EXECUTION
SHARE OPTION PURCHASE AGREEMENT
THIS SHARE OPTION PURCHASE AGREEMENT (this "AGREEMENT") is made as of
September 30, 1998, among Geneve Securities Holding Corp., Geneve Securities
Portfolio Corp., Chaparral International Re., Southern Mortgage Holding
Corporation and Southern Investors Corp. (collectively, "GHI"), Xxxxxxxxx Sign
Company, a Texas corporation (the "COMPANY"), and Xxxxx Xxxxxxxx ("XXXXXXXX,"
and together with the Company, the "OPTIONEES"). Except as otherwise indicated
herein, capitalized terms used and not otherwise defined herein have the
meanings ascribed to such terms in the Senior Subordinated Note, Preferred Stock
and Warrant Purchase Agreement, dated as of the date hereof (the "PURCHASE
AGREEMENT"), among the Company and certain investors listed therein.
GHI desires to grant to each Optionee and each Optionee desires to
acquire an option (each an "OPTION" and collectively the "Options") to purchase
the number of shares of the Company's Common Stock indicated on Schedule I
hereto which aggregate 785,143 shares (the "OPTION SHARES") at the exercise
prices and on the terms and subject to the conditions set forth herein.
As of the date hereof, the Company has entered into a Senior
Subordinated Note, Preferred Stock and Warrant Purchase Agreement (the
"RECAPITALIZATION AGREEMENT") pursuant to which the Company is initiating a plan
to recapitalize its existing debt and equity structure through a series of
transactions which include the issuance to certain investors of capital stock
and subordinate notes thereunder. Execution and delivery of this Share Option
Purchase Agreement is a condition to the obligations of such Investors
thereunder.
In consideration of the mutual covenants and promises contained herein
and for the good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
Section 1. OPTION.
1A. COMPANY OPTION. GHI hereby grants to the Company an Option for
the purchase of up to 357,143 Option Shares at a price per share equal to $1.50
per share in cash and the delivery of .0175 shares of Series C Preferred Stock,
par value $0.01 per share (the "SERIES C PREFERRED STOCK"), payable upon
exercise as set forth in SECTION 2. The Option granted pursuant to this SECTION
1A may be exercised only during the period (the "EXERCISE PERIOD") commencing
with the open of business on January 4, 1999 through the close of business on
January 8, 1999.
1B. XXXXXXXX OPTION. GHI hereby grants to Xxxxxxxx an Option (the
"XXXXXXXX OPTION") for the purchase of up to 428,000 Option Shares at a price
per share equal to $3.25 per share, payable in cash only upon exercise as set
forth in SECTION 2. The Xxxxxxxx Option may be exercised only during the
Exercise Period.
1C. CONSIDERATION. The consideration for an Option being granted
hereunder is $.25 per Option Share. As of the date hereof, the Company and
Xxxxxxxx shall deliver $89,285.75 and $107,000.00, respectively, to GHI, by
cashier's check or wire transfer of immediately available funds.
Section 2. EXERCISE OF THE OPTION. Each Optionee may exercise its
Option, in whole or in part, upon payment of the product of (i) the exercise
price set forth in SECTION 1A or 1B, as the case may be, multiplied by (ii) the
number of Option Shares to be acquired. Payment of the applicable option price
by Xxxxxxxx shall be made in cash, by wire transfer of immediately available
funds to an account designated by GHI. Payment of the applicable option price
by the Company shall be made by delivery of the applicable option price in cash,
by wire transfer of immediately and available funds, and by delivery of stock
certificates representing Series C Preferred Stock. Upon payment of the option
price by an Optionee, GHI shall deliver to such Optionee the stock certificates
evidencing the Option Shares to be acquired by such Optionee duly endorsed in
blank or accompanied by duly executed stock powers.
Section 3. REPRESENTATIONS AND WARRANTIES.
(a) GHI hereby represents and warrants to the Optionees as
follows:
(i) GHI is the record and beneficial owner of the
Option Shares free and clear of all Liens and no
other third party has any right or interest in the
Option Shares, and at the time of the exercise of
the Option by either Optionee, such Optionee will
acquire good and marketable title to the Option
Shares so acquired free and clear of any Liens;
(ii) the Option Shares are not subject to any statutory
or contractual stockholders' preemptive rights or
rights of first offer or refusal with respect to the
transfers of the Option Shares contemplated hereby;
(iii) Geneve Securities Portfolio Corp. is a corporation
duly organized, validly existing and in good
standing under the laws of the State of Delaware and
has the requisite corporate power and authority to
enter into this Agreement and consummate the
transactions contemplated hereby;
(iv) Chaparral International Re. is a corporation duly
organized, validly existing and in good standing
under the laws of the jurisdiction of its
organization and has the requisite
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corporate power and authority to enter into this
Agreement and consummate the transactions
contemplated hereby;
(v) Geneve Securities Holding Corp. is a corporation
duly organized, validly existing and in good
standing under the laws of the State of Delaware and
has the requisite corporate power and authority to
enter into this Agreement and consummate the
transactions contemplated hereby;
(vi) Southern Investors Corp. is a corporation duly
organized, validly existing and in good standing
under the laws of the State of Delaware and has the
requisite corporate power and authority to enter
into this Agreement and consummate the transactions
contemplated hereby; and
(vii) Southern Mortgage Holding Corp. is a corporation
duly organized, validly existing and in good
standing under the laws of the State of Delaware and
has the requisite corporate power and authority to
enter into this Agreement and consummate the
transactions contemplated hereby.
