Exhibit 2.2
AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF MERGER
DATED APRIL 16, 1999
BY AND AMONG
JLL VENTURES (DELAWARE) CORP.
JLL VENTURES ACQUISITION CORP.
CNF, INC.
AND
PAUL CHARLES, THE PRINCIPAL SHAREHOLDER
OF CNF, INC.
Dated: May 24, 1999
AMENDMENT NO. 1
TO THE AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 1 (the "Amendment") to that certain AGREEMENT AND
PLAN OF MERGER (the "Agreement") is made and entered into as of May ___, 1999 by
and among JLL VENTURES (DELAWARE) CORP., a Delaware corporation ("Acquiror"),
JLL VENTURES ACQUISITION CORP., a Delaware corporation and wholly owned
subsidiary of Acquiror ("JLL"), CNF, INC., a California corporation ("CNF"), and
PAUL CHARLES, an individual residing at 10931 East Laurel Lane, Scottsdale, AZ
85260, and the principal shareholder of CNF ("Charles" or "Shareholder").
Recitals
WHEREAS, the parties to the Agreement wish to amend the Agreement in
accordance with the following terms and conditions.
NOW, THEREFORE, in consideration of the foregoing premises and
agreements contained herein, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Exhibits and Schedules. The table of Exhibits and Schedules is
hereby amended to delete Exhibit 1.2 (c) - Form of Acquiror Option Agreement in
its entirety and to include the following additional Exhibit:
"Exhibit 5.20 - Form of Proxy"
2. Exhibits and Schedules. The table of Exhibits and Schedules is
hereby amended to include the following additional Schedules:
"Schedule 4.1(f)(iv) - Sublease Agreements
Schedule 4.1(y) - CNF Stock Option Plan
Schedule 5.22 - Personal Guarantees"
3. Recitals. The third "WHEREAS" clause is hereby deleted in its
entirety.
4. Name of Surviving Corporation. Section 1.1(c)(i) is hereby amended
to provide in its entirety as follows:
"JLL shall continue its existence under the laws of the State
of Delaware as the surviving corporation as "CNF Mobile Solutions,
Inc.";"
5. Officers and Directors of JLL and Acquiror. Section 1.1(c)(vii) is
hereby amended to provide in its entirety as follows:
"The officers and directors of each of JLL and
Acquiror shall resign upon the Effective Time and the officers
and directors of the Surviving Corporation and the Acquiror
shall consist of those individuals identified on Schedule
1.1(c)(vii), and such persons shall serve in such positions
for their respective terms provided by law or in the Bylaws of
the Surviving Corporation or Acquiror, as applicable, and
until their respective successors are elected and qualified."
6. Title of Section 1.2. The title of Section 1.2 is hereby amended to
provide in its entirety as follows:
"1.2 Conversion of Stock; Assumption of Outstanding
Options."
7. Assumption of Outstanding Options. Section 1.2(c) is hereby amended
to provide in its entirety as follows:
"(c) Assumption of Outstanding Options. As of the
Closing, there will be outstanding options, warrants or other
rights to purchase an aggregate of 405,658 shares of CNF
Common Stock or approximately 13.96% of the outstanding shares
of CNF Common Stock on a fully diluted basis (collectively,
the "CNF Options" and individually, a "CNF Option"). The CNF
Options were issued under the CNF 1997 Equity Incentive Plan
(the "Plan"). At the Effective Time, Acquiror shall assume the
Plan and all obligations of CNF under the Plan including, but
not limited to, the obligation to issue shares of CNF Common
Stock upon the exercise of the CNF Options. At the Effective
Time, in accordance with the terms of the CNF Options, each
CNF Option shall represent the right to purchase that number
of Preferred Shares equal to the product obtained by
multiplying that number of shares of CNF Common Stock
purchasable upon exercise of such option by 2.0628. The
exercise price of each CNF Option shall be reduced to an
amount equal to the quotient obtained by dividing the current
exercise price of such CNF Option by 2.0628. Schedule 1.2(c)
identifies each holder of a CNF Option, the exercise price and
number of shares of CNF Common Stock issuable upon exercise of
such option prior to the Effective Time and the exercise price
and number of Preferred Shares issuable upon exercise of such
option after the Effective Time."
