Document:

Exhibit 10.4

     

    

       

      SUBLEASE
        

       

      THIS
        SUBLEASE dated for reference April
        1, 2005

       

      BETWEEN:

       

      Asset
        Logics Inc, a corporation with an address in the province of British Columbia
        and having an office at Suite 1000, 885 Dunsmuir St,V6C 1N5, Vancouver, BC
        V6H
        1B5

       

      (the
        “Sublandlord”)

       

      AND:

       

      CTT
        Distributors Inc..,
        a
        corporation duly incorporated under the laws of the province of British Columbia
        and having an office at Suite
        1000, 885 Dunsmuir Street, Vancouver, British Columbia, V6C
        1N5

       

      (the
        “Subtenant”)

       

      WHEREAS:

       

      A.  By
        a
        lease made as of May 18th, 2004 (collectively, the “Head Lease leased to the
        Sublandlord upon and subject to the terms of the Head Lease, certain premises
        located on the 2nd
        floor in
        the building municipally known as Suite
        1000, 885 Dunsmuir Street, Vancouver, British Columbia, V6C 1N5
        (the
“Building”), which premises (the “Leased Premises”) are more particularly
        described in the Head Lease.

       

      B.  The
        Sublandlord and the Subtenant have agreed to enter into this Sublease on
        the
        terms hereinafter set forth.

       

      NOW
        THEREFORE in consideration of the premises and other good and valuable
        consideration, the receipt and sufficiency of which is acknowledged by each
        of
        the parties, the parties agree as follows:

       

      
        	(1)  	
                Capitalized
                  Terms

              

      

       

      Capitalized
        terms used in this Sublease will have the meanings ascribed to them in the
        Head
        Lease unless otherwise defined herein.

       

      
        	(2)  	
                Grant
                  Of Sublease.

              

      

       

      Subject
        to the consent of the Head Landlord, the Sublandlord subleases the Leased
        Premises (referred to as the “Sublet Premises” in this Sublease) from the
        Sublandlord for the balance of the Term, less one day (the “Sublease
        Term”).

       

      
        	(3)  	
                Basic
                  Rent and Additional Rent

              

      

       

      The
        Subtenant covenants to pay as basic rent (“Sublease Basic Rent”) for the whole
        period of the Sublease Term commencing on April
        1, 2005
        and
        ending on April 1, 2006 the sum of $12,000 per annum, in equal monthly
        instalments payable in advance on the first day of each and every month.
        The
        Subtenant covenants to pay all Additional Rent when due under the Head Lease.
        The Sublease Basic Rent and Additional Rent will be referred to collectively
        as
“Rent”.

       

      
        
          
          

        

        
          Sublease
            1 Agr

          
            

          

        

        
          
          

        

      

       

      
        	(4)  	
                Net
                  Rent

              

      

       

      Rent
        payable under this Sublease will be net and care free to the Sublandlord,
        and
        will be payable without deduction or set-off by the Subtenant throughout
        the
        Sublease Term. All costs incurred by the Sublandlord in collecting any amounts
        payable hereunder or enforcing any right or obligation of the Subtenant under
        this Sublease will be payable by the Subtenant on demand and will be deemed
        to
        be Rent for all purposes from the date demand therefor is made. In addition
        to
        Rent hereunder, the Subtenant will remit to the Sublandlord any goods and
        services tax or other tax or imposition collectible by the Sublandlord for
        the
        use of the Sublet Premises by the Subtenant or goods or services provided
        to the
        Subtenant, and the Sublandlord will be entitled to exercise all remedies
        in
        respect of any failure by the Subtenant to pay such amounts as if they were
        Rent
        in arrears. From the date any Rent or other amounts payable under this Sublease
        are due until they are actually paid, they will bear interest at the rate
        of
[percentage]
        % per
        annum.

       

      
        	(5)  	
                Subtenant’s
                  Covenants.

              

      

       

      The
        Subtenant acknowledges having received and read a copy of the Head Lease
        and
        covenants and agrees with the Sublandlord:

       

      
        	(a)  	
                to
                  perform all of the obligations of the Tenant under the Head
                  Lease.

