As filed with the Securities and Exchange Commission on January 12, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
WORLDCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3040585
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13373 Park Center Road
Suite 490
Herndon, Virginia 22071
(703) 834-9200
(Name, address, including ZIP code, and telephone number,
including area code, of registrant's principal executive offices)
T. Coleman Andrews, III
Chief Executive Officer and President
WorldCorp, Inc.
13873 Park Center Road, Suite 490
Herndon, Virginia 22071
(703) 834-9200
(Address, including ZIP code, and telephone number,
including area code, of agent for service)
Copies to:
ANDREW M. PAALBORG
Vice President and General Counsel
WORLDCORP, INC.
13873 Park Center Road, Suite 490
Herndon, Virginia 22071
(703) 834-9200
Approximate date of commencement of proposed sale to public:
From time to time after the effective date of this Registration
Statement.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment plans,
please check the following box. ( )
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend and interest reinvestment plans,
check the following box. (X)
CALCULATION OF REGISTRATION FEE
______________________________________________________________________________
Proposed
Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price Per Offering Registration
be Registered Registered Share (1) Price (1) Fee
Common Stock, par
value $1.00 . . . 663,679 $7.50 $4,977,593 $1,717
______________________________________________________________________________
(1) Estimated in accordance with Rule 457 solely for the
purpose of determining the registration fee.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
WORLDCORP
PROSPECTUS
663,679 Shares of Common Stock ($1.00 par value)
This Prospectus relates to (i) 302,278 shares (the "Founders
Shares") of common stock, par value $1.00 per share (the "Common
Stock"), of WorldCorp, Inc. ("WorldCorp" and, together with its
subsidiaries, the "Company"), issued to William F. Gorog and
Jonathan M. Gorog (together, the "Gorogs"), Henry R. Nichols,
William N. Melton and John Porter (collectively, the "US Order
Founders"), the founders of US Order, Inc. ("US Order"), in
connection with WorldCorp's exercise of its option, pursuant to
the terms of a Stock Restriction Agreement dated as of September
14, 1990, among WorldCorp and the US Order Founders, as amended
(the "Stock Restriction Agreement"), to purchase 4,757,679 shares
of the common stock of US Order, par value $.001 per share, owned
by the US Order Founders, and (ii) 361,401 shares (the "Pledged
Shares") of Common Stock offered for the account of Scott &
Stringfellow, Inc. (the "Pledge Holder"), the pledgee of the
Pledged Shares under a loan to the WorldCorp Employee Savings and
Stock Ownership Plan (the "ESSOP"), which shares may also be sold
by a subsequent pledgee. The Founders Shares and the Pledged
Shares are referred to herein collectively as the "Shares." Each
of the US Order Founders and the Pledge Holder (including
subsequent pledgees) are referred to herein individually as a
"Selling Shareholder" and collectively as the "Selling
Shareholders." Pursuant to the terms of the Stock Restriction
Agreement, WorldCorp is required to register the Founders Shares
once it receives a written request from William F. Gorog that
WorldCorp effect a registration of the Founders Shares on
Form S-3. WorldCorp received such written request from Mr.
William F. Gorog on January 2, 1995.
The Company will not receive any of the proceeds from the sale
of the Shares by the Selling Shareholders. The ESSOP will receive
any proceeds received by the Pledge Holder from the sale of the
Pledged Shares offered hereby in excess of the loan amount. The
Shares are being offered for sale by the Selling Shareholders, and
may be offered and sold in negotiated transactions, or otherwise,
at market prices prevailing at the time of sale or at negotiated
prices. The Pledged Shares only become available for sale by the
Pledge Holder (or a subsequent pledgee) pursuant to this
registration statement upon an event of default under the margin
loan agreement. See "Pledge Holder." The Company believes that
if the Pledge Holder were to foreclose its security interest in
the Pledged Shares, it would sell the Pledged Shares, from time to
time, either through a standard underwriting arrangement, or in
transactions involving broker-dealers who might act as agent
and/or acquire Pledged Shares as principal. See "Selling
Shareholders" and "Plan of Distribution."
SEE "CERTAIN INVESTMENT CONSIDERATIONS" FOR A
DISCUSSION OF CERTAIN FACTORS THAT PROSPECTIVE
INVESTORS SHOULD CONSIDER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Common Stock is listed on the New York Stock Exchange
(Symbol: WOA), on which the last reported sales price on January
11, 1995 was $7.50 per share.
The date of this Prospectus is January 12, 1995.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3
(the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Shares
offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and the
exhibits thereto. Statements made in this Prospectus as to the
contents of any contract, agreement or other document referred to
are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the
Registration Statement, reference is made to such exhibit for a
more complete description of the matters involved, and each such
statement shall be deemed qualified in its entirety by such
reference. For further information with respect to the Company
and the Shares offered hereby, reference is made to the
Registration Statement, including the exhibits thereto, which may
be obtained from the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of the fees
prescribed by the Commission.
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements
and other information with the Commission. Reports, proxy
statements and other information filed by the Company and its
predecessor, World Airways, can be inspected and copied at the
public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices of the Commission located at
Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661-2511 and at 7 World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can also be
obtained from the Public Reference Section of the Commission, at
450 Fifth Street, N.W., Washington, D.C. 20549 upon payment of
prescribed rates. In addition, the Company's Common Stock is
listed on the New York Stock Exchange, Inc. ("NYSE") and reports,
proxy statements and other information concerning the Company can
be inspected at the NYSE at 20 Broad Street, New York, New York
10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission pursuant to the Exchange Act are hereby incorporated by
reference into this Prospectus:
(i) the Company's Annual Report on Form 10-K for the
year ended December 31, 1993 (File No. 1-5351)(the "1993 Form 10-K");
(ii) the Company's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1994, June 30, 1994 and September
30, 1994 (File No. 1-5351);
(iii) the Company's Current Report on Form 8-K dated
February 28, 1994;
(iv) the Company's Proxy Statement dated April 18, 1994
in connection the Company's Annual Meeting of Shareholders held on
May 20, 1994 and the Company's Proxy Statement dated July 18, 1994
in connection with the Special Meeting of Shareholders held on
August 19, 1994; and
(v) the description of the Company's Common Stock in
the Registration Statement on Form 8-B filed June 9, 1987 under
Section 12 of the Exchange Act, including any amendment or report
for the purpose of updating that description (File No. 1-9591).
All documents filed by the Company after the date of this
Prospectus pursuant to Sections 13(a) and (c), 14 or 15(d) of the
Exchange Act prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold shall be
deemed to be incorporated by reference into this Prospectus and to
be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by
reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a
statement contained herein (or in any other subsequently filed
document which is also incorporated by reference in this
Prospectus) modifies or supersedes such statement. Any statement
so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Upon written or oral request, the Company will provide without
charge to each person, including any beneficial owner, to whom a
copy of this Prospectus has been delivered a copy of such
documents referred to above which have been incorporated by
reference in this Prospectus (other than exhibits to such
documents, unless such exhibits are specifically incorporated by
reference into the information incorporated by reference in this
Prospectus). Requests for information should be directed to
Andrew M. Paalborg, Vice President and General Counsel, WorldCorp,
Inc., 13873 Park Center Road, Suite 490, Herndon, Virginia 22071
(telephone (703) 834-9200).
THE COMPANY
WorldCorp, a Delaware corporation, was organized in March 1987
to serve as the holding company for World Airways, Inc. a Delaware
corporation ("World Airways" or "World"), which was organized in
March 1948 and is the predecessor to the Company. WorldCorp
currently owns majority positions in companies that operate in two
distinct business areas: air transportation (through World
Airways) and interactive products and services (through US Order).
WorldCorp's air transportation subsidiary, World Airways, is a
leading worldwide provider of air transportation for commercial
and government customers. US Order is an interactive products and
services company that has four lines of businesses: 1) smart
telephones (such as ScanFoneTM, PhonePlusTM and future generations
of smart telephones); 2) smart banking services (customer service,
telemarketing, distribution); 3) smart applications (interactive
content for smart telephones, including: shopping, directory
assistance, E-mail, sports scores, news updates, etc.); and 4)
smart solutions customized for the cable and telecommunications
industries. See "The Company--Interactive Products and Services."
Pursuant to the Stock Purchase Agreement dated October 30,
1993, on February 28, 1994, WorldCorp sold 24.9% of its ownership
in World Airways to MHS Berhad, a Malaysian aviation company
("MHS"). In December 1993, US Order completed a $12 million
private equity placement. On August 1, 1994, US Order sold its
electronic banking and bill payment operations to Visa
International Services Association, Inc. ("Visa"). WorldCorp
increased its ownership percentage of US Order to 89% on January
2, 1995 when WorldCorp exercised its option to purchase 4,757,679
shares of US Order common stock owned by the US Order Founders.
The principal executive offices of WorldCorp are located at 13873
Park Center Road, Suite 490, Herndon, Virginia 22071.
WorldCorp's telephone number is (703) 834-9200.
AIRLINE OPERATIONS
World Airways is a contract air carrier that generally charges
customers based on a block hour basis rather than a per seat or
per pound basis. A "block hour" is defined as the elapsed time
computed from the moment the aircraft moves at its point of origin
to the time it comes to rest at its destination. Fluctuations in
flight revenues are not necessarily indicative of true growth
because of shifts in the mix between full service contracts and
basic contracts. Under the terms of full service contracts, World
Airways is responsible for all costs associated with operating
these contracts and receives a higher rate per hour. Under the
terms of basic contracts, World Airways provides only certain
services associated with the contract including aircraft, crews,
insurance, and maintenance ("Basic Contracts"). World Airways
typically charges a lower rate per hour for Basic Contracts since
the customer is responsible for other operating costs. For this
reason, it is important to measure pure growth through block hours
flown rather than actual revenues earned. Typically, U.S.
military contracts are full service contracts where the rate paid
is set annually and consists of all flying costs, including fuel
and ground handling of the aircraft and cargo. World Airways is
24.9% owned by MHS. MHS purchased its interest in World Airways in
February, 1994 for $27 million. World operates in four core
markets: wet lease, cargo, passenger charter and military. World
plans to provide limited-frequency international scheduled service
from New York, New York to Tel Aviv, Israel, sometime during the
summer of 1995.
In World Airways' wet lease market, World leases both its
aircraft and crews, principally to foreign airlines, such as
Malaysian Airline System Berhad ("MAS"), Virgin Atlantic and
Cathay Pacific. In its cargo market, World leases its DC10-30 and
MD-11 aircraft in both all freighter and convertible freighter
configurations. A convertible freighter is an aircraft that can
be rapidly converted into either freight or passenger
configurations. World Airways currently flies cargo for MAS and
Asiana Airlines. World Airways flies passengers on a charter
basis, typically in the second and third quarters of each year.
During this period, World transports pilgrims for MAS and Garuda
from Southeast Asia to Saudi Arabia for the annual Hadj pilgrimage
and flies vacation passengers from Europe to the United States and
back. World Airways has had a contract with the Air Mobility
Command ("AMC") since 1956 to fly passengers and cargo.
Airline operations accounted for 100% of the Company's
operating revenue and operating income in 1986 through 1991. In
1992 through 1994, revenue from other business areas represented
less than 1% of the Company's total operating revenues. The
principal service provided within this industry is the worldwide
air transportation of passengers and cargo for individual
passengers, and commercial and government customers. World
Airways currently operates eight wide-body MD-11 and DC10-30
aircraft in long-range international markets.
INTERACTIVE PRODUCTS AND SERVICES
US ORDER'S CAPITALIZATION
WorldCorp owns 89% of the outstanding voting securities of US
Order. Knight-Ridder, Inc., Visa and other accredited investors
are equity investors in US Order. WorldCorp also holds 4,300
shares (100%) of US Order's redeemable, nonvoting preferred stock,
which earns quarterly dividends at a rate of 7.5% and is subject
to mandatory redemption on March 30, 1998.
VISA TRANSACTION
On August 3, 1994, Visa acquired the electronic banking and
bill payment operations of US Order. Using the operations
acquired from US Order, Visa created a new subsidiary, Visa
Interactive, Inc. ("Visa Interactive"), to enter the market for
electronic banking and bill payment. Under the terms of the Visa
transaction, Visa made a $15 million cash payment to US Order at
closing and will make royalty payments to US Order through the
year 2000 based on the number of Visa customers who use US Order's
technology for electronic banking and bill payment. As of its
last public announcement on September 30, 1994, Visa Interactive
has signed up over 30 financial institutions for which it will
provide bill pay services.
Visa is the largest consumer payment system in the world, with
over 19,000 member banks and more than 340 million cards issued
worldwide. Visa also operates the leading global ATM network with
more than 175,000 ATM's in 76 countries.
Consumers, billers and their banks each derive substantial
benefits from the Visa Interactive and US Order supplied services.
Consumers obtain faster, more convenient, and lower cost remote
banking service from their local financial institutions. Billers
enjoy faster and lower cost ways both to send out bills and
receive payments on those bills. Visa member banks earn new
revenues from personalized and distinctive electronic service
offerings, see lower costs by reducing the number of paper checks
they have to process, and strengthen their relationships with
their deposit and commercial customers. US Order believes that
these factors, combined with Visa's technical sophistication and
marketing and membership strength, should enable Visa to establish
standards for electronic banking and bill payment and to build a
scale business in a short period of time. This, in turn, should
positively affect the size of the royalty stream to US Order from
Visa. See, however, "Investment Considerations -- Interactive
Products and Services".
US Order's strategy is to build, deliver and manage a
profitable portfolio of products and services which maximize the
potential value of the Visa royalty stream and which can become a
sustainable, defensible and profitable business over the longrun
without the support of Visa. US Order's business is organized
around four complementary product lines: smart phones (hardware
such as PhonePlus and future generations of smart phones); smart
services for Visa member banks (customer service, telemarketing,
distribution) which services can be offered to other industries;
smart applications (news updates, shopping, directory assistance,
E-mail, sports scores, etc.); and smart solutions customized for
the cable and telecommunications industries.
CERTAIN INVESTMENT CONSIDERATIONS
Prospective investors should carefully consider the following
matters, together with the other information contained or
incorporated by reference in this Prospectus, in evaluating the
Company and its business before making an investment decision.
SUBSTANTIAL FINANCIAL LEVERAGE AND COMMITMENTS; STOCKHOLDERS' DEFICIT
The Company is highly leveraged primarily due to losses
sustained by World Airways' scheduled operations between 1979 and
1986, the debt restructuring in 1984 and 1987 and the losses the
Company incurred in 1990, 1992 and 1993. The losses are reflected
in the Company's retained common stockholders' deficiency, which
was $83.8 million at September 30, 1994. At September 30, 1994,
the Company had total long-term indebtedness of approximately
$109.8 million with current maturities of $17 million, and $3.8
million of indebtedness under a revolving line of credit. World
Airways was not in compliance with its debt covenants under the
revolving line of credit at the end of the third quarter but has
obtained a waiver of these covenants from the financial
institution. World Airways will not meet these required covenants
in the fourth quarter of 1994, and will seek waivers. No
assurances can be given, however, that the company will obtain the
required waivers. In addition, the Company has substantial long-
term lease obligations. For a discussion of such lease
obligations, see the information set forth under the heading
"Operating Leases" in Note 10 of the Company's Notes to
Consolidated Financial Statement in the 1993 Form 10-K and under
the heading "Management's Discussion and Analysis of Financial
Conditions and Results of Operations -- Liquidity and Capital
Resources" in the Company's Quarterly Report on 10-Q for the
quarter ended September 30, 1994. At September 30, 1994, the
Company's working capital (current assets less current
liabilities) was a negative $18.4 million and the Company's
current ratio (the ratio of current assets to current liabilities)
was less than one.
In October 1992 and January 1993, World Airways signed a
series of agreements to lease seven new McDonnell Douglas MD-11
aircraft for initial lease terms of two to five years. World
Airways has made $6.7 million of capital expenditures and cash
deposits for MD-11 integration in 1994. World Airways estimates
that its required capital expenditures for MD-11 integration will
be approximately $9.8 million in 1995. While World Airways is
seeking financing for the purchase of such additional spare parts
relating to the new MD-11 aircraft, no assurances can be given
that the Company will obtain the necessary financing.
The Company's current financial leverage requires a
substantial interest expense for each year. The Company's
operating expenses (which include interest expense) have
historically been satisfied from operating cash flow, secured
borrowings, and other financings from banks and other lenders.
All of the Company's funds are generated by the Company's
subsidiaries or through periodic sales by the Company of a portion
of its stock ownership in such subsidiaries. The ability of the
Company and its subsidiaries to pay principal and interest on
their respective short and long-term obligations is substantially
dependent upon the payment to the Company of dividends, interest
or other charges by its subsidiaries, upon funds generated by the
operations of the subsidiaries, or from revenue from sales of
stock of its subsidiaries.
The degree to which the Company is leveraged could have
important consequences to holders of Common Stock, including the
following: (i) the Company's ability to obtain additional
financing in the future for working capital, capital expenditures,
acquisitions or other purposes may be impaired; (ii) the Company's
degree of leverage and related debt service obligations, as well
as its obligations under operating leases for aircraft, may make
it more vulnerable than some of its competitors in a prolonged
economic downturn; and (iii) the Company's financial position may
restrict its ability to exploit new business opportunities and
limit its flexibility in responding to changing business
conditions. The Company's competitive position could also be
affected by the fact that it may be more highly leveraged than
some of its competitors.
AIRLINE INVESTMENT CONSIDERATIONS
DEPENDENCE UPON MATERIAL CONTRACTS
The Company's business relies heavily on World Airways'
contracts with the Air Mobility Command ("AMC"), Malaysia Airlines
System Berhad ("MAS") and P.T. Garuda Indonesia ("Garuda"), which
provided approximately 24%, 17% and 21%, respectively, of the
Company's consolidated revenues in 1993 and 19%, 16% and 16%,
respectively, of total block hours. During the first nine months
of 1994, the AMC, MAS and Garuda contracts provided 19%, 11%, and
31%, respectively, of consolidated revenues, and 15%, 10%, and
25%, respectively, of total block hours. The loss of any of these
contracts or a substantial reduction in business from any of these
sources, if not replaced, would have a material adverse effect on
WorldCorp's revenues and financial condition. AMC has awarded
contracts to World Airways since 1956, and World Airways has
provided service to MAS since 1981, primarily transporting
passengers for the annual Hadj pilgrimage (the "MAS Hadj
Contract"). World Airways' current annual contract with AMC will
expire in September 1995. World Airways cannot determine how any
future cuts in military spending may affect future operations with
AMC. The MAS Hadj Contract extends through 1996. World Airways
has also transported Hadj passengers for Garuda since 1988 (the
"Garuda Hadj contract"). The Garuda Hadj contract is awarded on
an annual basis. In 1994, World Airways supplied six of its
aircraft to Garuda for its 1994 Hadj operations. World Airways
currently anticipates providing at least four aircraft to Garuda
for the 1995 Hadj. It anticipates its aggregate Hadj flying for
1995 will equal 1994 levels.
MHS Berhad ("MHS"), which is a substantial minority
shareholder of World Airways, currently intends to acquire an
equity ownership interest of up to 32% of MAS in 1995. Due to
the strengthening of the MHS/MAS relationship, World Airways
agreed to provide aircraft to MAS under long-term contracts.
World Airways' dependence on its business with MAS increased
beginning in Fall, 1994, with the signing of several new contracts
with MAS. The loss of any of these contracts or a substantial
reduction in business from MAS, if not replaced, would have a
material adverse effect on WorldCorp's revenues and financial condition.
The Company is subject to the risk that a customer which has
contracted with the Company will cancel or default on its contract
or contracts and the Company will be unable to obtain other
business to cover the resulting loss of revenues. If the size of
the contract or contracts is significant enough, any such default
or cancellation could have a material adverse effect on the
Company.
EFFECTS OF SEASONALITY OF BUSINESS ON THE COMPANY
The Company's air carrier business is significantly affected
by seasonal factors. Typically, the Company experiences lower
levels of utilization during the first quarter as demand for
passenger and cargo services are lower relative to other times of
the year. The Company generally experiences higher levels of
utilization in the second quarter due to demand for commercial
passenger service including the annual Hadj pilgrimage. Fourth
quarter utilization generally depends upon the overall world
economic climate and global trade patterns. For example, World
Airways experienced soft market demand and weak yields in
worldwide cargo and passenger markets in the first and third
quarters of 1993 and 1994. See Note 19 of the Company's Notes to
Consolidated Financial Statements in the 1993 Form 10-K.
