EXHIBIT 10.48
PROMISSORY NOTE SATISFACTION AGREEMENT
This Agreement (this "Agreement"), dated March __, 2000, is entered
into by and between Entrade Inc., a Pennsylvania corporation ("Payor") and Xxx
Xxxxx ("Payee").
WITNESSETH
WHEREAS, pursuant to a certain Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated October 15, 1999, by and among Payor, Payee and
certain other parties thereto, Payor, among other things, acquired all of the
Shares of the Acquired Corporations then owned by Payee in consideration of
413,000 shares of Payor's Stock issued to Payee, the Short Term Note issued to
Payee, and the Payee Note (as defined below) issued to Payee. Capitalized terms
used herein and not otherwise defined herein shall have the meaning set forth in
the Stock Purchase Agreement.
WHEREAS, pursuant to a certain Term Note (the "Payee Note"), dated
October 15, 1999, Payor promised to pay to the order of Payee Twelve Million Six
Hundred Thousand dollars ($12,600,000) in installments as follows: $3,150,000 on
the April 1, 2000 (the "Initial Installment"), $3,150,000 on October 1, 2000 and
$6,300,000 on October 1, 2001 (together with interest as provided in the Payee
Note, the "Note Obligations").
WHEREAS, Payor desires to satisfy all Note Obligations and Payee
desires to accept such satisfaction pursuant to the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the foregoing, the covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
I. The Payment and Satisfaction.
I.1. Terms of the Payment and Satisfaction. Payor agrees to accelerate
to March 20, 2000 (the "Cash Payment Date"), the payment of the Initial
Installment, plus interest earned through such date, by wire transfer of
immediately available funds to Payee (the "Cash Amount"); at Payee's request,
Payor will pay $315,000 of the Initial Installment, plus an allocable portion of
the interest earned thereon through such date, to JDK & Associates ("JDK"); the
remaining $2,835,000 of the Initial Installment, plus an allocable portion of
the interest earned thereon through such date, shall be paid to Payee.
Thereafter, on the Closing Date (as defined below), as payment in full for all
remaining Note Obligations, Payor will issue to Payee an aggregate of Two
Hundred Twelve Thousand Four Hundred Ninety Seven (212,497) and will issue to
JDK, at Payee's request, Twenty-Six Thousand Five Hundred Sixty-Two (26,562)
fully paid and non-assessable shares of Entrade's common stock (collectively,
the "Entrade Stock"). The Entrade Stock issued hereunder is hereby expressly
excluded from the Stock Restriction and Registration Rights Agreement dated as
of October 15, 1999, by and between Payor, Payee, and certain other parties
thereto (the "Stock Restriction Agreement").
I.2. The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on the date hereof (the "Closing
Date") at the offices of the Payor three business days after the shareholders of
Payor approve of the transaction contemplated to take place at the Closing. If
the shareholders of the Payor do not approve such transaction, then Payor shall
remain obligated to satisfy all remaining Note Obligations in accordance with
the terms of the Payee Note.
I.3. Release from Stock Restriction Agreement. Payor hereby agrees that
239,059 of the Company Shares that are, as of the date hereof, subject to the
restrictions contained in Section 5 of the Stock Restriction Agreement shall be
deemed to be Saleable Company Shares from and after the date hereof.
II. Representations and Warranties of Payee.
Payee represents and warrants to Payor as follows:
II.1. Authorization. Payee has full power and authority to execute,
deliver and perform this Agreement and the transactions contemplated herein and
all other agreements, documents and instruments that may be executed by Payee in
connection with this Agreement. This Agreement has been duly executed and
delivered by Payee and constitutes the legal, valid and binding obligation of
Payee, enforceable against Payee in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting or relating to the enforcement of creditors rights generally and the
availability of equitable remedies, including specific performance.
II.2. No Violation, Etc. Neither Payee's execution and delivery of this
Agreement, nor the consummation of the transactions contemplated herein, nor
compliance by Payee with any of the provisions hereof will: (i) result in the
creation of any Encumbrance under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust, license, agreement, or any
other instrument or obligation to which Payee is a party, or (ii) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to Payee
or require consent or approval from any governmental, administrative or
self-regulatory authority.
II.3. Investment Representations. Payee is an accredited investor and
Payee is acquiring the Entrade Stock set forth herein for Payee's own account
(and not for the account of others), for investment and not with a view to the
sale, transfer, disposition or distribution thereof. Payee understands that the
Entrade Stock has not been registered under the securities laws of the United
States of America or any state or other political subdivision thereof, and that
such shares must be held indefinitely unless a subsequent disposition thereof is
registered under the United States and other applicable securities laws or is
exempt from registration. Payee will not sell or otherwise dispose of Entrade
Stock (whether pursuant to a liquidating distribution or otherwise) without
registration under the Securities Act of 1933 (the "Securities Act") or an
exemption therefrom, and the certificate or certificates representing the
Entrade Stock may contain a legend to the foregoing effect. Notwithstanding the
foregoing, Payee acknowledges that Payor intends to file, within twenty days of
the date of this agreement, a Registration Statement with the Securities and
Exchange Commission on Form S-4, which Registration Statement is intended to
include the Entrade Shares. Payor agrees to use its best efforts to file such
Registration Statements, to ensure that such Registration Statement includes the
Entrade Shares, and to take all reasonable actions to ensure that such
Registration Statement becomes effective.
