1
EXHIBIT 2.8
XXXXXX FIRST AMENDMENT EXECUTION VERSION
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated as of April
24, 1998, is by and among Provant, Inc., a Delaware corporation, Xxxxxx
Acquisition Corp., a Delaware corporation, X. Xxxxxx & Associates, Inc., a
Massachusetts corporation, Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxxx, Xxxx X. Xxxxxxxx
and Xxxxxxx X. Xxxxxxx (collectively, the "Parties").
WHEREAS, the Parties constitute all of the parties to that certain
Agreement and Plan of Merger dated as of February 12, 1998 by and among the
Parties (the "Merger Agreement"); and
WHEREAS, the Parties desire to amend the Merger Agreement in certain
respects, as set forth herein;
NOW, THEREFORE, in consideration of the mutual benefits to be obtained
by the consummation of the transactions contemplated by the Merger Agreement,
and for other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
1. All capitalized terms used but not defined herein shall have the
definitions given to them in the Merger Agreement. All references to Sections
and subsections shall mean Sections and subsections of the Merger Agreement
unless otherwise specified.
2. There is hereby inserted in the Merger Agreement a new Section 1.17A,
as follows:
1.17A "1999 EBIT" means the earnings before interest and taxes
of the Surviving Corporation for the period beginning July 1, 1998 and
ending at June 30, 1999, determined in accordance with the Instructions
for Determination of EBIT attached hereto as Exhibit 1.
3. There is hereby inserted in the Merger Agreement a new Section 1.27A,
as follows:
1.27A "1999 Market Price" means the average closing price of
Provant Common Stock on the Nasdaq National Market (or such other
market or exchange as is then the principal market or exchange on which
the Provant Common Stock is traded) during the twenty trading days
immediately following Provant's first public announcement of its
financial results for its fiscal year ending June 30, 1999.
2
4. Subsection 2.7(c) is hereby amended by substituting, in clause (i)
thereof, the figure $4.9 million in lieu of the figure $5.9 million currently
contained therein.
5. Section 2.8 is hereby amended by deleting the existing text of such
Section in its entirety and by substituting, in lieu thereof, the following:
2.8 RIGHT TO RECEIVE ADDITIONAL SHARES.
(a) Promptly following June 30, 1999 (but in no event later
than October 15, 1999), Provant will determine 1999 EBIT.
(I) In the event 1999 EBIT is $1.18 million or less, no
Additional Shares shall be issued in respect of the Shares.
(II) In the event 1999 EBIT is greater than $1.18
million but less than $1.84 million, there shall be issued in
respect of each Share that number of Additional Shares
determined by (A) multiplying $4.3 million by a fraction, the
numerator of which shall be the amount by which 1999 EBIT
exceeds $1.18 million and the denominator of which shall be
$660,000, (B) dividing the product obtained pursuant to clause
(A) by the 1999 Market Price, and (C) multiplying the quotient
obtained pursuant to clause (B) by the Fraction.
(III) In the event 1999 EBIT equals or exceeds $1.84
million, there shall be issued in respect of each Share that
number of Additional Shares determined by multiplying the
Fraction times the quotient obtained by dividing $4.3 million
by the 1999 Market Price.
Provant shall not issue any fractional share of Provant Common Stock;
in lieu of issuing a fractional share, Provant shall make a cash
payment in accordance with Section 2.9.
(b) No later than October 15, 1999, Provant shall deliver to
each former stockholder of the Company a statement showing in
reasonable detail Provant's computation of 1999 EBIT. Provant shall
maintain, and shall cause the Surviving Corporation to maintain,
complete books and records necessary for the proper computation of 1999
EBIT. The Stockholders (and only the Stockholders, acting jointly as
representatives of all former stockholders of the Company, as provided
in subsection (g) below) shall have the right at their expense, through
an independent certified public accountant reasonably acceptable to
Provant, to audit the books and records of the Surviving Corporation
solely for the purpose
-2-
3
of determining the accuracy of the computation of 1999 EBIT made by
Provant, and the Surviving Corporation and Provant shall cooperate
fully in all reasonable respects with any such audit. In no event shall
the Stockholders, or either of them, have the right to conduct more
than one such audit. If the Stockholders do not elect within 90 days of
delivery of the statement of Provant referred to in this subsection (b)
to cause an audit of the books and records of the Surviving Corporation
as provided herein, the Stockholders, on their behalf and on behalf of
all former holders of Shares, shall be deemed to have agreed that such
statement was correct in all respects. Unless the Stockholders have
asserted a dispute with respect to Provant's calculation of the 1999
EBIT in accordance with subsection (c), Provant shall cause the escrow
agent referred to in subsection (d) to release from escrow and deliver
any Additional Shares due pursuant to subsection (a) within ten (10)
days after (x) the expiration of the 90-day period referenced in the
immediately preceding sentence or, if earlier, Provant's receipt of
written confirmation from the Stockholders (as representatives of all
former stockholders of the Company) that the Stockholders do not
dispute Provant's calculation of the 1999 EBIT.
