EXHIBIT 2.3
AGREEMENT
AGREEMENT made as of the first day of November, 1999, by and among CNF
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), SYNERGY GROUP
INTERNATIONAL, INC., a Nevada corporation ("Synergy"), XXXXXXX XXXXXX, an
individual residing at 0000 Xxxx Xxxxxxx Xxxxx, #000, Xxxxxx, Xxxxxxx 00000
("Xxxxxx"), and XXXX XXXXXXX, an individual residing at 00000 Xxxx Xxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxx 00000 ("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, on April 16, 1999, an Agreement and Plan of Merger was entered
into among JLL Ventures (Delaware) Corp., ("JLL"), JLL Ventures Acquisition
Corp. ("JLL Acquisition"), CNF, INC., a California corporation ("CNF") and Xxxx
Xxxxxxx as the principal shareholder of CNF (the "Original Merger Agreement"),
the purpose of which was to effectuate the merger of CNF with and into JLL
Acquisition (the "Merger");
WHEREAS, on May 24, 1999, the parties to the Original Merger Agreement
entered into Amendment No. 1 to the Agreement and Plan of Merger dated April 16,
1999 ("Amendment No. 1 to the Merger Agreement");
WHEREAS, in connection with the Original Merger Agreement and Amendment No.
1 to the Merger Agreement (referred to in the aggregate as the "Merger
Agreement"), Xxxxxxx entered into an escrow agreement pursuant to which certain
of his shares of JLL were to be placed in escrow for indemnification claims,
among others (the "Shareholder Escrow Agreement"), and certain historic
stockholders of JLL entered into an escrow agreement pursuant to which certain
of their shares of JLL were placed in escrow to assure certain post-closing
placement activities (the "Acquiror Escrow Agreement");
WHEREAS, effective as of June 19, 1999, the Merger was completed (the
"Closing") pursuant to which CNF merged into JLL Acquisition, JLL Acquisition
changed its corporate name to "CNF Mobile Solutions, Inc." and JLL changed its
corporate name to "CNF Technologies, Inc.";
WHEREAS, on July 14, 1999, the Company commenced a private placement of
shares of its common stock in a manner contemplated in the Merger Agreement (the
"Private Placement");
WHEREAS, in order to induce the interest of certain investors to invest in
the Private Placement, the Company and the parties hereto have agreed to modify
certain components of the Private Placement, which, in turn, require an
amendment to certain of the agreements entered into in connection with the
Merger; and
WHEREAS, the parties hereto have agreed to enter into this Agreement
(the "Agreement") which is intended to constitute a formal amendment to the
Original Merger Agreement, Amendment No. 1 to the Merger Agreement, the
Shareholder Escrow Agreement and the Acquiror Escrow Agreement.
NOW THEREFORE, in consideration of the premises and agreements contained
herein, and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Matters of Corporate Governance
(a) Section 5.19 of the Original Merger Agreement shall be deleted in its
entirety, and shall be replaced by the following:
"Until May 19, 2001, Synergy, plus those other shareholders
who execute the signature page hereof, will agree to vote
their shares of common stock of the Company at any regular or
special meeting of its stockholders, or by written consent,
solicitation or otherwise, called or required for the purpose
of electing the Company's Board of Directors, for the
nomination of Xxxxxxx to the Company's Board of Directors
should there be a Board consisting of less than
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five (5) members; and for the nomination of Xxxxxxx and an additional
designee of Xxxxxxx, should the Board consist of five (5) or more
members."
(b) The Company shall amend its bylaws as promptly following the date
hereof as is practicable in order to effectuate the foregoing.
2. Voting Agreement.
Section 5.20 of the Original Merger Agreement and Section 16 of Amendment
No. 1 to the Merger Agreement shall be deleted in their entirety, and that
portion of Amendment No. 1 to the Merger Agreement pursuant to which certain of
the Company's stockholders executed the agreement to evidence their agreement to
the provisions of Section 5.20 shall be null and void.
