SHARES CO-SALE AGREEMENT
THIS SHARES CO-SALE AGREEMENT (the "Agreement") is made by and between
International Commercial Television Inc., a Nevada corporation (the "Company"),
and the selling shareholders of the Company listed in Schedule I hereto (the
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"Selling Shareholders").
WHEREAS, the Company and the Selling Shareholders severally propose to sell
to the public an aggregate of 2,000,000 shares of common stock of the Company
(the "Shares") on a registration statement on Form SB-2 (the "Offering"); and
WHEREAS, the 2,000,000 shares to be sold in the Offering consist of
1,333,000 authorized but unissued shares of common stock of the Company, and
667,000 outstanding shares of common stock of the Selling Shareholders; and
WHEREAS, the Company will sell the Shares, with the Company and the Selling
Shareholders disposing of the Shares and receiving consideration therefor on a
pro rata basis;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, the parties agree as follows:
1. THE OFFERING.
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1.1 On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell up to 1,333,000 authorized but unissued shares
of common stock of the Company, and each Selling Shareholder agrees, severally
and not jointly, to sell up to the number of shares listed next to their name on
Schedule I hereto. The Company shall have the discretion to determine the
offering price of the Shares.
1.2 Each Selling Shareholder has signed a Power of Attorney naming
Xxxxxx Xxxxxx and Xxxxxx Xxxxxx, or either of them, as his or her
attorneys-in-fact ("Attorneys-in-Fact") for the purpose of carrying out this
Agreement. In this connection, each Selling Shareholder has deposited in custody
with the Attorneys-in-Fact, as custodian, certificates in negotiable form for
the Shares to be sold by the Selling Shareholder under this Agreement for the
purpose of further delivery pursuant to this Agreement. The Attorneys-in-Fact
shall have the power to transfer the Selling Shareholders' Shares in one or more
transactions with full power of substitution in the premises. Each Selling
Shareholder agrees that the Shares to be sold by the Selling Shareholder,
represented by the certificates on deposit with the Attorneys-in-Fact are
subject to the interest of the Company and the other Selling Shareholder, that
the arrangements made for custody are to that extent irrevocable, and that the
obligations of the Selling Shareholder under the Agreement will not be
terminated, except as provided in this Agreement, by any act of the Selling
Shareholder or by operation of law, whether by the liquidation or dissolution of
such Selling Shareholder, by the death or incapacity of the Selling Shareholder
or by the occurrence of any other event. If any Selling Shareholder should
liquidate or dissolve, die or become incapacitated, or if any other event occurs
before the delivery of the Shares hereunder, certificates for the Shares
deposited with the Attorneys-in-Fact will be delivered by the Attorneys-in-Fact
in accordance with the terms and conditions of this Agreement as if such
liquidation, dissolution,
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death, incapacity or other event had not occurred regardless of whether the
Attorneys-in-Fact have received notice of the liquidation, dissolution, death,
incapacity or other event.
1.3 The Company shall conduct the Offering on a best efforts, no
minimum basis, with or without the aid of broker/dealers or other selling
agents. The Selling Shareholders agree that the Company may retain
broker/dealers or selling agents in the Offering on such terms and conditions as
the Company arranges in its sole discretion. If the Company retains
broker/dealers or selling agents, the Selling Shareholders shall pay their pro
rata share of commissions and expenses related thereto.
1.4 The Company shall have no obligation to sell any of the Shares
being offered by the Selling Shareholders in the Offering, but if any Shares in
the Offering are sold, the specific Shares sold shall be drawn from those made
available for sale by the Company and each Selling Shareholder based on
multiplying, with respect to each of them, (a) the number of Shares sold by (b)
a fraction, the numerator of which shall be the total number of Shares made
available for sale by the referenced person and the denominator of which shall
be the total Shares available for sale in the Offering. With respect to each
sale, the Company shall pay or cause to be paid to each Selling Shareholder an
amount equal to the difference of (x) the product of (i) the number of Shares
sold for such Selling Shareholder times (ii) the price per Share, minus (y) the
Selling Shareholder's pro rata share of commissions and expenses provided by
Section 1.3. At the conclusion of the Offering, the Company shall return to the
Selling Shareholders any unsold Shares belonging to such Selling Shareholders.
