Acquiror Escrow Agreement

Exhibit 10.7


ACQUIROR
ESCROW AGREEMENT


THIS ESCROW AGREEMENT ("Agreement") dated as of June __, 1999 by and among JLL VENTURES (DELAWARE) CORP., a Delaware corporation ("Acquiror"), SYNERGY GROUP INTERNATIONAL, INC., an Arizona corporation ("Synergy"), those stockholders identified on the signature page hereto (the "Signatories") and STOCKTRANS, INC., a Pennsylvania corporation, as escrow agent ("Escrow Agent"). Synergy and the Signatories are hereinafter collectively referred to as the "Shareholders" and individually as a "Shareholder".


WHEREAS, Acquiror, CNF, Inc., a California corporation ("CNF"), and the principal shareholder of CNF are parties to an Agreement and Plan of Merger dated as of April 16, 1999, and as amended thereafter (the "Merger Agreement"), providing for Acquiror's acquisition of all of the issued and outstanding capital stock of CNF; and


WHEREAS, the Merger Agreement provides in Section 1.4(a) for the establishment of an escrow fund (the "Escrow Fund") to be delivered by certain stockholders of Acquiror prior to the closing of the Merger Agreement consisting of 4,000,000 shares of common stock, $.0001 par value per share, of Acquiror (the "Escrow Shares").


NOW, THEREFORE, in consideration of Acquiror and CNF executing the Merger Agreement and of the mutual premises and agreements herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:


1. Definitions, Other Agreements.


(a) All capitalized terms used herein and not otherwise defined herein shall have the respective meanings assigned to such terms in the Merger Agreement.


(b) It is expressly understood and agreed by the parties hereto that all references in this Agreement to the Merger Agreement and to any exhibits to such Merger Agreement are for the convenience of the parties hereto other than the Escrow Agent, and the Escrow Agent shall have no obligations or duties with respect thereto other than the obligation to refer to the Merger Agreement for the purpose of determining the definitions of certain capitalized terms used herein and not otherwise defined herein or to interpret any provisions of such other agreements referred to in this Agreement for purposes of implementation thereof.


2. Appointment of Escrow Agent.


StockTrans, Inc. hereby accepts its appointment as Escrow Agent to serve in accordance with the terms, conditions and provisions of this Agreement. The acceptance by the Escrow Agent of its duties under this Agreement is subject to the terms and conditions set forth at Section 7 hereafter, which the parties to this Agreement hereby agree shall govern and control with respect to the rights, duties, liabilities and immunities of the Escrow Agent.


3. Establishment of Escrow Fund; Power of Attorney.


(a) Pursuant to Section 1.4(a) of the Merger Agreement, at the Closing, Shareholders shall deposit with the Escrow Agent, the Escrow Shares constituting the Escrow Fund in order to secure Acquiror's obligations under Section 5.13 of the Merger Agreement. The Escrow Agent shall hold the Escrow Shares in trust on behalf of the Shareholders, who shall remain the record and beneficial owners of the Escrow Shares comprising the Escrow Fund in the amounts as set forth on the signature page hereof. If dividends are paid or a distribution is made by Acquiror with respect to the Escrow Shares in cash or in property, such dividends or distributions shall be held as a part of the Escrow Fund. In the event of any stock splits, recapitalizations or other adjustments to the capital stock of Acquiror, the resulting number of shares, or other securities into which the Escrow Shares convert, shall be included in the Escrow Fund.


(b) By virtue of the Shareholders' execution of this Escrow Agreement, each of the Shareholders has, without any further act, consented to: (i) the establishment of this escrow pursuant to the Merger Agreement in the manner set forth herein, and (ii) all of the other terms, conditions and limitations in this Agreement.


(c) By virtue of the Shareholders' execution of this Escrow Agreement, each of the Shareholders hereby irrevocably constitutes and appoints the Escrow Agent the true and lawful agent and attorney-in-fact of the Shareholders with respect to all matters arising in connection with this Escrow Agreement, including the administration of the Escrow Fund pursuant to Section 4 below and the subsequent surrender and cancellation of the Escrow Shares pursuant to Section 4 herein.


4. Operation and Administration of the Escrow Fund; Release of Escrow Shares.


(a) To the extent provided herein and in the Merger Agreement, the Escrow Fund shall be established and thereafter applied as set forth in this Section 4 to secure the performance of Acquiror with respect to the completion of the Private Placement pursuant to Section 5.13 of the Merger Agreement.


(b) Upon the closing, if any, with respect to the Private Placement in accordance with Section 5.13 of the Merger Agreement, Synergy, on behalf of the Shareholders, shall deliver an application to the Escrow Agent, with a copy to Acquiror (the "Synergy Application"). The Synergy Application shall set forth the amount of net proceeds raised in the Private Placement, the number of Escrow Shares to be delivered to Shareholders and the number of Escrow Shares to be delivered to the Acquiror, if any, for cancellation as determined pursuant to Section 5.13(b) of the Merger Agreement and, subject to Section 4(e) herein, shall instruct the Escrow Agent to apply the Escrow Shares in the manner set forth in this Section 4.


(c) In the event that fifteen (15) days after expiration of the Offering Period a closing with respect to the Private Placement is not completed in accordance with Section 5.13 of the, Merger Agreement, other than by reason contained within Section 5.13(c) of the Merger Agreement, Acquiror shall deliver an application to the Escrow Agent (the "Acquiror Application"), with a copy to Synergy on behalf of the Shareholders. The Acquiror Application


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shall state that a closing with respect to the Private Placement has not occurred and shall instruct Escrow Agent to apply, subject to Section 4(e) herein, the Escrow Shares in the manner set forth in this Section 4. If a closing with respect to the Private Placement does not occur as a result of the conditions stated within Section 5.13(c) of the Merger Agreement, then, at the time of the occurrence of any of such conditions, Synergy shall make application to the Escrow Agent to release the Escrow Shares in full to the Shareholders. Such application shall also be referred to as the "Synergy Application".


(d) Unless the Escrow Agent is otherwise informed in writing by Synergy (with respect to the Acquiror Application) or by Acquiror (with respect to the Synergy Application) within thirty (30) days from the date of its receipt of either the Acquiror Application or the Synergy Application, as applicable, disputing the direction contained within such application then the Escrow Agent shall apply the Escrow Shares in the manner set forth in either the Acquiror Application or the Synergy Application.


(e) If the Escrow Agent is notified that Synergy (with respect to the Acquiror Application) or Acquiror (with respect to the Synergy Application) in good faith contests the direction contained within such application, then, and in that event, the Escrow Agent shall be permitted to submit the issues in dispute to arbitration in accordance with the provisions of Section 9.8 of the Merger Agreement.


(f) Any cash received in respect of the Escrow Shares (e.g., dividends) shall be placed in an interest bearing account of Escrow Agent and ...