IMPROVENET INC
PROMISSORY NOTE - MARK PLOEN
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>7
<FILENAME>exh10-6_12773.txt
<DESCRIPTION>PROMISSORY NOTE - MARK PLOEN
<TEXT>
                                                                    EXHIBIT 10.6
                                                                    ------------

                 SECOND AMENDMENT TO IMPROVENET, INC. UNSECURED
             CONVERTIBLE PROMISSORY NOTE SUBSCRIPTION AGREEMENT AND
                    8% UNSECURED CONVERTIBLE PROMISSORY NOTE

     This Second Amendment to ImproveNet, Inc. Unsecured Convertible Promissory
Note Subscription Agreement and 8% Unsecured Convertible Promissory Note (the
"SECOND AMENDMENT") is made this 23rd day of June 2004 (the "EFFECTIVE DATE") by
and between MARK PLOEN (the "SUBSCRIBER"), and ImproveNet, Inc., a Delaware
corporation ("COMPANY"). All terms used, but not otherwise defined herein, shall
have the meanings ascribed to such terms in the ImproveNet, Inc. Unsecured
Convertible Promissory Note Subscription Agreement dated October 24, 2003, as
amended, between Subscriber and Company.

     WHEREAS, Company accepted from Subscriber an ImproveNet, Inc. Unsecured
Convertible Promissory Note Subscription Agreement dated October 24, 2003 and
amended December 4, 2003 (the "AGREEMENT") for the issuance by the Company of an
8% unsecured convertible promissory note in the principal amount of $50,000 (the
"NOTE") which provided for conversion of the unpaid principal and accrued
interest into fully paid and nonassessable shares of the Company's Common Stock
at the rate of five (5) shares of Common Stock for every one dollar ($1.00) of
debt represented by the Note.

     WHEREAS, as a condition to the closing of a certain subscription received
from an accredited institutional investor for the purchase of 10,000,000 shares
of Common Stock of the Company at the price of $0.10 per share (the "NEW
INVESTMENT"), the Note must be converted into shares of Common Stock of the
Company.

     WHEREAS, to induce Subscriber to convert the Note into shares of Common
Stock of the Company immediately prior to but contingent upon the closing of the
New Investment, the Company must modify the provisions of the Agreement and the
Note on the terms and conditions set forth in this Second Amendment.

     NOW, THERFORE, in consideration of the premises, the mutual covenants and
agreements and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

     1.   Section 1(a) of the Agreement is hereby amended and restated in its
entirety as follows:

          "1.  SUBSCRIPTION.

               (a) The undersigned (the "SUBSCRIBER") hereby subscribes to
          purchase from ImproveNet, Inc., a Delaware corporation with its
          principal office located at 10799 N. 90th Street, Suite 200,
          Scottsdale, AZ 85260 (the "COMPANY"), (i) an 8% Unsecured Convertible
          Promissory Note in the form attached hereto as Exhibit A (the "NOTE")
          and (ii) a Common Stock Purchase Warrant (the "WARRANT") to purchase,
          for a three (3) year period, 333,333 shares of the Common Stock,
          $0.001 par value, of the Company (the "WARRANT SHARES") exercisable at
          $0.15 per share, on the terms and subject to the conditions set forth
          in this Agreement. The terms of the Note provide for conversion of the
          unpaid principal and accrued interest into fully paid and
          nonassessable shares of the Company's Common Stock at the rate of TEN
          (10) shares of Common Stock for every one dollar ($1.00) of debt
          represented by the Note (the "SHARES"). The Note subscribed for is one
          in a series of unsecured convertible promissory notes issued pursuant
          to an offering by the Company of Notes (a minimum amount of $25,000
          per Note but the Company in its sole discretion may accept minimum
          denominations of $5,000) totaling a minimum of $100,000 and a maximum
          of $500,000 in the aggregate (or such greater or additional maximum
          amount as the Company, in its sole discretion shall determine). The
          Notes are unsecured and have no liquidation rights or preferences
          senior to other unsecured liabilities of the Company. The Company may
          issue additional debt instruments senior to, or on parity with, the
          Notes, from time to time, in its sole discretion."

     2.   Section 2(a) of Exhibit A - Form of Unsecured Convertible Promissory
Note of the Agreement and Section 2(a) of the Note dated December 12, 2003 are
hereby amended and restated in their entirety as follows:

          "2.  CONVERSION.