1.5 In the event that either or both of the Selling Shareholders fail
to deliver the number of Shares that the Selling Shareholders are obligated to
sell hereunder, the Company may, at its option, increase the number of shares to
be sold by it hereunder to the total number of Shares to be sold in the
Offering. In such case, the Company may make any necessary changes in the
registration statement, the prospectus or in any other documents or
arrangements. No action taken pursuant to this Section 1.5 shall relieve any
Selling Shareholder so defaulting from liability, if any, in respect of such
default.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. Each selling
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shareholder, severally and not jointly, represents and warrants to, and agrees
with, the Company as follows:
2.1 OWNERSHIP. The Selling Shareholders are the record and beneficial
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owners of, and have good and marketable title to the shares to be sold by the
Selling Shareholders in the Offering, free and clear of any adverse claims and
all restrictions on transferability, legends, proxies or other encumbrances.
2.2 OWN ACCOUNT. The Selling Shareholders are selling their shares for
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their own account, and the Selling Shareholders are not selling their shares,
directly or indirectly, for the benefit of the Company, and the Selling
Shareholders have no present intent that any part of the proceeds of such sale
received by the Selling Shareholders will inure, either directly or indirectly,
to the benefit of the Company.
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2.3 SHARES VALIDLY ISSUED. For purposes of administering the
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Offering, the Selling Shareholders have placed or caused to be placed in the
custody of the Company the certificates representing the shares to be sold by
the Selling Shareholders, and such certificates represent validly issued, fully
paid and nonassessable shares of common stock; and such certificates were
accompanied by all documents duly and properly executed that are necessary to
validate the transfer of title thereto, free of any legend, restriction on
transferability, proxy, lien or claim, whatsoever.
2.4 AUTHORITY. The Selling Shareholders have the power and authority
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to enter into this Agreement and to sell, transfer and deliver their shares to
the Company to be sold by the Company on their behalf; and the Selling
Shareholders have authorized, executed and delivered to Xxxxxx Xxxxxx and Xxxxxx
Xxxxxx, or either of them, as Attorneys-in-Fact, an irrevocable Power of
Attorney authorizing and directing the Attorneys-In-Fact to effect the sale and
delivery of the Shares being sold by the Selling Shareholders, to enter into
this Agreement and to take all such other action as may be necessary hereunder.
2.5 VALID AND BINDING AGREEMENT. This Agreement has been duly
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authorized, executed and delivered by or on behalf of the Selling Shareholders
and constitutes a valid and binding agreement of the Selling Shareholders,
enforceable in accordance with its terms, except as rights to indemnity
hereunder may be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or laws
affecting the rights of creditors generally and subject to general principles of
equity. The execution and delivery of this Agreement and the performance of the
terms hereof and the consummation of the transactions herein will not result in
a breach or violation of the terms and provisions of any of, or constitute a
default under, any agreement or instrument to which any Selling Shareholder is a
party or by which any such Selling Shareholder is bound, or any law, regulation,
order or decree applicable to such Selling Shareholder; no consent, approval,
authorization or order of, or filing with, any court or governmental agency or
body is required for the execution, delivery and performance of this Agreement
and the Power of Attorney or for the consummation of the transactions
contemplated hereby, including the sale of the securities being sold buy such
Selling Shareholder, except such as may be required under the Securities Act of
1933, as amended (the "Act"), or state securities laws or blue sky laws.
2.6 GOOD TITLE. Each investor that purchases Shares sold by the
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Selling Shareholders in the Offering, upon delivery of and payment for the
Shares, will acquire good and marketable title to the Shares when sold pursuant
to the terms and conditions of this Agreement, and shall acquire good and
marketable title thereto, free and clear of any adverse claims and obtain
control thereto.
2.7 LIMITATIONS ON DISTRIBUTION OF PROSPECTUS. The Selling
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Shareholders have not distributed and will not distribute any prospectus or
other offering material in connection with the offering and sale of the Shares
other than any preliminary prospectus or the prospectus or other materials
permitted by the Act to be distributed by the Selling Shareholders.
2.8 NO UNTRUE STATEMENTS OF MATERIAL FACTS. To the extent that any
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statements or omissions made in the registration statement, any preliminary
prospectus, the prospectus or any amendment or supplement thereto, insofar as
such statements or omissions relate to the Selling Shareholders, such
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preliminary prospectus and the registration statement will, and the prospectus
and any amendments or supplements to the registration statement or prospectus
will, when they become effective or are filed with the Commission, as the case
may be, not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
2.9 CERTIFICATES SIGNED BY SELLING SHAREHOLDERS. Any certificate
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signed by or on behalf of any Selling Shareholder and delivered to the Company
shall be deemed a representation and warranty by such Selling Shareholder as to
the matters covered thereby.
