the
Maturity Date extends automatically to January 31, 2007 pursuant to Section 2(c),
twelve percent (12%) thereafter.  

5.         Notwithstanding
anything contained in this Note to the contrary, after compliance with the applicable
provisions of the Purchase Agreement and the Escrow Agreement, Maker shall have
the right to set off and apply against all sums owing to Payee hereunder, any
amounts that Payee owes Maker pursuant to the terms of the Purchase Agreement
(including, without limitation, any indemnity claims that Maker may have from
time to time against Payee under the Purchase Agreement) after final resolution
pursuant to the provisions of Section 11.04 of the Purchase Agreement.  Any
amounts which Maker has the right to set off and apply against amounts
outstanding under this Note shall be applied first, against unpaid accrued
interest, and next, against outstanding principal and any amount(s) set off and
applied pursuant to this paragraph shall be considered a payment on the Note in
such amount(s).  

6.         This
Note may be prepaid in whole or in part from time to time, without premium or
penalty.  Each prepayment of principal shall be accompanied by an amount equal
to the unpaid accrued interest on the principal amount prepaid to the date of
such prepayment.

            7.         The
following events shall be Events of Default (herein so called) hereunder: 

            (a)        if
Maker shall fail to pay when due any amounts due in accordance with the terms
of this Note, and such failure continues for a period of ten (10) days thereafter;
provided, that if Maker has made a claim against Payee pursuant
to the applicable provisions of the Purchase Agreement and the Escrow
Agreement, then Maker may withhold payment hereunder in an amount equal to (but
not exceeding) the amount of such claim (the "Abated Payment"), unless
and until such claim has been finally resolved in favor of Payee, and the
Abated Payment shall not be considered an Event of Default hereunder; or 

            (b)        Maker
shall have failed to have Payee released as a guarantor of the BB&T
Indebtedness on or before November 17, 2006, unless Payee shall have consented
in writing to an extension of such guaranty beyond November 17, 2006.  

8.         Upon
the occurrence and during the continuance of an Event of Default, the outstanding
principal amount of this Note, together with unpaid accrued interest that has
become due and payable pursuant to the terms hereof, shall bear interest from
the date of such Event of Default until the date such Event of Default is cured
or such Event of Default is waived in writing by Payee at a rate, accrued and
compounded monthly, equal to twelve percent (12%).  Upon the occurrence and
during the continuance of an Event of Default, Payee may declare the principal
of this Note together with all accrued and unpaid interest thereon to be due
and payable immediately, and the same shall become and be due and payable,
without notices, demands for payment, presentations for payment, notices of
payment default, notices of intention to accelerate maturity, protest and
notice of protest, and any other notices of any kind, all of which are
expressly waived by Maker and any and all sureties, guarantors and endorsers of
this Note.  

2

9.         If
an Event of Default occurs and this Note is placed in the hands of an attorney
for collection (whether or not suit is filed), or if all or any portion of this
Note is required to be collected by suit or legal proceedings or through
bankruptcy proceedings, Maker agrees to pay in addition to all sums then due
hereon, including principal and interest, all expenses of collection,
including, without limitation, reasonable attorneys' fees.

10.       Notwithstanding
anything contained in this Note to the contrary, after final resolution of any
dispute pursuant to the provisions of Section 11.04 of the Purchase
Agreement, if the transactions contemplated by the Purchase Agreement are
terminated or otherwise unwound for any reason, then concurrently therewith,
this Note shall immediately be deemed null and void and of no legal force or
effect, all amounts then due and owing under the Note shall be forever forgiven
and cancelled, and Payee shall immediately deliver the Note to Maker marked or
stamped "cancelled".  

11.       Maker
and any and all sureties, guarantors and endorsers of this Note and all other
parties now or hereafter liable hereon, severally waive grace, demand,
presentment for payment, notice of dishonor, protest and notice of protest,
notice of intention to accelerate, notice of acceleration, any other notice and
diligence in collecting and bringing suit against any party hereto and agree
(i) to all extensions and partial payments, with or without notice, before or
after the Maturity Date, (ii) to any substitution, exchange or release of any
security now or hereafter given for this Note, (iii) to the release of any
party primarily or secondarily liable hereon, and (iv) that it will not be
necessary for the holder hereof, in order to enforce payment of this Note, to
first institute or exhaust such holder's remedies against Maker or any other
party liable therefor or against any security for this Note.  No delay on the
part of Payee in exercising any power or right under this Note shall operate as
a waiver of such power or right, nor shall any single or partial exercise of
any power of right preclude further exercise of that power or right.

 

 

 

 

3

12.       All
agreements between Maker and the holder hereof, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of acceleration
of the Maturity Date hereof, or otherwise, shall the amount paid, or agreed to
be paid, to the holder hereof for the use, forbearance or detention of the
funds advanced pursuant to this Note, or otherwise, or for the payment of
performance of any covenant or obligation contained herein or in any other
document or instrument evidencing, securing or pertaining to this Note exceed
the maximum amount permissible under applicable law.  If from any circumstances
whatsoever fulfillment of any provision hereof or any other document or
instrument exceeds the maximum amount of interest prescribed by law, then ipso
facto, the obligation to be fulfilled shall be reduced to the limit of
such validity, and if from any such circumstances the holder hereof shall ever
receive anything of value deemed interest by applicable law, which would exceed
interest at the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the unpaid principal balance of
this Note or on account of any other principal indebtedness of Maker to the
holder hereof, and not to the payment of interest, or if such excessive
interest exceeds the unpaid principal balance of this Note and such other
indebtedness, such excess shall be refunded to Maker.  All sums paid, or agreed
to be paid, by Maker for the use, forbearance or detention of the indebtedness
of Maker to the holder of this Note shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the
full term of such indebtedness until payment in full so that the actual rate of
interest on account of such indebtedness is uniform throughout the term
hereof.  The terms and provisions of this paragraph shall control and supersede
every other provision of all agreements between Maker and the holder hereof.

13.       Payee
may not assign, endorse, hypothecate, pledge or otherwise transfer this Note
without the express prior written consent of the Maker, which consent shall not
be unreasonably withheld, and any such endorsement, hypothecation, pledge or
transfer without Maker's prior written consent shall be null and void and of no
legal force or effect.

14.       This
Note shall be governed by and construed in accordance with the laws of the
State of Florida, without regard to its principles of conflicts of laws.

MAKER:

 

 

HOME SOLUTIONS OF AMERICA, INC.

/s/ Frank J. Fradella                                    

By:  Frank Fradella

Its:   Chief Executive Officer

 

 

 

 

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]