EXHIBIT 10.2
POST-CLOSING ESCROW AGREEMENT
This Post-Closing Escrow Agreement (the "Agreement") is made as of June
13, 2002 by and among Horizon Health Corporation, a Delaware corporation
("Purchaser"); Lara Mac, Individually and as the agent and attorney-in-fact for
the Sellers (hereinafter defined) (the "Sellers Agent"); and First Bank and
Trust (the "Escrow Agent").
WHEREAS, Purchaser and Lara Mac, Xxxxx XxxXxxxxxx, Xxxxxx Xxxx and
Obstetrical Nurses, Inc. (Individually a "Seller" and collectively the
"Sellers") entered into that certain Member Interests Purchase Agreement, dated
June 13, 2002 (the "Purchase Agreement"), providing for the sale of all of the
issued and outstanding member interests of ProCare One Nurses, LLC, a Delaware
limited liability company (the "Company"), by the Sellers to the Purchaser; and
WHEREAS, pursuant to the Purchase Agreement, the Purchaser is required
to deposit the aggregate sum of One Million Five Hundred Sixty-Two Thousand Five
Hundred Dollars ($1,562,500) in escrow for the purposes and on and subject to
the terms and conditions hereinafter set forth; and
WHEREAS. the Sellers have agreed in the Purchase Agreement that the
Sellers Agent shall act as the agent and attorney-in-fact for all the Sellers
under this Agreement; and
WHEREAS, the transactions contemplated by Purchase Agreement have been
consummated on the date hereof and the parties desire to effectuate the
provisions of the Purchase Agreement with respect to such escrow fund;
NOW, THEREFORE, in consideration of the premises and the mutual terms
and conditions hereof, the parties hereby agree as follows:
1. Escrow Money. Simultaneously with the execution of this Agreement,
the Purchaser has deposited with the Escrow Agent the sum of One Million Five
Hundred Sixty-two Thousand Five Hundred Dollars ($1,562,500) (the "Escrow
Deposit") which constitutes a portion of the purchase price payable to the
Sellers pursuant to the Purchase Agreement (together with the earnings thereon,
the "Escrow Funds"). The respective interests of the Sellers in the Escrow Funds
shall be in the same proportions as the portions of the Escrow Deposit were
contributed by the Sellers pursuant to the Purchase Agreement.
2. Escrow Account. The Escrow Funds shall be held in escrow by the
Escrow Agent pursuant and subject to the terms and conditions of this Agreement.
Upon receipt of the Escrow Deposit, the Escrow Agent shall place the Escrow
Deposit into (a) readily marketable direct obligations of the United States of
America, (b) fully insured certificates of deposits issued by a commercial bank
operating in the United States, (c) commercial paper or bonds of a domestic
issuer if at the time of purchase such paper or bonds are rated in one of the
two highest rating categories of Standard and Poor's Corporation or Xxxxx'x
Investor Services, Inc., or (d) any money market mutual fund rated AAA or higher
by Standard and Poor's or Moody's, bills or other comparable financial
instruments selected in writing by Sellers Agent with a maturity
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date not in excess of one hundred eighty (180) days under the respective
taxpayer identification number of Sellers in proportion to their respective
interests in the Escrow Funds as set forth in Section 1 above. The Escrow Agent
shall invest the Escrow Funds as the Sellers Agent directs pursuant to
reasonable investment instructions of Sellers Agent which in each case may be
given verbally and confirmed in writing and sent to the Escrow Agent no later
than the next business day. The Escrow Funds shall at all times be held in a
separate account and shall only be delivered pursuant to the terms and
conditions of this Agreement.
3. Terms of Escrow. The Escrow Funds shall be held as a fund available
to satisfy any obligations of the Sellers to Purchaser which may arise under
Section 1.4 or Section 6.4 of the Purchase Agreement in the manner set forth
below:
(a) In the event that Purchaser shall assert a claim or claims
against the Sellers arising out of or relating to any matter with respect to
which Purchaser asserts that it is entitled to be indemnified by Sellers
pursuant to Section 6.4 of the Purchase Agreement (collectively, the "Claims";
singularly a "Claim"), Purchaser shall furnish written notice of the Claim (the
"Notice of Claim") to the Sellers Agent and the Escrow Agent. The Notice of
Claim: (i) shall state in reasonable detail the nature of the alleged liability;
(ii) shall state the amount of the payment that Purchaser claims it is entitled
to receive from the Escrow Funds based upon Purchaser's estimate of the
potential loss; and (iii) shall further provide a particularized statement
explaining the basis for such estimate. The Sellers Agent shall have thirty (30)
days after receipt of the Notice of Claim in which to advise the Escrow Agent
and Purchaser that the Sellers dispute the Claim by delivering written notice of
Sellers' dispute ("the Notice of Dispute") to the Escrow Agent and Purchaser.
