Exhibit 99(d)(5)
OPTION AGREEMENT
OPTION AGREEMENT, dated as of August 12, 2002 (the "AGREEMENT"), among
NRT Incorporated, a Delaware corporation ("PARENT"), Timber Acquisition
Corporation, a Massachusetts corporation ("PURCHASER"), and The XxXxxxx
Companies, Inc., a Massachusetts corporation (the "COMPANY"). Capitalized terms
used and not defined in this Agreement shall have the meanings ascribed to them
in the Agreement and Plan of Merger, dated as of August 12, 2002 (the "MERGER
AGREEMENT") by and among Parent, Purchaser and the Company.
WHEREAS, concurrently with the execution of this Agreement, Parent,
Purchaser and the Company are entering into the Merger Agreement, providing for
a tender offer (the "OFFER") to purchase all of the issued and outstanding
shares of the Company's common stock, par value $0.01 per share (the "SHARES"),
at a price per Share equal to the Offer Price and, following the completion of
the Offer, the merger (the "MERGER") of Purchaser with the Company, whereby each
Share not purchased pursuant to the Offer (other than Shares held in the
treasury of the Company and Dissenting Shares) will be converted into the right
to receive in cash the Offer Price in accordance with the terms of the Merger
Agreement; and
WHEREAS, the Company desires to induce Parent and Purchaser to enter
into the Merger Agreement and to facilitate the prompt completion of the Merger
following the purchase of Shares pursuant to the Offer.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto hereby agree as follows:
1. GRANT OF OPTION. The Company hereby grants to Purchaser an
irrevocable option (the "OPTION") to purchase up to that number of newly issued
Shares (the "OPTION SHARES") equal to the number of Shares, that when added to
the number of Shares owned by Purchaser and its affiliates immediately following
consummation of the Offer, shall constitute 90% of the Shares then outstanding
on a fully diluted basis (giving effect to the issuance of the Option Shares)
for a consideration per Option Share equal to the Offer Price; PROVIDED,
however, that the number of Option Shares shall not exceed that number equal to
19.9% of the Shares outstanding on the date of this Agreement.
2. EXERCISE OF THE OPTION. The Option may be exercised by Purchaser at
any time after the acceptance for payment by Purchaser of Shares pursuant to the
Offer in accordance with the terms of the Merger Agreement. In the event
Purchaser wishes to exercise the Option, Purchaser shall give written notice
(the "NOTICE") of its exercise of the Option specifying the number of Shares
owned by Purchaser and its affiliates immediately following consummation of the
Offer and a place and a time (which shall not be sooner than three business days
from the date of the Notice) for the closing of such purchase. The Company
shall, within two Business Days after receipt of the Notice, deliver written
notice to Purchaser specifying the number of Option Shares.
3. PAYMENT AND DELIVERY OF CERTIFICATES. At the closing hereunder: (i)
the Company will deliver to Purchaser a certificate or certificates representing
the number of Option Shares so purchased and (ii) Purchaser will make payment to
the Company of the aggregate price for the Option Shares being purchased, as
stated in the Notice, by check or wire transfer in an amount equal to the
product of (x) the Offer Price and (y) the total number of Option Shares
delivered at the closing. The Company shall pay all expenses, and any and all
United States federal, state and local taxes and other charges, that may be
payable in connection with the preparation, issuance and delivery of stock
certificates under this Section 3.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Parent and Purchaser as follows:
4.1 The Company has all requisite corporate power and authority to
enter into and perform all of its obligations under this Agreement. The
execution and delivery of this Agreement and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and, assuming the due and valid
authorization, execution and delivery by Parent and Purchaser, constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
4.2 The Company has taken all necessary corporate action to authorize
and reserve for issuance, and at all times prior to the termination of this
Agreement shall have reserved, all of the Option Shares issuable pursuant to
this Agreement.
4.3 The Shares to be issued upon exercise of the Option, upon their
issuance and delivery in accordance with this Agreement as provided herein, will
be duly authorized, validly issued, fully paid and nonassessable, will be
delivered free and clear of all Encumbrances of any nature whatsoever (other
than this Agreement) and will not be subject to any preemptive rights. Upon the
delivery to Purchaser by the Company of a certificate or certificates evidencing
the Option Shares, Purchaser will receive good, valid and marketable title to
the Option Shares.
5. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER. Each of
Parent and Purchaser hereby represents and warrants to the Company that (i) it
has all requisite power and authority to enter into and perform all of its
obligations under this Agreement; (ii) the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of Parent and Purchaser;
(iii) this Agreement has been duly executed and delivered by Parent and
Purchaser and, assuming the due and valid authorization, execution and delivery
by the Company, constitutes a valid and binding obligation of Parent and
Purchaser, enforceable against each of Parent and Purchaser in accordance with
its terms; and (iv) if and when Purchaser exercises the Option, it will be
acquiring the Option Shares pursuant to this Agreement for its own account and
not with a view to any public distribution thereof.
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6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of any
change in the number of issued and outstanding Shares by reason of any stock
dividend, subdivision, merger, recapitalization, combination, conversion or
exchange of shares, or any other change in the corporate or capital structure of
the Company (including, without limitation, the declaration or payment of any
extraordinary dividend of cash or securities) which would have the effect of
diluting or otherwise adversely affecting Purchaser's rights and privileges
under this Agreement, the number and kind of the Option Shares and the
consideration payable in respect of the Option Shares shall be appropriately and
equitably adjusted to restore to Purchaser its rights and privileges under this
Agreement.
7. TERMINATION. This Agreement will terminate upon the earlier to occur
of (i) termination of the Merger Agreement in accordance with its terms and (ii)
the Effective Time of the Merger.
8. ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
parties, except that Purchaser may assign, in its sole discretion, any or all of
its rights, interests and obligations hereunder to Parent or to any direct or
indirect wholly owned subsidiary of Parent. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and permitted assigns.
9. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given (and shall be deemed to have
been duly received if so given) if personally delivered or sent by registered or
certified mail, postage prepaid, or telecopy addressed to the respective parties
at their addresses specified in the Merger Agreement.
10. SPECIFIC PERFORMANCE. Each of the parties hereto acknowledges and
agrees that in the event of any breach by the Company of this Agreement, Parent
and Purchaser would be irreparably and immediately harmed and could not be made
whole by monetary damages. It is accordingly agreed that the Company will waive,
in any action for specific performance, the defense of adequacy of a remedy at
law, and Parent and Purchaser shall be entitled, in addition to any other remedy
to which they may be entitled at law or in equity, to compel specific
performance of this Agreement in any action instituted in a court of competent
jurisdiction.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state of Delaware, without regard to the
conflict of laws provisions thereof.
12. AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
13. WAIVER. Any party hereto may (i) extend the time for or waive
compliance with the performance of any obligation or other act of any other
party hereto
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or (ii) waive any inaccuracy in the representations and warranties contained
herein or in any document delivered pursuant hereto. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby. The failure of any party to assert any
rights under this Agreement or otherwise shall not constitute a waiver of those
rights.
14. FEES AND EXPENSES. Except as otherwise provided herein or in the
Merger Agreement, all costs, fees and expenses incurred in connection with this
Agreement shall be paid by the party incurring such expenses.
15. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void, unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
17. CONSTRUCTION. Capitalized terms used herein and not otherwise
defined have the meanings set forth in the Merger Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by duly authorized
officers of each of the parties hereto all as of the date first above written.
NRT INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
TIMBER ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
THE XXXXXXX COMPANIES, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxx
Title: President and Chief Operating
Officer
