EXHIBIT 10.11
WARRANT NO. 2000-
ENTRADE, INC.
WARRANT TO PURCHASE COMMON STOCK
(No Par Value)
January ___, 2000
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, HYPOTHECATED OR
OTHERWISE TRANSFERRED UNLESS REGISTERED PURSUANT TO THE ACT AND QUALIFIED UNDER
APPLICABLE STATE LAW OR, IN THE OPINION OF COUNSEL TO ENTRADE, INC., AN
EXEMPTION THEREFROM IS AVAILABLE.
FOR VALUE RECEIVED, (the "Holder") is entitled to purchase, subject to the
provisions of this Warrant, from ENTRADE, INC., a Pennsylvania corporation
("ENTRADE" or the "Company"), at a price of $ per share (the "Exercise Price")
of no par common stock of the Company, ("Common Stock"), at any time from
January __, 2000 to the time of expiration of this Warrant at 5:00 p.m.,
Chicago, Illinois time, on January __, 2003 (the "Expiration Date"), shares of
Common Stock, and the Holder shall be governed and bound by all of the
covenants, terms and conditions contained herein. The number of shares of Common
Stock to be received upon the exercise of this Warrant and the price to be paid
for a share of Common Stock may be adjusted from time to time as hereinafter set
forth. The shares of Common Stock deliverable upon such exercise and as adjusted
from time to time are hereinafter sometimes referred to as "Warrant Shares", and
the exercise price of a share of Common Stock in effect at any time and as
adjusted from time to time is hereinafter sometimes referred to as the "Exercise
Price".
1. Exercise of Warrant.
(a) This Warrant may be exercised in whole or in part at any
time after the First Exercise Date and on or before the Expiration Date of this
Warrant, or if such day is a day on which banking institutions are authorized by
law to close in Chicago, Illinois, then on the next succeeding business day, by
presentation and surrender hereof to the Company at its office at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, with the purchase form annexed hereto duly
executed and accompanied by payment of the Exercise Price for the number of
shares of Common Stock specified in such form. If this Warrant should be
exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder to purchase the balance of the Warrant Shares purchasable hereunder. Upon
receipt by the Company of this Warrant at its office in proper form for
exercise, the Holder shall be deemed to be the holder of record of the shares of
Common Stock issuable upon such exercise, notwithstanding that certificates
representing such shares of Common Stock shall not then be actually delivered to
the Holder.
(b) Notwithstanding the foregoing provision regarding payment
of the Exercise Price, the Holder may elect to receive a reduced number of
shares in lieu of tendering the Exercise price in cash ("Cashless Exercise"). In
such case, the number of shares to be issued to the Holder shall be computed
using the following formula:
X = Y(A-B)
------
A
where: X = the number of shares to be issued to the Holder; Y= the number of
shares to be exercised under this Warrant; A= the Market Value (defined below)
of one share of Common Stock on the trading day immediately prior to the date
that the purchase form annexed hereto is duly surrendered to the Company for
full or partial exercise; and B = the Exercise Price.
The term "Market Value" means, for any security as of any date, the five-day
average closing bid price of such security on the principal securities exchange
or trading market where such security is listed or traded as reported by
Bloomberg Financial Markets or a comparable reporting service of national
reputation selected by the Company and reasonably acceptable to the Holder if
Bloomberg Financial Markets is not then reporting closing bid prices of such
security (collectively, "Bloomberg"), or if the foregoing does not apply, the
last reported sale price of such security in the over-the-counter market or the
electronic bulletin board of such security as reported by Bloomberg, or, if no
sale price is reported for such security by Bloomberg, the average of the bid
prices of any market makers for such security that are reported in the "pink
sheets" by the National Quotation Bureau, Inc. If the Market Value cannot be
calculated for such security on such date on any of the foregoing bases, the
Market Value of such security on such date shall be the fair market value as
reasonably determined by an investment banking firm selected by the Company and
reasonably acceptable to the Holder with the costs of such appraisal to be borne
by the Company.
The Company represents to the Holder that the Shares, when delivered pursuant to
this Warrant against receipt of the Subscription Price by the Company, as
provided herein, shall be validly issued and fully paid Shares of the Company,
and will be free of any liens and encumbrances other than as a result of any
actions by the Subscriber.
Upon valid exercise of this Warrant and delivery of payment therefor in
accordance with the terms hereof, the Company shall, within three (3) days of
exercise, cause to be issued to Holder certificates evidencing the Shares
issuable upon such exercise.
