OPTION AGREEMENT
OPTION AGREEMENT dated December 1, 1994 between ACTV, Inc., a
Delaware corporation (the "Corporation") and Xxxxxx Xxxxxx Xxxxxxxx & Co. Inc.
(the "Company").
The Corporation desires to grant to the Company the right and
option to purchase up to 5,000 shares (the "Option Shares") of Common Stock (the
"Common Stock"), of the Corporation, on the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the receipt of $1.00 and
other good and valuable consideration, the receipt of which is hereby
acknowledge, the parties hereby agree as follows:
SECTION 1. Option to Purchase Common Stock.
a. Subject to Section 12 hereof, the Corporation hereby grants
to the Company an option (the "Option") to purchase from the Corporation 5,000
Option Shares, at a purchase price of $5.50 per Option Share (the "Option
Price"). The Company's right and option to purchase the Option Shares shall vest
on December 1, 1994. With respect to the Option, the "Option Period" shall
commence on the date hereof and terminate on December 1, 1997.
b. The Option may be exercised by the Company by delivery to
the Corporation of a written notice (the "Option Notice"), which Option Notice
shall state the Company's intention to exercise the Option, the date on which
the Company proposes to purchase the Option Shares (the "Closing Date") and the
number of Option Shares to be purchased on the Closing Date, which Closing Date
shall be no later than 30 days nor earlier than 10 days following the date of
the Option Notice. Upon receipt by the Corporation of an Option Notice from the
Company, the Company shall be obligated to purchase that number of Option Shares
to be purchased on the Closing Date set forth in the Option Notice.
c. The purchase and sale of Option Shares acquired pursuant to
the terms of this Option Agreement shall be made on the Closing Date at the
offices of the Corporation. Delivery of the Stock certificate of other
instrument registered in the name of the Company, evidencing the Option Shares
being purchased on the Closing Date, shall be made by the Corporation to the
Company of this Option on the Closing Date against the delivery to the
Corporation of a check in the full amount of the aggregate purchase price
therefor.
SECTION 2. Representations and Warranties of The Holder. The
Company hereby represents and warrants to the Corporation that in the event the
Company acquires any Option Shares, such Option Shares will be acquired for his
own account, for investment and not with a view to the distribution thereof. The
Company understands that except as set forth in Section 6 hereof, the Option
Shares will not be registered under the
Securities Act of 1933, as amended (the "Securities ACT"), by reason of their
issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to Section 4 (2) thereof and that they must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act or the transaction is except from registration.
SECTION 3. Reorganization; Mergers; Sales; Etc. If, at any
time during the Option Period, there shall be any capital reorganization,
reclassification of Common Stock (other than a change in par value or from par
value to nor par value or from no par value to par value or as a result of a
stock dividend or subdivision, split-up or combination of shares), the
consolidation or merger of the Corporation with or into another corporation or
of the sale of all or substantially all the properties and assets of the
Corporation as an entirety to any other corporation or person, the unexercised
and fully vested portion of this Option shall, after such reorganization,
reclassification, consolidation, merger or sale, be exercisable for the kind and
number of shares of stock or other securities or property of the Corporation or
of the corporation resulting from such consolidation or surviving such merger or
to which such properties and assets shall have been sold to which the Company
would have been entitled if the Company had held shares of Common Stock issuable
upon the exercise hereof immediately prior to such reorganization,
reclassification, consolidation, merger or sale. The provisions of this Section
3 shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers and sales.
SECTION 4. Adjustment of Option Shares and Option Price.
a. The number of Option Shares subject to this Option during
the Option Period shall be cumulative as to all prior dates of calculation and
shall be adjusted for any stock dividend, subdivision, split-up or combination
of Common Stock.
b. The Option Price shall be subject to adjustment from time
to time as follows:
(1) If, at any time during the Option Period, the number
of shares of Common Stock outstanding is increased by a stock dividend payable
in shares of Common Stock or by a subdivision or split-up of shares of Common
Stock, then, immediately following the record date fixed for the determination
of holders of shares of Common Stock entitled to receive such stock dividend,
subdivision or split-up, the Option Price shall be appropriately decreased so
that the number of shares of Common Stock issuable upon the exercise hereof
shall be increased in proportion to such increase in outstanding shares.
(2) If, at any time during the Option Period, the
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number of shares of Common Stock outstanding is decreased by a combination of
outstanding shares of Common Stock, then, immediately following the record date
for such combination, the Option Price shall be appropriately increased so that
the number of shares of Common Stock issuable upon the exercise hereof shall be
decreased in proportion to such decrease in outstanding shares.