The Notice of Dispute may contest all or any portion of the Notice of Claim
based on a dispute concerning the existence of a Claim, Sellers' liability, the
estimated amount of the alleged loss or any other related matter.
(b) If the Sellers Agent shall not deliver a Notice of Dispute
within such thirty (30) day period, the Sellers shall be deemed to have
acknowledged that Purchaser is entitled to payment as set forth in the Notice of
Claim and shall be deemed to have directed the Escrow Agent to disburse such
payment (the "Claim Payment") to Purchaser upon delivery to Escrow Agent by
Purchaser of evidence that the Notice of Claim was delivered to Sellers Agent.
In the event a Notice of Dispute is timely delivered but only a portion of a
Claim is disputed, then the undisputed portion of the Claim (the "Undisputed
Claim Payment") shall be promptly disbursed to Purchaser and only the sum that
is subject to a dispute shall be held by the Escrow Agent until the Claim is
resolved in accordance with the provisions of the Purchase Agreement.
(c) Subject to such right to dispute a Claim, once a Notice of
Claim is delivered to the Escrow Agent, the Escrow Agent shall not permit the
Escrow Funds to be reduced by disbursement to the Sellers to an amount which is
less than the aggregate dollar amount of all Claims for which a Notice of Claim
has delivered in accordance with the terms of Section 3(a). Furthermore, if the
amount of any Claim or the aggregate amount of all Claims should ever exceed the
amount of the Escrow Funds, then no portion of the Escrow Funds shall be
disbursed pursuant to Section 3(d) below.
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(d) In the event that the Sellers are obligated to make a
payment to the Purchaser under Section 1.4(b)(iii) of the Purchase Agreement and
such payment has become due, then Purchaser may furnish written notice to the
Escrow Agent and Sellers Agent stating such fact and the amount due to Purchaser
under Section 1.4(b)(iii). The Escrow Agent shall disburse to the Purchaser the
amount set forth in such notice on the fifth day after receipt of such notice
from Purchaser. With respect to any such payment, the Sellers expressly agree
that the amount of such payment shall be allocated against the respective
interests of Lara Mac and Xxxxx XxxXxxxxxx in the Escrow Funds and not the
portion of the Escrow Funds in which Xxxxxx Xxxx and Obstetrical Nurses, Inc.
have an interest. Such payment shall be allocated among Lara Mac and Xxxxx
XxxXxxxxxx proportionately according to the respective percentage held by each
in the total of the Escrow Funds in which both of them in the aggregate hold an
interest.
(e) On December 13, 2003 (the "First Release Date"), the Escrow
Agent after payment of all fees and expenses due to Escrow Agent shall
irrevocably and unconditionally disburse to the Sellers an aggregate amount
equal to the aggregate amount of the Escrow Funds (less the aggregate dollar
amount of each Claim previously paid to or for Purchaser pursuant to the terms
of this Agreement) less the total of (a) the aggregate dollar amount of any then
existing Claim or Claims for which a Notice of Claim was delivered by Purchaser
on or prior to the First Release Date in accordance with the terms of Section
3(a) above and (b) $500,000. The portion of the Escrow Funds, if any, retained
after the First Release Date relating to any then existing Claim or Claims shall
be disbursed to the Sellers or Purchaser, as appropriate, in one or more
disbursements, from time to time, as and when there is a final resolution of
each such Claim; provided, however, that no disbursement will be made upon final
resolution of a Claim if the amount of the remaining unresolved Claims exceed
the amount of the Escrow Funds then on deposit in the Escrow Account.
