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Exhibit: 10.8FD
FUNDEX GAMES, LTD.
STOCK PURCHASE AGREEMENT
This Agreement is made as of the ______ day of _________ 199 , by and
between Fundex Games, Ltd., a Nevada corporation (the "COMPANY"), And
_______________________ ("OPTIONEE"). Unless the context herein otherwise
requires, capitalized terms used herein shall have the same meaning as such
capitalized terms have under the Plan.
R E C I T A L S
A. Optionee was granted a Stock Option (the "Option") on October 24,
1997 pursuant to the Company's 1996 Employee Stock Option Plan (the "Plan"), the
terms and conditions of which are incorporated herein by reference.
B. Pursuant to said Option, Optionee was granted the right to purchase
shares of the Company's common stock, as adjusted in accordance with the (the
"Optioned Shares").
C. Optionee has elected to exercise the Option to purchase
________________________ of such Optioned Shares (herein referred to as the
"Shares") under the Stock Option Agreement evidencing said Option (the "Option
Agreement").
D. As required by the Option Agreement, as a condition to Optionee's
exercise of his or her Option, Optionee must execute this Agreement which gives
the Company the right of first refusal upon transfer.
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1 . EXERCISE OF OPTION. Subject to the terms and conditions hereof,
Optionee hereby agrees to exercise his or her Option or a portion thereof to
purchase ________ Shares at $________ per Share, payable in accordance with the
terms and provisions of the Option Agreement.
2. COMPANY'S RIGHT TO REPURCHASE SHARES.
(a) If an Optionee ceases to serve as an Employee for any reason,
including death, Disability or Termination for Cause, and thereby terminates his
or her Continuous Status As An Employee, the Company shall have the right to
repurchase all of the Shares purchased by Optionee hereunder, at a price to be
determined as set forth below. Such right on the part of the Company shall
commence upon the last day of such Optionee's Continuous Status As An Employee
(the "Termination Date") and shall expire on the 90th day after the Termination
Date.
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(b) The repurchase price shall be an amount equal to the higher of the
exercise price of the Option or 100% of the fair market value of the shares
underlying the option on the date of termination of employment, times the number
of shares to be repurchased. The repurchase price may be paid by the Company by
check, evidence of cancellation of indebtedness of Optionee to Company, or some
combination thereof, as the Company acting in its sole discretion determines.
3. RIGHT OF FIRST REFUSAL. Before any Shares registered in the name of
Optionee may be sold or transferred (including transfer by operation of law),
such Shares shall first be offered to the Company at the same price, and upon
the same terms (or terms as similar as reasonably possible), in the following
manner:
(a) Optionee shall deliver a notice ("Notice") to the Company stating
(i) his or her bona fide intention to sell or transfer such Shares, (ii) the
number of such Shares to be sold or transferred, (iii) the price for which he or
she proposes to sell or transfer such Shares, and (iv) the name of the proposed
purchaser or transferee.
(b) Within 30 days after receipt of the Notice, the Company or its
assignee may elect to purchase any or all Shares to which the Notice refers, at
the price per share and on the same terms (or terms as similar as reasonably
possible) specified in the Notice.
(c) If all or a portion of the Shares to which the Notice refers are
not elected to be purchased pursuant to paragraph 3(b) hereof, Optionee may sell
the Shares not purchased by the Company to any person named in the Notice at the
price and terms specified in the Notice or at a higher price, provided that such
sale or transfer is consummated within 60 days of the date of said Notice to the
Company, and provided, further, that any such sale is in accordance with all the
terms and conditions hereof.
In the event of any transfer by operation of law or other involuntary transfer
(including, but not limited to, by will or by the laws of descent or
distribution) where there is no price established as a matter law, the Company
shall have the right to repurchase all of the Shares purchased by Optionee
hereunder, at a price to be determined as set forth in Section 2(b) above. In
such event, Optionee or Optionee's estate shall notify the Company promptly
after the happening of the event giving rise to the involuntary transfer. Within
30 days after receipt of such Notice, the Company or its assignee may elect to
purchase any or all Shares to which the Notice refers.
