EXHIBIT 2.3
AMENDMENT NO. 2 TO AGREEMENT
AND PLAN OF REORGANIZATION
This Amendment No. 2 to the Agreement and Plan of Reorganization (this
"Amendment") dated as of April 20, 2001 by and among XxxxxxxxXxx.xxx, Inc., a
Nevada corporation ("PurchasePro"), NRI Merger Corporation, a Florida
corporation and wholly-owned subsidiary of PurchasePro (the "Merger
Subsidiary"), Net Research, Inc. (d/b/a BayBuilder), a Florida corporation
("NRI"), and Xxx X. Xxxxxx, the majority shareholder of NRI (the "Principal
Shareholder"). PurchasePro, the Merger Subsidiary, NRI and the Principal
Shareholder are collectively referred to herein as the "Parties."
W I T N E S S E T H :
WHEREAS, the parties have previously executed and delivered that
certain Agreement and Plan of Reorganization dated as of March 5, 2001 and as
amended April 17, 2001 (as amended, the "Original Agreement") pursuant to which
the parties agreed to the merger of NRI with and into the Merger Subsidiary (the
"Merger"); and
WHEREAS, the parties desire to amend the Original Agreement as set
forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and mutual agreements,
provisions and covenants contained in this Amendment, the parties hereby agree
as follows:
1. CAPITALIZED TERMS. Unless otherwise defined in this Amendment,
capitalized terms used in this Amendment shall have the meanings set
forth in the Original Agreement.
2. AMENDMENTS.
2.1 Section 1.5(a) of the Original Agreement is hereby amended
to read, in its entirety, as follows:
(a) CONVERSION OF NRI COMMON STOCK. Subject to the
provisions of SECTION 1.8 below, each share of Common Stock, par value
$0.001 per share, of NRI (the "NRI Common Stock") issued and
outstanding immediately prior to the Effective Time (other than any
share held in NRI's treasury) (the "Outstanding NRI Common Stock")
shall be canceled and extinguished and automatically converted into and
represent the right to receive (i) a pro rata portion of Three Million
Dollars ($3,000,000) (the "Cash Consideration") less the Escrow Cash
(as defined in SECTION 1.9 below), and (ii) that number of shares of
Common Stock, par value $0.01 per share, of PurchasePro ("PurchasePro
Common Stock") equal to the Exchange Ratio (as defined below) less the
Escrow
Shares (as defined in SECTION 1.9 below), upon the surrender of
the certificates representing such shares of NRI Common Stock in the
manner provided in SECTION 1.6 below (or in the case of a lost, stolen
or destroyed certificate, in the manner provided in SECTION 1.7 below).
The "Exchange Ratio" means the quotient obtained by dividing (x) the
quotient obtained by dividing Five Million Five Hundred Thousand
Dollars ($5,500,000) by the Outstanding NRI Common Stock by (y) the
average of the closing prices per share of PurchasePro Common Stock as
quoted on the Nasdaq National Market and reported in The Wall Street
Journal for the five (5) trading days immediately preceding (but not
including) the Closing Date (the "Closing Share Price").
2.2 Section 1.6(a) of the Original Agreement is hereby amended
to read, in its entirety, as follows:
(a) EXCHANGE AGENT. PurchasePro shall act as the
exchange agent (in such capacity, the "Exchange Agent") in the Merger.
