PUT OPTION AND CALL OPTION AGREEMENT
This Agreement dated as of __________ __, 1997 by and between WHG
Resorts & Casinos Inc., a Delaware corporation, with its principal executive
offices at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ residing at ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("▇▇▇▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, the Company is about to be spun off from its parent WMS
Industries Inc. and thereafter will be a separate public company; and
WHEREAS, the Company is the owner, among other things, of 62% of the
outstanding common stock of ▇▇▇▇▇▇▇▇ Hospitality Group Inc. ("WHGI") and is a
party to a stockholders agreement with the other stockholders of WHGI which
stockholders agreement provides, among other things, that commencing April 30,
1999 or earlier in the event ▇▇▇▇▇▇▇▇ ceases to be Chairman and Chief Executive
Officer of WHGI, certain actions by the WHGI Board of Directors and Stockholders
will require a super majority vote thereby permitting the minority stockholders
of WHGI to have the power to block those actions; and
WHEREAS, the Company desires to assure its ability after the spin-off
to obtain additional capital and to provide a sufficient equity interest in the
Company to ▇▇▇▇▇▇▇▇ so as to induce ▇▇▇▇▇▇▇▇ to remain employed by the Company
and to serve as Chairman of the Board and Chief Executive Officer of WHGI so as
to prevent the premature imposition of the super majority voting requirements at
WHGI; and
WHEREAS, ▇▇▇▇▇▇▇▇ is willing to enter into an agreement with the
Company which permits the Company to require him to purchase 300,000 shares of
Series B Preferred Stock of
the Company with the relative rights and preferences set forth on Exhibit A
hereto (300,000 shares of such preferred stock is referred to herein as the
"Preferred Stock"); and
WHEREAS, the Company is willing to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ the right to purchase
the Preferred Stock.
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein, and other valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. Put Option. ▇▇▇▇▇▇▇▇ hereby grants to the Company the option (the
"Put Option") to sell all, but not less than all, of the Preferred Stock to
▇▇▇▇▇▇▇▇ for a purchase price of $10.00 per share, or an aggregate purchase
price of Three Million Dollars ($3,000,000). The Put Option shall expire, if not
exercised or extended by mutual agreement between ▇▇▇▇▇▇▇▇ and the Company, at
5:00 p.m. local time New York, New York on December 31, 1999 (the "Put
Expiration Date"). The Put Option may be irrevocably exercised by the Company at
any time on or before the Put Expiration Date by written notice to ▇▇▇▇▇▇▇▇ of
the Company's election to exercise the Put Option in the manner herein provided.
Upon the exercise of the Put Option, the Company shall have the obligation to
issue and sell and ▇▇▇▇▇▇▇▇ shall have the right and the obligation to purchase
all of the Preferred Stock.
2. Call Option.
2.1 The Company hereby grants to ▇▇▇▇▇▇▇▇ the option (the
"Call Option") to purchase all, but not less than all, of the Preferred Stock
from the Company for a purchase price of $11.00 per share, or an aggregate
purchase price of Three Million Three Hundred Thousand Dollars ($3,300,000). The
Call Option shall expire, if not exercised or extended by mutual agreement
between ▇▇▇▇▇▇▇▇ and the Company, at 5:00 p.m. local time New York, New York
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on December 31, 1999 (the "Call Expiration Date"). The Call Option may be
exercised by ▇▇▇▇▇▇▇▇ at any time after the "Call Option Conditions" set forth
in Section 2.2 hereof are satisfied and on or before the Call Expiration Date by
written notice to the Company of his election to exercise the Call Option in the
manner herein provided. Upon the exercise of the Call Option, ▇▇▇▇▇▇▇▇ shall
have the right and the obligation to buy and the Company shall have the
obligation to issue and sell all of the Preferred Stock to ▇▇▇▇▇▇▇▇.
2.2 Call Option Conditions.
The "Call Option Conditions" shall mean and will be satisfied
if, at any time prior to the Call Expiration Date, any person or entity or group
of persons or entities acting in concert, acquires or announces the intention to
acquire beneficial ownership of 10% or more of the Company's voting common
stock, $.01 par value per share (the "Common Stock"), (as determined pursuant to
Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") provided that the Call Option Conditions shall not be
deemed satisfied if such person, entity or group
(i) was a 10% beneficial owner of Common Stock, as of the
first date such Common Stock begins official trading, on a when-issued basis or
otherwise; or
(ii) is at all times exempt from filing a Schedule 13D
pursuant to the rules and regulations promulgated under the Exchange Act,
3. Other Agreements.
3.1 The Company shall not increase the number of or change,
alter or otherwise impair the relative rights, preferences or other provisions
of the Preferred Stock as set forth in Exhibit A annexed hereto so long as the
Put Option and Call Option remain outstanding.
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3.2 Notwithstanding anything to the contrary contained
elsewhere in this Agreement, this Agreement and the Put Option and Call Option
shall terminate and be null and void immediately upon the death of ▇▇▇▇▇▇▇▇.
3.3 Concurrently herewith ▇▇▇▇▇▇▇▇ and the Company are
entering into a registration rights agreement with respect to the Common Stock
issuable upon conversion of the Preferred Stock.
