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EXHIBIT 4.1
OPTION AGREEMENT
AMONG
XXXXX WHEELS INTERNATIONAL, INC.,
XXXXXX XXXXX-XXXXXXX
AND
XXXX XXXXXX-XXXXXX
DATED AS OF
JULY 30, 1997
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OPTION AGREEMENT
OPTION AGREEMENT, dated as of July 30, 1997 (the "Agreement"), among:
X. Xxxxx Wheels International, Inc., a corporation organized under the
laws of the State of Delaware ("HWI");
B. Xxxxxx Xxxxx-Xxxxxxx, an individual residing in the Federal
Republic of Germany; and
C. Xxxx Xxxxxx-Xxxxxx, an individual residing in the Federal Republic
of Germany.
Xxxxxx Xxxxx-Xxxxxxx and Xxxx Xxxxxx-Xxxxxx are referred to herein,
individually, as a "Stockholder" and, together, as the "Stockholders." HWI and
the Stockholders are referred to herein, individually, as a "Party" and,
collectively, as the "Parties."
WHEREAS, the Stockholders own 1,628,800 shares (the "Shares") of Common
Stock, par value $.01 per share, of HWI ("Common Stock"), free and clear of any
and all Liens (as defined herein);
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants and agreements set forth herein, the Parties hereby agree as follows:
ARTICLE I
OPTION
Section 1.1 Grant of Option. Each Stockholder hereby grants to HWI an
irrevocable option (the "Option") to:
(a) purchase all of the Shares held by such Stockholder ("Purchase
Option"); or
(b) require such Stockholder to include all of the Shares held by such
Stockholder ("Call Option") in any public offering of equity securities of
HWI (a "Public Offering");
in each case, on the terms and subject to the conditions set forth herein.
Section 1.2 Exercise of Option.
(a) At any time prior to the termination of this Agreement, HWI may
exercise the Option, in whole but not in part, by giving a written notice of
such exercise (the "Exercise Notice") to the Stockholders at least ten days
prior to the date (the "Option Closing Date") for the closing of any purchase
and sale of the Shares pursuant to the Option (the "Closing"). The Closing shall
take place at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m., local time, on the day specified in
such notice or at such other place, and at such other time or date as the
Parties may agree. At the Closing, each Stockholder shall deliver the number of
Shares specified in the Exercise Notice and held by such Stockholder by delivery
of certificates evidencing such Shares, properly endorsed by such Stockholder
and accompanied by such stock powers and other documents as may be necessary to
transfer record ownership of such Shares on the stock transfer books of HWI,
against payment therefor as specified in Section 1.3. Notwithstanding any
Exercise Notice hereunder, the Company shall not be deemed to have exercised the
Purchase Option or the Call Option unless and until the Closing shall have
occurred hereunder.
(b) Notwithstanding any provision hereof to the contrary, each of HWI's
right to exercise, and each Stockholder's obligation to sell any Shares pursuant
to, the Option hereunder is subject to the conditions that (i) any Closing with
respect to such Shares must take place (A) on or prior to November 30, 1997 and
(B) in connection with a Public Offering for a number of shares at least equal
to the number of Shares and (ii) the requisite consent under the Stockholders
Agreement (as defined below) shall have been obtained.
Section 1.3 Purchase Price.
(a) At the Closing of the Purchase Option exercise, HWI shall deliver to
each Stockholder funds in an aggregate amount equal to (a) $30 multiplied by (b)
the total number of Shares sold by such Stockholder to
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HWI (the "Purchase Option Price"), by wire transfer of New York Clearing House
funds to an account designated by such Stockholder in writing at least three
days prior to the Closing Date.
(b) At the Closing of the Call Option exercise:
(i) in the event that the net proceeds per share ("Net Proceeds Per
Share") payable by the underwriters in respect of each Share sold in a
Public Offering pursuant to the Call Option is less than $30, HWI shall
deliver to such Stockholder funds in an aggregate amount equal to (A)
the amount by which $30 is greater than such Net Proceeds Per Share
multiplied by (B) the total number of Shares sold by such Stockholder in
the Public Offering pursuant to the Call Option, by wire transfer of New
York Clearing House funds to an account designated by such Stockholder
in writing at least three days prior to the Closing Date; and
(ii) in the event that the Net Proceeds Per Share payable by the
underwriters in respect of each Share sold in a Public Offering pursuant
to the Call Option is greater than $30, then such Stockholder shall
cause the underwriters of such Public Offering to deliver to HWI funds
in an aggregate amount equal to (A) the amount by which such Net
Proceeds Per Share is greater than $30 multiplied by (B) the total
number of Shares sold by such Stockholder in the Public Offering
pursuant to the Call Option, by wire transfer of New York Clearing House
funds to an account designated by HWI in writing at least three days
prior to the Closing Date. In no event and under no circumstances shall
any Stockholder be entitled to receive more than $30 for any Share sold
in a Public Offering pursuant to any Call Option.
