PRIVATE PLACEMENT DISTRIBUTION AGREEMENT
This Agreement made this day of November 1994 by and between ACTV, Inc.,
a Delaware Corporation (hereinafter referred to as 'ACTV') with its principal
offices located at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and
ETR & Associates, Inc., a Delaware Corporation (hereinafter referred to as
'ETR') located at 00 Xxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxx Xxxxxx 00000.
WITNESSETH
WHEREAS, ACTV is a 'reporting issuer' within the meaning of Section 902(1)
of Regulation S, 17 CFR Section 240.901 et seq. promulgated under the Securities
Act of 1933 ('Regulation S') which files reports with the U.S. Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934 (the
'Exchange Act') and whose stock is traded on the National Association of
Securities Dealers Automated Quotation System (NASDAQ Small Cap) under the
symbol 'IATV'.
WHEREAS, ETR is acting as a 'distributor' within the meaning of Section
902(c) of Regulation S; and
WHEREAS, ETR desires to assist ACTV in obtaining equity capital pursuant to
an offering conducted in compliance with Regulation S upon the terms and
conditions set forth herein;
NOW THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
I. PRIVATE PLACEMENT WARRANTIES AND COVENANTS
1.01 ETR shall use its 'best efforts' to offer and sell up to $300,000
worth of ACTV Common Stock, (the 'Securities') in an offering conducted pursuant
to Section 902 of Regulation S. The offering will consist of approximately
100,000 shares of common stock to be sold at a discounted share price of
approximately $3.00 per share. If the offering price per share is less than this
amount, ACTV must give its approval of this lower pricing.
1.02 ETR shall ensure compliance with Regulation S and shall send each
purchaser a confirmation or other notice to the purchaser stating that the
purchaser is subject to the same restrictions on offers and sales as ETR
pursuant to Section 903(c)(2)(IV) of Regulation S.
1.03 ETR agrees that all offers and sales of the Securities prior to the
expiration of the forty (40) day restricted period specified in Section
903(c)(2) of Regulation S shall be made only in accordance with the provisions
of Section 903 and 904 of Regulation S as applicable; pursuant to registration
of the Securities under the Securities Act of 1933 (the 'Securities Act'), or
pursuant to an available exemption from registration under the Securities Act.
1.04 ETR agrees that any offering materials or documents (except 1934 Act
filings and press releases) used in connection with offers and sales of
Securities, prior to the expiration of the restricted period specified in
Section 903(c)(2) of Regulation S shall include statements to the effect that
the Securities have not been registered under the Securities Act and may not be
offered or sold in the United States or to U.S. persons (other than distributors
as that term is defined under Section 902(c) of Regulation S) unless the
Securities are registered under the Securities Act, or an exemption from
registration requirements of the Securities Act is available. Such statements
shall appear on all materials as provided under Section 902(h)(2)(i), (ii) and
(iii) of Regulation S.
1.05 ETR shall advise ACTV of any legends or restrictions required by
foreign countries, if any, pertaining to the Securities which ACTV shall cause
to be placed on the certificates representing the Securities; and ETR shall
otherwise take all steps necessary to ensure that any offers and sales made
pursuant to this Agreement comply with the laws and regulations of all foreign
regulatory and/or self-regulatory authorities.
1.06 ACTV acknowledges that ACTV's counsel must prepare a legal opinion to
authorize the transfer agent to issue shares of ACTV's Common Stock with the
following restrictive legend:
'These shares have been issued pursuant to Regulation S as an
exemption to the registration provisions under the Securities Act
of 1933, as amended. These shares cannot be transferred, offered
or sold in the U.S. or to U.S. persons (as defined in Regulation
S) until after , 1994 (Forty-one days after
closing).'
1.07 ACTV shall maintain its status as a corporation in good standing and a
reporting issuer, operating in accordance with its most recent reports filed
under the Exchange Act and provided to ETR.
1.08 ETR shall insure that at the time the buy order is originated for any
of the Securities covered by the Agreement, the buyer is outside the United
States. Also, the offering will be restricted to a maximum of three qualified
offshore subscribers.
1.09 ETR shall insure that no directed selling efforts shall be made in the
United States by it, its affiliates, or any person acting on its behalf in
connection with the offer and sale of the Securities during the restricted
period. The term 'directed selling efforts' means any activity undertaken for
the purpose of, or that could reasonably be expected to have the effect of
conditioning the market in the United States for the Securities. This would
include the solicitation of offers to purchase and or sell the Securities from
persons in the United States.
1.10 ACTV shall promptly issue certificates representing the Securities
upon notice by Escrow Agent that payment has been received, accompanied by a
Subscription Agreement executed by a foreign purchaser, in the form attached
hereto in Exhibit A.
