EXHIBIT (c)(10)
AGREEMENT FOR SATISFACTION OF JUDGMENT
This Agreement for Satisfaction of Judgment (the "Agreement") is
entered into as of October 31, 1996 among Homeowners Group, Inc. ("HOMG"),
Homeowners Marketing Services, Inc. ("HMS") and The Cross Country Group, L.L.C.
("CC").
BACKGROUND
A. On or about November 20, 1991, Acceleration National
Insurance Company ("ANIC") filed a six-count complaint in the Court of Common
Pleas of Franklin County, Ohio, in a case styled Acceleration National Insurance
Company v. Homeowners Marketing Services, Inc., et al, Case No. 91CVH11-9404.
The complaint was subsequently amended to include ten counts.
B. On or about May 3, 1994, ANIC filed a fifteen-count complaint
in the Court of Common Pleas of Franklin County, Ohio, in a case styled
Acceleration National Insurance Company~v. Homeowners Marketing Services, Inc.,
et al, Case No. 94CVHO5-3083. The two complaints were consolidated and tried as
one action commencing on November 6, 1995 (the "Litigation").
C. On December 20, 1995, judgment was entered in favor of ANIC
against HMS for the sum of $5,156,022.00 plus interest and costs of the
Litigation (the "Judgment"). Judgment was also entered in favor of Defendant
HOMG.
D. HMS filed a notice of appeal from the Judgment initiating
Case No. 96APEO1-68 and Case No. 96APE01-69 in the Court of Appeals, Franklin
County, Ohio (the "Appeal"). On or about January 29, 1996, ANIC filed a
conditional cross-appeal of each of HMS' appeals in the Court of Appeals of
Franklin County, Ohio, which cross-appeals are currently pending (the
"Cross-Appeal").
E. ANIC initiated post judgment proceedings in Florida and
elsewhere, including discovery in aid of execution. On March 13, 1996, the
Circuit Court for Broward County, Florida dismissed an action by HMS which
contested the domestication of the Judgment in Florida.
X. XXXX applied for and held the right to receive a federal
income tax refund from the Internal Revenue Service ("IRS") for the 1994 taxable
year (the "Refund Claim").
X. XXXX entered into an Agreement and Plan of Merger with The
Cross Country Group, Inc. and CC Acquisition Corporation, affiliates of CC,
pursuant to which, subject to the approval of the stockholders of HOMG, CC
Acquisition Corporation will acquire the outstanding shares of HOMG (the "Merger
Agreement").
H. On May 2, 1996, Accel International Corporation ("Accel"),
ANIC, HOMG and HMS entered into an Agreement for Satisfaction of Judgment and on
May 7, 1996, entered into a First Amendment to May 2, 1996.
Agreement for Satisfaction of Judgment (collectively, the "May
Agreement").
I. On August 30, 1996, HOMG received the Refund Claim in the
amount of $1,401,785.20 and paid the same to ANIC and Accel.
J. As of October 31, 1996, CC purchased all right, title and
interest of Accel and ANIC pursuant to the Judgment.
K. The parties to this Agreement desire to provide for the
satisfaction and release of the Judgment.
STATEMENT OF AGREEMENT
In consideration of their mutual promises and covenants, the
parties agree as follows:
1. RECITALS. The foregoing recitals are true and correct and
repeated herein in their entirety.
2. CASH PAYMENT. CC, as assignee of the rights of ANIC, agrees
to accept the sum of $2,698,214.80 (the "Judgment Amount") plus interest at
10%/O per annum since September . 1996, as provided in Section 8, plus interest
at 10% per annum on $4, 100,000 from September 1,. through September 4, 1996
(collectively, the "Payoff Amount") in full and complete satisfaction of the
Judgment on the condition such payment is received by CC no later than the
closing of the initial Merger Agreement or January 1, 1997, whichever occurs
first.
3. INCOME TAX REFUND. CC hereby acknowledges that HOMG has
received the Refund Claim as set forth in Section 3 of the May Agreement and has
paid the same in full to Accel and ANIC, and that the Judgment Amount is the net
amount owed after giving effect to such payment of the Refund Claim. CC further
agrees to execute any and all documents reasonably required by HOMG to terminate
the security interest granted pursuant to the May Agreement with respect to the
Refund Claim.
4. DISMISSAL OF APPEAL. HOMG and HMS hereby represent and
warrant that the Appeal and Cross-Appeal have been dismissed with prejudice.
5. FORBEARANCE OF COLLECTION EFFORTS. Unless sooner terminated
pursuant to the provisions of Section 7 of this Agreement, CC, as the assignee
of the rights of ANIC, will not undertake prior to January 31, 1997, any act to
execute on the Judgment, including the issuance or service of writs of
attachment, Garnishment or execution from any court, or to obtain discovery in
aid
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of execution from any third party
6. CONDITION PRECEDENT TO CLOSING OF MERGER AGREEMENT. HOMG
covenants, represents and warrants that satisfaction of the Judgment in
accordance with the terms of this Agreement shall be a condition precedent to
the closing of the Merger Agreement.