              

      

       

      
        	(b)  	
                to
                  abide by any rules and regulations governing the use of the Premises
                  and
                  the Building appended to the Head Lease, as the same may be amended
                  from
                  time to time;

              

      

       

      
        	(c)  	
                to
                  pay Rent and perform all of the obligations of the Subtenant under
                  this
                  Sublease;

              

      

       

      
        	(d)  	
                not
                  to do or omit to do any act in or around the Sublet Premises which
                  would
                  cause a breach of the Sublandlord’s obligations as Tenant under the Head
                  Lease;

              

      

       

      
        	(e)  	
                to
                  promptly pay when due to the authorities having jurisdiction all
                  Taxes
                  (whether imposed upon the Subtenant or otherwise) attributable
                  to the
                  personal property, trade fixtures, business, income, or occupancy
                  of the
                  Subtenant or any other occupant of the Sublet Premises and to any
                  leasehold improvements or fixtures within the Sublet Premises,
                  and to the
                  use by the Subtenant or its officers, employees, and invitees of
                  any of
                  the Common Facilities; and

              

      

       

      
        	(f)  	
                to
                  indemnify and save harmless the Sublandlord against and from any
                  and all
                  expenses, costs, damages, suits, actions, or liabilities arising
                  or
                  growing out of the failure of the Subtenant to perform any of its
                  obligations hereunder and from all claims and demands of every
                  kind and
                  nature made by any person or persons to or against the Sublandlord
                  for all
                  and every manner of costs, damages, or expenses incurred by or
                  injury or
                  damage to such person or persons or his, her, or their property,
                  to the
                  extent such claims or demands arise out of the use and occupation
                  of the
                  Sublet Premises by the Subtenant or its officers, employees, or
                  any other
                  person authorized or permitted by the Subtenant to be on the Sublet
                  Premises or in or about the Building or any of the above-mentioned,
                  and
                  from all costs, counsel fees, expenses, and liabilities incurred
                  by reason
                  of any such claim or any action or proceeding brought
                  thereon.

              

      

       

      
        	(6)  	
                Subtenant’s
                  Breach

              

      

       

      If
        the
        Subtenant fails to perform any of its obligations herein, the Sublandlord
        will
        have all of the remedies against the Subtenant which the Head Landlord has
        under
        the Head Lease for a breach thereof, whether expressly set out in the Head
        Lease
        or arising in law or equity.

       

      
        
          
          

        

        
          Sublease
            2 Agr

          
            

          

        

        
          
          

        

      

       

      
        	(7)  	
                Sublandlord’s
                  Covenants

              

      

       

      Subject
        to the Head Landlord first consenting to this Sublease and the due performance
        by the Subtenant of its obligations herein, the Sublandlord covenants and
        agrees
        with the Subtenant:

       

      
        	(a)  	
                for
                  quiet enjoyment of the Sublet
                  Premises;

              

      

       

      
        	(b)  	
                to
                  enforce against the Head Landlord for the benefit of the Subtenant
                  the
                  obligations of the Head Landlord under the Head Lease which materially
                  affect the Sublet Premises;

              

      

       

      
        	(c)  	
                to
                  perform all of the obligations of the Sublandlord under this Sublease;
                  and

              

      

       

      
        	(d)  	
                to
                  perform all of the obligations of the Sublandlord under the Head
                  Lease
                  which materially affect the Sublet Premises, including without
                  limitation
                  the payment of Rent pursuant to the Head
                  Lease.

              

      

       

      
        	(8)  	
                Use

              

      

       

      The
        Sublet Premises will be used by the Subtenant solely for the purpose of
corporate
        offices
        and for no other purpose.

       

      
        	(9)  	
                Insurance

              

      

       

      The
        Subtenant will take out and maintain throughout the Sublease Term insurance
        with
        respect to the Sublet Premises providing for the coverages and upon the terms
        required in the Head Lease to be maintained by the Sublandlord. The Sublandlord
        and the Head Landlord will be shown as named insureds on all liability policies,
        with a cross liability and severability of interest endorsement, and each
        property insurance policy will contain a waiver of subrogation with respect
        to
        the Head Landlord and the Sublandlord. The Subtenant releases the Sublandlord
        from any claim the Subtenant may have which is or would be insured against
        by
        the insurance policies which the Subtenant is required to maintain by this
        Sublease.