4. TERMINATION OF REPURCHASE RIGHT AND RIGHT OF FIRST REFUSAL. Optionee's
obligations and the Company's rights under paragraphs 2 and 3 above shall
terminate upon the earlier of (i) the first sale of Common Stock by the Company
to the public which raises an aggregate of not less than $10,000,000.00 and
which is effected pursuant to a registration statement filed with, and declared
effective by, the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Act"), or (ii) the merger or
consolidation of the Company into, or the sale of all or substantially all of
the Company's assets to, another corporation, if immediately after such merger,
consolidation or sale of assets, at least 50% of the capital stock of the
Company or such other corporation is
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owned by persons who are not holders of capital stock of the Company immediately
prior to such merger, consolidation or sale.
5. ASSIGNMENT. The Company may assign its rights under paragraphs 2 and
3 hereof to one or more persons, who shall have the right to so exercise such
rights in his or her own name and for his or her own account. If the exercise of
any such right requires the consent of the Nevada Securities Commissioner or the
consent of the Securities Commissioner, or the equivalent, of another state, the
parties agree to cooperate in requesting such consent.
6. ADJUSTMENT. If, from time to time during the term of the right of
first refusal available pursuant to paragraph 3 hereof:
(a) There is any stock dividend or liquidating dividend of cash and/or
property, stock split or other change in the character or amount of any of the
outstanding securities of the Company; or
(b) There is any consolidation, merger or sale of all or substantially
all of the assets of the Company;
then, in such event, any and all new, substituted or additional securities or
other property to which Optionee is entitled by reason of his or her ownership
of Shares shall be immediately subject to the right of first refusal set forth
in paragraph 3 hereof, and be included in the word "Shares" for all purposes
with the same force and effect as the Shares presently subject to such right of
first refusal (provided, however, if such consolidation, merger or sale of all,
or substantially all, of the assets of the Company causes a termination of the
right of first refusal set forth in paragraph 3 hereof, then such new,
substituted or additional securities or other property shall not be included in
the word "Shares" for the purposes of this paragraph).
7. LEGENDS. All certificates representing any Shares of the Company
subject to the provisions of this Agreement shall have endorsed thereon legends
in substantially the following form unless in the opinion of the Company's
counsel such legends are no longer necessary:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED
ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT BETWEEN THE
COMPANY AND THE REGISTERED HOLDER, OR ITS PREDECESSOR IN INTEREST, COPY OF WHICH
IS ON FILE WITH THE SECRETARY OF THE COMPANY."
(b) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR
IN CONNECTION WITH, THE SALE, TRANSFER OR DISTRIBUTION THEREOF NO SUCH SALE,
TRANSFER OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED."
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8. INVESTMENT REPRESENTATIONS. Unless the Shares have been registered
under the Act in which event the Company will so advise Optionee in writing,
Optionee agrees, represents and warrants, in connection with the proposed
purchase of the Shares, as follows:
(a) Optionee represents and warrants that he or she is purchasing the
Shares solely for Optionee's own account for investment and not with a view to,
or for resale in connection with any distribution thereof within the meaning of
the Act. Optionee further represents that he or she does not have any present
intention of selling, offering to sell or otherwise disposing of or distributing
the Shares or any portion thereof, and that the entire legal and beneficial
interest of the Shares Optionee is purchasing is being purchased for, and will
be held for the account of, Optionee only and neither in whole nor in part for
any other person.
