FIRST AMENDMENT TO
STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT is made this 26th day of February, 1997, by and
among ▇.▇. ▇▇▇▇▇▇, INC., a Delaware corporation (the "Purchaser"), ▇▇▇▇▇▇▇ ▇.
SAAB, an individual residing in the State of Michigan ("Saab"), ▇▇▇▇▇▇▇ ▇. Saab
in his capacity as Trustee of the ▇▇▇▇▇▇▇ ▇. SAAB TRUST, a Michigan trust,
pursuant to a trust agreement dated February 16, 1987, as amended (the "Trust"),
▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual residing in the State of Georgia ("BTH"), ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, an individual residing in the State of Georgia ("▇▇▇▇▇▇"), and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, an individual residing in the State of Georgia ("Rivers").
WHEREAS, Purchaser, Saab, the Trust, and BTH entered into a Stock
Purchase Agreement on January 29, 1997 (the "Agreement");
WHEREAS, one or more of the Corporations has issued shares to ▇▇▇▇▇▇
and ▇▇▇▇▇▇ after the date of the Agreement and prior to the date hereof; and
WHEREAS, the parties hereto desire hereby to amend the Agreement to add
▇▇▇▇▇▇ and Rivers as parties, to provide for their participation in the
transactions contemplated therein and to provide for other amendments to the
Agreement and certain other agreements;
NOW, THEREFORE, in consideration of the premises and promises herein
contemplated, the parties agree as follows:
ARTICLE I
ADDITION OF ▇▇▇▇▇▇ AND ▇▇▇▇▇▇ AS PARTIES
1.1 Consent to Issuance of Shares. Purchaser hereby consents to the
issuance to ▇▇▇▇▇▇ and Rivers of the respective number of shares set forth next
to the Corporations set forth below and further agrees that such issuances do
not violate or breach any representation, warranty, covenant or agreement of the
Sellers set forth in the Agreement.
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Number of Shares Number of Shares
Corporation Issued to ▇▇▇▇▇▇ Issued to ▇▇▇▇▇▇
▇▇▇▇▇▇ Development Corporation 13.649 13.649
Torrey Development Corporation
of South Carolina, Inc. 9.099 9.099
▇▇ ▇▇▇▇▇▇ Atlanta, Ltd. 13.649 13.649
Torrey Homes of North Carolina, Inc. 9.099 9.099
The Mallard Group, Inc. 9.099 9.099
Torrey Development Corporation of
North Carolina, Inc. 9.099 9.099
Torrey Homes of South Carolina, Inc. 9.099 9.099
Provincial Realty and Investment
Company, Inc. 45.498 45.498
1.2 Additional Party. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ hereby join the Agreement
as parties, and the other parties hereto hereby accept and ratify such joinder.
1.2 Definition of Sellers. The term "Sellers" as used in the Agreement
is hereby amended to include each of ▇▇▇▇▇▇ and Rivers as one of them every time
such term is mentioned, except as follows:
(a) ▇▇▇▇▇▇ and ▇▇▇▇▇▇' obligations under Section 4.3(a) and
Article V of the Agreement shall only apply to their personal execution
and delivery of a closing certificate, share certificates, assignment
documents for the delivery of their shares, and any employment
agreements between either of them and Purchaser, and shall not apply to
any other actions or deliveries required to be taken by the Company or
any Seller.
(b) Neither ▇▇▇▇▇▇ nor Rivers makes any representation or
warranty in Article VII of the Agreement (other than the representation
and warranty in Section 7.27(a), which they are individually making as
to Legal Proceedings against them), it being understood that as to
Rivers, he is subject to those proceedings which he has described in a
separate letter dated of even date herewith as to which he will
indemnify and hold the Purchaser harmless without being subject to the
Indemnification Threshold. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ are each making all other
representations and warranties in the Agreement, including without
limitation, those in Article III thereof.
(c) Neither ▇▇▇▇▇▇ nor Rivers shall be responsible for the
performance of any covenants or agreements in Sections 8.1, 8.2, 8.5,
8.6, 8.7, 8.8, 8.9, 8.10 or 8.11 of the Agreement.
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(d) ▇▇▇▇▇▇ and ▇▇▇▇▇▇' obligations under Sections 8.3 and 8.4
of the Agreement shall only apply to each of them to the extent of
their disclosure of information on the Sellers' Schedules which relates
to Article VII-A of the Agreement.
(e) Neither ▇▇▇▇▇▇ nor Rivers shall have any responsibility
for any Sellers' compliance with the obligations described in Article
IX of the Agreement other than the obligations under Section 9.6 of the
Agreement which do apply to them.
(f) Neither ▇▇▇▇▇▇ nor ▇▇▇▇▇▇ shall be jointly and severally
liable for indemnification under Section 11.1(b) of the Agreement. The
sole responsibility of each of ▇▇▇▇▇▇ and Rivers to Purchaser under
Section 11.1(a) shall be for breaches of her or his personal
representations, warranties and covenants set forth in the Agreement as
hereby amended. The obligations of ▇▇▇▇▇▇ and ▇▇▇▇▇▇ under Article XI
shall be further limited by a separate maximum amount for which each
may be held liable under the Agreement (based only on matters for which
they have assumed responsibility and applicable only to their
individual obligations therefor). Neither ▇▇▇▇▇▇ nor Rivers shall be
obligated to pay any amounts for indemnification under Article XI in
excess of $339,600 each.
