STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is entered
into and effective as of the 31st day of October, 1997 by and
between SIGNAL APPAREL COMPANY, INC., an Indiana corporation (the
"Purchaser"), and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, a individual residing in
Houston, Texas (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser desires to purchase from the
Seller all of the shares of capital stock owned by the Seller in
Big Ball Sports, Inc., a Texas corporation ("Big Ball"), which
shares consist of 333 1/3 shares (the "Big Ball Shares") of
common stock, no par value, of Big Ball;
WHEREAS, in addition, Purchaser desires to obtain a
release of any claims Seller may have against Big Ball, Print the
Planet, Inc., a Texas corporation ("Print the Planet"), ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and the Purchaser;
WHEREAS, the Seller is willing to sell the Big Ball
Shares to the Purchaser and grant the above described release on
the terms herein provided;
NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein, the parties hereto
agree as follows:
SECTION 1. AGREEMENT TO SELL; AGREEMENT TO RELEASE.
Subject to the terms and conditions hereof, (i) the Seller agrees
to sell and the Purchaser agrees to buy the Big Ball Shares; and
(ii) the Seller agrees to execute the Release of Judgement in the
form attached hereto as EXHIBIT 1-A (the "Release of Judgement")
and the Mutual Release in the form attached hereto as EXHIBIT 1-B
(the "Mutual Release") (the Release of Judgement and the Mutual
Release are collectively referred to herein as the "Release").
SECTION 2. CONSIDERATION. Subject to the terms and
conditions of this Agreement, the Purchaser agrees to pay ten
dollars ($10.00) for the Big Ball Shares. In addition, the
Purchaser agrees to pay four hundred ninety-nine thousand nine
hundred and ninety dollars ($499,990) and deliver 200,000 shares
of common stock of Signal (the "Signal Shares") in exchange for
the Release. The consideration for the Big Ball Shares and the
consideration for the Release are collectively referred to herein
as the "Consideration". At the Closing (the "Closing"), the
Purchaser shall deliver to the Seller by wire transfer the sum of
two hundred fifty thousand dollars ($250,000.00), and the
remainder of the cash portion of the Consideration ($250,000.00)
shall be paid to the Seller in thirty-six (36) equal monthly
installments beginning on the twelve month anniversary date
following the Closing. The cash portion of the Consideration
that is to be paid after the Closing shall be evidenced by a
promissory note executed by the Purchaser in favor of the Seller
(the "Note"), which Note shall be in the form of Exhibit 2-a
attached hereto. The remaining portion of the Consideration,
consisting of the Signal Shares, shall be issued in the name of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, L.L.P. ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), and shall
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be delivered directly to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at the Closing. In
connection with the Signal Shares, Signal will enter into a
Registration Rights Agreement granting to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ certain
piggyback registration rights, which agreement shall be in the
form of EXHIBIT 2-B attached hereto (the "Registration Rights
Agreement").
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE
SELLER. The Seller represents and warrants to the Purchaser as
follows:
(a) THE SELLER'S AUTHORITY RELATIVE TO THIS AGREEMENT.
The Seller has all power and authority necessary to execute and
deliver this Agreement and perform her obligations hereunder; the
execution, delivery and performance of this Agreement by the
Seller will not conflict with, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the Big
Ball Shares to be sold by the Seller pursuant to the terms of, or
constitute a default under, any agreement, will or instrument, or
any order, rule or regulation of any court or governmental agency
having jurisdiction over the Seller or her property; no consent,
authorization or order of, or filing or registration with, any
court or governmental agency is required for the execution,
delivery and performance of this Agreement by the Seller.
(b) TITLE TO SHARES. The Seller has and will have as
of the Closing Date good title to the Big Ball Shares free and
clear of any and all liens, claims, encumbrances, preemptive
rights and any other claims of any third party; to the best of
Seller's knowledge, such Shares are, and as of the Closing will
be, validly authorized, issued and outstanding, fully paid and
non-assessable shares of common stock; and upon delivery of and
payment for such shares as contemplated herein, the Purchaser
will receive good and marketable title to the Big Ball Shares
purchased by it from the Seller, free and clear of any and all
liens, claims, encumbrances, preemptive rights and any other
claims of any third party. The Big Ball Shares constitute all of
the capital stock in Big Ball owned by the Seller. The Seller
has no ownership interest in Print the Planet.
(c) RELIANCE. In making her determination to sell the
Big Ball Shares for the Consideration and pursuant to the terms
contained herein, the Seller has relied on her own due diligence
effort and has not relied upon any representations of the
Purchaser or Big Ball, or documents presented by the Purchaser or
Big Ball, with regard to the financial condition of Big Ball.
