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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
April 1, 1996
NHP INCORPORATED
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 000-26572 52-1445137
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State or Other Jurisdiction of (Commission File (I.R.S. Employer
Incorporation or Organization) Number) Identification No.)
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<TABLE>
<S> <C>
1225 EYE STREET, N.W., WASHINGTON, D.C. 20005-3945
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(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (202) 347-6247
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Item 2. Acquisition or Disposition of Assets
As of April 1, 1996, NHP Incorporated (the "Company") closed
the acquisition of all of the outstanding capital stock of WMF
Holdings Ltd. ("WMF Holdings"), for consideration of approximately
$21 million in the form of $16,800,000 in cash and 210,000 shares
of the Company's unregistered common stock ("NHP Stock"), all of
which shares have been deposited in a holdback escrow account, as
discussed below. The Company acquired WMF Holdings from its sole
stockholder, Commonwealth Overseas Trading Company Limited
("Commonwealth"), pursuant to a Stock Purchase Agreement, as
subsequently amended by the First Amendment to Stock Purchase
Agreement. The Stock Purchase Agreement was previously filed as
Exhibit 10.28 of the Company's Annual Report on Form 10-K filed
with the commission on March 29, 1996 and a copy of the First
Amendment to the Stock Purchase Agreement is attached hereto as
Exhibit 2.2, both of which are incorporated in their entirety by
reference in response to this Item 2.
WMF Holdings is the owner of Washington Mortgage Financial
Group, Ltd. ("Washington Mortgage Financial"), located in Fairfax
County, Virginia, one of the nation's leading multifamily mortgage
originators and servicers. Washington Mortgage Financial had
mortgage servicing contracts aggregating approximately $4.5
billion as of February 29, 1996, and originated approximately $805
million in multifamily and other commercial mortgages in 1995.
Included in Washington Mortgage Financial is WMF/Huntoon, Paige
Associates Limited, a leading FHA mortgage originator and servicer
located in Edison, New Jersey. The Company currently intends to
operate Washington Mortgage Financial as a separate company, under
existing management, with the objective of expanding its market
share in the increasing consolidation of the nation's multifamily
residential mortgage market.
The purchase price, which was determined through arms-length
negotiations between the Company and Commonwealth, was funded from
the Company's revolving credit facility with a group of banks
which includes The First National Bank of Boston, Fleet Bank of
Massachusetts, N.A., Morgan Guaranty Trust Company of New York,
The Riggs National Bank of Washington and First National Bank of
Maryland. The transaction will be accounted for as a purchase. A
portion of the purchase consideration was utilized by WMF Holdings
to retire debt in the amount of $5,000,000 owed to a principal
shareholder of Commonwealth.
The Company also entered into an Escrow Agreement as of April
1, 1996, with Commonwealth and a principal shareholder of
Commonwealth pursuant to which the 210,000 shares of NHP Stock
issued to Commonwealth have been deposited in an escrow account.
The escrow account secures the indemnification obligations of
Commonwealth and the principal shareholder of Commonwealth to the
Company. Commonwealth has informed the Company that it has agreed
in principle to grant to Shekar Narasimhan, who will continue as
the President of WMF Holdings, a minority equity interest in
Commonwealth (as consideration for Mr. Narasimhan's agreement to
terminate an option which he previously held to acquire shares in
WMF Holdings). Mr. Narasimhan and certain other senior officers of
WMF Holdings and its subsidiaries have been elected as officers of
the Company. The Escrow Agreement, attached hereto as Exhibit 2.3,
is incorporated in its entirety by reference in response to this
Item 2.
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Item 7. Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
It is impracticable at this time to provide the
financial statements of WMF Holdings Ltd. and Subsidiaries
required by this item. Such financial statements will be filed
with the Securities and Exchange Commission no later than 60 days
after the date of this report.
(b) PRO FORMA FINANCIAL INFORMATION
It is impracticable at this time to provide the pro
forma financial information required by this item. Such pro forma
financial information will be filed with the Securities and
Exchange Commission no later than 60 days after the date of this
report.
(c) EXHIBITS
Exhibit 2.1 - Stock Purchase Agreement by and
between NHP Incorporated and Commonwealth Overseas Trading Company
Limited and Sheik Mohammed A. Al-Tuwaijri dated March 20, 1996
(previously filed as Exhibit 10.28 of the Company's Annual Report
on Form 10-K filed with the Commission on March 29, 1996)
Exhibit 2.2 - First Amendment to Stock Purchase
Agreement by and among NHP Incorporated, Commonwealth Overseas
Trading Company Limited and Sheik Mohammed A. Al-Tuwaijri, dated
as of April 1, 1996
Exhibit 2.3 - Escrow Agreement by and among NHP
Incorporated, Commonwealth Overseas Trading Company Limited, Sheik
Mohammed A. Al-Tuwaijri and State Street Bank and Trust Company,
dated as of April 1, 1996
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
NHP INCORPORATED
(Registrant)
By: /S/ JOEL F. BONDER
-------------------------------
Joel F. Bonder
Senior Vice President,General Counsel
Dated April 15, 1996
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EXHIBIT 2.2
FIRST AMENDMENT TO
STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (this
"Amendment") is made and entered into as of this 1st day of April,
1996, by and among NHP Incorporated, a Delaware corporation (the
"Purchaser"), Commonwealth Overseas Trading Company Limited, a
Bermuda corporation (the "Seller"), and Sheik Mohammed A. Al-
Tuwaijri, a shareholder of the Seller (the "Shareholder").
RECITALS
WHEREAS, the Purchaser, the Seller and the Shareholder
(together, the "Parties") have entered into a Stock Purchase
Agreement dated as of March 20, 1996 (the "Agreement") pursuant to
which, among other things, the Seller has agreed to sell the
Shares to the Purchaser, and the Purchaser has agreed to purchase
the Shares from the Seller;
WHEREAS, since the execution of the Agreement, the Seller and
the Shareholder have delivered to the Purchaser updated schedules,
and the Purchaser has requested certain amendments to the
Agreement as a condition precedent to closing; and
WHEREAS, the Parties wish to amend the Agreement to reflect
the foregoing developments and to effect certain additional
modifications.
NOW, THEREFORE, in consideration of the premises and the
mutual promises and agreements made herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the
Parties agree as follows:
I. DEFINITIONS. Unless otherwise defined in this
Amendment, all capitalized terms shall have the meanings given
such terms in the Agreement
II. CERTAIN AMENDMENTS TO ARTICLE I. Article I of the
Agreement is hereby amended by deleting the definition of
"Company" in its entirety and replacing it with the following:
"Company" shall mean the Parent and, unless the
context otherwise provides, each of its Subsidiaries, including,
without limitation, WMF Group, WMF/Huntoon, Vienna Mortgage
Corporation, a Virginia corporation, Sheffield Acquisition Corp.,
a Tennessee corporation, and, to the extent provided in Section
3.2, Beverly Hills Securities Company, Ltd., a Florida limited
partnership.
