EXHIBIT 99.D
WARRANT OPTION AGREEMENT
WARRANT OPTION AGREEMENT, dated as of August 9, 1995 (the
"Agreement"), among XXXXXX GROUP INTERNATIONAL, INC., a Delaware corporation
(the "Parent"), and MH ASSOCIATES, a New York general partnership (the
"Investor").
WHEREAS, the Parent, SPRT Corp., a Florida corporation and a wholly
owned subsidiary of the Parent (the "Purchaser"), and MHI Group, Inc., a Florida
corporation (the "Company"), propose to enter into an Agreement and Plan of
Merger of even date herewith (the "Merger Agreement") providing for the making
of a cash tender offer (the "Offer") by the Parent and the Purchaser for shares
of Common Stock, par value $.40 per share, of the Company (the "Common Stock")
and the merger of the Company and the Purchaser (the "Merger"); and
WHEREAS, the Investor is a party to the option agreement dated April
22, 1986, as amended (the "KD Warrant") to purchase 486,352 shares of Common
Stock (the "Optioned Shares");
NOW, THEREFORE, in consideration of the promises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
1. Grant of Options.
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(a) Initial Option. The Investor grants to the Parent an irrevocable
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option (the "Initial Option"), exercisable, as provided in Sections 2 and 3
(subject to Section 1(d)), at any time after the expiration or termination of
the Offer or the acceptance for purchase by the Purchaser (or any other person
who is authorized by the Parent) of any shares of Common Stock pursuant to the
Offer, until October 31, 1995 (the "Initial Option Period"), to purchase the KD
Warrant for the Option Purchase Price (as defined in Section 1(c) hereof).
(b) Extended Option. If, prior to the last day of the Initial Option
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Period, the Parent notifies the Investor of its intent to extend the exercise
period of the option described in this Section 1(b) and pays the Investor
$607,940 in cash (the "Extended Option Payment") by wire transfer of immediately
available funds to an account designated by the Investor within two business
days after delivery of such notice) the Investor shall grant to the Parent an
irrevocable option (the "Extended Option," and together with the Initial Option,
the "Options"), exercisable, as provided in Sections 2 and 3 (subject to Section
1(d)), at any time during the 60-day period commencing on the first day
following the Initial Option Period (the "Extended Option Period"), to purchase
the KD Warrant for the Option Purchase Price.
(c) Option Purchase Price. Except as provided in the last sentence
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of this Section 1(c), the Option Purchase Price shall be payable in cash by wire
transfer of immediately available funds to an account designated by the Investor
at least one business day prior to payment, and shall be an amount equal to (i)
486,352 times the greater of the per share price offered or to be offered for
Common Stock by the Parent or the Purchaser in the Offer (as such amount may be
increased in the Offer) and the highest price per share of Common Stock paid at
any time by the Parent or the Purchaser (or any of its affiliates) in any
transaction other than the Offer (including, but not limited to, open market
purchases or consideration paid pursuant to a merger or similar transaction, but
not including any amounts paid in respect of appraisal proceedings under Florida
law), in each case as of the date of exercise, subject to the following sentence
minus (ii) the sum of the aggregate exercise price of the KD Warrant and the
amount of the Extended Option Payment paid by the Parent. If, within one year
following the exercise of any of the Options, the per share prices described in
clause (i) are increased, within five business days thereafter the Parent shall
pay to the Investor an amount in cash, by wire transfer of immediately available
funds to an account designated by the Investor equal to the difference between
the amount or amounts previously paid to the Investor and the Option Purchase
Price as recomputed based upon such increased price or prices. In the event
that noncash consideration is included in the Option Purchase Price, the Option
Purchase Price shall be payable in both such noncash consideration and cash in
the respective percentages thereof paid by the Parent or the Purchaser for
shares of Common Stock.
(d) Limits on Exercise. Notwithstanding the provisions of Sections 1
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and 2 of this Agreement, the Options shall not be exercisable, shall expire and
shall be null and void after August 15, 1995 if the Offer is not commenced on or
prior to August 15, 1995.
2. Exercise of Options.
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(a) Elective Exercise. If the Parent wishes to exercise either of
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the Options, the Parent shall do so by delivering written notice during the
Initial Option Period or the Extended Option Period, as the case may be (the
date of such notice being herein called the "Notice Date"), to the Investor
specifying the place, time and date not earlier than two business days, nor
later than ten business days, from the Notice Date for the closing of the
purchase by the Parent pursuant to such exercise. The delivery of such notice
shall be deemed for all purposes to be the exercise of the Options and shall
constitute an irrevocable and binding commitment on the part of the Parent to
purchase the KD Warrant upon the terms set forth in this Agreement.
