Exhibit 2.2
FIRST AMENDMENT TO MERGER AGREEMENT
This First Amendment to Merger Agreement (this "Amendment") is entered
into as of this 12th day of January, 1998, by and among New Century Financial
Corporation ("Parent"), NC Acquisition Corp. ("Sub"), PWF Corporation ("PWF"),
Xxxx Xxxxx ("Xxxxx") and Xxxx Xxxxxxx ("Xxxxxxx"). This Amendment amends the
Merger Agreement, dated as of December 17, 1997 (the "Merger Agreement"), among
Parent, Sub, PWF, Xxxxx and Redding.
WHEREAS, after the execution of the Merger Agreement, there has been
brought to the attention of the parties to this Amendment an unintentional
omission of certain language from Section 3.6(b) of the Merger Agreement;
WHEREAS, the parties desire to correct such omission by entering into
this Amendment;
WHEREAS, the parties also desire to correct Schedule 5.1 to the Merger
Agreement to reflect that 35,000 shares of common stock of Sub were outstanding
as of December 17, 1997; and
WHEREAS, the parties desire to acknowledge and confirm the amounts
payable to certain designated consultants and/or employees of the Surviving
Corporation that will be deemed "Second Earn-Out Compensation" under the Merger
Agreement.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements herein contained, the parties hereto, intending to be legally
bound, agree as follows:
1. Section 3.6(b) of the Merger Agreement is amended in its entirety
to read as follows:
"(b) Second Earn-Out. If a Triggering Event occurs, Parent shall,
within five (5) days of the determination of the amount thereof in
accordance with Section 3.4, pay each Shareholder his Prorata Share of the
amount equal to (1) the product of (i) the Applicable Percent (as defined
below) of the Second Earn-Out Net Earnings of the Business for the shorter
of (A) the eight (8) completed fiscal quarters immediately preceding the
date of the Triggering Event or (B) the period beginning on the Closing
Date and ending on the last day of the last complete fiscal quarter
preceding the date of the Triggering Event, provided that if there is no
such complete fiscal quarter, the entire period from the Closing Date to
the date of the Triggering Event multiplied by (ii) the Triggered Multiple
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multiplied by (iii) 0.25 minus (2) all amounts paid or payable, if any, as
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Second Earn-Out Compensation. For purposes hereof, "Applicable Percent"
shall mean (A) if, between the Closing Date and the occurrence of the
Triggering Event, there are at least eight completed fiscal quarters, 50%;
and (B) if, between the Closing Date and the occurrence of the Triggering
Event, there are fewer than eight completed fiscal quarters, the percentage
set forth below opposite the applicable number of such completed fiscal
quarters:
Number of Completed Fiscal Quarters: Applicable Percent:
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7 57.143%
6 66.667%
5 80.000%
4 100.000%
3 133.000%
2 200.000%
1 400.000%
Upon any payment by Parent of all of the amounts specified in paragraphs (a) and
(b) of this Section 3.6, Parent shall have no further obligations under this
Article III."
2. Item 2(B) of Schedule 5.1 to the Merger Agreement is amended in
its entirety to read as follows:
"Issued and outstanding shares: 35,000 shares of Common Stock"
3. The parties acknowledge and agree that the amounts payable to the
individuals designated on Schedule 1 attached hereto, pursuant to the Stock
Appreciation Right Agreements to be entered into between Sub and such
individuals, shall be deemed "Second Earn-Out Compensation" under Section 3.2 of
the Merger Agreement.
4. As amended hereby, the Merger Agreement is ratified and confirmed
in all respects.
[This space intentionally left blank]
2
IN WITNESS WHEREOF, Parent, Sub and PWF have caused this Amendment to be
signed by their respective officers thereunto duly authorized, and Xxxxx and
Redding have signed this Amendment, all as of the date first written above.
"PARENT"
NEW CENTURY FINANCIAL CORPORATION,
a Delaware corporation
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
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Title: President
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"ACQUISITION SUBSIDIARY"
NC ACQUISITION CORP.,
a California corporation
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
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Title: President
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"COMPANY"
PWF Corporation,
a California corporation
By: /s/ XXXX XXXXXXX
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Name: Xxxx Xxxxxxx
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Title: President
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/s/ XXXX XXXXX
________________________________
XXXX XXXXX, individually
/s/ XXXX XXXXXXX
________________________________
XXXX XXXXXXX, individually
LIST OF OMITTED SCHEDULE TO
FIRST AMENDMENT TO MERGER AGREEMENT*
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SCHEDULE 1 -- SECOND EARN-OUT COMPENSATION
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* Registrant agrees to furnish supplementally a copy of the omitted Schedule to
the First Amendment to Merger Agreement to the Commission upon request.