(g) Neither ▇▇▇▇▇▇ nor ▇▇▇▇▇▇ shall be liable for payment of
the $1,000,000 topping fee contained in Section 12.3 of the Agreement.
(h) Neither ▇▇▇▇▇▇ nor Rivers shall be liable for or bound
by the second sentence of Section 14.4 of the Agreement.
1.3 Notices. All notices, requests, demands and other communica-
tions shall be delivered to ▇▇▇▇▇▇ and ▇▇▇▇▇▇ as follows:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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ARTICLE II
OTHER AMENDMENTS
2.1 Post-Closing Obligations. The parties hereby agree that the
obligations of Sellers and Company to make the 338(h)(10) Election described in
Section 2.2 of the Agreement and the parties' obligation to prepare and agree
upon Attachment 2.2 to the Agreement shall be accomplished within a reasonable
time after the Closing.
2.2 Amendment to Section 3.1. The first sentence of Section 3.1 of the
Agreement is hereby amended by deleting "except as contemplated by Section 3.3
of this Agreement" and replacing same with the following:
"except as contemplated by Section 3.2 or 3.3 of this Agreement,"
2.3 Reduction of Registration Rights Participation Period. Sections 3.2
(preamble), 3.2(b)(ii), 3.3(a) and 3.3(c) are hereby amended by deleting the
phrase "second anniversary" from each Section and replacing same with "first
anniversary."
2.4 Date of Good Standing Certificates. Section 5.1(d)(iii) of the
Agreement is hereby amended by deleting "January 15, 1997" and inserting in lieu
thereof "January 13, 1997."
2.5 Financial Statements. Financial statements prepared or caused to be
prepared on behalf of the Corporations after the Closing Date for any period
ending on or before the Closing Date shall be prepared in a manner consistent
with past practices except as agreed between the Purchaser and Saab and BTH.
2.6 Title Exceptions. Purchaser acknowledges that, prior to the date
hereof, the Company has sold the real property marked as "Closed" in the
January, 1997 and February, 1997 Closing Lists attached hereto as Exhibit D.
2.7 Amendment to Exhibit A. Exhibit A to the Agreement is hereby
amended by deleting The Torrey Corporation, ▇▇ ▇▇▇▇ Agency, Inc., and Aspen
Associates, Inc. therefrom. Accordingly, the parties hereto acknowledge and
agree that any shares owned by the Sellers in such entities shall not be
acquired by Purchaser pursuant to the Agreement.
2.8 Amendment to Exhibit B. Exhibit B to the Agreement is hereby
amended by deleting the same in its entirety and inserting in lieu thereof the
following:
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Cash Amount Purchaser Shares
50% to BTH to BTH: 392,035 shares
50% to Saab to Saab: 392,035 shares
to ▇▇▇▇▇▇: 30,187 shares
to Rivers: 30,187 shares
2.9 Form of Deed. Section 5.1(i)(v) is revised to change "limited
warranty deed" to "general warranty deed."
2.10 Golf Course Agreement. Sellers shall cause TDC 98 Partnership,
L.P, a Georgia limited partnership ("TDC 98"), to assign to ▇.▇. ▇▇▇▇▇▇ -
▇▇▇▇▇▇, Inc., a Delaware corporation, its rights in that certain Grove Park Golf
Course Purchase and Development Agreement dated February 9, 1996 by and between
TDC 98 and RDC Golf of North Carolina, Inc. ("RDC"), as amended, upon obtaining
RDC's consent to such assignment. Sellers and TDC 98 shall at Closing execute
and deliver to Purchaser a license agreement in the form attached hereto as
Exhibit E.
ARTICLE III
OTHER AGREEMENTS
3.1 Partnership Indemnity.
(a) In full satisfaction of the provisions of 5.1(o) of the
Agreement relating to Sellers' obligation to indemnify Purchaser for
certain matters related to the transfer to Purchaser of the assets of
the Partnerships, Saab, the Trust and BTH (collectively, the
"Responsible Parties") hereby agree to indemnify, defend, reimburse,
and hold Purchaser and ▇.▇. ▇▇▇▇▇▇ - ▇▇▇▇▇▇, Inc., their Affiliates,
agents, directors, employees (other than BTH), officers (other than
BTH), and stockholders (other than the Responsible Parties) harmless
from any and all liability to the limited partners of the Partnerships
and to the limited partners of those partnerships listed on Schedule 1
hereto (the "Additional Partnerships") for any and all Claims directly
or indirectly relating to or arising (i) from the sale of the
Partnership assets as provided in the Agreement, (ii) from the
violation of any federal or state securities law in connection with the
formation, continuation or termination of the Partnerships or the
Additional Partnerships, or (iii) from the operation of the
Partnerships or the Additional Partnerships.