       

      
        	(10)  	
                Assigning
                  or Subletting by the
                  Subtenant

              

      

       

      The
        Subtenant agrees that with respect to any assigning or subletting by it,
        the
        provisions of the Head Lease apply with the following amendments
        thereto:

       

      
        	(a)  	
                each
                  reference to the Landlord, the Tenant, the Lease and the Leased
                  Premises
                  will become, respectively, the Sublandlord, the Subtenant, the
                  Sublease
                  and the Sublet Premises;

              

      

       

      
        	(b)  	
                any
                  references to a period of days will be extended by 30
                  days; and

              

      

       

      
        	(c)  	
                the
                  Sublandlord will have the additional right to withhold and/or delay
                  its
                  consent if it has not received the prior written consent of the
                  Head
                  Landlord.

              

      

       

      
        	(11)  	
                Exercise
                  of Rights

              

      

       

      The
        determination of any state of facts, promulgation of any rules or regulations,
        or the taking of any other action or exercise of any other rights under the
        Head
        Lease which is permitted to the Head Landlord will, upon written notice to
        the
        Subtenant of such action or exercise, be binding upon the Subtenant and the
        Sublet Premises.

       

      
        	(12)  	
                Paramountcy
                  of Head Lease

              

      

       

      The
        Subtenant acknowledges and agrees that it has no greater interest in the
        Sublet
        Premises than the Sublandlord under the Head Lease. To the extent that any
        right
        or benefit conferred by this Sublease contravenes or is incompatible with
        the
        Head Lease, such right or benefit will be amended or modified so as not to
        contravene or be incompatible with the Head Lease.

       

      
        
          
          

        

        
          Sublease
            3 Agr

          
            

          

        

        
          
          

        

      

       

      
        	(13)  	
                Notices

              

      

       

      All
        notices, consents, and approvals permitted or required to be given hereunder
        will be in writing and will be delivered to the Sublandlord or the Subtenant
        as
        the case may be as follows:

       

      
        	(a)  	
                to
                  the Sublandlord at Suite
                  1000, 885 Dunsmuir St,V6C 1N5, Vancouver, BC V6H
                  1B5

              

      

       

      Attention:
        Peter Schriber;

       

      
        	(b)  	
                to
                  the Subtenant at the Sublet
                  Premises

              

      

       

      Attention:
        Amit Sankala

       

      Any
        notice so made will be deemed to have been given and received on the date
        of
        delivery on a business day to an adult person on the premises specified above
        and if no adult person is present, by posting the notice prominently at the
        entrance of the premises specified.

       

      
        	(14)  	
                Successors
                  and Assigns

              

      

       

      Except
        as
        otherwise provided herein, all of the rights and obligations of a party enure
        to
        the benefit of and are binding upon the successors and assigns of that
        party.

       

      
        	(15)  	
                Further
                  Assurances

              

      

       

      Each
        party agrees to execute such further assurances as may be reasonably required
        from time to time by any other party to more fully effect the true intent
        of
        this Sublease.

       

      
        	(16)  	
                Directory
                  Boards

              

      

       

      Subject
        to the Head Landlord’s consent and pursuant to the terms of the Head Lease,
        where applicable, the Subtenant will have the right to include the name of
        its
        firm on the Building directory board, in the main Building lobby, and on
        the
        2nd
        floor of
        the Building at the Sublandlord’s expense.

       

      
        	(17)  	
                Entire
                  Agreement and “As Is”

              

      

       

      This
        Sublease merges and supersedes all prior negotiations, representations, and
        agreements between the parties relating in any way to the Sublet Premises.
        The
        parties agree that there are no representations, covenants, agreements,
        warranties, or conditions in any way relating to the subject matter of this
        Sublease or the occupation or use of the Sublet Premises, whether express
        or
        implied, or otherwise, except as set forth in this Sublease.

       

      
        	(18)  	
                Waiver

              

      

       

      No
        waiver
        by the Sublandlord of a condition or the performance of an obligation of
        the
        Subtenant hereunder binds the Sublandlord unless in writing and executed
        by it,
        and no waiver given by the Sublandlord will constitute a waiver of any other
        condition or performance by the Subtenant of its obligations hereunder in
        any
        other case.

