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EXHIBIT 2.2
AMENDMENT NO. 1
THIS AMENDMENT NO. 1 (the "AMENDMENT") to that certain Assets Purchase
Agreement (the "AGREEMENT") dated August 15, 1997, by and among New Arts
Acquisition, Inc., a Delaware corporation ("New Arts"), National Insurance
Group, a California corporation ("XXXX"), American Realty Tax Services, Inc., a
Virginia corporation ("ARTS"), American Realty Tax Services of New York, Inc., a
Virginia corporation ("ARTS-NY" and, together with ARTS, the "Seller"), and the
stockholders named therein (the "Stockholders"), is made and entered into as of
September 18, 1997 by the parties to the Agreement, Pinnacle American Realty Tax
Services, Inc., a wholly owned subsidiary of New Arts ("PARTS"), and Pinnacle
American Realty Tax Services of New York, Inc., a wholly owned subsidiary of New
Arts ("PARTS-NY"). New Arts, PARTS and PARTS-NY are collectively referred to
herein as "Purchaser." Capitalized terms used but not defined herein shall have
the meanings assigned thereto in the Agreement.
WHEREAS, the parties to the Agreement desire to amend the Agreement in
accordance with the provisions of Section 11.17 thereof; and
WHEREAS, the parties to the Agreement desire to clarify certain of the
provisions thereof.
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereto, intending to be legally and equitably bound, agree as
follows:
1. Closing. The Closing Date shall be September 18, 1997,
effective 12:01 a.m., Virginia time.
2. New Arts Election. Pursuant to Section 2.1 of the Agreement,
New Arts hereby assigns (the "Assignment") its rights to receive the Purchased
Assets to PARTS and PARTS-NY, in each case consistent with paragraph 3 below.
3. Agreement to be Bound. Pursuant to the Assignment, (a) Arts
will sell, transfer, convey, assign and deliver to PARTS all of the Purchased
Assets that Arts has a right, title or interest to or in and whether or not used
in ARTS' business and (b) ARTS-NY will sell, transfer, convey, assign and
deliver to PARTS-NY all of the Purchased Assets that ARTS-NY has a right, title
or interest to or in and whether or not used in ARTS-NY's business. Each of
PARTS and PARTS-NY agrees to be bound by the terms of the Agreement as if it
were the Purchaser under the Agreement; provided, however, that the agreement of
PARTS extends only to the Purchased Assets and Assumed Liabilities of Arts, and
all representations, warranties, covenants, obligations, understandings, and
agreements relating thereto, and the agreement of PARTS-NY extends only to the
Purchased Assets and Assumed Liabilities of ARTS-NY and all representations,
warranties, covenants, obligations, understandings, and agreements relating
thereto.
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4. Seller Third Party Consents. Purchaser acknowledges and agrees
that certain of the Seller Third Party Consents have not been obtained as of the
Closing Date. Purchaser hereby waives this closing condition and agrees to hold
Seller and the Stockholders harmless for any Damages incurred by Purchaser as a
result of the failure to obtain such consents. Notwithstanding the foregoing,
following Closing Seller and the Stockholders agree to reasonably cooperate with
Purchaser in order to obtain such Seller Third Party Consents as provided in
Section 6.6 of the Agreement.
5. No Waivers. Except as set forth in paragraph 4 above and
except for the items described on Exhibit A hereto, each of the undersigned
acknowledges and agrees that Purchaser is not intending to, nor is it, waiving
or relinquishing any of its rights under the Agreement, including, without
limitation, its right to seek indemnification under Section 9 of the Agreement
(subject to the terms and conditions of the Agreement) for (i) any breach of any
representation or warranty of the Stockholder or Seller set forth in the
Agreement or any certificate delivered by or on behalf of any Stockholder or
Seller in connection therewith, (ii) any nonfulfillment of any covenant or
agreement on the part of the Stockholders or, prior to the Closing Date, the
Seller, in the Agreement or (iii) any Excluded Liability. Stockholders and
Seller further acknowledge and agree that no such waiver has occurred by reason
of XXXX'x or Purchaser's knowledge of any such breach or non-fulfillment,
regardless of whether Purchaser has notified Seller and Stockholders thereof.
6. Fleet. Purchaser agrees to assume all Liabilities for tax
penalties or base erroneous payments relating to the life of loan contract
between Seller and Fleet Real Estate Funding Corp., dated January 1, 1993, and
amended January 7, 1997. In consideration for the foregoing assumption by
Purchaser, the parties agree that the number $7,267,942 set forth in Section
2.2(c) of the Agreement shall be reduced by $125,000 to $7,142,942.
7. State Sales and Use Taxes. Section 9.5 of the Agreement is
amended by adding the following sentence to the end thereof: "Anything to the
contrary contained herein notwithstanding, the representations, warranties and
obligations of Seller contained in Appendix A.21 to the Agreement shall, as to
state sales and use taxes only survive for five (5) years after Closing."
