AMENDMENT NO. 1 TO WARRANT AGREEMENT
AMENDMENT
NO. 1 TO WARRANT AGREEMENT
THIS AMENDMENT NO. 1 TO WARRANT
AGREEMENT, dated as of the date provided on the signature page hereto
(this “Agreement”), is
entered into by and between WorldGate Communications, Inc., a Delaware
corporation (the “Company”), and the
person or entity under the heading “Holder” provided on
the signature page hereto (the “Holder”, and together
with the Company, the “Parties”). All
capitalized terms used but not defined in this Agreement shall have the meanings
ascribed to them by that certain warrant to purchase common stock of the Company
issued June 23, 2004 by the Company and attached hereto as Exhibit A (the “Warrant”).
NOW, THEREFORE, in
consideration of the premises and the mutual covenants hereinafter contained,
the Parties agree as follows:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED
UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS
AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER AND THE CORPORATION
RECEIVES AN OPINION OF COUNSEL (BOTH SUCH OPINION AND SUCH COUSEL BEING
REASONABLY ACCEPTABLE TO THE CORPORATION) TO SUCH EFFECT. SUBJECT TO COMPLIANCE
WITH THE REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE PLEDGED OR HYPOTHECATED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THE
SHARES REPRESENTED BY THIS CERTIFICATE.
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a.
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The
Holder hereby acknowledges and agrees that attached hereto as Exhibit A is
a true, complete and valid copy of the Warrant as currently in effect
prior to the amendment contemplated by this
Agreement.
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x.
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Xxxxxx
has all necessary power and authority under all applicable provisions of
law to execute and deliver this Agreement and to carry out its provisions.
All action on Holder’s part required for the lawful execution and delivery
of this Agreement has been or will be effectively taken prior to the
delivery of this Agreement by
Holder.
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c.
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Neither
the execution and delivery by the Holder of this Agreement, nor the
performance of the transactions performed hereunder by the Holder, will
require any filing, consent, renegotiation or approval that has not
previously been obtained or conflict with, result in any breach of or
constitute a default under (i) any provision of any law, statute, rule or
regulation, or any ruling, writ, injunction, order, judgment or decree of
any court order or other governmental authority to which the Holder is
subject, (ii) the organizational documents (if any) of the Holder, or
(iii) any contract, governmental permit or other document to which the
Holder is subject.
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d.
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The
Holder is the sole record and beneficial owner of the Warrant and the
Holder has good title to the Warrant free and clear of any mortgage, lien,
pledge, charge, security interest, encumbrance, conditional sales
contract, transfer restriction, right of first refusal, voting trust
agreement, preemptive right, power of attorney or other adverse claim,
defect of title, limitation or restriction of any type or nature
whatsoever. No other person, firm, corporation or other entity has any
right, title, claim, or interest in, to, or respecting any of the
Warrant.
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x.
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Xxxxxx
understands that the Warrant Shares have not been registered under the
Securities Act of 1933, as amended (the “Securities
Act”). The Warrant Shares are being acquired for Holder’s own
account and not with the view to, or for resale in connection with, any
distribution other than resales made in compliance with the Securities
Act. Holder has substantial experience in evaluating and investing in
private placement transactions of securities similar to the Company so
that Holder is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own
interests. Holder understands and agrees that the Warrant Shares are being
offered and will be sold in transactions in compliance with or exempt from
the registration requirements of the Securities Act based in part upon
Holder’s representations contained in this Agreement and, as a result, the
Warrant Shares may only be transferred if such securities are registered
under the Securities Act or if the transfer is exempt from registration.
Holder must bear the economic risk of this investment indefinitely unless
the Warrant Shares are registered pursuant to the Securities Act or an
exemption from registration is available. Holder understands that the
Company has no present intention of registering the Warrant Shares. Holder
also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow the Holder to transfer all or any
portion of the Warrant Shares under the circumstances, in the amounts or
at the times the Holder might propose. Holder has been advised of or is
aware of the provisions of Rule 144 promulgated under the Securities Act
as in effect from time to time, which permits limited resale of securities
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of certain
current public information about the Company, the resale occurring
following the required holding period under Rule 144 and the number of
securities being sold during any three month period not exceeding
specified limitations.