(b) Mandatory Exercise. If any share of Common Stock is accepted for
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payment by the Parent or the Purchaser (or any other person who is authorized by
the Parent) pursuant to the Offer, the Parent shall without the requirement of
any notice or other action
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by the Parent or the Investor, be deemed to have exercised the Options on the
business day immediately following such date and shall pay the Option Purchase
Price at a closing no later than three business days following the date of such
acceptance for payment. Such acceptance for payment pursuant to the Offer shall
constitute an irrevocable and binding commitment on the part of the Parent to
purchase the KD Warrant upon the terms set forth in this Agreement.
3. Payment of Option Purchase Price and Delivery of Assignment of the
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KD Option. At any closing of the exercise of the Options hereunder, (a) the
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Parent shall deliver to the Investor the Option Purchase Price and (b) the
Investor shall deliver to the Parent an instrument of assignment of the KD
Option in form and substance reasonably satisfactory to the Parent.
4. Sale or Transfer of the KD Warrant by the Parent. If, prior to the
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first anniversary of the date of the exercise of either of the Options, the
Parent or any of its affiliates sells or otherwise transfers (including but not
limited to, by merger of the Company) or assigns either the KD Warrant, in whole
or in part, or any shares of Common Stock acquired upon exercise thereof, it
will promptly pay over to the Investor 50% of the Profits (defined below)
realized therefrom. "Profits" shall mean, (a) in the case of shares of Common
Stock, (i) the excess of (A) the price per share received by the Parent over (B)
the sum of the Option Purchase Price, the aggregate exercise price of the KD
Warrant and the amount of any Extended Option Payment paid by the Parent,
divided by 486,352, multiplied by (ii) the number of shares in question, and (b)
in the case of the KD Warrant, the excess of (A) the consideration received by
the Parent over (B) the sum of the Option Purchase Price and the amount of any
Extended Option Payment paid by the Parent (or the appropriate pro rata portion
thereof, in the case of partial sales). In the event that noncash consideration
is included in consideration received by the Parent, the Profits shall be
payable in such noncash consideration in the same percentage as such noncash
consideration bears to the total consideration received by the Parent.
5. Representations and Warranties of the Investor. The Investor
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hereby represents and warrants to the Parent as follows:
(a) Authority; Noncontravention. The Investor has all requisite power
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and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Investor and the consummation by the Investor of the transactions contemplated
hereby have been duly authorized by all necessary partnership action on the part
of the Investor. This Agreement has been duly executed and delivered by the
Investor and constitutes a valid and binding obligation of the Investor,
enforceable against the Investor in accordance with its terms. The execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof will not, conflict
with, or result in any violation of, or default (with or without notice
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or lapse of time or both) under (i) organizational documents of the Investor or
(ii) any provision of any trust agreement, loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Investor or to the Investor's property or assets,
other than, in the case of clause (ii), any such conflicts, violations,
defaults, rights or liens that individually or in the aggregate would not
prevent the consummation of any of the transactions contemplated by this
Agreement. No consent, approval, order or authorization of, or registration,
declaration or filing with, any federal, state or local government or any court,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "Governmental Entity"), is required
by or with respect to the Investor in connection with the execution and delivery
of this Agreement or the consummation by the Investor of the transactions
contemplated by this Agreement, except for (1) the filing with the Securities
and Exchange Commission of such reports under Sections 13(d) and 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") as may be
required in connection with this Agreement and the transactions contemplated by
this Agreement and (2) such other consents, approvals, orders, authorizations,
registrations, declarations and filings as would not individually or in the
aggregate prevent the consummation of any of the transactions contemplated by
this Agreement.
(b) The KD Warrant. The KD Warrant is in full force and effect, has
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not heretofore been exercised in whole or in part, and is assignable by the
Investor free and clear of any claims, liens, encumbrances or security
interests.
6. Representations and Warranties of the Parent. The Parent
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hereby represents and warrants to the Investor as follows:
(a) Authority; Noncontravention. The Parent has all requisite
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corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of the Parent. This Agreement has been duly executed and delivered by the
Parent and constitutes a valid and binding obligation of the Parent, enforceable
against the Parent in accordance with its terms. The execution and delivery of
this Agreement do not, and the consummation of the transactions contemplated by
this Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, (i) the certificate of incorporation or by-
laws of the Parent or the comparable charter or organizational documents of any
other subsidiary of the Parent, (ii) any loan or credit agreement, note, bond,
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mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to the Parent or any of its subsidiaries or
their respective properties or assets or (iii) subject to the governmental
filings and other matters referred to in the following sentence, any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Parent or any of its subsidiaries or their respective properties or assets,
other than, in the case of clause (ii) or (iii), any such conflicts, violations,
defaults, rights or liens that individually or in the aggregate would not (x)
have a material adverse effect (as such term is defined in the Merger Agreement)
on the Parent, (y) impair the ability of the Parent to perform its respective
obligations under this Agreement or (z) prevent the consummation of any of the
transactions contemplated by this Agreement. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to the Parent or any of its subsidiaries
in connection with the execution and delivery of this Agreement or the
consummation by the Parent of any of the transactions contemplated by this
Agreement, except for (1) the filing with the Securities and Exchange Commission
of such reports under Sections 13(a), 13(d), 14(d) and 16(a) of the Exchange Act
as may be required in connection with this Agreement and the transactions
contemplated by this Agreement, (2) filings and reports under the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended, in connection with the
Offer, and (3) such other consents, approvals, orders, authorizations,
registrations, declarations and filings as would not individually or in the
aggregate (A) have a material adverse effect on the Parent or (B) prevent the
consummation of any of the transactions contemplated by this Agreement.