DEPENDENCE UPON AIR CARRIER BUSINESS
World Airways operates in a very challenging business
environment. The combination of a generally weak economy since
1991, reduced military spending, and the generally depressed state
of the airline industry and the economy has adversely affected the
Company's operating performance. World Airways has been adversely
impacted by the industry-wide trend toward declining yields.
Airline operations accounted for 100% of the Company's operating
revenue and operating income in 1986 through 1991. In 1992
through 1994, revenue from other business areas represented less
than 1% of the Company's total operating revenues.
AIRLINE COMPETITION
The airline industry is highly competitive and susceptible to
price discounting. The Company generally competes on the basis of
price, quality of service and convenience. Many of the airlines
against which the Company competes possess substantially greater
financial resources and more extensive facilities and equipment
than those which are now, or will in the foreseeable future
become, available to the Company. Many of World Airways'
competitors (both scheduled and non-scheduled air carriers)
compete for customers in a variety of ways, including wholesaling
to tour operators, discounting seats on scheduled flights,
promoting to travel agents, prepackaging tours for sale to retail
customers and selling discounted, excursion airfare-only products
to the public. During periods of dramatic fare cuts by World's
competitors, World may be forced to respond with reduced fares,
which could have a material adverse effect on World's operating
results.
World Airways competes directly against charter airlines, some
of which are larger than it, and certain of which are affiliates
of major scheduled airlines or tour operators. As a result, in
addition to greater access to financial resources, these charter
airlines may have greater distribution capabilities, including
exclusive or preferential relationships with affiliates which are
tour operators.
Under bilateral air services agreements between the United
States and many foreign countries, traffic rights in those
countries are available to only a limited number, and in some
cases only one or two, U.S. carriers and are subject to approval
by the applicable foreign regulators. Consequently, World
Airways' ability to provide service in some foreign markets in the
future may depend in part on the willingness of the Department of
Transportation (the "DOT") to allocate limited traffic rights to
World Airways rather than to competing U.S. airlines, including
major scheduled carriers capable of carrying greater passenger
traffic, and the approval of the applicable foreign regulators.
While World Airways generally has been able to obtain traffic
rights where it has sought them in the past, there can be no
assurance that it will be able to do so in the future.
There are relatively few barriers to entry into the airline
business, apart from the need for certain government licenses and
the need for and availability of financing, particularly for those
seeking to operate on a small scale with limited infrastructure
and other support systems. As a result, World Airways may face
increased competition from start-up airlines in selected markets
from time to time. The commencement of service by new carriers on
World's routes could negatively impact World's operating results.
FUEL COSTS
The cost of fuel is a major operating expense for all
airlines, including World Airways. However, because World's MD-11
fleet is relatively new, the Company's aircraft tend to be more
fuel efficient than older aircraft. Both the cost and
availability of fuel are subject to many economic and political
factors and events occurring throughout the world. World's price
for fuel varies directly with market conditions, and it has no
guaranteed long-term sources of supply.
The Company's current fuel purchasing policy consists of the
purchase of fuel within seven days in advance of all flights based
on current prices set by individual airports. In addition, the
Company receives certain volume discounts. The Company purchases
no fuel under long-term contracts nor does the Company enter into
futures or fuel swap contracts. The Company manages fuel price
risk by making the Company's customers responsible in all of the
Company's contracts for potential fuel price fluctuations in
excess of five percent. World Airways' ability to pass on
increased fuel costs through fare increases may be limited,
however, by economic and competitive conditions, and the inability
to pass through such increased costs could have a material adverse
effect on operating results or result in a reduction in the
Company's services or both. Similarly, a reduction in the
availability of fuel could have a material adverse effect on the
Company.
Although the Company has in the past successfully hedged fuel
prices, it does not regularly enter into hedging arrangements at
the present. There can be no assurances that if the Company
elects to hedge fuel prices in the future, through the purchase of
fuel futures or options or otherwise, it will be able to do so
successfully. In addition, while the Company currently passes on
to the military the cost of jet fuel pursuant to its AMC charter
arrangement, there can be no assurances that such arrangement will
not change.
GOVERNMENT REGULATION
The Company is subject to government regulation and control
under United States laws and the laws of the various countries
which it serves. It is also governed by bilateral air services
agreements between the United States and the countries to which
the Company provides airlines service.
The Company is subject to regulation under various provisions
of the Federal Aviation Act of 1958, as amended (the "Aviation
Act"), which is administered by the FAA and the DOT. The FAA and
the DOT have the power to bring proceedings to enforce certain
laws and regulations under the Aviation Act. The Company is
subject to continuing regulation and inspection by the FAA
regarding its flight operations, maintenance program and
operations personnel, flight training and retraining programs,
security program, ground facilities, dispatch, communications,
equipment, carriage of hazardous materials and other matters
affecting air safety. In addition, the FAA mandates certain
recordkeeping procedures, conducts regular compliance examinations
of the Company and has the authority under the Noise Control Act
of 1982 to monitor and regulate aircraft engine noise. The
Company is subject to continuing regulations by the DOT regarding
the air transportation services provided by the Company. The DOT
has jurisdiction to enforce statutory limitations on foreign
control of U.S. airlines, to prevent unfair methods of competition
and deceptive practices, to prohibit certain pricing practices, to
inspect a carrier's properties and records, to mandate certain
recordkeeping practices and conditions of carriage, to approve or
disapprove certain relationships between carriers, to protect
consumers and other economic regulatory matters. The Company
believes that it is in compliance with all requirements necessary
to maintain in good standing its air carrier Operating Certificate
issued by the FAA and its operating authority granted by the DOT.
A modification, suspension or revocation of any of the Company's
FAA or DOT authorizations could have a material adverse effect
upon the Company.
In addition, the Company is subject to the jurisdiction of
other governmental entities, including (i) the Federal
Communications Commission (the "FCC") regarding its use of radio
facilities, (ii) the Commerce Department, the Customs Service, the
Immigration and Naturalization Service and the Animal and Plant
Health Inspection Service of the Department of Agriculture
regarding the Company's international operations, (iii) the
Environmental Protection Agency regarding compliance with
standards for aircraft exhaust emissions, (iv) the Department of
Justice regarding certain merger and acquisition transactions and
(v) the National Mediation Board concerning certain aspects of
labor relations. The Company is also subject to state and local
laws and regulations at locations where it operates and the
regulations of various local authorities which operate the
airports it serves. While the Company believes it is currently in
compliance with all appropriate standards and has all required
licenses and authorities, any material non-compliance by the
Company therewith or the revocation or suspension of licenses or
authorities could have a material adverse effect on the Company.
The Company owns no aircraft maintenance facilities, and uses
small amounts of materials which are regulated as hazardous under
federal, state and local laws. Accordingly, the Company does not
expect that the costs associated with compliance with such laws
will have a material adverse effect on the Company.
The Company cannot predict what laws and regulations will be
adopted or what changes to international and transportation
treaties will be effected, if any, or how they will affect World
Airways.
EMPLOYEE RELATIONS
Cockpit Crewmembers. On August 15, 1994 World Airways and the
International Brotherhood of Teamsters ("Teamsters") executed a
four-year agreement on behalf of the World Airways' cockpit
crewmembers, which was ratified on September 9, 1994. This
contract becomes amendable June 30, 1998. The agreement met the
Company's two objectives of (i) establishing workplace stability
for a reasonably long term; and (ii) establishing wage and benefit
levels which make it possible for the Company to achieve a
competitive structure.
Flight Attendants. On July 16, 1987, World Airways and the
Teamsters executed a five-year agreement on behalf of the World
Airways' flight attendants, which was ratified on August 5, 1987.
This contract also became subject to renegotiation on July 1,
1992. The parties exchanged their opening proposals in 1992 and
have had numerous contract negotiation sessions. In December
1994, the Company and the Teamsters jointly requested the
assistance of a federal mediator to facilitate negotiations.
Mediated sessions could begin as early as January 1995.
Dispatchers. World Airways' aircraft dispatchers are
represented by the Transport Workers Union ("TWU"). This contract
became subject to renegotiation on June 30, 1993. The TWU
negotiating committee presented its opening proposals in the
summer of 1993, and the World Airways' negotiating committee
responded with an opening proposal in the fall of 1994. As a
consequence, negotiations are in their early stages. Less than a
dozen World Airways employees are covered by this collective
bargaining agreement.
The outcome of the negotiations with flight attendants and
dispatchers cannot be determined at this time and therefore there
can be no assurance that the result of the negotiations will not
have a material adverse effect on the Company.
INTERACTIVE PRODUCTS AND SERVICES INVESTMENT CONSIDERATIONS
RISKS ARISING FROM INVESTMENT IN A DEVELOPMENTAL STAGE
COMPANY; COMPETITION
US Order introduced its first commercial product in 1991 and,
accordingly, has a limited operating history. The most smart
telephone subscribers US Order has had at any one time since 1990
has been 10,500, and US Order has earned limited revenue from
these customers. US Order generates revenue through the sale of
its interactive products and services. Additional sources of
revenue are expected to come from the Visa royalty stream. To
date, US Order has generated limited revenues through the sale of
its products and services and there can be no assurance as to what
level of royalties US Order will receive from Visa.
US Order may experience fluctuations in quarterly operating
results due to the size and timing of customer orders, changes in
US Order's pricing policies or those of its competitors, new
product introductions or enhancements by competitors, delays in
the introduction of products or product enhancements by US Order
or by US Order's competitors, customer order deferrals in
anticipation of upgrades and new products, market acceptance of
new products, the timing and nature of sales and marketing
expenses, other changes in operating expenses, personnel changes,
and general economic conditions.
US Order's interactive products and services are in the early
stages of marketing and development and are therefore subject to
the risks inherent in the marketing and development of new
products. These risks include: (1) the absence of any assurances
that the US Order smart telephones will be commercially
successful; (2) the risk that a future competitor may develop a
more effective technology for interactive transaction processing;
(3) the risk that financial institutions will not require remote
banking facilities management services; (4) the risk that US Order
will encounter technical, engineering or design problems
developing and delivering new smart telephone applications and
custom transaction processing technology solutions to customers,
and (5) the risk that market demand for these products and
services does not emerge.
The market for US Order's products and services is relatively
new and is characterized by rapid technological change, evolving
industry standards, changes in end-user requirements and frequent
new product introductions and enhancements. The introduction of
products and services embodying new technologies and the emergence
of new industry standards could render US Order's existing
products and services and those currently under development
obsolete and unmarketable. There can be no assurance that US
Order will be successful in the future in developing products or
services to meet new end-user requirements or industry standards,
or that such new end-user requirements or industry standards will
not obviate the need for US Order's products and services.
In addition, the interactive products and services industry is
intensely competitive. US Order experiences direct competition
from manufacturers of smart telephones and from high technology
companies which develop software solutions and applications for
interactive transaction processing and remote banking facilities
management services. Many of these competitors and potential
competitors have significantly greater financial, technical, sales
and marketing name recognition and other resources than US Order,
such as Phillips, Sony, Northern Telecom and AT & T.
UNCERTAINTY OF THE VISA ROYALTY STREAM TO US ORDER; DEPENDENCE
ON VISA
US Order sold its electronic banking and bill payment division
to Visa on August 1, 1994, for $15 million in cash and a 72 month
royalty stream commencing January 1, 1995 and ending December 31,
2000 (the "Royalty Period"). The royalty amount is based on the
number of active retail bill pay accounts that use the electronic
banking and bill payment technology sold by US Order to Visa on
August 1, 1994 (the "Visa Bill-Pay System") during the Royalty
Period.
Any royalties to US Order are calculated and paid by Visa
quarterly during the Royalty Period. Because the royalties to US
Order are contingent upon the number of accounts that use the Visa
Bill-Pay System during the Royalty Period, the Company cannot
provide any assurances of the level of royalties that will be
payable by Visa to US Order. US Order's liquidity and capital
requirements, as well as its ability to achieve its strategic
objectives depend, in large part, on the size of the royalty
stream from Visa. Therefore, any material variances between
actual royalties received by US Order during the Royalty Period
and internal US Order royalty projections, may have a material
adverse effect upon US Order's future prospects, assets, financial
condition and liquidity.
In addition, under the terms of its agreement with Visa, Visa
is not obligated to pay to US Order royalties for active retail
bill-pay accounts that utilize electronic banking and bill payment
technology independently developed by Visa. If Visa independently
develops its own electronic banking and bill payment technology
which does not use US Order's technology, this could have a
material, adverse effect on the amount of royalties payable by
Visa to US Order.
As a condition of Visa's acquisition of the Visa Bill Pay
System from US Order, US Order has agreed to work exclusively with
Visa in certain areas and to refrain from certain activities that
are in competition with Visa and its members. These covenants may
increase US Order's reliance upon Visa.
DEPENDENCE ON PROPRIETARY TECHNOLOGY
US Order's success is heavily dependent upon proprietary
technology. Having sold its sole patent to Visa, US Order has no
patents, and existing copyright laws afford only limited practical
protection for US Order's software. US Order sold a significant
portion of its proprietary technology to Visa, and Visa licensed
back certain proprietary technology to US Order. While this
license agreement gives US Order a worldwide, royalty-free license
(exclusive in some cases and non-exclusive in others) to use the
transaction processing software sold to Visa, this license does
contain certain restrictions on the usage of the licensed
technology, including certain restrictions on US Order's
sublicensing of such technology. No assurances can be given as to
whether any of such restrictions in the licensing agreement from
Visa to US Order will adversely effect the operations or business
in the future of US Order.
In addition, the laws of some foreign countries do not protect
US Order's proprietary rights to the same extent as do the laws of
the United States and Canada. Accordingly, US Order relies
primarily on trade secret protection and confidentiality and
proprietary information agreements to protect its intellectual
property. The loss of any material trade secret, trademark, trade
name or copyright could have a material adverse effect on US
Order. There can be no assurance that the company's efforts to
protect its intellectual property rights will be successful.
Despite US Order's precautions, it may be possible for
unauthorized third parties to copy certain portions of US Order's
products and services or to obtain and use information that the
company regards as proprietary. Although the company does not
believe that its products and services infringe on the rights of
third parties, there can be no assurance that third parties will
not assert infringement claims against US Order in the future or
that any such assertion will not result in costly litigation or
require the company to obtain a license to intellectual property
rights of such parties. In addition, there can be no assurance
that such licenses will be available to the company on reasonable
terms or at all.
POSSIBLE EFFECTS OF LITIGATION AGAINST THE COMPANY
On August 11, 1992, the Company, World Airways, and certain
other commercial paper customers of Washington Bancorporation
("WBC") were served with a complaint by WBC as debtor-in-
possession by and through the Committee of Unsecured Creditors of
WBC (the "Committee"). The complaint arises from investment
proceeds totaling $6.8 million received by the Company and World
Airways from WBC in May 1990 in connection with the maturity of
WBC commercial paper. The Committee seeks to recover this amount
on the grounds that these payments constituted voidable
preferences and/or fraudulent conveyances under the Federal
Bankruptcy Code and under applicable state law. On June 9, 1993,
the Company filed a motion to dismiss the litigation and intends
to vigorously contest the claim. No assurances can be given,
however, of the eventual outcome of this litigation.
In August 1991, US Order received a letter from a third party
bringing to US Order's attention a patent issued to such third
party entitled Home Merchandise Ordering Telecommunications
Terminal, which such third party subsequently claimed was
infringed by US Order. In US Order's patent counsel's opinion,
there is no infringement, and US Order advised such third party
that US Order's technology did not infringe any claims of such
patent. Nonetheless, there can be no assurance that such third
party will drop its claim of infringement or that US Order would
prevail in any proceeding in relation thereto.
In July 1994, US Order received a letter from a third party
bringing to US Order's attention a patent issued to such third
party entitled Method and Apparatus for Decoding and Processing
the Informational Content of Multi-Frequency Signals. No claim of
infringement has been asserted. In US Order's patent counsel's
opinion there is no infringement. Nonetheless, there can be no
assurance that such third party will not file a claim of
infringement or that US Order would prevail in any proceeding in
relation thereto.
The Company is involved in various other claims and legal
actions arising in the ordinary course of business. In the
opinion of management, the ultimate disposition of these other
matters will not have a material adverse effect on the Company's
consolidated financial position.
SHARES AVAILABLE FOR FUTURE SALE; SALES BY SELLING SHAREHOLDERS
As of December 31, 1994, there were 15,429,114 shares of
Common Stock of the Company outstanding. As of that date, there
were an additional 2,863,987 warrants and options outstanding,
principally to management of the Company, exercisable for up to
2,866,903 shares (subject to antidilution adjustments) of Common
Stock, of which 2,079,682 warrants and options had vested, at a
weighted average exercise price of $5.70 per share.
In August 1994, the Compensation Committee granted 800,000
options to T. Coleman Andrews, III, the Company's Chief Executive
Officer, and 250,000 options to Mr. William F. Gorog, the
Company's Chairman (these options being hereinafter referred to
collectively as the "Executive Options"). The Executive Options
become exercisable by Messrs. Andrews and Gorog under a schedule
that is largely dependent on increases in the stock price of the
Company. The Executive Options may become exercisable only so
long as Messrs. Andrews and Gorog are employed as the Chief
Executive Officer and the Chairman of the Board, respectively, of
the Company. As of January 11, 1995, 400,000 of Mr. Andrews'
options and 150,000 of Mr. William Gorog's options were vested.
A total of approximately 5,877,034 shares of Common Stock
would be issued if all of the outstanding 7% Convertible
Debentures (as hereinafter defined) were converted.
No prediction can be made as to the effect, if any, that
future sales of shares of Common Stock, including sales available
under this Prospectus or the availability of shares for future
sale (including shares issuable upon the exercise of warrants and
options), will have on the market price of Common Stock
prevailing from time to time. Sales of substantial amounts of
Common Stock or the perception that such sales may occur, could
adversely effect prevailing market prices for the Common Stock.
See "Plan of Distribution" and "Selling Shareholders."
USE OF PROCEEDS
The Company will not receive any proceeds resulting from the
sale of the Shares by the Selling Shareholders. See "Selling
Shareholders." The ESSOP will receive any proceeds received by
the Pledge Holder from the sale of the Pledged Shares offered
hereby in excess of the loan amount. See "Pledge Holder."
SELLING SHAREHOLDERS
The Selling Shareholders identified in the table below hold
the following relationships with the Company. Since 1989, William
F. Gorog has been a director of WorldCorp. On May 12, 1993 he was
named Chairman of the Board of WorldCorp. He has been Chairman of
the Board and Chief Executive Officer of US Order since its
inception in May 1990. Jonathan M. Gorog was Senior Vice
President of US Order from May 1990 through November, 1993, and he
has been a director of US Order since May 1990.
The shares registered for sale by Scott & Stringfellow, Inc.
may also be sold by other pledgees, if any, who may receive a
security interest in such shares of Common Stock if the loan is
refinanced again. If such event occurs, this Prospectus will be
supplemented prior to such sale to include the name of the
subsequent pledge holder.
The following table sets forth the names of the Selling
Shareholders who are offering the Shares in this offering and the
number of shares of Common Stock being offered in this offering by
each such Selling Shareholder.
Name of Selling Prior to Shares After
Shareholder Offering(1)(2) Offered(3) Offering(1)(2)(3)
Shares Percent Shares Percent
William F. Gorog 733,223(4) 4.7% 180,822 552,401 3.5%
Jonathan M. Gorog 58,987(5) * 58,987 0 *
Henry R. Nichols 26,549(6) * 26,549 0 *
William N. Melton 17,960(7) * 17,960 0 *
John Porter 17,960(8) * 17,960 0 *
Scott & 361,401(9) 2.3% 361,401 0 *
Stringfellow,Inc.
* Individual is the beneficial owner of less than one percent
(1%) of the Company's outstanding Common Stock.
1. Unless otherwise indicated, each shareholder has sole
voting and investment power with respect to all such
shares.
2. Any securities that are not issued and outstanding,
but that can be acquired through the exercise of
options, warrants or convertible securities,
exercisable or convertible within 60 days, are deemed
to be outstanding for the purposes of computing the
percentage of outstanding securities owned by
shareholders holding such options, warrants or
convertible securities but are not deemed to be
issued and outstanding for the purpose of computing
the percentage of the class of securities held by any
other person.
3. Assumes the sale of the shares of Common Stock being
registered herein, which a Selling Shareholder may
not have any present intention of making.
4. Includes 150,000 of the options granted August 1,
1994 to purchase 250,000 shares of Common Stock at an
exercise price of $4.50 per share, 150,000 of which
are immediately exercisable. Also includes: (i)
41,000 shares of Common Stock directly owned by Mr.