3. COVENANTS OF SELLING SHAREHOLDERS. The Selling Shareholders, severally
---------------------------------
and not jointly, covenant and agree with the Company as follows:
3.1 REQUESTS FOR INFORMATION. The Selling Shareholders agree to
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promptly furnish the Company with any and all written information concerning the
Selling Shareholders that the Company reasonably requests in order to prepare
the registration statement, any preliminary prospectus, the prospectus or any
amendment or supplement thereto, and to conduct such other due diligence as may
be necessary for the Company to satisfy or respond to any regulatory or
governmental requirements or requests. The Selling Shareholders agree to
provide true, complete and accurate information based on a diligent review of
appropriate records as would be conducted by a prudent man in the management of
his own property. The Selling Shareholders understand that the Company may
incorporate some or all of such information into the registration statement, the
preliminary prospectus, the prospectus or any amendment or supplement thereto,
or may determine based on such information that certain disclosures are not
required, and that the Company will depend on the Selling Shareholders to
provide true, complete and accurate information.
3.2 Except as otherwise agreed to by the Company and the Selling
Shareholders, the Selling Shareholders will pay all taxes, if any, on the
transfer and sale of the Securities being sold by such Selling Shareholders, the
fees of such Selling Shareholders' counsel.
3.3 If this Agreement shall be terminated by the Company because of any
failure, refusal or inability on the part of any Selling Shareholder to perform
or failure to comply with its obligations under this Agreement, such Selling
Shareholder agrees to reimburse the Company for any and all out-of-pocket
disbursements (including fees and disbursements of counsel for the Company)
incurred by the Company in connection with the marketing of the Shares or in
contemplation of performing its obligations hereunder. The Selling Shareholder
shall not in any event be liable the Company for loss of anticipated profits
from the transactions covered by this Agreement.
3.4 The Selling Shareholders have not taken and will not take, directly
or indirectly, any action designed to or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares, and have not
effected any sales of common stock, which, if effected by the Company, would be
required to be disclosed in response to Item 701 of Regulation S-B.
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3.5 The Selling Shareholders shall immediately notify the Company if
any event occurs, if any change of information occurs relating to a Selling
Shareholder or the Company, or if any new information exists relating to the
Company or relating to any matter stated in the prospectus or any supplement
thereto, any of which results in the prospectus (as supplemented) either
including any untrue statement of material fact or omitting to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
4. INDEMNIFICATION.
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4.1 The Company agrees to indemnify and hold harmless each Selling
Shareholder and each person, if any, who controls a Selling Shareholder within
the meaning of the Act against any losses, claims, damages or liabilities, joint
or several (which shall, for all purposes of this Agreement, include, but not be
limited to, all reasonable costs of defense and investigation and all reasonably
attorneys' fees), to which a Selling Shareholder may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus, or amendments or
supplements thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission in
the registration statement, any preliminary prospectus, the prospectus, or
amendments or supplements thereto, in reliance upon, and in conformity with,
written information furnished to the Company by the Selling Shareholders
specifically for use in the preparation thereof. This indemnity provision will
be in addition to any liability that the Company may otherwise have.
4.2 The Selling Shareholders each agree that they will indemnify and
hold harmless the Company, and each officer, director or person, if any who
controls the Company within the meaning of the Act, against any losses, claims,
damages or liabilities (which shall, for all purposes of this Agreement,
include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees) to which the Company or any
such officer, director or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration statement,
any preliminary prospectus, the prospectus or amendments or supplements thereto,
or arise out of or are based upon the omission to make statements therein not
misleading, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the registration
statement, any preliminary prospectus, the prospectus or amendments or
supplements thereto in reliance upon and in conformity with, written information
furnished to the Company by the Selling Shareholders specifically for use in the
preparation thereof. This indemnity provision will be in addition to any
liability the Selling Shareholders may otherwise have.
4.3 Promptly after receipt by an indemnified party under this Section 4
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
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Section 4, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability that it may have to any indemnified party
except to the extent of actual prejudice demonstrated by the indemnifying party.
In case any such action is brought against any indemnified party, and the
indemnified party notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
assume the defense thereof, subject to the provisions herein stated and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 4 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless the indemnifying
party shall not pursue the action to its final conclusion. The indemnified
party shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall not be at the expense of the indemnifying party if the indemnifying party
has assumed the defense of the action with counsel reasonably satisfactory to
the indemnified party. No settlement of any action against an indemnified party
shall be made without the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld.
4.4 All fees and expenses of the indemnified party (including
reasonable costs of defense and investigation in a manner not inconsistent with
this Section 4 and all reasonable attorneys' fees and expenses), shall be paid
to the indemnified party, as incurred, within thirty (30) days of written notice
thereof to the indemnifying party; provided, that the indemnifying party may
require such indemnified party to undertake to reimburse all such fees and
expenses to the extent it is finally judicially determined that such indemnified
party is not entitled to indemnification hereunder.