(b) All claims for indemnification under this Section 3.1
shall be asserted and resolved as provided for in Section 11.3 of the
Agreement.
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(c) It is understood and agreed that the indemnity provided
for in this Section 3.1 shall not be subject to either the
Indemnification Cap or the Indemnification Threshold as set forth in
Section 11.8 of the Agreement.
3.2 Remaining Guaranties and Obligations. Purchaser agrees to use its
reasonable efforts to cancel or replace the bonds, guaranties, letters of credit
and other obligations of the Sellers described on Exhibit C hereto.
3.3 Reserves for ▇▇▇▇▇▇▇'▇ Compensation Liabilities. To the extent of
the Company's reserve in its Financial Statements in the amount of $382,631 for
contingent future liabilities of the Company and those corporations deleted by
this Amendment from Exhibit A to the Agreement to Homebuilders Associations of
Georgia Mutual Insurance Company serviced by PCA Solutions, Inc. for
underpayment of ▇▇▇▇▇▇▇'▇ compensation insurance which has been asserted and is
referenced in the schedules, the Purchaser shall utilize the amount of such
reserve to satisfy such future liability, if any, before enforcing its indemnity
rights against Sellers pursuant to Article XI hereof. Saab, the Trust and BTH
agree that the indemnities set forth in Article XI of the Agreement shall apply
to the amount by which the sum of any such liabilities of the Company exceeds
the total amount reserved therefor.
3.4 Assignment of Interest in Sale of ▇▇ ▇▇▇▇ Agency, Inc. and Aspen
Associates, Inc. Saab, the Trust and BTH hereby transfer and assign to Purchaser
all of their right, title and interest in and to their rights to receive payment
under the following agreements and documents relating to the sale of ▇▇ ▇▇▇▇
Agency, Inc. ("AG") and Aspen Associates, Inc. ("Aspen"): that certain Stock
Purchase Agreement dated February 25, 1997, among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇"), BTH and the Trust; that certain Escrow Agreement dated February 25,
1997, among BTH, the Trust, ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, P.C.; that
certain Covenant Not to Compete among ▇▇▇▇▇▇▇ and ▇.▇. ▇▇▇▇▇▇ Atlanta, Ltd.,
Torrey Homes, Inc., Torrey Development Corporation and Torrey Realty Services,
Inc.; that certain General Release dated February 25, 1997, by ▇▇▇▇▇▇▇; and the
Powers of Attorney to Transfer Stock related to the foregoing documents, all as
held in escrow by ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, P.C. Notwithstanding the foregoing,
none of Saab, the Trust or BTH shall have any present or future liability to
Purchaser under the terms of any of the foregoing documents or agreements;
however, Saab, the Trust and BTH agree to enforce the terms thereof and any and
all obligations thereunder as directed by Purchaser at Purchaser's cost and
expense. Sellers represent and warrant that they transferred all assets which
belonged to AG and Aspen immediately prior to the closing under such documents
other than software and furniture to one of the Corporations. If such closing
does not occur, Sellers shall transfer the stock in AG and Aspen to Purchaser.
3.5 Miscellaneous Torrey Corporation Matters. In connection with The
Torrey Corporation, Saab, the Trust and BTH agree as follows: (a) to cause any
assets of the Partnerships not distributed to their limited partners to be paid
over to one or more of the
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Corporations as agreed with the Purchaser, and (b) upon request of the
Purchaser, to cause an amendment to its articles of incorporation to be filed
deleting the word "Torrey" from its name.
ARTICLE IV
ACCEPTANCE OF SCHEDULES
The Sellers' Schedules of even date herewith, in the form today
delivered by Sellers to Purchaser and attached hereto, are hereby accepted by
Purchaser. The Attachments attached hereto are accepted and agreed to by
Purchaser and Sellers.
ARTICLE V
CONSTRUCTION OF AMENDMENT
5.1 Effect on Agreement. Except as hereby modified, amended or
supplemented, the Agreement shall remain in full force and effect, and any
reference hereafter made by any party hereto to the Agreement shall be deemed to
refer to the same as hereby amended, regardless of whether specific reference is
made hereto.
5.2 Defined Terms. All capitalized terms used herein and not otherwise
defined herein shall have the meaning ascribed thereto in the Agreement.
5.3 Miscellaneous. All terms of construction and interpretation set
forth in the Agreement shall have equal effect in construing this Amendment.
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IN WITNESS WHEREOF, each party has executed and delivered this
Amendment or caused this Amendment to be executed and delivered on its behalf by
a duly authorized officer, all as of the date first written above.
▇.▇. ▇▇▇▇▇▇, INC.
By: \s\
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
[CORPORATE SEAL]
\s\
▇▇▇▇ ▇. ▇▇▇▇▇▇
\s\
▇▇▇▇▇▇▇ ▇. Saab
\s\
▇▇▇▇▇▇▇ ▇. Saab, as Trustee of the ▇▇▇▇▇▇▇ ▇. Saab
Trust Agreement dated February 16, 1987, as amended
\s\
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
\s\
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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