SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) October 10, 1996
AMERTRANZ WORLDWIDE HOLDING CORP.
(Exact name of Registrant as specified in charter)
Delaware 0001-14474 11-3309110
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification
Number)
2001 Marcus Avenue
Lake Success, New York 11042
(516) 326-9000
(Address, including zip code and telephone number, including area code, of
Registrant's principal executive offices)
Not Applicable
(Former name or former address of Registrant, if changed since last report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets.
On October 10, 1996, Consolidated Air Services, Inc., an Arizona
Corporation ("Consolidated") merged (the "Merger") with and into Amertranz
Worldwide Holding Corp. (the "Company") pursuant to the terms of an Agreement of
Merger dated as of September 30, 1996 (the "Agreement of Merger").
Consolidated was engaged in the freight forwarding business with
offices in the Los Angeles, California area, Scottsdale, Arizona and Newark, New
Jersey. For the 12-month period ended June 30, 1996, Consolidated had net sales
of $5,995,000, and net income of $347,000. Pursuant to the Merger, the Company
acquired all of the assets of Consolidated, consisting principally of office and
freight forwarding assets, accounts receivable and customer lists, and assumed
all of Consolidated's liabilities.
Prior to the Merger, all issued and outstanding stock of Consolidated
was owned by David W. Hockersmith and Douglas E. Hockersmith (collectively, the
"Consolidated Stockholders"). In the Merger, all of the issued and outstanding
shares of Consolidated were exchanged for an aggregate of 20,000 shares of the
Company's Class B Preferred Stock. Each share of the Company's Class B Preferred
Stock is convertible, at the option of the holder thereof at any time after
October 10, 1997, into 10 shares of the Company's Common Stock. In addition, the
Company issued a promissory note to the Consolidated Stockholders in the
aggregate principal amount of $150,000.
Pursuant to the terms of the Agreement of Merger, the Consolidated
Stockholders will receive up to an additional 50,000 shares of the Company's
Common Stock in the aggregate if, following the Merger, the Company meets
certain revenue targets as set forth in the Agreement of Merger.
Subsequent to June 30, 1996 (the date of Consolidated's financial
statements included herewith) and prior to the Merger, Consolidated distributed
to the Consolidated Stockholders $640,000 representing part of Consolidated's
accumulated subchapter S earnings. This distribution was made $40,000 in cash,
and $600,000 pursuant to the terms of a promissory note. As part of the Merger,
the Company assumed this obligation along with all other obligations of
Consolidated.
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Item 7. Financial Statements and Exhibits.
The following financial statements, pro forma financial information and
exhibits are filed herewith and set forth following the signatures hereto:
PAGE
(a) Financial Statements of Business Acquired
CONSOLIDATED AIR SERVICES, INC.
Report of Independent Public Accountants F-1
Balance Sheet as of June 30, 1996 F-2
Statement of Operations for the Year Ended June 30, 1996 F-3
Statement of Shareholders' Equity for the Year Ended June 30, 1996 F-4
Statement of Cash Flows for the Year Ended June 30, 1996 F-5
Notes to Financial Statements F-6
PAGE
(b) Pro Forma Financial Information
AMERTRANZ WORLDWIDE HOLDING CORP.
The Company has not completed the preparation of the pro forma
financial information required by this Item. The Company will file an amendment
to this current report on Form 8-K containing such pro forma financial
information, if so required, not later than 60 days after this current report on
Form 8-K is due.
(c) Exhibits
The following exhibit is filed herewith:
Exhibit No.
- - - -----------
2.1 Agreement of Merger dated as of September 30, 1996 by and E-1
among Amertranz Worldwide, Inc., a Delaware corporation;
Amertranz Worldwide Holding Corp., a Delaware corporation;
Consolidated Air Services, Inc., an Arizona corporation; and
David W. Hockersmith and Douglas E. Hockersmith
Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and exhibits to the
Agreement of Merger are briefly described on the index thereto (on page E-37)
but have been omitted from this filing. The Company will furnish supplementally
a copy of any omitted schedule or exhibit to the Commission upon request.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERTRANZ WORLDWIDE HOLDING CORP.
