EXHIBIT 20.2
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.
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IN WITNESS WHEREOF, each party has executed this Amendment by its duly
authorized representative on the date set forth below.
HOMEOWNERS GROUP, INC.
Date: 7/1/97 By: /s/ C. XXXXXXX XXXXXX
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Name: C. Xxxxxxx Xxxxxx
Title: VP, Treas, CFO
HOMEOWNERS MARKETING
SERVICES, INC.
Date: 7/1/97 By: /s/ C. XXXXXXX XXXXXX
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Name: C. Xxxxxxx Xxxxxx
Title: VP, Treas, CFO
THE CROSS COUNTRY GROUP,
L.L.C.
Date: By: /s/ XXXXXX XXXX
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Name: Xxxxxx Xxxx
Title: Manager
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