(b) Optionee represents and warrants that he or she is aware of the
Company's business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to
acquire the Shares. Optionee further represents that he or she has a preexisting
personal or business relationship with the officers and directors of the Company
and that Optionee has such knowledge and experience in business and financial
matters to enable him to evaluate the risks of the prospective investment and to
make an informed investment decision with respect thereto and that he or she has
the capacity to protect his or her own interests in connection with the purchase
of the Shares. Optionee further represents and warrants that Optionee has
discussed the Company and its plans, operations and financial condition with its
officers, has received all such information as he or she deems necessary and
appropriate to enable Optionee to evaluate the financial risk inherent in making
an investment in the Shares and has received satisfactory and complete
information concerning the business and financial condition of the Company in
response to all inquiries in respect thereof.
(c) Optionee represents and warrants that he or she realizes that
Optionee's purchase of the Shares will be a speculative investment and that he
or she is able, without impairing Optionee's financial condition, to hold the
Shares for an indefinite period of time and to suffer a complete loss on his or
her investment.
(d) Optionee represents and warrants that the Company has disclosed to
him or her in writing: (i) the sale of the Shares has not been registered under
the Act, and the Shares must be held indefinitely unless a transfer of them is
subsequently registered under the Act or an exemption from such registration is
available, and that the Company is under no obligation to register the Shares;
and (ii) the Company shall make a notation in its records of the aforementioned
restrictions on transfer and legends.
(e) Optionee represents and warrants that he or she is aware of the
provisions of Rule 144, promulgated under the Act, which, in substance, permits
limited public resale of restricted securities acquired, directly or indirectly,
from the issuer thereof (or an affiliate of such issuer) in a non-public
offering subject to the satisfaction of certain conditions, including among
other things: the resale occurring not less than one (1) year from the date
Optionee has purchased and paid for the Shares; the availability of certain
public information concerning the Company; the sale being through a broker in an
unsolicited "brokers' transaction" or in a
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transaction directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934); and that any sale of the Shares may be made by
Optionee, if he or she is an affiliate of the Company, only in limited amounts
during any three-month period not exceeding specified limitations. Optionee
further represents that Optionee understands that at the time he or she wishes
to sell the Shares there may be no public market upon which to make such a sale,
and that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, he or she may be precluded from selling the Shares under Rule 144
even if the one-year minimum holding period had been satisfied. Optionee
represents that he or she understands that in the event the applicable
requirements of Rule 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
Staff of the SEC has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.
(f) Without in any way limiting Optionee's representations and
warranties set forth herein, Optionee further agrees that he or she shall in no
event make any disposition of all or any portion of the Shares which Optionee is
purchasing unless and until:
(i) There is then in effect a Registration Statement under the
Act covering such proposed disposition and such disposition is made in
accordance with said Registration Statement; or
(ii) Optionee shall have (x) notified the Company of the
proposed disposition and furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition,
and (y) furnished the Company with an opinion of his or her own counsel
to the effect that such disposition will not require registration of
such shares under the Act, and such opinion of his or her counsel shall
have been concurred in by counsel for the Company and the Company shall
have advised Optionee of such concurrence.
9. ESCROW. As security for his or her faithful performance of the terms
of this Agreement and to insure the availability for delivery of Optionee's
Shares upon exercise of the Company's right to repurchase and right of first
refusal herein provided for, Optionee agrees to deliver to and deposit with the
Secretary of the Company or the Secretary's nominee (in either case, the "Escrow
Agent"), as Escrow Agent in this transaction, two Assignment Separate From
Certificates duly endorsed (with date and number of shares blank) in the form
attached hereto as Attachment A, together with the certificate or certificates
evidencing the Shares; said documents are to be held by the Escrow Agent and
delivered to said Escrow Agent pursuant to the Joint Escrow Instructions of the
Company and Optionee set forth in Attachment B attached hereto and incorporated
herein by this reference, which instructions shall also be delivered to the
Escrow Agent at the closing hereunder.