3. Employment Arrangements.
(a) The Company shall enter into amended employment agreements with Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx and Xxxxxx Xxxxxx Xxxxxx on terms agreed to by the
parties, as evidenced by a Term Sheet dated October 22, 1999.
(b) Xxxxxxx has agreed to relinquish his position as Chief Executive
Officer and to cooperate with the Company's newly constituted Board of Directors
to select a replacement candidate with industry and other corporate experience
deemed acceptable to the investors of the Private Placement.
4. Surrender of Preferred Shares.
(a) In order to accommodate the issuance of equity considerations by the
Company to a new chief executive officer, and to encourage the conversion to
equity of holders of bridge indebtedness, Xxxxxxx agrees to surrender to the
Company for cancellation 1,000,000 shares of Series A Convertible Preferred
Stock (the "Preferred Shares").
(b) The Company agrees to accord to Xxxxxxx' remaining Preferred Shares the
same terms and conditions as may be provided to any other holders of the
Preferred Shares, should the
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Company elect to modify, extend, alter or waive any of the terms and conditions
of the Preferred Shares.
5. Removal of Certain Xxxxxxx Shares Held in Escrow.
(a) Section 9 of Amendment No. 1 to the Merger Agreement shall be modified
such that the 1,000,000 Preferred Shares surrendered according to Section 4 of
this Agreement shall be removed from the Preferred Shares held in escrow for
eighteen (18) months. Accordingly, the Shareholder Escrow Agreement is deemed
amended and modified to the extent necessary to remain consistent with the
above.
6. Private Placement: Modification to Acquiror Escrow.
(a) Section 5.13 of the Original Merger Agreement shall be deleted in its
entirety and shall be replaced by the following:
"(a) After the Closing, the Company shall undertake a private
placement transaction to accredited and institutional investors which
is intended to yield gross proceeds (the "Gross Proceeds") of no less
than $2 million, nor more than $6 million, through the sale of shares
of Common Stock (the "Private Placement"). For the purposes of this
Section 5.13, the term "Gross Proceeds" shall mean cash realized from
the sale of Common Stock, as well as the principal and accrued
interest cancelled by conversion of the Bridge Notes or other
unsecured indebtedness into equity (whether converted at the offering
price or any discount thereto) however issued during the "Offering
Period" (as herein defined). The Private Placement shall be completed
during an offering period (the "Offering Period") commencing July 14,
1999 through February 15, 2000. The Company's obligation to complete
the Private Placement is conditioned upon (i) there being no material
adverse change, or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise,
of CNF Mobile Solutions, Inc. ("CNF"), or the earnings, business
affairs, management or business prospects of CNF; and (ii) there being
no pending material indemnification claim hereunder regarding the
breach of any of the representations, warranties, agreement or
covenants of CNF or Xxxxxxx hereunder on and as of the date of the
closing of the Private Placement. If the Company's Board of Directors
is unable to agree on whether an event set forth in Section 5.13(a)(i)
or 5.13(a)(ii) above has
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occurred, such dispute shall be submitted to arbitration in accordance
with Section 9.8 hereof. The Gross Proceeds of the Private Placement
shall be utilized for working capital purposes and, depending on the
amount of Gross Proceeds, to repay the Bridge Notes which are not
canceled in payment for shares issuable in the Private Placement or
otherwise. The Private Placement may be completed through the use of a
placement agent which is a broker-dealer registered with the
Securities and Exchange Commission and in good standing with the NASD,
upon payment of sales commissions, expenses and warrants which are
reasonable and customary in transactions of this nature.
(b) Subject to Section 5.13(c) below, the Historic Acquiror
Shareholders shall surrender that number of Acquiror Escrow Shares to
the Company for cancellation in accordance with the following:
(i) If Gross Proceeds of less than $2 million are realized
by the Company through either the Private Placement or through
conversion of Bridge Notes or other unsecured indebtedness by
December 6, 1999, the Historic Acquiror Shareholders shall
surrender 2,000,000 shares, and the Acquiror Escrow Agreement
shall terminate thereafter with no further obligation on the
Historic Acquiror Shareholders to surrender any additional
shares;
(ii) If $2 million of Gross Proceeds are raised by December
6, 1999, however, an additional $2 million of Gross Proceeds are
not realized by the Company through either the Private Placement
or through conversion of Bridge Notes or other unsecured
indebtedness by December 15, 1999, the Historic Acquiror
Shareholders shall surrender 1,000,000 shares; and
(iii) If $4 million of Gross Proceeds are raised by December
15, 1999, however, an additional $2 million of Gross Proceeds are
not realized by the Company through either the Private Placement
or through conversion of Bridge Notes or other unsecured
indebtedness by February 15, 2000, the Historic Acquiror
Stockholders shall surrender 1,000,000 shares.