Gorog; (ii) 180,822 shares of Common Stock issued to
Mr. Gorog by the Company in partial consideration for
the sale by Mr. Gorog to the Company of shares of US
Order common stock owned by Mr. Gorog; and (iii)
361,401 shares of Common Stock held by the ESSOP, as
to which Mr. Gorog exercises shared voting and
investment power as one of the three trustees of the
ESSOP. Mr. Gorog disclaims beneficial ownership of
shared held by the ESSOP.
5. Includes 58,987 shares of Common Stock issued to Mr.
Jonathan Gorog by the Company in partial
consideration for the sale by Mr. Gorog to the
Company of shares of US Order common stock owned by
Mr. Gorog.
6. Includes 26,549 shares of Common Stock issued to Mr.
Nichols by the Company in partial consideration for
the sale by Mr. Nichols to the Company of shares of
US Order common stock owned by Mr. Nichols.
7. Includes 17,960 shares of Common Stock issues to Mr.
Melton by the Company in partial consideration for
the sale by Mr. Melton to the Company of shares of US
Order common stock owned by Mr. Melton.
8. Includes 17,960 shares of Common Stock issued to Mr.
Porter by the Company in partial consideration for
the sale by Mr. Porter to the Company of shares of US
Order common stock owned by Mr. Porter.
9. Includes all 361,401 of the unallocated shares in the
Company's ESSOP (i.e., ESSOP shares which have not
yet been allocated to the accounts of ESSOP
participants) as of November 30, 1994, the date of
the most recent statement available from the Plan
Administrator.
PLEDGE HOLDER
Effective February 2, 1989, the Company adopted the ESSOP for
the benefit of eligible employees. Pursuant to the terms of a
Loan and Pledge Agreement by and between the Company and the
ESSOP, dated February 21, 1989, the ESSOP borrowed $3,600,000 (the
"ESSOP Loan") from the Company and used such funds to purchase
900,000 shares of Common Stock during 1989. The ESSOP refinanced
the ESSOP Loan using the proceeds of a new loan (the "Bank Loan")
made to the ESSOP by American Security Bank, N.A. (the "Bank")
pursuant to the terms of a Loan and Security Agreement, dated May
24, 1989, by and between the ESSOP and the Bank (the "Bank Loan
Agreement"), which refinancing was further evidenced by a
promissory note, dated May 24, 1989, in the amount of $3,650,000
issued to the Bank by the ESSOP. As a condition to the Bank Loan,
the Company guaranteed the repayment of the Bank Loan pursuant to
the terms of a Guaranty Agreement (the "Bank Guaranty"), dated May
24, 1989, by and between WorldCorp and the Bank.
The Company was not in compliance with certain financial
covenants set forth in the Bank Guaranty and the bank required the
Company to pay in full the Bank Loan. On August 24, 1994, the
Company paid to the Bank $1,740,895.02 in complete satisfaction of
all obligations of the ESSOP under the Bank Loan. The ESSOP and
the Company agreed that in consideration for the Company's
repayment of the Bank Loan, the ESSOP will repay to the Company
the amount of the Bank Loan repaid by the Company (the "Refinanced
ESSOP Loan"). The ESSOP and the Company entered into a Loan and
Pledge Agreement further evidenced by a promissory note (the
"Refinanced ESSOP Note") dated August 24, 1994, in the amount of
$1,740,895.02 issued to the Company by the ESSOP. In connection
therewith, the ESSOP pledged 472,500 shares of Common Stock to the
Company as collateral for the Refinanced ESSOP Loan, subject to
release of shares in connection with each quarterly principal
payment.
The ESSOP refinanced its debt to the Company through a margin
loan to the ESSOP by agreement dated January 10, 1995, from Scott
& Stringfellow Investment Corp. ("S&S") (the "S&S Loan"). The S&S
Loan is collateralized by the unallocated shares of Common Stock
owned by the ESSOP. The S&S Loan is a non-recourse loan and as
such the only assets of the ESSOP subject to the loan are the
unallocated shares. Under the terms of the S&S Loan, S&S will
release the Pledged Shares as they become allocated. To the extent
such release of Pledged Shares violates the margin requirements of
the S&S Loan, WorldCorp will provide collateral or make a contribution
adequate to meet such margin requirements or cure any resulting
default. The value of the Pledged Shares at any time must equal
or exceed 40% of the loan amount. Failure to maintain that ratio
will result in a margin call. In the event of a margin call, the
ESSOP has five days to respond. Failure to respond to a margin call
constitutes an event of default. Pursuant to the terms of the S&S
Loan, if the Common Stock of the Company drops under $2.00 per share,
the loan will be moved to a cash account and the entire margin debt
must be repaid within 24 hours. WorldCorp has agreed to act as
guarantor of the S&S Loan, has agreed to make loans or contributions
to the ESSOP as necessary, and has agreed for the benefit of S&S to
maintain the effectiveness of this and any substitute registration
statement with respect to the Pledged Shares.
Upon completion of this offering, the Pledge Holder will have
pledged to it 361,401 shares of Common Stock, which constitutes
2.3% of the Company's outstanding Common Stock as of December 31,
1994. No other shares of Common Stock are owned by, or pledged as
collateral to, the Pledge Holder.
PLAN OF DISTRIBUTION
This offering of Shares is being made by the Selling
Shareholders. The Company will not receive any of the proceeds
from the sale of the Shares by the Selling Shareholders.
The Selling Shareholders have informed the Company that they
may sell the Shares being offered hereby in one or more
transactions effected on the NYSE or on any other national
exchange upon which the Shares may be listed in the future, in the
over-the-counter market, or in one or more negotiated
transactions, or through a combination of such methods of sale, in
each case at market prices prevailing at the time of sale, at
prices relating to such prevailing market prices, or at negotiated
prices. The Company intends to list the Shares on the NYSE.
If any of the Shares included in this Prospectus are sold
through broker-dealers, then the Selling Shareholders and any
broker-dealers or other persons who participate with them in the
distribution of the securities being offered hereby may be deemed
to be "underwriters" within the meaning of the Securities act, and
any commissions and discounts received by such broker-dealers, and
any profit on the resale of the Shares by such broker-dealers, may
be deemed to be underwriting discounts and commissions under the
Securities Act.
DESCRIPTION OF COMMON STOCK
The Company is authorized to issue 60,000,000 shares of Common
Stock, par value $1.00 per share. Holders of Common Stock are
entitled to one vote for each share of Common Stock held. All
outstanding shares of Common Stock are fully paid and
nonassessable.
Holders of Common Stock are entitled to received such
dividends as are declared by the Board of Directors out of funds
legally available therefor. The Company has never paid and does
not intend to pay cash dividends in the foreseeable future on its
Common Stock. In the event of liquidation, holders of the Common
Stock are entitled to receive pro rata any assets distributable
after payment of liabilities and the liquidation preference of any
shares of any series of preferred stock then outstanding. There
are no conversion, preemptive or redemption rights of the Common
Stock.
Under the terms of the Indenture dated as of August 1, 1987
between the Company and Norwest Bank of Minneapolis, N.A. (the
"1987 Indenture"), pursuant to which 13 7/8% Subordinated Notes
due 1997 (the "13 7/8% Subordinated Notes") were issued, the
Company is generally restricted in its ability to pay dividends or
make distributions on its capital stock if: (i) a default or an
event of default exists under the 1987 Indenture and is
continuing; or (ii) Adjusted Stockholders' Equity (as defined in
the 1987 Indenture) is not a positive amount; or (iii) the
aggregate amount expended for such purpose and certain other
purposes since June 30, 1987 exceeds the sum of (A) 50% of the
Company's Consolidated Net Income since June 30, 1987 (or if such
aggregate is a loss, minus 100% of such loss), plus (B) the
aggregate net proceeds from certain issuances of capital stock
since June 30, 1987, plus (C) $10 million. As of September 30,
1994, Adjusted Stockholders' Equity was not a positive amount.
In May 1992, the Company issued $65.0 million of Convertible
Subordinated Debentures due 2004 (the "7% Convertible Debentures")
under an Indenture dated May 15, 1992 between the Company and The
First National Bank of Boston (the "1992 Indenture"). The 7%
Convertible Debentures are convertible into shares of Common Stock
at $11.06 per share, subject to adjustment in certain events, and
bear an annual interest rate of 7%. Semiannual interest payments
are due on May 15 and November 15. During the second and third
quarters of 1992, the Company used $47.1 million of the proceeds
from this borrowing to retire a portion of its 13 7/8%
Subordinated Notes. Under the terms of the 1992 Indenture, the
Company is precluded from paying dividends or making distributions
on its capital stock if a default or an event of default exists
under the 1992 Indenture and is continuing. The Company is not
currently in default under the 1992 Indenture. The 1992 Indenture
provides that distributions and dividends may in no event exceed
the sum of (a) 50% of cumulative Consolidated Net Income (as
defined) after December 31, 1991; (b) the aggregate net proceeds,
including the fair market value of property other than cash, of
certain issuances after December 31, 1991 of its capital stock;
and (c) $27,800,000.
The foregoing summary does not purport to be complete and is
qualified in its entirety by reference to the text of the
Company's Certificate of Incorporation and By-Laws, the 1987
Indenture and the 1992 Indenture, copies of each of which are
exhibits to the Registration Statement and are incorporated herein
by reference.
LEGAL MATTERS
The validity of the shares of Common Stock being offered
hereby will be passed upon by Andrew M. Paalborg, Vice President
and General Counsel of the Company. See "Selling Shareholders."
EXPERTS
The consolidated financial statements and consolidated
financial statement schedules of WorldCorp and its subsidiaries as
of December 31, 1993 and 1992, and for each of the years in the
three-year period ended December 31, 1993, incorporated by
reference herein and elsewhere in the registration statement have
been incorporated by reference herein and in the registration
statement in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts
in accounting and auditing. The report of KPMG Peat Marwick LLP
covering the 1993 consolidated financial statements of the Company
refers to changes in the methods of accounting for postretirement
benefits other than pensions and income taxes.
No person is authorized to give any information
or to make any representation not contained or
incorporated by reference in this Prospectus, and
any information or representations not contained or
incorporated by reference herein must not be
relied upon as having been authorized by the
Company or the Selling Shareholders. This
Prospectus does not constitute an offer of any
securities other than the registered securities to
which it relates or an offer to any person in any
jurisdiction where such offer would be unlawful.
Neither the delivery of this Prospectus nor any
sales made hereunder shall, under any WORLDCORP, INC.
circumstances, create any implication that there
has been no change in the affairs of the Company 663,679 Shares
since the date hereof. of Common Stock
TABLE OF CONTENTS
Available Information
Incorporation of Certain Documents
by Reference
The Company
Certain Investment Considerations PROSPECTUS
Use of Proceeds
Selling Shareholders
Pledge Holder
Plan of Distribution
Description of Common Stock
Legal Matters
Experts
January 12, 1995
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemized statement of
all estimated expenses in connection with the issuance and
distribution of the securities being registered:
Registration fees $ 1,716
Legal expenses $ 25,000
Accounting fees and expenses $ 7,500
Stock Exchange Listing fee $ 1,500
Total $ 35,716
All such expenses will be borne by the registrant.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Company, a Delaware corporation, is empowered by
Section 145 of the Delaware General Corporation Law, subject to
the procedures and limitations stated therein, to indemnify any
person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred in the defense of any threatened, pending or completed
action, suit or proceeding in which such person is made a party by
reason of his or her being or having been a director or officer of
the Company. The statute provides that such indemnification is
not exclusive of other rights or indemnification to which a person
may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Certificate of
Incorporation and Bylaws of the Company provide that the Company
shall indemnify its directors and officers to the full extent
permitted by the Delaware General Corporation Law.
The Company is also empowered by Section 102(b) of the
Delaware General Corporation Law to include a provision in its
Certificate of Incorporation that limits a director's liability to
the Company or its stockholders for monetary damages for breaches
of his or her fiduciary duty except for (i) a breach of the
director's duty of loyalty to the Company or its stockholders;
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing a violation of law; (iii)
improper dividend payments, stock repurchases or redemptions; and
(iv) any transaction from which the director derived an improper
personal benefit. Article 10 of the Company's Certificate of
Incorporation includes such a provision.
Policies of insurance are maintained by the Company
under which directors and officers are insured, within the limits
and subject to the limitations of the policies, against certain
expenses in connection with the defense of actions, suits or
proceedings, and certain liabilities that might be imposed as a
result of such actions, suits or proceedings, to which they are
parties by reason of being or having been directors or officers of
the Company.
The Company has entered into indemnification agreements
with its officers and directors that indemnify such officers and
directors to the full extent permitted by law against all
expenses, judgments, fines or settlement amounts incurred or paid
by them in any action or proceeding, including any action by or in
the right of the Company on account of their service as a director
or officer of the Company.
ITEM 16. EXHIBITS
4.1 Acquisition Agreement dated as of July 15, 1994, among
Visa International Service Association, Inc., US Order,
Inc. and WorldCorp, Inc. Filed as Exhibit 10.1 to
WorldCorp's Quarterly Report on Form 10-Q (Commission
File 1-5351) for the quarter ended June 30, 1994 and
incorporated herein by reference.
4.2 Indenture dated as of August 1, 1987 between WorldCorp,
Inc. and Norwest Bank of Minneapolis, N.A., as Trustee.
Filed as Exhibit 4.1 to Amendment No. 2 to WorldCorp,
Inc.'s Form S-2 Registration Statement (Commission File
No. 33-1358276) filed August 13, 1987 and incorporated
herein by reference.
4.3 First Supplemental Indenture dated as of March 1, 1988
between WorldCorp, Inc. and Norwest Bank of Minneapolis,
N.A. Filed as Exhibit 4.2 to WorldCorp, Inc.'s Annual
Report on Form 10-K for the fiscal year ended December
31, 1988 and incorporated herein by reference.
4.4 Indenture dated as of May 15, 1992 between WorldCorp,
Inc. and The First Bank of Boston, as Trustee. Filed as
Exhibit 4.2 to WorldCorp, Inc.'s Current Report on Form
8-K filed on July 15, 1992 and incorporated herein by
reference.
4.5 Stock Restriction Agreement dated as of September 14,
1990 among WorldCorp, Inc., William F. Gorog, Jonathan
M. Gorog, Peter M. Gorog, Henry R. Nichols, William N.
Melton and John Porter, as amended by Amendment No. 1 to
Stock Restriction Agreement dated as of August 29, 1991,
Amendment No. 2 to Stock Restriction Agreement dated as
of March 31, 1993, Amendment No. 3 to Stock Restriction
Agreement dated as of September 1, 1994, and Amendment
No. 4 to Stock Restriction Agreement dated as of
December 1, 1994.
4.6 Scott & Stringfellow, Inc. Customer Agreement dated
January 11, 1995 entered into by the WorldCorp Employee
Savings and Stock Ownership Plan.
4.7 Guarantee Agreement dated as of January 11, 1995 by
WorldCorp, Inc. for the benefit of Scott & Stringfellow,
Inc.
4.8 Registration Rights Agreement dated January 11, 1995 by
and between WorldCorp, Inc. and Scott & Stringfellow, Inc.
4.9 Letter Agreement dated January 11, 1995 by and between
Scott & Stringfellow, Inc. and the WorldCorp Employee
Savings and Stock Ownership Plan.
4.10 Letter dated January 11, 1995 from WorldCorp, Inc. to
the WorldCorp Employee Savings and Stock Ownership Plan.
5.1 Opinion of Andrew M. Paalborg, Vice President and
General Counsel of WorldCorp, Inc.
23.1 Consent of KPMG Peat Marwick LLP dated January 12, 1995.
23.2 Consent of Andrew M. Paalborg, Vice President and
General Counsel of WorldCorp, Inc. (included in the
Opinion of Counsel filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (included on signature page in this
Registration Statement).
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) that, insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suite or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue;
(2) that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(3) to file, during any period in which offers or sales
are being made, a post effective amendment to the registration
statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(4) that, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be an initial bona
fide offering thereof;
(5) to remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
Herndon, Virginia, on this 12th day of January, 1995.
WORLDCORP, INC.
/s/ T. Coleman Andrews, III
-------------------------------
By: T. Coleman Andrews, III
Chief Executive Officer and
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of
WorldCorp, Inc., a Delaware corporation, do hereby constitute and
appoint T. Coleman Andrews, III, and Andrew M. Paalborg, and each
of them, the lawful attorneys and agents or attorney and agent,
with power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents,
and any one of them, determine may be necessary or advisable or
required to enable said corporation to comply with the Securities
Act of 1933 as amended, and any rules or regulations or
requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the
generality of the foregoing power and authority, the powers
granted include the power an authority to sign the names of the
undersigned officers and directors in the capacities indicated
below to this Registration Statement, to any and all amendments,
both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or
documents filed as part of or in conjunction with this
Registration Statement or amendments or supplements thereto, and
each of the undersigned hereby ratifies and confirms all that said
attorneys and agents or any of them shall do or cause to be done
by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed
this Power of Attorney as of the date indicated opposite his name.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
Signature Title Date
/s/ T. Coleman Andrews, III Chief Executive Officer, January 12, 1995
___________________________ President and Director
T. Coleman Andrews, III (Principal Executive
Officer and Principal
Financial and Accounting
Officer)
/s/ William F. Gorog Chairman of the Board January 12, 1995
____________________________ of Directors
William F. Gorog
/s/ James E. Colburn Director January 12, 1995
___________________________
James E. Colburn
/s/ Juan C. O'Callahan Director January 12, 1995
___________________________
Juan C. O'Callahan
/s/ Patrick F. Graham Director January 12, 1995
___________________________
Patrick F. Graham
/s/ Geoffrey S. Rehnert Director January 12, 1995
__________________________
Geoffrey S. Rehnert
/s/ John C. Backus Director January 12, 1995
__________________________
John C. Backus
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
4.5 Stock Restriction
Agreement dated as of
September 14, 1990 among
WorldCorp, Inc., William
F. Gorog, Jonathan M.
Gorog, Peter M. Gorog,
Henry R. Nichols, William
N. Melton and John Porter,
as amended by Amendment
No. 1 to Stock Restriction
Agreement dated as of
August 29, 1991, Amendment
No. 2 to Stock Restriction
Agreement dated as of
March 31, 1993, Amendment
No. 3 to Stock Restriction
Agreement dated as of
September 1, 1994, and
Amendment No. 4 to Stock
Restriction Agreement
dated as of December 1,
1994.
4.6 Scott & Stringfellow,
Inc. Customer
Agreement dated
January 11, 1995
entered into by the
WorldCorp Employee
Savings and Stock
Ownership Plan.
4.7 Guarantee Agreement
dated as of January
11, 1995 by
WorldCorp, Inc. for
the benefit of Scott
& Stringfellow, Inc.
4.8 Registration Rights
Agreement dated
January 11, 1995 by
and between
WorldCorp, Inc. and
Scott & Stringfellow,
Inc.
4.9 Letter Agreement
dated January 11,
1995 by and between
Scott & Stringfellow,
Inc. and the
WorldCorp Employee
Savings and Stock
Ownership Plan.
4.10 Letter dated January
11, 1995 from
WorldCorp, Inc. to
the WorldCorp
Employee Savings and
Stock Ownership Plan.
5.1 Opinion of Andrew M.
Paalborg, Vice
President and General
Counsel of WorldCorp,
Inc.
23.1 Consent of KPMG Peat
Marwick LLP dated
January 12, 1995.
EXHIBIT 4.5
STOCK RESTRICTION AGREEMENT
THIS STOCK RESTRICTION AGREEMENT, dated as of September
14, 1990 (this "Agreement") is made among WorldCorp, Inc., a
Delaware corporation ("WorldCorp"), William F. Gorog, Jonathan M.
Gorog, Peter M. Gorog, Henry R. Nichols, William N. Melton and
John Porter (collectively, the "Founders" and each a "Founder"),
and those persons who may execute this Agreement from time to
time and whose names are thereupon listed on Exhibit A hereto
(the "Employees").
A. U.S. Order, Incorporated, a Delaware corporation
(the "Company"), has authorized 15,000,000 shares of Common
Stock, par value $.001 per share ("Common Stock"), of which
5,000,000 shares are owned, directly or indirectly, by the
Founders.
B. WorldCorp has agreed to purchase 1,250,000 shares
of Series A Preferred Stock, par value $.001 per share ("Series A
Preferred Stock"), pursuant to the terms of the Series A
Preferred Stock Purchase Agreement dated as of September 14, 1990
between WorldCorp and the Company (the "Stock Purchase
Agreement").
