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EXHIBIT 9
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is entered into as of the
31st day of October, 1996, by and between RIVIERA HOLDING COMPANY, a Michigan
corporation, having its principal office at 5460 Executive Parkway, S.E., Grand
Rapids, Michigan ("Riviera Holding") and MOTOR WHEEL CORPORATION, an Ohio
corporation, having its principal office at 00000 Xxxxx Xxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx ("Motor Wheel").
WHEREAS the parties have entered into a Shareholders Agreement of even
date with respect to their stock in Riviera Tool Company ("Riviera"), a
Michigan corporation; and
WHEREAS, this Stock Option Agreement is required to be executed in
connection therewith.
NOW, THEREFORE, in consideration of the premises and terms and
conditions hereof, the parties agree as follows:
1. MOTOR WHEEL OPTION. Motor Wheel hereby grants to Riviera
Holding an option to purchase all shares of the capital stock of Riviera held
by Motor Wheel from time to time.
2. EXERCISE. This option shall be exercisable by the delivery to
Motor Wheel of a notice of exercise by Riviera Holding. Such exercise, to be
effective, must be signed by Riviera in its corporate capacity and consented to
in writing by Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxxx, both Michigan residents,
or the survivor, in their individual capacity. The signatures of Messrs. Xxxxx
and Xxxxxx shall be guarantied by counsel to Riviera and such guarantied
signatures shall be conclusive evidence of the required consent.
3. EXPIRATION. The option granted under Paragraph 1 above shall
expire at 5:00 p.m. Eastern time on the first anniversary of the date hereof.
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4. PRICE. The purchase price of the stock being purchased
pursuant to this option shall be U.S. $3,000,000.00 payable 30 days after
delivery of certificates required by Paragraph 9 below.
5. OTHER SALES. Prior to the expiration of this option and
except as provided in Paragraph 4.4 of a Shareholders Agreement of even date
among Riviera Holding, Motor Wheel and Riviera, Motor Wheel may not assign,
sell, transfer or otherwise dispose of the stock subject to this Agreement or
any interest therein.
6. REPRESENTATIONS AND WARRANTIES OF RIVIERA HOLDING. Riviera
Holding covenants, represents and warrants to Motor Wheel as follows:
a. Riviera Holding is, and will remain during the term
of this Agreement, a corporation duly organized and
validly existing and in good standing under the laws
of the state of its incorporation (currently
Michigan);
b. Riviera Holding has the full corporate power,
authority, and legal right to execute and perform
this Agreement, which will be a valid and binding
obligation enforceable against Riviera Holding in
accordance with its terms;
c. The execution and delivery of this Agreement and the
consummation by Riviera Holding of the transactions
contemplated hereby will comply with its Articles of
Incorporation and all applicable laws and will not
conflict with or result in the breach of any of the
unwaived terms or conditions of or constitute a
default under any agreement, license or other
instrument to which Riviera Holding is a party or by
which it is bound or constitute a default thereunder;
d. Riviera Holding understands that this option and the
shares of stock to be purchased and sold pursuant
hereto are transferred pursuant to various exemptions
to registration contained in federal and state
securities laws, will be
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restricted securities not generally marketable and
represents that it is purchasing such securities as
an investment with an intent to hold its securities
for an indefinite period, has had adequate
opportunity to review the investment and asked
questions with respect thereto, understands the
business in which Riviera is engaged, is capable of
evaluating the risks and suitability of this
investment and bearing the economic risk thereof;
e. Riviera Holding has consulted with its legal and
accounting advisors with respect to this Option
Agreement and prior to making the representations
contained herein; and
f. Riviera Holding has authorized shares of capital
stock as 100 shares of Class A common stock, 22,530
of Class B common stock and 2,737 of 8% preferred
stock, $10.00 par value, of which 100 shares of Class
A common stock are issued and outstanding fully paid
and nonassessable in the name of Xxxxxxx X. Xxxxx and
shall not permit the issued and outstanding shares of
capital stock of Riviera Holding to change during the
term of this Agreement.