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10. RESTRICTION ON ALIENATION. Optionee agrees that he or she will not
sell, transfer, gift, pledge, hypothecate, assign or otherwise dispose of any of
the Shares or any right or interest therein, whether voluntary, by operation of
law or otherwise, without the prior written consent of the Company, except a
transfer which meets the requirements of this Agreement. Any sale, transfer,
gift, pledge, hypothecation, assignment or disposition or purported sale,
transfer or other disposition of such Shares by Optionee shall be null and void
unless the terms, conditions and provisions of this Agreement are strictly
observed.
11. LOCKUP AGREEMENT. Optionee, if requested by the Company and an
underwriter of Common Stock or other securities of the Company, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by the Optionee during the period not to exceed 180 days as
requested by the managing underwriter following the effective date of a
registration statement of the Company filed under the Securities Act of 1933, as
amended, provided that all officers and directors of the Company are required or
agreed to enter into similar agreements. Such agreement shall be in writing in a
form satisfactory to the Company and such underwriter. The Company may impose
stop-transfer instructions with respect to the shares or other securities
subject to the foregoing restriction until the end of such period.
12. MISCELLANEOUS.
(a) The Company shall not be required (i) to transfer on its books any
Shares which shall have been sold or transferred in violation of any of the
provisions set forth in this Agreement, or (ii) to treat as owner of such Shares
or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such Shares shall have been so transferred.
(b) Subject to the provisions of this Agreement, Optionee shall, during
the term of this Agreement, exercise all rights and privileges of a stockholder
of the Company with respect to the purchased Shares.
(c) The parties agree to execute such further instruments and to take
such further action as may reasonably be necessary to carry out the intent of
this Agreement.
(d) Any notice required or permitted hereunder shall be writing and
shall be deemed effectively given upon personal delivery or deposit in the
United States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to the other party hereto at his or her address hereinafter
shown below his or her signature or at such other address as such party may
designate by ten days' advance written notice to the other party hereto.
(e) This Agreement shall inure to the benefit of the successors and
assigns of the Company and, subject to all compliance with the restrictions on
transfer herein set forth, be binding upon Optionee, his or her heirs,
executors, administrators, and permitted successors and assigns.
(f) This Agreement shall be construed under the laws of the State of
Nevada and constitutes the entire Agreement of the parties with respect to the
subject matter hereof
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superseding all prior written or oral agreements, and no amendment or addition
hereto shall be deemed effective unless agreed to in writing by the parties
hereto.
(g) Optionee agrees that, until a public market for the Shares exists,
the Shares cannot be readily purchased, sold, or evaluated in the open market,
that they have a unique and special value, and that the Company and its
stockholders would be irreparably damaged if the terms of this Agreement were
not capable of being specifically enforced, and for this reason, among others,
Optionee agrees that the Company shall be entitled to a decree of specific
performance of the terms hereof or an injunction restraining violation of this
Agreement, said right to be in addition to any other remedies of the Company.
(h) If any provision of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
shall nevertheless continue in full force and effect without being impaired or
invalidated in any way and shall be construed in accordance with the purposes
and tenor and effect of this Agreement.
(i) Nothing in this Agreement shall be deemed to create any term of
employment or affect in any manner whatsoever the right or power of the Company
to terminate Optionee's employment, for any reason, with or without cause.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
FUNDEX GAMES, LTD., a Nevada corporation
By: ____________________________________
Title: _________________________________
OPTIONEE
________________________________________
Address:________________________________
________________________________________
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CONSENT
The undersigned spouse of Optionee acknowledges that he/she has read
the foregoing Agreement and agrees that his or her interest, if any, in the
Shares subject to the foregoing Agreement shall be irrevocably bound by this
Agreement and further understands and agrees that any community property
interest, if any, shall be similarly bound by this Agreement.
Date: ____________________________ ________________________________________
Spouse of Optionee
Spouse's Name: _________________________
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ATTACHMENT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED _______________________________ hereby sells,
assigns and transfers unto _______________________________________ (________)
shares of the Common Stock (the "Shares") of Fundex Games, Ltd. a Nevada
corporation (the "Company"), standing in the undersigned's name on the books of
the Company represented by Certificate No. ________ herewith, and does hereby
irrevocably constitute and appoint _______________ attorney to transfer the
Shares on the books of the Company with full power of substitution in the
premises.