          CONVERSION RATE. At any time during the term of this Note (the
          "CONVERSION PERIOD") and in the event the entire outstanding principal
          balance of this Note, plus accrued interest hereunder, has not been
          paid in full, then Lender may elect to convert, in whole or in part,
          the outstanding principal balance of this Note and accrued but unpaid
          interest into shares of common stock of Maker, par value $0.001 per
          share, (the "CONVERSION STOCK") at the rate of TEN (10) shares of
          common stock for every one dollar ($1.00) of debt represented by this
          Note (the "CONVERSION RATE"); provided, however, that Lender must
          convert a minimum of $5,000 of debt (unless Lender is converting a
          lesser amount of debt as the final conversion of all amounts due to
          Lender under the Note). Conversion under this Section 2 shall occur
          only upon surrender of this Note for conversion at the principal
          offices of the Maker along with a written request as to the amount of
          debt represented by this Note which is being converted. In the event
          that all of the outstanding principal balance and accrued but unpaid
          interest is not converted, then Maker will issue a new note for the
          balance of such outstanding amounts. Maker makes no warranties or
          representations that the shares of common stock received upon
          conversion are not or will not be "restricted securities" as that term
          is defined in Rule 144 under the Securities Act of 1933. Conversion
          under this Section 2 shall occur only upon surrender of this Note for
          conversion at the principal offices of Maker."

     3.   Subscriber agrees to and does hereby provide written notice of its
election to convert the entire outstanding principal balance and accrued but
unpaid interest on the Note as amended, in accordance with the provisions
thereof and at the conversion ratio set forth in Section 2 above, into shares of
Common Stock of the Company immediately prior to but contingent upon the closing
of the New Investment. In the event the New Investment does not close by July
16, 2004, then the parties agree that this Second Amendment shall automatically
be rescinded without any further action of the parties, and this Second
Amendment shall be void from its inception.

     4.   Upon the conversion as set forth in Section 3 above and surrender of
the original Note to the Company, the Company shall issue to the Subscriber a
certificate for the Shares and the Warrant document. Except as otherwise amended
hereby, the Agreement and the Note remain in full force and effect.

     5.   The Company shall prepare, and, on or prior to sixty (60) days from
the date of the Second Amendment (the "FILING DATE"), file with the Securities
and Exchange Commission ("SEC") a registration statement (the "REGISTRATION
STATEMENT") on Form S-3 (or, if Form S-3 is not then available, on Form SB-2 or
such form of Registration Statement as is then available to effect a
registration of the Shares and the Warrant Shares) covering the resale of the
Shares and the Warrant Shares, which Registration Statement, to the extent
allowable under the Act and the rules and regulations promulgated thereunder
(including Rule 416), shall state that such Registration Statement also covers
the shares underlying the Warrants. The number of shares of Common Stock
initially included in such Registration Statement shall be no less than an
amount equal to the total number of Shares and Warrant Shares, without regard to
any limitation, if any, on Subscriber's ability to exercise the Warrants. The
Company, in its sole discretion may include other selling shareholders in the
Registration Statement.

     6.   Subscriber acknowledges and understands that noteholders (i) Hayjour
Family Limited Partnership, Jeffrey I. Rassas General Partner, (ii) Farsi Family
Trust, Homayoon J. Farsi, Trustee, and (iii) Ahmad Family Trust, Naser Ahmad,
Trustee, (the "AFFILIATE SHAREHOLDERS") of which directors and officers, Jeffrey
I. Rassas, Homayoon J. Farsi, and Naser Ahmad hold beneficial ownership,
respectively, have waived participation in the conversion contemplated by this
Second Amendment. Company shall make payment in full of all outstanding
principal and accrued but unpaid interest on the Notes (as defined in Section 1
of the Agreement) held by the Affiliate Shareholders under the original
provisions thereof within a reasonable time following the closing of the New
Investment. The current principal balance of the Notes held by the Affiliate
Shareholders is $30,000. Subscriber hereby agrees and consents to such payments
by the Company to the Affiliate Shareholders.

     7.   This Second Amendment may be executed in one or more counterparts and
by original or facsimile signature, each of which will constitute an original
and all of which together will constitute one and the same instrument.


                         [SIGNATURES ON FOLLOWING PAGE]
<PAGE>

     IN WITNESS WHEREOF, this Second Amendment has been executed by each of the
parties as of the day and year first above written.


COMPANY                                         SUBSCRIBER
IMPROVENET, INC.                                MARK PLOEN



By: /s/ Jeffrey I. Rassas                       By: /s/ Mark Ploen
    -------------------------                       -------------------------

Name:   Jeffrey I. Rassas                       Name:   Mark Ploen
      -----------------------                         -----------------------

Title:  CEO                                     Title:
       ----------------------                          ----------------------

</TEXT>
</DOCUMENT>