       

      
        	(19)  	
                Sublease
                  Execution and Head Landlord’s Consent
                  Required

              

      

       

      This
        Sublease and all subsequent amendments thereto are only binding on the
        Sublandlord and the Subtenant respectively, if in writing and executed by
        authorized signatories for the Sublandlord and the Subtenant and if executed
        copies thereof have been delivered to each party. It is a condition precedent
        to
        this Sublease and all obligations of the Sublandlord and Subtenant hereunder
        that the Head Landlord consents to this Sublease. The parties agree to use
        their
        commercially reasonable best efforts to obtain the consent of the Head Landlord
        to this Sublease, and to provide all such information and assurances (other
        than
        third-party guarantees or covenants or additional security) as the Head Landlord
        may reasonably require in this regard.

       

      
        
          
          

        

        
          Sublease
            4 Agr

          
            

          

        

        
          
          

        

      

      

       

      
        	(20)  	
                Governing
                  Law

              

      

       

      This
        Sublease will be governed in accordance with laws applicable in the province
        of
        British Columbia, and the parties irrevocably attorn to the non-exclusive
        jurisdiction of the courts of British Columbia.

       

      IN
        WITNESS WHEREOF the parties have duly executed this Sublease as of the date
        set
        out above.

       

      [if
        a
        party is an individual:]

      
        	
                 

                SIGNED,
                  SEALED & DELIVERED 

                 

                by
                  [name]
                  in
                  the presence of:

                 

                _________________________________________

                Signature
                  of Witness

                 

                Name: ________________________________________

                 

                Address:______________________________________

                _________________________________________

                 

                Occupation:___________________________________

              	
                 

                )

                )

                )

                )

                ) 

                ) [name]

                )

                )

                )

                )

                )

                )

                )

                )

              

      

       

      [if
        a
        party is a corporation:]

       

      The
        Corporate Seal of [name]
        has been
        affixed to this document in the presence of:

       

      /s/
        Authorized Signatory   

       

      Authorized
        Signatory        C/S

       

      

       

      /s/
        Authorized Signatory   

       

      Authorized
        Signatory

       

      The
        consent to sublease should include the following schedule:

       

    

     

    
      
        
        

      

      
        Sublease
          5 AgrExhibit 4.1

 

THIS
WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”).  NO TRANSFER OF THIS WARRANT
SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS MADE (A) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR (B) AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.

 

	
  Warrant No. -

  	
   

  	
  Issue Date: August 3, 2005

  

 

WARRANT TO PURCHASE COMMON STOCK

OF

WORLDGATE COMMMUNICATIONS, INC.

 

This
certifies that, for value received, receipt and sufficiency of which are hereby
acknowledged,                         
(the “Holder”), is entitled, subject to the
terms and conditions set forth below, to purchase from WorldGate Communications, Inc.,
a Delaware corporation (the “Company”),                           
validly issued, fully paid and nonassessable shares (the “Warrant
Shares”) of Common Stock of the Company, par value $0.01 per share
(the “Common Stock”), subject to adjustment
as provided herein, at a purchase price equal to $5.00 per
share (the “Exercise Price”), subject to
adjustment as provided herein.

 

The
term “Warrant” as used herein shall mean this
Warrant, and any warrants delivered in substitution or exchange therefor as
provided herein.

 

1.                                       Term
of Warrant.  Subject to the terms and
conditions set forth herein, this Warrant shall be exercisable, in whole or in
part, during the term commencing on February 3, 2006 and ending at 5:00 P.M.
(United States Eastern Time) on August 3, 2010 (subject to extension as
provided below, the “Exercise Period”);
provided, however,
that in the event that the expiration date of this Warrant shall fall on a day
that is not a Business Day (defined below), the expiration date for this
Warrant shall be extended to 5:00 P.M. (United States Eastern Time) on the
Business Day following such date.  The
term “Business Day” shall mean any day except
a Saturday, Sunday or any day on which banking institutions are authorized or
required to close in the city of New York, New York.

 

2.                                       Exercise
of Warrant.

 

(a)                                  This
Warrant may be exercised by the Holder, in whole or in part, by (i) the
surrender of this Warrant to the Company, with the Notice of Exercise annexed
hereto duly completed and executed on behalf of the Holder and delivered to the
Company during the Exercise Period and, (ii) in the case of a Cash
Exercise (defined below), the delivery of payment to the Company of the
Exercise Price for the number of Warrant Shares specified in the Notice of
Exercise.