2. Reservation of Shares, Fractional Shares.
(a) ENTRADE hereby agrees that at all times it shall reserve
for issue and delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issue and delivery upon exercise of
this Warrant.
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(b) No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. With respect to any
fraction of a share called for upon exercise hereof, ENTRADE shall pay to the
Holder an amount in cash equal to such fraction multiplied by the then current
Market Value calculated as set forth in Paragraph 1(b)
3. Exchange, Assignment, or Loss of Warrant. This Warrant is
exchangeable, without expense to the Holder, at the option of the Holder, upon
presentation and surrender hereof to the ENTRADE for other Warrants of different
denominations entitling the Holder hereof to purchase in the aggregate the same
number of shares of Common Stock purchasable hereunder. Any such exchange shall
be made by surrender of this Warrant to ENTRADE or at the office of its agent,
if any, with the assignment form annexed duly executed. Subject to compliance
with the provisions of applicable law, ENTRADE, without charge to the Holder,
shall execute and deliver a new Warrant in the name of any assignee named in
such instrument or assignment, and this Warrant shall promptly be canceled. This
Warrant may be divided or combined with other Warrants which carry the same
rights upon presentation hereof at the office of ENTRADE or at the office of its
agent, if any, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and signed by the Holder
hereof. The term "Warrant" as used herein includes any Warrants into which this
Warrant may be divided or exchanged. Upon receipt by ENTRADE of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, ENTRADE will execute and deliver a new Warrant of like
tenor and date.
4. Rights of the Holder. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a stockholder of ENTRADE. No
provision of this Warrant, in the absence of affirmative action by the Holder to
purchase shares of Common Stock, and no mere enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder for the
warrant purchase price or as a stockholder of ENTRADE, whether such liability is
asserted by ENTRADE or by creditors of ENTRADE. The rights of the Holder are
limited to those expressed in this Warrant and are not enforceable against
ENTRADE except to the extent set forth herein.
5. Stock Dividends; Reclassification, Reorganization, Anti-Dilution
Provisions. This Warrant is subject to the following further provisions:
(a) In case, prior to the expiration of this Warrant by
exercise or by its terms, ENTRADE shall issue any shares of Common Stock as a
stock dividend or subdivide the number of outstanding shares of Common Stock
into a greater number of shares, then in either of such cases, the Exercise
Price per share of the Warrant Shares purchasable pursuant to this Warrant in
effect at the time of such action shall be proportionately reduced, and the
number of Warrant Shares at that time purchasable pursuant to this Warrant shall
be proportionately increased; and conversely, in the event ENTRADE shall
contract the number of outstanding shares of Common Stock by combining such
shares into a smaller number of shares, then, in such case, the Exercise Price
per share of the Warrant Shares purchasable pursuant to this Warrant in effect
at the time of such action shall be proportionately increased, and the number of
Warrant Shares at the time purchasable pursuant to this Warrant shall be
proportionally decreased. Any dividend paid or distributed upon the Common Stock
in stock of any other class or securities convertible into shares of Common
Stock shall be treated as a dividend paid in Common Stock to the extent that
shares of Common Stock are issuable upon the conversion thereof.
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(b) In case, prior to the expiration of this Warrant by
exercise or by its terms, ENTRADE shall be recapitalized by reclassifying its
Common Stock into stock with par value, or the Company or a successor
corporation shall consolidate or merge with or convey all or substantially all
of its or of any successor corporation's property and assets to any other
corporation or corporations (any such corporation being included within the
meaning of the term "successor corporation" in the event of any consolidation or
merger of any such corporation with, or the sale of all or substantially all of
the property of any such corporation to another corporation or corporations), in
exchange for stock or securities of a successor corporation, the Holder of this
Warrant shall thereafter have the right to purchase, upon the terms and
conditions and during the time specified in this Warrant, in lieu of the Warrant
Shares theretofore purchasable upon the exercise of this Warrant, the kind and
number of shares of stock and other securities receivable upon such
recapitalization or consolidation, merger or conveyance by a holder of the
number of shares of Common Stock which the Holder of this Warrant might have
purchased immediately prior to such recapitalization or consolidation, merger or
conveyance.