2.3 Section 1.6(c) of the Original Agreement is hereby amended
to read, in its entirety, as follows:
(c) EXCHANGE PROCEDURES. Immediately after the
Effective Time, the Surviving Corporation shall cause to be mailed to
each holder of record of outstanding shares of NRI Common Stock whose
shares were converted into the right to receive the Merger Shares and
the Cash Consideration pursuant to SECTION 1.5(a), (i) a letter of
transmittal, (ii) an Investment Representation Letter (as defined in
SECTION 1.12 herein), (iii) a Shareholder Waiver Agreement (as defined
in SECTION 5.1(g) herein) and (iv) instructions for use in effecting
the surrender of the Certificates in exchange for certificates
representing shares of Merger Shares (less the Escrow Shares) and Cash
Consideration (less the Escrow Cash). Upon surrender of (i) a
Certificate for cancellation to the Exchange Agent and (ii) such letter
of transmittal, Investment Representation Letter and Shareholder Waiver
Agreement, each duly completed and validly executed in accordance with
the instructions thereto, the holder of such Certificate shall be
entitled to receive in exchange therefor and PurchasePro shall promptly
cause to be issued, a certificate representing the number of whole
shares of Merger Shares (less the Escrow Shares), cash payment in lieu
of fractional shares which such holder has the right to receive
pursuant to SECTION 1.5, and such holder's pro rata portion of the Cash
Consideration (less the Escrow Cash), and the Certificate so
surrendered shall forthwith be canceled. Until so surrendered, each
outstanding Certificate that, prior to the Effective Time, represented
shares of NRI Common Stock will be deemed from and after the Effective
Time, for all corporate purposes, other than the payment of dividends,
to evidence the ownership of the number of full shares of Merger Shares
(less the Escrow Shares), the pro rata portion of the Cash
Consideration (less the Escrow Cash) into which such shares of
PurchasePro Common Stock shall have been so converted and the right to
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receive an amount in cash in lieu of the issuance of any fractional
shares in accordance with SECTION 1.5.
2.4 Section 1.9 of the Original Agreement is hereby amended to
read, in its entirety, as follows:
1.9 ESCROW. On the Closing Date, PurchasePro shall
deliver to the Escrow Agent: (i) Five Hundred Thousand Dollars
($500,000) of the Cash Consideration (the "Escrow Cash") and (ii) that
number of shares of PurchasePro Common Stock equal to Three Hundred
Fifty Thousand Dollars ($350,000), based on the Closing Share Price
(the "Escrow Shares" and together with the Escrow Cash, the "Escrow
Fund") for the purpose of securing the indemnification obligations of
the NRI Common Shareholders (as defined hereinafter) set forth in this
Agreement. The Escrow Cash and the Escrow Shares shall be held by the
Escrow Agent pursuant to the terms of the Indemnity Escrow Agreement
substantially in the form of EXHIBIT A attached hereto (the "Escrow
Agreement") by and among PurchasePro, the Escrow Agent and the
Shareholder Representative (as defined in SECTION 1.11 below).
2.5 Section 1.13 of the Original Agreement is hereby amended
to read, in its entirety, as follows:
1.13 THE CLOSING. The closing of the transactions
contemplated by this Agreement (the "Closing") shall occur commencing
at 5 P.M. on April 20, 2001 in such manner as the Parties mutually
agree (the "Closing Date").
2.6 Section 2.7(g) of the Original Agreement is hereby amended
to read, in its entirety, as follows:
(g) except as otherwise provided in SECTION 4.3(d)
hereof, made any changes in any employee compensation, severance or
termination agreement, commitment or transaction other than routine
salary increases consistent with past practice or offer employment to
any individuals;
2.7 A new Section 2.29 is hereby added to the Original
Agreement to read, in its entirety, as follows:
2.29 XXXXXX PAYMENT. NRI has received and recorded in
its books and records the payment of $37,125 from Xxxxxxxx Xxxxxx for
the shares of NRI Common Stock previously issued to him.
2.8 Section 4.3(d) of the Original Agreement is hereby amended
to read, in its entirety, as follows:
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(d) enter into, adopt or amend any Employee Benefit
Plan or any employment or severance agreement or arrangement of the
type described in SECTION 2.21(k) or increase in any manner the
compensation or fringe benefits of, or materially modify the employment
terms of, its directors, officers or employees, generally or
individually, or pay any bonus or other benefit to its directors,
officers or employees (except for (i) the payment of bonuses of $16,000
each to Xxxxxxxxxxx Xxx and Xxxxxxx Trader, (ii) bonus of $18,000 to
Xxxxxxx Xxxxxxxx, III and (iii) a payment of $37,125 to Xxxxxxxx Xxxxxx
as compensation, which compensation payment is properly recorded in the
NRI's books and records as a compensation payment).
2.9 Section 4.3(m) of the Original Agreement is hereby amended
to read, in its entirety, as follows:
(m) take any action or fail to take any action
permitted by this Agreement with the knowledge that such action or
failure to take action would result in (i) any of the representations
and warranties of NRI set forth in this Agreement becoming untrue or
(ii) any of the deliveries at Closing set forth in ARTICLE V not being
made; or
2.10 Section 4.10 of the Original Agreement is hereby amended
to read, in its entirety, as follows:
4.10 CASH AS OF THE CLOSING DATE. NRI shall have at
least $250,000 in cash as of the Closing Date.