(f) On December 13, 2004, (the "Second Release Date"), the
Escrow Agent after payment of all fees and expenses due the Escrow Agent shall
irrevocably and unconditionally disburse to the Sellers the aggregate amount of
the Escrow Funds (less the aggregate dollar amount of each Claim previously paid
to or for Purchaser pursuant to the terms of this Agreement) to the extent that
the Escrow Funds exceed the aggregate dollar amount of any then existing Claim
or Claims for which a Notice of Claim was delivered by Purchaser on or prior to
the Second Release Date in accordance with the terms of Section 3(a) above. The
portion of the Escrow Funds, if any, retained after the Second Release Date
relating to any then existing Claim or Claims shall be disbursed to Sellers or
Purchaser, as appropriate, in one or more disbursements, from time to time, as
and when there is a final resolution of each such Claim; provided, however, that
no disbursement will be made upon final resolution of a Claim if the amount of
the remaining unresolved Claims exceed the amount of the Escrow Funds then on
deposit in the Escrow Agreement.
(g) Unless delivery is made in person at the Escrow Agent's
office or unless the Escrow Agent is properly instructed in writing by Purchaser
or the Sellers, as the case may be, to make delivery in such other manner, the
Escrow Agent shall be deemed to have properly delivered to Purchaser or Sellers,
as the case may be, such funds as Purchaser or the Sellers are entitled to
receive, upon placing the same in
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United States Mail in a suitable package or envelope, registered or certified
mail, return receipt requested, postage prepaid, addressed to the address listed
in Section 8 hereof or such other address as may be furnished to the Escrow
Agent in writing.
(h) Interest or other earnings on the Escrow Funds shall be
retained by the Escrow Agent and held as a part of the Escrow Funds to be
disbursed in accordance with this Agreement.
(I) Notwithstanding any other provision hereof which shall
direct the release of all or a part of the Escrow Funds on a particular date,
without the prior written consent of Purchaser and the Sellers Agent as to any
withdrawal before a Release Date, and without the prior written consent of the
Sellers Agent as to any withdrawal on or after a Release Date, the Escrow Agent
shall not withdraw any investment of the Escrow Funds prior to the maturity date
of such investment to make a payment to Purchaser or the Sellers hereunder if
such withdrawal will cause an early withdrawal penalty to be imposed or any loss
of income from such withdrawal to occur. If such a penalty would be imposed or
any loss of income would occur if the investment were to be withdrawn, the
payment of any amounts of the Escrow Funds due to the Sellers or to Purchaser
shall be made as soon as practicable after the maturity date of the investment.
(j) All disbursements by the Escrow Agent to the Sellers
pursuant to this Agreement shall be in the proportionate interests that the
Sellers hold in the Escrow Fund.
4. Liability of Escrow Agent. The Sellers and Purchaser agree that the
following provisions shall control with respect to the rights, duties,
liabilities, privileges and amenities of the Escrow Agent:
(a) The Escrow Agent is not a party to, and is not bound by, or
charged with notice of, any agreement out of which this escrow may arise.
(b) The Escrow Agent acts hereunder as a depository only, and is
not responsible or liable in any manner whatsoever for the sufficiency,
correctness, genuineness or validity of the subject matter of the escrow, or any
part thereof, or for the form or execution thereof, or for the identity or
authority of any person executing or depositing the escrow.
(c) The Escrow Agent shall be protected in acting upon any
written notice, request, waiver, consent, certificate, receipt, authorization,
power of attorney, or other paper or document which the Escrow Agent in good
faith believes to be genuine and what it purports to be.
(d) The Sellers and Purchaser, jointly and severally, agree to
indemnify and hold the Escrow Agent harmless against any and all losses, claims,
demands, liabilities and expenses, including attorney's fees and costs, which
may be incurred by the Escrow Agent in connection with the acceptance and
performance or non-performance of its duties hereunder, excluding, however, any
such liability resulting from its negligence, misconduct or breach of its
instructions under this Agreement. In
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the event the Escrow Agent becomes involved in litigation in connection with
this escrow, the Sellers and Purchaser, jointly and severally, agree to
indemnify and save the Escrow Agent harmless from any and all losses, claims,
damages, liabilities and expenses, including attorney's fees and costs, which
may be incurred or suffered by Escrow Agent as a result thereof, excluding,
however, any such liability resulting from its negligence, misconduct, or breach
of its instructions under this Agreement.