4.5 The obligations of the Company and the Selling Shareholders under
this Section 4 shall be in addition to any liability that the Company or any
Selling Shareholder may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Company and the Selling
Shareholders within the meaning of the Act. The obligations of the Company
under this Section 4 shall extend, upon the same terms and conditions, to each
director of the Company (including any person who, with his consent, is named in
the Registration Statement as about to become a director of the Company) and to
each officer of the Company who has signed the registration statement on Form
SB-2.
5. CONTRIBUTION. In order to provide for just and equitable contribution
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under the Act or otherwise arising out of or based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus or amendments or
supplements thereto, or arising out of or based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in any case in which (i)
the indemnified party makes a claim for indemnification pursuant to Section 4
hereof but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that the express provision of
Section 4 hereof provide for indemnification in such case, or (ii) contribution
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under the Act or otherwise may be required on the part of any indemnified party,
in either such case, the Company and the Selling Shareholders shall contribute
to the aggregate losses, claims, damages or liabilities to which they may be
subject (which shall, for all purposes of this Agreement, include, but not be
limited to, all reasonable costs of defense and investigation and all reasonable
attorneys' fees), in either such case (after contribution from others) on the
bases of relative fault as well as any other relevant equitable considerations.
The relative fault shall be determined by a reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand and a Selling Shareholder on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Selling Shareholders agree that it would not be just or equitable if
contribution pursuant to this Section 5 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in this Section 5. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Section 5.4 shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
6. MISCELLANEOUS.
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6.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the entire
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agreements between, the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto. This Agreement may
not be amended without the joint written consent of both parties to this
Agreement.
6.2 NOTICES. Any notice or other communication between the parties
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under the Agreement shall be in writing and shall be considered given when
accomplished by any of the following methods: (i) if by personal delivery, when
such delivery occurs, (ii) if by reputable overnight courier service, when such
courier indicates delivery was made, or (iii) if sent by U.S. mail, return
receipt requested, on the earlier of actual receipt or the date five (5)
business days after mailing. Such notice shall be delivered, if to the Company,
to:
Xxx Xxxxxxx
International Commercial Television Inc.
0000 X. Xxxxx Xxxxxxx, Xxxxx 000X
Xxxx Xxxxx, XX 00000-0000
With a copy to:
(which shall not constitute notice)
Xxxx Xxxxxx
Xxxxx Xxxxxx Xxxxxxx, P.L.L.C.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
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If to the Selling Shareholders, to:
Xxxxxxx Xxxxxx
1190 Xxxx Xxxx Extension
Xxxxxx Xxxx
Xxxxx Xxxxxx 0000 Xxxxxxxxxxx
The Better Blocks Trust
c/o Xxxxxxx Xxxxxxx Xxxxx, Trustee
Xxxxx 0, 0 Xxxx Xxxxxx
Xxxxxxxx Xxx Xxxxxxx
No change of address shall be valid unless it is communicated in writing to the
other party with at least five business days notice.
6.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
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shall inure to the benefit of the permitted successors and assigns of the
parties hereto.
6.4 WAIVER. The failure of a party to insist on strict adherence to
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any term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
6.5 HEADINGS. The section headings in this Agreement are for reference
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only and shall not constitute a part of this Agreement for any other purpose and
shall not be deemed to limit or affect any of the provisions hereof.
6.6 GOVERNING LAW. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Nevada, without regard to conflicts
of law principles.
6.7 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
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benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
6.8 COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be
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executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one and the same document. Signatures transmitted
by facsimile shall be deemed valid execution of this Agreement and binding on
the parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the latest date indicated below.
INTERNATIONAL COMMERCIAL TELEVISION INC.
/s/ Xxxxxx Xxxxxxx Date: December 4, 2001
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Xxxxxx Xxxxxxx, President
SELLING SHAREHOLDERS
/s/ Xxxxxxx Xxxxxx Date: November 5th, 2001
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Xxxxxxx Xxxxxx
Each undersigned in their capacity as a trustee
of The Better Blocks Trust created by Deed
1 January 1994
/s/ Xxxxxx Xxxxxx Date: October 24, 2001
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Xxxxxx Xxxxxx, Trustee
/s/ Xxxxx Xxx Xxxxxx Date: Nov. 15 2001
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Xxxxx Xxx Xxxxxx, Trustee
/s/ Xxxxxxx Xxxxxxx Xxxxx Date: 5 November 2001
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Xxxxxxx Xxxxxxx Xxxxx, Trustee
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SCHEDULE I
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NAME OF SELLING SHAREHOLDER NUMBER OF SHARES TO BE SOLD
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Xxxxxxx Xxxxxx 333,500
The Better Blocks Trust, declared 1 January 1994 333,500
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