7. CONTINGENCIES AND TERMINATION. The obligations of CC, as the
assignee of ANIC, to accept the Payoff Amount in full satisfaction of the
Judgment and to forbear from any and all efforts to enforce the Judgment are
contingent upon the closing of the Merger Agreement. Sections 2 and 5 of this
Agreement shall become null, void, and of no further force or effect at the sole
option of CC upon the occurrence of any one of the following events-.
(a) the Merger Agreement has not been closed on or before
January 1,1997;
(b) HOMG advises CC or either ~HOMG or CC publicly
announces that the Merger Agreement has been
abandoned. HOMG further agrees to directly notify CC
within twenty-four hours should the proposed Merger
Agreement be abandoned by HOMG for any reason;
(c) the stockholders of HOMG fail to approve and to
authorize the Merger Agreement; or
(d) HOMG or CC falls to obtain the approval of any
government regulatory body or agency from which
approval of the Merger Agreement is required prior to
closing of the Merger Agreement.
If any of the foregoing events occur and CC elects to terminate
its agreements and commitments set forth in Sections 2 and 5 of this Agreement,
CC shall promptly notify HOMG and HMS in writing of its decision to do so.
8. INTEREST. Interest on the unpaid portion of the Judgment
Amount shall accrue at a per annum rate of 10% starting September 5, 1996.
9. EFFECT OF TERMINATION. In the event CC elects in accordance
with Section 7 of this Agreement to terminate its obligations to accept the
Payoff Amount in fun satisfaction of the Judgment and to forebear from any and
all efforts to enforce the Judgment, the parties shall be in the same position
they were in prior to this Agreement, except that CC shall be free to enforce
the Judgment as reduced by the Refund Claim.
10. MUTUAL RELEASE. At the closing of the Merger Agreement and
upon receipt by CC of either the Payoff Amount (if such payment occurs on or
before January 31, 1997) or the Judgment, as reduced by the Refund Claim (if
such payment occurs after January 31, 1997), CC, HOMG and HMS will execute and
exchange a mutual release in the form attached hereto as Exhibit 1. Within 30
days after receiving such payment, CC shall file a Satisfaction of Judgment for
each action pending in: (i) the Circuit Court of Broward County, Florida, styled
Homeowners Marketing Services, Inc.
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v. Acceleration National Insurance Company. Case No. 96-001110 CACE (12) (the
"Domestication Action"); and (ii) the Court of Common Pleas of Franklin County,
Ohio, styled Acceleration National Insurance Company v. Homeowner Marketing
Services, Inc., Consolidated Case Nos. 91CVH11- 9404, 94CVHO5-3083 (the "Ohio
Action"), and be responsible for dismissing with prejudice each of the following
actions: (i) the Ohio Action; (ii) the Domestication Action; (iii) that certain
action pending in the Circuit Court of ~Broward County, Florida, styled
Acceleration National Insurance Company v. Homeowners Marketing Services, Inc.,
et al, Case No. 96-001152 (18)- and (iv) that certain action pending in the
Circuit Court of Dade County, Florida, styled Acceleration National Insurance
Company v. Homeowners Marketing Services, Inc., Case No. 96~-00850 (CA) 23.
11. ADDITIONAL REPRESENTATIONS AND WARRANTIES. CC, HOMG and HMS
each warrants and represents that the officer signing this Agreement on its
behalf is authorized to do so and to bind the entity to the terms of this
Agreement. By execution of this Agreement, the parties represent that they have
the capacity to execute this Agreement on behalf of HMS, HOMG and CC,
respectively. HMS and HOMG hereby represent and warrant: (i) that they have not
been released from the Judgment and agree not to contest the validity of the
Judgment; (ii) that they have made no assistant of their claims or causes of
action against AMC set forth in the Litigation; and (iii) that no other person
has any right to or interest in them.
12. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall
be construed according to the laws of the State of ~Massachusetts. Should any
dispute arise regarding this Agreement which the parties are unable to resolve,
the par-tics agree that the Superior Court of Suffolk County, Massachusetts
shall have exclusive jurisdiction to adjudicate any and all such controversies.
13. CONSTRUCTION. The parties to this Agreement have been
re~presented by counsel in connection with the negotiations and drafting of this
Agreement and any ambiguity in this Agreement shall not be construed against any
party. Nothing herein expressed or implied is intended or shall be construed to
confer upon or waive any person, firm or corporation other than CC, HOMG and HMS
and their respective subsidiaries, affiliates, legal representatives, successors
and assigns, any rights or benefits under or by reason of this Agreement.
