EXHIBIT (c)(4)
THIRD AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This Amendment, dated as of the 1st day of July, 1997, is entered into
by and among The Cross Country Group, Inc. ("Parent"), CC Acquisition
Corporation ("Merger Sub"), and Homeowners Group, Inc. (the "Company").
WHEREAS, Parent, CHGI Acquisition Corporation, a wholly-owned
subsidiary of the Parent and the Company entered into an Agreement and Plan of
Merger dated as of May 14, 1996 (the "Merger Agreement");
WHEREAS, Parent, Merger Sub and the Company amended the Merger
Agreement as of October 31, 1996 (the "First Amendment") and again amended the
Merger Agreement as of January 31, 1997 (the "Second Amendment") (collectively,
the "Prior Amendments");
WHEREAS, the Company recently received Notices of Proposed Adjustment
from the Internal Revenue Service ("IRS") that could result in the disallowance
of approximately $20 million in losses previously claimed by the Company on its
federal income tax returns (the "Tax Contingency");
WHEREAS, Parent notified the Company that the Tax Contingency is a
Company Material Adverse Effect (as defined in the Merger Agreement) and that as
a result of such Company Material Adverse Effect, Parent and Merger Sub were not
willing to proceed with the Merger under the current terms of the Merger
Agreement; and
WHEREAS, The Company acknowledges that the Tax Contingency is a Company
Material Adverse Effect and the parties desire to further amend the Merger
Agreement to adequately reflect the impact of the Tax Contingency on the
Company.
NOW THEREFORE, in consideration of the premises and agreements
contained herein, Parent, Merger Sub and the Company agree as follows:
1. EFFECT ON MERGER AGREEMENT AND PRIOR AMENDMENTS.
The terms of this Amendment shall amend, modify, and supersede any
contrary or inconsistent terms in the Merger Agreement and Prior
Amendments. Except as modified
by this Third Amendment, the terms of the Merger Agreement, as amended
by the Prior Amendments, shall remain unmodified and in full force and
effect. Except as otherwise indicated herein, all defined terms shall
have the meaning ascribed to them in the Merger Agreement.
2. FRANCHISE AMENDMENTS.
As a condition to the obligations of Parent and Merger Sub to
consummate the Merger, the Company shall have caused HMSI to enter into
and execute a Third Amendment to Affiliation Agreement, Second
Amendment to Profit Sharing Release and Second Amendment to Estoppel
Agreement with each of HMSI's Franchisees, upon terms and conditions
satisfactory to Parent in its sole discretion.
3. TAX CONTINGENCY.
Parent may designate one person as its representative, who shall be
kept fully informed by, and whose advice shall be conveyed to, legal
counsel retained by the Company to represent it in connection with the
Tax Contingency.
4. EXTENSION OF AGREEMENT FOR SATISFACTION OF JUDGMENT.
Contemporaneously with execution of this Third Amendment, the Company
and The Cross Country Group, L.L.C. shall enter into an Extension of
Agreement for Satisfaction of Judgment which shall provide for the
agreement of The Cross Country Group, L.L.C. to take no action with
respect to realization of its rights under the Agreement for
Satisfaction of Judgment between Homeowners Marketing Services, Inc.
and The Cross Country Group, L.L.C., as amended, prior to the earlier
of: (a) July 31, 1997 or (b) termination of Parent's obligations under
the Merger Agreement, as amended by the Prior Amendments and this Third
Amendment.
5. TERMINATION AND ABANDONMENT.
In addition to and not in limitation of, the termination rights set
forth in the Merger Agreement, as amended by the Prior Amendments, the
Merger Agreement, as amended by the Prior Amendments and this Third
Amendment shall terminate if, on or before July 31, 1997 both (a) the
Tax Contingency shall not have been resolved to the satisfaction of
Parent, and (b) the Merger shall not have been consummated.
2
IN WITNESS WHEREOF, each party has executed this Third Amendment as of
the first date set forth above.
THE CROSS COUNTRY GROUP, INC.
By:/s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
--------------------------------
Title: Vice President
-------------------------------
CC ACQUISITION CORPORATION
By:/s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
--------------------------------
Title: President
-------------------------------
HOMEOWNERS GROUP, INC.
By:/s/ C. Xxxxxxx Xxxxxx
----------------------------------
Name: C. Xxxxxxx Xxxxxx
--------------------------------
Title: Vice President, Treasurer and
Chief Financial Officer
-------------------------------
3
