Exhibit 10.26
REFUNDS PAYABLE
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") is made and entered into this 5th
day of June, 1997 among First American National Bank (the "Escrow Agent"),
Nova Holdings, Inc., a Delaware corporation ("Purchaser"), and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ and ▇.▇. ▇▇▇▇▇▇▇▇, III ("Sellers").
WHEREAS, Sellers and Purchaser are parties to a Stock Purchase Agreement,
dated as of June 5, 1997 (the "Purchase Agreement"), providing the terms,
conditions and provisions for the purchase by Purchaser of 100% of the stock
("Stock") of Horizon Health Systems, Inc. ("Horizon");
WHEREAS, Purchaser and Sellers desire to appoint the Escrow Agent, and the
Escrow Agent is willing to accept such appointment, on the terms and
conditions of this Agreement, to act as escrow agent to hold, administer and
disburse the Escrowed Funds (as hereinafter defined).
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties to this Agreement
hereby agree as follows:
1. Definitions.
When used in this Agreement, the following terms shall be defined as
follows:
"Sellers' Representative" shall mean ▇▇▇ ▇▇▇▇▇▇, Esq. and ▇▇▇▇▇ ▇▇▇▇▇ or
such other authorized representative of Sellers as shall be designated in
written notice from Sellers received by the Escrow Agent.
"Escrowed Funds" shall mean a portion of the Purchase Price paid for the
Stock in the amount of Two Million Eight Hundred Forty-Seven Thousand Six
Hundred Fifty-Two ($2,847,652.00) Dollars deposited with the Escrow Agent
simultaneously with the execution hereof, plus any interest or other income
earned on the foregoing during the term of this Agreement, less any
disbursements made pursuant to the term of this Agreement, and all
instruments representing the investment or re-investment, if any, of such
cash.
"Purchaser's Representative" shall mean ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇, or such other persons as shall subsequently be designated by written
notice from Purchaser received by the Escrow Agent.
"Refunds Payable" shall mean the unpaid balance of the Two Million Eight
Hundred Forty-Seven Thousand Six Hundred Fifty-Two
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($2,847,652.00) Dollars "refunds payable" amount reflected on Horizon's March
31, 1997 balance sheet.
2. Establishment of Escrow.
(a) Simultaneously with the execution of this Agreement, Purchaser has
delivered Escrowed Funds to the Escrow Agent in cash, receipt of which is
hereby acknowledged by the Escrow Agent.
(b) Pursuant to Sections 1.01 and 7.03 of the Purchase Agreement,
Purchaser and Sellers appoint Escrow Agent as escrow agent for the purpose of
receiving communications from Purchaser and Sellers, and disbursing the
Escrowed Funds to Purchaser and Sellers pursuant to the terms of the Purchase
Agreement and the terms of this Escrow Agreement. Purchaser, Sellers and the
Escrow Agent agree that the Escrow Agent shall hold, administer and disburse
the Escrowed Funds on the terms and conditions of this Agreement.
3. Investment of Escrow.
All funds received by the Escrow Agent pursuant to this Agreement shall
be invested, to the extent practicable, in a fully
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liquid instrument of deposit with the Escrow Agent. Unless otherwise directed
in writing by the Seller Representative and Buyer Representative, the escrow
funds held hereunder shall be invested in Escrow Agent's U.S. Treasury Fund,
currently called "Ameristar Treasury Fund".
The cost and expenses incurred by the Escrow Agent in the investment or
reinvestment of all or any portion of the Escrowed Funds shall be paid from
the Escrowed Funds and the Escrow Agent is hereby authorized to pay such cost
and expense from the Escrowed Funds.
4. Disbursement of Escrowed Funds.
(a) The parties agree that all of the Escrowed Funds are available to
satisfy the obligation of Sellers to indemnify Horizon and Purchaser for
Horizon's obligation to pay Refunds Payable as set out in Section 7.03 of the
Purchase Agreement.
The Escrow Agent shall release all or a portion of the Escrow Deposit to
Purchaser fifteen (15) days following receipt by Escrow Agent of a written
statement from Purchaser's Representative, a copy of which shall be provided
simultaneously to
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Sellers stating (i) the dollar amount of any indemnification owed to
Purchaser by either Seller under the Purchase Agreement, (ii) a concise
statement of the facts giving rise to such claim for indemnification, (iii)
that Purchaser has made a claim for such indemnification pursuant to the
terms of the Purchase Agreement, and (iv) that Purchaser has not received
payment of such indemnification amounts within fifteen days after delivery of
such claim to the Sellers; provided that if such sworn written statement
shall be disputed by Sellers in writing delivered to Escrow Agent with a copy
to Purchaser's Representative within ten (10) days after Escrow Agent's
receipt of such written statement from Purchaser's Representative, the Escrow
Agent shall continue to hold in escrow the portion of the Escrow Deposit
subject to such dispute until the dispute shall have been finally resolved by
mutual agreement or by a court of competent jurisdiction. Any notice
disputing the Purchaser's sworn written statement shall set forth a concise
statement of the facts upon which Sellers are relying in disputing said sworn
statement. The Escrowed Funds may be disbursed to Purchaser or by check made
payable directly to the governmental agencies to which the Refunds Payable
are due as directed in the Purchaser's statement referenced above. Except as
expressly set forth in the Stock Purchase Agreement, Purchaser's failure to
claim, or delay in claiming Escrowed Funds shall not be a waiver of Purchaser's
rights and shall in no way affect or prejudice Purchaser's rights and
remedies against Sellers to recover any amounts due Purchaser.