Section 1.4 Adjustments. If at any time the outstanding shares of Common
Stock are changed into a different number of shares or a different class by
reason of any reclassification, recapitalization, split-up, combination,
exchange of shares or readjustment or if a stock dividend therein is declared
with a record date prior to the termination of this Agreement, then the number
of Shares subject to the Option and the applicable per Share consideration to be
paid by HWI upon exercise of the Option (but not the total purchase price) shall
be appropriately and equitably adjusted.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF EACH STOCKHOLDER
Each Stockholder, as to herself, hereby represents and warrants to HWI as
follows:
Section 2.1 Authority. Such Stockholder has the requisite power, capacity
and authority to execute and deliver this Agreement, to perform her obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by such Stockholder and, assuming the due
authorization, execution and delivery hereof by HWI, constitutes the valid and
binding obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms.
Section 2.2 Title to Shares.
(a) Such Stockholder has good and marketable title to the number of Shares
set forth opposite such Stockholder's name in Annex 1, free and clear of any and
all liens, encumbrances, security interests, mortgages or pledges (collectively,
"Liens").
(b) At any Closing, with respect to each Share to be sold, assigned,
transferred and conveyed by such Stockholder, upon delivery and payment to such
Stockholder of the Purchase Option Price or the Net Proceeds Per Share, as the
case may be, for such Share in accordance with Article II hereof, the purchaser
thereof will acquire good and valid title to such Share, free and clear of any
and all Liens.
Section 2.3 No Violation; Consents and Approvals.
(a) The execution and delivery of this Agreement by such Stockholder do
not, and the performance of this Agreement by such Stockholder and the
consummation of the transactions contemplated hereby will not,
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(i) conflict with or violate any law, order, judgment or decree applicable to
such Stockholder, or (ii) other than the Amended and Restated Stockholders
Agreement dated as of June 30, 1997 (the "Stockholders Agreement"), result in
any breach of, or constitute a default (or an event that with notice or lapse of
time or both would constitute a default) under any agreement to which such
Stockholder is a party.
(b) The execution and delivery of this Agreement by such Stockholder do
not, and the performance by such Stockholder of this Agreement and the
consummation of the transactions contemplated hereby will not, require such
Stockholder to obtain any consent, approval, waiver, authorization or permit of,
or to make any filing or registration with or notification to ("Consent"), any
nation or govern ment, or any state or other political subdivision thereof, any
entity, authority or body exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, including
any government authority, agency, department, board, commission or
instrumentality of the United States, any state of the United States or any
political subdivision thereof, the Federal Republic of Germany or any political
subdivision thereof, or any other nation, or any court, tribunal or arbitrator
("Governmental Entity"), or any third party, other than under the Stockholders
Agreement and under federal and state securities laws.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HWI
HWI hereby represents and warrants to the Stockholders as follows:
Section 3.1 Corporate Organization; Subsidiaries. HWI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 3.2 Authorization; No Violation; Consents and Approvals.
(a) HWI has the requisite corporate power and corporate authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. Other than filings under
federal and state securities laws, the execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby,
have been duly authorized by the Board of Directors of HWI and no other
corporate proceeding on the part of HWI is required to authorize the execution,
delivery and performance hereof, and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by HWI
and, assuming the due authorization, execution and delivery hereof by each
Stockholder, constitutes the valid and binding obligation of HWI, enforceable
against HWI in accordance with its terms.
(b) The execution and delivery of this Agreement by HWI do not, and the
performance of this Agreement by HWI and the consummation of the transactions
contemplated hereby, will not, (i) conflict with or violate the certificate of
incorporation or by-laws, in each case as amended or restated to date, of HWI,
(ii) conflict with or violate any law, judgment, order or decree applicable to
HWI, or (iii) other than the Stockholders Agreement, result in any breach of, or
constitute a default (or an event that with notice or lapse of time or both
would constitute a default) under any agreement to which HWI is a party, other
than, with respect to clause (iii) above, such conflicts, violations, breaches
and defaults as could not reasonably be expected, individually or in the
aggregate, to impair in any material respect HWI's ability to perform its
obligations hereunder or to consummate the transactions contemplated hereby.
