Exhibit No. 10.1
AMENDMENT TO PURCHASE AGREEMENT
This Amendment to Purchase Agreement, dated as of November 13, 1998 (this
"AMENDMENT"), is made by and among Xxxxxx Incorporated ("XXXXXX"), Diamond Key
Homes, Inc., Diamond Key Construction LLC, Xxxxxxx X. Xxxxx ("SELLER") and Xxxx
X. Xxxxx ("XXXXX"). Reference is made to that certain Stock and Membership
Interest Purchase Agreement dated as of October 7, 1998 (as amended hereby, the
"PURCHASE AGREEMENT"), by and among Xxxxxx, Seller, Xxxxx and the other parties
thereto. Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the Purchase Agreement.
1. The Purchase Agreement is hereby amended by the addition thereto of
paragraph (e) to Section 2.3 to read as follows:
(e) Closing Net Book Equity shall be determined after giving effect
to cash distributions by the Company to Seller and by the LLC to
Seller and Xxxxx in an aggregate amount equal to the excess of 42.5%
of the combined estimated book income of the Company and the LLC for
the period January 1, 1998 through November 6, 1998 over the sum of
(i) the aggregate amount of prior cash distributions by the Company to
Seller in respect of Seller's estimated 1998 federal and state income
tax liabilities attributable to net income of the Company and (ii) the
aggregate amount of prior cash distributions by the LLC to Seller and
Xxxxx in respect of Seller's and Xxxxx'x estimated 1998 federal and
state income tax liabilities attributable to net income of the LLC
(all such distributions for tax purposes being collectively, the
"INITIAL DISTRIBUTIONS")
Within 30 days after the Company has filed its 1998 federal Form
1120-S and its Arizona Form 120-S and the LLC has filed its 1998
federal form 1065 and its Arizona Form 165, Closing Net Book Equity
shall be redetermined as if the Initial Distributions by the Company
to Seller and by the LLC to Seller and Xxxxx had been based on the
actual incremental federal and state income tax liabilities of Seller
and Xxxxx attributable to Seller's distributive share of 1998 tax
items of the Company and to Seller's and Xxxxx'x distributive shares
of 1998 tax items of the LLC (such redetermination being, the
"REDETERMINATION").
If the Closing Net Book Equity after the Redetermination is
greater than prior to the Redetermination, Buyer shall pay to Seller
50% of such difference. If the Closing Net Book Equity after the
Redetermination is less than prior to the Redetermination, Seller
shall pay to Buyer 50% of such difference.
2. The Purchase Agreement is hereby amended by the addition thereto
of Section 3.29 to read as follows:
Section 3.29 ADEQUATE FUNDING FOR FUTURE LOT LOANS AND CONSTRUCTION
LOANS
The Company and the LLC have adequate funding commitments, or are
able to obtain adequate funding commitments, without incurring costs
in excess of the financing costs of existing financing, for finished
lot loans and pre-sold homes construction loans, required in the
normal course of business consistent with past practices, for the
sixty day period commencing on the Closing Date, without the use of
any additional funds from Guaranty Federal Bank, F.S.B.
3. The Purchase Agreement is hereby further amended by the amendment
and replacement of Section 4.7 to read as follows:
4.7 FILINGS
Buyer has timely made all filings required under the Securities
Exchange Act of 1934, as amended, and, except as set forth on Schedule
4.7, none of such filings contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
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4. The Purchase Agreement is hereby further amended by the amendment
and replacement of the definition of "Closing Net Book Equity" to read
as follows:
"CLOSING NET BOOK EQUITY" means 150% of the net book equity of
the Company and the LLC determined as of November 6, 1998 by the
Auditors pursuant to Section 2.3 of the Agreement; provided, however,
that in making such determination all monies directly spent and
expenses directly incurred by the Company and the LLC relating to the
Taliverde Lot 94 shall be considered a distribution of equity to
Seller.
5. The Purchase Agreement is hereby further amended to provide that,
notwithstanding anything to the contrary contained in the Purchase
Agreement or herein, Buyer shall not be obligated to deposit the
Closing Escrow Deposit. Any payments to be made upon any adjustments
made pursuant to Section 2.3 of the Purchase Agreement shall be made
directly by Buyer or Seller, as the case may be. Additionally,
notwithstanding anything to the contrary contained in the Purchase
Agreement or herein, any references in the Purchase Agreement to the
"Closing Escrow Deposit" or the "Closing Escrow Deposit Account" shall
be deemed null and void and any provision of the Purchase Agreement
containing any such reference shall be given effect to without taking
into account any such reference.
6. Except with respect to the amendments to the Purchase Agreement
expressly set forth above and except for the Limited Waiver dated
November 13, 1998, by and between Xxxxxx Incorporated, Seller, the
Company and the LLC (a copy of which is attached hereto as EXHIBIT 1),
no provision of the Purchase Agreement is hereby amended or waived.
7. This Amendment may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of
which when executed shall be deemed an original, all of which taken
together shall constitute one and the same Amendment.
XXXXXX INCORPORATED, DIAMOND KEY HOMES, INC.
A Nevada corporation an Arizona corporation
By: By:
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Name: Name:
Title: Title:
XXXXXXX X. XXXXX DIAMOND KEY CONSTRUCTION LLC,
An Arizona limited liability company
By:
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XXXX X. XXXXX
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