Exhibit 4.3
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WORLDCORP, INC.
PURCHASE AGREEMENT
Dated as of September 30, 1996
$10,000,000 10.00% Senior Subordinated Notes
Due September 30, 2000
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TABLE OF CONTENTS
(Not a part of the Agreement)
Section Page
1. DESCRIPTION OF NOTES, WARRANTS AND COMMITMENT......................... 1
1.1. Description of Notes and Warrants............................... 1
1.2. Commitment; Closing Date........................................ 2
1.3. Other Purchasers................................................ 3
1.4. Subordination................................................... 3
2. PREPAYMENT OF NOTES................................................... 3
2.1. Required Prepayments............................................ 3
2.2. Optional Prepayments at Par..................................... 3
2.3. Notice of Prepayments........................................... 4
2.4. Surrender of Notes on Transfer or Exchange...................... 4
2.5. Allocation of Prepayments....................................... 4
2.6. Direct Payment.................................................. 4
2.7. Effect of Prepayment on Warrants................................ 5
3. REPRESENTATIONS....................................................... 5
3.1. Representations of the Company.................................. 5
3.2. Representations of the Purchasers............................... 10
4. CLOSING CONDITIONS.................................................... 11
4.1. Representations and Warranties.................................. 11
4.2. Legal Opinions.................................................. 11
4.3. Events of Default............................................... 11
4.4. Sale of Notes................................................... 11
4.5. Satisfactory Proceedings........................................ 11
4.6. Waiver of Conditions............................................ 12
4.7. Secretary's Certificate......................................... 12
5. COMPANY COVENANTS..................................................... 12
5.1. Payment of the Notes............................................ 12
5.2. Company Existence; Maintenance of Office or Agency.............. 12
5.3. SEC Reports..................................................... 12
5.4. Waiver of Stay, Extension or Usury Laws......................... 13
5.5. Notice of Default............................................... 13
5.6. Compliance Certificates......................................... 13
5.7. Limitation on Dividends and Other Distributions................. 13
5.8. Stock Repurchases............................................... 14
5.9. Registration Rights............................................. 14
5.10. Senior Indebtedness............................................. 00
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Xxxxxxx Xxxxxxx Page
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5.11. Asset Value..................................................... 16
5.12. Sale of USOCDT Merger Corporation Common Stock.................. 16
6. EVENTS OF DEFAULT AND REMEDIES THEREFOR................................ 17
6.1. Events of Default............................................... 17
6.2. Acceleration of Maturities...................................... 18
6.3. Rescission of Acceleration...................................... 19
6.4. Notice of Default............................................... 19
7. AMENDMENTS, WAIVERS AND CONSENTS....................................... 19
7.1. Consent Required................................................ 19
7.2. Effect of Amendment or Waiver................................... 20
7.3. Solicitation of Noteholders..................................... 20
8. SUBORDINATION OF SECURITIES............................................ 20
8.1. Notes Subordinate to Senior Indebtedness........................ 20
9. INTERPRETATION OF AGREEMENT; DEFINITIONS............................... 23
9.1. Definitions..................................................... 23
9.2. Accounting Principles........................................... 25
9.3. Directly or Indirectly.......................................... 25
10. REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT OF NOTES.............. 26
10.1. Registered Notes................................................ 26
10.2. Exchange of Notes............................................... 26
10.3. Loss, Theft, etc. of Notes...................................... 26
11. MISCELLANEOUS.......................................................... 27
11.1. Expenses, Stamp Tax Indemnity................................... 27
11.2. Powers and Rights Not Waived; Remedies Cumulative............... 27
11.3. Notices......................................................... 27
11.4. Successors and Assigns.......................................... 27
11.5. Survival of Covenants and Representations....................... 27
11.6. Integration..................................................... 28
11.7. Governing Law................................................... 28
11.8. Headings........................................................ 28
11.9. Counterparts.................................................... 28
11.10. Agent's Fee..................................................... 28
Signature Page.............................................................. 29
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ATTACHMENTS TO PURCHASE AGREEMENT:
Schedule I Principal Amount of Notes to be Purchased
Annex I List of Subsidiaries and Jurisdictions in Which the Company and its
Subsidiaries are Qualified as Foreign Corporations
Exhibit A Form of 10.00% Senior Subordinated Note, due September 30, 2000
Exhibit B Form of Warrants
Exhibit C Description of Closing Opinion of Counsel for the Company
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WORLDCORP, INC.
The Hallmark Building
00000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
PURCHASE AGREEMENT
Dated as of
September 30, 1996
To each of the Purchasers
listed on Schedule I Hereto
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Ladies and Gentlemen:
The undersigned, WORLDCORP, INC., a Delaware corporation (the "Company"),
agrees with each of you as follows:
SECTION 1. DESCRIPTION OF NOTES, WARRANTS AND COMMITMENT.
1.1. Description of Notes and Warrants.
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(a) The Company will authorize the issuance and sale of $10,000,000
aggregate principal amount of its 10.00% Senior Subordinated Notes due September
30, 2000 (the "Notes"), to be dated the date of issue, to bear interest from
such date at the rate of 10.00% per annum, to mature September 30, 2000 and to
be substantially in the form attached hereto as Exhibit A. Interest on the
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Notes shall be payable semi-annually on September 30 and March 31 in each year
(commencing March 31, 1997) and at maturity and shall be computed on the basis
of a 360-day year of twelve 30-day months. The Notes are subject to prepayment
or redemption at par (with all accrued but unpaid interest thereon) at any time
prior to maturity at the option of the Company, set forth in Section 2 of this
Agreement. The term "Notes" as used herein shall include the Notes delivered
pursuant to this Agreement and each Note issued upon transfer thereof or in
exchange therefor. You, together with the other purchasers named in Schedule I,
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are hereinafter sometimes referred to as the "Purchasers."
(b) In connection with the Company's issuance of the Notes, the
Company will issue warrants to purchase twelve (12) shares of the Company's
common stock, par value $.001 per share (the "Company Common Stock"), per each
$1,000 in principal amount of the
Notes (hereinafter referred to individually as an "Initial Warrant" and
collectively as the "Initial Warrants."
(c) The exercise price for the Initial Warrants shall be $6.00 per
share.
(d) Subject to the provisions of Section 2.7, if the Company Common
Stock does not close on the New York Stock Exchange ("NYSE") at a bid price of
$12.00 per share or greater for any five consecutive trading day period
occurring between September 30, 1996 and September 30, 1997, the Company will
issue to each Purchaser on October 1, 1997, four (4) additional warrants to
purchase the Company Common Stock at a price of $6.00 per share (individually, a
"1997 Warrant," and collectively, the "1997 Warrants"). The 1997 Warrants shall
be identical in all respects with the Initial Warrants, except that the 1997
Warrants shall expire on September 30, 2001.
(e) Subject to the provisions of Section 2.7, if the Company Common
Stock does not close on the NYSE at a bid price of $12.00 per share or greater
for any five consecutive trading day period occurring between September 30, 1997
and September 30, 1998, the company will issue to each Purchaser on October 1,
1998, four (4) additional warrants to purchase the Company Common Stock at a
price of $6.00 per share (individually, a "1998 Warrant," and collectively, the
"1998 Warrants"). The 1998 Warrants shall be identical in all respects with the
Initial Warrants, except that the 1998 Warrants shall expire on September 30,
2002 (the 1997 Warrants and the 1998 Warrants are hereinafter referred to
collectively as the "Additional Warrants," and the Initial Warrants and the
Additional Warrants are hereinafter referred to collectively as the "Warrants").
(f) The form of the Warrants is attached hereto as Exhibit B. The
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Warrants shall be deemed a separate security from the Notes.
1.2. Commitment; Closing Date. Subject to the terms and conditions hereof
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and on the basis of the representations and warranties hereinafter set forth,
the Company agrees to issue and sell to you, and you agree to purchase from the
Company, on the Closing Date, Notes in the principal amount set forth opposite
your name in Schedule I at a price of 100% of the principal amount thereof and
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the Warrants set forth opposite your name in Schedule I.
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Delivery of the Notes and the Warrants will be made at the offices of
Hunton & Williams, McLean, Virginia at 10:00 a.m. Virginia time, on the Closing
Date or at such place or later time as may be mutually agreed upon by the
Company and the Purchasers. Delivery of the Notes and the Warrants to you on
the Closing Date shall be against payment of the purchase price thereof in
Federal Funds or other immediately available funds in U.S. dollars transmitted
to First Union National Bank of Virginia, ABA No. 000000000, for deposit in
WorldCorp's Account No. 2070388012683. The Notes will be delivered to you on
the Closing Date in the form of a single registered Note for the full amount of
your purchase (unless different denominations are specified by you). The Notes
and the Warrants will be
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registered in your name or in the name of your nominee, all as you may specify
in Schedule I or otherwise at any time prior to the Closing Date. If on the
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Closing Date, the Company shall fail to tender the Notes and the Warrants to
you, you shall be relieved of all remaining obligations under this Agreement.