14. NOTICES. In the event that any party to this Agreement shall
be required to afford notice in writing to any other party of the occurrence or
non-occurrence of any event, such notice shall be provided as follows:
If to CC:
Xxxxxx Xxxx
The Cross Country Group, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
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With a Copy to:
Xxxxxx X. Xxxxx
Xxxx Xxxxxx & Xxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
If to HOMG or HMS:
Xxxx Xxxxxxxxxx
Chairman and Chief Executive Officer
[HOMG or HMS]
000 Xxxxxxxx Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
With a Copy to:
Xxxx Xxxxxxxxx, Esq.
Greenberg, Traurig, Hoffman, Lipoff,
Xxxxx & Quentel. P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
15. HOMG GUARANTY AND PLEDGE. In consideration of the execution
of this Agreement by CC, HOMG hereby agrees to guaranty the obligations of HMS
under the Judgment and this Agreement, including, but not limited to, the
payment as described in Section 2 and further agrees to pledge to CC all of its
rights, title and interest in and to the shares of HMS and Homeowners Marketing
Services International, Inc. ("HMSI") owned by HOMG, such guaranty and pledge to
be in form and substance reasonably satisfactory to CC.
16. GRANT OF SECURITY INTEREST BY HMSI AND HMSI. In further
consideration of the execution of this Agreement by CC, HOMG agrees to cause HMS
and HMSI to enter into an agreement providing for the guaranty of the obligation
of HOMG under the Judgment and this Agreement, including, but not limited to,
the payment as described in Section 2 and further providing to secure that
guaranty by granting a security interest to CC in their assets, such agreement
to be in form and substance reasonably satisfactory to CC.
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IN WITNESS WHEREOF, each party has executed this Agreement by
its duly authorized representative on the date set forth below.
HOMEOWNERS GROUP, INC.
By:/s/ C. Xxxxxxx Xxxxxx
----------------------------------------
C. Xxxxxxx Xxxxxx, Vice President,
Treasurer & Chief Financial Officer
HOMEOWNERS MARKETING
SERVICES, INC.
By:/s/ C. Xxxxxxx Xxxxxx
----------------------------------------
C. Xxxxxxx Xxxxxx, Vice President,
Treasurer & Chief Financial Officer
THE CROSS COUNTRY GROUP, L.L.C.
By:/s/ Xxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Member
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MUTUAL RELEASE
The Cross Country Group, L.L.C., a Massachusetts limited
liability company with its principal place of business at 0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("Cross Country" or "First Party"), as
assignee and successor in interest to the right, title and interest of
Acceleration National Insurance Company ("ANIC") in the judgment entered in
favor of ANIC against Homeowners Marketing Services, Inc. on or about December
20, 1995, in the amount of $5,156,022.00, plus interest and costs (the
"Judgment") in the Court of Common Pleas of Franklin County, Ohio, in the
consolidation cases styled, Acceleration National Insurance Company v.
Homeowners Marketing Services, Inc., et al., Case. Nos. 9CVH11-9404,
94CVH05-3083 (the "Ohio Action"), and Homeowners Group, Inc., a Delaware
corporation with its principal place of business at 000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx, Xxxxxxx 00000-0000 ("HOMG"), and Homeowners Marketing
Services, Inc., a Florida corporation with its principal place of business at
000 Xxxxxxxx Xxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxx 00000-0000 ("HMS") (HOMG and
HMS, collectively referred to as "Second Party"), for themselves and their
successors and assigns, hereby mutually release and forever discharge the other
Party, and all of their past and present directors, officers, employees, and
agents from any and all claims whatsoever, from the beginning of the world to
the date of these presents, whether such claims are legal or equitable, known or
unknown, contingent or mature, or joint, several or individual, including but
not limited to all claims or causes of action asserted or which could have been
asserted in the Ohio Action and any other outstanding action relating to the
Judgment, including those actions filed by ANIC styled, Homeowners Marketing
Services, Inc. v. Acceleration National Insurance Company, Case No. 96- 0011110
CACE (12) (Circuit Court of Broward County, Florida), Acceleration National
Insurance
Company v. Homeowners Marketing Services, Inc., et al., Case No. 96-001152 (18)
(Circuit Court of Broward County, Florida), and Acceleration National Insurance
Company v. Homeowners Marketing Services, Inc., Case No. 96-00850 (CA) 23
(Circuit Court of Dade County, Florida), and any other interest in the Judgment,
including any claim to, right to execute upon, seek satisfaction of, or seek
recovery arising out of or to the Judgment.
THE CROSS COUNTRY GROUP, L.L.C.
Date:__________________________ By___________________________________
Its__________________________________
HOMEOWNERS GROUP, INC.
Date:__________________________ By___________________________________
Its__________________________________
HOMEOWNERS MARKETING SERVICES, INC.
Date:__________________________ By___________________________________
Its__________________________________