(c) The execution and delivery of this Agreement by HWI do not, and the
performance by HWI of this Agreement and the consummation of the transactions
contemplated hereby, will not, require HWI to obtain any Consent of any
Governmental Entity, or any third party, except for the Stockholders Agreement,
under federal and state securities laws and such Consents, the failure of which
to obtain or make could not reasonably be expected, individually or in the
aggregate, to impair in any material respect HWI's ability to perform its
obligations hereunder or to consummate the transactions contemplated hereby.
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ARTICLE IV
COVENANTS OF THE PARTIES
Section 4.1 Information from the Stockholders. The Stockholders shall use
their respective reasonable best efforts promptly to provide HWI with all
information concerning the Stockholders requested by HWI and required to be
included in the registration statement relating to any Public Offering in which
Shares are to be sold.
Section 4.2 Cooperation; Further Action. In the event that, prior to or
after the Closing, any action is necessary or desirable to carry out the
purposes of this Agreement, including entering into any customary agreements
with underwriters of any Public Offering in which the Shares are included, each
Party shall take, and shall cause its directors, officers, employees,
representatives (including, in the case of the Stockholders, their director
designees on the Board of Directors of HWI) and agents, as the case may be, to
take, all such necessary actions including the execution and delivery of such
further instruments and documents as may reasonably be requested by any Party
for such purposes or otherwise to complete or perfect the transactions
contemplated hereby. The Stockholders agree to fully cooperate with HWI and the
underwriters of any Public Offering in which the Shares are included.
Section 4.3 Legend. Upon execution and delivery of this Agreement, the
Stockholders shall promptly after the date hereof submit to HWI the stock
certificate or stock certificates representing the Shares and substantially the
following legend shall be placed thereon:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF THE OPTION AGREEMENT DATED AS OF JULY 30, 1997 AMONG XXXXX
WHEELS INTERNATIONAL, INC., XXXXXX XXXXX-XXXXXXX AND XXXX XXXXXX-XXXXXX, A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF XXXXX WHEELS INTERNATIONAL,
INC. AND IS AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST THEREFOR.
Section 4.4 Stockholders Agreement. Each Party, and each of Xxxxxxxx
Xxxxxxx and Xxxxx Xxxxx-Xxxxxxx, hereby irrevocably consents to the transactions
contemplated hereby for purposes of the Stockholders Agreement; and HWI shall
use its reasonable best efforts to obtain the required consent under the
Stockholders Agreement from each other party thereto.
Section 4.5 Mutual Release. To the fullest extent permitted by applicable
law, each Party, and the respective directors, officers, employees,
representatives, agents, successors and permitted assigns of any Party, if any,
and each of Xxxxxxxx Xxxxxxx, Xxxxx Xxxxx-Xxxxxxx and H.K.L., L.L.C., hereby
irrevocably and unconditionally releases and discharges each other Party, and
each of Xxxxxxxx Xxxxxxx, Xxxxx Xxxxx-Xxxxxxx and H.K.L., L.L.C., and the
respective directors, officers, employees, representatives, agents, successors
and permitted assigns of any Party, if any, from any and all liability which
such person or entity now has or may hereafter have against any such other
person or entity, and to the extent applicable, any of its directors, officers,
employees, representatives or agents, arising out of, based upon or relating to
the purchase by the Stockholders of the Shares from K-H Corporation pursuant to
the letter agreement dated July 23, 1997, a true, correct and complete copy of
which has been furnished to HWI, or the transactions expressly provided for
herein.
ARTICLE V
TERMINATION
Section 5.1 Termination. This Agreement shall terminate at the earlier of
(a) 11:59 p.m., New York City time, on November 30, 1997 or (b) immediately
following any Closing hereunder.
Section 5.2 Effect of Termination. Upon termination of this Agreement
pursuant to this Article V, this Agreement and the transactions contemplated
hereby shall be deemed abandoned (and HWI shall promptly deliver to the
Stockholders a certificate or certificates representing the Shares not
theretofore sold hereunder
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without the legend thereon described in Section 4.3) and this Agreement shall
forthwith become null and void, except that the provisions of Sections 4.4 and
4.5 and Article V shall survive any termination of this Agreement; provided,
however, that nothing in this Agreement shall relieve any party from liability
for any willful breach of this Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of all Parties.
