EXHIBIT 99.2
NOTE RESTRUCTURING AGREEMENT
This Note Restructuring Agreement (this "Agreement") is made as of the
February 17, 2005, by and among Xxxxx Xxxxx ("Payee") and Entrade Inc., a
Pennsylvania corporation ("Payor").
R E C I T A L S
A. Payee is the holder of those certain promissory notes made by Payor and
more fully set forth on Exhibit A hereto (the "Original Notes"), as well as the
beneficiary of certain related agreements more fully set forth on Exhibit B (the
"Related Documents").
B. Payor has defaulted in the payment of the principal and interest due
and payable under the Notes, as the result of which the entire principal amount
of the original Notes, together with all interest accrued and unpaid thereon, is
now due and payable.
C. Subject to the terms and conditions set forth herein, Payor and Payee
have agreed to substitute a new promissory note of Payor for the Original Notes
and Payee has agreed to waive the current defaults in payment by Payor.
NOW THEREFORE, in consideration of the foregoing, the covenants and
agreements contained herein and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Waiver of Defaults. Payee hereby waives any and all current defaults by
Payor in connection with the Original Note (the "Waiver"). The parties
acknowledge and agree that this Waiver is limited and constitutes only a waiver
of any defaults that occurred or are occurring prior to and including the date
of this Agreement.
2. New Entrade Note. Payee hereby agrees to accept a new promissory note
of Payor (the "New Entrade Note") in substitution for the Original Note. The New
Entrade Note shall be substantially in the form of the promissory note attached
hereto as Exhibit C.
3. Security for New Entrade Note. The Original Notes are currently secured
by a first priority lien on 100% of the capital stock of Public Liquidation
Systems, Inc. and Asset Liquidation Group, Inc., both Nevada corporations doing
business as Nationwide Auction Systems ("Nationwide") as evidenced by that
certain Pledge Agreement dated October 10, 2000, and amended on July 17, 2001,
by and between Payor and Payee's predecessors-in-interest with respect to the
Original Notes (the "Pledge Agreement"), the rights under which have been
assigned to Payee. Payor and Payee agree to enter into such amendments with
respect to the Related Documents as may be necessary to effectuate the purpose
of this paragraph and this letter.
4. Entrade Warrant. Concurrently with the issuance of the New Entrade
Note, Payor will issue to Payee a 5-year warrant to purchase 500,000 shares of
the common stock of Payor at an exercise price of $0.10 per share (the
"Warrant"). Concurrently with the issuance of the Warrant, Entrade will issue to
payee a letter (the "Registration Rights Letter"), which will evidence an
obligation of Payor to register the shares issuable upon exercise of the
Warrant, as well as any shares issuable upon the exercise of any other warrant
of Payor held by Payee as of the date of this Agreement. The Registration Rights
Letter shall be in substantially the form as Exhibit D hereto.
5. Miscellaneous. This Agreement shall be construed in accordance with the
State of California. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. This
Agreement shall not be amended or terminated except by a written agreement
executed by Payor and Payee. Payor and Payee agree to execute any further
assignments, transfers, consents and conveyances as reasonably may be necessary
to carry out intentions of the parties pursuant to this Agreement. This
Agreement may be executed in any number of counterparts, each of which
counterparts once they are executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one and
the same Agreement. Signatures transmitted by facsimile shall be considered
authentic and binding. This Agreement represents the entire agreement of
understanding between Payor and Payee with respect to the transactions
contemplated herein and supercedes all prior representations, agreements,
covenants and understandings, whether oral or written, relating to the subject
matter of this Agreement.
6. PAYOR AND PAYEE EACH CONSENT TO JURISDICTION IN THE STATE OF CALIFORNIA
AND VENUE IN ANY FEDERAL OR STATE COURT IN THE COUNTY OF SAN DIEGO FOR SUCH
PURPOSES AND THEY EACH WAIVE ANY AND ALL RIGHTS TO CONTEST SAID JURISDICTION AND
ANY OBJECTION THAT SUCH COUNTY IS INCONVENIENT. PAYOR AND PAYEE EACH HEREBY
EXPRESSLY WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY WITH
RESPECT TO ANY MATTER WHATSOEVER RELATING TO, ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS AGREEMENT AND/OR THE TRANSACTIONS WHICH ARE THE SUBJECT OF
THIS AGREEMENT.
[Signatures being on the next page]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered at San Diego, California as of the date first above
written.
PAYOR: PAYEE:
ENTRADE INC. XXXXX XXXXX
By: __________________________ __________________________
Xxxxx X. Xxxxxx, President
EXHIBITS TO BE ATTACHED