C. Each of the Founders owns that number of shares of
Common Stock set forth opposite his name on Exhibit B hereto.
D. WorldCorp is willing to complete the purchase of
Series A Preferred Stock pursuant to the Stock Purchase Agreement
if the Founders execute this Agreement.
E. As an inducement to WorldCorp to complete such
purchase, the parties wish to make certain provisions among
themselves concerning the governance of the Company and the
purchase and sale of Common Stock and Series A Preferred Stock.
NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements of the parties contained
herein, the parties agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement,
the following terms shall have the meanings set forth below:
"AFFILIATE" of a Person, shall mean any Person
which, directly or indirectly, controls, is controlled by, or is
under common control with, such Person. The term "control"
(including, 'with correlative meaning, the terms "controlled by"
and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
"COMMON STOCK" shall have the meaning set forth in
Recital A.
"OTHER SECURITIES" shall mean securities of the
Company which are convertible into, exchangeable for or
exercisable for Common Stock other than the option to purchase
additional shares of Series A Preferred Stock granted to
WorldCorp pursuant to Section 7.7 of the Stock Purchase
Agreement.
"PERSON" shall mean an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency
thereof.
"SERIES A PREFERRED STOCK" shall have the meaning
set forth in Recital B.
"STOCK PURCHASE AGREEMENT" shall have the meaning
set forth in Recital B.
"STOCKHOLDERS" shall mean any of WorldCorp and its
assignees, the Founders and the Employees.
"VOTING STOCK" shall mean any class or classes of
the capital stock of the Company the holders of which are
entitled to participate generally in the election of directors of
the Company, including, but not limited to, the Common Stock and
the Series A Preferred Stock.
2. EFFECTIVENESS OF AGREEMENT. This Agreement shall
be effective from and after the date hereof.
3. COVENANTS REGARDING TRANSFER AND RELEASE OF SHARES.
(a) Prior to March 16, 1992, WorldCorp agrees not
to dispose of or otherwise encumber any of the shares of Series A
Preferred Stock purchased by WorldCorp under the Stock Purchase
Agreement or any shares of Common Stock into which the Series A
Preferred Stock was converted (other than transfers of any of
such shares to an Affiliate of WorldCorp if the parties to this
Agreement shall first have received an agreement and
acknowledgment in writing from such transferee that such shares
remain subject to the provisions of this Agreement), or enter
into any arrangements (including the granting of options or
similar rights) for such purposes. Notwithstanding the foregoing,
WorldCorp may transfer all or any part of such shares (i) with
the prior written consent, which consent shall not be
unreasonably withheld, of the holders of a majority of the
outstanding Common Stock to such transfer or (ii) if prior to or
concurrently with such transfer WorldCorp exercises its option to
purchase additional shares of Series A Preferred Stock pursuant
to Section 7.7 of the Stock Purchase Agreement in which case
Sections 4 and 5 of this Agreement shall govern such a transfer.
(b) Prior to September 16, 1993 and except as
provided in Section 6 hereof, a Founder or Employee shall not
dispose of or otherwise encumber any of the shares of Common
Stock held by such Founder or Employee or enter into any
arrangements (including the granting of options or similar
rights) for such purposes. Notwithstanding the foregoing, the
Founders and Employees may transfer all or any part of such
shares with the prior written consent, which consent shall not be
unreasonably withheld, of holders of a majority of the
outstanding Series A Preferred Stock. Upon September 16, 1993
and thereafter, any transfer of shares of Common Stock by a
Founder or Employee shall be governed by Sections 4 and 5 of this
Agreement.
4. RIGHT OF FIRST OFFER.
(a) Each time a Founder or an Employee (the
"Offering Stockholder") proposes to offer for sale any shares of
Common Stock, such Offering Stockholder shall first make an
offering of such Common Stock to WorldCorp in accordance with the
following provisions:
(i) The Offering Stockholder shall deliver a
notice (the "Offering Notice") to WorldCorp stating (i) the
Offering Stockholder's bona fide intention to offer such Common
Stock, (ii) the number of shares of such Common Stock to be
offered for sale, and (iii) the price and terms, if any, upon
which the Offering Stockholder proposes to offer such Common
Stock.
(ii) Within 30 days after the Offering Notice
is given, WorldCorp may elect to purchase from the Offering
Stockholder, at the price and on the terms specified in the
Offering Notice, all of the shares of Common Stock offered in the
Offering Notice.
(iii) The Closing of the purchase of any
shares of Common Stock by WorldCorp shall take place at the
principal offices of the Company (or such other location as the
parties may agree on) on the third business day after the
expiration of the 30-day period following the giving of the
Offering Notice. At such closing, WorldCorp shall (x) agree in
writing with the Offering Stockholder not to sell or otherwise
dispose of such shares in violation of the Securities Act of
1933, as amended, and (y) make payment in the appropriate amount
by means of a check or by a wire transfer to the Offering
Stockholder against delivery of stock certificates representing
the shares so purchased, duly endorsed in blank by the Person or
Persons in whose name such certificate is registered or
accompanied by a duly executed stock or security assignment
separate from the certificate.
(b) Each time WorldCorp proposes to offer for
sale any shares of Common Stock or any shares of Series A
Preferred Stock, it shall first make an offering of such Common
Stock or Series A Preferred Stock, as the case may be, to each
other Stockholder in accordance with the following provisions:
(i) WorldCorp shall deliver a notice
("WorldCorp Offering Notice") to each other Stockholder stating
(i) its bona fide intention to offer such Common Stock or Series
A Preferred Stock, (ii) the number of shares of such Common Stock
or Series A Preferred Stock, as the case may be, to be offered
for sale, and (iii) the price and terms, if any, upon which it
proposes to offer such Common Stock or Series A Preferred Stock;
(ii) Within 20 days after the WorldCorp
Offering Notice is given, each Stockholder may elect to purchase
from WorldCorp, at the price and on the terms specified in the
WorldCorp Offering Notice, up to that number of shares of Common
Stock or Series A Preferred Stock equal to the number of shares
of Common Stock or Series A Preferred Stock, as the case may be,
offered in the WorldCorp Offering Notice multiplied by the
fraction obtained by dividing the number of shares of Common
Stock owned by such Stockholder at such time by the aggregate
number of shares of Common Stock then held by such Stockholder
and the other non-offering Stockholders. If the WorldCorp
Offering Notice covers both shares of Common Stock and Series A
Preferred Stock, each Stockholder may at its option elect to
purchase its pro rata portion of either such shares of Common
Stock or Series A Preferred Stock, or both;
(iii) In the event that any non-offering
Stockholder determines not to purchase its pro rata portion of
the shares of Common Stock or Series A Preferred Stock, as the
case may be, being offered (either by permitting the 20-day
notice period set forth in subsection (b)(ii) to expire or by
delivering a notice of its decision not to purchase all of its
pro rata portion of such shares to WorldCorp prior to the
expiration of such period), WorldCorp shall promptly deliver a
notice of such determination (the "Re-Offer Notice") to the other
Stockholders who elected to purchase their pro rata portion of
such shares. Within 10 days after the Re-Offer Notice is given,
such other Stockholders may elect to purchase, at the same price
and on the same terms as set forth in the original Offering
Notice, all of the shares of Common Stock or Series A Preferred
Stock, as the case may be, offered in the Re-Offer Notice. In the
event that more than one Stockholder elects to purchase all of
the shares of Common Stock or all of the Series A Preferred
Stock, as the case may be, offered in the Re-Offer Notice, each
such electing Stockholder shall be permitted to purchase that
fraction of such shares obtained by dividing the number of shares
of Common Stock owned by such Stockholder at such time by the
aggregate number of shares of Common Stock then owned by the
Stockholders accepting the offer set forth in the Re-Offer
Notice. In no event shall the non-offering Stockholders be
permitted to purchase in total less than all of the shares
originally offered by WorldCorp in the WorldCorp Offering Notice.
(iv) The closing of the purchase of the
shares of Common Stock and Series A Preferred Stock by each non-
offering Stockholder who has accepted an offer or offers pursuant
to subsections (b)(ii) and (b)(iii) shall take place at the
principal offices of the Company (or such other location as the
parties may agree on) on the third business day after the later
to expire of the 20-day period following the giving of the
WorldCorp Offering Notice or the 10-day period following the
giving of the Re-Offer Notice, if any, and shall be held
simultaneously with the closing of all other purchases of such
shares by all other non-offering Stockholders. At such closing,
such non-offering Stockholder shall (x) agree in writing with
WorldCorp not to sell or otherwise dispose of such shares in
violation of the Securities Act of 1933, as amended, and (y) make
payment in the appropriate amount by means of a check or by a
wire transfer to WorldCorp against delivery of stock certificates
representing the shares so purchased, duly endorsed in blank by
the Person or Persons in whose name such certificate is
registered or accompanied by a duly executed stock or security
assignment separate from the certificate.
(c) In the event that all of the shares being
offered are not purchased at the closing referred to in
subsection (a)(iii) or (b)(iv), the Offering Stockholder or
WorldCorp, as the case may be, shall for a period of 120 days
thereafter have the right to sell or otherwise dispose of the
number of shares of Common Stock or Series A Preferred Stock
offered in the Offering Notice or the WorldCorp Offering Notice,
as the case may be, upon terms and conditions (including the
price per share) no more favorable to the third party purchaser
than those specified in the Offering Notice or the WorldCorp
Offering Notice, as the case may be. In the event that the
Offering Stockholder or WorldCorp, as the case may be, does not
sell or otherwise dispose of such shares of Common Stock or
Series A Preferred Stock within the specified 120-day period, the
right of first offer provided for in this Section 4 shall
continue to be applicable to any subsequent disposition of such
shares.
(d) The right of first offer provided for in this
Section 4 shall not be applicable to (i) any offer, sale or other
disposition of shares of Common Stock or Series A Preferred Stock
by WorldCorp to any of its Affiliates; provided, however. that,
prior to the consummation of such a sale or other disposition,
such transferee agrees to be bound by the terms and conditions of
this Agreement by executing and delivering to each party hereto
its agreement to that effect; (ii) any merger or other
reorganization involving the Company in which the shares of
Common Stock owned by any Stockholder are in substantial part
exchanged for or converted into securities of another corporation
or cash or both; or (iii) any bona fide transaction not intended
to avoid the provisions hereof in which any Stockholder merges or
consolidates with a Person or sells all or substantially all of
its assets (including the shares of Common Stock or Series A
Preferred Stock owned by it at such time) to, such a Person in
exchange for securities of such Person or cash or both; provided,
however. that, prior to the consummation of such transactions,
such Person agrees to be bound by the terms and conditions of
this Agreement by executing and delivering to each party hereto
its agreement to that effect.
(e) In the event that the right of first offer set
forth in this Section 4 is not exercised by the non-offering
Stockholders with respect to sales of any shares of Common Stock
or Series A Preferred Stock offered for sale by a Stockholder,
the purchaser of such shares shall not be bound by the terms of
this Agreement or be entitled to any benefits hereunder.
5. CO-SALE PROVISIONS.
(a) In the event that any Founder or Founders
(together, the "Transferring Stockholders") shall determine to
sell shares of Common Stock or Other Securities owned by such
Transferring Stockholder or Stockholders constituting more than
3% of the then outstanding shares of Common Stock (treating all
such Other Securities as having been converted, exchange or
exercised) to any person or persons (individually a "Third Party"
and collectively, "Third Parties") other than WorldCorp in any
one transaction or any series of related transactions, directly
or indirectly, such sale or other disposition shall not be
permitted unless the Transferring Stockholders shall offer (or
cause the Third Party to offer) WorldCorp the right to elect to
include, at the sole option of WorldCorp, in the sale or other
disposition to the Third Party such number of shares of Common
Stock or Series A Preferred Stock owned by WorldCorp as shall be
determined in accordance with subsection (a)(i) of this Section 5
(the "Tag-Along Shares"). The Transferring Stockholders shall
give notice to WorldCorp describing the transaction (the "Joint
Notice") and at any time within 20 days after the giving of the
Joint Notice, WorldCorp may make an election to include the Tag-
Along Shares in such a sale or other disposition (the "Inclusion
Election") by giving written notice of its Inclusion Election to
each of the Transferring Stockholders and delivering to the
designated representative of the Transferring Stockholders a
stock certificate or certificates representing the Tag-Along
Shares, together with a limited power-of-attorney authorizing the
Transferring Stockholders to sell or otherwise dispose of such
Tag-Along Shares pursuant to the terms of such Third Party's
offer.
(i) WorldCorp shall have the right to sell,
pursuant to the Third Party's offer, that percentage of the
number of shares of Common Stock or Other Securities to be sold
to the Third Party equal to the ratio (expressed as a percentage)
of (i) the shares of Common Stock (treating the Other Securities
as having been converted into, exchanged for or exercised for
Common Stock) owned by WorldCorp, as compared with (ii) the
aggregate number of shares of Common Stock or Other Securities
owned by the Transferring Stockholders and WorldCorp treating the
Other Securities as having been converted into, exchanged for or
exercised for Common Stock.
(ii) The purchase from WorldCorp pursuant to
this Section 5(a) shall be on the same terms and conditions,
including the price per share and the date of sale or other
disposition, as are received by the Transferring Stockholders and
stated in the Joint Notice.
(iii) Promptly (but in no event later
than two business days) after the consummation of the sale or
other disposition of shares of Common Stock or Other Securities
of the Transferring Stockholders and WorldCorp to the Third Party
pursuant to the Third Party's offer, the Transferring
Stockholders shall (i) notify WorldCorp of the completion
thereof, (ii) cause to be remitted to WorldCorp the total sales
price attributable to the shares of Common Stock or Other
Securities which WorldCorp sold or otherwise disposed of pursuant
thereto, and (iii) furnish such other evidence of the completion
and time of completion of such sale or other disposition and the
terms thereof as may be reasonably requested by WorldCorp.
(iv) If within 20 days after the Joint Notice
is given, WorldCorp has not accepted the offer to make an
Inclusion Election, WorldCorp will be deemed to have waived any
and all of its rights with respect to the sale or other
disposition of shares of Common Stock or Other Securities
described in the Joint Notice. The Transferring Stockholders
shall have 90 days after such 20-day period in which to sell or
otherwise dispose of the shares of Common Stock or Other
Securities of the Transferring Stockholders to the Third Party or
any other Person at a price and on terms not more favorable to
the Transferring Stockholders than were set forth in the Joint
Notice.
(v) If, at the end of such 90-day period,
the Transferring Stockholders have not completed the sale of
shares of Common Stock or Other Securities of the Transferring
Stockholders in accordance with the terms of the Third Party's
offer, all the restrictions on sale contained in this Agreement
with respect to Common Stock or Other Securities owned by the
Transferring Stockholders shall again be in effect (unless such
90-day period is extended with the consent of WorldCorp).
(b) In the event that WorldCorp shall determine
to sell shares of Common Stock or Other Securities owned by
WorldCorp constituting more than 3% of the then outstanding
shares of Common Stock (treating the Other Securities as having
been converted into, exchanged for or exercised for Common Stock)
to any Third Party or Third Parties other than the Founders in
any one transaction or any series of related transactions,
directly or indirectly, such sale or other disposition shall not
be permitted unless WorldCorp shall offer (or cause the Third
Party to offer) the Founders (the "NonParticipating
Stockholders") the right to elect to include, at the sole option
of each of the NonParticipating Stockholders, in the sale or
other disposition to the Third Party such number of Tag-Along
Shares owned by such Non-Participating Stockholder as shall be
determined in accordance with subsection (b)(i) of this Section
5. WorldCorp shall give notice to each of the Non-Participating
Stockholders describing the transaction (the "WorldCorp Notice")
and at any time within 20 days after the giving of the WorldCorp
Notice, each Non-Participating Stockholder may make an Inclusion
Election by giving written notice of its Inclusion Election to
each of WorldCorp and delivering to WorldCorp a stock certificate
or certificates representing the Tag-Along Shares, together with
a limited power-of-attorney authorizing WorldCorp to sell or
otherwise dispose of such Tag-Along Shares pursuant to the terms
of such Third Party's offer.
(i) Each Non-Participating Stockholder shall
have the right to sell, pursuant to the Third Party's offer, that
percentage of the number of shares of Common Stock or Other
Securities to be sold to the Third Party equal to the ratio
(expressed as a percentage) of (i) the shares of Common Stock
(treating the Other Securities as having been converted into,
exchanged for or exercised for Common Stock) owned by the Non-
Participating Stockholder, as compared with (ii) the aggregate
number of shares of Common Stock or Other Securities owned by
WorldCorp and the Non-Participating Stockholders treating the
Other Securities as having been converted into, exchanged for or
exercised for Common Stock.
(ii) The purchase from a Non-Participating
Stockholder pursuant to this Section 5(b) shall be on the same
terms and conditions, including the price per share and the date
of sale or other disposition, as are received by WorldCorp and
stated in the WorldCorp Notice; provided, however, that if
WorldCorp is selling Other Securities, the price per share for
shares of Common Stock being sold by the Non-Participating
Stockholders may be less than the price being received by
WorldCorp for the Other Securities.
(iii) Promptly (but in no event later
than two business days) after the consummation of the sale or
other disposition of shares of Common Stock or Other Securities
of WorldCorp and Non-Participating Stockholders making an
Inclusion Election to the Third Party pursuant to the Third
Party's offer, WorldCorp shall (i) notify such Non-Participating
Stockholders of the completion thereof, (ii) cause to be remitted
to each Non-Participating Stockholder the total sales price
attributable to the shares of Common Stock or Series A Preferred
Stock which such Non-Participating Stockholder sold or otherwise
disposed of pursuant thereto, and (iii) furnish such other
evidence of the completion and time of completion of such sale or
other disposition and the terms thereof as may be reasonably
requested by any Non-Participating Stockholder.
(iv) If within 20 days after the WorldCorp
Notice is given, any NonParticipating Stockholder has not
accepted the offer to make an Inclusion Election, such Non-
Participating Stockholder will be deemed to have waived any and
all of its rights with respect to the sale or other disposition
of shares of Common Stock or Other Securities described in the
WorldCorp Notice. WorldCorp shall have 90 days after such 20-day
period in which to sell or otherwise dispose of the shares of
Common Stock or Other Securities of WorldCorp and the Non-
Participating Stockholders which have made an Inclusion Election
(as calculated pursuant to subsection (b)(i)) to the Third Party
or any other Person at a price and on terms not more favorable to
WorldCorp than were set forth in the WorldCorp Notice.
(v) If, at the end of such 90-day period,
WorldCorp has not completed the sale of shares of Common Stock or
Other Securities of WorldCorp and any Non-Participating
Stockholders making an Inclusion Election in accordance with the
terms of the Third Party's offer, WorldCorp shall return to such
Non-Participating Stockholders all certificates representing
shares of Common Stock or Other Securities, if any, which such
Non-Participating Stockholders delivered for sale pursuant to
this subsection (b), and all the restrictions on sale contained
in this Agreement with respect to Common Stock or Other
Securities owned by WorldCorp shall again be in effect (unless
such 90-day period is extended with the consent of the Non-
Participating Stockholders).
(c) The rights provided in this Section 5 shall
not be applicable to any transaction if Section 4(d) makes
Section 4 inapplicable thereto.
(d) The provisions of Section 4 shall take
priority over this Section 5, and nothing in this Section 5 shall
be construed to relieve WorldCorp or any Transferring Stockholder
of its obligation to deliver an Offering Notice to each of the
other Stockholders pursuant to the terms of Section 4 in
connection with such a proposed transaction.
(e) In the event that a sale of shares of Common
Stock is made to a Third Party pursuant to this Section 5, such
Third Party shall not be bound by the terms of this Agreement,
nor shall it be entitled to any benefits hereunder.
6. OPTION TO PURCHASE FOUNDERS' AND EMPLOYEES'
SHARES. Subject to the provisions of Section 6(b) hereof, each
Founder and Employee hereby grants to WorldCorp option (the
"Option") exercisable after September 10, 1991 but prior to the
Termination Date (as defined in Section 6(e)) to purchase for the
price set forth in Section 6(a) all of the outstanding shares of
Common Stock held by such Founders and Employees and all vested
but unexercised options to purchase Common Stock held by such
Founders and Employees (the "Optioned Shares").
(a) The exercise price per share for the Optioned
Shares (the "Exercise Price") shall be payable in shares of
WorldCorp Common Stock and shall equal (i) 400,000 shares of
Common Stock, par value $1.00, of WorldCorp as adjusted for
subsequent stock splits or dividends ("WorldCorp Common Stock")
plus such additional number of shares of WorldCorp Common Stock,
if any, such that the aggregate value (based on the then-current
market price of WorldCorp Common Stock) of all such shares equals
$5,000,000, divided by (ii) the sum of (x) the number of Optioned
Shares held by the Founders and (y) 49% of the number of
outstanding shares of Common Stock held by Employees (treating
all outstanding options to purchase Common Stock held by such
persons or entities that are vested as having been exercised).