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x.
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Xxxxxx
is an “accredited investor” within the meaning of Regulation D, Rule
501(a), promulgated by the Securities and Exchange Commission. Holder
represents that by reason of its or its management’s business or financial
experience, Holder has the capacity to protect its own interests in
connection with the transactions contemplated in this Agreement. Further,
Holder is aware of no publication of any advertisement in connection with
the transactions contemplated in this Agreement. Holder acknowledges that
its investment in the Company is highly speculative and entails a
substantial degree of risk and Holder is in a position to lose the entire
amount of such investment.
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x.
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Xxxxxx
acknowledges that Holder has received any information requested by Holder
for Holder to make an investment decision. Holder has had an opportunity
to discuss the Company’s business, management and financial affairs with
the Company and their respective representatives and has had the
opportunity to review the Company’s operations and facilities. Holder has
also had the opportunity to ask questions of and receive answers from the
Company and its management regarding the terms and conditions of this
investment. Except as expressly set forth in this Agreement, Holder
acknowledges and agrees that the Company have made no other representation
or warranty regarding the operations, business, prospects or condition
(financial or otherwise) of the Company or its
affiliates.
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x.
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Xxxxxx
has had full opportunity to seek the advice of independent counsel
respecting the transactions contemplated by this Agreement and exercise of
the Warrant and the tax risks and implications thereof. Holder maintains
such Holder’s domicile (and is not a transient or temporary resident) at
the address shown on the signature page of this Agreement. There are no
claims for brokerage commission, finders’ fees or similar compensation in
connection with the transactions contemplated by this Agreement or related
documents based on any arrangement or agreement binding upon
Holder.
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a.
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In
consideration of the foregoing, Holder hereby irrevocably and
unconditionally REMISES, RELEASES AND FOREVER DISCHARGES the Company and
its Related Persons from and against any and all Claims which the Holder can, shall or may have against
the Company and its Related Persons (the “Company Released
Claims”), except with respect to the issuance of the Warrant Shares
upon exercise of, and pursuant to the terms of the Warrant, as amended by
this Agreement.
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x.
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Xxxxxx
hereby covenants not to commence or prosecute against the Company or its
Related Persons, or to cause or assist any other person or entity in
commencing or prosecuting against the Company or its Related Persons, any
action or proceeding arising out of or in any way connected with Company
Released Claims, except with respect to the issuance of the Warrant Shares
upon exercise of, and pursuant to the terms of the Warrant, as amended by
this Agreement.
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x.
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Xxxxxx
represents and warrants to the Company that it has not assigned or
transferred, or purported to assign or transfer, voluntarily,
involuntarily, or by operation of law, any Company Released Claims, or any
part or portion thereof.
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d.
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For
purposes of this Agreement,
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i.
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“Related
Persons” means predecessors, successors, affiliates,
successors-in-interest, executors, heirs, administrators, receivers,
trustees, assigns, assignees and its and their insurers, officers,
directors, members (direct and indirect), partners (direct and indirect),
owners, past and present shareholders, past and present stockholders,
direct or indirect subsidiaries, employees, agents, attorneys, lenders
(and agents related thereto) and/or
representatives.
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ii.
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“Claims” means
actions, suits, claims, demands, debts, dues, complaints, sums of money,
accounts, reckonings, bonds, bills, specialities, covenants, contracts
(whether oral or written, express or implied from any source), agreements,
warranties, controversies, promises, judgments, extents, executions,
variances, trespasses, liabilities or obligations of any kind whatsoever,
in law or equity, and causes of action of every kind and nature, or
otherwise (including, claims for damages, costs, expenses, and attorneys’,
brokers’ and accountants’ fees and expenses) arising out of or related,
directly or indirectly, to events, facts, conditions or circumstances
existing or arising from the beginning of the world, through and until the
day of date of this Agreement, whether arising in law, admiralty, or
equity or by statute, by regulation, or otherwise, whether known or
unknown, suspected or unsuspected, unanticipated as well as anticipated,
groundless or otherwise, and that now exist or may hereafter accrue based
on matters now unknown as well as known, including, without limitation,
any and all claims and demands under, related to, arising from, or in any
way connected with this Agreement, the Warrant or any of the Current
Agreements.