7. REPRESENTATIONS AND WARRANTIES OF MOTOR WHEEL. Motor Wheel
covenants, represents, and warrants to Riviera Holding as follows:
a. Motor Wheel is, and will remain during the term of
this Agreement, a corporation duly organized and
validly existing and in good standing under the laws
of the state of its incorporation (currently Ohio);
b. Motor Wheel has the full corporate power, authority,
and legal right to execute and perform this
Agreement, which will be a valid and binding
obligation enforceable against Motor Wheel in
accordance with its terms;
c. The execution and delivery of this Agreement, and the
consummation by Motor Wheel of the transactions
contemplated hereby, will comply with its Articles of
Incorporation and Code of Regulations and all
applicable laws and will not conflict with or result
in the breach of any of the unwaived terms or
conditions of, or constitute a default under, any
agreement, license or other instrument to
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which Motor Wheel is a party or by which it is bound,
or constitute a default thereunder;
d. Motor Wheel owns one (1) share of Class A common
stock of Riviera which in connection with the
Shareholders Agreement and this Option Agreement is
being converted into 730,000 shares of common stock
of Riviera and it is the intent of this Agreement
that this Agreement apply to all shares that may be
issued in connection with or with respect thereto or
by recapitalization, merger or otherwise;
e. There are no outstanding subscriptions, options,
warrants, calls, commitments, pledges or other
arrangements to which Motor Wheel is a party or by
which it is bound relating to the capital stock of
Riviera owned by Motor Wheel; and
f. Motor Wheel has consulted with its legal and
accounting advisors with respect to this Option
Agreement and prior to making the representations
contained herein.
8. Closing. Closing of the exercise of this option shall occur
on the twenty-second business day after the exercise of the option pursuant to
Paragraph 2 or at such other date and time as the parties may agree upon. At
the closing Motor Wheel shall deliver certificates for the shares being
purchased hereunder, duly endorsed in blank or accompanied by stock powers
endorsed in blank conveying to Riviera Holding or its assignee all right, title
and interest in the shares being purchased, free and clear of all liens,
encumbrances and claims whatsoever. Riviera Holding shall deliver to Motor
Wheel a promissory note in the amount of the purchase price pursuant to
Paragraph 4 above, in the form of Exhibit A hereto, together with a pledge of
50% of the capital stock of Riviera Holding in the form of Exhibit B hereto as
collateral security for the rights of the Holder pursuant to such note.
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9. MISCELLANEOUS.
9.1. The parties recognize and agree that the shares of
Riviera are unique in that they are closely held and cannot be purchased on the
open market in the quantity provided here. Therefore, it is agreed that
damages for non-performance of any obligation herein would be an inadequate
remedy and that the covenants and agreements herein set forth are specifically
enforceable.
9.2. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, including the conflicts of
law provisions thereof.
9.3. Every notice or communication required or permitted
hereunder shall be validly made or given if in writing and personally delivered
to the party to whom directed, or mailed, registered or certified or delivered
by independent contract courier to the address set out below or such other
address as shall be provided by such party pursuant to this notice provision.
If to Riviera Holding:
Xxxxxxx X. Xxxxx
0000 Xxxxxxxxx Xxxxxxx, X.X.
Xxxxx Xxxxxx, XX 00000
If to Motor Wheel:
Motor Wheel Corporation
00000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Vice President - General Counsel
9.4 No modification of this Agreement shall be binding
upon a party unless in writing and signed by the parties to be charged.
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9.5 All terms, covenants, representations, warranties and
conditions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their successors, heirs, and
assigns. Riviera Holding may assign its rights under this option to any party.
Except as provided in Paragraph 4.4 of the Shareholders Agreement of even date
between Riviera Holding, Motor Wheel and Riviera, Motor Wheel may not assign
its stock in Riviera or its rights or obligations hereunder to any party.
9.6 The paragraph headings used herein are for
convenience only and shall not be construed to modify, supplement or otherwise
affect the terms hereof. The use of words in the singular shall be interpreted
to be in the plural when appropriate and vice versa. The use of the terms of
the masculine gender shall be interpreted to include the feminine gender, when
appropriate.
WHEREFORE, the undersigned have executed this Agreement as of the day,
month and year first above written.
RIVIERA HOLDING COMPANY
By: /s/ Xxxxxxx X. Xxxxx, President
---------------------------------
Xxxxxxx X. Xxxxx, President
MOTOR WHEEL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxx, V.P.