(c) Upon the occurrence of each event requiring an adjustment
of the Exercise Price and of the number of Warrant Shares purchasable pursuant
to this Warrant in accordance with and as required by, the terms of subdivision
(a) of this Section 5, ENTRADE shall compute the adjusted Exercise Price and the
adjusted number of Warrant Shares purchasable at such adjusted Exercise Price by
reason of such event in accordance with the provisions of subdivision (a) and
shall prepare an officer's certificate setting forth such adjusted Exercise
Price and the adjusted number of Warrant Shares and showing in detail the facts
upon which such conclusions are based. ENTRADE shall forthwith mail a copy of
such certificate to each Holder of this Warrant at the Holder's address shown in
the Company's Warrant Registry, and thereafter such certificate shall be
conclusive and binding upon such Holder unless contested by such Holder by
written notice to ENTRADE ten (10) days after receipt of the certificate.
(d) In case:
(i) ENTRADE shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or any
other distribution in respect of the Common Stock (including cash) pursuant to,
without limitation, any spin-off, split-off or distribution of ENTRADE's assets;
or
(ii) ENTRADE shall take a record of the holders of
its Common Stock for the purpose of entitling them to subscribe for or purchase
any shares of stock of any class or to receive any other rights; or
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(iii) of a classification, reclassification or other
reorganization of the capital stock of ENTRADE, consolidation or merger of
ENTRADE with or into another corporation or conveyance of all or substantially
all of the assets of ENTRADE; or
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of
ENTRADE,
then, and in any such case, ENTRADE shall mail to the Holder of this Warrant at
the Holder's address shown in ENTRADE's Warrant Registry a notice stating the
date or expected date (the "Record Date") on which a record is to be taken for
the purpose of such dividend, distribution or rights, on which such
classification, reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up is to take place, as the case
may be. Such notice shall then specify the date or expected date, if any is to
be fixed, as of which holders of Common Stock of record shall be entitled to
participate in said dividend, distribution or rights, or shall be entitled to
exchange shares of Common Stock for securities or other property deliverable
upon such liquidation or winding up, as the case may be. Such notice shall be
provided at least fifteen (15) days prior to the Record Date.
(e) In case ENTRADE at any time while this Warrant shall
remain unexpired and unexercised shall dissolve, liquidate or wind up its
affairs, the Holder of this Warrant may receive, upon exercise hereof prior to
the Record Date, in lieu of each share of Common Stock of ENTRADE which it would
have been entitled to receive, the same number of any securities or assets as
may be issuable, distributable or payable upon any such dissolution, liquidation
or winding up with respect to each share of Common Stock of ENTRADE.
6. Restriction on Transferability. (a) This Warrant and the
shares of ENTRADE issuable upon the exercise of this Warrant have not been
registered under the Securities Act of 1933, as amended (the "Act"). By
acceptance hereof, the Holder covenants, agrees and represents that:
(i) This Warrant has been acquired for, and such
shares, if acquired upon the exercise of this Warrant, shall be acquired for,
investment and may not be sold, offered for sale, pledged, hypothecated or
otherwise transferred, in the absence of an effective registration statement for
such securities under the Act or an opinion of counsel reasonably satisfactory
to ENTRADE to the effect that registration is not required under the Act, and
the Holder has the capacity to protect his interests in connection with the
purchase of this Warrant.
(ii) The Holder has had the opportunity to ask
questions and receive answers from ENTRADE about ENTRADE's business and the
purchase by him of these securities, and he has been given the opportunity to
make any inquiries that he may desire of any personnel of ENTRADE concerning the
proposed operation of ENTRADE and has been furnished with all of the information
he has requested. No advertisement has been used in connection with the offer or
sale of this Warrant to the Holder.
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(iii) The Holder will not offer, sell, transfer,
mortgage, assign or otherwise dispose of this Warrant or the shares of Common
Stock issuable upon the exercise of this Warrant except pursuant to a
registration statement under the Act and qualification under applicable state
securities laws or pursuant to an opinion of counsel reasonably satisfactory to
ENTRADE that such registration and qualification are not required, and that the
transaction (if it involves a sale in the over-the-counter market or on a
securities exchange) does not violate any provision of the Act. The Holder
understands that a stop-transfer order will be placed on the books of ENTRADE
respecting this Warrant and any certificates representing the shares of Common
Stock issuable upon the exercise of this Warrant and that this Warrant and any
such certificates shall bear a restrictive legend and a stop transfer order
shall be placed with the transfer agent prohibiting any such transfer until such
time as the securities represented by such certificates shall have been
registered under the Act or shall have been transferred in accordance with an
opinion of counsel reasonably satisfactory to ENTRADE that such registration is
not required; and
(iv) The Holder understands that he must hold the
shares issuable upon the exercise of this Warrant indefinitely unless they are
registered under the Act or an exemption from registration becomes available.