III. CERTAIN AMENDMENTS TO ARTICLE I. Article I of the
Agreement is hereby amended adding the definition of "knowledge"
after the definition of HUD as follows:
"knowledge" shall mean, with respect to each of the
Seller and the Shareholder, the actual or deemed knowledge of any
officer or director (including the Shareholder) of the Seller or
the Company, after diligent inquiry.
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IV. CERTAIN AMENDMENTS TO SECTION 3.2 OF ARTICLE III.
Article III of the Agreement is hereby amended by appending the
following to the end of Section 3.2:
With respect to the Representations and Warranties, the
term "Company" shall not include Beverly Hills Securities Company,
Ltd., a Florida limited partnership; provided, that the
disclosures made concerning Beverly Hills Securities Company, Ltd.
on Schedule 3.2(Part2) are, to the best knowledge of the Seller
and the Shareholder, after diligent inquiry, correct in all
material respects and do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
V. CERTAIN AMENDMENTS TO ARTICLE II. Article II of the
Agreement is hereby amended by deleting Section 2.6 in its
entirety and replacing it with the following:
2.6 POST-CLOSING ADJUSTMENTS. In each of the three
twelve month periods from the Closing Date until the third
anniversary of the Closing Date (each, a "Warranty Year"), the
Purchaser shall be entitled to indemnification if there shall
occur one or more Seller Representation and Warranty Default
Events in any such Warranty Year, to the extent that the loss or
damage (which, with respect to certain Representations and
Warranties, will be determined according to the Escrow Agreement),
plus Adjustment Period Interest, arising or resulting from, or as
a consequence of:
(a) any single Seller Representation and
Warranty Default Event, or a series of related Seller
Representation and Warranty Default Events, exceeds $300,000, in
which case the Purchase Price shall be reduced by such excess;
and/or
(b) all Seller Representation and Warranty
Default Events, taken together (including, for the purpose of this
calculation, all losses or damages from any event specified in
Section 2.6(a) and all claims for indemnification pursuant to the
Indefinite Term Warranties (as hereinafter defined) and Sections
11.3(d) and (e)) exceeds $600,000, in which case the Purchase
Price shall be reduced by any such excess.
Indemnification shall be accomplished by receipt of
assets from the Escrow Fund in accordance with the Escrow
Agreement or from payments made by the Seller and/or the
Shareholder in accordance with this Agreement. The limitations in
this Section 2.6 shall only apply to those monetary claims,
demands or other actions arising pursuant to the Representations
and Warranties other than the Indefinite Term Warranties and the
indemnification provisions in Article XI (other than Sections
11.3(d) and (e)).
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VI. CERTAIN AMENDMENTS TO SECTION 4.2(C) OF ARTICLE IV.
Article IV of the Agreement is hereby amended by deleting Section
4.2(c) in its entirety and replacing it with the following:
(c) COMPLIANCE. Each Originated Mortgage Loan, the
related Loan Documents and Loan Files has complied with (i) all
Legal Requirements applicable to such Mortgage Loan and (ii) the
terms of any sales contracts with Investors by which the Mortgage
Loans were transferred to the Investors ("Sales Agreements") and
any schedule, statement or certificate furnished to the Investors
pursuant to any of the Mortgage Servicing Agreements or the Sales
Agreements. Except as described in Schedule 4.2(c) of the Company
Disclosure Schedule, each Mortgage Loan (i) is evidenced by an
enforceable note or other evidence of indebtedness and is subject
to no defense, offset or counterclaim, and (ii) is secured by a
duly recorded and enforceable first Mortgage. Except as described
in Schedule 4.2(c) of the Company Disclosure Schedule, the Company
has not assumed any obligations with respect to Non-Originated
Mortgage Loans other than non-recourse servicing obligations. The
Company has complied with all guidelines, procedures, rules and
regulations of FHA, GNMA, Fannie Mae, Freddie Mac, Investors, PMIs
(if any) and/or state banking authorities relating to the
origination, underwriting and servicing thereof, which are
applicable to the Company.
VII. CERTAIN AMENDMENTS TO SECTION 4.2(Y) OF ARTICLE IV.
Article IV of the Agreement is hereby amended by deleting Section
4.2(y) in its entirety and replacing it with the following:
(y) Except as set forth on Schedule 4.2(y) of the
Company Disclosure Schedule:
(i) there exists a binding contract or
agreement providing for the purchase of each of the Owned Mortgage
Loans by an Investor; each such contract or agreement is in full
force and effect; there exists no basis upon which any of such
Investors could refuse to purchase any of the Owned Mortgage Loans
pursuant to such contracts or agreements; neither the Seller nor
the Shareholder has any reason to believe, after diligent inquiry,
that any of the Owned Mortgage Loans will not be purchased by the
applicable Investors in due course in accordance with such
contracts or agreements; and the total interest expense on the
Investor commitment to purchase the Owned Mortgage Loan is not
greater than the maximum interest rate chargeable to the borrower
under the Owned Mortgage Loan, net of servicing fees; and
(ii) there exists a binding contract or
agreement providing for the purchase of each commitment by an
Investor; each such contract or agreement is in full force and
effect; to the best knowledge of the Seller and the Shareholder,
after diligent inquiry, there exists no basis upon which any of
such Investors could refuse to purchase any of such commitments
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pursuant to such contracts or agreements; the Company has never
failed to complete a delivery of a Mortgage Loan to an Investor
which has committed to purchase such loan; neither the Seller nor
the Shareholder has any reason to believe, after diligent inquiry,
that any of the commitments will not be purchased by the
applicable Investors in due course in accordance with such
contracts or agreements; and the total interest expense on the
Investor commitment is not greater than the maximum interest rate
chargeable to the borrower under the borrower commitment, net of
servicing fees.
VIII. CERTAIN AMENDMENTS TO SECTION 4.2(CC) OF ARTICLE
IV. Article IV of the Agreement is hereby amended by appending
the following to the end of Section 4.2(cc):
Except as disclosed on Schedule 4.2(cc)(Part 2) of the
Company Disclosure Schedule, none of the Mortgage Servicing
Agreements entered into by the Company contain any provisions
permitting the termination of such agreement by the Investor
without cause without the payment of a termination fee. With
respect to the Mortgage Servicing Agreements entered into by the
Company (excluding WMF/Huntoon), the disclosures on Schedule
4.2(cc)(Part 3) of the Company Disclosure Schedule are a true and
accurate summary of the termination provisions contained in such
agreements. With respect to those Mortgage Servicing Agreements
entered into by WMF/Huntoon which are disclosed on Schedule
4.2(cc)(Part 4) of the Company Disclosure Schedule, the summary of
the termination provisions contained in such agreements set forth
in Schedule 4.2(cc)(Part 4) is true and accurate.