Date: October 21, 1996 By: /s/ Stuart Hettleman
---------------------------------
Stuart Hettleman, President
C66364.198
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Consolidated Air Services, Inc.:
We have audited the accompanying balance sheet of CONSOLIDATED AIR SERVICES,
INC. (an Arizona S corporation) as of June 30, 1996, and the related statements
of operations, shareholders' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Consolidated Air Services, Inc.
as of June 30, 1996, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Phoenix, Arizona,
September 12, 1996.
F-1
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CONSOLIDATED AIR SERVICES, INC.
BALANCE SHEET
JUNE 30, 1996
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 253,729
Accounts receivable, net of allowance for doubtful accounts
of $12,000 646,675
Prepaid expenses 39,211
----------
Total current assets 939,615
PROPERTY AND EQUIPMENT, net 148,431
OTHER ASSETS 50,228
----------
$1,138,274
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 228,355
Accrued expenses 168,063
----------
Total current liabilities 396,418
----------
SHAREHOLDERS' EQUITY:
Common stock, $1 par value, 1,000 shares issued and
outstanding 1,000
Retained earnings 740,856
----------
Total shareholders' equity 741,856
----------
$1,138,274
==========
The accompanying notes to financial statements are an integral part
of this balance sheet.
F-2
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CONSOLIDATED AIR SERVICES, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1996
NET SALES $ 5,995,390
COST OF SALES 3,180,125
--------------
Gross profit 2,815,265
GENERAL AND ADMINISTRATIVE EXPENSES 2,479,393
--------------
Income from operations 335,872
OTHER INCOME (EXPENSE):
Interest 12,608
Other (1,143)
--------------
NET INCOME $ 347,337
==============
The accompanying notes to financial statements are an integral
part of this statement.
F-3
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CONSOLIDATED AIR SERVICES, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED JUNE 30, 1996
Common Retained
Stock Earnings Total
----- -------- -----
BALANCE AT JUNE 30, 1995 $ 1,000 $ 722,519 $ 723,519
Net income - 347,337 347,337
Distributions to shareholders - (329,000) (329,000)
----------- ------------ ------------
BALANCE AT JUNE 30, 1996 $ 1,000 $ 740,856 $ 741,856
=========== ============ ============
The accompanying notes to financial statements are an integral
part of this statement.
F-4
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CONSOLIDATED AIR SERVICES, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 347,337
Adjustments to reconcile net income to net cash
provided by operating activities-
Depreciation 46,154
Changes in certain assets and liabilities-
Accounts receivable 126,685
Prepaid expenses (48,077)
Accounts payable (42,670)
Accrued expenses 11,797
-------------
Net cash provided by operating activities 441,226
-------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (76,949)
Net cash used in investing activities (76,949)
-------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease (5,856)
Distributions to shareholders (329,000)
Net cash used in financing activities (334,856)
-------------
Net increase in cash and cash equivalents 29,421
CASH AND CASH EQUIVALENTS, beginning of year 224,308
-------------
CASH AND CASH EQUIVALENTS, end of year $ 253,729
=============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $ 875
=============
The accompanying notes to financial statements are an integral
part of this statement.
F-5
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CONSOLIDATED AIR SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(1) NATURE OF OPERATIONS:
Consolidated Air Services, Inc. (the Company), an Arizona S corporation, is
primarily engaged in domestic and international air freight forwarding that
offers a full range of logistic and transportation services. The Company is
headquartered in Scottsdale, Arizona, with offices in Los Angeles, California
and Newark, New Jersey. The Company also has sales offices in Dallas, Texas and
San Diego, California.
The Company focuses primarily on the fashion and retail industry. It has carved
a respected niche in this industry by offering a detailed menu of services
unique to this industry. Fashion services currently provide approximately 70% of
the Company's revenue. The balance is derived from industries ranging from
publishing and medical equipment, to television and video equipment.
