EXHIBIT (c)(9)
ESCROW AGREEMENT
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THIS ESCROW AGREEMENT (the "Escrow Agreement") is made and entered into
as of this ___ day of ____________, 1997, by and among , HAC, Inc., a Florida
corporation ("HAC"), Xxxxxx Xxxxxxx of Hollywood, Florida, Xx. Xxxxxxx Xxxxxx,
of Orlando, Florida, and Xxxxx Xxxxxx of Red Bank, New Jersey, as
representatives of those stockholders of Homeowners Group, Inc., a Delaware
corporation ("HOMG") who tender Shares pursuant to the Offer or whose Shares are
converted in the Merger (as hereinafter defined) (individually and collectively,
the "Stockholder Representatives"), and _____________________ as escrow agent
(the "Escrow Agent").
RECITALS:
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1. HOMG and CC Acquisition Corporation ("Merger Sub") have entered into
an Agreement and Plan of Merger dated as of May 14, 1996, as amended most
recently by Fourth Amendment to Agreement and Plan of Merger dated September 9,
1997 (the "Fourth Amendment") (the Agreement and Plan of Merger as so amended is
referred to herein as the "Merger Agreement").
2. Merger Sub has made a tender offer (the "Offer") for all of the
shares of common stock, $.01 par value of HOMG (the "Company Common Stock") not
held Merger Sub or any other affiliate of Merger Sub at a cash price of $.55 per
share (the "Cash Price"), and such Offer is expected to be consummated on or
about October ___, 1997, unless extended ("Consummation of the Offer").
3. It is contemplated that following the Consummation of the Offer, and
in accordance with the terms of the Merger Agreement, Merger Sub will merge into
HOMG (the "Merger") for consideration equal to the Cash Price, with HOMG being
the surviving corporation (the "Surviving Corporation").
4. As additional consideration for both the Offer and the Merger, the
sum of $1.51 for each share of Company Common Stock acquired for the Cash Price
is to be deposited in escrow to cover the Tax Claims, as set forth in that
certain Tax Contingency Settlement Agreement dated as of even date herewith.
5. This Escrow Agreement is entered into pursuant to Section 3.1 of the
Fourth Amendment, and as a condition precedent to the closing of the
transactions contemplated therein (the "Closing").
6. Capitalized terms used herein, unless otherwise defined, shall have
the meanings assigned to them in the Merger Agreement.
AGREEMENTS
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Accordingly, in consideration of the recitals and of the respective
agreements and covenants contained herein, and intending to be legally bound
hereby, the parties agree as follows:
Section 1 Escrow Funds. Simultaneously with the execution hereof, and
pursuant to Section 3.2 of the Merger Agreement, HAC is depositing with the
Escrow Agent the sum of $__________ and may in the future deposit with the
Escrow Agent additional amounts, (such funds presently and as may in the future
be so deposited, the "Escrow Funds"), which Escrow Funds may, at the election of
HAC, be either in the form of cash ("Cash Escrow") or an irrevocable standby
letter of credit issued by Fleet Bank, N.A., or such other bank reasonably
satisfactory to the Stockholder Representatives ("L/C Escrow"), issued on the
terms set forth on Exhibit B. The Escrow Funds will be held and distributed by
the Escrow Agent in accordance with the provisions contained herein.
Section 2 Acceptance of Appointment as Escrow Agent. The Escrow Agent,
by signing this Escrow Agreement, accepts the appointment as Escrow Agent and
agrees to hold and distribute all Escrow Funds in accordance with the provisions
contained herein.
Section 3 Investment of Cash Escrow. Pending distribution of the Escrow
Funds as provided herein, the Escrow Agent shall invest the Cash Escrow as
directed in writing by HAC in money market funds consisting of short-term U.S.
Treasury securities (or such other investments as HAC specifies, in its sole
discretion, in which case HAC shall reimburse the Escrow Fund for any loss of
principal thereof and net interest at four percent per year). The Escrow Agent
shall accept written instructions as to investment of the Cash Escrow from any
party specified in writing by HAC.
Section 4 Distribution of Escrow Funds. The Escrow Agent shall draw on
the L/C Escrow and/or distribute the Escrow Funds net of all fees and expenses
payable pursuant to Section 6 hereof:
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(a) in accordance with any written notices received by it from time to
time containing mutually agreed upon directions of HAC and Stockholder
Representatives; or
(b) in accordance with written notices given to it by either HAC or
Stockholder Representatives provided that Escrow Agent has provided a
copy of such notice to the other party in the manner set forth in
Section 8 hereof, and such other party has not objected thereto within
five (5) business days after the Escrow Agent has so delivered a copy
of such notice. If either party shall object to such notice, that party
shall deliver to the other party and the Escrow Agent a written notice
describing such objections in reasonable detail (a "Dispute Notice").