(e) In the event of any disagreement between any of the parties
to this Agreement resulting in adverse claims or demands being made in
connection with the Escrow Funds, or in the event the Escrow Agent in good faith
is in doubt as to what action it should take hereunder, the Escrow Agent may, at
its option, refuse to comply with any claims or demands on it, or refuse to take
any other action hereunder, so long as such disagreement continues or doubt
exists, and in such event, the Escrow Agent shall not be or become liable in any
way or to any person for its failure or refusal to act, and the Escrow Agent
shall be entitled to continue to so refrain from acting until (i) the rights of
all the parties shall have been fully and finally adjudicated by a court of
competent jurisdiction or by arbitration pursuant to the Stock Purchase
Agreement, or (ii) all differences shall have been adjudicated and all doubt
resolved by agreement among all the interested parties and the Escrow Agent
shall have been notified thereof pursuant to written directions duly executed by
all such persons.
5. Compensation of Escrow Agent. The fees and expenses of the Escrow
Agent in connection with this Agreement shall be paid by the Purchaser on a
quarterly basis as invoiced by the Escrow Agent. If Purchaser does not pay the
fees within thirty (30) days from the date of invoice, the Escrow Agent may
deduct the fees from the Escrow Funds. All outstanding fees must be paid prior
to the final distribution of the Escrow Funds. The fees of the Escrow Agent
shall be as set forth in the Custodial Securities Fee Schedule, dated January 1,
2001, provided by the Escrow Agent to Sellers Agent and Purchaser.
6. Non-Waiver. Nothing contained in this Agreement shall be deemed or
construed to release or waive any of the rights or obligations of Purchaser or
the Sellers under the Purchase Agreement, and all rights and remedies of
Purchaser and the Sellers under this Agreement are cumulative of all other
rights and remedies which either of them may have under the Purchase Agreement,
at law, in equity or otherwise.
7. Arbitration. Any disputes between the Sellers and the Purchaser which
are the subject of a "Claim" under this Agreement (but not disputes to be
resolved under the procedures set forth in Section 1.4 of the Purchaser
Agreement) shall be resolved by arbitration pursuant to the arbitration
provisions set forth in Article X of the Purchase Agreement which are
incorporated herein by reference.
8. Notices. Any notices, claims or demands which any party is required
or may desire to give to another under or in conjunction with this Agreement
shall be in writing, and shall be given by addressing the same to such other
party(ies) at the address set forth below, and by: (i) depositing the same so
addressed, postage prepaid, first class, certified or registered, in United
States mail, return receipt requested, (herein referred to as "Mailing"); (ii)
overnight delivery by a nationally
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recognized overnight courier service (e.g. UPS, Federal Express); (iii)
delivering the same personally to such other party(ies); or (iv) transmitting by
facsimile and Mailing the original. Any notice shall be deemed to have been
given five (5) U.S. Post Office delivery days following the date of Mailing; one
day after timely delivery to an overnight courier; if by personal delivery, upon
such delivery; or if by facsimile, the day of transmission if made within
customary business hours, or if not transmitted within customary business hours
the following business day.
If to Sellers Agent:
Xx. Xxxx Mac
Xxxx Xxxxxx Xxx 00
Xxx, Xxxxxxxxxx 00000
Facsimile Number: 000-000-0000
With a copy to:
Xxxxx X. Xxxxxx, Esq.
0000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
(b) If to Purchaser:
Horizon Health Corporation
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxx X. XxXxxx, President
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxxxxxx & Price, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Facsimile Number: (000) 000-0000
(c) If to the Escrow Agent:
First Bank and Trust
0000 XxxXxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
Attention: Xx. Xxx Xxxxxx
Facsimile: (000) 000-0000
Any of the parties hereto may change the address for notices to be sent to it by
written notice delivered pursuant to the terms of this section.
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9. Entire Agreement; Amendments. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements or
understandings, whether written or oral, with respect to the subject matter
hereof. No terms, conditions or agreements other than those contained herein,
and no amendments or modifications hereto shall be valid unless made in writing
and signed by the parties hereto.
10. Capitalized Terms. Capitalized terms in this Agreement which are not
otherwise defined herein shall have the same meanings as are provided for such
terms in the Purchase Agreement.