Nothing in the preceding sentence shall relieve the Company of any liability
occasioned by such failure to deliver the Notes or the Warrants.
1.3. Other Purchasers. Your obligation and the obligations of the Company
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hereunder are subject to the execution and delivery of this Agreement by the
other Purchasers. The obligations of each Purchaser shall be several and not
joint and no Purchaser shall be liable or responsible for the act of any other
Purchaser.
1.4. Subordination. The Notes will be subordinate to all Senior
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Indebtedness and Senior to all Subordinated Indebtedness. The Company shall
cause all future Subordinated Indebtedness to be subordinated to the Notes in
the same manner, on the same terms and to the same extent as the Notes are
subordinated to Senior Indebtedness pursuant to Section 8.1 hereof, and the
Company shall include such terms in any agreement, note or instrument evidencing
such future Subordinated Indebtedness.
SECTION 2. PREPAYMENT OF NOTES.
2.1. Required Prepayments.
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(a) In addition to payment of all outstanding principal of the Notes
at maturity and regardless of the amount of Notes that may be outstanding from
time to time, the Company agrees that it will prepay and apply pursuant to
Section 2.6 hereof and there shall become due and payable 20% of the outstanding
principal amount of the Notes, or such lesser amount as would constitute payment
in full on the Notes on such date, on September 30, 1998 and September 30, 1999.
The entire remaining unpaid principal amount of the Notes shall become due and
payable on September 30, 2000.
(b) No premium shall be payable in connection with any prepayment
made when due pursuant to this Section 2.1.
2.2. Optional Prepayments at Par.
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(a) Upon notice as provided in Section 2.3, the Company may prepay the
outstanding Notes (in units of at least $250,000), in whole or in part pursuant
to Section 2.6 hereof, at any time prior to September 30, 2000, by payment of
the principal amount of the Notes to be prepaid at par, plus accrued interest
thereon to the date of such prepayment. Except as provided in Section 2.1
hereof and this Section 2.2, the Notes shall not be prepayable in whole or in
part prior to their maturity.
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(b) No premium shall be payable in connection with any prepayment
made when due pursuant to this Section 2.2.
2.3. Notice of Prepayments.
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(a) The Company shall give written notice of any prepayment of the
Notes pursuant to Section 2.2 hereof to each holder thereof, not less than 30
days nor more than 60 days before the date fixed for such optional prepayment,
specifying (i) such date, (ii) the principal amount of the holder's Notes to be
prepaid on such date, (iii) the accrued interest payable to the holder in
connection with the prepayment, and (iv) in the case of a prepayment in full,
the place where the Notes are to be surrendered for cancellation. Notice of
such prepayment having been so given, the aggregate principal amount of the
Notes specified in such notice, together with the accrued and unpaid interest
thereon, shall become due and payable on the prepayment date specified in such
notice.
(b) The Company shall also give notice to each holder of the Notes by
telecopy, telegram, telex or other same-day written communication at least three
business days before the date fixed for such prepayment (confirmed in a writing
delivered at least two business days prior to the payment date).
2.4. Surrender of Notes on Transfer or Exchange. Upon any partial
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transfer or partial exchange of a Note pursuant to Section 10.2 , such Note
shall be surrendered to the Company pursuant to Section 10.2 hereof in exchange
for one or more new Notes equal to the principal amount remaining unpaid on the
surrendered Note. In case the entire principal amount of any Note is prepaid or
exchanged, such Note shall be surrendered to the Company for cancellation and
shall not be reissued, and no Note shall be issued in lieu of such Note.
2.5. Allocation of Prepayments. All partial prepayments of the Notes
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pursuant to Sections 2.1 and 2.2 shall be allocated to all outstanding Notes
ratably in accordance with the unpaid principal amounts thereof. Any prepayment
of less than all of the Notes pursuant to Section 2.2 shall be deemed to be
applied first to the amount of principal scheduled to remain unpaid on September
30, 2000 and then to the required prepayments of principal in inverse
chronological order.
2.6. Direct Payment. Notwithstanding any other provision contained in the
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Notes or this Agreement, the Company will pay all sums becoming due on each Note
held by you or any subsequent Institutional Holder by wire transfer of
immediately available funds to such account as you have designated in Schedule I
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hereto, or as you or such subsequent Institutional Holder may otherwise
designate by notice to the Company, in each case without presentment and without
notations being made thereon, except that any such Note so paid or prepaid in
full shall be surrendered to the Company for cancellation. Any wire transfer
shall identify such payment in the manner set forth in the attached Schedule I
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and shall identify the payment as principal and/or interest. You and any
subsequent Institutional Holder of a Note agree that,
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before selling or otherwise transferring any such Note, you or it will make a
notation thereon of the aggregate amount of all payments of principal
theretofore made and of the date to which interest has been paid and, upon
written request of the Company, will provide a copy of such notations to the
Company.
2.7. Effect of Prepayment on Warrants. If the Company redeems in full the
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aggregate principal amount of all outstanding Notes prior to October 1, 1997,
then the Company shall have no further obligation to issue the Additional
Warrants. If the Company redeems in full the aggregate principal amount of all
outstanding Notes after October 1, 1997, and prior to October 1, 1998, then the
Company shall have no further obligation to issue the 1998 Warrants.
SECTION 3. REPRESENTATIONS.
3.1. Representations of the Company. As an inducement to, and as part of
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the consideration for, your purchase of the Notes and the Warrants pursuant to
this Agreement, the Company represents and warrants to you as follows:
(a) Corporate Organization and Authority. The Company is a
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corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power and authority to own
and operate its properties, to carry on its business as now conducted, to enter
into this Agreement and to issue and sell the Notes and the Warrants as
contemplated in this Agreement.
(b) Qualification to Do Business. The Company is duly licensed or
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qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction where the nature of its business or the character
of its properties makes such qualification or licensing necessary, except for
such jurisdictions where the failure to be so qualified or licensed will not
have a materially adverse effect on the business, properties, operations or
condition (financial or other) of the Company. A list of those jurisdictions
wherein the Company is qualified to do business is set forth in the attached
Annex I.
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(c) Subsidiaries. The Company has no Subsidiaries except those listed
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in Annex I, which correctly sets forth the percentage of the outstanding capital
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stock or equivalent interest of each Subsidiary which is owned, of record or
beneficially, by the Company and/or one or more Subsidiaries. Each Subsidiary
has been duly organized and is validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization and is duly licensed
or qualified in each other jurisdiction where the nature of its business or the
character of its properties makes such qualification or licensing necessary,
except for such jurisdictions where the failure to be so qualified or licensed
will not have a materially adverse effect on the business, properties,
operations or condition (financial or other) of such Subsidiary. A list of
those jurisdictions wherein each Subsidiary is qualified to do business is set
forth in the attached Annex I. Each Subsidiary has full corporate power and
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authority and all necessary licenses, permits and other authorizations to own
and operate its properties and to carry on its business as now conducted, except
for such licenses, permits and other authorizations the failure of which to
obtain will not have a materially adverse effect on the business, properties,
operations or condition (financial or other) of such Subsidiary. The Company
has good and marketable title to all of the shares it purports to own of the
capital stock of each Subsidiary, free and clear in each case of any lien or
encumbrance, and all such shares have been duly issued and are fully paid and
nonassessable.
(d) Financial Statements. The consolidated balance sheets of the
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Company and its Subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for the three years ended December 31, 1995, 1994 and 1993, as reported on
the Company's Annual Report on Form 10-K for the year ended December 31, 1995,
copies of which have heretofore been delivered to you, were prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as otherwise noted therein) and present fairly the financial position
and results of operations and cash flows of the Company and its Subsidiaries for
and as of the end of each of such years. The unaudited consolidated balance
sheet of the Company and its Subsidiaries as of June 30, 1996, and the unaudited
statements of income, changes in stockholders' equity and cash flows for the
accounting period ended on said date as reported on the Company's Quarterly
Report on Form 10-Q for the six months ended June 30, 1996, copies of which have
heretofore been delivered to you, have been prepared in accordance with GAAP
consistently applied, are correct and complete and present fairly the financial
position of the Company and its Subsidiaries as of said date and the results of
their operations and cash flows for said period, subject to customary year-end
adjustments. The financial statements referenced herein are collectively
referred to as the "Financial Statements."
(e) No Contingent Liabilities or Adverse Changes. Neither the Company
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nor any of its Subsidiaries has any contingent liabilities or liabilities for
taxes, long-term leases, or forward or long-term commitments that are material
to the Company or any of its Subsidiaries other than as described in the
Financial Statements. Since June 30, 1996, there have been no materially
adverse changes in the business, properties, operations or condition (financial
or other) of the Company or any of its Subsidiaries.
