EXHIBIT B
STOCK OPTION AND PURCHASE AGREEMENT
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THIS STOCK OPTION AND PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 9th day of April 1998, by and between Xxxxxx Xxxxx and Xxx. Xxxxxxx X.
Xxxxx, spouse of Xxxxxx Xxxxx, her liability limited as to conveyance of her
marital interest in the stock, if any, (herein acting collectively and
designated as the "Seller"), and Fortune Entertainment Corporation, a Delaware
corporation, (hereinafter referred to and designated as the "Buyer") herein
represented by Mr. Xxxxx Xxxxxxx, duly authorized for these purposes as he so
declares.
RECITALS
A. "Seller" is the recorded and beneficial owner of the aggregate sum of 125,000
shares (the "Stock") of the common stock ("Common Stock"), of Sega Gaming
Technology Inc., a Nevada corporation (the "Company"), and has all of the rights
necessary and required to sell and transfer the said "Stock";
B. "Buyer" desires to acquire "the Stock" from "Seller" and "Seller" desires to
sell "the Stock" to "Buyer", upon such terms and conditions as are hereinafter
to be more fully enumerated;
Now, therefore, in consideration of the foregoing premises and the
mutual convenants and conditions hereinafter set forth, the parties, hereto do
hereby mutually agree as follows:
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1. PURCHASE, OPTION, TRANSFER, CONSIDERATION AND DELIVERY OF STOCK:
a) Purchase of stock. "Buyer" shall purchase 62,500 shares from
"Seller" for $8.00 U.S. Dollars per share for a total purchase price of
$500,000.00 Dollars in the aggregate, payable forthwith upon the execution of
the present Memorandum of "Stock Option and Purchase Agreement";
b) Option of stock. "Buyer" shall have an exclusive option to further
purchase the balance of the "Stock", (62,500 shares) from "Seller", for $8.80
U.S. Dollars per share ($550,000.00 in the aggregate), (THE "OPTION");
The "Option" shall expire on December 31, 1998, at 4:00 p.m. Est. if not
exercised prior thereto;
c) Transfer of stock. Upon the terms and subject to the conditions of
this Agreement, "Seller" hereby agrees to transfer physical possession and
title, and "Buyer" hereby agrees to take physical possession and title to "the
Stock";
i) in the case of the first 62,500 shares, physical possession and
title thereto, are to be transferred upon receipt of payment by
the "Seller";
ii) in the case of the second tranche of 62,500 shares, physical
possession and title are to be transferred upon receipt of
payment by the "Seller", or in the event of partial payment(s),
in accordance with section e) hereinabove;
d) Consideration. In consideration of the option and purchase of the
aforesaid "Stock", "Buyer" shall pay:
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i) $550,000.00 U.S. Dollars at the execution of the present
Memorandum of "Stock Option and Purchase Agreement";
e) Payment and Delivery. In the event that "Buyer" makes partial
payments prior to December 31st, 1998, on the balance of the stock, "Seller"
shall be required to deliver physical possession and title to the pro-rata
portion of shares paid for, but never in a block(s) of less than 15% of the
total number of shares (62,500) to be purchased.
f) Conditions to Closing. The obligations of "Buyer" and "Seller"
pursuant to this Agreement are conditional upon (i) the consent of each of the
shareholders of the "Company" to the sale of "the Stock" pursuant to the terms
of this Agreement, as required by those certain Stockholders and Registration
Rights Agreements, dated May 27, 1997 and December 8, 1997, executed between the
"Company" and the persons named therein (the "Stockholders Agreement") and (ii)
"Buyer" executing a counterpart of the Stockholders Agreement or an
acknowledgment of "Buyer's" obligations as a shareholder of the "Company", at
the election of the "Company" and in accordance with the terms of the
Stockholders Agreement (the "Conditions"). "Seller" shall give notice of
satisfaction of the Conditions referred to in (i) above, promptly upon becoming
aware of the same. "Buyer" further agrees to enter into the Stockholders
Agreement in satisfaction of the condition described in (ii) above.
g) Delivery of documents. "Seller" shall cause to be delivered to
"Buyer", prior to the signature of these presents, all of the documents
mentioned in section 1 paragraph (c)(i) of these presents, including the
Stockholders Agreement, and with respect to Section 1 paragraph (c)(ii), all
undertakings expressed or implied on the part of the "Buyer" in the present
agreement, are subject to the "Buyer"'s satisfaction with said documents. The
signature of these presents by the "Buyer" shall confirm his satisfaction that
the aforesaid documents have been delivered.
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h) Further Assurances. Subject to the Closing, each party to this Agreement
agrees to execute and deliver, from time to time in the future, such other
documents and instruments as the other party may reasonably request in order to
carry out and effect the sale, transfer and delivery of "the Stock" to "Buyer",
and to vest in "Buyer", a good and marketable title thereto.