The Company provides various levels of services ranging from Overnight, Second
Day, Deferred Service, Same Day and Surface Consolidations. The Company focuses
on heavyweight shipments rather than small packages which are handled by many
companies specializing in that competitive market. The Company has established a
control center in Scottsdale, Arizona to provide a central point of contact for
customers anywhere in the world. This center is staffed 24 hours a day.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Revenue Recognition
Revenues and direct related costs are recognized upon shipment of freight.
Income Taxes
The Company has elected to operate under Subchapter S of the Internal Revenue
Code and thus, is not directly subject to income taxes. As a result, there is no
provision or benefit for income taxes reflected in the accompanying financial
statements, since detailed items of revenue and expenses are reported on the
individual returns of the shareholders. The shareholders of the Company are
liable for income taxes on the earnings of the Company.
F-6
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Cash and Cash Equivalents
All highly liquid investments with original maturities of three months or less
are considered to be cash equivalents.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, accounts receivable and
accounts payable approximate fair value because of the short-term maturity of
these financial instruments.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosures of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of
credit risk consist of cash and accounts receivable. The Company places its cash
with high quality financial institutions.
Concentrations of credit risk with respect to accounts receivable are limited
due to the large number of customers comprising the Company's customer base. The
Company performs ongoing credit evaluations of its customers, but does not
require collateral to support customer receivables. The Company established an
allowance for doubtful accounts based on factors surrounding the credit risk of
specific customers, historical trends, and other information.
(3) PROPERTY AND EQUIPMENT:
Property and equipment are stated at cost. Depreciation of property and
equipment is provided using the straight-line method and is included in general
and administrative expense. The following estimated useful lives are used for
depreciation:
Leasehold improvements 7-10 years
Equipment 5-7 years
Computer equipment 5-7 years
Furniture and fixtures 5 years
Vehicles 5 years
Maintenance and repairs are charged directly to expense as incurred.
Expenditures of major renewals and betterments to property and equipment are
capitalized. For the year ended June 30, 1996, maintenance and repair expenses
was approximately $46,000.
F-7
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Property and equipment consist of the following at June 30, 1996:
Leasehold improvements $ 9,608
Equipment 92,467
Computer equipment 168,697
Furniture and fixtures 52,903
Vehicles 78,956
------------
402,631
Less- Accumulated depreciation 254,200
------------
$ 148,431
============
(4) COMMITMENTS AND CONTINGENCIES:
Lease Obligations
The Company leases various property and equipment under noncancelable operating
leases including trucks used to pick up freight. Rent expense was approximately
$223,880 for the year ended June 30, 1996. As of June 30, 1996, future minimum
lease payments under noncancelable operating leases are as follows:
Year Ending
June 30,
-----------
1997 $ 295,871
1998 194,627
1999 86,735
2000 755
(5) SIGNIFICANT CUSTOMER:
Sales to one customer for the year ended June 30, 1996 represented 15% of
revenue.
F-8
<PAGE>
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER (the "Agreement") is made and entered into as
of the 30th day of September, 1996 by and among AMERTRANZ WORLDWIDE, INC., a
Delaware corporation ("Amertranz"); AMERTRANZ WORLDWIDE HOLDING CORP., a
Delaware corporation ("Holding"); CONSOLIDATED AIR SERVICES, INC., an Arizona
corporation ("Consolidated"); and DAVID W. HOCKERSMITH and DOUGLAS E. HOCKERS-
MITH (collectively, the "Consolidated Stockholders").
EXPLANATORY STATEMENT
Amertranz is a wholly-owned subsidiary of Holding. The Consolidated
Stockholders are the owners of all of the issued and outstanding Consolidated
Shares.
Holding desires to acquire all of the business of Consolidated. In
furtherance thereof, it is in the best interest of the parties for Consolidated
to merge with and into Holding. The parties intend that the transactions
contemplated by this Agreement be accomplished in a tax-free reorganization
under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended. This
Agreement constitutes a plan of reorganization.
NOW THEREFORE, for the mutual consideration set out herein, the parties
hereto agree as follows:
1. Definitions; Rules of Construction.
1.1. For purposes of this Agreement, the terms set forth below shall
have the following meanings:
Amertranz - As defined in the introductory paragraph of this Agreement.