Section 6.2 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given on the date delivered, if delivered personally, on the fifth business day
after being mailed by registered or certified international airmail (postage
prepaid, return receipt requested) or on the second business day after being
sent by reputable overnight courier (delivery prepaid), in each case, to the
parties at the following addresses, or on the date sent and confirmed by
electronic transmission to the telecopier number specified below (or at such
other address or telecopier number for a party as shall be specified by notice
given in accordance with this Section):
(a) if to any Stockholder, to:
Herrn Xxxxx-Xxxxx Lemmerz
x/x Xxxxxxx Xxxxxxx XxxX
Xxxxxxxx 0000
53621 Konigswinter
Federal Republic of Germany
Tel: x00-0000-00-0
Fax: x00-0000-00-000
with a copy to:
Xxxxxxxx & Partner
Attention: Xx. Xxxxxxx Xxxxxxxx
Xxxxxxxxxxxxx Xxxxx 000
00000 Xxxx,
Xxxxxxx Xxxxxxxx of Germany
Tel: x00-000-00000-0
Fax: x00-000-00000-00
and
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Attention: Xxxxxxx X. Xxxxx, Esq.
0 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Tel: x0-000-000-0000
Fax: x0-000-000-0000
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(b) if to HWI, to:
Xxxxx Wheels International, Inc.
Attention: Xxxxxx X. Xxxxxxxx, Esq.
00000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
X.X.X.
Tel: x0-000-000-0000
Fax: x0-000-000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Attention: Xxxxxx X. Xxxxxx, Esq.
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
X.X.X.
Tel: x0-000-000-0000
Fax: x0-000-000-0000
Section 6.3 Parties in Interest; Assignment. This Agreement shall be
binding upon and inure solely to the benefit of each Party hereto and its
respective successors and permitted assigns, and except for Section 4.4 and 4.5
hereof, no provision of this Agreement, express or implied, is intended to or
shall confer upon any other person or entity any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned,
directly or indirectly, by any Party without the prior written consent of the
other Parties.
Section 6.4 Counterparts. This Agreement may be executed in counterparts,
each of which when executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
Section 6.5 Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the Parties and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 6.6 Entire Agreement. This Agreement constitutes the entire
agreement of the Parties and supersedes all prior agreements and undertakings,
both written and oral, between or among the Parties, or any of them, with
respect to the subject matter hereof.
Section 6.7 Specific Performance. Each Party hereto acknowledges that money
damages would be both incalculable and an insufficient remedy for any breach of
this Agreement by such Party and that any such breach of this Agreement would
cause the other Party or Parties hereto irreparable harm. Accordingly, each
Party hereto also agrees that, in the event of any breach or threatened breach
of the provisions of this Agreement by such Party, the other Party or Parties
hereto shall be entitled to equitable relief without the requirement of posting
a bond or other security, including in the form of injunctions and orders for
specific performance, in addition to all other remedies available to such other
Parties at law or in equity.
Section 6.8 Governing Law. This Agreement shall be governed by the laws of
the State of New York, without regard to conflicts of law principles.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, HWI and each Stockholder have duly executed and
delivered this Agreement as of the day and year first written above.
XXXXX WHEELS INTERNATIONAL, INC.
By: /s/
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
/s/
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Xxxxxx Xxxxx-Xxxxxxx
/s/
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Xxxx Xxxxxx-Xxxxxx
ACKNOWLEDGED AND AGREED
(solely for purposes of Sections 4.4
and 4.5 hereof):
/s/
--------------------------------------
Xxxxxxxx Xxxxxxx
/s/
--------------------------------------
Xxxxx Xxxxx-Xxxxxxx
ACKNOWLEDGED AND AGREED
(solely for purposes of Section 4.5):
H.K.L., L.L.C.
By: /s/
----------------------------------
Xxxxx Xxxxx-Xxxxxxx
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ANNEX I
OWNERSHIP OF SHARES
NUMBER OF
HOLDER SHARES
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Xxxxxx Xxxxx-Xxxxxxx........................................ 814,400
Xxxx Xxxxxx-Xxxxxx.......................................... 814,400
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