2.11 Article V of the Original Agreement is hereby amended to
read, in its entirety, as follows:
ARTICLE V
CLOSING DELIVERIES
5.1 CLOSING DELIVERIES TO PURCHASEPRO. At the
Closing, NRI shall cause the delivery to PurchasePro of the following
items:
(a) The holders of at least ninety percent
(90%) of the outstanding shares of NRI Common Stock shall have executed
and delivered to PurchasePro the Registration Rights Agreement (either
individually or by proxy) in the form attached hereto as EXHIBIT D (the
"Registration Rights Agreement").
(b) NRI shall have executed and delivered to
PurchasePro and the Merger Subsidiary a certificate (the "NRI
Certificate") in the form of EXHIBIT E attached hereto.
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(c) Each of the NRI Common Shareholders who
have consented to the Merger shall have executed and delivered to
PurchasePro an Investment Representation Letter.
(d) Broad and Xxxxxx, counsel to NRI, shall
execute and deliver to PurchasePro an opinion in the form attached
hereto as EXHIBIT F, addressed to PurchasePro and dated as of the
Closing Date.
(e) NRI's secretary shall execute and
deliver to PurchasePro a certificate in the form of EXHIBIT G attached
hereto, certifying as of the Closing Date (i) a true and complete copy
of the Articles of Incorporation and Bylaws of NRI certified as of a
recent date by the Secretary of State of Florida, (ii) a certificate of
each appropriate Secretary of State certifying the good standing of NRI
in its state of incorporation and all states in which it qualified to
do business, (iii) a true and complete copy of the resolutions of the
board of directors of NRI and the resolutions of the NRI Common
Shareholders, each authorizing this Agreement, the Merger and all the
other documents to be delivered hereunder and duly and validly
approving and adopting, as required by applicable law and, with respect
to the resolutions of the NRI Common Shareholders, by the valid and
affirmative vote of no less than ninety percent (90%) of the
outstanding shares of NRI's capital stock entitled to vote thereon and
(iv) incumbency matters.
(f) The Principal Shareholder shall execute
and deliver to PurchasePro an Employment Agreement with PurchasePro in
the form attached hereto as EXHIBIT H.
(g) Each shareholder of NRI that has
executed the Registration Rights Agreement shall execute and deliver to
PurchasePro a Shareholder Waiver Agreement in the form attached hereto
as EXHIBIT I.
(h) The Escrow Agent and the Shareholder
Representative shall execute and deliver to PurchasePro the Escrow
Agreement.
(i) All officers, employees and consultants
of NRI shall execute and deliver to PurchasePro proprietary information
and inventions agreements in the form attached hereto as EXHIBIT J.
(j) Each of The Timken Company, Dofasco Inc.
and Xxxxx Corning shall execute and deliver to PurchasePro the
applicable Consent to Assignment and Amendment to Service License
Agreement in the form attached hereto as EXHIBIT N.
5.2 CLOSING DELIVERIES TO NRI. At the Closing,
PurchasePro shall cause the delivery to NRI of the following items:
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(a) PurchasePro shall execute and deliver to
NRI a certificate (the "PurchasePro Certificate") in the form attached
hereto as EXHIBIT K.
(b) PurchasePro's Secretary shall execute
and deliver to NRI a certificate in the form of EXHIBIT L attached
hereto, certifying as of the Closing Date (i) a true and complete copy
of the Certificate of Incorporation and Bylaws of PurchasePro certified
as of a recent date by the Secretary of State of Nevada (ii) a
certificate of Secretary of State of Nevada certifying the good
standing of PurchasePro in its state of incorporation, (iii) a true and
complete copy of the resolutions of the board of directors of
PurchasePro, authorizing the execution, delivery and performance of
this Agreement by PurchasePro and (iv) incumbency matters.
(c) Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel to
PurchasePro, shall execute and deliver to NRI an opinion in the form
attached hereto as EXHIBIT M, addressed to NRI and the Principal
Shareholder and dated as of the Closing Date.
(d) PurchasePro shall execute and deliver to
the Shareholder Representative the Registration Rights Agreement and
the Escrow Agreement.
Exhibit N, as referenced above in the revised Section 5.1(j) of the
Original Agreement, is attached hereto as EXHIBIT A.