(f) No Pending Litigation or Proceedings. Except as disclosed in the
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Company's publicly filed reports with the SEC, there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or its Subsidiaries, at law or in equity or before or by
any Federal, state, municipal or other court, governmental department,
commission, board, bureau, agency, official or instrumentality or arbitration
board or tribunal, domestic or foreign, which might result, either individually
or collectively, in any materially adverse change in the business, properties,
operations or financial condition of the Company or any of its Subsidiaries or
which are likely to have a materially adverse effect on the consummation of the
transactions contemplated hereby.
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(g) Compliance with Law. Neither the Company nor any of its
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Subsidiaries are: (i) in default with respect to any order, writ, injunction or
decree of any court, governmental authority or agency or arbitration board or
tribunal to which it is a named party, or (ii) in violation of any law, rule,
regulation, ordinance or order relating to its or their respective businesses;
except for any such defaults or violations which would not individually or in
the aggregate have a materially adverse effect on the business, properties,
operations or financial condition of the Company or any of its Subsidiaries.
(h) Title to Properties. The Company and each of its Subsidiaries
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have good title to all property it purports to own, including that reflected in
the consolidated balance sheets included in the Financial Statements or
subsequently acquired by the Company or any Subsidiary (except as sold or
otherwise disposed of in the ordinary course of business), in each case free
from all liens, charges, and encumbrances of any kind, except those securing
Indebtedness for borrowed money of the Company or a Subsidiary provided that any
such liens, charges and encumbrances do not, individually or in the aggregate,
materially impair the use or value of the property in the operation of the
business of the Company and its Subsidiaries.
(i) Leases. The Company and each Subsidiary enjoy peaceful and
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undisturbed possession under all leases under which the Company or such
Subsidiary is a lessee or is operating. In the absence of a default under such
leases, none of such leases contains any provision which might materially and
adversely affect the operation or use of the property so leased. All of such
leases are valid and subsisting and none of them is in default.
(j) Franchises, Licenses, Patents, Trademarks and Other Rights. The
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Company and each Subsidiary have all franchises, licenses, permits and other
authorizations necessary to carry on their businesses as now being conducted and
as proposed to be conducted, to own and operate their properties and, in the
case of the Company, to enter into this Agreement and to issue and sell the
Notes and the Warrants as contemplated in this Agreement, except for such
permits and licenses the failure of which to obtain will not have a materially
adverse effect on the business, properties, operations or financial condition of
the Company or any of its Subsidiaries. Neither the Company nor any Subsidiary
is in default under any of such franchises, permits, licenses or other
authorizations. The Company and each Subsidiary own or possess all patents,
trademarks, service marks, trade names, copyrights, licenses and rights with
respect to the foregoing necessary for the present conduct of their businesses,
without any known conflict with the rights of others.
(k) Status of Notes and Sale of Notes and Warrants.
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(i) The execution and delivery of this Agreement by the Company,
the sale of the Notes and the Warrants by the Company and compliance by the
Company with all of the provisions of this Agreement, the Notes and the
Warrants:
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(1) are within the corporate powers of the Company;
(2) will not violate any provisions of any law or any order
of any court or governmental authority or agency and will not
conflict with or result in any breach of any of the terms, conditions
or provisions of, or constitute (with or without the giving of notice
or lapse of time, or both) a default under the Articles of
Incorporation or Bylaws of the Company or any indenture or other
agreement or instrument to which the Company or any Subsidiary is a
party or by which it may be bound or result in the imposition of any
liens or encumbrances on any property of the Company or any
Subsidiary; and
(3) have been duly authorized by proper corporate action on
the part of the Company (no action by the stockholders of the Company
being required by law, by the Articles of Incorporation or Bylaws of
the Company or otherwise).
(ii) This Agreement, the Notes and the Warrants have been duly
executed and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting creditor's rights
generally, and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or
at law).
(iii) Upon issuance of the Notes and the Warrants, the Notes and
the Warrants are not, or will not be, of the same class as securities
listed on a national securities exchange registered under Section 6 of the
Exchange Act of 1934, as amended, or quoted in a United States automated
inter-dealer quotation system, within the meaning of Rule 144A.
(l) No Defaults. No event has occurred and no condition exists which,
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upon the issuance of the Notes, would constitute a Default or an Event of
Default under this Agreement. Neither the Company nor any Subsidiary is in
default, and no event has occurred which with notice or passage of time or both
would constitute a default, under any charter instrument, bylaw, loan agreement,
indenture or other material agreement or instrument to which the Company or any
Subsidiary is a party or by which it or its property may be bound.
(m) Governmental Consent. Neither the nature of the Company nor any
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of its Subsidiaries, their respective businesses or properties, nor any
relationship between the Company or any of its Subsidiaries and any other
Person, nor any circumstances in connection with the offer, issue, sale or
delivery of the Notes and the Warrants is such as to require a consent, approval
or authorization of, or filing, registration or qualification with, any
governmental authority or agency in connection with the execution and delivery
of this
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Agreement or the offer, issue, sale or delivery of the Notes and the Warrants or
compliance with the terms hereof or thereof other than filings with the SEC
contemplated by Section 5.9.
(n) Taxes. The Company and its Subsidiaries have filed all United
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States Federal income tax returns and all other material returns that are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Company or any of its
Subsidiaries, except as to any taxes the Company or any of its Subsidiaries is
contesting in good faith. The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of taxes and other charges are, in
the opinion of the Company, adequate.
(o) Investment Company Act. The Company is not an "investment
----------------------
company" or an "affiliated person" thereof or an "affiliated person" of any such
"affiliated person," as such terms are defined in the Investment Company Act of
1940, as amended.
(p) Private Offering. Neither the Company nor, to the knowledge of
----------------
the Company, Gulfstream Financial Advisors, Inc. (the only Person authorized or
employed by the Company as agent, broker, dealer or otherwise in connection with
the offering of the Notes and the Warrants or any similar security of the
Company) nor any other Person has offered any of the Notes and the Warrants or
any similar security of the Company for sale to, or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto with,
any prospective purchaser other than the Purchasers, as set forth in a letter
from Gulfstream Financial Advisors, Inc., dated the date hereof, a copy of which
has been delivered to your special counsel, each of whom was offered all or a
portion of the Notes and the Warrants at private sale to be held in accordance
with the representations set forth in Section 3.2(a) hereof. Neither the
Company nor, to the knowledge of the Company, Gulfstream Financial Advisors,
Inc. (the only Person authorized or employed by the Company as agent, broker,
dealer or otherwise in connection with the offering of the Notes and the
Warrants or any similar security of the Company) nor any other Person has
offered or will offer the Notes and the Warrants or any part thereof or any
similar securities for issue or sale to, or has solicited or will solicit any
offer to acquire any of the same from, anyone so as to bring the issuance and
sale of the Notes and the Warrants within the provisions of Section 5 of the
Securities Act.
(q) Effect of Other Instruments. Neither the Company nor any
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Subsidiary is bound by any agreement or instrument or subject to any charter or
other corporate restriction which materially and adversely affects the business,
properties, operations or financial condition of the Company or any Subsidiary
or the Company's ability to perform its obligations under this Agreement, the
Notes and the Warrants.
(r) Use of Proceeds. The Company will apply the proceeds from the
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sale of the Notes to retire Indebtedness and for working capital purposes.
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(s) Condition of Property. All of the facilities used in the conduct
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of the business of the Company and the Subsidiaries are in sound operating
condition and repair except for facilities being repaired in the ordinary course
of business.
(t) Books and Records. The Company and each Subsidiary maintain
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books, records and accounts all in reasonable detail which accurately and fairly
reflect the ownership of, transactions with respect to and dispositions of their
respective assets, and maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary (x) to permit preparation of financial
statements in accordance with GAAP and (y) to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(u) Full Disclosure. The Private Placement Memorandum (the "Private
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Placement Memorandum") previously furnished to you generally describes the
business conducted and proposed to be conducted by the Company and its
Subsidiaries and the principal properties of the Company and its Subsidiaries.
Neither the Private Placement Memorandum, including any exhibits and appendices
thereto, the financial statements referred to in paragraph (d) of this Section
3.1, nor this Agreement, nor any other statement or document furnished by the
Company to you in connection with the negotiation of the sale of the Notes
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not misleading.
There is no fact peculiar to the Company or its Subsidiaries known by the
Company which the Company has not disclosed to you in writing which has a
materially adverse effect on or, so far as the Company can now reasonably
foresee, might have a materially adverse effect on the business, property,
operations or financial condition of the Company and its Subsidiaries or the
ability of the Company to perform its undertakings under and in respect of this
Agreement, the Notes and the Warrants.