 

 

(b)                                 The
Company agrees that such Warrant Shares shall be deemed to be issued to the
Holder as the record holder of such Warrant Shares as of the close of business
on the date on which this Warrant shall have been surrendered and payment made
for the Warrant Shares as provided herein. 
A stock certificate or certificates for the Warrant Shares specified in
the Notice of Exercise shall be delivered to the Holder as promptly as
practicable, and in any event within five days thereafter.  If this Warrant shall have been exercised
only in part, the Company shall, at the time of delivery of the stock
certificate or certificates, deliver to the Holder a new Warrant evidencing the
rights to purchase the remaining Warrant Shares, which new Warrant shall in all
other respects be identical with this Warrant. 
Notwithstanding the foregoing, if the Company’s transfer agent is
participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer program, and so long as the certificates
therefore do not bear a legend (pursuant to the terms of the Securities
Purchase Agreement, dated as of August 3,
2005, among the Company and the investors identified on the signature pages thereto
(the “Securities Purchase Agreement”))
and the Holder is not then required to return such certificate for the
placement of a legend thereon (pursuant to the terms of the Securities Purchase
Agreement), the Company shall cause its transfer agent to promptly
electronically transmit the Warrant Shares issuable upon conversion to the Holder
by crediting the account of the Holder or its nominee with DTC through its Deposit
Withdrawal Agent Commission system (“DTC Transfer”).  If the aforementioned conditions to a DTC
Transfer are not satisfied, the Company shall deliver as provided above to the
Holder physical certificates representing the Warrant Shares issuable upon conversion.  Further, the Holder may instruct the Company
to deliver to the Holder physical certificates representing the Warrant Shares
issuable upon conversion in lieu of delivering such shares by way of DTC
Transfer.

 

(c)                                  Notwithstanding
anything to the contrary contained herein, the number of Warrant Shares that
may be acquired by the Holder upon any exercise of this Warrant (or otherwise
in respect hereof) shall be limited to the extent necessary to insure that,
following such exercise (or other issuance), the total number of shares of
Common Stock then beneficially owned by such Holder and its Affiliates and any
other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder’s for purposes of Section 13(d) of the Exchange Act,
does not exceed 4.99% of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise). For such purposes, beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder. Each delivery of a
Notice of Exercise hereunder will constitute a representation by the Holder
that it has evaluated the limitation set forth in this paragraph and determined
that issuance of the full number of Warrant Shares requested in such Notice of
Exercise is permitted under this paragraph. By written notice to the Company,
the Holder may waive the provisions of this Section but any such waiver
will not be effective until the 61st
day after such notice is delivered to the Company.

 

3.                                       No
Fractional Shares or Scrip.  No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant.  In lieu of
any fractional share to which the Holder would otherwise be entitled, the
Company shall make a cash payment equal to the fair market value multiplied by
such fraction or, at the Company’s option, round such fractional share to the
nearest whole share.  The fair market
value shall be determined by the Company’s Board of Directors.

 

 

4.                                       Replacement
of Warrant.  On receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and
substance to the Company or, in the case of mutilation, on surrender and
cancellation of this Warrant, the Company at its expense shall execute and
deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

 

5.                                       Rights
of Stockholders.  Subject to the
provisions of Sections 7 and 9 hereof, the Holder shall not be entitled to vote
or receive dividends or be deemed the holder of Common Stock or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value, or change of stock to no
par value, consolidation, merger, conveyance or otherwise) or to receive notice
of meetings, or to receive dividends or subscription rights or otherwise until
the Warrant shall have been exercised as provided herein.

 

6.                                       Payment
of the Exercise Price; Cashless Exercise. 
The Holder may pay the Exercise Price in either of the following forms
or, at the election of Holder, a combination thereof:

 

(a)                                  through
a cash exercise (a “Cash Exercise”),
payable by wire transfer of immediately available funds to a bank account
specified by the Company or by certified or bank cashiers’ check in lawful
money of the United States of America; or

 

(b)                                 if (i) the Registration Statement
(as defined in the Securities Purchase
Agreement) has not been declared effective until such time as the
Registration Statement is declared effective or at any time a Registration
Statement is no longer effective or a stop order issued by the staff of the
Securities and Exchange Commission is in effect with respect to the
Registration Statement, and (ii) the fair market value of one share of the
Company’s Common Stock is greater than the Exercise Price (at the date of
calculation as set forth below),
through a cashless exercise (a “Cashless Exercise”). 
The Holder may effect a Cashless Exercise by surrendering this Warrant to the
Company and noting on the Notice of Exercise that the Holder wishes to effect a
Cashless Exercise, upon which the Company shall issue to the Holder the number
of Warrant Shares determined as follows:

 

X = Y
(A-B)

A

 

where:                                                             X
=                             the
number of Warrant Shares to be issued to the Holder;

 

Y =                              the
number of Warrant Shares purchasable under the Warrant or, if only a portion of
the Warrant is being exercised, the portion of the Warrant being canceled (at
the date of such calculation);

 

A =                            the
fair market value of one share of the Company’s Common Stock (at the date of
such calculation); and

 

B =                              Exercise
Price (as adjusted to the date of such calculation).

 

 

For purposes of the above
calculation, the “fair market value”
of one share of Common Stock shall mean (i) the average of the closing
sales prices for the shares of Common Stock on the Nasdaq SmallCap Market or
other trading market where such security is listed or traded as reported by
Bloomberg Financial Markets (or a comparable reporting service of national
reputation selected by the Company and reasonably acceptable to the Holders if
Bloomberg Financial Markets is not then reporting sales prices of such
security) (collectively, “Bloomberg”) for
the 10 consecutive trading days immediately preceding such date, or (ii) if
the Nasdaq SmallCap Market is not the principal trading market for the shares
of Common Stock, the average of the reported sales prices reported by Bloomberg
on the principal trading market for the Common Stock during the same period,
or, if there is no sales price for such period, the last sales price reported
by Bloomberg for such period, or (iii) if neither of the foregoing
applies, the last sales price of such security in the over-the-counter market on
the pink sheets or bulletin board for such security as reported by Bloomberg,
or if no sales price is so reported for such security, the last bid price of
such security as reported by Bloomberg or (iv) if fair market value cannot
be calculated as of such date on any of the foregoing bases, the fair market
value shall be as determined by the Board of Directors of the Company in the
exercise of its good faith judgment.

 

7.                                       Adjustments.

 

(a)                                  Adjustment
for Stock Splits and Combinations. 
If the Company shall effect a subdivision of the outstanding shares of
the Company’s Common Stock, then the Exercise Price then in effect immediately
before that subdivision shall be proportionately decreased and the number of
shares of Common Stock issuable upon any exercise of such warrant shall be
proportionally increased, and conversely, if the Company combines the
outstanding shares of the Company’s Common Stock into a smaller number of
shares, the Exercise Price then in effect immediately before the combination
shall be proportionately increased and the number of shares of Common Stock
issuable upon any exercise of such warrant shall be proportionally decreased.

 

(b)                                 Adjustment
for Certain Dividends and Distributions. 
If the Company makes or fixes a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, then and in each such event (i) the
Exercise Price then in effect shall be decreased as of the time of such issuance
or, in the event such record date is fixed, as of the close of business on such
record date, by multiplying the Exercise Price then in effect by a fraction (1) the
numerator of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date, and (2) the denominator of which shall be
the total number of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business on such record date
plus the number of shares of Common Stock issuable in payment of such dividend
or distribution, and (ii) the number of shares of Common Stock issuable
upon exercise of this Warrant at such time shall be increased as of the time of
such issuance, or in the event such record date is fixed, as of the close of
business on such record date, by multiplying the number of shares issuable upon
any exercise of this Warrant by a fraction (1) the numerator of which
shall be the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on such
record date plus the number of shares of Common Stock issuable in

 

 

payment of such dividend or distribution, and (2) the
denominator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date; provided, however, that if such record date is
fixed and such dividend is not fully paid or if such distribution is not fully
made on the date fixed therefor, the Exercise Price and the number of shares of
Common Stock issuable upon any exercise of this Warrant shall be recomputed
accordingly as of the close of business on such record date and thereafter the
Exercise Price shall be adjusted pursuant to this section as of the time
of actual payment of such dividends or distributions.

 

(c)                                  Adjustments
for Other Dividends and Distributions. 
In the event the Company at any time prior to exercise of this Warrant
shall make or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
securities of the Company (other than Common Stock for which an adjustment is
made pursuant to Section 7(a), Section 7(b) or Section 7(d) hereof)
or in cash or other property, then and in each such event provision shall be
made so that the Holder shall receive upon exercise hereof, in addition to the
number of shares of Common Stock issuable hereunder, the kind and amount of
securities of the Company and/or cash and other property which the Holder would
have been entitled to receive had this Warrant been exercised into Common Stock
on the date of such event and had the Holder thereafter, during the period from
the date of such event to and including the Exercise Date, retained any such
securities receivable, giving application to all adjustments called for during
such period under this Section 7 with respect to the rights of the Holder.