IX. CERTAIN AMENDMENTS TO ARTICLE IV. Article IV of the
Agreement is hereby amended by adding the following new Section
4.2(kk) thereto:
(kk) All DUS Mortgage Loans are Level I Fannie Mae
Mortgage Loans, except the Bluffs, which is a Level II Fannie Mae
Mortgage Loan.
X. CERTAIN AMENDMENTS TO ARTICLE XI. Article XI of the
Agreement is hereby amended by adding the following new Sections
11.3 and 11.4 thereto:
11.3 ADDITIONAL INDEMNIFICATION. Notwithstanding
anything to the contrary in this Agreement, the Seller and the
Shareholder, jointly and severally, hereby indemnify, defend and
hold harmless the Purchaser and each of its respective
subsidiaries (including, from and after the Closing Date, the
Company and its Subsidiaries), affiliates, directors, officers and
employees, and shall reimburse such Persons for, from and against
all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities and Expenses, including, without
limitation, interest, penalties and reasonable attorneys' fees,
disbursements and expenses, imposed on or incurred by such
Persons, or any of them, directly or indirectly, by reason of:
<PAGE> 5
(a) Rights or claims of third parties to
ownership or other interests in the capital stock of the Company;
(b) The failure to deliver for cancellation
the original Note in the principal amount of $2,000,000;
(c) The absence of any Investor take-out
commitments with respect to the Owned Mortgage Loans and
commitments disclosed on Schedules 4.2(y) and 4.2(bb) of the
Company Disclosure Schedule (in which event, damages shall
include, without limitation, the aggregate market loss incurred,
if any, with respect to all such Owned Mortgage Loans and
commitments disclosed on Schedules 4.2(y) and 4.2(bb) (without
consideration for deferred origination fees with respect to those
assets disclosed on Schedule 4.2(bb)); provided, however, that the
Purchaser shall use reasonable efforts to mitigate such damages;
(d) Environmental liability of the Company
(without regard to the liability of Sheffield) with respect to the
real property owned by Sheffield Acquisition Corp., subject to the
deductibles as provided in Section 2.6;
(e) The demands disclosed in Schedule 4.1 of
the Company Disclosure Schedule concerning Vienna Mortgage
Corporation, subject to the deductibles as provided in Section
2.6;
(f) The claims of Freddie Mac disclosed in
Schedule 4.2(dd) of the Company Disclosure Schedule, to the extent
such claims exceed in the aggregate US$50,000; provided, however,
that the Purchaser shall use reasonable efforts to mitigate such
damages; and
(g) The expiration or reduction, pursuant to
a marking-to-market, of any Mortgage Loan which has Housing
Assistance Payments under a Section 8 subsidy contract on 50% or
more of the units, to the extent that a loan prepays or defaults
prior to the end of the term of the applicable Section 8 subsidy
contract as the direct or indirect result of any action by HUD,
the United States Congress or the owner to directly or indirectly
reduce the Section 8 assistance on the project (or its net cost)
under the Section 8 contract, in which event damages shall be the
present value of such lost servicing rights through the term of
the applicable Section 8 subsidy contract, discounted at a rate of
8% per annum; provided,that the maximum indemnity pursuant to this
Section 11.3(g) shall be $300,000.
Notwithstanding Section 12.4, the Seller and the
Shareholder may participate in the defense of matters set forth in
Sections 11.3(d) and (e).
11.4 SURVIVAL OF WARRANTIES. Each of the
warranties set forth in Sections 11.2(f) and 11.3 shall not be
deemed waived or otherwise affected by any
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investigation and shall survive the Closing and remain in full
force and effect until the later of the date of final resolution
of any claims timely made under this Agreement with respect to any
such warranty or as follows:
(a) With respect to the warranties set forth in
Section 11.2(f) and Sections 11.3(a), (b), (d) and (e), there
shall be no limitation;
(b) With respect to the warranties set forth in
Sections 11.3(c) and (f), the third anniversary of the Closing;
and
(c) With respect to the warranties set forth in
Section 11.3(g), fifth anniversary of the Closing.
XI. CERTAIN AMENDMENTS TO ARTICLE XII. Article XII of the
Agreement is hereby amended by deleting Section 12.5 in its
entirety and replacing it with the following:
12.5 REMEDIES.
(a) With respect to those monetary claims, demands
or other actions arising pursuant to the Representations and
Warranties, other than the Indefinite Term Warranties, except as
provided in Section 2.5, the sole and exclusive means by which the
Purchaser or any Person or party in Pari Causa therewith may seek
recovery from the Seller and the Shareholder pursuant to such
claims, demands or other actions shall be by claiming rights to
assets held under to the Escrow Fund (taking into account the
deductibles as provided in Section 2.6); provided, however, that
in the event that one or more Notices of Claim have been filed
pursuant to the terms of the Escrow Agreement in any Warranty
Year, the Purchaser shall be indemnified by the Seller and the
Shareholder pursuant to the terms of Section 12.2 hereof but only
to the extent of any remaining Escrow Fund plus the market value
of any assets thereafter released from the Escrow Account (the
value of which assets shall be determined with respect to the NHPI
Shares by multiplying the number of NHPI Shares released by last
reported closing sales price for common stock of the Purchaser on
the Nasdaq Stock Market on the date such shares are released from
the Escrow Account, or, if not a trading day, on the immediately
preceding trading day) prior to the final resolution of any claims
which are the subject of any such Notice of Claim.
(b) With respect to those monetary claims, demands
or other actions arising pursuant to the indemnifications set
forth in Sections 11.3(d) and (e), except as provided in Section
2.5, the Purchaser or any Person or party in Pari Causa therewith
seeking recovery from the Seller and the Shareholder pursuant to
such claims, demands or other actions shall first look to the
assets held under to the Escrow Fund.
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(c) Notwithstanding anything to the contrary
herein and without limiting the indemnification rights and
remedies set forth in Articles XI or XII, with respect to those
claims for indemnification arising pursuant to the Indefinite Term
Warranties or Article XI, the Purchaser or any Person or party in
Pari Causa therewith may seek recovery from the Seller and/or the
Shareholder pursuant to such claims, demands or other actions by
claiming rights to assets held under to the Escrow Fund.