The Seller agrees that she has had such access to financial
information of Big Ball as the Seller deems reasonable and
necessary in connection with this Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER. The Purchaser represents and warrants to the Seller
as follows:
(a) THE PURCHASER'S AUTHORITY RELATIVE TO THIS
AGREEMENT. This Agreement has been duly authorized by the Board
of Directors of the Purchaser and has been duly executed and
delivered by the Purchaser, and no further corporate action is
necessary with respect to the Purchaser to make this Agreement a
valid and binding obligation of the Purchaser, enforceable in
accordance with its terms. Neither the execution, delivery nor
performance of this Agreement by the Purchaser will result in a
violation or breach of any term or provision under the Articles
of Incorporation or Bylaws or any resolution of the Board of
Directors or shareholders of the
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Purchaser or constitute a default or breach of, or accelerate the
performance required under, or require the consent of any person
or entity under any indenture, mortgage, deed of trust or other
contract or agreement to which the Purchaser is a party or by
which it or any of its assets are bound, or violate any order,
writ, injunction or decree of any court, administrative agency or
governmental body.
(b) ORGANIZATION AND EXISTENCE. The Purchaser is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Indiana and has all requisite
corporate power to carry on its business as now conducted and to
enter into and perform this Agreement.
(c) PURCHASE OF BIG BALL SHARES. The Purchaser
acknowledges and understands that the Big Ball Shares are being
purchased for its own account, for investment purposes only, and
not for the account of any other person and not with a view to
distribution, assignment or resale to others, in whole or in
part, and acknowledges that the sale of the Shares is intended to
be exempt from registration under the Securities Act of 1933, as
amended (the "Act").
SECTION 5. COVENANTS OF THE PURCHASER. The Purchaser
acknowledges that it is has entered into a letter of intent with
▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ (the "Other Shareholders") for the
purchase of all shares of capital stock in Big Ball and Print the
Planet held by the Other Shareholders. In connection with such
purchase and in the event such purchase is completed, the
Purchaser hereby covenants and agrees that it shall not pay any
cash consideration to the Other Shareholders in exchange for such
stock. Notwithstanding the foregoing, the Purchaser shall be
permitted to provide the Other Shareholders with options to
purchase common stock of the Purchaser at an exercise price that
is equal to or above the closing price of the Purchaser's common
stock on the date the purchase of the Other Shareholders capital
stock in Big Ball is completed, and the Purchaser shall be
permitted to repay or cause Big Ball or PTP to repay certain
loans from the Other Shareholders to Big Ball and/or Print the
Planet and to repay certain loans or other obligations of Big
Ball and/or Print the Planet that were guaranteed by the Other
Shareholders.
SECTION 6. EXPENSES AND COMMISSIONS. Each of the
Seller and the Purchaser will pay their own expenses incident to
the transaction contemplated by this Agreement, whether or not
such transaction is consummated. The Seller and the Purchaser
each represent to the other that there are no agents or brokers
entitled to a commission in connection with this purchase and
sale of the Big Ball Shares other than ▇▇▇▇▇▇▇▇▇ Financial that
was engaged by the Purchaser. The Seller hereby agrees to
indemnify and hold harmless the Purchaser against any and all
claims of any agent, broker, finder or similar party claiming
through the Seller, and the Purchaser hereby agrees to indemnify
and hold harmless the Seller against any and all claims of any
agent, broker, finder, or other similar party claiming through
the Purchaser (including any claims of ▇▇▇▇▇▇▇▇▇ Financial).
SECTION 7. DISCLOSURE OF CONFIDENTIAL INFORMATION.
Except to the extent required by law, the Seller will never,
directly or indirectly, at any time, for any reason whatsoever,
with or without cause, breach the confidence reposed in her by
Big Ball by using, disseminating, disclosing, divulging or in any
manner whatsoever permitting to be divulged or
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disclosed to any person, firm, corporation, association or other
business entity, trade secrets, secret methods or "Confidential
Information" of Big Ball. As used herein, the term "Confidential
Information" means any and all information relating directly or
indirectly to the business, conducted by Purchaser on or before
the Closing, including, but not limited to any and all files,
documents, customer lists, accounting records, other written
material and financial data (both relating to Big Ball and the
customers of Big Ball); provided, however, that "Confidential
Information" shall not include information that is generally
ascertainable from public or published information or trade
sources. Nothing herein prohibits Seller from disclosing any
information to Seller's attorneys, accountants or other advisors.