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a.
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This
Agreement shall amend and is incorporated into and made part of the
Warrant. To the extent any term or provision of this Agreement may be
deemed expressly inconsistent with any term or provision in the Warrant,
the terms and provisions of this Agreement shall control. Except as
expressly amended by this Agreement, all of the terms, conditions and
provisions of the Warrant are hereby ratified and continue unchanged and
remain in full force and effect.
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b.
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This
Agreement shall be governed by, and interpreted in accordance with, the
laws of the State of Delaware, without giving effect to any choice of law
or conflicts of laws provisions or rule of any jurisdiction that would
cause the substantive laws of any other jurisdiction to apply. Holder
hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the federal and state courts located in the city of
Wilmington, Delaware for any actions, suits or proceedings arising out of
or relating to this Agreement. Holder hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement, in the federal and state
courts located in the city of Wilmington, Delaware and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in
any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient
forum.
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c.
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This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the
same instrument. This Agreement, any and all agreements and instruments
executed and delivered in accordance herewith, along with any amendments
hereto or thereto, to the extent signed and delivered by means of E-mail,
a facsimile machine or other means of electronic transmission, shall be
treated in all manner and respects and for all purposes as an original
signature, agreement or instrument and shall be considered to have the
same binding legal effect as if it were the original signed version
thereof delivered in person.
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d.
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Notices
given hereunder shall be in writing and shall be deemed to have been duly
given on the date established by the sender as having been delivered
personally, upon confirmation of receipt if sent by facsimile, on the date
delivered by a private courier as established by the sender by evidence
obtained from the courier, on the third day after the date mailed, if
mailed by certified or registered mail, return receipt requested, postage
prepaid, to the party being notified at its address or facsimile number
set forth on the signature page hereto or such other address as the
addressee may subsequently notify the other party of in
writing.
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e.
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This
Agreement may be amended, and any provisions hereof may be waived, only by
a writing signed by Holder and the Company. Holder may not assign this
Agreement or any of its rights hereunder without the written consent of
the Company. This Agreement shall be binding upon and inure to the benefit
of Holder and the Company and their respective successors and assigns. If
any portion or provision of this Agreement shall to any extent be declared
illegal or unenforceable by a court of competent jurisdiction, then the
remainder of this Agreement, or the application of such portion or
provision in circumstances other than those as to which it is so declared
illegal or unenforceable, shall not be affected thereby, and each portion
and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by applicable law. No failure or delay by the
Company in exercising any right, power or privilege hereunder will operate
as a waiver thereof, nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder. This Agreement embodies the
entire agreement and understanding of the Company and Holder with respect
to the subject matter hereof and supersedes all prior discussions,
negotiations, agreements and understandings among Holder and the Company
with respect to the subject matter hereof. Holder shall not issue any
press release, make any other public statement or otherwise disclose to
any person the existence of this Agreement or any of the terms and
conditions hereof, without the prior written consent of the Company,
except to the extent legally required to make such disclosure upon the
advice of outside legal counsel.
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f.
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If
the Warrant was transferred from a third party to Holder in contemplation
of entering this Agreement, the Company agrees to reimburse Holder for the
transfer fee paid by Holder to such third
party.
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[Signature
Page Follows]
IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be executed and delivered
as of June __, 2009 by persons thereunto duly authorized.
COMPANY:
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HOLDER:
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WorldGate
Communications, Inc.
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By:_______________________
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__________________________
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Name: Xxxxxxxxxxx
X. Xxxxxx
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Title: General
Counsel and Secretary
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Address:
0000 Xxxxxxx Xxxxxx
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Address:
__________________
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Xxxxxxx,
Xxxxxxxxxxxx 00000
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__________________
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Fax:
000-000-0000
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Fax: __________________
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Social
Security Number/Federal Tax ID number:
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__________________
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Provisions Referenced
in Agreement:
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“Warrant Shares” means
_______________shares of
Common Stock.
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“New Exercise Price”
means $0.25 per share of Common Stock.
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“Confidentiality Agreement”
means the Confidentiality Agreement, dated June __, 2009, between
the Company and Holder.
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Exhibit
A
Warrant