 

(d)                                 Reorganizations,
Mergers, Consolidations or Transfers of Assets.  If at any time or from time to time there is
a capital reorganization of the Common Stock or other securities that will be
issuable upon exercise of this Warrant, or a merger, consolidation or binding
share exchange of the Company with or into another entity, or the transfer of
all or substantially all of the Company’s properties and assets to any other
entity, then, as a part of such capital reorganization, merger, consolidation,
exchange or transfer, provision shall be made so that Holder shall thereafter
be entitled to receive upon exercise of this Warrant the number of shares of
stock or other securities, cash or property to which a holder of the number of
shares of Common Stock or other securities otherwise deliverable upon exercise
of this Warrant would have been entitled on such capital reorganization,
merger, consolidation, exchange or transfer in respect of such Common Stock or
other securities.  In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 7 to the end that the provisions of this Section 7
(including adjustment of the then in effect Exercise Price and the number of
shares purchasable upon exercise of this Warrant) shall be applicable after
that event and be as nearly equivalent as may be practicable.  Upon the consummation of such capital
reorganization, merger, consolidation, exchange or transfer, the successor (if
other than the Company) resulting from such transaction or the entity acquiring
such assets or other appropriate entity shall assume, by written instrument,
the obligation to deliver to Holder such securities, cash or other property as,
in accordance with the foregoing provisions, Holder may be entitled to purchase
pursuant to this Warrant.

 

(e)                                  Certificate
of Adjustment.  Upon the occurrence
of each adjustment or readjustment pursuant to this Section 7 of the
Exercise Price, the number of Warrant Shares or other securities issuable upon exercise
of this Warrant, the Company shall promptly compute

 

 

such adjustment or readjustment in accordance with the
terms hereof and furnish to the Holder a certificate setting forth such
adjustment or readjustment (including the kind and amount of securities, cash
or other property for which this Warrant shall be exercisable and the Exercise
Price) and showing in detail the facts upon which such adjustment or
readjustment is based.  The Company
shall, upon the written request at any time of the Holder, furnish or cause to
be furnished to the Holder a certificate setting forth (i) the Exercise
Price then in effect and (ii) the number of Warrant Shares and the amount,
if any, of other securities, cash or property which then would be received upon
the exercise of this Warrant.

 

(f)                                    In
case:

 

(i)                                     the
Company shall declare a dividend or other distribution on its Common Stock;

 

(ii)                                  the
Company or any of its subsidiaries shall make a tender offer for the Common
Stock;

 

(iii)                               the Company shall
authorize the granting to holders of its Common Stock of rights, options or
warrants to subscribe for or purchase any shares of capital stock of any class;

 

(iv)                              of
any reclassification of the Common Stock (other than a subdivision or
combination of its outstanding shares of Common Stock), or of any
consolidation, merger or share exchange to which the Company is a party and for
which approval of any stockholders of the Company is required, or of the sale
or transfer of all or substantially all of the assets of the Company; or

 

(v)                                 of
the voluntary of involuntary dissolution, liquidation or winding up of the
Company;

 

then the Company shall cause to be mailed to the
Holder of this Warrant, at least ten days prior written notice stating (A) the
date on which a record has been taken for the purpose of such dividend,
distribution or grant of rights, options or warrants, or, if record is not to
be taken, the date as of which the identity of the holders of Common Stock of
record entitled to such dividend, distribution, rights, options or warrants is
to be determined, (B) the date on which a record shall be taken for
determining rights to vote, if any, in respect of the matters referred to in
clauses (i) through (v), and (C) the date on which such
reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, share
exchange, sale, transfer, dissolution, liquidation or winding up.