In addition, the Seller agrees that she shall refrain from making
disparaging remarks about Big Ball or Print the Planet, as well
as their respective customers and suppliers, and about the Other
Shareholders.
SECTION 8. CONDITIONS TO CLOSING; TERMINATION OF
AGREEMENT. As a condition to the Closing, (i) the Purchaser
shall have closed (or shall close simultaneous with the Closing
provided for herein) the purchase of the all the remaining shares
of capital stock of Big Ball and Print the Planet from ▇▇▇ ▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇▇ and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have executed the
Investment Letter in the form attached hereto as EXHIBIT "8". In
the event that the conditions described herein have not been
satisfied by October 31, 1997, either party hereto shall be
permitted to terminate this Agreement without any further
liability hereunder (provided that the party terminating this
Agreement is not in default of its obligations hereunder).
SECTION 9. CLOSING. The closing of the transactions
provided for herein (the "Closing") shall take place at the
office of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ at 10:00 a.m. on October ___, 1997, or such other
date as the parties hereto may agree to in writing (the "Closing
Date"). At the Closing, the following shall occur:
(a) WIRE TRANSFER. The Purchaser shall deliver to
Seller's account a wire transfer in the amount of two hundred
fifty thousand dollars ($250,000).
(b) NOTE. The Purchaser shall deliver the Note to the
Seller, duly executed by the Purchaser.
(c) SIGNAL SHARES. The Purchaser shall deliver to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ a certificate representing the Signal Shares.
(d) REGISTRATION RIGHTS AGREEMENT. The Purchaser
shall deliver to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ the Registration Rights
Agreement, duly executed by the Purchaser.
(e) INVESTMENT LETTER. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall deliver
to the Purchaser the Investment Letter, duly executed by ▇▇▇▇▇▇
▇▇▇▇▇▇▇.
(f) RELEASE OF JUDGEMENT. The Seller shall deliver to
the Purchaser the Release of Judgement, duly executed by the
Seller.
(g) MUTUAL RELEASE. The Purchaser and the Seller
shall execute the Mutual Release, and the Purchaser shall cause
the other parties to the Mutual Release to have executed
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such Mutual Release, with each of the Purchaser and the Seller to
receive an original of the Mutual Release.
(h) BIG BALL SHARES. The Seller shall deliver to the
Purchaser a certificate representing the Big Ball Shares, duly
endorsed or accompanied by a duly executed stock power in blank,
and in proper form for transfer.
SECTION 10. NOTICES. All notices, requests, consents
and other communications hereunder shall be in writing and shall
be deemed to have been given if personally delivered or mailed,
first class, registered or certified mail, postage prepaid to the
following:
If to Seller, to: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to Purchaser, to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief
Executive Officer
Signal Apparel Company, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
or to such other address as shall be given in writing by any
party to the others. If sent by U. S. mail in accordance with
this Section 10, such notices shall be deemed given and received
on the earlier to occur of (a) actual receipt at the above
specified address of the mailed addressee, or (b) the third (3rd)
business day after deposit with the U.S. Postal Service in the
manner herein provided. Notices delivered by any other means
shall be deemed given and received upon actual receipt of the
above specified address of the addressee.
SECTION 11. AMENDMENT. This Agreement may not be
modified, amended, altered or supplemented except upon execution
and delivery of a written agreement executed by the parties
hereto.
SECTION 12. SURVIVAL OF REPRESENTATIONS AND
WARRANTIES. The Purchaser and the Seller agree that their
respective representations and warranties contained in this
Agreement shall survive the Closing Date and any investigation
made by the parties with respect thereto.
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SECTION 13. MISCELLANEOUS.
(a) This Agreement shall be governed and construed in
accordance with the laws of the State of Texas. The provisions
hereof shall be binding upon and inure to the benefit of the
parties and their respective successors, heirs, personal
representatives and assigns.
(b) This Agreement may not be assigned without the
prior written consent of the parties hereto; provided, however,
the Purchaser may assign the right to receive the Big Ball Shares
to an affiliate without the consent of the Seller.
(c) This Agreement and the additional documents
referenced herein merge all prior negotiations and agreements
between the parties relating to the subject matter hereof and
constitute the entire agreement between the parties relating to
such subject matter. No prior or contemporaneous agreements,
except as specified herein, written or oral, relating to such
subject matter shall be binding.
IN WITNESS WHEREOF, the Purchaser and the Seller have
executed this Agreement as of the date and year first above
written.
PURCHASER:
SIGNAL APPAREL COMPANY, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief Executive Officer
SELLER:
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
___________________________________
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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