(v) Indebtedness. Except for a $25.0 million secured loan to the
------------
Company from First Union National Bank of Virginia, the Company and the
Subsidiaries have no Indebtedness for borrowed money outstanding as of the
Closing Date other than as set forth in the Financial Statements.
3.2. Representations of the Purchasers.
---------------------------------
(a) Each of you acknowledges that you are an "accredited investor" as
defined in Rule 501(a) of the Securities Act as promulgated by the SEC. Each of
you represents, and in entering into this Agreement the Company understands,
that you are acquiring the Notes and the Warrants for the purpose of investment
and not with a view to the resale or distribution thereof, and that you have no
present intention of selling, negotiating or otherwise disposing of the Notes
and the Warrants; provided that the disposition of your property shall at all
times be and remain within your control. You acknowledge that the
-10-
Notes, the Warrants and the Company Common Stock to be issued upon exercise of
the Warrants have not been registered under the Securities Act and you
understand that the Notes, the Warrants and the Company Common Stock to be
issued upon exercise of the Warrants must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available.
(b) You further represent that either no part of the funds to be used
by you to purchase the Notes are derived from the assets of an employee benefit
plan that is subject to the Employee Retirement Income Security Act of 1974
("ERISA") or Section 4975 of the Code, except with respect to those plans that
have been identified to the Company by you. The Company has represented to you
that the Company is not a "party-in-interest" under ERISA or a "disqualified
person" under the Code, with respect to any such employee benefit plan
identified to the Company by you. As used in this Section, the term "plan"
shall have the meaning assigned to it in Code section 4975.
(c) No provision set forth in this Section 3.2 shall be construed to
relieve the Company of its obligations pursuant to Section 5.9.
SECTION 4. CLOSING CONDITIONS.
Your obligation to purchase the Notes and the Warrants on the Closing Date
shall be subject to the performance by the Company of its agreements hereunder
which by the terms hereof are to be performed at or prior to the time of
delivery of the Notes and the Warrants and to the following further conditions
precedent:
4.1. Representations and Warranties. The representations and warranties
------------------------------
of the Company contained in this Agreement or otherwise made in connection
herewith shall be true and correct on the Closing Date and you shall receive
from the Company a closing certificate dated the Closing Date, and executed by
the President, a Vice President or the Chief Financial Officer of the Company to
such effect.
4.2. Legal Opinions. You shall receive from Hunton & Xxxxxxxx, counsel of
--------------
the Company, their opinion, addressed to you and dated the Closing Date, in form
and substance satisfactory to you, and covering the matters set forth in Exhibit
C hereto.
4.3. Events of Default. No event shall have occurred and be continuing on
-----------------
such Closing Date which would constitute a Default or an Event of Default, and
the Company shall have delivered to you on such Closing Date a certificate
signed by the President, a Vice President or the Chief Financial Officer of the
Company to such effect.
4.4. Sale of Notes. The Company shall have consummated the sale of the
-------------
entire principal amount of the Notes scheduled to be sold on the Closing Date to
the Purchasers pursuant to this Agreement.
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4.5. Satisfactory Proceedings. All proceedings taken in connection with
------------------------
the transactions contemplated by this Agreement, and all documents necessary to
the consummation thereof, shall be satisfactory in form and substance to you and
Solomon & Xxxxxxxxx, P.C., your special counsel, and you and your special
counsel shall have received a copy (executed or certified as may be appropriate)
of all legal documents or proceedings taken in connection with the consummation
of said transactions.
4.6. Waiver of Conditions. If, on the Closing Date, the Company fails to
--------------------
tender to you the Notes and the Warrants to be issued to you on such date or if
the conditions specified in this Section 4 have not been fulfilled, you may
thereupon elect to be relieved of all further obligations under this Agreement.
Without limiting the foregoing, if the conditions specified in this Section 4
have not been fulfilled, you may waive compliance by the Company with any such
condition to such extent as you may in your sole discretion determine. Nothing
in this Section 4.6 shall operate to relieve the Company of any of its
obligations hereunder or to waive any of your rights against the Company.
4.7. Secretary's Certificate. The Company shall have delivered to the
-----------------------
Purchasers the Secretary's Certificate substantially in the form of Exhibit 4.7
-----------
attached hereto.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
5.1. Payment of the Notes. The Company shall pay the principal of and
--------------------
interest on the Notes on the dates and in the manner provided in the Notes and
this Agreement. An installment of principal or interest shall be considered
paid on the date it is due if the holders of the Notes receive the money
sufficient to pay the installment. The Company shall pay interest on overdue
principal at the rate of 12.00% per annum; it shall pay interest, including
post-petition interest in the event of a proceeding under the Bankruptcy Laws,
on overdue installments of interest at the same rate to the extent lawful.
5.2. Company Existence; Maintenance of Office or Agency. Subject to this
--------------------------------------------------
Section 5, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate existence of each Subsidiary in accordance with the respective
organizational documents of each Subsidiary and the rights (statutory and
other), licenses and franchises of the Company and each Subsidiary; provided,
however, that the Company shall not be required to preserve any such right,
licenses or franchise, or the corporate existence of any Subsidiary, if the
Board of Directors shall determine in good faith (i) such preservation or
existence is not material to the conduct of business of the Company and (ii) the
loss of such right, license or franchise or the dissolution of such Subsidiary
does not have and is not likely to have a material adverse impact on the
Purchasers.
-12-
5.3. SEC Reports. The Company shall send to each holder of a Note, within
-----------
30 days after it files them with the SEC, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. So long as the Notes remain outstanding, the Company shall cause
its annual reports to stockholders (containing audited financial statements) and
any other financial reports furnished by it to stockholders to be mailed
concurrently to the holders of Notes at their addresses set forth herein.
5.4. Waiver of Stay, Extension or Usury Laws. The Company covenants (to
---------------------------------------
the extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law that would prohibit or
forgive the Company from paying all or any portion of the principal of or
interest on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or that may affect the covenants or the performance of
this Agreement; and (to the extent that it may lawfully do so) the Company
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted, but will suffer and permit the execution of every such power as though
no such law had been enacted.
5.5. Notice of Default. The Company will, so long as any of the Notes are
-----------------
outstanding, deliver to the Purchasers, forthwith upon becoming aware of (i) any
Default or Event of Default, an officers' certificate specifying such Default or
Event of Default.
5.6. Compliance Certificates.
-----------------------
(a) The Company will deliver to the Purchasers, within 120 days after
the end of each fiscal year, a written statement signed by the President or a
Vice President and by the Treasurer, an Assistant Treasurer, the Controller or
an Assistant Controller of the Company, stating, as to each signer thereof,
that:
(i) a review of the activities of the Company during such year
and of performance under this Agreement has been made under his supervision
and
(ii) whether the officer knows of any Defaults by the Company
under this Agreement throughout such year or, if there has been a default
in the fulfillment of any such obligation, specifying each such Default
known to him and the nature and status thereof.
(b) The Company will deliver to the Purchasers, within 30 days after
the end of each fiscal quarter, a written statement signed by the President or a
Vice President and by the Treasurer, an Assistant Treasurer, the Controller or
an Assistant Controller of the Company, stating, as to each signer thereof, that
the Company is in compliance with the
-13-
covenants of Section 5.10 hereof and that no prepayment of the Notes is required
under Sections 5.11 or 5.12 hereof.
5.7. Limitation on Dividends and Other Distributions. The Company shall
-----------------------------------------------
not declare or pay any dividend or make any distribution on or in respect of any
of its capital stock or to its stockholders (other than dividends or
distributions payable solely in its capital stock) or purchase, redeem or
otherwise acquire or retire for value any capital stock or any warrants, rights
or options (including any securities convertible into or exercisable or
exchangeable for such capital stock, but not including the Notes or the
Warrants) of the Company or any Subsidiary, provided, however, that if a Default
or an Event of Default has not occurred and is continuing, such provisions shall
not prevent (i) the retirement of any shares of the Company's capital stock by
exchange for, or out of the proceeds of, the substantially concurrent sale of
other shares of its capital stock, (ii) the purchase, redemption, retirement or
other acquisition for value, at any time, of the Company Common Stock using
$25.0 million in cash and up to 650,000 shares of Company Common Stock using
shares of common stock of World Airways, $.001 par value per share, of which the
Company is the owner or (iii) any prepayment of the Notes pursuant to the terms
thereof; provided, further, that such provisions shall not prevent the payment
of any dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment complied with the provisions of this limitation
on dividends. The Company shall also be able to repurchase, redeem, retire or
otherwise acquire for value up to $5.0 million of additional shares of Company
Common Stock for every $15.0 million increase in Asset Value at such time
compared to such value as of September 12, 1996.