 

8.                                       Transfers.

 

(a)                                  The
Warrant Shares shall not be sold or transferred unless either (i) they
first shall have been registered under the Act and any other applicable
securities laws, or (ii) the Company first shall have been furnished with
an opinion of legal counsel, reasonably satisfactory

 

 

to the Company, to the effect that such sale or transfer
is exempt from the registration requirements of the Act and any other
applicable securities laws. 
Notwithstanding the foregoing, no opinion of counsel shall be required
for a transfer by a holder of Warrant Shares (1) which is a corporation to
an affiliate of such corporation, (2) which is a partnership to a partner
of such partnership or a retired partner of such partnership or to the estate
of any such partner or retired partner, or (3) which is a limited
liability company to a member of such limited liability company or a retired
member or to the estate of any such member or retired member; provided that in
each case the transferee in each case executes the Assignment Form attached
hereto.

 

(b)                                 In
addition, the Holder shall not assign, pledge, hypothecate, sell or otherwise
transfer this Warrant (other than to an affiliate of the Holder) without the
prior written consent of the Company, which consent will not be unreasonably
withheld, delayed or conditioned.

 

9.                                       Covenants
of the Company.  The Company hereby
covenants and agrees that:

 

(a)                                  during
the term of this Warrant, the Company will reserve a sufficient number of
shares of authorized and unissued Common Stock to provide for the issuance of
Common Stock, which shares shall be duly authorized, fully paid and
non-assessable, upon the exercise of this Warrant and, from time to time, will
take all steps necessary to amend its Certificate of Incorporation to provide
sufficient reserves of shares of Common Stock issuable upon exercise of the
Warrant;

 

(b)                                 the
Company will not, by amendment of its Certificate of Incorporation or through
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms.

 

(c)                                  all
shares that may be issued upon the exercise of this Warrant, upon exercise of
this Warrant and payment of the Exercise Price, all as set forth herein, will
be free from all taxes, liens and charges in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously or
otherwise specified herein); and

 

(d)                                 issuance
of this Warrant by the Company shall constitute full authority to its officers
who are charged with the duty of executing stock certificates to execute and
issue the necessary certificates for shares of Common Stock upon the exercise
of this Warrant

 

10.                                 Notices.  Any notice or other communication to the
Company or to Holder regarding the Warrant shall be in writing and shall be
deemed duly given or made when hand delivered, when delivered by overnight
courier or three business days after mailed by registered or certified mail,
return receipt requested, postage prepaid and, if to the Company, to the
Company’s office at 3190 Tremont Avenue, Trevose, PA 19053, or such other
address as the Company may designate by notice to Holder and, if to Holder, to:
                                                , or such other address as Holder may
designate by prior written notice to the Company.

 

11.                                 Amendments.  Neither this Warrant nor any term hereof may
be amended, waived, discharged or terminated other than by a written instrument
signed by the Company and the Holder.

 

 

12.                                 Governing
Law.  This Warrant shall be governed
in all respects by the internal laws of the State of Delaware as applied to
contracts entered into solely between residents of, and to be performed
entirely within, such state, and without reference to principles of conflicts
of laws or choice of laws.

 

13.                                 Successors
and Assigns.  This Warrant shall be
binding upon the Company’s successors and assigns and shall inure to the
benefit of the Holder’s successors, legal representatives and assigns.

 

 

IN
WITNESS WHEREOF, WORLDGATE COMMUNICATIONS, INC. has caused this Warrant to be
executed by its authorized officer.

 

	
   

  	
  WORLDGATE COMMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

NOTICE OF EXERCISE

 

To:  WORLDGATE
COMMMUNICATIONS, INC.

 

(1)                                  The
undersigned hereby elects to purchase                      
shares of Common Stock of WorldGate Communications, Inc., pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price for such shares in full.

 

(2)                                  Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified below:

 

	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  

 

 

(3)                                  Please
issue a new Warrant for the unexercised portion of the attached Warrant in the
name of the undersigned or in such other name as is specified below:

 

 

	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
  (Signature)

  	
   

  

 

 

ASSIGNMENT FORM

 

FOR
VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells,
assigns and transfers unto the Assignee named below all of the rights of the
undersigned under the within Warrant, with respect to the number of shares of
Common Stock set forth below:

 

	
   

  	
   

  	
   

  	
   

  	
  No of

  
	
  Name of Assignee

  	
   

  	
  Address

  	
   

  	
  Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

and does hereby
irrevocably constitute and appoint as Attorney                                  to
make such transfer on the books of WORLDGATE COMMUNICATIONS, INC., maintained
for the purpose, with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature of Holder

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature of Assignee

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}]]