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(b) In the case of any dispute between Sellers and Purchaser as to any
claim or demand for payment hereunder, Escrow Agent shall withhold an amount
sufficient to cover such claims or demands, until a settlement has been
effected or a final judicial determination has been made.
(c) The parties agree that Purchaser shall have the right to make claims
to the Escrowed Funds for so long as Refunds Payable are due ("Claim
Deadline"). Refunds Payable shall no longer be due when Sellers and Purchaser
agree in writing delivered to the Escrow Agent that Refunds Payable have been
(i) paid in full, (ii) compromised and settled or (iii) the liability of
Horizon therefor has been otherwise eliminated. In the even that the
aggregate of (1) claims of Purchaser paid from Escrowed Funds (2) amounts
withheld to cover disputed claims and demands and (3) fees and expenses of
the Escrow Agent, does not exceed the proceeds deposited, Escrow Agent, on
the Claim Deadline, shall pay to Sellers out of the Escrow Funds a sum equal
to the amount, if any, by which the proceeds deposited exceeds the aggregate
of (1) amounts paid to or claimed by Purchaser prior to the Claim Deadline
and (2) amounts withheld to cover disputed claims and (3) any fees due Escrow
Agent.
(d) Notwithstanding anything to the contrary which might be set forth in
this Agreement, if Escrow Agent receives any dividends, distributions,
interest or other income in respect of the investment of the Escrowed Funds,
Escrow Agent shall pay to
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Sellers no more frequently than monthly, any such dividends, distributions,
interest or other income Escrow Agent has received in respect to the
investment of the Escrowed Funds.
5. Certain Provisions Relating to Escrow Agent.
(a) The Escrow Agent shall be entitled to receive fees for its service
under this Agreement in the amount of $1,500.00 for each twelve month period
during which this Agreement shall remain in effect ("Annual Fee"). The Annual
Fee shall be paid by Sellers with the Annual Fee for the first twelve month
period being due on the date of this Agreement and the Annual Fee for the
second twelve month period being due on the first anniversary of the date
hereof. The Escrow Agent shall also be entitled to be reimbursed for the
reasonable expenses incurred by it in the performance of its obligations
under this Agreement, including the reasonable fees of legal counsel which
the Escrow Agent may deem necessary to advise it in connection with its
obligations under this Agreement. All fees and expenses of the Escrow Agent
shall be paid by the Sellers.
(b) The Escrow Agent shall not be liable for any diminution of value of
the Escrowed Funds due to investments, if any, made as provided herein. The
Escrow Agent shall have no authority to disburse or otherwise dispose of the
Escrowed Funds except as provided herein.
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(c) Notwithstanding any provision of this Agreement to the contrary,
the Escrow Agent may at all times act upon and in accordance with the joint
written instructions of Sellers' Representative and Purchaser's
Representative. The Escrow Agent shall not be liable for any act done or
omitted by it in accordance with such instructions or the advise of counsel
of its selection.
(d) The duties and responsibilities of the Escrow Agent shall be
limited to those expressly set forth in this Agreement and instructions given
to the Escrow Agent pursuant to this Agreement, and no additional duties
shall be inferred herefrom or implied hereby. The Escrow Agent shall not be
subject to, or obliged to recognize, any other agreement between any or all
of the parties hereto even though reference to such agreement may be made
herein. With, and only with, the written consent of the Escrow Agent, this
Agreement may be amended at any time or times by an instrument in writing
signed by Sellers' Representative and Purchaser's Representative.
(e) The Escrow Agent may act in reliance upon any written notice,
demand, certificate or document which it reasonably in good faith believes to
be genuine, without being required to determine the authenticity thereof or
the correctness of any fact stated therein or the propriety or validity of the
service thereof, and may assume that any person purporting to give any such
written
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notice, demand, certificate or document has been duly authorized to do so.