5.8. Stock Repurchases. Each Subsidiary shall be permitted to, directly
-----------------
or indirectly, repurchase, redeem, retire or otherwise acquire for value any of
its shares of capital stock of any class or any warrants, rights, options to
purchase or acquire any shares of its capital stock.
5.9. Registration Rights.
-------------------
(a) Not later than 45 days after the Closing Date, the Company agrees
to file a registration statement to register with the SEC the Notes and to use
its best efforts to have such registration statement declared effective as soon
as practicable after the filing thereof, but in no event later than 45 days
following the filing thereof. WorldCorp agrees only to pay the cost of its
legal counsel and related filing fees in connection with such registration.
(b) The Company will file a "shelf" registration statement on an
appropriate form pursuant to Rule 415 under the Securities Act and/or any
similar rule that may be adopted by the Securities and Exchange Commission (the
"Commission") with respect to the (i) the Initial Warrants and the shares of
Common Stock issuable upon exercise of the Initial Warrants, (ii) the 1997
Warrants, if any, and the shares of Common Stock issuable upon exercise of the
1997 Warrants, and (iii) the 1998 Warrants, if any, and the shares of Common
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Stock issuable upon exercise of the 1998 Warrants, in each case as soon as
practicable after, but in no event later than 45 days following, the issuance of
the relevant Warrants, respectively (each such shelf registration statement, a
"Shelf Registration" and collectively, the "Shelf Registrations"). The Company
agrees to use its best efforts to have the Shelf Registration declared effective
as soon as practicable after the filing thereof, but in no event later than 45
days following the filing thereof, and shall keep such Shelf Registration
continuously effective for a period of at least 48 months from the date on which
such Shelf Registration is declared effective; provided, however, that
notwithstanding the foregoing, the Company shall not be required to continue to
keep a Shelf Registration effective with respect to the Initial Warrants, the
1997 Warrants or the 1998 Warrants or the shares of Common Stock issuable upon
the exercise of the Initial Warrants, the 1997 Warrants or the 1998 Warrants,
once such Warrants or the shares of Common Stock issuable under such Warrants,
as the case may be, may be sold by the holders thereof pursuant to Rule 144(k)
of the Securities Act (or any successor rule) in a single transaction. If the
Company commences a registered public offering of its Common Stock, the Company
may notify the holders of the Warrants ("Warrant Holders") not to sell any
shares of Common Stock pursuant to any Shelf Registration for a period of up to
90 days, and after receiving such notice, the Warrant Holders shall not sell any
Shares pursuant to such Shelf Registration during such period, in which event
the Company shall extend the period during which Shelf Registration shall be
maintained effective pursuant to this Warrant by the number of days during such
period, from and including the date of the giving of such notice. The Company
agrees, if necessary, to supplement or make amendments to a Shelf Registration
if required by the registration form used by the Company for such Shelf
Registration or the instructions applicable to each such registration form or by
the Securities, and the Company agrees to furnish to the Warrant Holders copies
of any such supplement or amendment prior to its being used and/or filed with
the Commission. The Company will make available to its security holders, as soon
as reasonably practicable, a statement of operations covering a period of 12
months, commencing on the effective date of each Shelf Registration, which
earning statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder. In no event shall any Shelf Registration
include securities other than the Warrants and the shares of Common Stock
underlying the Warrants, unless Warrant Holders holding, in the aggregate, a
majority of the outstanding Warrants being registered thereunder consent to such
inclusion.
(c) In connection with each Shelf Registration, the Company shall pay
the costs of registration, including registration and filing fees, blue sky fees
and expenses, printing expenses, annual audit fees and expenses, and fees and
disbursements of counsel and accountants for the Company in connection
therewith, whether such Shelf Registration becomes effective. The Warrant
Holders shall bear (i) the legal fees and expenses of any counsel retained by
the Warrant Holders, (ii) underwriting discounts and commissions, if any and
(iii) the accountants' fees and expenses of any accountant retained by the
Warrant Holders in connection with the offering of their securities.
(d) Each Warrant Holder shall furnish to the Company all information
regarding the Warrant Holder as is reasonably requested by the Company in
connection with
-15-
the preparation of the Shelf Registrations. Each Warrant Holder who owns
Warrants or shares of Common Stock included in a Shelf Registration will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed such Shelf Registration and each person, if any, who
controls the Company within the meaning of the Securities Act, against any
losses, claims, damages, or liabilities to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Shelf
Registration, the prospectus included in the Shelf Registration at the time it
became effective, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Warrant
Holder specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action.
(e) The Company shall indemnify and hold harmless each Warrant Holder
who owns Warrants or shares of Common Stock included in a Shelf Registration,
and each officer and director of such Warrant Holder, and each person, if any,
who controls any such Warrant Holder within the meaning of the Securities Act,
against any losses, claims, damages, or liabilities to which such Warrant Holder
or any such officer, director or controlling person may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
such Shelf Registration, the prospectus included in such Shelf Registration at
the time it became effective, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that the Company shall have no obligation under this paragraph to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with information
furnished to the Company by the Warrant Holder specifically for use therein; and
will reimburse any legal or other expenses reasonably incurred by such Warrant
Holder or any such officer, director or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
5.10. Senior Indebtedness. The Company agrees that Senior Indebtedness
-------------------
shall not exceed $50.0 million.
5.11. Asset Value. If the Asset Value is less than $70.0 million at the
-----------
end of any fiscal quarter, then the Company shall prepay 50% of the then
outstanding Notes in accordance with Section 2 hereof within 60 days. If the
Asset Value at the end of any fiscal
-16-
quarter is less than $50.0 million, then the Company shall redeem all of the
then outstanding Notes in accordance with Section 2 hereof within 60 days.
5.12. Sale of USOCDT Merger Corporation Common Stock. If the Company sells
----------------------------------------------
any shares of common stock of USOCDT Merger Corporation, as successor to US
Order, Inc., 20% of the net proceeds (i.e., gross proceeds less direct costs
----
associated with such sales) received by the Company upon such sale will be used
to prepay the Notes in accordance with Section 2 hereof within 30 days.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
6.1. Events of Default. Any one or more of the following shall constitute
-----------------
an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest on any Note when
the same shall have become due and such default shall continue for more than 10
calendar days; or
(b) Default shall occur in the making of any required prepayment on
any of the Notes as provided in Section 2.1 or in the making of any other
payment of the principal of any Note at the maturity date; or
(c) Default shall be made in the payment of the principal of or
interest or premium on Indebtedness of the Company and its Subsidiaries
aggregating in excess of $5.0 million, as and when the same shall become due and
payable by the lapse of time, by declaration of acceleration, by call for
redemption or otherwise, and such default shall continue beyond the period of
grace, if any, allowed with respect thereto unless such default is being
contested in good faith by appropriate actions or proceedings; or
(d) Default shall occur in the observance or performance of any other
covenant of this Agreement which is not remedied within 30 calendar days after
the Company has received written notice thereof; or
(e) Any representation or warranty made by the Company herein, or made
by the Company in any statement or certificate furnished by the Company in
connection with the consummation of the issuance and delivery of the Notes or
furnished by the Company pursuant hereto, is untrue in any material respect as
of the date of the issuance or making thereof; or
(f) Any judgment, writ or warrant of attachment or any similar process
in an aggregate amount in excess of $5.0 million shall be entered or filed
against the Company or any Subsidiary or against any property or assets of
either and remain unpaid, unvacated, unbonded or unstayed (through appeal or
otherwise) for a period of 60 days after the date of entry or filing thereof; or
-17-
(g) The Company or any Subsidiary shall:
(i) generally not pay its debts as they become due or admit
in writing its inability to pay its debts generally as they become due;
(ii) file a petition in bankruptcy or for reorganization or
for the adoption of an arrangement under the Federal Bankruptcy Code, or
any similar applicable bankruptcy or insolvency law, as now or in the
future amended (herein collectively called "Bankruptcy Laws"), or an answer
or other pleading admitting or failing to deny the material allegations of
such a petition or seeking, consenting to or acquiescing in relief provided
for under the Bankruptcy Laws;
(iii) make an assignment of all or a substantial part of its
property for the benefit of its creditors;
(iv) seek or consent to or acquiesce in the appointment of a
receiver, liquidator, custodian or trustee of it or for all or a
substantial part of its property;
(v) be subject to the entry of a court order, which shall not
be vacated, set aside or stayed within 45 days from the date of entry,
appointing a receiver, liquidator, custodian or trustee of it or for all or
a substantial part of its property;
(vi) be subject to the institution against it of bankruptcy,
reorganization, arrangement or insolvency proceedings, or other proceedings
pursuant to the Bankruptcy Laws or any other proceedings for judicial
modification or alteration of the rights of creditors, which proceedings
are not dismissed within 60 days after such institution or which otherwise
result in the Company or such Subsidiary being finally adjudicated a
bankrupt or insolvent; or
(vii) be subject to the assumption of custody or sequestration
by a court of competent jurisdiction of all or a substantial part of its
property, which custody or sequestration shall not be suspended or
terminated within 60 days from its inception.