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EXHIBIT A
TIME NOTE
$3,000,000.00 Grand Rapids,
Michigan _______________, 199_
Riviera Holding Company ("Company"), hereby promises to pay to Motor
Wheel Corporation ("Holder") at 00000 Xxxxx Xxxxx Xxxxx, Xxxxxxx, Mich., the
principal sum of Three Million Dollars ($3,000,000.00) pursuant to that certain
Stock Option Agreement dated __________,199_ between Company and Holder (the
"Agreement").
No interest is payable on any amount due hereunder. Principal is
payable on the 30th day after the date hereof in full.
Company may prepay this Note in whole or in part without penalty at
any time.
In the event of default in payment hereof, as its complete and sole
remedies for such default, Holder shall have this note paid by way of (i) first
return of the shares of capital stock of Riviera Tool Company purchased with
this note (the "MWC Shares"), if then still in existence or (ii) if the MWC
Shares are not then in existence, issuance from Company of a number of shares
of capital stock which, upon their issuance would represent fifty percent (50%)
of all the equity and voting stock of Company then outstanding. Company
represents that it has 100 shares of Class A Common stock issued and
outstanding at this date and there are no options, calls, warrants or other
securities or rights outstanding which are convertible into, exercisable for or
relate to the capital stock of the Company.
The rights of the Holder hereunder are secured by a pledge of capital
stock of the undersigned of even date, which pledge secures no other
obligations of any person and terminates and expires completely upon payment of
the sum due hereunder.
The holder and maker hereof are entitled to all the benefits provided
in the Agreement to which reference is hereby made for a statement of the terms
and conditions by which the loan evidenced hereby was made or its maturity
accelerated.
RIVIERA HOLDING COMANY
By:
---------------------------------
Xxxxxxx X. Xxxxx, President
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STOCK PLEDGE AGREEMENT EXHIBIT B
THIS AGREEMENT is made and granted as of the _____ day of ____________,
19__, by and between Motor Wheel Corporation ("MWC"), Riviera Holding Company
and Xxxxxxx X. Xxxxx (collectively the "Debtor").
W I T N E S S E T H
1. Collateral and Obligation. For valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Debtor grants to MWC a security
interest in Fifty Percent (50%) of all of the capital stock of Riviera Holding
Company, a Michigan corporation, and all proceeds of and other rights in
connection with such stock (such proceeds and other rights, together with the
capital stock, is hereinafter called the "Pledged Stock"). The security
interest hereby granted secures the repayment of that certain Time Note (the
"Time Note") dated ___________ __, 19__ in the event the second remedy provided
therein is applicable (the "Obligation"). Debtor, jointly and severally,
hereby represents and warrants that the Pledged Stock constitutes 50% of the
outstanding shares of common stock in Riviera Holding Company and that there
are no other preferred, common, or other classes or other types of equity
issued and outstanding in Riviera Holding Company. In the event that
additional shares of stock in Riviera Holding Company are issued for any reason
after the date of this Agreement, Debtor hereby covenants to deliver sufficient
shares of such stock to MWC as additional collateral under this Agreement so as
to ensure that MWC holds 50% of the total equity outstanding in and of Riviera
Holding Company.
2. Warranty of Title. Debtor, jointly and severally, represents and
warrants that Xxxxxxx X. Xxxxx is the owner of the Pledged Stock free from all
liens, encumbrances, or security interests (except MWC's security interest),
with complete authority to pledge such Pledged Stock to MWC.
3. Preservation of Collateral. MWC is not required to insure or take any
steps to collect or realize upon the Pledged Stock or any distribution of
principal. Except as arise from MWC, Debtor will keep the Pledged Stock free
from all liens, encumbrances and security interests; pay and discharge when
due, all taxes, levies and other charges upon it; defend it against all claims
and legal proceedings by persons other than MWC and/or preserve rights with
respect to the Pledged Stock against prior parties. Loss of or damage to the
Pledged Stock will not release the Obligation. Debtor will deliver to MWC all
notices, statements or other communications received by Debtor as an owner or
holder of the Pledged Stock.
4. Maintenance of Security Interest. Debtor will pay all expenses and,
upon request, take any action reasonably deemed advisable by MWC to preserve
the Pledged Stock or to establish, determine priority of, perfect, continue
perfected, terminate and/or enforce MWC's interest therein or rights under this
Agreement.