2
8. Merger Consideration. Sections 1.3(a) and 1.3(b) are hereby amended
to provide in their entirety as follows:
"(a) Subject to the provisions of Section 1.4(b)
hereafter, the Merger Consideration, consisting of the total
purchase price payable to the holders of 100% of the
outstanding CNF Common Stock (the "CNF Shareholders") in
connection with the acquisition by merger of CNF, shall be
delivered and shall consist exclusively of the issuance of
2.0628 newly issued shares of Series A Convertible Preferred
Stock, $.0001 par value per share, of Acquiror (the "Preferred
Shares") for each share of CNF Common Stock outstanding (on a
fully diluted basis), thus resulting in the issuance of
5,163,202 Preferred Shares to the CNF Shareholders at Closing
and the reservation of an additional 836,798 Preferred Shares
issuable upon exercise of the CNF Options resulting in an
aggregate of 6,000,000 Preferred Shares on a fully diluted
basis. The Preferred Shares shall be convertible at the option
of the holder thereof into shares of common stock, $.0001 par
value per share, of Acquiror (the "Common Stock") and have
those rights, preferences and designations set forth in that
certain Certificate of Designation, Preferences and Rights of
Series A Preferred Stock (the "Certificate of Designation"), a
true and correct copy of which is attached hereto and made a
part hereof as Exhibit 1.3(a).
(b) The Merger Consideration shall be allocated among
the CNF Shareholders in the proportion of their share
ownership of the outstanding shares of CNF Common Stock at the
Closing as set forth on Schedule 1.3(b)."
9. Shareholder Shares to be Placed Into Escrow. Section 1.4(b) is
hereby amended to provide in its entirety as follows:
"In order to secure the Shareholder's indemnification
obligations under Article VII hereof, 2,000,000 of the
Preferred Shares issuable to the Shareholder hereunder (the
"Shareholder Indemnification Escrow Shares") shall be placed
into escrow pursuant to the escrow agreement attached hereto
as Schedule 1.4(b) (the "Shareholder Escrow Agreement");
1,000,000 of which shall be retained for a period of six (6)
months after the Closing and 1,000,000 of which shall be
retained for a period of eighteen (18) months after the
Closing. While retained in escrow, the Shareholder shall
retain full voting rights with respect to the Shareholder
Escrow Shares."
10. Closing Transactions. Section 2.2(a)(iii) is hereby deleted in its
entirety.
3
11. Closing Transactions. Section 2.2(b)(i) is hereby amended to
provide in its entirety as follows:
"Subject to Section 1.4(b), Acquiror shall deliver or
shall cause to be delivered to the CNF Shareholders
certificates evidencing 5,163,202 Preferred Shares in payment
of the Purchase Price. 2,000,000 of the Preferred Shares
issuable to the Shareholder shall be delivered into escrow
pursuant to the terms of the Shareholder Escrow Agreement;"
12. Closing Transactions. Section 2.2(b)(ii) is hereby deleted in its
entirety.
13. Closing Transactions. Section 2.2(b)(xvii) is hereby amended to
provide in its entirety as follows:
"Each of the officers and directors of each of
Acquiror and JLL shall have tendered their resignations in
form and substance satisfactory to CNF and the Shareholder;"
14. Representations and Warranties of CNF and Shareholder. Section
4.1(y) is hereby added to provide in its entirety as follows:
"(y) CNF Stock Option Plan. Attached hereto as
Schedule 4.1(y) is a true, correct and complete copy of the
CNF 1997 Equity Incentive Plan (the "Plan"). The Plan is in
full force and effect on and as of the date hereof and has not
been amended, modified, superseded or qualified in any manner
whatsoever. The Plan has been duly adopted by all necessary
corporation action on the part of CNF. All of the CNF Options
were issued under the Plan in accordance with the terms of the
Plan. All CNF Options have been duly and validly authorized by
all necessary corporate action on the part of CNF and have not
been amended, modified, superseded or qualified in any manner
whatsoever."
15. Acquiror Post-Closing Actions. Section 5.1(vii) is hereby amended
to delete the words "CNF Holdings, Inc." and replace them with the words "CNF
Technologies, Inc."
16. Voting Agreement. Section 5.20 is hereby amended to provide in its
entirety as follows:
"(a) Subject to Section 5.20(b) below, until the
later of (i) the completion of audited financial statements of
Acquiror for the fiscal year ending March 31, 2000; or (ii)
June 30, 2000 (the "Term"), those shareholders of Acquiror
holding an aggregate of 2,100,000 shares of Common Stock as of
the Closing identified as signatories to this Amendment (the
"JLL Shareholders") agree to vote all voting securities of
Acquiror owned beneficially or of
4
record by such holder at every Annual Meeting of Stockholders,
at any Special Meeting of Stockholders called for the purpose
of electing members to the Board of Directors, or will act by
written consent or otherwise take such action as is required,
to vote for and elect a Board of Directors in the manner
identified in Section 5.19(a) of this Agreement and not to
take any action inconsistent with Section 5.19 of this
Agreement, including voting any voting securities of Acquiror
to amend the Company's By-laws or Certificate of Incorporation
in a manner inconsistent with Section 5.19.