Dated: _________________________________
Signature: _____________________________
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ATTACHMENT B
JOINT ESCROW INSTRUCTIONS
____________________, 199__
Secretary
Fundex Games, Ltd.
P.O. Box 22128
Indianapolis, Indiana 46222
Dear ____________________:
As Escrow Agent for both Fundex Games, Ltd., a Nevada corporation (the
"COMPANY"), and the undersigned grantee of an option to purchase stock of the
Company ("OPTIONEE") you are hereby authorized and directed to hold the
documents delivered to you pursuant to the terms of that certain Stock Purchase
Agreement (the "AGREEMENT"), dated as of ___________, 199_, to which a copy of
these Joint Escrow Instructions is attached as Attachment B, in accordance with
the following instructions:
1. In the event the Company and/or any assignee of the Company
(referred to collectively for convenience herein as the "COMPANY") shall elect
to exercise the repurchase right set forth in Section 2 of the Agreement or the
right of first refusal set forth in Section 3 of the Agreement (collectively,
"REPURCHASE RIGHTS"), the Company shall give to Optionee and you a written
notice specifying the number of shares of stock to be purchased, the exercise
price, and the time for a closing hereunder at the principal office of the
Company. Optionee and the Company hereby irrevocably authorize and direct you to
close the transaction contemplated by such notice in accordance with the terms
of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company against the
simultaneous delivery to you of the exercise price (by check, evidence of
cancellation of indebtedness of Optionee to the Company or a promissory note, or
some combination thereof) for the number of shares of stock being purchased
pursuant to the exercise of the Repurchase Rights.
3. Optionee irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said stock as defined in the Agreement. Optionee
does hereby irrevocably constitute and appoint you as his attorney-in-fact and
agent for the term of this escrow to execute with respect to such securities all
stock certificates, stock assignments, or other
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documents necessary or appropriate to make such securities negotiable and
complete any transaction herein contemplated.
4. This escrow shall terminate at such time as there are no longer any
shares of stock subject to the Repurchase Rights under the Agreement.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Optionee,
you shall deliver all of same to Optionee and shall be discharged of all further
obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Optionee while acting in good faith
and in the exercise of your own good judgment, and any act done or omitted by
you pursuant to the advice of your own attorneys shall be conclusive evidence of
such good faith.
8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law, and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree of any
court, you shall not be liable to any of the parties hereto or to any other
person, firm or corporation by reason of such compliance, notwithstanding any
such order, judgment or decree being subsequently reversed, modified, annulled,
set aside, vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under any
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You shall be entitled to employ such legal counsel and other
experts as you may deem necessary or proper to advise you in connection with
your obligations hereunder and may rely upon the advice of such counsel, and
Company shall pay such counsel reasonable compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be Secretary of the Company or if you shall resign by written
notice to each party. In
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the event of any such termination, the Company shall appoint any officer or
employee of the Company as successor Escrow Agent.
13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such dispute shall have been settled either by mutual written agreement of
the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses, or at such other address as a party may
designate by ten (10) days advance written notice to each of the other parties
hereto.
COMPANY: Fundex Games, Ltd.
P.O. Box 28128
Indianapolis, Indiana 46222
Attention: President
OPTIONEE: ____________________________________________________
____________________________________________________
____________________________________________________
ESCROW AGENT: Fundex Games, Ltd.
P.O. Box 28128
Indianapolis, Indiana 46222
Attention: Secretary
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.
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17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
Very truly yours,
Fundex Games, Ltd., a Nevada corporation
By:
Title:
OPTIONEE
Address:
Agreed to and accepted as of the date set
forth above.
ESCROW AGENT
Secretary
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