(d) The indemnification provisions in this Article
XII are in addition to, and not in derogation of, any statutory,
equitable or common-law right or remedy any party may otherwise
have for breach of representation, warranty, covenant or
agreement.
XII. RATIFICATION. Except as expressly amended by this
Amendment and the delivery of schedules to the Agreement, the
Agreement shall remain in full force and effect and the Agreement,
with the schedules attached, is hereby ratified and confirmed as
of the date first written above.
XIII. GOVERNING LAW. The laws of the District of
Columbia, regardless of laws that might be applied under equitable
principles of conflicts of laws, shall govern the validity,
construction and interpretation of this Amendment.
XIV. COUNTERPARTS. This Amendment may be executed in
multiple counterparts, each of which shall be deemed an original,
but all of which taken together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
NHP INCORPORATED
By:
_________________________________________________________
J. Roderick Heller, III
Chairman and Chief Executive Officer
COMMONWEALTH OVERSEAS TRADING COMPANY LIMITED
By:
_________________________________________________________
Sheik Mohammed A. Al-Tuwaijri, Director
_________________________________________________________
Sheik Mohammed A. Al-Tuwaijri, individually
ACKNOWLEDGEMENT:
WMF HOLDINGS LTD.
By:
_________________________________________________________
Shekar Narasimhan, President and Chief Executive Officer
<PAGE> 9
INDEX OF SCHEDULES
OMMITTED FROM EXHIBIT 2.2
(FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT)
The following Schedules have been omitted from Exhibit 2.2 in accordance
with Item 601(b)(2) of Regulation S-K. The registrant will furnish
supplementally a copy of any omitted schedule to the Commission upon request.
SCHEDULES DESCRIPTION
GENERAL CORPORATE REPRESENTATIONS AND WARRANTIES CONCERNING WMF HOLDINGS LTD.
AND SUBSIDIARIES
SCHEDULE 3.1 ORGANIZATION; STANDING AND POWER
SCHEDULE 3.2 SUBSIDIARIES
SCHEDULE 3.3 CAPITALIZATION
SCHEDULE 3.4 AUTHORITY; NONCONTRAVENTION
SCHEDULE 3.5 GOVERNMENTAL CONSENTS
SCHEDULE 3.6 LITIGATION
Schedule 3.7 FINANCIAL STATEMENTS
SCHEDULE 3.8 ABSENCE OF LIABILITIES
SCHEDULE 3.9 TAXES
SCHEDULE 3.10 PROPERTY AND ASSETS
SCHEDULE 3.11 PATENTS AND TRADEMARKS
Schedule 3.12 Insurance
Schedule 3.13 Material Contracts and Obligations
SCHEDULE 3.16 ERISA AND EMPLOYEE MATTERS
SCHEDULE 3.17 ENVIRONMENTAL MATTERS
Schedule 3.18 Employees; Labor Relations
Schedule 3.23 Banking
Schedule 3.24 Disclosures
GENERAL LOAN AND SERVICING PORTFOLIO REPRESENTATIONS AND WARRANTIES CONCERNING
WMF HOLDINGS LTD. AND SUBSIDIARIES
Schedule 4.1 Approved Issuer
Schedule 4.2(c) Compliance
Schedule 4.2(d) No Outstanding Charges
Schedule 4.2(e) Original Terms Unmodified
Schedule 4.2(g) No Recourse
Schedule 4.2(h) Condemnation and Casualty
Schedule 4.2(k) No Payment Defaults
Schedule 4.2(m) Insurance
Schedule 4.2(o) Escrow Accounts
Schedule 4.2(q) Defaults under FHA Loans
Schedule 4.2(r) Letters of Credit
Schedule 4.2(s) Original Notes
Schedule 4.2(t) Future Advances
Schedule 4.2(w) Structural Defects
Schedule 4.2(y) Purchases of Owned Mortgage Loans
Schedule 4.2(z) Prior Claims Experience
SCHEDULE 4.2(BB) Loan and Other Commitments
Schedule 4.2(cc) Servicing Rights
Schedule 4.2(dd) Servicing Compliance
SCHEDULE 4.2(GG) NO DISCLAIMERS OF LIABILITY
<PAGE> 10
REPRESENTATIONS AND WARRANTIES CONCERNING COMMONWEALTH
SCHEDULE 5.4 CAPITALIZATION
SCHEDULE 5.6 GOVERNMENTAL CONSENTS
Schedule 5.7 Litigation
REPRESENTATIONS AND WARRANTIES CONCERNING SHEIK MOHAMMED A. AL-TUWAIJRI
SCHEDULE 6.3 LITIGATION
REPRESENTATIONS AND WARRANTIES CONCERNING THE REGISTRANT
SCHEDULE 7.4 GOVERNMENTAL CONSENTS
<PAGE> 1
EXHIBIT 2.3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Escrow") is made and entered
into as of this 1st day of April, 1996, by and between NHP
Incorporated, a Delaware corporation (the "Purchaser"),
Commonwealth Overseas Trading Company Limited, a Bermuda
corporation (the "Seller"), Sheik Mohammed A. Al-Tuwaijri (the
"Shareholder") and State Street Bank and Trust Company (the
"Escrow Agent").
WITNESSETH:
WHEREAS, the Purchaser, the Seller and the Shareholder have
entered into that certain Stock Purchase Agreement dated as of
March 20, 1996, as amended (the "Purchase Agreement") with respect
to the purchase by the Purchaser and the sale by the Seller of all
of the issued and outstanding capital stock of WMF Holdings Ltd.,
a Delaware corporation (the "Company");
WHEREAS, an aggregate of 210,000 shares of common stock, par
value $.01 per share of the Purchaser (together with any
additional securities and instruments identified in Section 2.2(a)
and (b) hereof, the "NHPI Shares"), constructively received by the
Seller pursuant to the Purchase Agreement, are to be deposited
with the Escrow Agent subject to the terms and conditions of this
Escrow, as security for the indemnification obligations of the
Seller and the Shareholder under the Purchase Agreement; and
WHEREAS, pursuant to Section 2.4 of the Purchase Agreement,
the parties thereto agreed to enter into an Escrow with the Escrow
Agent containing the provisions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration, the receipt and sufficiency
of which are acknowledged by each of the parties hereto, the
parties hereby agree as follows:
1. DEFINED TERMS. All capitalized terms used but not
defined in this Escrow shall have the respective meanings ascribed
to such terms in the Purchase Agreement.