Upon receipt of any Dispute Notice, the Escrow Agent shall not draw on
the Escrow L/C and/or distribute the Escrow Funds, but shall continue
to hold the Escrow Funds until receipt of either (x) written notice
containing mutually agreed upon directions signed by both HAC and
Stockholder Representatives, or (y) written notice from HAC or
Stockholder Representatives that a final judgment or binding
arbitration decision pursuant to Section 17 of this Agreement has been
rendered and is in full force and effect as to the Escrow Funds, and a
copy of such final judgment or binding arbitration is delivered with
such notice, at which time the Escrow Agent shall draw on the Escrow
L/C and/or distribute the Escrow Funds pursuant to such mutually agreed
upon written notice or such written notice of HAC or Stockholder
Representatives (accompanied by such final judgment or binding
arbitration), as the case may be.
Section 5 Rights and Responsibilities of the Escrow Agent. (a) HAC and
Stockholder Representatives acknowledge and agree that the Escrow Agent (i)
shall be obligated only for the performance of such duties as are specifically
set forth in this Escrow Agreement on its part to be performed; (ii) shall not
be obligated to take any legal or other action hereunder which might in its
judgment involve any expense or liability unless it shall have been furnished
with acceptable indemnification; (iii) may rely on and shall be protected in
acting or refraining from acting upon any written notice, instruction,
instrument, statement, request or document furnished to it hereunder and
believed by it to be genuine and to have been signed or presented by the proper
person, and shall have no responsibility for determining the accuracy thereof,
and (iv) may
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consult counsel satisfactory to it, including in-house counsel, and the opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion of such counsel.
(b) Neither the Escrow Agent nor any of its directors, officers or
employees shall be liable to anyone for any action taken or omitted to be taken
by it or any of its directors, officers or employees hereunder except in the
case of gross negligence or willful misconduct. Subject to the provisions of
Section 6 hereof, HAC covenants and agrees to indemnify the Escrow Agent and
hold it harmless without limitation from and against any loss, liability or
expense of any nature incurred by the Escrow Agent arising out of or in
connection with this Escrow Agreement or with the administration of its duties
hereunder, including but not limited to legal fees and other costs and expenses
of defending or preparing to defend against any claim or liability, unless such
loss, liability or expense shall be caused by the Escrow Agent's willful
misconduct or gross negligence. In no event shall the Escrow Agent be liable for
indirect, punitive, special or consequential damages.
(c) Subject to the provisions of Section 6 hereof, HAC agrees to assume
any and all obligations imposed now or hereafter by any applicable tax law with
respect to the payment of Escrow Funds under this Agreement, and to indemnify
and hold the Escrow Agent harmless from and against any taxes, additions for
late payment, interest, penalties and other expenses, that may be assessed
against the Escrow Agent on any such payment or other activities under this
Agreement. HAC and Stockholder Representatives undertake to instruct the Escrow
Agent in writing with respect to the Escrow Agent's responsibility for
withholding and other taxes, assessments or other governmental charges,
certifications and governmental reporting in connection with its acting as
Escrow Agent under this Agreement. Subject to the provisions of Section 6
hereof, HAC agrees to indemnify and hold the Escrow Agent harmless from any
liability on account of taxes, assessments or other governmental charges,
including, without limitation, the withholding or deduction of, or the failure
to withhold or deduct, same, and any liability for failure to obtain proper
certifications or to properly report to governmental authorities, to which the
Escrow Agent may be or become subject in connection with or which arises out of
this Agreement, including costs and expenses (including reasonable legal fees)
interest and penalties. Notwithstanding the foregoing, no distributions will be
made unless the Escrow Agent is supplied with an original, signed W- 9 form or
its equivalent prior to distribution.
(d) The Escrow Agent may at any time resign as Escrow Agent hereunder
by giving thirty (30 ) days, prior written notice of resignation to HAC and
Stockholder Representatives. Prior to the effective date of the resignation as
specified in such notice, HAC will issue to the Escrow Agent a written
instruction authorizing redelivery of the Escrow Funds to a bank or trust
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company that it selects subject to the reasonable consent of the Stockholder
Representatives. Such bank or trust company shall have a principal office in
Boston, Massachusetts, and shall have capital, surplus and undivided profits in
excess of $50,000,000. If, however, HAC shall fail to name such a successor
escrow agent within twenty (20) days after the notice of resignation from the
Escrow Agent, the Stockholder Representatives shall be entitled to name such
successor escrow agent. If no successor escrow agent is named by HAC or
Stockholder Representatives, the Escrow Agent may apply to a court of competent
jurisdiction for appointment of a successor escrow agent. The provisions of
Section 5(b) and Section 5(c) shall survive the termination of this Agreement.