With respect to vested but unexercised options to purchase Common
Stock, the Exercise Price shall be reduced by the exercise price
per share for such option. Upon the exercise by WorldCorp of the
Option, all unexercised options which are not vested shall be
cancelled. The then-current market price of WorldCorp Common
Stock shall be the closing price reported on the New York Stock
Exchange Composite Transaction Reporting System on the business
day prior to the exercise of the Option, or if WorldCorp Common
Stock is no longer listed on the New York Stock Exchange, the
closing price on the primary market on which such Common Stock is
traded.
(b) WorldCorp may not exercise the Option until
and unless WorldCorp exercises its option to purchase additional
shares of Series A Preferred Stock pursuant to Section 7.7 of the
Stock Purchase Agreement. WorldCorp shall exercise the Option by
giving written notice to the Founders and Employees. The payment
of the Exercise Price and the transfer of the Optioned Shares
shall occur on the date set forth in such notice, which date
shall be no later than 15 days after the date of such notice.
(c) A Founder or Employee shall not dispose of or
otherwise encumber any of the Optioned Shares nor shall a Founder
or Employee enter into any arrangements (including the granting
of options or similar rights) for such purposes, from the date of
this Agreement to the termination of the rights granted under
this Section 6, unless permitted by this Agreement and only
if WorldCorp shall first have received an agreement and
acknowledgement in writing from such transferee that such
Optioned Shares remain subject to the provisions of this Section 6.
(d) For purposes of this Section 6(d):
(i) the term "register," "registered," and
"registration" refer to a registration effected by preparing and
filing a registration statement or similar document in compliance
with the Act, and the declaration or ordering of effectiveness of
such registration statement or document;
(ii) the term "Registrable Securities" means
(1) the WorldCorp Common Stock issued upon purchase of the
Optioned Shares and (2) any Common Stock of WorldCorp issued as
(or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in
replacement of, such WorldCorp Common Stock, excluding in all
cases, however, any Registrable Securities sold by a person in a
transaction in which his rights under this Section 6(d) are not
assigned;
(iii) the number of shares of
"Registrable Securities then outstanding" shall be determined by
the number of shares of WorldCorp Common Stock outstanding which
are, and the number of shares of WorldCorp Common Stock issuable
pursuant to then exercisable or convertible securities which are,
Registrable Securities.
(iv) the term "Holder" means any person
owning or having the right to acquire Registrable Securities or
any assignee thereof in accordance with Section 6(xiii) hereof;
and
(v) the term "Form S-3" means such form
under the Act as in effect on the date hereof or any registration
form under the Act subsequently adopted by the Securities and
Exchange Commission ("SEC") which permits inclusion or
incorporation of substantial information by reference to other
documents filed by WorldCorp with the SEC.
(vi) If WorldCorp shall receive at any time
after the issuance of the WorldCorp Common Stock to the Founders
a written request from William F. Gorog (or in the event of the
incapacity of William F. Gorog from Jonathan M. Gorog) (the
"Initiating Holder") that WorldCorp effect a registration on Form
S-3 and any related qualification or compliance with respect to
all or a part of the Registrable Securities owned by a Holder or
Holders, WorldCorp will:
a. promptly give written notice of
the proposed registration, and any related qualification or
compliance, to all other Holders; and
b. as soon as practicable, effect
such registration and all such qualifications and compliances as
may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities
of any other Holder or Holders joining in such request as are
specified in a written request given within 15 days after receipt
of such written notice from WorldCorp; provided, however, that
WorldCorp shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this section 6(d) (vi):
(1) if Form S-3 is not available for such offering by the
Holders; (2) if the Holders, together with the holders of any
other securities of WorldCorp entitled to inclusion in such
registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public
(net of any underwriters' discounts or commissions) of less than
$2,000,000; (3) if WorldCorp shall furnish to the Holders a
certificate signed by the President of WorldCorp stating that in
the good faith judgment of the Board of Directors of WorldCorp,
it would be seriously detrimental to WorldCorp and its
stockholders for such Form S-3 Registration to be effected at
such time, in which event WorldCorp shall have the right to defer
the filing of the Form S-3 registration statement for a period of
not more than 90 days after receipt of the request of the Holder
or Holders under this Section 6(d)(vi); provided, however, that
WorldCorp shall not utilize this right more than once in any
twelve month period; (4) in any particular jurisdiction in which
WorldCorp would be required to qualify to do business or to
execute a general consent to service of process in effecting such
registration, qualification or compliance.
Subject to the foregoing, WorldCorp shall file a
registration statement covering the Registrable Securities and
other securities so requested to be registered as soon as
practicable after receipt of the request or requests of the
Holders.
If the Initiating Holder intends to distribute the
Registrable Securities covered by the request by means of an
underwriting, he shall so advise WorldCorp as a part of the
request made pursuant to this Section 6(d)(vi) and WorldCorp
shall include such information in the written notice. The
underwriter will be selected by the Initiating Holder, as the
case may be, and shall be reasonably acceptable to WorldCorp. In
such event, the right of any Holder to include his Registrable
Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of
such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall (together with
WorldCorp) enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provision of this Section
6(d)(vi), if the underwriter advises Holders in writing that
marketing factors require a limitation of the number of shares to
be underwritten, then the number of shares of Registrable
Securities that may be included in the underwriting shall be
allocated among all Holders thereof in proportion (as nearly as
practicable) to the amount of Registrable Securities of WorldCorp
owned by each Holder; provided, however, that the number of
shares of Registrable Securities to be included in such
underwriting shall not be reduced below 50% if other securities
are included in the underwriting.
WorldCorp is obligated to effect only one (1) such
registration pursuant to this Section 6(d)(vi); provided,
however, that if the number of shares of Registrable Securities
included in the underwriting is reduced by the underwriter to 50%
because of the inclusion of other securities in the underwritten
offering, WorldCorp shall be obligated to effect one addition
registration pursuant to this Section 6(d)(vi). In no event shall
WorldCorp be obligated to effect more than two such registrations
pursuant to this Section 6(d)(vi).
(vii) If (but without any obligation to do
so) WorldCorp proposes to register (including for this purpose a
registration effected by WorldCorp for stockholders other than
the Holders) any of its stock or other securities under the Act
in connection with the public offering of such securities solely
for cash (other than a registration relating solely to the sale
of securities to participants in a WorldCorp stock plan, or a
registration on any form which does not include substantially the
same information as would be required to be included in a
registration statement covering the sale of the Registrable
Securities), WorldCorp shall, at such time, promptly give each
Holder written notice of such registration. Upon the written
request of each Holder given within twenty (20) days after
mailing of such notice by the Company in accordance with Section
12, WorldCorp shall, subject to the provisions of Section
6(d)(xi), cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be
registered.
(viii) Whenever required under this Section
6(d) to effect the registration of any Registrable Securities,
WorldCorp shall, as expeditiously as reasonably possible:
a. Prepare and file with the SEC a
registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration
statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to
one hundred twenty (120) days.
b. Prepare and file with the SEC
such amendments and supplements to such registration statement
and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of
the Act with respect to the disposition of all securities covered
by such registration statement.
c. Furnish to the Holders such
numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Act, and
such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by
them.
d. Use its best efforts to register
and qualify the securities covered by such registration statement
under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders,
provided that WorldCorp shall not be required in connection
therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such
states or jurisdictions.
e. In the event of any underwritten
public offering, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the
managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its
obligations under such an agreement.
f. Notify each Holder of Registrable
Securities covered by such registration statement at any time
when a prospectus relating thereto is required to be delivered
under the Act of the happening of any event as a result of which
the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing.
g. Furnish, at the request of any
Holder requesting registration of Registrable Securities pursuant
to this Section 6(d), on the date that such Registrable
Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 6(d), if
such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date
that the registration statement with respect to such securities
becomes effective, (i) an opinion, dated such date, of the
counsel representing WorldCorp for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting registration
of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of WorldCorp, in
form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
(ix) It shall be a condition precedent to
the obligations of WorldCorp to take any action pursuant to this
Section 6(d) with respect to the Registrable Securities of any
selling Holder that such Holder shall furnish to WorldCorp such
information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as
shall be required to effect the registration of such Holder's
Registrable Securities.
(x) All expenses incurred in connection
with a registration requested pursuant to Section 6(d)(vi) or
6(d) (vii), including (without limitation) all registration,
filing, qualification, printer's and accounting fees and the
reasonable fees and disbursements of counsel for the selling
Holder or Holders and counsel for WorldCorp, but excluding any
underwriters' discounts or commissions associated with
Registrable Securities, shall be borne by WorldCorp; provided,
however, that WorldCorp shall not be required to pay for any
expenses of any registration proceeding begun pursuant to Section
6(d)(vi) if the registration request is subsequently withdrawn at
the request of the Initiating Holder (in which case all
Participating Holders shall bear such expenses), unless the
Initiating Holder agrees to forfeit the right to one demand
registration pursuant to Section 6(d)(vi); provided further,
however, that if at the time of such withdrawal, the Holders have
learned of a material adverse change in the condition, business,
or prospects of WorldCorp from that known to the Holders at the
time of their request and have withdrawn the request with
reasonable promptness following disclosure by WorldCorp of such
material adverse change, then the Holders shall not be required
to pay any of such expenses and shall retain their rights
pursuant to Section 6(d)(vi).
(xi) In connection with any offering
involving an underwriting of shares of WorldCorp's capital stock,
WorldCorp shall not be required under Section 6(d)(vii) to
include any of the Holders' securities in such underwriting
unless they accept the terms of the underwriting as agreed upon
between WorldCorp and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only
in such quantity as the underwriters determine in their sole
discretion will not, jeopardize the success of the offering by
WorldCorp. If the total amount of securities, including
Registrable Securities, requested by stockholders to be included
in such offering exceeds the amount of securities to be sold that
the underwriters determine in their sole discretion is compatible
with the success of the offering, then WorldCorp shall only be
required to include in the offering that number, if any, of the
Registrable Securities which the underwriters determine in their
sole discretion will not jeopardize the success of the offering
(the Registrable Securities so included to be apportioned pro
rata among the Holders or in such other proportions as shall
mutually be agreed to by the Holders).
(xi) No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying
any such registration as the result of any controversy that might
arise with respect to the interpretation or implementation of
this Section 6(d).
(xii) In the event any Registrable
Securities are included in a registration statement under this
Section 6(d):
a. To the extent permitted by law,
WorldCorp will indemnify and hold harmless each Holder, any
underwriter (as defined in the Act) for such Holder and each
person, if any, who controls such Holder or underwriter within
the meaning of the Act or the Securities Exchange Act of 1934, as
amended (the "1934 Act"), against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject
under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any of
the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration
statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements
thereto, (ii) 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, or (iii) any violation or
alleged violation by WorldCorp of the Act, the 1934 Act, any
state securities law or any rule or regulation promulgated under
the Act, the 1934 Act or any state securities law; and WorldCorp
will pay to each such Holder, underwriter or controlling person,
as incurred, any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection 6(d)(xii) shall
not apply to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected
without the consent of WorldCorp (which consent shall not be
unreasonably withheld), nor shall WorldCorp be liable in any such
case for any such loss, claim, damage, liability, or action to
the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling
person.
b. To the extent permitted by law,
each selling Holder will indemnify and hold harmless WorldCorp,
each of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls
WorldCorp within the meaning of the Act, any underwriter, any
other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other
Holder, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may
become subject, under the Act, the 1934 Act or other federal or
state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder
expressly for use in connection with such registration; and each
such Holder will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified
pursuant to this subsection 6(d)(xii), in connection with
investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity
agreement contained in this subsection 6(d)(xii) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably
withheld; provided, that, in no event shall any indemnity under
this subsection 6.10(b) exceed the gross proceeds from the
offering received by such Holder.
c. Promptly after receipt by an
indemnified party under this Section 6(d)(xii) of notice of the
commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this Section
6(d)(xii), deliver to the indemnifying party a written notice of
the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties
which may be represented without conflict by one counsel) shall
have the right to retain one separate counsel, with the fees and
expenses to be paid by the indemnifying party, if representation
of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding.
The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action,
if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the
indemnified party under this Section 6(d)(xii), but the omission
so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 6(d)(xii).
d. The obligations of WorldCorp and
Holders under this Section 6(d)(xii) shall survive the completion
of any offering of Registrable Securities in a registration
statement under this Section 6(d), and otherwise.
(xiii) The rights to cause WorldCorp to
register Registrable Securities pursuant to this Section 6 may be
assigned (but only with all related obligations) by a Holder to a
transferee or assignee of such securities who, after such
assignment or transfer, holds at least 100,000 shares of
Registrable Securities (subject to appropriate adjustment for
stock splits, stock dividends, combinations and other
recapitalizations) provided WorldCorp is, within a reasonable
time after such transfer, furnished with written notice of the
name and address of such transferee or assignee and the
securities with respect to which such registration rights are
being assigned; and provided, further, that such assignment shall
be effective only if immediately following such transfer the
further disposition of such securities by the transferee or
assignee is restricted under the Act.
(xiv) Each Holder hereby agrees that, during
the period, of duration specified by WorldCorp and an underwriter
of common stock or other securities of WorldCorp, following the
effective date of a registration statement of WorldCorp filed
under the Act, it shall not, to the extent requested by WorldCorp
and such underwriter, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale),
grant any option to purchase or otherwise transfer or dispose of
(other than to donees who agree to be similarly bound) any
securities of WorldCorp held by it at any time during such period
except common stock included in such registration; provided,
however, that all executive officers and directors of WorldCorp
and all other persons with registration rights (whether or not
pursuant to this Agreement) enter into similar agreements. In
order to enforce the foregoing covenant, WorldCorp may impose
stop-transfer instructions with respect to the Registrable
Securities of each Holder (and the shares or securities of every
other person subject to the foregoing restriction) until the end
of such period.
(e) The option granted under this Section 6 shall
terminate if notice of exercise is not given on or prior to
September 15, 1993 (the "Termination Date").
7. AMENDMENTS TO CHARTER DOCUMENTS. Pursuant to the
terms of the Stock Purchase Agreement, upon the earlier of the
expiration of WorldCorp's option under Section 7.7 thereof or the
exercise of such option, the Company has agreed to use its best
efforts to amend its Restated Certificate of Incorporation to
provide that the members of the Board of Directors shall be
elected by a plurality of the holders of shares of Common Stock
and of the Series A Preferred Stock, voting together as a single
class. The Founders, the Employees and WorldCorp each agree to
vote his, her or its shares of Common Stock in favor of such an
amendment.
8. VOTING AND BOARD REPRESENTATION.
(a) Until the expiration of WorldCorp's option to
purchase the Employees shares of Common Stock pursuant to Section
6 hereof, each Employee shall vote the shares of Common Stock he
or she holds at any regular or special meeting of stockholders of
the Company or in any written consent executed in lieu of such
meeting of stockholders in the same manner and proportion as the
shares held by each of the Founders and WorldCorp.
Each Employee agrees to vote, and hereby grants to
WorldCorp an irrevocable proxy pursuant to the provisions of
Section 212 of the Delaware General Corporation Law to vote, or
to execute and deliver written consents or otherwise act with
respect to, all shares of Common Stock now owned or hereafter
acquired by the Employee as fully, to the same extent and with
the same effect as the Employee might or could do under any
applicable laws or regulations governing the rights and powers of
stockholders of a Delaware corporation, in connection with the
election of directors of the Company as provided in and in
accordance with this Section 8. Each Employee hereby affirms that
this proxy is given as a condition of this Agreement and the
issuance of the shares of (or options to purchase shares of)
Common Stock and as such is coupled with an interest and is
irrevocable until expiration of WorldCorp's option to purchase
the Employees' shares pursuant to Section 6 hereof.
THIS PROXY IS IRREVOCABLE AND SHALL REMAIN IN-FULL
FORCE AND EFFECT.
(b) If WorldCorp exercises its option to purchase
additional shares of Series A Preferred Stock pursuant to Section
7.7 of the Stock Purchase Agreement, WorldCorp shall vote its
shares of Series A Preferred Stock (and any Common Stock
resulting form a conversion thereof) at any regular or special
meeting of the stockholders of the Company called for the purpose
of filling positions on the Board of Directors of the Company, or
in any written consent executed in lieu of such a meeting of
stockholders, and shall take all actions necessary, to ensure the
election to the Board of Directors of the Company of two
individuals selected by the Founders. WorldCorp's obligations
under this Section 8(b) shall terminate at such time that the
Founders as a group own less than 5% of the outstanding shares of
capital stock of the Company.
9. GOVERNING LAW; JURISDICTION. This Agreement shall
be governed by and construed under the laws of the State of
Delaware as applied to agreements made and to be performed in the
State of Delaware without regard to the conflict of laws
principles thereof. Each of the Stockholders hereby consents to
personal jurisdiction in respect of any action arising under or
in connection with this Agreement instituted in the United States
District Court for the District of Delaware or the Delaware Court
of Chancery or other state court of Delaware, and to service of
process upon it in the manner set forth in Section 12.
10. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
11. TITLES AND SUBTITLES. The titles and subtitles
used in this Agreement are used for convenience only and are not
to be considered in construing or interpreting this Agreement.
12. NOTICES. Any notice, request, instruction or
other document to be given hereunder by any party hereto to
another party hereto shall be in writing, shall be deemed to have
been duly given or delivered when delivered personally or
telecopied (receipt confirmed, with a copy sent by certified or
registered mail as set forth herein) or sent by certified or
registered mail, postage prepaid, return receipt requested, or by
Federal Express or other overnight delivery service, to the
address of the party set forth below such person's signature on
this Agreement or to such address as the party to whom notice is
to be given may provide in a written notice to each of the other
parties to this Agreement, a copy of which written notice shall
be on file with the Secretary of the Company.
13. LEGEND.
(a) Each certificate representing shares of
Common Stock or Series A Preferred Stock subject to this
Agreement shall be endorsed with the following legend:
"THE SALE, PLEDGE HYPOTHECATION OR
TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE TERMS AND CONDITIONS
OF A CERTAIN STOCK RESTRICTION
AGREEMENT BY AND AMONG THE
STOCKHOLDER AND CERTAIN HOLDERS OF
STOCK OF THE CORPORATION. COPIES OF
SUCH AGREEMENT MAY BE OBTAINED UPON
WRITTEN REQUEST TO THE SECRETARY OF
THE CORPORATION."
(b) Each party to this Agreement agrees that the
Company may instruct the transfer agent to impose transfer
restrictions on the shares represented by certificates bearing
the legend referred to in Section 13(a) above to enforce the
provisions of this Agreement. The legend shall be removed upon
termination of this Agreement.
14. AMENDMENTS AND WAIVERS. Any term of this Agreement
may be amended and the observance of any term of this Agreement
may be waived (either generally or in a particular instance and
either retroactively or prospectively) only with the written
consent of each of the Stockholders; provided, however, that no
consent shall be required from any Stockholder if at the time of
such amendment or waiver such Stockholder owns less than 5% of
the then outstanding shares of Common Stock (treating the Series
A Preferred Stock as having been converted).
15. SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such
provision shall be excluded from this Agreement and the balance
of the Agreement shall be interpreted as if such provision were
so excluded and shall be enforceable in accordance with its terms
to the fullest extent permitted by law.
16. FURTHER ASSURANCES. Each of the parties shall,
without further consideration, use reasonable efforts to execute
and deliver such additional documents and take such other action,
as the other parties, or any of them may reasonably request to
carry out the intent of this Agreement and the transactions
contemplated hereby.
17. ENTIRE AGREEMENT. This Agreement, together with
the Stock Purchase Agreement, embodies the entire agreement and
understanding of the parties hereto in respect of the actions and
transactions contemplated by this Agreement. There are no
restrictions, promises, inducements, representations, warranties,
covenants or undertakings, other than those expressly set forth
or referred to herein.
18. SPECIFIC PERFORMANCE. Each of the Stockholders
acknowledges and agrees that in the event of any breach of this
Agreement, the non-breaching party or parties would be
irreparably harmed and could not be made whole by monetary
damages. It is accordingly agreed that the Stockholders will
waive the defense in any action for specific performance that a
remedy at law would be adequate and that the Stockholders, in
addition to any other remedy to which they may be entitled at law
or in equity, shall be entitled to compel specific performance of
this Agreement in any action instituted in the Delaware Court of
Chancery or the United States District Court for the District of
Delaware or, in the event said Courts would not have jurisdiction
for such action, in any court of the United States or any state
thereof having jurisdiction for such action.