6.2. Acceleration of Maturities. When any Event of Default described in
--------------------------
paragraph (a) or (b) of Section 6.1 has occurred and is continuing, any holder
of any Note may, and when any Event of Default described in paragraphs (c)
through (f), both inclusive, of said Section 6.1 has occurred and is continuing,
the holder or holders of a majority in aggregate principal amount of the Notes
at the time outstanding may, by notice in writing, declare the entire principal,
together with the premium set forth below, and all interest accrued on all
Notes, to be, and all Notes shall thereupon become, forthwith due and payable,
without any presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived. When any Event of Default described in
paragraph (g) of Section 6.1 has occurred and is continuing, all of the Notes,
and all interest accrued thereon, shall
-18-
automatically become forthwith due and payable, without any presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived. Upon
the Notes becoming due and payable as a result of any Event of Default as
aforesaid, the Company will forthwith pay to the holders of the Notes the entire
principal of, and interest accrued on, the Notes. No course of dealing on the
part of any holder of Notes, nor any delay or failure on the part of any holder
of Notes to exercise any of its rights, shall operate as a waiver of such rights
or otherwise prejudice such holder's rights, powers and remedies. The Company
further agrees to pay to the holder or holders of the Notes all costs and
expenses incurred by them in the collection or enforcement of any Notes upon any
default hereunder or thereon, including reasonable compensation to such holder's
or holders' attorneys for all services rendered in connection therewith.
6.3. Rescission of Acceleration. The provisions of Section 6.2 are
--------------------------
subject to the condition that if the principal of and accrued interest on all or
any outstanding Notes have been declared immediately due and payable by reason
of the occurrence of any Event of Default, the holders of a majority in
aggregate principal amount of the Notes then outstanding may within 90 days of
the Notes becoming due and payable, by written instrument filed with the
Company, rescind and annul such declaration and the consequences thereof,
provided that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal or
interest on the Notes which has become due and payable solely by reason of such
declaration under Section 6.2) shall have been duly paid;
(c) each and every Default and Event of Default shall have been made
good, cured or waived pursuant to Section 7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Event of Default or impair any right consequent thereto.
6.4. Notice of Default. With respect to Events of Default or claimed
-----------------
defaults, the Company will give the following notices:
(a) The Company promptly, but in any event within four business days,
will furnish to each holder of a Note written notice of the occurrence of a
Default or an Event of Default. Such notice shall specify the nature of such
Default or Event of Default, the period of existence thereof and what action the
Company has taken or is taking or proposes to take with respect thereto.
-19-
(b) If the holder of any Note or of any other evidence of
indebtedness of the Company or any Subsidiary gives any notice or takes any
other action with respect to a claimed default, the Company will forthwith give
written notice thereof to each holder of the then outstanding Notes, describing
the notice or action and the nature of the claimed default.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
7.1. Consent Required. Any term, covenant, agreement or condition of this
----------------
Agreement may, with the consent of the Company, be amended or compliance
therewith may be waived (either generally or in a particular instance and either
retroactively or prospectively), if the Company shall have obtained the consent
in writing of the holders of at least 51% in aggregate principal amount of Notes
then outstanding; provided that without the written consent of the holders of
all of the Notes then outstanding, no such waiver, modification, alteration or
amendment shall be effective (i) which will change the time of payment
(including any prepayment required by Section 2.1) of the principal of or the
interest on any Note or change the principal amount of payments (including the
prepayments required by Section 2.1 hereof) or change the rate of interest
thereon, or (ii) which will change any of the provisions with respect to
optional prepayments, or (iii) which will change the percentage of holders of
the Notes required to consent to any amendment, alteration or modification.
For the purpose of determining whether holders of the requisite principal
amount of Notes have made or concurred in any waiver, consent, approval, notice
or other communication under this Agreement, Notes held in the name of, or owned
beneficially by, the Company, any Subsidiary or any Affiliate of any thereof,
shall not be deemed outstanding.
7.2. Effect of Amendment or Waiver. Any such amendment or waiver shall
-----------------------------
apply equally to all of the holders of the Notes and shall be binding upon them,
upon each future holder of any Note and upon the Company, whether or not such
Note shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
7.3. Solicitation of Noteholders. The Company will not solicit, request
---------------------------
or negotiate for or with respect to any proposed waiver or amendment of any of
the provisions of this Agreement or the Notes unless each holder of the Notes
(irrespective of the amount of Notes then owned by it) shall be informed thereof
by the Company and shall be afforded the opportunity of considering the same and
shall be supplied by the Company with sufficient information to enable it to
make an informed decision with respect thereto. Executed or true and correct
copies of any waiver or consent effected pursuant to the provisions of this
Section 7 shall be delivered by the Company to each holder of outstanding Notes
forthwith following the date on which the same shall have been executed and
delivered by the holder or holders of the requisite percentage of outstanding
Notes. The Company will not, and will not permit any Subsidiary or Affiliate
to, directly or indirectly, pay or cause to be paid any remuneration, whether by
way of supplemental or additional interest, fee or otherwise, to any holder of
the Notes as consideration for or as inducement to the entering into by any
holder of the
-20-
Notes of any waiver or amendment of any of the terms and provisions of the
Agreements unless such remuneration is concurrently paid, on the same terms,
ratably to the holders of all the Notes then outstanding.
SECTION 8. SUBORDINATION OF SECURITIES.
8.1. Notes Subordinate to Senior Indebtedness. The Company covenants and
----------------------------------------
agrees that anything in this Agreement or the Notes to the contrary
notwithstanding, the indebtedness evidenced by the Notes is subordinate and
junior in right of payment to all Senior Indebtedness to the extent provided
herein, and each holder of Notes, by his acceptance thereof, likewise covenants
and agrees to the subordination herein provided and shall be bound by the
provisions hereof. Senior Indebtedness shall continue to be Senior Indebtedness
and entitled to the benefits of these subordination provisions irrespective of
any amendment, modification or waiver of any term of the Senior Indebtedness or
extension or renewal of the Senior Indebtedness.
In the event that the Company shall default in the payment of any principal
of (or premium, if any) or interest on any Senior Indebtedness when the same
becomes due and payable, whether at maturity or at a date fixed for repayment or
by declaration of acceleration or otherwise, then, upon written notice of such
default to the Company by the holders of Senior Indebtedness or any trustee
therefor or representative thereof, unless and until such default shall have
been cured or waived or shall have ceased to exist, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise) shall be made
or agreed to be made on account of the principal of or interest on any of the
Notes, or in respect of any redemption, retirement, purchase or other
acquisition of any of the Notes.
In the event of:
(a) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding
relating to the Company, its creditors or its property,
(b) any proceeding for the liquidation, dissolution or other winding
up of the Company, voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings,
(c) any assignment by the Company for the benefit of creditors, or
(d) any other marshalling of the assets of the Company,
all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) shall first be paid in full before any
payment or distribution, whether in cash, securities or other property, shall be
made to any holder of any of the Notes on account thereof. Any payment or
distribution, whether in cash, securities or other property (other than
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securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Notes, to the payment of all Senior Indebtedness
at the time outstanding and to any securities issued in respect thereof under
any such plan of reorganization or readjustment), which would otherwise (but for
these subordination provisions) be payable or deliverable in respect of the
Notes shall be paid or delivered directly to the holders of Senior Indebtedness
in accordance with the priorities then existing among such holders until all
Senior Indebtedness (including any interest thereof accruing after the
commencement of any such proceedings) shall have been paid in full. In the
event of any such proceeding, after payment in full of all sums owing with
respect to Senior Indebtedness, the holders of the Notes, together with the
holders of any obligations of the Company ranking on a parity with the Notes,
shall be entitled to be paid from the remaining assets of the Company the
amounts at the time due and owing on account of unpaid principal of (and
premium, if any) and interest on the Notes and such other obligations before any
payment or other distribution, whether in cash, property or otherwise, shall be
made on account of any capital stock or any obligations of the Company ranking
junior to the Notes and such other obligations.
In the event that, notwithstanding the foregoing, any payment or
distribution of any character, whether in cash, securities or other property
(other than securities of the Company or any other corporation provided for by a
plan of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in these subordination provisions with respect to
the indebtedness evidenced by the Notes, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), or any security
shall be received by any holder in contravention of any of the terms hereof,
such payment or distribution or security shall be received in trust for the
benefit of, and shall be paid over or delivered and transferred to, the holders
of the Senior Indebtedness at the time outstanding in accordance with the
priorities then existing among such holders for application to the payment of
all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
such Senior Indebtedness in full. In the event of the failure of any holder to
endorse or assign any such payment, distribution or security, each holder of
Senior Indebtedness is hereby irrevocably authorized to endorse or assign the
same.