(e) The Escrow Agent shall be fully entitled to act on written
instructions as follows:
(i) On behalf of HAC - any one of Xxxxxx Xxxx, Xxxxxx Xxxx or
Xxx Xxxxxx or any other individual identified in writing by any one of them.
(ii) On behalf of the Stockholder Representatives - any two of
Xxxxxx Xxxxxxx, Xx. Xxxxxxx Xxxxxx or Xxxxx Xxxxxx, or any two successor
Stockholder Representatives.
Section 6 Fees and Expenses:
(a) Of Escrow Agent. The Escrow Agent shall (i) be paid a fee for its
services under this Escrow Agreement as provided by Exhibit A and (ii) be
entitled to reimbursement for reasonable expenses (including the reasonable fees
and disbursements of its counsel) actually incurred by the Escrow Agent in
connection with its duties under this Escrow Agreement (collectively, the
"Escrow Agent Fees and Expenses"). The Escrow Agent shall be entitled to
reimbursement on demand for all expenses incurred in connection with the
administration of the escrow account created hereby which are in excess of its
compensation for normal services hereunder, including without limitation,
payment of any legal fees incurred by the Escrow Agent in connection with
resolution of any claim by any party hereunder. All Escrow Agent Fees and
Expenses, and all rights of the Escrow Agent for indemnification, shall be paid
out of the Escrow Fund to the extent of available funds, and shall then be paid
by HAC.
(b) HAC shall be entitled to reimbursement out of the Escrow Fund for
any amount that it is required to pay in satisfaction of its obligation to
indemnify the Escrow Agent pursuant to this Escrow Agreement, the Tax
Contingency Settlement Agreement or otherwise.
Section 7 Successor Stockholder Representatives. Any one or more of the
Stockholder Representatives may at any time resign as a Stockholder
Representative by giving thirty (30) days prior written notice of resignation to
HAC and Escrow Agent and to the other Stockholder
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Representatives. In the event of such resignation, the remainder of the
Stockholder Representatives shall continue to act by unanimous consent, as a
Stockholder Representative. In the event there shall be only one Stockholder
Representative, then Xxxx X. Xxxxxx shall act as a successor Stockholder
Representative, upon his executing and delivering to HAC and Escrow Agent a
written acknowledgment of his acceptance of such position.
If no two Stockholder Representatives are acting in accordance
herewith, HAC or the remaining Stockholder Representative may apply to a court
of competent jurisdiction for appointment of successors. The successor
Stockholder Representatives as so selected shall act as the Stockholder
Representatives hereunder and under the Tax Contingency Settlement Agreement.
Section 8 Notices. All notices, requests, consents or other
communications required or permitted under this Escrow Agreement shall be in
writing and shall be deemed to have been duly given or delivered by any party
(a) when received by such party if delivered by hand, (b) upon confirmation when
delivered by telecopy, (c) within one day after being sent by recognized
overnight delivery service, or (d) within three business days after being mailed
by first-class mail, postage prepaid, and in each case addressed as follows:
To Escrow Agent: ____________________________
____________________________
____________________________
Attention: _____________________
Phone: ________________________
Fax: __________________________
To HAC: HAC, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Phone: (000)000-0000
Fax: (000) 000-0000
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With a copy to: Xxxx Xxxxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
To Stockholder Representatives: Xxxxxx Xxxxxxx
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Xx. Xxxxxxx Xxxxxx
Central Florida Cardiology Group
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxx Xxxxxx
Xxxxxx Enterprises
000 Xxxxx Xxxxxx
Xxxxx 0X
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxxxxxx, Traurig
0000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Xxxx Xxxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
Any party by written notice to the other parties pursuant to this
Section 8 may change the address or the persons to whom notices or copies
thereof shall be directed.
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Section 9 Assignment. This Escrow Agreement and the rights and duties
hereunder shall be binding upon and inure to the benefit of the parties hereto
and the successors and assigns of each of the parties to this Escrow Agreement.
No rights, obligations or liabilities hereunder shall be assignable by any party
without the prior written consent of the other parties.
Section 10 Amendment. This Escrow Agreement may be amended or modified
only by an instrument in writing duly executed by the parties to this Escrow
Agreement.
