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Modification Agreement

 

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Title:

Modification Agreement

Entities:

Paid Inc

Date:

2002

Size:

Preview shows 6KB of 21KB total

Price:

$41

ID:

#1238444

 

 

► Legal ► Modification Agreements

 

 

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                             MODIFICATION AGREEMENT


This MODIFICATION AGREEMENT (the "Agreement") is made as of May 21, 2002,
by and between SALES ONLINE DIRECT, INC., a Delaware corporation (the
"Corporation") and AUGUSTINE FUND, L.P. (the "Lender").

WITNESSETH

R. 1. On November 7, 2001 (the "Transaction Date"), the Corporation and
the Lender entered into a Loan Agreement (the "Loan Agreement") pursuant to
which the Lender agreed to extend loans up to $1,000,000 in the form of a
Convertible Promissory Note (the "Note"). The Note is convertible into shares of
the Corporation's common stock, par value $.001 per share (the "Common Stock").

R.2. In connection with the issuance of the Note, the Corporation and the
Lender executed a Registration Rights Agreement (the "Registration Rights
Agreement"), pursuant to which the Corporation agreed to file with the
Securities and Exchange Commission (the "Commission") within 180 days after the
closing date (the "Filing Date") a registration statement for the resale of the
shares of Common Stock issuable upon the conversion of the Note (the Loan
Agreement, the Note, and the Registration Rights Agreement are collectively
referred to herein as the "Transaction Documents"). The Registration Rights
Agreement further provides that the Registration Statement shall be declared
effective by the Commission within 240 days following the Closing Date (the
"Effectiveness Date") and if such Registration Statement is not filed by the
Filing Date or declared effective by the Effectiveness Date, the conversion
price for conversion of principal and interest into shares shall decrease
monthly by two percent (2%).

R.3. On March 24, 2002, the Corporation and Lender agreed to amend the
Loan Agreement, the Note, and the Registration Rights Agreement in the manner
and subject to the terms and conditions set forth herein, and to enter into a
Third Amended Modification Agreement, dated of even date herewith.

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Corporation and Lender hereby
agree as follows:

1. Recitals; Definitions. The recitals set forth above are true and
correct in every respect and are incorporated herein by reference. Any
capitalized terms contained herein not defined herein shall have the meaning
assigned to such term in the Loan Agreement, or if not defined in the Loan
Agreement, in the Note, or if not defined in the Loan Agreement or Note, in the
Registration Rights Agreement.

2. Amendments to Loan Agreement. The following amendments are hereby made
to the Loan Agreement:

(a) All references in the Note to "One Million Dollars" or "$1,000,000"
are hereby amended to be "Two Million Dollars" or "$2,000,000."

(b) The fifth sentence of Section 2.2 shall be deleted in its entirety,
and in lieu thereof, shall state as follows:

"Draw Requests shall be in the form of Exhibit D, be sent at least
seven (7) calendar days (although the Corporation shall use its best
efforts to send such Draw Request thirty (30) calendar days) prior to the
date that the requested funds are to be sent to the Corporation and
include a detailed description of the specific bona fide operating
expenses that the Corporation intends to pay with the requested funds."

(c) The first and second sentence of Section 2.3(b) shall be deleted in
their entirety, and in lieu thereof, shall state as follows:

<PAGE>

"The interest payable to the Lender for any given period shall be
paid, at the Corporation's election, either in cash or in shares of Common
Stock (such shares being referred to as "Interest Payment Shares"), which
election may be made notwithstanding any prior practice or prior
election."

(d) The first sentence to Section 2.3(c) shall be deleted in its entirety,
and in lieu thereof, shall be replaced with the following:

"Notwithstanding anything to the contrary set forth herein, in no
event shall the Lender be entitled to receive Interest Payment Shares in
lieu of a cash interest payment if, upon giving effect to such issuance,
such payment would cause the aggregate number of shares of Common Stock
beneficially owned by the Lender and its affiliates to exceed 4.99% of the
outstanding shares of the Common Stock following such issuance. To the
extent, but only to the extent that the receipt of Interest Shares would
cause the Lender's beneficial ownership of shares of Common Stock to
exceed 4.99% of the outstanding shares of Common Stock, the Corporation
may delay the issuance of such Interest Payment Shares until such time as
the Lender requests them to be issued. In such event, the unpaid interest
shall not accrue additional interest and shall not constitute an Event of
Default by the Corporation. The Corporation shall not be required to make
that portion of the interest payment in cash."

 

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