SECTION 5. Termination of the Options.
a. Termination of Options in General. The Option granted
hereby shall terminate and the Option shall no longer be exercisable after
December 1, 1997.
SECTION 6. Piggyback Registration.
a. If, at any time commencing August 15, 1995 and expiring
December 1, 1997, the Corporation proposes to register any of its securities
under the Securities Act (other than in connection with a merger of pursuant to
Form S-8 or other comparable Form) it will give written notice by registered
mail, at least thirty (30) days prior to the filing of such registration
statement, to the Company of its intention to do so. If the Company notifies the
Corporation within ten (10) days after receipt of any such notice of his desire
to include any Option Shares, owned by him (on a fully vested basis) in such
proposed registration statement, the Corporation shall afford the Company the
opportunity to have any of his Option Shares registered under such registration
statement, the Corporation shall afford the Company the opportunity to have any
of his Option Shares registered under such registration statement; provided that
(i) such inclusion does not pose any significant legal problem and (ii) if such
registration statement is filed pursuant to an underwritten public offering, the
underwriter approves such inclusion.
b. Notwithstanding the provisions of this Section 6, the
Corporation shall have the right at any time after it shall have given written
notice pursuant to this Section 6 (irrespective of whether a written request for
inclusion of any Option Shares shall have been made) to elect not to file any
such proposed registration statement, or to withdraw the same after the filing
but prior to the effective date thereof.
c. Company will cooperate with the Corporation in all respects
in connection with this Agreement, including, timely supplying all information
reasonably requested by the Corporation and executing and returning all
documents reasonably requested in connection with the registration and sale of
the Option Shares. In addition, Company will comply with all applicable
provisions of state and federal securities laws, including rule 10b-6 and will
not, during the course of a distribution, purchase any of the securities being
distributed.
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d. All expenses incurred in any registration of the Option
Shares under this Agreement shall be paid by the Corporation, including, without
limitation, printing expenses, fees and disbursements of counsel for the
Corporation, expenses of any audits to which the Corporation shall agree or
which shall be necessary to comply with governmental requirements in connection
with any such registration, all registration and filing fees for the Option
Shares under federal and state securities laws, and expenses of complying with
the securities or blue sky laws of any jurisdictions; provided, however, the
Corporation shall not be liable for (a) any discounts or commissions to any
underwriter; (b) any stock transfer taxes incurred with respect to Option Shares
sold in the offering or (c) the fees and expenses of counsel for Company,
provided that the Corporation will pay, the costs and expenses of Company's
counsel when the Corporation's counsel is representing all selling security
holders.
SECTION 7. Transfer of Option; Successors And Assigns. This
Agreement (including the Option) and all rights hereunder shall not be
transferable at any time without the prior written consent of the Corporation.
This Agreement and all the rights hereunder shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns and
transferees.
SECTION 8. Notices. All notices or other communications which
are required or permitted hereunder shall be in writing and sufficient if
delivered personally or sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If to the Corporation, to:
ACTV, Inc.
1270 Avenue of the Americas - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, President and CEO
With a copy to:
Gersten, Savage, Kaplowitz & Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxxxx, Esquire
If to the Company, to:
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
or to such other address as the party to whom notice is to be
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given may have furnished to the other party in writing in accordance herewith.
If mailed as aforesaid, any such communication shall be deemed to have been
given on the third business day following the day on which the piece of mail
containing such communication is posted.
SECTION 9. Governing Law. This Agreement shall be governed by,
and construed in accordance with the laws of the State of New York.
SECTION 10. Entire Agreement. This Agreement contains the
entire agreement between the parties hereto with respect to the transactions
contemplated herein and supersedes all previously written or oral negotiations,
commitments, representations and agreement.
SECTION 11. Amendments and Modifications. This Agreement, or
any provision hereof, may not be amended, changed or modified without the prior
written consent of each of the parties hereto.
SECTION 12. Termination. In addition to the termination
provisions set forth in Section 1 hereof, the Option shall terminate and the
Option shall no longer be exercisable on December 1, 1997.
IN WITNESS WHEREOF, the parties hereto have caused this Option
Agreement to be executed and delivered as of the date first above written.
ACTV, Inc.
By: XXXXXXX X. XXXXXXX
______________________
Xxxxxxx X. Xxxxxxx
President
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