(c) Notwithstanding the provisions of Section 5.13(b) above, the
Historic Acquiror Shareholders shall not be required to surrender any
of the Acquiror Escrow Shares in the event that a closing with respect
to the Private Placement is not completed within fifteen (15) days
after the expiration of the Offering Period as a result of: (i) the
occurrence of any events set forth at Section 5.13(a)(i); (ii) the
occurrence of any events set forth at
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Section 5.13(a)(ii); or (iii) Acquiror or Shareholder failing to
execute a definitive placement agent or similar agreement for the
placement of securities within 30 days from the time first proposed in
writing by any placement agent or broker-dealer in connection with the
Private Placement."
(b) The Acquiror Escrow Agreement shall be deemed amended so as to reflect
terms and conditions consistent with those set forth in Section 5.13(b) of the
Original Merger Agreement, as amended by the foregoing Section 6(a) of this
Agreement.
7. Private Sale of Securities.
Synergy will either purchase, or arrange for the purchase, of 200,000 of
the Preferred Shares owned by Xxxxxxx, at a price of $1.25 per share, within no
more than ninety (90) days of the date the Company first files a registration
statement (on either Form 10 or Form SB-2) with the Securities and Exchange
Commission. The Preferred Shares shall be paid for at least 25% upon the date of
purchase, with the balance paid in three ratable monthly installments
thereafter.
8. Effective Date.
This Agreement shall be of full legal force and effect upon execution,
however, shall automatically terminate and be of no further force and effect,
and all of the actions contained herein shall be rescinded in the event that the
Company does not realize Gross Proceeds of $2 million by December 6, 1999
through the sale of stock in the Private Placement or through the conversion
into equity of Bridge Notes or other unsecured indebtedness.
9. Capitalized Terms.
All capitalized terms utilized herein and not otherwise defined herein,
shall have the meaning ascribed thereto in the Merger Agreement.
10. Full Force and Effect.
All other provisions in the Merger Agreement shall remain in full force and
effect except those identified in this Agreement.
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11. Counterpart and Facsimile.
This Agreement may be executed in two or more counterparts and delivered
via facsimile, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
(This Space Left Blank Intentionally)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date and year first written above.
CNF TECHNOLOGIES, INC.
By: /s/Xxxx Xxxxxxx
-----------------------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
SYNERGY GROUP INTERNATIONAL, INC.
By: /s/Xxxxxxx Xxxxxx
----------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
/s/Xxxxxxx Xxxxxx
----------------------------------------------
Xxxxxxx Xxxxxx, as designee of Acquiror's
Board of Directors pursuant to Section 5.19(a)
of the Original Merger Agreement
/s/Xxxx Xxxxxxx
----------------------------------------------
Xxxx Xxxxxxx
For the sole purpose of acknowledging their agreement to vote their shares in
the manner provided at Section 1(a) of this Agreement:
BY:____________________________ BY:____________________________
Name:__________________________ Name:__________________________
Number of Shares:______________ Number of Shares:______________
BY:____________________________ BY:____________________________
Name:__________________________ Name:__________________________
Number of Shares:______________ Number of Shares:______________
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BY:____________________________ BY:____________________________
Name:__________________________ Name:__________________________
Number of Shares:______________ Number of Shares:______________
BY:____________________________ BY:____________________________
Name:__________________________ Name:__________________________
Number of Shares:______________ Number of Shares:______________
BY:____________________________
Name:__________________________
Number of Shares:______________
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