II.4. Ownership. Payee has all right, title and interest in and to the
Payee Note that Payee acquired on October 15, 1999, and has not assigned,
transferred, encumbered, hypothecated or otherwise transferred any right, title
or interest in or to the Payee Note to any third party.
II.5. Litigation. There is no litigation, proceeding or arbitral action
pending or, so far as is known to Payee, threatened against Payee that would
adversely affect Payee's ability to consummate the transactions contemplated
hereby.
III. Representations and Warranties of Payor.
Payor represents and warrants to Payee as follows:
III.1. Organization and Qualification. Payor is a corporation duly
organized, validly existing, and in good standing under the laws of the
Commonwealth of Pennsylvania, with all requisite power and authority to own,
lease, license, and use its properties and assets and to carry on the business
in which it is now engaged and the business in which it contemplates engaging.
III.2. Authorization. This Agreement and all other agreements,
documents and instruments that may be executed by Payor in connection with this
Agreement and the transactions contemplated herein have been duly approved by
all necessary corporate action on the part of Payor. This Agreement has been
duly executed and delivered by Payor and constitutes the legal, valid and
binding obligation of Payor, enforceable against Payor in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting or relating to the enforcement of creditors rights
generally and the availability of equitable remedies, including specific
performance.
III.3. No Violation, Etc. Neither Payor's execution and delivery of
this Agreement, nor the consummation of the transactions contemplated herein,
nor compliance by Payor with any of the provisions hereof will: (i) violate or
conflict with the articles of incorporation, by-laws or other organizational
documents of Payor, (ii) result in the creation of any Encumbrance under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, deed
of trust, license, agreement, or any other instrument or obligation to which
Payor is a party, or (ii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Payor or require consent or approval from any
governmental, administrative or self-regulatory authority.
III.4. Valid Issuance, Etc. At the Closing, the Entrade Stock will be
validly authorized, validly issued, fully paid, and nonassessable and will not
have been issued in violation of any preemptive right of stockholders, and Payee
will receive good title to the Entrade Stock, free and clear of all liens,
security interests, pledges, charges, encumbrances, stockholders' agreements,
voting trusts or other rights of any third party.
IIII.5. Litigation. There is no litigation, proceeding or arbitral
action pending or, so far as is known to Payor, threatened against Payor that
would adversely affect Payor's ability to consummate the transactions
contemplated hereby.
IV. Conditions to Closing.
The obligations of the parties hereto to consummate the transactions
contemplated hereby shall be subject to the fulfillment, or waiver, of the
following conditions:
IV.1. Payment. Payor shall have delivered the Cash Amount to Payee on
or about the Cash Payment Date, and Payor shall deliver the Entrade Stock to
Payee on the Closing Date.
IV.2. Cancellation of Payee Note. At the Closing, Payee shall deliver
to Payor the original Payee Note marked "CANCELLED."
V. Indemnification.
V.1. General. Each party (the "indemnifying party") shall indemnify and
hold harmless the other party and the other party's affiliates, officers,
directors, trustees, stockholders, employees, agents, and representatives from
and against any and all liabilities, claims, demands, actions, suits, losses,
damages, costs, and expenses (including, without limitation, reasonable
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing, or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), based upon or arising out of a breach of any covenant, agreement,
representation, or warranty made by the indemnifying party in this Agreement.
V.2. Survival. All representations, warranties, covenants, and
agreements contained in this Agreement shall survive the execution and delivery
of this Agreement and the Closing hereunder.
VI. Miscellaneous.
VI.1. Further Actions. At any time and from time to time, each party
agrees, at its expense, to take such actions and to execute and deliver such
documents as may be reasonably necessary to effectuate the purposes of this
Agreement.
VI.2. Modification. This Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof, supersedes all
existing agreements among them concerning such subject matter, and may be
modified only by a written instrument duly executed by each party.
VI.3. Waiver. Any waiver by either party of a breach of any term of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of that term or of any breach of any other term of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions will not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. Any waiver must be in writing.
VI.4. Binding Effect. No party may sell, assign, transfer, or otherwise
convey any of its rights or delegate any of its duties under this Agreement
without first receiving the prior written consent of the other party, such
consent shall not be unreasonably withheld.
VI.5. Expenses. Each party shall be responsible for its own expenses in
connection with this Agreement.
VI.6. No Third Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement (except as provided in Section 6.4).
VI.7. Separability. If any provision of this Agreement is invalid,
illegal, or unenforceable, the balance of this Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
VI.8. Headings. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
VI.9. Counterparts; Governing Law. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. It shall be
governed by and construed in accordance with the laws of the State of Illinois,
without giving effect to conflict of laws.
*** Remainder of Page Intentionally Left Blank ***
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
------------------------------------
Xxx Xxxxx
ENTRADE INC.
------------------------------------
By: Xxxx X. Xxxxxxxxxx
Its:President