Although ENTRADE files reports pursuant to the Securities Act of 1934 and
accordingly makes available to the public the information required by Rule 144,
nothing contained in this Warrant shall require ENTRADE to continue to make
available to the public such information.
(b) Each certificate for the shares issued upon the exercise
of the Warrant shall bear a legend in substantially the following form:
"The shares represented by this Certificate have not
been registered under the Securities Act of 1933, as amended
(the "Act") and may not be sold, offered for sale, pledged,
hypothecated or otherwise transferred except pursuant to a
registration statement under the Act or an exemption from
registration under the Act or the rules and regulations
thereunder."
7. Registration Rights. The initial Holder is entitled to the benefit
of such registration rights in respect of the Shares as are set forth in Section
2.2.6 of that certain Subscription and Investment Representation Agreement,
dated December 20, 1999 and accepted December 21, 1999, by and among Fleetfooted
& Company (SunAmerica Small Company Growth Fund) and the Company, which Section
is incorporated herein and made a part hereof by this reference.
8. Registration on the Books of ENTRADE. ENTRADE shall keep, or cause
to be kept, at its office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, a
register in which ENTRADE shall register this Warrant. No transfer of this
Warrant shall be valid unless made at such office and noted on the Warrant
register upon satisfaction of all conditions for transfer. When presented for
transfer or payment, this Warrant shall be accompanied by a written instrument
or instruments of transfer or surrender, in form satisfactory to ENTRADE, duly
executed by the registered Holder or by his duly authorized attorney. ENTRADE
may deem and treat the registered Holder hereof as the absolute owner of this
Warrant for all purposes, and ENTRADE shall not be affected by any notice to the
contrary.
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9. Governing Law. This Warrant has been executed and delivered in the
State of Illinois and shall be construed in accordance with the internal laws of
the State of Illinois, and not its conflict of laws provisions.
IN WITNESS WHEREOF, ENTRADE has caused this Warrant to be executed by
its duly authorized officer.
ENTRADE, INC.
By: __________________________
Title: __________________________
Agreed to and accepted:
HOLDER:
_________________________
Date:_____________
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ASSIGNMENT FORM
FOR VALUE RECEIVED _____________________________________________ hereby
sells, assigns and transfers unto
Name_____________________________________________________________
(Please typewrite or print in block letters)
Address__________________________________________________________ the right to
purchase Common Stock, represented by this Warrant, to the extent of
______________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint _____________________________ attorney, to
transfer the same on the books of ENTRADE with full power of substitution in the
premises.
Signature__________________________
Date: __________________ , ____
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
ONLY BE SOLD OR TRANSFERRED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR, AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT, PROVIDED THAT IN THE EVENT THAT ANY RESALE OF THIS SECURITY IS MADE
PURSUANT TO SUCH AN EXEMPTION AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY
AND ITS LEGAL COUNSEL, WILL BE PROVIDED TO THE EFFECT THAT SUCH TRANSFER IS MADE
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OF 1933.
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PURCHASE FORM
Dated _________________ , ____
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing __________ shares of Common Stock and hereby
makes payment of $__________ in payment of the exercise price thereof.
-----------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name_____________________________________________________________
(Please typewrite or print in block letters)
Address__________________________________________________________
Social Security or other Taxpayer Identification Number__________
Signature_______________________________
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
ONLY BE SOLD OR TRANSFERRED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR, AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT, PROVIDED THAT IN THE EVENT THAT ANY RESALE OF THIS SECURITY IS MADE
PURSUANT TO SUCH AN EXEMPTION AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY
AND ITS LEGAL COUNSEL, WILL BE PROVIDED TO THE EFFECT THAT SUCH TRANSFER IS MADE
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OF 1933.
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SCHEDULE TO FORM OF WARRANT
Entrade issued warrants to purchase 12,500 shares of its common stock at a price
of $32.00 per share and warrants to purchase 8,000 shares of its common stock at
a price of $55.65 per share, all exerciseable January 6, 2000, expiring January
5, 2003.