2. ESTABLISHMENT OF ESCROW; PURPOSE OF ESCROW.
2.1 Simultaneously with the execution and delivery of
this Escrow, the Purchaser, pursuant to the instructions of the
Seller and in accordance with the Purchase Agreement, is
delivering to and depositing with the Escrow Agent the NHPI
Shares, issued in the name of the Seller, as holder of record,
comprising a portion of the Purchase Price payable under the
Purchase Agreement, together with stock powers in blank duly
executed by the Seller.
2.2 Seller hereby agrees that the address of the Seller
on the stock ledger of the Purchaser (and any transfer agent of
the Purchaser's securities) with respect to any NHPI Shares or
other securities held in the Escrow Fund (as hereinafter defined)
shall
<PAGE> 2
be recorded as "care of" the Escrow Agent, which address may only
be changed upon the express written instructions of the Escrow
Agent. If at any time and from time to time following the
execution of this Escrow the Seller shall become entitled to
receive, in connection with any of the NHPI Shares held in the
Escrow Fund, any:
(a) stock certificate, including, without
limitation, any certificate representing a stock dividend or in
connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets,
combination of shares, stock split, spin-off of split-off; or
(b) option, warrant, right, or other security
whether as an addition to or in substitution of or in exchange for
any of such NHPI Shares or otherwise;
then, the Seller hereby agrees and directs the Purchaser to
deliver the same to the Escrow Agent and the Seller hereby
covenants and agrees to deliver to the Escrow Agent, at the Escrow
Agent's request, appropriate endorsement when necessary, or
appropriate stock powers duly executed in blank, together with any
documentary tax stamps and any other documents necessary to cause
the Escrow Agent to have, for the benefit of the Purchaser, a
good, valid and perfected first pledge of, lien on and security
interest in the NHPI Shares, free and clear of any mortgage,
pledge, lien, security interest, hypothecation, assignment,
charge, right or encumbrance (collectively, an "Encumbrance").
The Escrow Agent shall promptly notify the Seller upon its receipt
of any of said certificates or other securities. In the event
that the Seller shall receive any of said certificates or other
securities, the Seller hereby agrees and covenants that it shall
accept the same as the Escrow Agent's agent, in trust for the
Escrow Agent (as part of the Escrow Fund), and shall deliver the
same immediately to the Escrow Agent, in the exact form received,
with the appropriate endorsement when necessary, or appropriate
stock powers duly executed in blank, together with any documentary
tax stamps and any other documents necessary to cause the Escrow
Agent to have, for the benefit of the Purchaser, a good, valid and
perfected first pledge of, lien on and security interest in the
NHPI Shares, free and clear of any Encumbrance.
2.3 The Escrow Agent hereby acknowledges receipt of the
Escrow Fund and agrees to hold (i) the NHPI Shares and (ii) any
dividends or other distributions thereon or substitutions
therefor, whether payable in the form of cash, securities,
instruments or other property or assets (collectively, the "Escrow
Fund"), and to invest any proceeds therefrom and disburse the
Escrow Fund for the benefit of the Purchaser, the Seller and the
Shareholder and their respective legal representatives, successors
and assigns as provided herein. All interest and other earnings
on the Escrow Fund shall be added to and shall constitute a part
of the Escrow Fund and shall be held and disbursed only as herein
permitted and provided. The Escrow Agent shall hold the Escrow
Fund in a separate escrow account.
2.4 The Escrow Fund is being deposited with the Escrow
Agent to assure that funds will be available, in an amount equal
to the Escrow Fund and interest and other earnings thereon, to
meet certain indemnification obligations of the Seller and the
<PAGE> 3
Shareholder under the Purchase Agreement as more particularly set
forth therein and herein. In order to secure the Seller's and the
Shareholder's full and timely payment of such indemnification
obligations, the Seller and the Shareholder each hereby pledges,
assigns, hypothecates, transfers, delivers and grants to the
Purchaser a first priority security interest in and to all of the
Seller's and the Shareholder's present and future right, title and
interest in and to the Escrow Fund, together with all accrued
interest thereon and all proceeds thereof and amounts with the
same fair value in substitution therefor, free and clear of any
Encumbrance.
2.5 The Escrow Agent shall hold the Escrow Fund in
escrow in accordance with and subject to the terms and provisions
of this Escrow and shall invest the same and make disbursements
therefrom only as herein permitted and provided.
3. INVESTMENT OF ESCROW FUND. The Escrow Agent shall
invest any proceeds of the NHPI Shares constituting a portion of
the Escrow Fund only in Permitted Investments as directed in
writing by the mutual consent of the Purchaser and the Seller.
For the purposes of this Escrow, the term "Permitted Investments"
shall mean: certificates of deposit issued by banks or trust
companies having in each case a combined capital and surplus of
not less than $50 million, United States Overnight Repurchase
Agreements, or money market funds consisting of debt instruments
of the United States or its agencies. The Escrow Agent shall not
incur any liability in acting in good faith in making investments
authorized herein.
4. NOTICE OF CLAIM. Purchaser may submit a notice to the
Escrow Agent at any time that Purchaser believes that it has
identified a breach of a Representation and Warranty indemnifiable
under the Purchase Agreement (a "Notice of Claim"), which notice
may precede the filing of any claim or action against the Seller
or the Shareholder.
5. DISBURSEMENTS FROM ESCROW FUND.
5.1 BASIS FOR DISBURSEMENTS. Disbursements from the
Escrow Fund shall be made from time to time by the Escrow Agent to
reimburse the Purchaser for losses and damages arising from
breaches of Representations and Warranties and to pay to the
Purchaser amounts due in respect of the indemnification
obligations of the Seller and the Shareholder pursuant to Articles
XI and XII of the Purchase Agreement and for Adjustment Period
Interest thereon, subject to the threshold limitations of Section
2.6 of the Purchase Agreement, where applicable.
5.2 PAYMENT NOTICE. Disbursements from the Escrow Fund
shall be made only after the submission to the Escrow Agent by the
Purchaser of a payment notice (the "Payment Notice") which shall
set forth in reasonable detail the basis upon which the
Purchaser's claim of entitlement to a payment pursuant to Article
XI and XII and Section 2.6 (to the extent applicable) of the
Purchase Agreement is predicated, together with the computations
in respect of the calculation of the amount thereof. In the event
that the Purchaser files a Payment Notice prior to the filing of
any Notice of Claim with respect to the same claim of entitlement,
such Payment Notice shall constitute a Notice of Claim for the
purpose of Section 12.5 of the Purchase Agreement.