(c) Any dispute as to the correct computation of 1999 EBIT
shall be referred to the First Accountants for determination. If the
Stockholders do not elect to dispute the First Accountants'
determination of 1999 EBIT within 30 days following the delivery
thereof to the Stockholders, such determination shall be final, binding
and conclusive and shall not be subject to challenge by Provant, either
Stockholder or any other former Stockholder of the Company, and in such
event the fees and expenses of the First Accountants shall be borne by
Provant. In the event the Stockholders do unanimously elect within such
30 day period to dispute the determination of the First Accountants,
the Stockholders shall specify the amount (in dollars) that they
contend to be the correct 1999 EBIT (the Stockholders' "EBIT
Position"), and the final calculation of 1999 EBIT shall be referred to
the Second Accountants. Absent manifest error or willful misconduct,
the determination of the Second Accountants shall be final, binding and
conclusive and shall not be subject to challenge by Provant, either
Stockholder or any other former stockholder of the Company. In the
event the calculation of 1999 EBIT is referred to the Second
Accountants, the fees and expenses of both the First Accountants and
the Second Accountants shall be borne by that party (i.e., the
Stockholders, jointly and severally, or Provant) whose EBIT Position is
furthest, in gross dollars, from the 1999 EBIT as finally determined by
the Second Accountants. For purposes of the preceding sentence,
Provant's "EBIT Position" shall be deemed to be the amount determined
by the First Accountants to be the 1999 EBIT. The parties recognize
that in making such determinations, each such firm of accountants will
be performing a function separate and distinct from their audit
function, if any, and shall be entitled to the immunities, rights and
discretion of arbitrators in general. Any issuance and payment of
Additional
-3-
4
Shares (or cash in lieu of fractional Additional Shares) which is
finally determined to be due to the former holders of Shares in
accordance with this subsection (c) shall be made by Provant (i) if
based on the determination of the First Accountants, within 10 days
after such determination becomes final, and (ii) if based on the
determination of the Second Accountants, within 10 days after Provant
receives notice of such determination, if Provant is responsible for
the fees and expenses of the accountants pursuant to this Section, and
within 10 days after the Stockholders have paid the fees and expenses
of the accountants, if the Stockholders are responsible for such fees
and expenses pursuant to this Section.
(d) Prior to the first anniversary of the Effective Time,
Provant shall issue and place into escrow, with an institutional escrow
agent reasonably selected by Provant, the number of shares of Provant
Common Stock that Provant then estimates (based on the year-to-date
EBIT of the Surviving Corporation and Provant's projection for the
remainder of the 1999 fiscal year) will be issued as Additional Shares.
Such shares of Provant Common Stock shall be held in escrow pending
final determination of 1999 EBIT, upon which the final number of shares
constituting Additional Shares, if any, shall be released from escrow
to the former stockholders of the Company and any escrowed shares not
distributed as Additional Shares shall be released to Provant. If and
to the extent the escrowed shares are less than the final amount of
Additional Shares as finally determined pursuant to subsection (b) or
(c) above, Provant shall issue additional shares of Provant Common
Stock as necessary. The expenses of the escrow agent shall be paid by
Provant, except that if the determination of 1999 EBIT is referred to
the Second Accountants, the incremental expenses of the escrow agent
for the period following such referral shall be allocated in the same
manner as the expenses of the Second Accountants, as set forth in
subsection (c).
(e) The Stockholders acknowledge and agree, on behalf of
themselves and the other stockholders of the Company, that Provant and
the Surviving Corporation shall be free to pursue their respective
business goals and that 1999 EBIT may be affected thereby.
Notwithstanding the foregoing, Provant hereby agrees that it will take
no action and adopt no policy (and will not cause the Surviving
Corporation to take any action or adopt any policy) during the period
from the Effective Time through June 30, 1999 that a
majority-in-interest of the former stockholders of the Company have
reasonably asserted (in advance of or contemporaneously with such
action or adoption), in good faith and in writing, can reasonably be
expected to result (directly or indirectly) in a reduction of 1999
EBIT.
-4-
5
(f) The right of the stockholders of the Company to receive
Additional Shares and/or cash payment for fractional shares may not be
transferred or assigned except by operation of law or pursuant to the
laws of descent and distribution.
(g) The Stockholders are hereby appointed as the
representatives of all stockholders of the Company for purposes of this
Section 2.8. No Stockholder shall have any liability to any other
holder of Shares, including any other Stockholder, for any action taken
or position asserted (or any failure to act or to assert any position)
pursuant to this Section 2.8, provided only that such Stockholder has
acted in a manner he believed in good faith to be in the interest of
all holders of Shares.
6. The title to Exhibit 1 to the Merger Agreement is hereby amended to
read: "Instructions for Determination of 1998 and 0000 XXXX," and all references
in such Exhibit 1 to "1998 EBIT" shall be amended to read "1998 and 1999 EBIT".
7. Provant, Acquisition and the Provant Principals hereby waive the
closing condition set forth in Section 7.1(b) solely with respect to the
requirements contained therein that the Company have (a) projected pro forma
revenues for the 12 months ending June 30, 1998 ("1998 Revenues") of not less
than $7.8 million, and (b) projected 1998 EBIT of not less than $1.02 million
(in each case calculated in the manner provided in Section 1.21), provided that,
in lieu of such requirements, the Company have 1998 Revenues of not less than
$6.5 million and 1998 EBIT of not less than $600,000, in each case calculated in
the foregoing manner.
8. Except as expressly amended in this Amendment, the Merger Agreement
is hereby reaffirmed by each of the Parties and remains in full force and
effect.
[remainder of page intentionally blank]
-5-
6
IN WITNESS WHEREOF, and intending to be legally bound hereby, each of
the Parties has caused this Amendment to be executed under seal on its behalf,
by its officers thereunto duly authorized where applicable, all as of the day
and year first above written.
PROVANT, INC.
By:
Name:______________________________
Title:
XXXXXX ACQUISITION CORP.
By:
Name:______________________________
Title:
X. XXXXXX & ASSOCIATES, INC.
By:________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and Chief Executive
Officer
STOCKHOLDERS:
___________________________________
XXXXXXX X. XXXXXX
___________________________________
XXXX X. XXXXXXX
7
PROVANT PRINCIPALS:
___________________________________
XXXX X. XXXXXXXX
___________________________________
XXXXXXX X. XXXXXXX