II. COMPENSATION
2.01 ACTV hereby agrees to compensate ETR for its services 10% of the gross
proceeds received by ACTV.
ACTV also agrees to compensate ETR for any travel or other reasonable
out of pocket expenses related to the offering.
2.02 All subscriptions received by ETR will be directed to the Attorney
Trust Account of Harley & Deickler, Attn: Xxxxx Xxxxxx, Esq./as Escrow Agent.
ACTV agrees to pay for all wire transfer fees and miscellaneous legal fees
incurred by counsel. Each time that ACTV delivers Securities in accordance to
Regulation S, in the name of each subscriber, the proceeds will be immediately
delivered to ACTV in a certified check or wire, less a one-half percent (0.5%)
escrow fee to Harley & Deickler, and the 10% fee to ETR as set forth in 2.01
above.
III INDEMNIFICATION
3.01 ETR and ACTV agree to indemnify and hold harmless the escrow agent
from any and all claims, liabilities, losses, actions, suits or proceedings, at
law or in equity, that it may incur or with which it may be threatened by reason
of its acting as escrow agent as described herein (including but not limited to
expenses reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever); provided,
however, that the provisions of this paragraph shall not apply in the event of
any claim, liability, loss, action, suit, or proceeding resulting from the
breach of the Escrow Agent of any material provision of this Agreement or from
its gross negligence or willful misconduct.
3.02 ACTV agrees to indemnify and hold harmless ETR, its directors and each
person, if any, who controls or is employed by ETR within the meaning of Section
15 of the Securities Act of 1933 as follows:
a. Against any loss, liability, claim, damage and expense arising out of
(including but not limited to expenses reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever based upon) any untrue or alleged untrue statement of a
material fact contained in the offering materials (as amended or supplemented)
furnished to ETR by ACTV, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading unless such statement or omission was made in reliance
upon and in conformity with written information furnished to ACTV by ETR
expressly for use in the offering materials or any amendment or supplement
thereof; and
b. Against any loss, liability, claim, damage and expense to the extent of
the aggregate amount paid in settlement of any litigaion commenced or
threatened, or of any claim based upon any untrue statement or omission or any
alleged untrue statement or omission (including but not limited to expenses
reasonably incurred in investigating, preparing or defending against any such
litigation or claim) if such settlement is effected with the written consent of
ACTV.
3.03 ETR agrees to indemnify and hold harmless ACTV, its directors, the
attorney for ACTV who prepares the legal opinion in connection with the
Regulation S offering, and each person, if any who controls or is employed by
ACTV within the meaning of Section 15 of the Securities Act as follows:
a. Against any loss, liability, claim, damage and expense arising out of
(including but not limited to expenses reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever based upon) ETR's violation or alleged violation of Regulation
S and any other applicable law or any untrue or alleged untrue statement of a
material fact contained in the offering materials, if any, (as amended and
supplemented) executed by ETR, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission was
made in the offering materials or in any other offering documentation in
reliance upon and in conformity with written information furnished to ACTV by
ETR specifically for use in the preparation thereof; and
b. Against loss, liability, claim, damage and expense to the extent of the
aggregate amount paid in settlement of any litigation commenced or threatened,
or of any claim based upon by any untrue statement or omission of any alleged
untrue statement or omission (including but not limited to expenses reasonable
incurred in investigating, preparing or defending against any such litigation or
claim) if any settlement is effected with the written consent of ETR.
IV Termination
4.01 This offering will terminate at 5:00pm Eastern Standard Time on
November 25, 1994, unless extended by all the parties to this Agreement.
V. Governing Law
5.01 This Agreement is binding on all parties, as well as on their
successors, assignees and representatives, and constitutes the entire Agreement
between the parties. This Agreement may be modified or amended solely by a
written agreement executed by the parties hereto, and may be executed in
counterparts.
5.02 The parties shall resolve any dispute arising hereunder before an
arbitrator pursuant to the rules of the American Arbitration Association and
each party shall bear their own attorney's fees and costs of such arbitration.
Disputes under this agreement shall be governed by the laws of the State of New
York.
VI Notices
6.01 All notices and communications regarding this Agreement shall be sent
to the following:
If to ACTV:
Xx. Xxxxxxx X. Xxxxxxx
President
ACTV, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to ETR:
Xx. Xxxxxx X. Xxx
President
ETR & Associates, Inc.
00 Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
executed this Agreement:
ETR & ASSOCIATES, INC.
By: XXXXXX X. XXX 11-11-94
...................................
Xxxxxx X. Xxx, President
ACTV, INC.
By: XXXXXXX X. XXXXXXX
...................................
Xxxxxxx X. Xxxxxxx, President