(b) In the event that the Acquiror issues additional
shares of Common Stock during the Term, it shall cause
shareholders of Acquiror holding that number of additional
shares of Common Stock equal to 50% of the number of
additional shares of Common Stock so issued to be subject to
the provisions of Section 5.20(a). In addition, if during the
Term certain of the Historic Acquiror Shareholders are caused
to surrender certain shares held in escrow or any events occur
such that the Shareholder holds voting power over more than
51% of the total number of Acquiror securities outstanding,
then, and in that event, the number of shares subject to
section 5.20(a) shall be reduced to equal only that number
necessary to grant voting power to the Shareholder (when added
to his then record and beneficial direct or indirect
ownership) equal to 51% of the total voting power of all
outstanding voting securities of Acquiror. Any shares of
Common Stock or other securities of Acquiror issued during the
Term upon exercise of any CNF Options shall be deemed to be
beneficially owned by Shareholder for the purpose of
determining whether Shareholder holds voting power over more
than 51% of the total number of Acquiror securities
outstanding.
17. Indemnification of Certain Obligations. Section 5.22 is hereby
added to provide in its entirety as follows:
"5.22 Indemnification of Certain Obligations. As set
forth on Schedule 5.22, Shareholder, Julie Charles, the wife
of the Shareholder, and David Thompson, the Chief Financial
Officer of CNF are personal guarantors of certain obligations
of CNF outstanding as of the Closing (the "Guarantees"). By
executing below, JLL and Acquiror hereby agree to indemnify,
defend and hold harmless, Shareholder, Julie Charles and David
Thompson from and against any and all demands, claims, actions
or causes of action, judgment, assessments, losses,
liabilities, damages or
5
penalties and reasonable attorneys' fees and related
disbursements incurred by such person which arise out of or
result from any obligation of such person under any of the
Guarantees."
18. Capitalized Terms. All capitalized terms used herein and not
otherwise defined herein shall have the meaning ascribed thereto in the Merger
Agreement.
19. Full Force and Effect. All other provisions in the Merger Agreement
shall remain in full force and effect except those identified within this
Amendment.
20. Counterpart and Facsimile. This Amendment 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.
6
IN WITNESS WHEREOF, Acquiror, JLL, CNF and the Shareholder have caused
this Amendment to be signed by their respective officers hereunto duly
authorized, all as of the date first written above.
JLL VENTURES (DELAWARE) CORP.,
a Delaware Corporation
By: /s/ Vincent J. Marold
---------------------------
Name: Vincent J. Marold
Title: President
JLL VENTURES ACQUISITION CORP.,
a Delaware Corporation
By: /s/ Vincent J. Marold
---------------------------
Name: Vincent J. Marold
Title: President
CNF, INC., a California Corporation
By: /s/ Paul Charles
---------------------------
Name: Paul Charles
Title: President
PAUL CHARLES
/s/ Paul Charles
---------------------------
Signature
7
For the sole purpose of evidencing their agreement to the provisions of
Section 5.20 of the Agreement, the undersigned have executed this Agreement as
of the date first written above.
JLL SHAREHOLDERS
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
8
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
9
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
By:
--------------------------------
Name:
------------------------
Number of Shares of Common Stock:
-------
10
Schedule 4.1(f)(iv)
Sublease Agreements
Sublease of 7722 East Gray Road,
Scottsdale, AZ 85260,
as amended
Located at Pages 02477-02478
of the Due Diligence Binders
11
Schedule 4.1(y)
CNF Stock Option Plan
1997 Equity Incentive Plan
Located at Pages 01574-01590
of the Due Diligence Binders
12
Schedule 5.22
Personal Guarantees
U.S. Small Business Administration Guarantee
Located at Pages 02753-02755
of the Due Diligence Binder
Commercial Guarantee
Loan #SJ02535721
Located at Pages 02757-02760
of the Due Diligence Binder
Commercial Guarantee
Loan #SJ04340901
Located at pages 02762-02768
of the Due Diligence Binder
13