19. TERMINATION. This Agreement shall terminate the
earlier of (i) 10 years from the date hereof, (ii) upon a firmly
underwritten public offering of the Common Stock unless it shall
be extended prior to such date by the mutual consent of each of
the parties hereto or (iii) with respect to a Stockholder, at
such time that such Stockholder no longer holds any securities of
the Company. Notwithstanding the foregoing, the rights pursuant
to Section 5 hereof shall terminate (i) with respect to any sale
of capital stock of the Company by WorldCorp, on March 15, 1992
and (ii) with respect to any sale of capital stock of the Company
by a Founder or Founders, five years from the date hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized
officers as of the date first above written.
WORLDCORP, INC.
/s/ Andrew M. Paalborg
By: Andrew M. Paalborg
Title: Secretary
Address: 13873 Park Center Road
Suite 490
Herndon, VA 22071
WILLIAM F. GOROG
/s/ William F. Gorog
William F. Gorog
Address: 1307 Daviswood Drive
McLean, VA 22102
JONATHAN M. GOROG
/s/ Jonathan M. Gorog
Jonathan M. Gorog
Address: 6846 McLean Province Circle
Falls Church, VA 22043
PETER M. GOROG
/s/ Peter M. Gorog
Peter M. Gorog
Address: 1283 Auburn Grove Lane
Reston, VA 22094
HENRY R. NICHOLS
/s/ Henry R. Nichols
Henry R. Nichols
Address: 8456 Holly Leaf Drive
McLean, VA 22102
WILLIAM N. MELTON
/s/ William N. Melton
William N. Melton
Address:
JOHN PORTER
/s/ John Porter
John Porter
Address:
EXHIBIT A
EMPLOYEES
The undersigned hereby adopts and agrees to be bound by the Stock
Restriction Agreement dated as of September 14, 1990 by and among
WorldCorp, Inc., William F. Gorog, Jonathan M. Gorog, Peter M.
Gorog, Henry R. Nichols, William N. Melton and John Porter.
EMPLOYEE
Name of Employee:
Signature(s):
Address:
EXHIBIT B
FOUNDERS
Number of Shares
Founder of Common Stock
William F. Gorog 1,900,000
Jonathan M. Gorog 1,900,000
Peter M. Gorog 575,000
Henry R. Nichols 375,000
William N. Melton 125,000
John Porter 125,000
AMENDMENT NO. 1
TO
STOCK RESTRICTION AGREEMENT
AMENDMENT NO. 1 dated as of August 29, 1991 to Stock
Restriction Agreement dated as of September 14, 1990 (the "Stock
Restriction Agreement") among WorldCorp, Inc. ("WorldCorp"),
William F. Gorog, Jonathan M. Gorog, Peter M. Gorog, Henry R.
Nichols, William N. Melton and John Porter.
WITNESSETH:
WHEREAS, U.S. Order, Inc. (the "Company") is developing
employee compensation plans to enhance its ability to recruit,
motivate and retain employees:
WHEREAS, certain terms and conditions contained in the
Stock Restriction Agreement may be incompatible with the
objectives of the compensation plans;
WHEREAS, the parties wish to amend certain provisions of
the Stock Restriction Agreement
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties agree to amend the Stock Restriction Agreement as follows:
1. The following sentence is hereby added at the end of
Section 3(b) of the Stock Restriction Agreement:
"This Section 3(b) shall not apply to shares
of Common Stock that are issued by the Company
pursuant to the exercise of stock options
granted under the U.S Order, Inc. 1991 Stock
Option Plan."
2. The following sentence is hereby added to the end of
Section 4(a) of the Stock Restriction Agreement:
"This Section 4(a) shall not apply to any
shares of Common stock that are issued by the
Company pursuant to the exercise of stock
options granted under the U.S. Order, Inc.
1991 Stock Option Plan."
3. The title and first sentence of Section 6 of the
Stock Restriction Agreement is hereby amended to
read as follows:
"OPTION TO PURCHASE FOUNDERS' SHARES. Subject
to the provisions of Section 6(b) hereof, each
Founder hereby grants to WorldCorp an option
(the "Option") exercisable after September 10,
1991 but prior to the Termination Date (as
defined in Section 6(e)) to purchase for the
price set forth in Section 6(a) all of the
outstanding shares of Common Stock held by
such Founders (the "Optioned Shares").
4. The following sentence is hereby added at the end of
the first sentence of Section 6 of the Stock
Restriction Agreement:
"This Section 6 shall not apply to any shares
of Common Stock that are issued by the Company
pursuant to the exercise of stock options
granted under the U.S. Order, Inc. 1991 Stock
Option Plan."
5. The first sentence of Section 6(a) is hereby amended
to read as follows:
"The exercise price for the Optioned Shares (the
"Exercise Price") shall be payable in shares of
WorldCorp Common Stock and shall equal (i) 400,000
shares of Common Stock, par value $1.00, of
WorldCorp as adjusted for subsequent stock splits or
dividends ("WorldCorp Common Stock") plus such
additional number of shares of WorldCorp Common
Stock, if any, such that the aggregate value (based
on the then current market price of WorldCorp Common
Stock) of all such shares equals $5,000,000.
6. Section 6(a) of the Stock Restriction Agreement is
hereby amended by deleting the second and third
sentences thereof.
7. Subsections (b) and (c) of Section 6 of the Stock
Purchase Agreement are hereby amended to delete the
words "and Employees" from the second sentence of
Subsection (b) and the words "or Employee" in the
first and second line of Subsection (c).
8. Section 8(a) of the Stock Restriction Agreement is
hereby amended by deleting "Until the expiration of
WorldCorp's option to purchase the Employees' shares
of Common Stock pursuant to Section 6 hereof" and by
inserting "Until the Termination Date" in lieu thereof.
9. WorldCorp's interim partial exercises of the option
described in Section 7 of the Series A Stock
Purchase Agreement dated as of September 14, 1990,
between U.S. Order, Inc. and WorldCorp, Inc., as
amended, will not be deemed to be exercises for
purposes of Section 3(a)(ii) of the Stock
Restriction Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Amendment No. 1 as of the day and year first written above.
WORLDCORP, INC.
By:/s/ T. Coleman Andrews, III
Name: _______________________
Title: ______________________
/s/ William F. Gorog
William F. Gorog
/s/ Jonathan M. Gorog
Jonathan M. Gorog
/s/ Peter M. Gorog
Peter M. Gorog
/s/ Henry R. Nichols
Henry R. Nichols
/s/ William N. Melton
William N. Melton
/s/ John Porter
John Porter
AMENDMENT NO. 2 TO STOCK RESTRICTION AGREEMENT
AMENDMENT NO. 2, dated as of March 31, 1993 (this
"Amendment"), to the Stock Restriction Agreement, dated
as of September 14, 1990, as amended by Amendment No. 1
thereto dated as of August 29, 1991 (the "Stock
Restriction Agreement"), by and among WorldCorp, Inc. a
Delaware corporation ("Worldcorp"), William F. Gorog,
Jonathan M. Gorog, Peter M. Gorog, Henry R. Nichols,
William N. Melton and John Porter.
WHEREAS, the parties to the Stock Restriction
Agreement desire to amend certain provisions thereof.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained and for other
good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. DEFINED TERMS.
Capitalized terms used but not defined in this
Amendment shall have the meanings assigned to such terms
in the Stock Restriction Agreement.
2. AMENDMENTS.
(i) Section 6(a) of the Stock Restriction Agreement
is hereby amended to read in its entirety as follows:
(a) The exercise price for the Optioned Shares
(the "Exercise Price") shall consist of 400,000 shares of
Common Stock, par value $1.00 per share, of Worldcorp
("Worldcorp Common Stock"), plus such additional
consideration, if any, such that the aggregate value of
such 400,000 shares of WorldCorp Common Stock plus such
additional consideration equals $5,000,000. Any such
additional consideration shall be payable in cash, shares
of WorldCorp Common Stock or, following a US Order IPO
(as hereinafter defined), shares of Series A Preferred
Stock, or any combination of the foregoing. For purposes
hereof, WorldCorp Common Stock shall be valued based on
its closing price reported on the New York Stock Exchange
Composite Transaction Reporting System on the business
day prior to the exercise of the Option, or if WorldCorp
Common Stock is no longer listed on the New York Stock
Exchange, the closing price on the primary market on
which WorldCorp Common Stock is traded. For purposes
hereof, Series A Preferred Stock shall be valued by
reference to the value of the shares of Common Stock into
which such Series A Preferred Stock is convertible on the
business day prior to the exercise of the Option, and
Common Stock shall be valued based on its closing price
on such date on the primary market on which the Common
Stock is traded. As used herein, "US Order IPO" shall
mean an underwritten initial public offering of Common
Stock pursuant to an effective registration statement
under the Securities Act of 1933, as amended.
(ii) Section 6(e) of the Stock Restriction
Agreement is hereby amended to read in its entirety as
follows:
(e) The Option granted under this Section 6
shall terminate if notice of exercise is not given on or
prior to December 15, 1994; provided, that in the event a
US Order IPO is consummated prior to September 15, 1993,
then such Option shall terminate if notice of exercise is
not given on or prior to September 15, 1993; and
provided, further, that in the event a US Order IPO is
consummated on or after September 15, 1993 but on or
prior to December 15, 1994, then such Option shall
terminate upon the earlier of (i) the thirtieth business
day following the consummation of such US Order IPO and
(ii) December 15, 1994, if notice of exercise is not
given on or prior to such earlier date.
(iii) A new Section 6(f) is hereby added to the
Stock Restriction Agreement, which Section 6(f) shall
read in its entirety as follows:
(f) Notwithstanding anything in this
Agreement to the contrary, in the event that on or prior
to June 30, 1993, US Order shall not have retained a
nationally recognized investment banking firm in
connection with a US Order IPO, then the number of shares
of Common Stock held by the Founders which shall
constitute Option Shares for purposes of this Agreement
shall be reduced by 2% (such reduction to be made pro
rata among such Founders according to their respective
holdings of Common Stock).
3. EFFECT OF AMENDMENT.
The Stock Restriction Agreement shall remain in full
force and effect as modified by this Amendment.
4. HEADINGS.
The headings contained in this Amendment are for
reference purposes only, shall not be deemed a part of
this Amendment and shall not affect in any way the
meaning or interpretation of this Agreement.
5. COUNTERPARTS.
This Amendment maybe executed simultaneously in
counterparts, each of which will be deemed an original,
but all of which together will constitute one and the
same instrument.
IN WITNESS WHEREOF, this Amendment has been duly
executed and delivered by the parties hereto as of the
date first above written.
WORLDCORP, INC.
By: /s/ Scott Andrews
Name: Scott Andrews
Title: Chief Financial Officer
WILLIAM F. GOROG
/s/ William F. Gorog
JONATHAN M. GOROG
/s/ Jonathan M. Gorog
PETER M. GOROG
/s/ Peter M. Gorog
HENRY R. NICHOLS
/s/ Henry R. Nichols
WILLIAM N. MELTON
/s/ William N. Melton
JOHN PORTER
/s/ John Porter
AMENDMENT NO. 3 TO STOCK RESTRICTION AGREEMENT
AMENDMENT NO. 3, dated as of September 1, 1994 (this
"Amendment"), to the Stock Restriction Agreement, dated as of
September 14, 1990, as amended by Amendment No. 1 thereto dated
as of August 29, 1991 and Amendment No. 2 thereto dated as of
March 31, 1993 (the "Stock Restriction Agreement"), by and among
WorldCorp, Inc., a Delaware corporation ("WorldCorp"), William F.
Gorog, Jonathan M. Gorog, Peter M. Gorog, Henry R. Nichols,
William N. Melton and John Porter.
WHEREAS, the parties to the Stock Restriction Agreement
desire to amend certain provisions thereof.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. DEFINED TERMS.
Capitalized terms used but not defined in this Amendment
shall have the meanings assigned to such terms in the Stock
Restriction Agreement.
2. AMENDMENTS.
(i) The first paragraph of Section 6 of the Stock
Restriction Agreement is hereby amended to read in its entirety
as follows:
"6. OPTION TO PURCHASE FOUNDERS' SHARES. Subject to
the provisions of Section 6(b) hereof, the Founders hereby
grant to WorldCorp the option (the "Option"), exercisable
after September 10, 1991, to purchase 4,757,679 of the
outstanding shares of Common Stock held by such Founders
(the "Optioned Shares")."
(ii) Section 6(a) of the Stock Restriction Agreement is
hereby amended to read in its entirety as follows:
"(a) The exercise price of the Optioned Shares (the
"Exercise Price") shall be $3,885,249 payable as follows:
October 14, 1994 $ 400,000 Cash
171,261 WOA Shares
January 2, 1995 $1,394,500 Cash
$ 922,875 Worth of WA shares
(see below for Valuation)
For purposes hereof, WorldCorp Common Stock will be valued
as follows: (1) any WorldCorp Common Stock to be issued on
October 14, 1994 shall be valued based on the average
closing price reported on the New York Stock Exchange
("NYSE") for the 30 day period from August 3, 1994 through
September 2, 1994; and (2) any WorldCorp Common Stock
issued on January 2, 1995 shall be valued based on the
average closing price reported on the NYSE for the 30 day
period from December 2, 1994 through January 2, 1995."
(iii) Section 6(e) of the Stock Restriction Agreement is
hereby amended to read in its entirety as follows:
"(e) WorldCorp's option to purchase the Optioned Shares,
granted under this Section 6, shall be exercised at the
times, and in the manner, specified in Section 6(a)
hereof."
3. EFFECT OF AMENDMENT.
The Stock Restriction Agreement shall remain in full force
and effect as modified by this Amendment.
4. HEADINGS.
The headings contained in this Amendment are for reference
purposes only, shall not be deemed a part of this Amendment
and shall not affect in any way the meaning or
interpretation of this Agreement.
5. COUNTERPARTS.
This Amendment may be executed simultaneously in
counterparts, each of which will be deemed an original, but
all of which together will constitute one and the same
instrument.
IN WITNESS WHEREOF, this Amendment has been duly executed
and delivered by the parties hereto as of the date first
above written.
WORLDCORP, INC.
By:/s/ T. Coleman Andrews, III
Name: T. Coleman Andrews, III
President and Chief
Executive Officer
WILLIAM F. GOROG
/s/ William F. Gorog
JONATHAN M. GOROG
/s/ Jonathan M. Gorog
PETER M. GOROG
/s/ Peter M. Gorog
HENRY R. NICHOLS
/s/ Henry R. Nichols
WILLIAM N. MELTON
/s/ William N. Melton
JOHN PORTER
/s/ John Porter
AMENDMENT NO. 4 TO STOCK RESTRICTION AGREEMENT
AMENDMENT NO. 4, dated as of December 1, 1994 (this
"Amendment"), to the Stock Restriction Agreement, dated as
of September 14, 1990, as amended by Amendment No. 1 thereto
dated as of August 2'9, 1991, Amendment No. 2 thereto dated
as of March 31, 1993, and Amendment No. 3 dated September 1,
1994 (the "Stock Restriction Agreement"), by and among
WorldCorp, Inc., a Delaware corporation ("WorldCorp"),
William F. Gorog, Jonathan M. Gorog, Peter M. Gorog, Henry
R. Nichols, William N. Melton and John Porter.
WHEREAS, the parties to the Stock Restriction Agreement
desire to amend certain provisions thereof.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained and for other good
and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINED TERMS.
Capitalized terms used but not defined in this
Amendment shall have the meanings assigned to such terms in
the Stock Restriction Agreement.
2. AMENDMENTS.
(i) The first paragraph of Section 6 of the Stock
Restriction Agreement is hereby amended to read in its
entirety as follows:
"6. OPTION TO PURCHASE FOUNDERS' SHARES.
Subject to the provisions of Section 6(b) hereof,
the Founders hereby grant to WorldCorp the option
(the "Option"), exercisable after September 10,
1991, to purchase 4,757,679 of the outstanding
shares of Common Stock held by such Founders (the
"Optioned Shares")."
(ii) Section 6(a) of the Stock Restriction Agreement is
hereby amended to read in its entirety as follows:
"(a) The exercise price of the Optioned Shares (the
"Exercise Price") shall be $3,885,249 payable as
follows:
October 14, 1994 $ 400,000 Cash
171,261WOA Shares
(see below for Valuation
and issue dates)
February 2, 1995 $1,394,500 Cash
$ 922,875 Worth of WOA shares
(see below for Valuation
and issue dates)
For purposes hereof, WorldCorp Common Stock will be valued
as follows: (1) any WorldCorp Common Stock to be issued
based on the October 14, 1994 exercise shall be valued
based on the average closing price reported on the New York
Stock Exchange ("NYSE") for the 30 day period from August
3, 1994 through September 2, 1994, and shall be issued when
the Company has filed with the Securities and Exchange
Commission ("SEC") an effective Registration Statement on
Form S-1, S-2 or S-3 covering the optioned shares; and (2)
any WorldCorp Common Stock to be issued based on the
February 2, 1995 exercise shall be valued based on the
average closing price reported on the NYSE for the 30 day
period from December 2, 1994 through January 2, 1995, and
shall be issued when the Company has filed with the SEC an
effective Registration Statement on Form S-1, S-2 or S-3
covering the optioned shares.
(iii) Section 6(e) of the Stock Restriction Agreement is
hereby amended to read in its entirety as follows:
"(e) WorldCorp's option to purchase the Optioned Shares,
granted under this Section 6, shall be exercised at the
times, and in the manner, specified in Section 6(a)
hereof."
3. EFFECT OF AMENDMENT.
The Stock Restriction Agreement shall remain in full force
and effect as modified by this Amendment.
4. HEADINGS.
The headings contained in this Amendment are for reference
purposes only, shall not be deemed a part of this Amendment and
shall not affect in any way the meaning or interpretation of this
Agreement.
5. COUNTERPARTS.
This Amendment may be executed simultaneously in
counterparts, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Amendment has been duly executed
and delivered by the parties hereto as of the date first above
written.
WORLDCORP, INC.
By:/s/ T. Coleman Andrews, III
Name: T. Coleman Andrews, III
President and Chief Executive
Officer
WILLIAM F. GOROG
/s/ William F. Gorog
JONATHAN M. GOROG
/s/ Jonathan M. Gorog
PETER M. GOROG
/s/ Peter M. Gorog
HENRY R. NICHOLS
/s/ Henry R. Nichols
WILLIAM N. MELTON
/s/ William N. Melton
JOHN PORTER
/s/ John Porter
EXHIBIT 4.6
SCOTT & STRINGFELLOW, INC.
CUSTOMER AGREEMENT
In consideration for you (the "Broker") opening
or maintaining one or more accounts (the "Account") for
the undersigned (the "Customer"), the Customer agrees to
the terms and conditions contained in this Agreement.
The heading of each provision of this Agreement is for
descriptive purposes only and shall not be deemed to
modify or qualify any of the rights or obligations set
forth in each such provision. For purposes of this
Agreement, "securities and other property" means, but is
not limited to, money, securities, financial instruments
and commodities of every kind and nature and related
contacts and options, except that the provisions of
paragraph 21 herein (the arbitration clause) shall not
apply to commodities accounts. This definition includes
securities or other property currently or hereafter held
carried or maintained by you or any of your affiliates,
in your possession or control, or in the possession or
control of any such affiliate, for any purpose, in and
for any of my accounts now or hereafter opened, including
any account in which I may have an interest.
1. APPLICABLE RULES AND REGULATIONS. All
transactions in the Customer's Account shall be subject
to the constitution, rules, regulations, customs and
usages of the exchange or market, and its clearing house,
if any, where the transactions are executed by the Broker
or its agents, including its subsidiaries and affiliates.
Also, where applicable, the transactions shall be subject
(a) to the provisions of (1) the Securities Exchange Act
of 1934, as amended, and (2) the Commodities Exchange
Act, as amended; and (b) to the rules and regulations of
(1) the Securities Exchange Commission, (2) the Board of
Governors of the Federal Reserve System and (3) the
Commodities Futures Trading Commission.
2. AGREEMENT CONTAINS ENTIRE
UNDERSTANDING/ASSIGNMENT. This Agreement contains the
entire understanding between the Customer and the Broker
concerning the subject matter of this Agreement.
Customer may not assign the rights and obligations
hereunder without first obtaining the prior written
consent of the Broker.