4. The Closing. Upon due exercise of the Put Option or the Call Option,
the Company and ▇▇▇▇▇▇▇▇ shall mutually agree upon a closing date (the "Closing
Date") which shall be within five days after such exercise; provided that if
they shall fail to agree, the Closing Date shall be the fifth day after the
exercise of the Put Option or the Call Option, as the case may be. The closing
(the "Closing") with respect to the sale of the Preferred Stock to ▇▇▇▇▇▇▇▇
shall be held at the offices of the Company at its address set forth on the
first page of this Agreement, or at such other place as shall be mutually
agreeable to the Company and ▇▇▇▇▇▇▇▇. At the Closing, the Company shall issue
and sell, and ▇▇▇▇▇▇▇▇ shall purchase, the Preferred Stock, subject to the
Closing conditions set forth below.
4.1 The obligations of the Company to issue and sell the
Preferred Stock to ▇▇▇▇▇▇▇▇ shall be subject to the fulfillment on or prior to
the Closing Date of the following conditions, or the written waiver thereof by
the Company.
4.1.1 ▇▇▇▇▇▇▇▇ shall have paid the purchase price for
the Preferred Stock in accordance with Section 4 hereof; and
4.1.2 There shall be no temporary or permanent
injunction or restraining order in effect preventing such Closing.
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4.2 The obligations of ▇▇▇▇▇▇▇▇ to purchase the Preferred
Stock from the Company shall be subject to the fulfillment on or prior to the
Closing Date of the following conditions, or the written waiver thereof by
▇▇▇▇▇▇▇▇.
4.2.1 The Company shall have delivered the
certificates representing the Preferred Stock to ▇▇▇▇▇▇▇▇, free and clear of any
liens, charges, encumbrances or other adverse claims with respect thereto.
4.2.2 There shall be no temporary or permanent
injunction or restraining order in effect preventing such Closing.
4.2.3 All representations and warranties of the
Company made herein shall be true in all material respects when made and on the
Closing Date, and the Company shall have performed all agreements on its part to
be performed hereunder.
5. Payment of Purchase Price. The purchase price for the Preferred
Stock shall be paid on the Closing Date by wire transfer to the bank account of
the Company, or in such other manner as shall be acceptable to ▇▇▇▇▇▇▇▇ and the
Company.
6. Consent Rights. So long as the Put Option and Call Option remain
outstanding, the Company shall not, without the consent of two-thirds of its
entire Board of Directors, issue any shares or become bound to issue any shares
of any class or series of capital stock of the Company having voting rights
other than (i) the 12,000,000 shares of Common Stock authorized for issuance
pursuant to the Company's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") or (ii) other capital stock containing only such
limited voting rights as may be required by law.
7. Representations and Warranties.
7.1 The Company hereby represents and warrants as follows:
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7.1.1 The Company is a corporation validly existing
and in good standing under the laws of the State of Delaware.
7.1.2 The execution and delivery of this Agreement
has been duly authorized by the Board of Directors of the Company and no further
corporate action is necessary to constitute this Agreement a valid and binding
obligation of the Company.
7.1.3 The execution, delivery and performance by the
Company of this Agreement does not conflict with any provision of its
Certificate of Incorporation or By-laws.
7.1.4 The Company has designated for issuance the
Preferred Stock and reserved all of such shares only for issuance upon exercise
of the Put Option or Call Option.
7.1.5 The Preferred Stock, when issued is accordance
with the terms of this Agreement, and any shares of common stock issued upon
conversion of shares of Preferred Stock, shall be fully paid and non assessable.
7.2 ▇▇▇▇▇▇▇▇ represents and warrants that he has full right,
power and authority to enter into this Agreement, and that he is acquiring the
Put Option and will acquire the Preferred Stock for his own account without a
view to distribution except as permitted by law.
8. General Provisions.
8.1 This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof. No change, modification,
amendment, addition or termination of this Agreement or any part thereof shall
be valid unless in writing and signed by or on behalf of the party to be charged
therewith.
8.2 This Agreement may be executed in one or more counterparts
and shall become effective when one or more counterparts has been signed by each
of the parties.
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8.3 Any and all notices or communications or deliveries
required or permitted to be given pursuant to any of the provisions of this
Agreement shall be deemed to have been duly given for all purposes if sent by
certified or registered mail, return receipt requested and postage prepaid, hand
delivered or sent by telegraph, telex or telephone facsimile as follows:
If to the Company:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
with a copy to:
Shack & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to ▇▇▇▇▇▇▇▇:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
or at such other address as any party may specify by notice given to the other
parties in accordance with this Section 8.3. The date of giving of such notice
shall be the date of actual receipt by the addressee of such notice.
8.4 This Agreement and the various rights and obligations
arising hereunder shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. This Agreement shall not be
assignable by any of the parties hereto and any attempt to assign this Agreement
shall be void and of no effect.
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8.5 This Agreement shall be governed, interpreted and
construed in accordance with the laws of the State of Delaware.
8.6 This Agreement and the sale of the Preferred Stock
hereunder has not been registered under the Securities Act of 1933, as amended,
or the Securities Act of Puerto Rico.
IN WITNESS WHEREOF, this Agreement has been made and executed as of the
date first above written.
WHG RESORTS & CASINOS INC.
By:__________________________________
_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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