EXHIBIT 10.2
PROMISSORY NOTE
THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED
AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF
AN EFFECTIVE
REGISTRATION STATEMENT
AS TO THE SECURITIES
UNDER SAID ACT OR AN
OPINION OF COUNSEL
SATISFACTORY TO THE
COMPANY THAT SUCH
REGISTRATION IS
NOT
REQUIRED.
PROMISSORY NOTE
$2,500,000
April 29, 2008
FOR VALUE RECEIVED, PAID, INC., a Delaware corporation (the
"Company"), promises
to pay to the order of Lewis Asset Management, or its registered
assigns
("Holder"), on or before the first event of the following:
1. 24
months from the date of this Note ("Maturity Date"); or
2. Any
time during the 24 months prior to the Maturity Date;
in lawful money of the
United States,
in immediately available funds, the
principal sum of Two Million Five Hundred Thousand Dollars
($2,500,000) (or such
lesser amount
actually extended by Holder to Company)
plus the full amount of
the interest owed
hereunder, with
interest on the unpaid
balance at a rate of
Fifteen Percent (15%). As further consideration for the Note, the Company will
issue the Warrant
in the form
attached hereto to Holder equal to a right to
purchase one hundred
thousand shares for
every $100,000 loaned
at an exercise
price of $.25 per
share. This Note does
not conflict
with any other
Company
commitments to other
lenders and shall be
unsecured.
The Company agrees to
secure this $2,500,000
Revolving Credit Facility with (.5%) one
half of 1% of
the patent portfolio asset owned 100% by Paid, Inc. The unpaid
principal of this
Note from time to time
outstanding shall
bear interest, payable monthly in
arrears, computed on
the basis of the actual number of days elapsed over a year
assumed to have 360 days
1. Events of Default. The occurrence of any of the following shall
constitute an
Event of Default:
(a)
Failure to Pay
Principal or Interest when Due. The Company shall fail
to pay (or shall state in writing an intention not to pay or its inability to
pay) any principal or interest payment when due hereunder;
(b)
Voluntary Bankruptcy or Insolvency Proceedings. The Company shall
(a)(i) apply
for or consent to the appointment of a receiver, trustee,
liquidator or
custodian of itself or of all or a substantial part of its
property, (ii) be
unable, or admit in
writing its inability,
to pay its debts
generally as they mature, (iii) make a general assignment for the
benefit of its
or any of its creditors, (iv) be dissolved or liquidated in full or
in part, (v)
become insolvent
(as such term may be
defined or interpreted
pursuant to any
applicable statute),
(vi) commence a voluntary case or other proceeding seeking
liquidation,
reorganization or other relief with respect to itself or its
debts
pursuant to any
bankruptcy,
insolvency,
or similar law now or
hereafter in
effect or consent to any such relief or to the appointment of or taking
possession of its
property by any
official in any
involuntary
case or other
proceeding commenced
against it, or (vii) take any action for
the purpose of
effecting any of the
foregoing;
or (b) become a debtor in any involuntary
bankruptcy or insolvency proceedings if such proceedings
for the appointment of
a receiver,
trustee, liquidator or custodian of the Company or of all or a
substantial part of
the property
thereof, or an involuntary case or other
proceedings seeking liquidation, reorganization or other relief
with respect to
the Company or the debts thereof
