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EXHIBIT 2.25
AMENDMENT NO. 2 TO MERGER AGREEMENT
AMENDMENT NO. 2, dated as of August 3, 1998 by and among OFFICE CENTRE
CORPORATION, a Delaware corporation ("Buyer"), OFFICE CENTRE SACRAMENTO, a
Delaware corporation ("Acquisition"), SIERRA OFFICE SYSTEMS AND PRODUCTS, INC.,
a California corporation ("Company"), XXXXXXX XXXX, an individual resident in
California, XXXX X. XXXX, XX. and ROSE XXXXX XXXX (each a "Seller" collectively
the "Sellers").
WITNESSETH
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WHEREAS, the parties hereto are parties to that certain merger agreement,
dated as of April 23, 1998 (the "Original Merger Agreement"), as amended on May
20, 1998 (collectively the "Original Agreements"); and
WHEREAS, the parties desire to amend the original Agreements in accordance
with the terms set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. Section 2.7 of the Merger Agreement is hereby deleted in its entirety
and replaced with the following:
2.7 CONVERSION OF COMPANY COMMON STOCK
(a) At the Effective Time, by virtue of the Merger and without any action
on the part of any holder of capital stock of Buyer, Acquisition, the Company or
Sellers; (1) the shares of Common Stock of Acquisition purchased, issued and
outstanding immediately prior to the Effective Time shall be converted as a
result of the Merger and without any action on the part of the holder thereof,
into 1 share of capital stock of the Surviving Corporation, and (2) the shares
of the Company held by Sellers (and the other shareholders of the Company) shall
be converted into and shall become, without further action on the part of the
Sellers and the other shareholders of the Company, the right to receive seven
(7) times the Company's actual adjusted EBITDA (as set forth in Schedule 2.7(a))
for the fiscal year ending March 31, 1998, which shall be composed of the
Company's pre-tax earnings for the fiscal year ending March 31, 1998 plus the
sum of (x) interest in an amount not less than $310,000, (y) depreciation and
amortization in an amount not less than $200,000 and (z) the adjustments listed
on Schedule 2.7(a) in the amount of $217,000, plus the additional consideration
set forth in Section 2.7(b) below (the "Purchase Price"). The Purchase Price
shall be reduced by (a) any amounts outstanding under the Company's line of
credit with San Xxxx National Bank on the Closing Date; (b) any accounts payable
over 30 days on the Closing Date; (c) any negative cash balance per the
Company's financial records on the Closing Date; and (d) the amount of legal
fees and costs incurred by the Company in connection with the negotiation and
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documentation of this Agreement and the Employment Agreement that will have
been paid and/or remain payable on the Closing Date. The Purchase Price shall
be further adjusted (increased or decreased, as the case may be) by the
difference between the amount of accounts receivable (less than 90 days),
inventory and accounts payable on the Closing Date as compared to the amount of
the Company's accounts receivable (less than 90 days), inventory and accounts
payable on December 31, 1997. The consideration shall consist of shares of
restricted Common Stock of Buyer which number of shares of Common Stock shall
be determined by dividing the Purchase Price above by Buyer's initial public
offering price per share (the "IPO Price"), provided, however, that the
consideration to be received by shareholders, other than the Sellers, shall
consist only of cash.
(b) As additional consideration, in connection with that certain
promissory note (the "Promissory Note") issued by Sellers to the Company in the
amount of $875,000 on the date of the Original Merger Agreement and which is
expected to be about $800,000 on the Closing Date, at the Buyer's option, (i)
the Sellers (and the other shareholders of the Company) shall receive $550,000
in cash or (ii) Buyer shall forgive $550,000 of the principal amount of the
Promissory Note, in either case in three (3) equal installments, over a three
(3) year period, beginning one (1) year from the Closing Date.
2. Section 7.11 of the Merger Agreement is hereby deleted in its entirety
and replaced with following:
7.11 PROMISSORY NOTE
Xxxxxxx Xxxx and Company shall have entered into a revised Promissory
Note as of the Closing, which shall provide for interest at the rate of six
percent (6%) per annum, to be paid on the annual anniversary of the revised
Promissory Note, with all principal due and payable on the third anniversary of
such note, and which shall be secured by a number of shares of Buyer's Common
Stock issued to Sellers in this Agreement equal to $250,000 principal amount of
the revised Promissory Note divided by the IPO Price. Such shares shall be
released upon the full payment of such Promissory Note, which may be prepaid
at any time without penalty.
3. The Original Agreements, as hereby amended, shall remain in full
force and effect.
4. This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, but all of
which counterparts shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
OFFICE CENTRE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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OFFICE CENTRE SACRAMENTO
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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SIERRA OFFICE SYSTEMS AND PRODUCTS, INC.
By: /s/ Xxxxxxx Xxxx
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/s/ Xxxxxxx Xxxx
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XXXXXXX XXXX
/s/ Xxxx X. Xxxx, Xx.
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XXXX X. XXXX, XX.
/s/ Rose Xxxxx Xxxx
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ROSE XXXXX XXXX