(b) Each of the Company and Xxxxxxxx hereby represent and
warrant to GHI that such person has the requisite power and authority to
enter into this Agreement and consummate the transactions contemplated
thereby and that if the Options are exercised each is acquiring the Option
Shares for investment purposes and not with any present intention to resell
or distribute such shares except for the contemplated sale by Xxxxxxxx of a
portion of the Option Shares to the Company.
Section 4. CERTAIN COVENANTS. Until exercise of the Options
contemplated hereby, GHI shall not and shall not permit any of its
representatives to take any action (whether as a shareholder, director, officer,
employee or otherwise) which would reasonably be anticipated to have an adverse
effect on the Company or the transactions contemplated hereby or in the
Recapitalization Agreement or the other agreements contemplated hereby. Without
limiting the foregoing in any way, prior to exercise of the Options hereunder,
GHI shall not, directly or indirectly, enter into any contract, agreement or
understanding with respect to the transfer or voting of the Option Shares or the
placing of a Lien on any of the Option Shares.
Section 5. MISCELLANEOUS.
5A. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement and the consummation of the transactions
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contemplated hereby. The covenants contained herein shall terminate upon the
earlier of consummation of the transactions contemplated hereby or the
expiration of the Exercise Period.
5B. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
5C. OTHER AGREEMENTS. Upon exercise of the Xxxxxxxx Option, the
Option Shares not subsequently conveyed to the Company shall be deemed
Stockholder Shares (as defined in the Stockholders Agreement) and Other
Registrable Securities (as defined in the Registration Agreement).
5D. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
5E. GOVERNING LAW. THE CORPORATE LAW OF THE STATE OF TEXAS SHALL
GOVERN ALL ISSUES AND QUESTIONS CONCERNING THE RELATIVE RIGHTS AND OBLIGATIONS
OF THE COMPANY AND ITS STOCKHOLDERS. ALL OTHER ISSUES AND QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND
THE EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF
TEXAS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF
ANY JURISDICTION OTHER THAN THE STATE OF TEXAS.
5F. NOTICES. All notices, demands and other communications given
or delivered under this Agreement shall be in writing and shall be deemed to
have been given upon receipt when delivered personally or by telecopy, one
Business Day after being deposited with a reputable overnight courier service or
three Business Days after being deposited in the U.S. Mail. Notices, demands
and communications to the Purchasers and the Company, unless another address is
specified in writing, shall be sent to the address or telecopy number indicated
below and to the attention of such other persons indicated below or to such
other address or to the attention of such other person as the recipient party
has specified by prior written notice to the sending party:
IF TO GHI:
Geneve Holdings, Inc.
00 Xxxxxxxx Xx. Xx.
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
Telecopier: (000) 000-0000
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IF TO THE COMPANY:
Xxxxxxxxx Sign Company
0000 Xxx 00 Xxxx
Xxxxx, Xxxxx 00000
Attn: Chief Executive Officer
Telecopier: (000) 000-0000
WITH COPIES TO:
Xxxxxxx Xxxxxx L.L.P.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx
Telecopier: 214/953-5822
Bank of America National Trust and
Savings Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Telecopier: 312/828-6298
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxxx
Xxxxx X. Xxxxxxxxxx
Telecopier: 312/861-2200
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
5G. SPECIFIC PERFORMANCE. Each of the parties hereto acknowledges
and agrees that the other parties would be damaged irreparably in the event any
of the provisions of this Agreement are not performed in accordance with their
specific terms or are otherwise breached. Accordingly, each of the parties
hereto agrees that the other parties shall be entitled to an injunction or
injunctions (without the posting of bond or any other security) to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court in the United States or in any state having jurisdiction over the parties
and the matter in addition to any other remedy to which it may be entitled
pursuant hereto.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
SOUTHERN INVESTORS CORP.
By /s/ Xxxxxx X Xxxxx
Its
SOUTHERN MORTGAGE HOLDING
CORPORATION
By /s/ Xxxxxx X Xxxxx
Its
GENEVE SECURITIES PORTFOLIO CORP.
By /s/ Xxxxxx X Xxxxx
Its
GENEVE SECURITIES HOLDING CORP.
By /s/ Xxxxxx X Xxxxx
Its
CHAPARRAL INTERNATIONAL RE.
By /s/ Xxxxxx X Xxxxx
Its
XXXXXXXXX SIGN COMPANY
By /s/ Xxxxx X. Xxxxxxxx
Its Chairman
Xxxxx Xxxxxxxx
SCHEDULE I
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SHARES TRANSFERRED
SHARES SUBJECT UPON EXERCISE
SELLER TO OPTIONS OPTION HOLDER OF OPTION
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Geneve Securities 173,771 Company 173,771
Portfolio Corp. Xxxxxxxx -0-
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Geneve Securities 156,578 Company 156,578
Holding Corp. Xxxxxxxx -0-
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Chaparral 17,500 Company 17,500
International Re. Xxxxxxxx -0-
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Southern Mortgage 36,956 Company 9,151
Holding Corp. Xxxxxxxx 27,805
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Southern Investors 400,338 Company 143
Corp. Xxxxxxxx 400,195
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