2. REPRESENTATIONS AND WARRANTIES OF "SELLER"
As a material inducement to "Buyer" to execute this Agreement, and to
acquire "the Stock", "Seller" represents and warrants to "Buyer" as follows:
a) Equity Interest in the Company. "Seller" is the recorded and beneficial
owner of and aggregate 125,000 shares of Common Stock.
b) Title to the Stock. "Seller" warrants and declares that it has good,
absolute and marketable title to "the Stock", free and clear of all liens,
claims, encumbrances and restrictions of every kind, type, or nature, other than
those arising pursuant to the Stockholders Agreement of Sega Gaming Technology.
"Seller" has not granted any options, warrants or other rights to any person to
acquire any rights or interests in or to any shares of "the Stock", The delivery
of "the Stock" to "Buyer" at the closing, under this Agreement shall vest in
"Buyer" a good, absolute and marketable title to all of "the Stock", free and
clear of any and all liens, claims encumbrances and restrictions of every kind.
c) Authority; Binding Obligation. "Seller" represents and warrants that it
has the full and unrestricted right, power, capacity and authority to enter
into, execute and deliver this Agreement and to transfer and deliver good, valid
and marketable title to all of "the Stock", free and clear of any and all liens,
claims, encumbrances and restrictions of every kind, including any and all
community property interests therein, pursuant only to the consent of the
"Seller's" spouse, the intervening party, Xxx. Xxxxxxx X. Xxxxx, which said
consent, is part of the present agreement. This Agreement constitutes the legal,
valid and binding obligation of "Seller", enforceable against "Seller". In
accordance with its terms, except that such enforcement may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally.
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d) Knowledge of "Seller". In entering into this Agreement and performing
its obligations hereunder, "Seller" has relied upon information concerning the
Company from sources other than "Buyer", and not upon any representations of the
"Buyer" with respect thereto.
3. REPRESENTATIONS AND WARRANTIES BY "BUYER"
As a material inducement to "Seller" to execute this Agreement and to
perform "Sellers" obligations hereunder, "Buyer" hereby represents and warrants
to "Seller" as follows:
a) Due Authorization. This Agreement has been duly authorized, executed and
delivered by "Buyer" and constitutes a legal, valid and binding obligation of
"Buyer", enforceable against "Buyer" in accordance with its terms, except that
such enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally.
b) Circumstances of Transfer. "Buyer" is acquiring "the Stock" for its own
account, for investment purposes only, and not with a view to or for resale in
connection with the distribution thereof, in a transaction not accompanied by
the publication of any advertisement. Buyer is sophisticated in business matters
of this nature, and experienced in evaluation investments of this type.
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c) Knowledge of "Buyer"; Restricted Stock. In entering into this
Agreement and performing its obligations hereunder, "Buyer" has relied upon
information concerning the Company from sources other than the "Seller", and not
upon any representations of the "Seller" with respect thereto. "Buyer" is aware
of the absence of a public market for "the Stock", knows that the transfer of
"the Stock" is restricted by the Securities Act of 1933, as amended, and by the
terms of the Stockholders Agreement, and may be restricted by other applicable
laws and regulations, and "Buyer" agrees to such restrictions and the placement
of a legend or legends reflecting such restrictions an any certificates
representing "the Stock".
4. MISCELLANEOUS
a) Governing Law. This Agreement is made and entered into in the State
of Nevada and the laws of said State shall govern the validity and
interpretation hereof and the performance by the parties hereto of their
respective duties and obligations hereunder.
b) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
c) Captions and Section Headings. Section titles and captions contained
in this Agreement are inserted as a matter of convenience and for reference
purposes only, and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provisions hereof.
d) Costs and Attorneys' Fees. If any action, suit or other proceeding
is instituted concerning or arising out of this Agreement, the party in whose
favor judgement is rendered shall recover all of such party's costs and
attorneys' fees
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incurred in each and every such action, suit or other proceeding, including any
and all appeals or petitions therefrom.
e) Notices. All notices, requests, demands, deliveries and other
communications hereunder shall be in writing and, except as otherwise
specifically provided in this Agreement, shall be deemed to have been duly given
if delivered by facsimile transmission to the parties at the following addresses
and fax numbers.
If to "Seller";
0000 Xxxxx Xxxxxxxxxx Xx.
Xxx Xxxxx, XX 00000
Fax No, 000-000-0000
If to "Buyer":
Xxxx and Xxxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax No.
Any of the parties hereto may, from time to time, change its address
for receiving notices by giving written notice thereof in the manner outlined
above.
f) Survival of Representations and Warranties. All agreements,
representations and warranties contained herein shall survive the execution and
delivery of this Agreement, any investigation at any time made, the sale and
purchase of "the Stock" and payment therefor, and any disposition of "the
Stock".
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g) Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter of this Agreement and there
are no further or other representations, warranties, agreements or
understandings, written or oral, in effect between the parties relating to the
subject matter of this Agreement unless expressly referred to herein.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
"SELLER"
/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX
/s/ Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX
"BUYER"
FORTUNE ENTERTAINMENT CORPORATION
PER: /s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX, CEO