3. SEVERABILITY. If any provision of this
Agreement is to be held invalid, void or unenforceable by
reason of any law, rule, administrative order or judicial
decision, that determination shall not affect the
validity of the remaining provisions of this Agreement.
4. WAIVER. Except as specifically permitted
in this Agreement, no provision of this Agreement can be,
nor be deemed to be, waived, altered, modified or amended
unless such is agreed to in a writing signed by the
Broker.
5. DELIVERY OF SECURITIES. Without abrogating
any of the Broker's rights under any other portion of
this Agreement and subject to any indebtedness of the
Customer to the Broker, the Customer is entitled, upon
appropriate demand, to receive physical delivery of fully
paid securities in the Customer's Account.
6. LIENS. All securities and other property
of the Customer in any account in which the Customer has
an interest shall be subject to a lien for the discharge
of any and all indebtedness or any other obligation of
the Customer to the Broker. All securities and other
property of the Customer shall be held by the Broker as
security for the payment of any such obligations or
indebtedness to the Broker in any Account that the
Customer may have an interest, and the Broker subject to
applicable law may, at any time and without prior notice
to the Customer, use and/or transfer any or all
securities and other property interchangeably in any
Account(s) in which the Customer has an interest (except
regulated commodity Accounts).
7. PLEDGE OF SECURITIES AND OTHER PROPERTY.
Within the limitations imposed by applicable laws, rules
and regulations, all securities and other property of the
Customer may be pledged and repledged and hypothecated
and rehypothecated by the Broker from time to time,
without notice to the Customer, either separately or in
common with such other securities and other property of
other bona fide customers of the Broker, for any amount
due to the Broker in the Customer's Account(s). The
Broker may do so without retaining in its possession or
under its control for delivery a like amount of similar
securities or other property.
8. INTEREST. Debit balances of the Account(s)
of the Customer shall be charged with interest in
accordance with the Broker's established custom, as
disclosed to the Customer pursuant to the provisions of
Rule 10b-16 of the Securities Exchange Act of 1934.
I HAVE READ AND UNDERSTAND THE STATEMENT OF
CREDIT PRACTICES DESCRIBING INTEREST CHARGES PRINTED ON
THE REVERSE SIDE.
9. DISCLOSURES REGARDING LIQUIDATIONS AND
COVERING POSITIONS. The Customer should clearly
understand that, notwithstanding a general policy of
giving customers notice of a margin deficiency, the
Broker is not obligated to request additional margin from
the Customer in the event the Customer's account falls
below minimum maintenance requirements. More
importantly, there may/will be circumstances where the
Broker will liquidate securities and/or other property in
the account without notice to the Customer to ensure that
minimum maintenance requirements are satisfied.
10. LIQUIDATIONS AND COVERING POSITIONS. The
Broker shall have the right in accordance with its
general policies regarding margin maintenance
requirements to require additional collateral on the
liquidation of any securities and other property whenever
Broker's discretion considers it necessary for its
protection including in the event of, but not limited to:
the failure of the Customer to promptly meet any call for
additional collateral; the filing of a petition in
bankruptcy by or against the Customer; the appointment of
a receiver is filed by or against the Customer; an
attachment is levied against any account of the Customer
or in which the Customer has an interest or; the
Customer's death. In such event, the Broker is
authorized to sell any and all securities and other
property in any account of the Customer whether carried
individually or jointly with others, to buy all
securities or other property which may be short in such
account(s), to cancel any open orders and to close any or
all outstanding contracts, all without demand for margin
or additional margin, other notice of sale or purchase,
or other notice or advertisement each of which is
expressly waived by the Customer. Any such sales or
purchases may be made at Broker's discretion on any
exchange or other market where such business is usually
transacted or at public auction or private sale, and
Broker may be the purchaser for Broker's own account. It
is understood a prior demand, or call, or prior notice of
the time and place of such sale or purchase shall not be
considered a waiver of Broker's right to sell or buy
without demand or notice as herein provided.
11. MARGIN. The Customer agrees to maintain
in all accounts with the Broker such positions and
margins as required by all applicable statutes, rules,
regulations, procedures and custom, or as the Broker
deems necessary or advisable. The Customer agrees to
promptly satisfy all margin and maintenance calls.
12. SATISFACTION OF INDEBTEDNESS. The
Customer agrees to satisfy, upon demand, any
indebtedness, and to pay any debit balance remaining when
the Customer's Account is closed, either partially or
totally. Customer Account(s) may not be closed without
Broker first receiving all securities and other property
for which the Account is short and all funds to pay in
full for all securities and other property in which the
Account(s) are long.
13. TRANSACTIONS AND SETTLEMENTS. All orders
for the purchase or sale of securities and other property
will be authorized by the Customer and executed with the
understanding that an actual purchase or sale is intended
and that it is the Customer's intention and obligation in
every case to deliver certificates or commodities to
cover any and all sales or to pay for any purchase upon
the Broker's demand. If the Broker makes a short sale of
any securities and other property at the Customer's
direction or if the Customer fails to deliver to the
Broker any securities and other property that the Broker
has sold at the Customer's direction, the Broker is
authorized to borrow the securities and other property
necessary to enable the Broker to make delivery and the
Customer agrees to be responsible for any cost or loss
the Broker may incur, or the cost of obtaining the
securities and other property if the Broker is unable to
borrow it. The Broker is the Customer's agent to
complete all such transactions and is authorized to make
advances and expend monies as are required.
14. SALES BY CUSTOMER. The Customer
understands and agrees any order to sell "short" will be
designated as such by the Customer, and that the Broker
will mark the order as "short." All other sell orders
will be for securities owned ("long"), at that time, by
the Customer. By placing the order the Customer affirms
that he will deliver the securities on or before the
settlement date.
15. BROKER AS AGENT. The Customer understands
that the Broker is acting as the Customer's agent, unless
the Broker notifies the Customer, in writing before the
settlement date for the transaction, that the Broker is
acting as a dealer for its own account or as agent for
some other person.
16. CONFIRMATIONS AND STATEMENTS.
Confirmations of transactions and statements for the
Customer's Account(s) shall be binding upon the Customer
if the Customer does not object, in writing, within ten
days after receipt by the Customer. Notice or other
communications, including margin and maintenance calls
delivered or mailed to the address given below shall,
until the Broker has received notice in writing of a
different address, be deemed to have been personally
delivered to the Customer whether actually received or
not.
17. SUCCESSORS. Customer hereby agrees that
this Agreement and all the terms thereof shall be binding
upon Customer's heirs, executors, administrators,
personal representatives, and assigns. This Agreement
shall inure to the benefit of the Broker's present
organization, and any successor organization,
irrespective of any change or changes at any time in the
personnel thereof, for any cause whatsoever.
18. CHOICE OF LAWS. THIS AGREEMENT SHALL BE
DEEMED TO HAVE BEEN MADE IN THE STATE OF VIRGINIA AND
SHALL BE CONSTRUED, AND THE RIGHTS AND LIABILITIES OF THE
PARTIES DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE
STATE OF VIRGINIA.
19. CAPACITY TO CONTRACT, CUSTOMER
AFFILIATION. By signing below, the Customer represents
that he/she is of legal age, and that he/she is not an
employee of any exchange, or of any corporation of which
any exchange owns a majority of the capital stock, or of
a member of any exchange, or of a member firm or member
corporation registered on any exchange, or of a bank,
trust company, insurance company or of any corporation,
firm or individual engaged in the business of dealing,
either as broker or as principal, in securities, bills of
exchange, acceptances or other forms of commercial paper,
and that the Customer will promptly notify the Broker in
writing if the Customer is now or becomes so employed.
The Customer also represents that no one except the
Customer has an interest in the account or accounts of
the Customer with you.
20. DISCLOSURES TO ISSUERS. Under Rule 14b-
1(c) of the Securities Exchange Act of 1934, we are
required to disclose to an issuer the name, address and
securities position of our customers who are beneficial
owners of that issuer's securities unless the customer
objects. Therefore, please check one of the boxes below:
( ) Yes. I do object to the disclosure of such
information.
(X) No. I do not object to the disclosure of such
information.
21. LOAN OR PLEDGE OF SECURITIES. THE
CUSTOMER HEREBY AUTHORIZES THE BROKER TO LEND EITHER TO
ITSELF OR TO OTHERS ANY SECURITIES HELD BY THE BROKER IN
THE CUSTOMER'S MARGIN ACCOUNT AND TO CARRY SUCH PROPERTY
IN ITS GENERAL LOANS. SUCH PROPERTY MAY BE PLEDGED,
REPLEDGED, HYPOTHECATED OR REHYPOTHECATED EITHER
SEPARATELY OR IN COMMON WITH OTHER SUCH PROPERTY FOR ANY
AMOUNTS DUE TO THE BROKER THEREON OR FOR A GREATER SUM
AND THE BROKER SHALL HAVE NO OBLIGATION TO RETAIN A LIKE
AMOUNT OF SIMILAR PROPERTY IN ITS POSSESSION AND CONTROL.
22. Upon the effectiveness of an S-3
registration statement filed by Customer with respect to
the pledged collateral, and receipt of opinion letters
satisfactory to Scott & Stringfellow, Broker will lend
funds pursuant to the terms of this Customer Agreement.
23. This Customer Agreement has been modified
by and is subject to the provisions of the letter
agreement from Scott & Stringfellow to the WorldCorp ESOP
of even date herewith, and the Registration Rights
Agreement between Scott & Stringfellow and WorldCorp and
WorldCorp's Guarantee Agreement, all of even date herewith.
/s/ William F. Gorog
WorldCorp Employee Savings
and Stock Ownership Trust
William F. Gorog, Trustee
13873 Park Center Road
Herndon, VA 22071
METHOD OF COMPUTING INTEREST ON YOUR ACCOUNT
INTEREST CHARGE
An interest charge will be imposed for any
statement period during which your average daily debit
balance is greater than zero. The normal statement
period will end on the last Friday in each month, but
will end on the last business day of December. The
statement period may be for some fraction of a normal
statement period on opening or closing your account.
Interest will ordinarily be calculated through
the last Friday of the normal statement period and will
ordinarily be charged to the account on the last Friday
of the normal statement period. In December, interest
will ordinarily be calculated through the last business
day of December and will ordinarily be charged to the
account on the last business day of December.
DETERMINATION OF INTEREST RATE
The annual rate of interest to be applied each
time interest is charged to your account will depend upon
and will vary with the size of your average daily debit
balance for the period and with the average call money
rate in effect during the interest period, in accordance
with the following schedule:
If Your Average Daily Debit The Annual Interest Rate
Balance for the Period is: Applied Will Be:
$0 to $24,999 1 3/4 above the average
call money rate for the
period
$25,000 and above 1 1/2 above the average
call money rate for the
period
The call money rate is based on published rates
for call money lent brokers on stock exchange collateral
or call money rates quoted by commercial banks, as
determined by Scott & Stringfellow Investment Corp.
Under no circumstance will the call money rate
used to determine the interest rate exceed the cost of
borrowing money. "Cost of borrowing money" shall be the
higher of (a) the interest rate charged Scott &
Stringfellow Investment Corp. by a bank doing business in
Virginia on loans collateralized by securities; or (b)
the interest rate charged Scott & Stringfellow Investment
Corp. by a bank doing business in Virginia on loans for
business purposes.
Your average daily debit balance for each
interest period will be computed by adding each daily
debit balance in your account and dividing that sum by
the number of days in that period.
You will be given at least 30 days prior
written notice of any changes in the terms and conditions
under which interest is charged other than changes which
are explained herein, are required by law or result in
lower interest charges.
CALCULATION OF INTEREST CHARGES
To compute the interest charge to be made to
your account for any period of time, multiply the average
daily debit balance for such period by the applicable
interest rate and by the number of days in the period and
divide that product by 360.
Any credit or debit balance in the cash account
will be combined with the balance in the margin account
for the purpose of computing interest.
A credit balance in any short account will not
reduce the average daily debit balance in your margin
account because such credit balances are normally used to
collateralize the borrowing of stock to make delivery
against the short sale. However, short sale positions
will be marked to the market weekly and such changes
resulting therefrom will affect the debit balance in your
margin account. Therefore, if such change results in a
credit, such credit will be transferred to your margin
account as a credit; and conversely, if such change
results in a debit, such debit will be transferred as a
debit to your margin account.
COLLATERAL
By virtue of the Customer's Agreement which you
have executed, or will execute upon opening a margin
account with us, we have or will have a general lien on
all monies, securities or other properties we may at any
time be carrying for you or which may be in our
possession for any purpose, including safekeeping, to
secure the discharge of all your obligations to us.
Notwithstanding you may have deposited monies,
securities or other properties with us sufficient to
satisfy the margin requirements of any law, rule or
regulation enacted or promulgated by any government
regulatory body or authority, we expressly reserve the
right to require you at any time, and from time to time,
to deliver to us such additional collateral as we, in our
sole discretion, may deem necessary to adequately secure
us in the discharge of all your obligations to us.
This notice is written to conform with
Securities and Exchange Commission Rule 10b-16.
Should you have any questions, please let us
suggest that you talk to your Investment Broker.
SCOTT & STRINGFELLOW, INC.
P.O. BOX 1575
RICHMOND, VA 23213
(804) 643-1811
(800) 552-7757
EXHIBIT 4.7
GUARANTEE AGREEMENT
THIS GUARANTEE AGREEMENT (the "Agreement") is made
this 11th day of January, 1995, by Worldcorp, Inc., a
corporation organized under the laws of the State of
Delaware (the "Guarantor") for the benefit of Scott &
Stringfellow, Inc. (the "Lender").
WHEREAS, the WorldCorp Employee Savings and Stock
Ownership Trust (the "Borrower") has applied to the
Lender for a margin loan (the "Loan") which is to be
advanced pursuant to the terms of a Customer Agreement of
even date herewith (the Customer Agreement, together with
any and all amendments and modifications thereto,
renewals and extensions thereof and substitutes therefor
are herein collectively referred to as the "Loan
Agreement"); and
WHEREAS, the Guarantor has requested the Lender to
enter into the Loan Agreement with the Borrower and to
make the Loan to the Borrower pursuant thereto; and
WHEREAS, the Lender has required, as a condition of
making the Loan, the execution of this Agreement by the
Guarantor.
NOW, THEREFORE, in order to induce the Lender to
make the Loan to Borrower, the Guarantor covenants and
agrees with the Lender as follows:
I. The Guaranty.
1. The Guarantor hereby unconditionally and
irrevocably guarantees to the Lender:
A. the payment in full (and not merely the
collectibility) of the principal of the Loan and the
interest thereon, and the full amount of any margin call,
in each case when due and payable according to the terms
of the Loan Agreement;
B. the payment in full of all other sums and
charges which at any time may be due and payable in
accordance with the Loan Agreement; and
C. the due and punctual performance of all of
the other terms, covenants and conditions contained in
the Loan Agreement.
This Guarantee is not limited by the non-recourse
nature of the Loan Agreement. In this regard, the
amount of the principal, interest, margin calls and
other sums payable under the Loan Agreement shall be
determined without regard to the non-recourse nature of
the Loan Agreement, and the obligations of the Borrower
shall not be deemed to be limited by the non-recourse
nature of the Loan Agreement.
2. The obligations and liabilities of the Guarantor
under this Agreement shall be absolute, unconditional,
irrespective of the genuineness, validity, priority,
regularity or enforceability of the Loan Agreement or any
other circumstance which might otherwise constitute a
legal or equitable discharge of a surety or guarantor.
The Guarantor expressly agrees that the Lender may, in
its sole and absolute discretion, without notice to or
further assent of the Guarantor and without in any way
releasing, affecting or in any way impairing the
obligation and liabilities of the Guarantor hereunder:
A. waive compliance with, or any defaults
under, or grant any other indulgences under or with
respect to the Loan Agreement;
B. grant extensions or renewals of or with
respect to the Loan Agreement;
C. effect any release, subordination,
compromise or settlement in connection with the Loan
Agreement; and
D. make advances for the purpose of performing
any term, provision or covenant contained in the Loan
Agreement with respect to which the Borrower shall then
be in default.
3. The obligations and liabilities of the Guarantor
under this Agreement shall be primary, direct and
immediate, shall not be subject to any counterclaim,
recoupment, set off, reduction or defense based upon any
claim that the Guarantor may have against the Borrower
and/or the Lender and shall not be conditional or
contingent upon pursuit or enforcement by the Lender of
any remedies it may have against the Borrower with
respect to the Loan Agreement, whether pursuant to the
terms thereof or by operation of law. Without limiting
the generality of the foregoing, the Lender shall not be
required to make any demand upon the Borrower, or to sell
the Collateral or otherwise pursue, enforce or exhaust
its remedies against the Borrower or the Collateral
either before, concurrently with or after pursuing or
enforcing its rights and remedies hereunder. Any one or
more successive or concurrent actions or proceedings may
be brought against the Guarantor under this Agreement,
either in the same action, if any, brought against the
Borrower or in separate actions or proceedings, as often
as the Lender may deem expedient or advisable. Without
limiting the forgoing, it is specifically understood that
any modification, limitation or discharge of any of the
liabilities or obligations of the Borrower, the Guarantor
or any obligor under the Loan Agreement, arising out of,
or by virtue of, any bankruptcy, arrangement,
reorganization or similar proceeding for relief of
debtors under federal or state law initiated by or
against the Borrower or the Guarantor or any obligor
under the Loan Agreement shall not modify, limit, lessen,
reduce, impair, discharge, or otherwise affect the
liability of the Guarantor hereunder in any manner
whatsoever, and this Agreement shall remain and continue
in full force and effect. It is the intent and purpose
of this Agreement that the Guarantor shall and does
hereby waive all rights and benefits which might accrue
to the Guarantor by reason of any such proceeding, and
the Guarantor agrees that it shall be liable for the full
amount of the obligations and liabilities under this
Agreement, regardless of, and irrespective to, any
modification, limitation or discharge of the liability of
the Borrower, the Guarantor or any obligor under the Loan
Agreement, that may result from such proceedings.
4. The Guarantor hereby unconditionally,
irrevocably and expressly waives:
A. presentment and demand for payment of the
principal or of the interest under the Loan and protest
of non-payment;
B. notice of acceptance of this Agreement and
of presentment, demand and protest thereof;
C. notice of any default hereunder or under
the Loan Agreement and notice of all indulgences except
such notices as are specifically provided for in this
Agreement;
D. demand for observance, performance or
enforcement of any of the terms or provisions of this
Agreement or the Loan Agreement;
E. any right or claim of right to cause a
marshalling of the assets of the Borrower; and
F. all other notices and demands otherwise
required by law which the Guarantor may lawfully waive.
5. In the event the Lender shall commence any
action or proceeding for the enforcement of this
Agreement, then the Guarantor will reimburse the Lender,
promptly upon demand, for any and all expenses incurred
by the Lender in connection with such action or
proceeding including, without limitation, reasonable
attorney's fees together with interest thereon.
II. Representation and Warranties
1. The Guarantor:
A. is duly organized, validly existing and in
good standing under the laws of the State of its
organization;
B. has the power and authority to own its
properties and to carry on its business as now being
conducted;
C. is qualified to do business in every
jurisdiction in which the nature of its business or its
properties makes such qualification necessary; and
D. is in material compliance with all laws,
regulations, ordinances and orders of public authorities
applicable to it.
2. The execution, delivery and performance by the
Guarantor of this Agreement (a) is within the powers of
the Guarantor; (b) has been duly authorized by all
requisite action of the Guarantor; (c) has received all
necessary governmental and other approvals; and (d) will
not violate any provision of law, any order of court or
other agency of government, the articles of incorporation
or by-laws of the Guarantor or any indenture, agreement
or other instrument to which the Guarantor is a party or
by which the Guarantor or any of its property is bound or
be in conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default
under any such indenture, agreement, or other instrument
or result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any
of their property or assets except as contemplated in
this Agreement.
III. Affirmative Covenants
1. The Guarantor will do any and all things
necessary to preserve and keep in full force and effect
its existence, franchises, rights, privileges and trade
names as a corporation under the laws of the State of its
incorporation and in every jurisdiction in which the
nature of its business or its properties makes
qualification to do business necessary.
2. The Guarantor will make, execute, acknowledge
and deliver all and every such further acts and
assurances as the Lender shall from time to time require
for confirming or carrying out the intentions or
facilitating the performance of the terms of this
Agreement.