XXXX and Purchaser covenant and agree that XXXX and Purchaser and their
Affiliates, agents and representatives, accountants or other tax professionals
shall not take any Prohibitive Action, and that neither Seller nor the
Stockholders shall be liable for indemnification of Purchaser for any tax
liability assessed against Purchaser as a result of any Prohibited Action by
XXXX or Purchaser or their Affiliates, agents or representatives, accountants or
other tax professionals. A "Prohibited Action" is a request for a certificate of
tax clearance, or the filing of an amended return on behalf of Seller, or a
request for an audit or review by any taxing authority of any return filed by or
on behalf of Seller; provided, however, that, notwithstanding the foregoing,
Prohibited Action does not include the filing of any return or other document
that Purchaser reasonably concludes is required by law with any federal, state
or local
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government or taxing authorities following the Closing with respect to matters
arising after the Closing, or participating in or responding to any audit by,
request for information from, or other investigation conducted by, any federal,
state or local government or taxing authority.
8. Schedule 2.1(c). Schedule 2.1(c) (relating to Assumed
Liabilities) is amended and restated in its entirety in the form attached hereto
as Exhibit B
9. Excluded Liabilities. Without in any way limiting the
definition of "Excluded Liabilities" set forth in Section 2.1(d) of the
Agreement, Seller and the Stockholders acknowledge and agree that all and each
of the following are Excluded Liabilities: (i) the items identified on Schedule
A.20 and (ii) liability, if any, relating to the termination of Xxxxx Xxxxxxx.
10. Accounts Receivable. Seller and the Stockholders represent and
warrant that Exhibit C attached hereto is a true and complete list of all of
Seller's accounts receivable as of September 17, 1997. Seller and the
Stockholders acknowledge and agree that Purchaser is acquiring these accounts
receivable.
11. Accounts Payable. Seller and the Stockholders acknowledge and
agree that Seller is responsible for satisfying all accounts payable set forth
on Exhibit D hereto. Purchaser acknowledges and agrees to be responsible for
accounts payable set forth on Exhibit E hereto.
12. Payroll. Purchaser acknowledges and agrees that it is
responsible for paying Seller's payroll in the amount of $113,950 for the two
weeks ended September 19, 1997.
13. Clarification of Agreement. The parties agree to the following
clarifications of the Agreement:
a. In Section 2.2(b)(iii) the reference to "cash. . . "
should be to "cash and cash equivalents. . . "
b. The reference to "s" following the words ", in the
sole discretion" in Section 2.1(b)(iv) should be to "elects."
c. The last phrase of Section 2.2(d)(3) should read
"(ii) issue to Seller a Purchaser Note in the face amount of $2,000,000
minus an amount equal to the principal payments, if any, paid to Seller
on May 25, 1998, pursuant to subsection (i) immediately above."
d. The last phrase of Section 2.2(d)(4) should read
"(ii) issue to Seller a Purchaser Note in the face amount of $1,145,000
minus an amount equal to the principal payments, if any, paid to Seller
on May 25, 1998, pursuant to subsection (i) immediately above."
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14. Effect of Amendment. This Amendment supersedes the Agreement
with respect to the explicit subject matter hereof. To the extent not amended
hereby, the Agreement remains in full force and effect.
15. Counterparts. This Amendment may be executed in counterparts,
together constituting one instrument.
Signatures next page.
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IN WITNESS WHEREOF, Seller, New Arts, XXXX, PARTS and PARTS-NY have
caused their duly authorized representatives to have, and the Stockholders each
have, executed this Amendment as of the day and year first above written.
SELLER:
AMERICAN REALTY TAX SERVICES, INC.,
a Virginia corporation
/s/ Xxxxxx X. Xxxxxxxx
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By: Xxxxxx X. Xxxxxxxx
Its: President
AMERICAN REALTY TAX SERVICES
OF NEW YORK, INC.,
a Virginia corporation
/s/ Xxxxx X. Xxxxxxxx
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By: Xxxxxx X. Xxxxxxxx
Its: President
STOCKHOLDERS:
XXXXXX X. XXXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
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XXXXXXX X. XXXXXXXX
/s/ Xxxxxxx X. Xxxxxxxx
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XXXXX X. XXXXXXXX
/s/ Xxxxx X. Xxxxxxxx
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Signatures continued next page.
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NEW ARTS ACQUISITION, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxx
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Its: President
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NATIONAL INSURANCE GROUP,
a California corporation
By: /s/ Xxxxx X. Xxxx
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Its: President
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PINNACLE AMERICAN REALTY TAX
SERVICES, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxx
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Its: President
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PINNACLE AMERICAN REALTY TAX
SERVICES OF NEW YORK, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxx
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Its: President
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