Amertranz Freight Gross Profit - Door-to-door freight revenues less
pick-up costs, airport-to-airport freight costs and delivery costs with respect
to the Earn-Out Accounts (regardless of the content of such freight) other than
customer accounts of Consolidated as of the Closing Date, calculated in
accordance with GAAP.
Amertranz Group - Holding and Amertranz, collectively.
Auditor - Arthur Andersen LLP or such other independent certified
public accountant regularly serving, or otherwise acceptable to, Holding.
Certificate of Merger - The Certificate of Merger with respect to the
Merger in such form as required by, and executed in accordance with, the
Delaware Corporation Law.
Closing - The closing of the transactions contemplated by this
Agreement.
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Closing Audit - The audit of Consolidated as of September 30, 1996 as
follows: Consolidated shall engage the Auditor to conduct an audit of
Consolidated's financial condition as of September 30, 1996 and to prepare an
income statement for the period July 1, 1996 through September 30, 1996. Such
audit shall be conducted in accordance with generally accepted auditing
standards.
Closing Balance Sheet - The balance sheet of Consolidated as of
September 30, 1996 prepared pursuant to the Closing Audit. The Closing Balance
Sheet shall be prepared in accordance with GAAP and shall be completed and
presented to the Amertranz Group and to the Consolidated Stockholders no later
than 60 days following the Closing Date, or such later date as the Auditor
reasonably determines, but in no event later than 75 days following the Closing
Date. The Closing Balance Sheet shall be subject to audit by Holding and the
Consolidated Stockholders within 10 days following presentation thereof to the
Amertranz Group and the Consolidated Stockholders. Any dispute concerning the
Closing Balance Sheet shall be submitted to binding arbitration in accordance
with Section 25.
Closing Date - October 10, 1996, to be effective as of the close of
business on September 30, 1996.
Code - The Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder.
Consolidated - As defined in the introductory paragraph of this
Agreement.
Consolidated Assets - All of the assets of Consolidated, including cash
on hand, cash in depositories, cash equivalents, accounts receivable, notes
receivable, securities, equipment, vehicles, parts, tools, computers and
computer equipment, other assets, the active, prospective, and historical
customer lists for the past five years, related current and historical business
records relating to prospective, active and inactive customers and business for
the preceding five years (including pricing information, costing and vendor
information as to trucking and air); all associated computerized information
relating to such business and customers (including computer disks and tapes);
all information relating to current, historical, and planned marketing and sales
of services; all interest in the name "Consolidated Air Services", and all
service marks utilized in connection therewith; all local, 800 and international
telephone and telefax numbers utilized by Consolidated in connection with its
businesses; the leases for Consolidated's Los Angeles, California, Newark, New
Jersey, and Scottsdale, Arizona, facilities, including all furniture, fixtures
and equipment used in each respective facility or in connection therewith
(subject to dispositions or replacements prior to Closing in the ordinary course
of business); all customer and sales representative contracts of Consolidated in
connection with its businesses; all other contracts of Consolidated in
connection with its business; and all governmental licenses or authorizations
with respect to the conduct of the Consolidated Business.
Consolidated Business - The business heretofore operated by
Consolidated.
Consolidated Freight Gross Profit - Door-to-door freight revenues less
pick-up costs, airport-to-airport freight costs and delivery costs with respect
to the customer accounts of
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Consolidated as of the Closing Date included in the Earn-Out Accounts
(regardless of the content of such freight), calculated by excluding local
pick-up and delivery costs in Los Angeles and San Diego, calculated in
accordance with GAAP.
Consolidated's June 30 Audit - The audit of Consolidated's financial
statements as of June 30, 1996 as follows: Consolidated shall engage the Auditor
to conduct an audit of Consolidated's financial condition as of June 30, 1996
and to prepare an income statement for the 12-month period then ended and a
balance sheet as of such date. Such audit shall be conducted in accordance with
generally accepted auditing standards and the resulting financial statements
shall be prepared in accordance with GAAP.
Consolidated's Net Worth - The net assets less net liabilities of
Consolidated calculated in accordance with GAAP.
Consolidated Shares - Shares of Common Stock of Consolidated, par value
$.01 per share.