<PAGE> 4
5.3 MEASUREMENT OF DAMAGES. In the event that the
Purchaser suffers losses, claims, damages, liabilities, costs,
counsel fees and/or other expenses for which the Purchaser is
entitled to indemnification pursuant to Article XI, Article XII
and/or Section 2.6 (to the extent applicable) of the Purchase
Agreement, the amount of such indemnity shall be based on the
actual loss incurred by the Company and/or the Purchaser;
PROVIDED, that with respect to losses related to loan servicing by
the Company, such amount shall equal the greater of (i) the actual
loss incurred or (ii) the value assigned to the servicing rights
in question by the Purchaser, in accordance with generally
accepted accounting principles, in its initial financial
statements prepared following the Closing Date.
5.4 DISBURSEMENT PROCEDURE. The following procedures
shall be observed in connection with the making of disbursements
from the Escrow Fund.
(a) The Purchaser shall simultaneously furnish
copies of each Payment Notice to each of the Escrow Agent, the
Seller and the Shareholder. Unless the Escrow Agent receives a
notice from the Seller or the Shareholder objecting to the making
of the payment to which the Purchaser claims to be entitled and
setting forth with reasonable particularity the basis of such
objection (an "Objection Notice") within fifteen Business Days
after the Escrow Agent's receipt of a Payment Notice (the
"Objection Period"), the Escrow Agent shall, within ten Business
Days after the end of the Objection Period, disburse from the
Escrow Fund and transfer (in the case of stock) and pay (in all
other respects) to the Purchaser the amount claimed to be due as
set forth in the Payment Notice pursuant to the valuation
procedures in Section 5.5 of this Escrow. A copy of any Objection
Notice submitted by the Seller or the Shareholder to the Escrow
Agent shall be simultaneously submitted by the Seller or the
Shareholder, as the case may be, to the Purchaser.
(b) If the Escrow Agent receives an Objection
Notice within the Objection Period, it shall not make the
disbursement demanded in the Payment Notice until it receives (i)
a written instruction signed by the Purchaser and either the
Seller or the Shareholder directing that the disbursement be made
(either in the amount originally set forth in the Payment Notice
or in a modified amount), (ii) a copy of an order of a court
having jurisdiction over the parties and the matter, which order
shall have become final and not subject to further appeal, or
(iii) a copy of a determination of the issue by arbitrators
appointed by the Purchaser and the Seller and/or the Shareholder.
The Escrow Agent shall fully comply with the terms of any such
written instruction, order or determination as promptly as shall
be practicable.
(c) If it shall be determined by a court or by
arbitrators appointed by the Purchaser and the Seller and/or the
Shareholder that any (i) Notice of Claim or Payment Notice
submitted to the Escrow Agent by the Purchaser or (ii) Objection
Notice submitted to the Escrow Agent by the Seller and/or the
Shareholder fails to meet the standard required of pleadings and
motions
<PAGE> 5
pursuant to Rule 11 of the Federal Rules of Civil Procedure, then
the Seller (in the case of a Notice of Claim or Payment Notice) or
the Purchaser (in the case of a Objection Notice) shall be
entitled to receive from the Escrow Fund, as liquidated damages to
compensate it for the costs and damages incurred as a result of
being forced to litigate or arbitrate a claim, cash or other
assets valued at One Hundred Thousand Dollars ($100,000). The
Purchaser, the Seller and the Shareholder acknowledge that the
actual amount of damages that would be incurred as a result of the
assertion of any such claim would be difficult or impossible to
ascertain and that the amount specified herein as liquidated
damages constitutes a reasonable estimate of the amount of such
damages.
5.5 VALUATION PROCEDURE. In the event that the
Purchaser is entitled to a certain amount of disbursals from the
Escrow Fund (the "Disbursal Amount"), the Escrow Agent shall
observe the following procedures:
(a) The Escrow Agent shall first disburse any cash
or cash equivalents held in the Escrow Fund, up to the Disbursal
Amount.
(b) If the amount of cash or cash equivalents held
in the Escrow Fund is less than the Disbursal Amount, the Escrow
Agent shall determine the number of NHPI Shares necessary to make
up such shortfall, based on the then current market price per
share of NHPI Common Stock, as reported on the Nasdaq Stock Market
at the close of trading on the Business Day prior to such
determination (or other securities exchange on which such shares
are then trading), and shall, subject to the provisions of Section
5.5(c) hereof, disburse such NHPI Shares to NHPI.
(c) Upon a determination that NHPI Shares are to
be disbursed to the Purchaser pursuant to Section 5.5(b) hereof,
prior to such disbursal the Escrow Agent shall notify the Seller
and the Shareholder of the number of NHPI Shares to be disbursed
and the aggregate value determined for such shares. Within five
Business Days of the Escrow Agent's delivery of such notice, the
Seller and/or the Shareholder may, at their option, wire transfer
immediately available funds to the Escrow Agent in the amount set
forth on such notice, in which case, upon the receipt of such
funds in the Escrow Fund, the Escrow Agent shall release the
number of NHPI Shares identified in such notice to the Seller and
shall disburse the exchanged funds to the Purchaser.
6. TERM OF ESCROW; RELEASE OF ESCROW FUND; TERMINATION.
6.1 This Escrow shall be and remain in full force and
effect until the third anniversary of the Closing Date (the
"Escrow Termination Date").
6.2 On the first anniversary of the Closing Date, or,
if such anniversary is not a Business Day, on the first Business
Day next succeeding such date, the Escrow Agent shall release to
the Seller that amount of NHPI Shares held in the Escrow Fund
which
<PAGE> 6
exceeds 105,000 NHPI Shares, or in the event that fewer than
105,000 NHPI Shares are then held in the Escrow Fund, that amount
of assets which exceeds the then current market value of 105,000
NHPI Common Shares (determined pursuant to Section 5.5(b) hereof).
6.3 On the second anniversary of the Closing Date, or,
if such anniversary is not a Business Day, on the first Business
Day next succeeding such date, the Escrow Agent shall release to
the Seller that amount of NHPI Shares held in the Escrow Fund
which exceeds 52,500 NHPI Shares, or in the event that fewer than
52,500 NHPI Shares are then held in the Escrow Fund, that amount
of assets which exceeds the then current market value of 52,500
NHPI Common Shares (determined pursuant to Section 5.5(b) hereof).
6.4 On the Escrow Termination Date, or, if the Escrow
Termination Date shall not be a Business Day, on the first
Business Day next succeeding the Escrow Termination Date, the
Escrow Agent shall disburse the then remaining balance in the
Escrow Fund to the Seller.
6.5 For the purposes of the calculations in Section 6.2
and 6.3 hereof (i) the Escrow Fund shall exclude any Disbursal
Amount and (ii) the threshold number of NHPI Shares identified in
each section shall be adjusted proportionately in the event of any
stock splits or stock dividends by the Purchaser from and after
the Closing Date.