5. Acts Not Affecting Obligation. None of the following will affect the
liabilities of Debtor under this Agreement, or the Obligation, or the rights of
MWC with respect to the Pledged Stock: (a) acceptance or retention by MWC of
other property or interests as security for
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the Obligation, or for the liability of any person, for the Obligation; (b) the
release of all or any of the Pledged Stock or other security for the
Obligation; (c) any release, extension, renewal, modification or compromise of
the Obligation or the liability of any obligor thereon; (d) failure by MWC to
resort to other security or any other liable for the Obligation before
resorting to the Pledged Stock; (e) any increase in the amount of the
Obligation secured hereunder, for any reason whatsoever; and (f) any exercise
of, or failure to exercise, any remedy or taking or failing to take any action
with respect thereto described in Section 7.
6. Events of Default. The occurrence of any one or more of the
following will be deemed an Event of Default.
(a) Nonperformance. If Debtor fails to pay when due any of the
Obligation and to return the stock sold in consideration of the Time Note
on the due date of the Time Note, or to perform, or rectify breach of,
any warranty or other undertaking in this Agreement or in any evidence
of, or documents or agreements relating to, the Obligation.
(b) Insolvency. Either of the Debtor is the subject of bankruptcy
or insolvency proceedings or any proceedings for reorganization or
rehabilitation of debts.
(c) Misrepresentation. If any representation or warranty hereunder
is false in any material respect when made.
7. Remedies. Upon the occurrence of an Event of Default, MWC shall
immediately become the lawful and unqualified owner of the Pledged Stock and
shall have all rights and remedies for default provided under the Time Note.
MWC may permit Debtor or any endorser, guarantor or surety upon the Obligation
to remedy any default without waiving the default so remedied, and MWC may
waive any default without waiving any other subsequent or prior default by
Debtor or any other person.
8. Possession of Pledged Stock. All of the Pledged Stock to be held by
MWC hereunder shall be held by the Detroit office of the law firm of Dickinson,
Wright, Moon, Van Dusen & Xxxxxxx as agent for MWC, but not as agent for any
creditor, secured or otherwise of MWC, and shall be released upon (a) the joint
written direction of MWC and Debtor, (b) ten (10) business days after an Event
of Default certified as true and correct in writing by MWC and its parent
corporation Xxxxx Wheels International, Inc., has been delivered to Debtor and
said agent then at the direction of MWC, or (c) ten (10) business days after
the payment of the Obligation in full has been certified in writing as having
been accomplished by Debtor, has been delivered to MWC and said agent then at
the direction of Debtor, or (d) pursuant to an order of court of competent
jurisdiction which order has become final, is not on appeal, and is
unappealable thereafter. Delivery to the agent shall be accomplished by
delivery to its Executive Partner.
9. Shareholders Agreement. In the event that MWC effects the second
alternate remedy under the Time Note and becomes the owner of the
Pledged Stock, such stock shall become
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subject to all the terms and conditions of that certain Shareholders Agreement
dated October __, 1996 between Riviera Holding and MWC. MWC and Xxxxxxx X.
Xxxxx hereby agree to amend and restate such agreement so as to substitute
Xxxxxxx X. Xxxxx for Riviera Holding Company as a party to such agreement and
to have the agreement refer to shares of stock of Riviera Holding Company as
opposed to shares of stock of Riviera Tool Company, and to otherwise be
identical to and contain all the terms and conditions of such agreement.
10. Costs of Enforcement. In the event that either of Debtor or MWC
brings an action to enforce its rights hereunder and is successful in such
action, then the costs of such enforcement action including reasonable
attorneys' fees and court costs shall be paid by the unsuccessful party in such
action.
11. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
12. Interpretation. The validity, construction and enforcement of this
Agreement are governed by the internal laws of Michigan. All terms not
otherwise defined have the meanings assigned to them by the Michigan Uniform
Commercial Code. Invalidity of any provision of this Agreement will not affect
the validity of any other provision.
13. Persons Bound. This Agreement benefits MWC, its successors and
assigns, and binds Debtor, and their respective heirs, personal
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Stock Pledge Agreement on the date first above written.
WITNESSES: MOTOR WHEEL CORPORATION
____________________________ By:_________________________________
____________________________
RIVIERA HOLDING COMPANY
____________________________ By:_________________________________
Xxxxxxx X. Xxxxx, President
____________________________ ____________________________________
Xxxxxxx X. Xxxxx
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