(f) The Escrow Agent is authorized, in its sole discretion, to
disregard any and all notices or instructions given by any of the undersigned
or by any other person, firm, or corporation, except only such notices or
instructions as are herein provided for and the orders or process of any
court. If any property subject hereto is at any time attached, garnished, or
levied upon under any court order, or in case the payment, assignment,
transfer, conveyance or delivery of any such property shall be stayed or
enjoined by any court order, or in case any order, judgment or decree shall be
made or entered by a court affecting such property or any part hereof, then
and in any of such events, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ, judgment or
decree, and it shall not be liable to any of the parties hereto or to any
other person, firm or corporation by reason of such compliance even though
such order, writ, judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.
The Escrow Agent shall not be required to institute or defend any
action involving any matter referred to herein or which affects it or its
duties or liabilities hereunder unless and until requested to do so by any
party to this Escrow Agreement and then only upon receiving full indemnity,
in amount and character
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satisfactory to the Escrow Agent, against any and all claims, liabilities and
expenses, including attorney's fees, in relation thereto.
(g) The Escrow Agent shall have no liability under this Agreement to any
party other than for its gross negligence or fraud or the gross negligence or
fraud of its agents, servants or employees.
(h) Purchaser and Sellers hereby jointly and severally agree to defend,
indemnify and hold harmless the Escrow Agent from and against any and all
losses, damages, deficiencies or expenses, including court costs and
attorney's fees, arising out of or by reason of this Agreement, the execution
and delivery of this Agreement, the Escrow Agent's execution and delivery of
this Agreement, the Escrow Agent's execution of its duties pursuant to this
Agreement, or any claim against the Escrowed Funds, except those as arise out
of or by reason of gross negligence or fraud.
(I) Escrow Agent shall have no obligation for payment to any person or
entity except from, and to the extent of, Escrowed Funds.
(j) The Escrow Agent may resign by giving thirty (30) days written notice
to Purchaser and Sellers and thereafter shall deliver the Escrowed Funds to
such substitute escrow agent as Purchaser and Sellers shall jointly direct in
writing. If such direction to deliver the Escrowed Funds to a substitute
escrow
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agent is not received by the Escrow Agent within thirty (30) days after
mailing such notices of resignation, the Escrow Agent may in its sole
discretion, interplead all or such portion of the Escrowed Funds into a court
of competent jurisdiction.
6. Termination of Escrow.
When all of the Escrowed Funds shall have been disbursed by the Escrow
Agent, this Agreement and the escrow established by this Agreement shall
terminate and the Escrow Agent shall be relieved and discharged of all
further responsibilities, obligations and liabilities under this Agreement.
7. Notices.
(a) all notices, requests, demands and other communications under this
Agreement shall be in writing and delivered in person or sent by telegraph or
certified mail, return receipt requested, and properly addressed as follows:
(a) if to Sellers, to them at:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇.▇. ▇▇▇▇▇▇▇▇, III
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
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Bass, ▇▇▇▇▇ & ▇▇▇▇, PLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
(b) if to Purchaser to it at:
Nova Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
(c) if to the Escrow Agent, to it at:
First American National Bank
Corporate Trust Department
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
All notices and other communications required or permitted under this
Agreement which are addressed as provided in this Section shall be effective
upon delivery.
(b) Any party may from time to time change its address for the purpose of
notices to that party by a similar notice specifying a new address, but no
such change shall be deemed to have been given until it is actually received
by the party sought to be charged with the contents.
8. General
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Bass, ▇▇▇▇▇ & ▇▇▇▇, PLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
(b) if to Purchaser to it at:
Nova Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
(c) if to the Escrow Agent, to it at:
First American National Bank
Corporate Trust Department
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
All notices and other communications required or permitted under this
Agreement which are addressed as provided in this Section shall be effective
upon delivery.
(b) Any party may from time to time change its address for the purpose of
notices to that party by a similar notice specifying a new address, but no
such change shall be deemed to have been given until it is actually received
by the party sought to be charged with the contents.
8. General
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(a) The rights of Purchaser and Sellers hereunder are cumulative and are
not exclusive of any other rights Sellers or Purchaser may have under the
Purchase Agreement or otherwise.
(b) This Agreement shall be governed by and construed under the laws of
the State of Tennessee.
(c) This Agreement shall inure to the benefit of and be enforceable by and
against Purchaser, Sellers and the Escrow Agent and their respective
successors and assigns.
(d) This Agreement may be executed by the parties in several counterparts,
each of which shall be deemed to be an original and one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date above written.
FIRST AMERICAN NATIONAL BANK
By: /s/Tamaia L. Nohiston
---------------------
Title: Vice President
---------------
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NOVA HOLDINGS, INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Title: CEC
---------------------
/s/▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/▇.▇. ▇▇▇▇▇▇▇▇, III
------------------------
▇.▇. ▇▇▇▇▇▇▇▇, III
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