OPTION AGREEMENT
OPTION AGREEMENT dated September 29, 1995 between ACTV, Inc., a Delaware
corporation (the 'Corporation') and Xxxxxxx X. Xxxxxxx ('Xxxxxxx').
The Corporation desires to grant to Xxxxxxx the right and option to acquire
up to 20,000 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 assignment of Xxxxxxx'x U.S. Patent
No. 5,068,733, the receipt of which is hereby acknowledged, the parties hereby
agree as follows:
SECTION 1. Option to Purchase Common Stock.
a. The Corporation hereby grants to Xxxxxxx an option (the 'Option') to
acquire from the Corporation 20,000 Option Shares, in consideration of the
assignment to ACTV, Inc. of Xxxxxxx'x U.S. Patent No. 5,068,733 (the 'Option
Price'). Xxxxxxx'x right and option to acquire the Option Shares shall vest
10,000 October 1, 1995, 5,000 Option Shares on October 1, 1996, and 5,000 Option
Shares on October 1, 1997 at. Said right shall be cumulative so that as of
October 1, 1997, Optionee shall have the fully vested right to receive 20,000
Option Shares. With respect to the Option, the 'Option Period' shall commence on
the date hereof and shall terminate October 1, 1999.
b. The vested Options may be exercised by Xxxxxxx by delivery to the
Corporation, at any time, of a written notice (the 'Option Notice'), which
Option Notice shall state Xxxxxxx'x intention to exercise the Options, the date
on which Xxxxxxx proposes to receive the vested Option Shares (the 'Closing
Date') and the number of vested Option Shares to be received 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.
c. The delivery 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 registered in the name of
Xxxxxxx, evidencing the vested Option Shares being acquired on the Closing Date,
shall be made by the Corporation to Xxxxxxx on the Closing Date.
SECTION 2. Representations and Warranties of The Holder. Xxxxxxx hereby
represents and warrants to the Corporation that in the event Xxxxxxx acquires
any unregistered Option Shares, such Option Shares will be acquired for his own
account, for investment and not with a view to the distribution thereof. Xxxxxxx
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 exempt 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 no 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 Xxxxxxx would have been entitled if Xxxxxxx
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
reorganization, 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
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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 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. Death of the Optionee.
Death of the Optionee. In the event that Xxxxxxx shall die prior to his
complete exercise of the Option, the Option may be exercised in whole or in part
only: (i) by Xxxxxxx'x estate or on behalf of such person or persons to whom
Xxxxxxx'x rights pass under his Will or by the laws of descent and distribution,
(ii) to the extent that Xxxxxxx was entitled to exercise the Option at the date
of his death, and (iii) prior to the expiration of the term of the Option.
SECTION 6. Piggyback Registration.
a. The 10,000 Option Shares vesting October 1, 1995 will be immediately
registered upon the receipt of written notice prior to January 1, 1996.
b. If, at any time commencing January 1, 1996 and expiring October 1, 2001,
the Corporation proposes to register any of its securities under the Securities
Act (other than in connection with a merger or 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 Xxxxxxx of its
intention to do so. If Xxxxxxx notifies the Corporation within ten (10) days
after receipt of any such notice of his desire to include any vested Option
Shares, owned by him in such proposed registration statement, the Corporation
shall afford Xxxxxxx the opportunity to have any of his Option Shares registered
under such registration statement, the Corporation shall afford Xxxxxxx 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
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offering, the underwriter approves such inclusion.
c. 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.
x. Xxxxxxx 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, Xxxxxxx 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.
e. 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 Xxxxxxx, provided that the
Corporation will pay, the costs and expenses of Xxxxxxx'x 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:
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If the Corporation, to:
ACTV, Inc.
1270 Avenue of the Americas, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Chief Executive Officer
With a copy to:
Xxx X. Xxxxxxxxx, Esquire
Gersten, Savage, Kaplowitz & Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Xxxxxxx, to:
Xxxxxxx X. Xxxxxxx
Xxxxxxxx Law Firm, P.A.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, III, P.A.
or to such other address as the party to whom notice is to be 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.
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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 By: XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
Chief Executive Officer
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