2.12 Section 6.1 of the Original Agreement is hereby amended
to read, in its entirety, as follows:
6.1 INDEMNIFICATION BY THE PRINCIPAL SHAREHOLDER. The
Principal Shareholder shall indemnify PurchasePro, the Surviving
Corporation and their respective officers, directors, Affiliates,
employees, agents, successors and assigns (collectively the
"PurchasePro Group") in respect of, and hold it harmless against, any
and all debts, obligations and other liabilities (whether absolute,
accrued, contingent, fixed or otherwise, or whether known or unknown,
or due or to become due or otherwise), monetary damages, fines, fees,
penalties, interest obligations, deficiencies, losses and expenses
(including amounts paid in settlement, interest, court costs, costs of
investigators, fees and expenses of attorneys, accountants, financial
advisors and other experts, and other expenses of litigation)
("Damages") incurred or suffered by any member of the PurchasePro Group
thereof resulting from, relating to or constituting:
(a) breach of any covenant, representation,
warranty or agreement made by NRI or the Principal Shareholder in or
pursuant to this Agreement, or in other documents delivered in
connection with the transactions
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contemplated in this Agreement (including, but not limited to, the
Employment Agreement);
(b) any failure of any NRI Common
Shareholder to have good, valid and marketable title to the issued and
outstanding NRI Common Stock issued in the name of such NRI Common
Shareholder, free and clear of all Security Interests and any other
encumbrances;
(c) any claim by a shareholder or former
shareholder of NRI, or any other person or entity, seeking to assert,
or based upon: (i) ownership or rights to ownership of any shares of
stock of NRI; (ii) any rights of a shareholder (other than the right to
receive the Merger Shares pursuant to this Agreement), including any
option, preemptive rights, appraisal or dissenters' rights, or rights
to notice or to vote; (iii) any rights under the Articles of
Incorporation or Bylaws of NRI; or (iv) any claim that, his, her or its
shares were wrongfully repurchased by NRI; or
(d) any Legal Proceedings listed in the
Disclosure Schedule.
2.13 Section 6.5(c) of the Original Agreement is hereby
amended to read, in its entirety, as follows:
(c) CAP AMOUNT. The Principal Shareholder shall have
no liability to any member of the PurchasePro Group, and PurchasePro
shall have no liability to the NRI Common Shareholders, pursuant to
their respective indemnification obligations in this ARTICLE VI to the
extent that the total of all Damages (subject to the threshold
requirements set forth in SECTION 6.5(b) above) paid by such
indemnifying party pursuant to such indemnification obligations exceeds
Eight Million Five Hundred Thousand Dollars ($8,500,000) in the
aggregate.
2.14 Article VII of the Original Agreement is hereby deleted
in its entirety.
3. EXHIBITS TO ORIGINAL AGREEMENT. The Exhibits to the Original Agreement
shall be revised to reflect the execution of this Amendment. The
Registration Rights Agreement shall also be revised to require
PurchasePro to satisfy certain registration obligations within ninety
(90) days of the Closing Date. The Escrow Agreement shall also be
revised to reflect the provisions of SECTION 2.4 of this Amendment and
changes consistent therewith. In addition, the NRI Certificate shall
also be revised to include a certification by NRI that all Derivative
Securities have been terminated or converted into NRI Common Stock.
4. GOVERNING LAW. This Amendment shall be governed by the laws of the
State of Nevada.
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5. ORIGINAL AGREEMENT. Except as expressly amended hereby, the Original
Agreement remains in full force and effect.
6. COUNTERPARTS. This Amendment may be executed in one or more
counterparts each of which shall be deemed an original and all of which
together will constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
XXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxx XxXxxx
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Name: Xxxxx XxXxxx
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Title: President
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NRI MERGER CORPORATION
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Title: President
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NET RESEARCH, INC. (D/B/A BAYBUILDER)
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
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Title: President
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PRINCIPAL SHAREHOLDER
/s/ Xxx X. Xxxxxx
-------------------------------------
Xxx X. Xxxxxx
[Signature Page to Amendment No. 2 to Agreement and Plan of Reorganization]
EXHIBIT A
EXHIBIT N To the Original Agreement
Consent to Assignment and Amendment to Service License Agreement
[See Attached]
A-1