No present or future holder of any Senior Indebtedness shall be prejudiced
in the right to enforce subordination of the indebtedness evidenced by the Notes
by any act or failure to act on the part of the Company. Nothing contained
herein shall impair, as between the Company and the holders of Notes, the
obligation of the Company to pay to such holders the principal of and interest
on such Notes or prevent the holder from exercising all rights, powers and
remedies otherwise permitted by applicable law or hereunder upon a Default or
Event of Default hereunder, all subject to the rights of the holders of the
Senior Indebtedness to receive cash, securities or other property otherwise
payable or deliverable to the holders.
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Senior Indebtedness shall not be deemed to have been paid in full unless
the holders thereof shall have received cash, securities or other property equal
to the amount of such Senior Indebtedness then outstanding. Upon the payment in
full of all Senior Indebtedness, the holders of Notes shall be subrogated to all
rights of any holders of Senior Indebtedness to receive any further payments or
distributions applicable to the Senior Indebtedness until the indebtedness
evidenced by the Notes shall have been paid in full, and such payments or
distributions received by such holders, by reason of such subrogation, of cash,
securities or other property which otherwise would be paid or distributed to the
holders of Senior Indebtedness, shall, as between the Company and its creditors
other than the holders of Senior Indebtedness, on the one hand, and such
holders, on the other hand, be deemed to be a payment by the Company on account
of Senior Indebtedness, and not on account of the Notes.
The provisions of this Section shall not impair any right, interests,
remedies or powers of any secured creditor of the Company in respect of any
security interest the creation of which is not prohibited by the provisions of
this Agreement.
The securing of any obligations of the Company, otherwise ranking on a
parity with the Notes or ranking junior to the Notes, shall not be deemed to
prevent such obligations from constituting, respectively, obligations ranking on
a parity with the Notes or ranking junior to the Notes.
SECTION 9. INTERPRETATION OF AGREEMENT; DEFINITIONS.
9.1. Definitions. Unless the context otherwise requires, the terms
-----------
hereinafter set forth when used herein shall have the following meanings and the
following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined:
"Affiliate" shall mean any Person (other than a Subsidiary) (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (ii) which
beneficially owns or holds 10% or more of any class of the voting stock of the
Company or (iii) 10% or more of the voting stock (or in the case of a Person
which is not a corporation, 10% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting stock, by contract or otherwise.
"Agreement" shall mean this purchase agreement.
"Asset Value" shall mean (A) the market value of the common stock of its
Subsidiaries or the Company Common Stock measured based on the monthly closing
prices of each of the common stocks as listed on the New York Stock Exchange or
the Nasdaq National Market, as the case may be, plus (B) all other tangible
assets of the Company calculated in accordance
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with generally accepted accounting principles consistently applied, measured
based on the value of such assets as of the applicable date.
"Closing Date" shall mean September 30, 1996.
"Company Common Stock" shall have the meaning assigned thereto in Section
1.1(b).
"Default" shall mean any event or condition, the occurrence of which would,
with the lapse of time or the giving of notice, or both, constitute an Event of
Default as defined in Section 6.1.
"ERISA" shall have the meaning assigned thereto in Section 3.2(b).
"Event of Default" shall have the meaning assigned thereto in Section 6.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
as it may be further amended from time to time.
"Financial Statements" shall have the meaning assigned thereto in Section
3.1(d).
"GAAP" shall mean the generally accepted accounting principles at the time
promulgated by the United States Financial Accounting Standards Board.
"Indebtedness" of any Person shall mean and include all obligations of such
Person which in accordance with GAAP shall be classified upon a balance sheet of
such Person as liabilities of such Person, and in any event shall include all
(i) obligations of such Person for borrowed money or which have been incurred in
connection with the acquisition of property or assets, (ii) obligations secured
by any lien or other charge to property or assets owned by such Person, even
though such Person has not assumed or become liable for the payment of such
obligations, (iii) obligations created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person, notwithstanding the fact that the rights and remedies of the seller,
lender or lessor under such agreement in the event of default are limited to
repossession or sale of property, (iv) guaranties, (v) capitalized rentals under
any capitalized lease and (vi) any recourse obligations arising upon a sale of
assets. Any Indebtedness extended or renewed, other than at the option of the
obligor pursuant to the terms thereof, will be deemed to have been incurred at
the time of such extension or renewal.
"Institutional Holder" shall mean any bank, trust company, insurance
company, pension fund, investment company, institution of the Farm Credit
System, or other financial institution, including, without limiting the
foregoing, any "qualified institutional buyer" within the meaning of Rule 144A
which is or becomes a holder of any Note.
"Notes" shall have the meaning assigned thereto in Section 1.1(a).
-24-
"Person" shall mean an individual, partnership, corporation, limited
liability company, trust, estate or unincorporated organization, and a
government or agency or political subdivision thereof.
"Private Placement Memorandum" shall have the meaning assigned thereto in
Section 3.1(v).
"Rule 144A" shall mean Rule 144A promulgated pursuant to the Securities
Act, as it may be amended from time to time.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, and as
it may be further amended from time to time.
"Senior Indebtedness" shall mean at any date, (i) all Indebtedness of the
Company for money borrowed from any institutional lender secured by any lien or
other charge to the property or assets owned by the Company, whether created
prior to, or after the date of the issuance of the Notes, including principal
and interest on such Indebtedness and all other amounts due on or in connection
with such Indebtedness including all charges, fees and expenses and (ii) all
interest on any Indebtedness referred to in clause (i) accruing during the
pendency of any bankruptcy or insolvency proceeding, whether or not allowed
thereunder. Notwithstanding the foregoing, Senior Indebtedness shall not
include (a) Indebtedness which is pursuant to its terms or any agreement
relating thereto or by operation of law subordinated or junior in right of
payment or otherwise to any other Indebtedness of the Company and (b) any
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of the Bankruptcy Code, is without recourse to the Company.
"Shelf Registration" shall have the meaning assigned thereto in Section
5.9(b).
"Subordinated Indebtedness" shall mean any Indebtedness other than the
Notes that is not Senior Indebtedness. Subordinated Indebtedness shall include,
without limitation, (a) the Company's 7% Convertible Subordinated Debentures due
2004 and (b) any Indebtedness of the Company to any Subsidiary of the Company.
"Subsidiary" shall mean any corporation of which more than 50% (by number
of votes) of the voting stock shall be owned or controlled by the Company or by
one or more Subsidiaries of the Company.
"Warrant Holders" shall have the meaning assigned thereto in Section
5.9(b).
"Warrants" shall have the meaning assigned thereto in Section 1.1(b).
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Terms which are defined in other Sections of this Agreement shall have the
meanings specified therein.
9.2. Accounting Principles. Where the character or amount of any asset
---------------------
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP, to
the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
9.3. Directly or Indirectly. Where any provision in this Agreement
----------------------
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether the action in question
is taken directly or indirectly by such Person.
SECTION 10. REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT OF NOTES.
10.1. Registered Notes. The Company shall cause to be kept at its
----------------
principal office a register for the registration and transfer of the Notes
(hereinafter called the "Note Register"). The names and addresses of the
holders of the Notes, the transfer of Notes and the names and addresses of the
transferees of the Notes shall be registered in the Note Register.
The Person in whose name any registered Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes of this
Agreement and the Company shall not be affected by any notice to the contrary,
until due presentment of such Note for registration of transfer so provided in
this Section 10. Payment of or on account of the principal and interest on any
registered Note shall be made to or upon the written order of such registered
holder.
10.2. Exchange of Notes. At any time, and from time to time, upon
-----------------
surrender for exchange or registration of transfer of any Note at the office of
the Company designated for notices in accordance with Section 11.3, the Company
shall execute and deliver in exchange therefor, without expense to the holder,
except as set forth below, one or more new Notes for the same aggregate
principal amount as the then unpaid principal amount of the Note so surrendered,
in authorized denominations, dated as of the date to which interest has been
paid on the Note so surrendered (or, if no interest has been paid, the date of
such surrendered Note), registered in the name of such Person or Persons, or
order, as may be designated by such holder in writing, and otherwise of the same
form and tenor as the Notes so surrendered for exchange. Every Note surrendered
for transfer of registration shall be duly endorsed, or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
its attorney duly authorized in writing. The Company may require the payment of
a sum sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer. The Notes are issuable only in fully registered form and
in the face amount of at least $250,000 (or the remaining outstanding balance if
less than $250,000).