7. VOTING RIGHTS, ETC. The Escrow Agent shall provide
appropriate notices to the Seller and Seller shall exercise any
and all voting rights pertaining to the NHPI Shares which at any
time may be held in the Escrow Fund; UNLESS a claim identified in
a Notice of Claim or Payment Notice filed by the Purchaser has not
been resolved, in which event, without further notice and whether
or not the NHPI Shares shall have been registered in the name of
the Escrow Agent or its nominee, the Seller shall have no right to
direct the voting of the NHPI Shares then held in the Escrow Fund,
or any other corporate rights or any conversion, exchange,
subscription or other rights, privileges or options pertaining
thereto. The Escrow Agent shall not vote the NHPI Shares held in
this Escrow Fund and shall not exercise any other rights.
8. ESCROW AGENT PROTECTIVE PROVISIONS.
8.1 The duties of the Escrow Agent shall be solely as
set forth in this Escrow. The Escrow Agent's duties and
obligations shall be purely ministerial and not discretionary;
such duties and obligations shall be determined solely by the
express provisions of this Escrow, and the Escrow Agent shall have
no obligation to refer to any other documents or agreements
between or among the parties related in any way to the Purchase
Agreement, regardless of whether it has knowledge of the
provisions of such other agreements. The Escrow Agent is to be
considered and regarded as a depository only and shall not be
responsible or liable (except for its gross negligence or willful
misconduct) for the sufficiency or correctness as to form, manner
of execution, or
<PAGE> 7
validity of any instrument deposited with the Escrow Agent, nor as
to the identity, authority, or rights of any person executing the
same. The Escrow Agent's duties hereunder shall be limited to the
safekeeping and investment of the Escrow Fund and for its
disbursement in accordance with the provisions of this Escrow.
The Escrow Agent may consult counsel satisfactory to it, including
in-house counsel, and the opinion of such counsel shall be full
and complete 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.
8.2 The Escrow Agent shall not incur any liability in
acting upon any signature, notice, request, waiver, consent,
receipt or other paper or document believed by the Escrow Agent to
be genuine, and the Escrow Agent may assume that any person
purporting to give the Escrow Agent any notice on behalf of any
party in accordance with the provisions hereof has been duly
authorized to do so.
8.3 In the event of the death of any person who may be
a party in interest hereunder, the Escrow Agent shall deem and
treat the legal representative of such person's estate as the
successor in interest of said deceased person for all purposes of
this Escrow.
8.4 It is expressly understood that the Escrow Agent is
not responsible or liable in any manner whatsoever for the
sufficiency, correctness, genuineness or validity of any
instrument deposited with the Escrow Agent or for the form of
execution of such instruments, or for the identity, authority or
right of any person executing or depositing the same, or for the
terms and conditions of any instrument pursuant to the Escrow
Agent or the other parties hereto may act.
8.5 Subject to Section 3 hereof, the Escrow Agent shall
not be responsible for any act or failure to act and shall have no
liability under this Escrow or in connection herewith except in
the case of its own willful misconduct or gross negligence.
8.6 Subject to Section 3 hereof, 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. Each of the
Purchaser, the Seller and the Shareholder, jointly and severally,
covenant and agree 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 or with the administration of
its duties hereunder, including, but not limited to reasonable
legal fees and other reasonable costs and expenses of defending or
preparing to defend against any claim or liability in the
premises, 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 damage.
<PAGE> 8
8.7 Subject to Section 3 hereof, the Escrow Agent shall
not be responsible for any diminution of monies deposited with
the Escrow Agent except to the extent that such loss arises out of
gross negligence or willful misconduct of the Escrow Agent.
8.8 The Purchaser, the Seller and the Shareholder,
jointly and severally, agree 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 Escrow, 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 Escrow. Each of the
Purchaser, the Seller and the Shareholder 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
Escrow. The Purchaser, the Seller and the Shareholder, jointly
and severally, agree 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 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 Escrow, 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.
8.9 The Escrow Agent shall have no more or less
responsibility or liability on account of any action or omission
of any book-entry depository or subescrow agent employed by the
Escrow Agent than any such book-entry depository or subescrow has
to the Escrow Agent, except to the extent that such action or
omission of any book-entry depository or subescrow agent was
caused by the Escrow Agent's own gross negligence or bad faith.
8.10 In case of conflicting demands upon the Escrow
Agent, it may (i) refuse to comply therewith as long as such
disagreement continues and make no delivery or other disposition
of any funds or property then held (and the Escrow Agent shall not
be or become liable in any way for such failure or refusal to
comply with such conflicting or adverse claims or demands); (ii)
continue to so refrain and so refuse to act until all differences
have been adjusted by agreement and the Escrow Agent has been
notified thereof by joint written instructions of the Purchaser,
the Seller and the Shareholder, or (iii) interplead the portion of
the Escrow Fund in dispute with the Clerk of the Superior Court of
the District of Columbia.
8.11 The Escrow Agent may resign as Escrow Agent by
giving each of the Purchaser, the Seller and the Shareholder
twenty (20) Business Days written notice of its intention to
resign. Prior to the effective date of the resignation as
specified in such notice, the Purchaser will issue to the Escrow
Agent a written instruction authorizing redelivery of the Escrow
Funds to a bank or trust company that it selects subject to the
<PAGE> 9
reasonable consent of the Seller. Such bank or trust company
shall have a principal office in Boston, Massachusetts or in the
Washington, D.C. metropolitan area, and shall have capital,
surplus and undivided profits in excess of $50,000,000. If,
however, the Purchaser shall fail to name such a successor escrow
agent within fifteen (15) Business Days after the notice of
resignation from the Escrow Agent, the Seller shall be entitled to
name such successor escrow agent. If no successor escrow agent is
named by the Purchaser or the Seller, the Escrow Agent may apply
to a court of competent jurisdiction for appointment of a
successor escrow agent. The provisions of Sections 8.6 and 8.8
shall survive the termination of this Escrow.
8.12 The Escrow Agent shall not be under any obligation
to take any legal action in connection with this Escrow or for its
enforcement, or to appear in, prosecute, or defend any action or
legal proceeding which, in its opinion, would or might involve it
in any costs, expense, loss, or liability, unless and as often as
required by it, it is furnished with satisfactory security and
indemnity against all such costs, expenses, losses, or
liabilities.
8.13 Each of the Seller and the Shareholder agree to pay
the Escrow Agent's reasonable compensation for its normal services
hereunder in accordance with the attached fee schedule, which may
be subject to change on an annual basis. The Escrow Agent shall
be entitled to reimbursement on demand for all expenses incurred
in connection with the administration of the escrow 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.