Section 11 Waivers. Any waiver by any party hereto of any breach of or
failure to comply with any provision of this Escrow Agreement by any other party
hereto shall be in writing and shall not be construed as, or constitute, a
continuing waiver of, such provision, or a waiver of any other breach of, or
failure to comply with, any other provision of this Escrow Agreement.
Section 12 Governing Law. This Escrow Agreement shall be governed by
and construed in accordance with the laws, and enforced in the courts, of the
Commonwealth of Massachusetts without regard to conflict-of-laws rules thereof.
Section 13 Construction. The headings in this Escrow Agreement are
solely for convenience of reference and shall not be given any effect in the
construction or interpretation of this Escrow Agreement. Unless otherwise
stated, references to Sections and Exhibits are references to Sections and
Exhibits of this Escrow Agreement.
Section 14 Acknowledgment. The funds placed in escrow pursuant to this
Agreement are intended solely for the benefit of the Stockholders of HOMG after
payment of and satisfaction of the Tax Claims. Neither HOMG, nor any of its
subsidiaries, has any interest, legal or equitable, in the escrowed funds or any
proceeds thereof.
Section 15 Termination. This Escrow Agreement shall terminate at the
time of the final distribution by the Escrow Agent of all Escrow Funds in
accordance with the provisions of this Escrow Agreement.
Section 16 Counterparts. This Escrow Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute a single instrument.
Section 17 Dispute Resolution. It is understood and agreed that should
any dispute arise with respect to the delivery, ownership, right of possession,
and/or disposition of the Escrow Funds, including without limitation, the
obligation of HAC or the Stockholder Representatives to
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give the Escrow Agent instructions with respect thereto pursuant to the terms of
the Tax Contingency Settlement Agreement, or should any claim be made upon such
Escrow Funds by a third party, the Escrow Agent upon receipt of written notice
of such dispute or claim by the parties hereto or by a third party, is
authorized and directed to retain in its possession without liability to anyone,
all or any of said Escrow Funds until such dispute shall have been settled
either by the mutual agreement of the parties involved, by a final order, decree
or judgment of a court in the United States of America, the time for perfection
of an appeal of such order, decree or judgment having expired, or by an award of
an Arbitration panel of the American Arbitration Association. The Escrow Agent
may, but shall be under no duty whatsoever to, institute or defend any legal
proceedings which relate to the Escrow Funds.
Section 18 Force Majeure. Neither HAC nor Stockholder Representatives
nor Escrow Agent shall be responsible for delays or failures in performance
resulting from acts beyond its control. Such acts shall include, without
limitation, acts of God, strikes, lockouts, riots, acts of war, epidemics,
governmental regulations superimposed after the fact, fire, computer viruses,
power failures, communication line failures, earthquakes or other disasters.
Section 19 Consent to Jurisdiction and Service. HAC and Stockholder
Representatives hereby absolutely and irrevocably consent and submit to the
jurisdiction of the courts of the Commonwealth of Massachusetts and of any
federal court located in said Commonwealth in connection with any actions or
proceedings brought against HAC and Stockholder Representatives by the Escrow
Agent, or brought against HAC or Stockholder Representatives by the other of
them, arising out of or relating to this Escrow Agreement. In any such action or
proceeding, HAC and Stockholder Representatives hereby absolutely and
irrevocably waive personal service of any summons, complaint, declaration or
other process and hereby absolutely and irrevocably agree that service thereof
may be made by certified or registered first class mail directed to HAC and
Stockholder Representatives, as the case may be, at their respective addresses
in accordance with Section 8 hereof.
Section 20 Reproduction of Documents. This Escrow Agreement and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, and (b) certificates and
other information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, optical disk, micro- card, miniature
photographic or other similar process. The parties hereto agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction shall likewise be admissible in evidence.
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IN WITNESS WHEREOF, the undersigned have executed this Escrow Agreement
as of the date first written above.
HAC, INC. (EIN# __-_______)
By:________________________
Title:
Stockholder Representatives
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ESCROW AGENT
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EXHIBIT A
ESCROW AGENT'S FEE
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Annual Fee:
Out-of-Pocket Expenses:
Investment Fees:
Wire Fee:
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EXHIBIT B
TERMS OF IRREVOCABLE STANDBY LETTER OF CREDIT
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1) Principal amount equal to
(a) $1.51, multiplied by
(b) Number of Shares tendered and accepted in Offer, plus number
of non-tendered Shares converted in Merger, multiplied by
(c) 1.04
2) Final Expiration Date of Letter of Credit
- October 15, 2000
3) Conditions
- Receipt of written instructions of Escrow Agent
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