11. Binding Effect. This Agreement shall extend to and be binding upon
and inure to the benefit of the parties hereto, their respective successors and
assigns.
12. Waiver; Remedies. Waiver by any party hereto of any breach of or
exercise of any rights under this Agreement shall not be deemed to be a waiver
of similar or other breaches or rights or a future breach of the same duty. The
failure of a party to take any action by reason of any such breach or to
exercise any such right shall not deprive any party of the right to take any
action at any time while such breach or condition giving rise to such right
continues. The parties shall have all remedies permitted to them by this
Agreement or law, and all such remedies shall be cumulative.
13. Attorney's Fees and Costs. In the event of a breach by any party to
this Agreement and commencement of a subsequent legal action in a court of law
or forum of arbitration, the prevailing party in any such dispute shall be
entitled to reimbursement of reasonable attorney's fees and court costs,
including, but not limited to, the costs of expert witnesses, transportation,
lodging and meal costs of the parties and witnesses, costs of transcript
preparation and other reasonable and necessary direct and incidental costs of
such dispute.
14. Termination. This Agreement shall terminate at such time as all of
the Escrow Funds shall have been released in accordance with the terms and
conditions of this Agreement.
15. Notification. Escrow Agent by Escrow Agent's execution acknowledges
that Escrow Agent has received notification of Purchaser's interest in the
Escrow Funds.
16. Resignation and Termination. The Escrow Agent may resign as such by
delivering written notice to that effect at least sixty (60) days prior to the
effective date of such resignation to Sellers Agent and Purchaser. Upon
expiration of such sixty (60) day notice period, the Escrow Agent may deliver
the portion of the Escrow Funds remaining in its possession to any successor
Escrow Agent appointed by Sellers Agent and Purchaser pursuant to this Section
16 or, if no successor Escrow Agent has been appointed, to any court of
competent jurisdiction in California, or in accordance with the joint written
instructions of Purchaser and Sellers. Purchaser and Sellers Agent, acting
jointly, may terminate the Escrow Agent from its position as such by delivering
to the Escrow Agent written notice to that effect executed by Purchaser and
Sellers Agent at least thirty (30) days prior to the effective date of such
termination. In the event of such resignation or termination of the Escrow
Agent, a successor Escrow Agent shall be
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appointed by mutual agreement between Purchaser and Sellers Agent, and the
Escrow Agent shall deliver the portion of the Escrow Funds remaining in its
possession to such successor Escrow Agent. From and after the appointment of a
successor Escrow Agent pursuant to this Section 16, all references herein to the
Escrow Agent shall be deemed to be to such successor Escrow Agent. The delivery
by the Escrow Agent of the Escrow Funds hereunder in accordance with the
provisions of this Section 16 shall constitute a full and sufficient discharge
and acquittance of the Escrow Agent in respect to such sums delivered, and the
Escrow Agent shall be entitled to receive releases and discharges therefor. The
indemnities in favor of the Escrow Agent contained in this Agreement and the
obligations of Purchaser and Sellers Agent under Section 4 hereof shall survive
for the benefit of the Escrow Agent after any resignation or termination.
17 No Liability to Purchaser. It is expressly understood that Sellers
Agent is acting and shall act hereunder as the agent and attorney-in-fact for
and on behalf of all the Sellers under the Purchase Agreement. All allocations
and distributions of the Escrow Funds to the Sellers shall be the responsibility
of the Sellers Agent and Purchaser shall have no obligation or liability to the
Sellers with respect thereto. In addition, Purchaser shall have no obligations
or liabilities of any kind whatsoever for any acts or omissions of the Sellers
Agent acting in her capacity as agent and attorney-in-fact for all the Sellers
under this Agreement.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Post-Closing
Escrow Agreement as of the day and year first written above.
PURCHASER: SELLERS AGENT:
HORIZON HEALTH CORPORATION /s/ LARA MAC
--------------------------------------
Lara Mac, Individually and as agent
and attorney-in-fact for the Sellers
By: /s/ XXXXX X. XXXXXX
----------------------------
Name: Xxxxx X. XxXxxx
Title: President
ESCROW AGENT:
FIRST BANK & TRUST
By: /s/ XXXXXX X. XXXXXX
-----------------------------------
Its: Vice President
Xxxxxx X. Xxxxxx
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