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10.3. Loss, Theft, etc. of Notes. Upon receipt of evidence satisfactory
--------------------------
to the Company of the loss, theft, mutilation or destruction of any Note, and in
the case of any such loss, theft or destruction upon delivery of a bond of
indemnity in such form and amount as shall be reasonably satisfactory to the
Company, or in the event of such mutilation upon surrender and cancellation of
the Note, the Company will make and deliver, without expense to the holder
thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note. If any Purchaser or any other Institutional Holder is the owner
of any such lost, stolen or destroyed Note, then the affidavit of an authorized
officer of such owner, setting forth the fact of loss, theft or destruction and
of its ownership of the Note at the time of such loss, theft or destruction
shall be accepted as satisfactory evidence thereof and no further indemnity
shall be required as a condition to the execution and delivery of a new Note
other than the written agreement of such owner to indemnify the Company.
SECTION 11. MISCELLANEOUS.
11.1. Expenses, Stamp Tax Indemnity. Whether or not the transactions
-----------------------------
herein contemplated shall be consummated, the Company agrees to pay directly the
reasonable charges and disbursements (not to exceed $25,000 in the aggregate) of
Gulfstream Financial Advisors, Inc. (the "Placement Agent"), your special
counsel, duplicating and printing costs and charges for shipping the Notes and
the Warrants, adequately insured to the Purchaser at the Purchaser's home office
or at such other place as the Purchaser may designate, and all similar expenses
relating to any amendment, waivers or consents pursuant to the provisions
hereof. The Company also agrees that it will pay and save the Purchaser
harmless from and against any and all liability with respect to stamp and other
taxes, if any, which may be payable or which may be determined to be payable in
connection with the execution and delivery of this Agreement, the Notes or the
Warrants (but not in connection with a transfer of any Note or Warrant), whether
or not any Notes are then outstanding. The Company agrees to protect and
indemnify the Purchaser against any liability for any and all brokerage fees and
commissions payable or claimed to be payable to any Person in connection with
the transactions contemplated by this Agreement.
11.2. Powers and Rights Not Waived; Remedies Cumulative. No delay or
-------------------------------------------------
failure on the part of the holder of any Note in the exercise of any power or
right shall operate as a waiver thereof; nor shall any single or partial
exercise of the same preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies of the holder
of any Note are cumulative to and are not exclusive of any rights or remedies
any such holder would otherwise have, and no waiver or consent, given or
extended pursuant to Section 7 hereof, shall extend to or affect any obligation
or right not expressly waived or consented to.
11.3. Notices. Except as otherwise expressly provided herein, all notices
-------
provided for hereunder shall be in writing and mailed by registered or certified
mail (return receipt requested) or delivered by overnight courier for which a
signed receipt is obtained, addressed (i) if to you, to your address appearing
on Schedule I to this Agreement or such other address
----------
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as you or the subsequent holder of any Note may designate to the Company in
writing, and (ii) if to the Company, to WorldCorp, Inc., The Hallmark Building,
00000 Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xx. Xxxxxx X.
Xxxxxxxx, or to such other address as the Company may in writing designate to
the holders of the Notes.
11.4. Successors and Assigns. This Agreement shall be binding upon the
----------------------
Company and its successors and assigns and shall inure to your benefit and to
the benefit of your successors and assigns, including each successive holder or
holders of any Notes.
11.5. Survival of Covenants and Representations. All covenants,
-----------------------------------------
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with a
Closing Date, shall survive the closing and the delivery of this Agreement, the
Notes and the Warrants.
11.6. Integration. This Agreement embodies the entire agreement and
-----------
understanding between you and the Company, and supersedes all prior agreements
and understandings relating to the subject matter hereof.
11.7. Governing Law. This Agreement and the Notes and the Warrants
-------------
issued and sold hereunder shall be governed by and construed in accordance with
the internal laws of the State of Delaware without regard to its conflict of
laws principles or rules.
11.8. Headings. The descriptive headings of the various Sections or
--------
parts of this Agreement are for convenience only and do not constitute a part of
this Agreement and shall not affect the meaning or construction of any of the
provisions hereof.
11.9. Counterparts. This Agreement may be executed simultaneously in one
------------
or more counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
11.10. Agent's Fee. The Company agrees to pay, and agrees the Purchasers
-----------
shall have no obligation to pay, any fees and expenses due and owing to any
person, firm or corporation for services of such person, firm or corporation as
agent, broker or dealer for the Company with respect to the offer and sale of
the Notes and the Warrants.
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IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Agreement to be executed and delivered by their respective officer or officers
thereunto duly authorized.
WORLDCORP, INC.
By: _________________________
Name:
Title:
PURCHASER
By: _________________________
Name:
Title:
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Schedule I
----------
Principal Amount of Notes to be Purchased
-----------------------------------------
Principal Number and
Purchaser Amount of Notes Type of Warrants
--------- --------------- ----------------
All payments on or in respect of the Notes
are to be by bank wire transfer of
immediately available funds to:
with sufficient information to identify the
source and application of funds
(identifying each payment as WorldCorp,
Inc., 10.00% Senior Subordinated Notes due
September 30, 2000, principal, interest and
premium, if any).
All notices and communication should be
addressed to:
With copies to:
Name in which Notes are to be issued: _________________________________________
Name in which Warrants are to be issued: ______________________________________
Tax Identification No.: _______________________________________________________
ANNEX I
List of Subsidiaries and Jurisdictions
in Which the Company and its Subsidiaries
are Qualified as Foreign Corporations
State of
% Incorporation Foreign
Organization Ownership or Organization Qualifications
------------ --------- --------------- --------------
WorldCorp Investments, Inc. 100% Delaware Virginia
US Order, Inc. 56.6%* Delaware Virginia
World Airways, Inc. 59.3% Delaware Virginia
*Prior to proposed merger with Colonial Data Technologies Corp., which merger is
anticipated to be effective in November 1996.
Exhibit A
---------
WORLDCORP, INC.
10.00% SENIOR SUBORDINATED NOTE
Due September 30, 2000
---------------
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED. THIS NOTE MAY BE OFFERED OR SOLD ONLY IF REGISTERED UNDER SAID ACT
OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. EACH SUBSEQUENT
PURCHASER REPRESENTS TO THE COMPANY THAT THE PURCHASE OF THIS NOTE BY SUCH
PURCHASER IS NOT A "NON-EXEMPT PROHIBITED TRANSACTION" AS DEFINED IN SECTION 406
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED.
---------------
Registered Note No. R-___ September 30, 1996
$____________
WorldCorp, Inc., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to ____________________ or registered assigns,
on the thirtieth day of September, 2000, the principal amount of
______________________________ Dollars ($__________) and to pay interest
(computed on the basis of a 360-day year of 12 30-day months) on the principal
amount from time to time remaining unpaid hereon at the rate of 10.00% per annum
from the date hereof until maturity, payable on March 31 and September 30 in
each year, commencing on March 31, 1997, and at maturity, and to pay interest on
overdue principal and (to the extent legally enforceable) on any overdue
installment of interest at the rate of 12.00% per annum after maturity or the
date due thereof, until paid. Payments of the principal and interest on this
Note shall be made in lawful money of the United States of America in the manner
and at the place provided in Section 2.6 of the Agreement (as hereinafter
defined).
This Note is issued under and pursuant to the terms and provisions of the
Purchase Agreement, dated as of September 30, 1996, entered into between the
Company and the Purchasers listed on Schedule I thereto (the "Agreement"), and
----------
this Note and any holder hereof are entitled to all of the benefits provided for
by such Agreement or referred to therein. The provisions of the Agreement are
hereby incorporated in this Note to the same extent as if set forth at length
herein.
As provided in the Agreement, upon surrender of this Note for registration
of transfer, duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder
hereof or his attorney duly authorized in writing, a new Note for a like unpaid
principal amount will be issued to, and registered in the name of, the
transferee upon the payment of the taxes or other governmental charges, if any,
that may be imposed in connection therewith. The Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
This Note may be declared due prior to its expressed maturity date,
voluntary prepayments may be made hereon and certain prepayments are required to
be made hereon, all in the events, on the terms and in the manner provided in
the Agreement. Such prepayments include (i) certain required prepayments on
September 30, 1998 and September 30, 1999 and upon the occurrence of certain
events specified in the Agreement, and (ii) certain optional prepayments. The
principal of this Note may not be prepaid prior to the expressed maturity date
except as provided in the Agreement.
The indebtedness evidenced by this Note is, to the extent provided in the
Agreement, subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness as defined in the Agreement, and this Note is
issued subject to such provisions and each holder of this Note, by accepting the
same, agrees to and shall be bound by such provisions, and authorizes the
Company in the holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Agreement. The
Company shall not make any payment of principal or interest, as applicable, on
the Notes while the Company is in default with respect to any Senior
Indebtedness, except as provided in the Agreement.
This Note and the Agreement are governed by and construed in accordance
with the laws of the State of Delaware.
WORLDCORP, INC.
By: _____________________
Name:
Title:
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