8.14 Notwithstanding any contrary provision contained
herein, the Escrow Agent, at all times, shall have full right and
authority to pay over and disburse the Escrow Fund in accordance
with the joint written instructions of the Purchaser, the Seller
and the Shareholder. 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 Fund, or should any
claim be made upon such fund 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 mutual agreement of the parties involved or by a final
order, decree or judgment of a Court in the United States of
America, the time for perfection of an appeal or such order,
decree or judgment having expired. The Escrow Agent may, but
shall be under no duty whatsoever to, institute or defend any
legal proceedings which relate to the Escrow Fund.
9. CONSENT TO JURISDICTION. Each of the Purchaser, the
Seller and the Shareholder hereby absolutely and irrevocably
consent and submit to the jurisdiction of the courts of the
District of Columbia and of any Federal court located in said
jurisdiction in connection with any actions or proceedings brought
against the Purchaser, the Seller and/or the Shareholder by the
Escrow Agent arising out of or relating to this Escrow. In any
such action or proceeding, each of the Purchaser, the Seller and
the Shareholder hereby absolutely and
<PAGE> 10
irrevocably waives personal service of any summons, complaint,
declaration or other process and hereby absolutely and irrevocably
agrees that the service thereof may be made by certified or
registered first-class mail directed to each of the Purchaser, the
Seller and the Shareholder, as the case may be, at their
respective addresses in accordance with Section 11 hereof.
10. ARBITRATION. The parties hereto agree that any and all
disputes and claims of any nature whatsoever which relate to or
arise pursuant to this Agreement or the Purchase Agreement shall
be resolved, solely and exclusively, pursuant to arbitration in
the District of Columbia in accordance with the commercial
arbitration rules and procedures of the American Arbitration
Association in effect at the time at which the dispute or claim
arises, and judgment upon the award rendered by the arbitrator or
arbitrators may be entered in any court having jurisdiction
thereof. If the matter in dispute concerns an amount in excess of
$300,000, there shall be three arbitrators arbitrating the matter,
with the Purchaser appointing the first arbitrator, the Seller and
the Shareholder together appointing the second arbitrator, and
the first and second arbitrators together appointing a third
arbitrator. The arbitrator or arbitrators shall be deemed to
possess the powers to issue mandatory orders and restraining
orders in connection with such arbitration; provided, however,
that nothing in this Section 10 shall be construed so as to deny
the Purchaser the right and power to seek and obtain injunctive
relief in a court of equity for any breach or threatened breach by
the Seller or the Shareholder of any of their covenants contained
in this Escrow.
11. NOTICES. All notices, demands or requests required or
permitted hereunder shall be in writing and shall be deemed duly
delivered and received on the date of personal delivery (which
shall include delivery by Express Mail, Federal Express or other
recognized overnight courier service that issues a receipt or
other confirmation of delivery) to the party for whom such
communication is intended, addressed as follows or to such other
address as any party may hereafter designate to the other by like
notice:
If to the Seller, to:
Commonwealth Overseas Trading Company Limited
P.O. Box 1179
Cedar House
41 Cedar Avenue
Hamilton HM 12, Bermuda
with a copy to:
Krooth & Altman
1850 M Street, N.W.
Washington, D.C. 20036-5803
Attn: Patrick Clancy
If to the Shareholder, to:
<PAGE> 11
Al-Thomad Trading & Contracting Co. Ltd.
P.O. Box 16296
Riyadh 11464
Kingdom of Saudi Arabia
Attn: Sheik Mohammed A. Al-Tuwaijri
with a copy to:
Krooth & Altman
1850 M Street, N.W.
Washington, D.C. 20036-5803
Attn: Patrick Clancy
If to the Purchaser, to:
(THROUGH MAY 31, 1996) (AFTER MAY 31, 1996)
NHP Incorporated NHP Incorporated
1225 Eye Street, N.W. 8065 Leesburg Pike
Suite 601 Suite 400
Washington, D.C. 20005-3945 Vienna, VA 22182
Attn: J. Roderick Heller III Attn: J. Roderick Heller III
with a copy to:
Swidler & Berlin, Chartered
3000 K Street, N.W., Suite 300
Washington, D.C. 20007
Attn: Kenneth G. Lore
If to the Escrow Agent:
State Street Bank and Trust Company
Two International Place, 4th Floor
Boston, MA 02110
Attn: Arthur MacDonald, Corporate Trust Department
12. GOVERNING LAW. This Escrow and the rights and
obligations of the parties hereunder shall be construed and
interpreted in accordance with the internal laws of the District
of Columbia, without reference to such jurisdiction's conflict of
law principals.
13. ENTIRE AGREEMENT, AMENDMENT AND WAIVER. Except for the
other documents expressly referred to herein, this Escrow contains
the entire agreement between the parties regarding the subject
matter of this Escrow, and no modification or waiver of any
provision of this Escrow shall be effective unless such
modification or waiver shall be in writing and signed by an
authorized representative of the party agreeing to such
modification, and the
<PAGE> 12
same shall then be effective only for the period and on the
conditions and for the specific instances and purposes specified
in such writing.
14. FORCE MAJEURE. Neither the Purchaser, the Seller, the
Shareholder nor Escrow Agent shall be responsible for delays or
failures in performance resulting from acts beyond its control.
Such acts shall include but not be limited to acts of God,
strikes, lockouts, riots, acts of war, epidemics, governmental
regulations superimposed after the fact, fire, communication line
failures, computer viruses, power failures, earthquakes or other
disasters.
15. SUCCESSORS AND ASSIGNS. This Escrow shall inure to the
benefit of and bind the respective parties hereto and their legal
representatives, successors and permitted assigns.
16. NO THIRD PARTY BENEFIT. This Escrow is intended solely
for the benefit of the parties hereto and their respective legal
representatives, successors and assigns, and no other party shall
have any rights or interest in any provision of this Escrow.
17. REPRODUCTION OF DOCUMENTS. This Escrow 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 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 of such reproduction shall likewise be admissible in
evidence.
18. COUNTERPARTS. This Escrow may be executed in multiple
counterparts, each of which shall be deemed an original, but all
of which taken together shall constitute one and the same
instrument.
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have executed this
Escrow as of the date first hereinabove written.
NHP INCORPORATED
[EIN No. ]
By:
______________________________________________________
COMMONWEALTH OVERSEAS TRADING COMPANY LIMITED
[EIN No. ]
By:
______________________________________________________
SHEIK MOHAMMED A. AL-TUWAIJRI
STATE STREET BANK AND TRUST COMPANY
By:
______________________________________________________