IV. Miscellaneous
1. In the event any provision of this Agreement (or
any part of any provision) is held by a court of
competent jurisdiction to be invalid, illegal, or
unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any
other provision (or remaining part of the affected
provision) of this Agreement; but this Agreement shall be
construed as if such invalid, illegal, or unenforceable
provision (or part thereof) had not been contained in
this Agreement, but only to the extent it is invalid,
illegal, or unenforceable.
2. All of the grants, covenants, terms, provisions
and conditions of this Agreement shall inure to the
benefit of, and be enforceable by, the Lender and its
successors and assigns, and shall be binding upon, and
enforceable against, the Guarantor and its successors and
assigns.
3. No modification or waiver of any provision of
this Agreement shall in any event be effective unless the
same shall be in writing, and then such waiver or consent
shall be effective only in the specific instance and for
the purposes for which given. None of the terms or
provisions of this Agreement shall be deemed to have been
abrogated or waived by reason of any failure or failures
to enforce the same or by any course of conduct by the
Lender.
4. The captions and headings contained in this
Agreement are included herein for convenience of
reference only and shall not be considered a part hereof
and are not in any way intended to define, limit or
enlarge the terms hereof.
5. This Agreement may be executed in any number of
counterparts, each of which shall be considered an
original for all purposes; provided, however, that all
such counterparts shall together constitute one and the
same instrument.
6. This Agreement shall be governed by the laws of
the Commonwealth of Virginia.
7. All notices, demands, requests and other
communications required pursuant to the provisions of
this Agreement shall be in writing and shall be deemed to
have been properly given or served for all purposes when
delivered by hand, or sent by overnight courier or by
certified mail, postage prepaid, return receipt
requested, to the respective addresses as follows:
(a) If to Lender:
Scott & Stringfellow, Inc.
909 East Main Street
Richmond, VA 23219
Attention: Steven DeLaney
(b) If to Guarantor:
WorldCorp, Inc.
13873 Park Center Road
Herndon, VA 22071
Attention: General Counsel
Any of the parties hereto may designate a change of
address by notice in writing to the other parties.
Whenever in this Agreement the giving of notice by mail
or otherwise is required, the giving of such notice may
be waived in writing by the person or persons entitled to
receive such notice.
8. This Agreement shall be a continuing one and
shall be binding upon the Guarantor regardless of how
long before or after the date hereof any of the
obligations and liabilities were or are incurred. This
Agreement shall end on the date when, after termination
of the Loan in accordance with the provisions thereof,
there shall be no obligations or liabilities under this
Agreement outstanding.
WITNESS the signature and seal of an authorized
officer of the Guarantor as of the day and year first
above written.
WITNESS (OR ATTEST): WORLDCORP, INC.
/s/ Andrew M. Paalborg
_________________________ /s/ T. Coleman Andrews
By:__________________________
T. Coleman Andrews
Chief Executive Officer and
President
STATE/COMMONWEALTH OF VIRGINIA
COUNTY/CITY OF FAIRFAX, TO WIT:
I HEREBY CERTIFY, that on this 11th day of January,
1995, before me, a Notary Public of said
State/Commonwealth, personally appeared T. Coleman
Andrews, III, who acknowledged himself to be the Chief
Executive Officer and President of WorldCorp, Inc., a
Delaware corporation, known to me to be the person whose
name is subscribed to the foregoing instrument and
acknowledged that he executed the same for the purposes
therein contained as the fully authorized Chief Executive
Officer and President of said corporation by signing the
name of the corporation by himself as Chief Executive
Officer and President.
WITNESS my hand and Notarial Seal.
/s/ Carol Bengston
_____________________________
Notary Public
My commission expires:
EXHIBIT 4.8
WORLDCORP, INC.
REGISTRATION RIGHTS AGREEMENT
JANUARY 11, 1995
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of
January 11, 1995, by and between WORLDCORP, INC., a
Delaware corporation (the "Company"), and SCOTT &
STRINGFELLOW, INC. (the "Lender").
WHEREAS, the Lender has made a term loan in the
amount of approximately $1,350,000 (the "Loan") to
WORLDCORP EMPLOYEE SAVINGS AND STOCK OWNERSHIP TRUST (the
"Borrower"), which Loan is (i) secured by a pledge by the
Borrower to the Lender of an aggregate of 361,401 shares
of Common Stock of the Company owned of record by the
Borrower (the "Pledged Shares") and (ii) guaranteed by
the Company; and
WHEREAS, as a condition to the making of the
Loan by the Lender to the Borrower, the Company has
agreed to file a registration statement on Form S-3 (the
"Registration Statement") with the Securities and
Exchange Commission (the "SEC") pursuant to the
Securities Act of 1933, as amended (the "Act"); and
WHEREAS, the parties hereto wish to set forth
certain agreements and understandings regarding the
Registration Statement and the registration rights that
have been granted to the Lender;
NOW, THEREFORE, the parties hereto agree as
follows:
1. Definition. For purposes of this
Agreement, the term "Registrable Securities" means
(i) the Pledged Shares, and (ii) any securities issued or
issuable as a dividend or other distribution with respect
to any of the Pledged Shares; provided, however, that as
to any particular security or securities that are
contained in the Registrable Securities, such securities
shall cease to be Registrable Securities when (i) they
are released from the pledge in favor of the Lender, (ii)
they have been sold in accordance with the Registration
Statement or (iii) they have been sold to the public
pursuant to Rule 144 (or any successor provision) under
the Act.
2. Obligations of the Company. The Company
agrees:
2.1. To keep the Registration Statement
effective for so long as there remain any Registrable
Securities.
2.2. To promptly prepare and file with
the SEC such amendments to the Registration Statement and
such supplements to any prospectus or preliminary
prospectus included in the Registration Statement as may
be necessary to comply with the provisions of the Act
with respect to the disposition of any or all of the
Registrable Securities, and to use its best efforts to
have any such amendment declared effective by the SEC.
2.3. To furnish to the Lender such
numbers of copies of any prospectus or preliminary
prospectus included in the Registration Statement and
such other documents as the Lender may reasonably request
in order to facilitate the disposition of the Registrable
Securities.
2.4. To use its best efforts to register
and qualify the Registrable Securities under the
securities or "Blue Sky" laws of such jurisdictions as
shall be reasonably requested by the Lender; provided,
however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify
to do business or to file a general consent to service of
process in any such jurisdiction.
3. Obligations of the Lender. The Lender
agrees:
3.1. That the information furnished by it
to the Company regarding itself, the number of
Registrable Securities pledged to or held by it, and the
intended method of disposition of the Registrable
Securities was and is true and correct and will be
updated by the Lender to the Company as necessary in
order to enable the Company to maintain the effectiveness
of the Registration Statement.
3.2. Not to make any sale of the
Registrable Securities without causing its prospectus
delivery requirements under the Act to be satisfied.
3.3. To notify the Company promptly (and
in any event a reasonable time in advance of any sale) in
the event the Lender enters into any material arrangement
with any broker-dealer or other underwriter with respect
to the Registrable Securities or otherwise plans to offer
or sell any of the Registrable Securities in a manner
that would require the prospectus included in the
Registration Statement to be supplemented or the
Registration Statement to be amended.
3.4. That there may occasionally be
periods (each, a "black-out period") when the Company
must suspend the use of the prospectus included in the
Registration Statement until such time as an amendment to
the Registration Statement has been filed by the Company
and declared effective by the SEC or until such time as a
supplement to such prospectus has been prepared and filed
with the SEC, or until such time as the Company has filed
an appropriate report with the SEC pursuant to the
Securities Exchange Act of 1934, as amended (the "1934
Act"). The Company will use its best efforts to prevent
any black-out period from exceeding 10 days. The Lender
hereby covenants that it will not sell any Registrable
Securities pursuant to said prospectus during any black-
out period. A black-out period shall be deemed to
commence at the time the Company gives the Lender notice
of the suspension of the use of such prospectus and to
end at the time the Company gives the Lender notice that
the Lender may thereafter effect sales pursuant to such
prospectus.
4. Registration Expenses. All expenses,
other than underwriting discounts and commissions,
incurred in connection with the registration of the
Registrable Securities, including, without limitation,
all registration, filing and qualification fees,
accounting fees, fees and disbursements of counsel for
the Company, and the reasonable fees and disbursements of
one counsel for the Lender shall be borne by the Company.
5. Indemnification.
5.1. The Company agrees to indemnify and
hold harmless the Lender and its officers and directors,
any underwriter (as defined in the Act) of the
Registrable Securities and each person, if any, who
controls the Lender or such underwriter within the
meaning of the Act or the 1934 Act (each, an
"Indemnitee"), against any losses, claims, damages or
liabilities (or actions in respect thereof) to which they
may become subject under the Act, the 1934 Act, any state
securities law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the
following statements, omissions or violations
(collectively, a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained
in the Registration Statement, any preliminary prospectus
or prospectus contained therein or any amendments or
supplements thereto, (ii) 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, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any
state securities law or any rule or regulation
promulgated under the Act or the 1934 Act or any state
securities law; and the Company will pay to each such
Indemnitee, as incurred, any legal or other expenses
reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the
indemnity agreement contained in this Section 5.1 shall
not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is
effected without the consent of the Company, which
consent shall not be unreasonably withheld, nor shall the
Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs
in reliance upon and in conformity with written
information furnished expressly for use in connection
with such registration by any such Indemnitee.
5.2. The Lender agrees to indemnify and
hold harmless the Company, each of its directors, each of
its officers who has signed the Registration Statement,
each person, if any, who controls the Company within the
meaning of the Act or the 1934 Act, any underwriter, and
any controlling person of any underwriter against any
losses, claims, damages or liabilities (joint or several)
(or actions in respect thereof) to which any of the
foregoing persons may become subject under the Act, the
1934 Act, any state securities law or otherwise, insofar
as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only
to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished
by the Lender expressly for use in connection with the
Registration Statement; and the Lender will pay, as
incurred, any legal or other expenses reasonably incurred
by any person intended to be indemnified pursuant to this
Section 5.2 in connection with investigating or defending
any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained
in this Section 5.2 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent
of the Lender, which consent shall not be unreasonably
withheld; provided, further, however, that, in no event
shall any indemnity under this Section 5.2 exceed the
gross proceeds from such registration received by the
Lender.
5.3. Promptly after receipt by an
indemnified party under this Section of notice of the
commencement of any action (including any governmental
action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying
party under this Section, deliver to the indemnifying
party a written notice of the commencement thereof, and
the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party
so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties, provided,
however, that an indemnified party (together with all
other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be
paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified
party and any other party represented by such counsel in
such proceeding. The failure to deliver written notice
to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified
party under this Section to the extent of such prejudice,
but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than
under this Section.
5.4. The obligations of the Company and
the Lender under this Section shall survive the
completion of any offering of Registrable Securities
under this Agreement.
6. Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed
an original, but both of which together shall constitute
one and the same instrument.
7. Titles and Subtitles. The titles and
subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or
interpreting this Agreement.
8. Notices. Unless otherwise provided, any
notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given
upon personal delivery to the party to be notified or
upon deposit with a reputable overnight courier or with
the United States Post Office, by registered or certified
mail, postage prepaid and addressed to the party to be
notified at the principal executive office of such party,
or at such other address as such party may designate by
ten (10) days' advance written notice to the party to be
notified.
9. Governing Law. This Agreement shall be
governed by and construed under the laws of the State of
New York without regard to conflicts of law principles.
10. Severability. If one or more provisions
of this Agreement are held to be unenforceable under
applicable law, such provisions shall be excluded from
this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and
shall be enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above
written.
WORLDCORP, INC.
By: /s/ T. Andrews Coleman, III
Name: T. Andrews Coleman, III
Title: Chief Executive Officer
and President
SCOTT & STRINGFELLOW, INC.
By: /s/ Steven C. DeLaney
Name: Steven C. DeLaney
Title: First Vice President
and Chief Financial
Officer
EXHIBIT 4.9
January 11, 1995
Mr. William F. Gorog, Trustee
WorldCorp Employee Savings and
Stock Ownership Plan
13873 Park Center Road
Herndon, Virginia 22071
Re: Supplemental Terms and Provisions
to Customer Agreement Dated
January 11, 1995
Dear Mr. Gorog:
This letter agreement sets forth certain terms
and provisions which are supplemental to the terms of a
Customer Agreement dated January 11, 1995, for a margin
loan to the WorldCorp ESSOP. The following terms and
provisions shall apply to this account:
1) The maintenance equity requirement for this
margin account will be 40% as required by NYSE
rules for margin accounts of Rule 144
affiliates. In the event that the stock price
closes at $4.00 or lower for 5 consecutive
trading days, the maintenance equity
requirement will increase to 50%, and it will
increase to 60% if the stock closes at $3.00
per share for 5 consecutive trading days. The
initial debit may not exceed 50% of the market
value of the collateral shares.
2) Margin calls must be met within five (5)
business days from the date of issuance.
3) If the price of WorldCorp common stock should
close at $2.00 or lower, the shares will be
moved to a cash account and the outstanding
margin loan shall be repaid in full within 24
hours. Thereafter, the shares may not be
transferred back to the margin account until
the stock returns to the $5.00 level.
4) Scott & Stringfellow will not lend or deliver
the collateral shares at any time to another
broker-dealer and the shares will at all times
remain in the possession and control of Scott &
Stringfellow.
5) The arbitration clauses contained in paragraphs
20 and 21 of the Customer Agreement shall have
been eliminated due to ERISA considerations.
6) The interest rate which shall apply to this
margin loan will be based on the broker call
rate as quoted in the Wall Street Journal plus
100 basis points.
7) It is our understanding that the WorldCorp
ESSOP expects that the margin debit will be
reduced by approximately $90,000 per calendar
quarter. Scott & Stringfellow agrees upon each
such payment of principal to release the number
of shares determined pursuant to the release
provisions in section 6(d)(1) of the ESSOP. To
the extent such release of shares violates the
margin requirements of the Loan Agreement,
WorldCorp will provide collateral or make a
contribution adequate to meet such margin
requirement or cure any resulting default.
8) This loan is a non-recourse obligation of the
ESSOP. With respect to recourse against the
ESSOP, Scott & Stringfellow will look only to
the collateral held by it for satisfaction of
any amounts due. Notwithstanding the
foregoing, Scott & Stringfellow may look to
WorldCorp pursuant to the Guarantee Agreement
for full payment of all amounts owed under the
loan (such amounts to be determined without
regard to the non-recourse nature of the loan).
Payments made by the ESSOP of principal and
interest on the loan shall not exceed the sum
of all contributions (excluding any
contributions of stock of the Company) that are
made to the ESSOP by the Company to enable the
ESSOP to meet its obligations under the Loan
Agreement, any earnings on such Company
contributions, and any cash dividends on the
shares of the Company stock purchased with the
proceeds of the prior loan refinanced by this
Loan (whether or not such shares have been
released from pledge hereunder).
Notwithstanding the foregoing provisions, the
Trustees of the ESSOP may apply the proceeds
from the sale of any shares remaining subject
to pledge hereunder to pay principal and
accrued interest due on the loan in the event
of the sale of the Company or the termination
of the ESSOP or if the ESSOP ceases to be an
employee stock ownership plan under section
4975(e)(7) of the Internal Revenue Code.
9) The loan is due and payable May 23, 1996,
unless earlier repaid or unless earlier payment
in part or full is required pursuant to the
terms of the Loan Agreement.
10) Upon the occurrence of an event of default as
defined below, all principal and accrued
interest under the loan shall be immediately
due and payable, and, without limiting any
other rights it may have, Scott & Stringfellow
may take any action described in Section 10 of
the Customer Agreement. An event of default
shall include (i) any breach by the ESSOP of
any of its obligations under the Customer
Agreement or this letter agreement, (ii) the
occurrence of any of the circumstances
described in Section 10 of the Customer
Agreement which would give Scott & Stringfellow
the right to take any of the actions specified
therein, (iii) a lapse in the effectiveness of
the registration statement filed pursuant to
the Registration Rights Agreement between Scott
& Stringfellow and WorldCorp or any breach by
WorldCorp of any obligation under the
Registration Rights Agreement, or (iv) any
black-out period pursuant to the Registration
Rights Agreement exceeds 20 days.
Please indicate your knowledge and acceptance
of these supplemental terms and provisions by signing
where indicated below. Thank you.
Sincerely,
SCOTT & STRINGFELLOW, INC.
/s/ Steven C. DeLaney
______________________________________
Steven C. DeLaney
First Vice President and
Chief Financial Officer
SCD
ACCEPTED.
WORLDCORP EMPLOYEE SAVINGS AND
STOCK OWNERSHIP PLAN
/s/ William F. Gorog
By:____________________________________
William F. Gorog, Trustee
EXHIBIT 4.10
January 11, 1995
Mr. William F. Gorog, Trustee
WorldCorp Employee Savings and Stock
Ownership Trust
13873 Park Center Road
Herndon, VA 22071
Re: Commitment to Make Contributions
Dear Mr. Gorog:
This letter sets forth WorldCorp, Inc.'s
commitment to make contributions to the WorldCorp
Employee Savings and Stock Ownership Plan (the "ESSOP"),
for the duration of the Scott & Stringfellow loan to the
ESSOP, under the following circumstances and to the
following extent:
1. To the extent there is, or the ESSOP
anticipates, an event of default pursuant to
the terms of the Loan Agreement with Scott &
Stringfellow, WorldCorp agrees to make a loan
or a contribution, in its discretion, adequate
to avoid or cure an event of default;
2. To the extent the margin requirements of the
Loan Agreement with Scott & Stringfellow would
be or are violated by the release of shares for
participants' accounts as required by section
6(d)(1) of the ESSOP, WorldCorp agrees to make
contributions to the extent necessary to
satisfy the margin requirements.
WorldCorp reserves the right, in the event the entire
loan becomes due and payable in the event of default, to
seek a substitute lender for the ESSOP or become such
substitute lender.
WORLDCORP, INC.
By: /s/ T. Coleman Andrews, III
T. Coleman Andrews, III
Chief Executive Officer and
President
EXHIBIT 5.1
January 12, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Registration Statement on Form S-3
Dear Ladies and Gentlemen:
I am Vice President and General Counsel of
WorldCorp, Inc., a Delaware corporation (the "Company").
The Company has filed a Registration Statement on Form
S-3 (the "Registration Statement") with the Securities
and Exchange Commission relating to the sale of 302,278
shares (the "Founders Shares") of common stock, par value
$1.00 per share (the "Common Stock"), of WorldCorp, Inc.
("WorldCorp" and, together with its subsidiaries, the
"Company") issued to William F. Gorog and Jonathan M.
Gorog (together, the "Gorogs"), Henry R. Nichols, William
N. Melton and John Porter (collectively, the "US Order
Founders"), the founders of US Order, Inc. ("US Order")
and 361,401 shares (the "Pledged Shares") of Common Stock
offered for the account of Scott & Stringfellow, Inc.
(the "Pledge Holder"), the pledgee of the Pledged Shares
under a loan to the WorldCorp Employee Savings and Stock
Ownership Plan (the "ESSOP").
This opinion is delivered in accordance with
the requirements of Item 601(b)(5) of Regulation S-K
under the Securities Act of 1933, as amended (the "Act").
In connection with this opinion, I have
reviewed such documents as I have deemed necessary or
appropriate as a basis for the opinion set forth below.
In my examination, I have assumed the genuineness of all
signatures, the legal capacity of all natural persons,
the authenticity of all documents submitted to me as
originals, the conformity to original documents of all
documents submitted to me as certified or photostatic
copies, and the authenticity of the originals of such
copies. As to any facts material to this opinion that I
did not independently establish or verify, I have relied
upon representations or certificates of the officers and
directors of the Company. I am a member of the District
of Columbia Bar, Virginia Bar and New York Bar and I
express no opinion as to the laws of any other
jurisdiction except the General Corporation Law of the
State of Delaware.
Based upon the foregoing, and subject to the
qualifications set forth herein, I am of the opinion that
the Founders Shares and the Pledged Shares have been duly
and validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion
as Exhibit 5.1 to the Registration Statement and to the
use of my name in the Prospectus that is a part of the
Registration Statement.
Very truly yours,
/s/ Andrew M. Peaalborg
Andrew M. Paalborg
Vice President and General
Counsel
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
WorldCorp, Inc.:
We consent to the use of our reports included or
incorporated by reference in WorldCorp's Annual Report on
Form 10-K for the year ended December 31, 1993,
incorporated herein by reference and to the reference to
our firm under the heading "Experts" in the prospectus.
Our report on the consolidated financial statements
refers to changes in the methods of accounting for
postretirement benefits other than pensions and income
taxes.
KPMG PEAT MARWICK LLP
Washington, D.C.
January 12, 1995