(b) Securities Act. The KD Warrant and any shares of Common Stock
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acquired upon exercise thereof will be acquired for investment only and not with
a view to any public distribution thereof, and the Parent will not offer to sell
or otherwise dispose of the KD Warrant or any shares so acquired by it in
violation of any of the registration requirements of the Securities Act of 1933,
as amended.
7. Covenants of the Investor. The Investor agrees, until the Options
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have expired, not to exercise the KD Warrant in whole or in part or to sell,
transfer, pledge, assign or otherwise dispose of, or enter into any contract,
option or other arrangement with respect to the sale, transfer, pledge,
assignment or other disposition of, the KD Warrant to any person other than
pursuant to this Agreement.
8. No Brokers. Except for Xxxxx Xxxxxx Inc. and Xx. Xxxxx Xxxxxxxxx
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(the financial advisors retained by the Parent), each of the Investor and the
Parent represents, as to itself and its affiliates, that no agent, broker,
investment banker or other firm or person is or will be entitled to any broker's
or finder's fees or
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any other commission or similar fee in connection with any transaction
undertaken pursuant to this Agreement and respectively agrees to indemnify and
hold the others harmless from and against any and all claims, liabilities or
obligations with respect to any such fees, commissions or expenses asserted by
any person on the basis of any act or statement alleged to have occurred or been
made by such party or its affiliates.
9. Survival of Representations. All representations, warranties and
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agreements made by the parties to this Agreement shall not survive beyond the
first anniversary of the date of the exercise of any of the Options, except that
the representations of the Investor with respect to the Parent's title to the KD
Warrant shall survive indefinitely.
10. Further Assurances. If the Parent shall exercise either of the
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Options in accordance with the terms of this Agreement, from time to time and
without additional consideration the Investor will execute and deliver, or cause
to be executed and delivered, such additional or further transfers, assignments,
endorsements, consents and other instruments as the Parent may reasonably
request for the purpose of effectively carrying out the transactions
contemplated by this Agreement, including the transfer of the KD Warrant to the
Parent and the release of any and all liens, claims and encumbrances with
respect thereto.
11. Assignment. Neither this Agreement nor any of the rights,
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interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other party, except that the Parent may
assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to any direct or indirect wholly owned subsidiary of the
Parent in which case such subsidiary and the Parent shall remain jointly and
severally liable for all of the Parent's obligations hereunder. 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 assigns.
12. General Provisions.
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(a) Expenses. Whether or not the Option is exercised, all costs and
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expenses incurred in connection with the Option, this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense.
(b) Amendments. This Agreement may not be amended except by an
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instrument in writing signed by each of the parties hereto.
(c) Notices. All notices and other communications hereunder shall be
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in writing and shall be deemed delivered if delivered personally or sent by
overnight courier (providing proof of delivery) or by electronically confirmed
facsimile to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
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(i) if to the Parent, to
Xxxxxx Group International, Inc.
00 Xxxx XxxxxXxxxxx Xxxxxxxxx
Xxxxx #000
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx Xxxxx, Esq., and
(ii) if to the Investor, to
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxx & Co.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxx, Esq.
(d) Enforcement of the Agreement. The parties hereto agree that
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irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that, in the event of a breach
hereof, the parties hereto will be entitled to and injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
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(e) Interpretation. When a reference is made in this Agreement to
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Sections or Exhibits, such reference shall be to a Section or Exhibit to this
Agreement unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
(f) Counterparts. This Agreement may be executed in one or more
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counterparts, all of which shall be considered one and the same agreement.
(g) Entire Agreement; No Third Party Beneficiaries. This Agreement
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(including the documents and instruments referred to herein) (i) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
(h) Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the Parent and the Investor have caused this Agreement to
be signed by their respective duly authorized representatives, all as of the
date first written above.
XXXXXX GROUP INTERNATIONAL, INC.
By: /s/ A.M. Xxxxx Xxxxxx
________________________________
Name: A.M. Xxxxx Xxxxxx
Title: Executive Vice President
MH ASSOCIATES
By: /s/ Xxxxxx Xxxxxxx
________________________________
Name: Xxxxxx Xxxxxxx
Title: Managing Partner
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