Consolidated Stockholders - As defined in the introductory paragraph of
this Agreement.
Delaware Corporation Law - The General Corporation Law of the State of
Delaware.
Earn-Out - As set forth in Section 5.
Earn-Out Accounts - All Fashion Air Accounts, all customer accounts of
Consolidated as of the Closing Date, and all accounts of customers obtained by
the Consolidated Stockholders on behalf of Amertranz or the Consolidated
Business following the Closing. All Earn-Out Accounts existing as of the date
hereof are listed on Schedule 1.1. With respect to this definition, the parties
recognize that certain customers are currently serviced by both Amertranz and
Consolidated. With respect to such customers other than Fashion Air Accounts,
for purposes of this definition, the phrase "customer accounts of Consolidated
as of the Closing Date" shall only include such customers to the extent of
shipments in lane segments (i.e., points of origin and destination) currently
serviced for such customers by Consolidated, and the phrase "accounts of
customers obtained by the Consolidated Stockholders on behalf of Amertranz or
the Consolidated Business following the Closing" shall include shipments in new
lane segments for such customers obtained by the Consolidated Stockholders.
Earn-Out Target - $3,500,000.
Earn-Out Years - The three consecutive 12-month periods beginning
October 1, 1996.
Effective Time - The time at which the Merger is effected by filing the
Certificate of Merger with the Secretary of State of the State of Delaware.
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Employment Agreements - The Employment Agreements attached hereto as
Exhibit A.
ERISA - The Employee Retirement Income Security Act of 1974, as
amended, and the regulations issued thereunder.
Fashion Air Accounts - All customer accounts of Amertranz or
Consolidated with respect to customers in the garment industry (including any
and all wholesale or retail producers and manufacturers of any fashion products
from loose fabric to finished goods), whether or not such customer accounts have
been designated as accounts of Amertranz's Fashion Air division and whether such
customer accounts were in existence on the Closing Date or obtained following
the Closing Date.
Freight Gross Profit - The aggregate of Amertranz Freight Gross Profit
and Consolidated Freight Gross Profit.
GAAP - United States generally accepted accounting principles.
Holding - As defined in the introductory paragraph of this Agreement.
Holding Common Shares - Shares of Common Stock of Holding, par value
$.01 per share.
Holding Preferred Shares - Shares of Preferred Stock of Holding.
Holding Promissory Note - The promissory note in the principal amount
of $150,000 attached hereto as Exhibit B.
June 30 Balance Sheet - The balance sheet of Consolidated as of June
30, 1996 prepared pursuant to the June 30 Audit.
Merger - The merger of Consolidated with and into Holding as set forth
in Section 2.
Merger Holding Common Shares - Holding Common Shares delivered to the
Consolidated Stockholders pursuant to the Merger and pursuant to the Earn-Out or
converted from Merger Holding Preferred Shares.
Merger Holding Preferred Shares - Holding Preferred Shares delivered to
the Consolidated Stockholders pursuant to the Merger, each of which shall be
convertible into 10 Merger Holding Common Shares at the option of the holder
thereof at any time after the first anniversary of the Closing Date and with
such other rights and preferences as set forth on the Certificate of Designation
attached hereto as Exhibit C.
Merger Holding Shares - Merger Holding Common Shares and Merger Holding
Preferred Shares.
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Net Worth Target - $150,000
SEC - United States Securities and Exchange Commission.
Securities Act - The Securities Act of 1933, as amended.
1.2. The Explanatory Statement is hereby incorporated into this
Agreement and made a part hereof.
1.3. The section and other headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.
1.4. References in this Agreement to the "knowledge" of an entity
shall mean the knowledge of the chief executive officer, chief operating
officer, and chief financial officer of such entity, to the extent applicable,
and with respect to Consolidated shall specifically include the knowledge of the
Consolidated Stockholders.
1.5. Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular, to the singular
include the plural, to the part include the whole, and to the male gender shall
also pertain to the female and neuter genders and vice versa. The term
"including" is not limiting, and the term "or" has the inclusive meaning
represented by the phrase "and/or". The words "hereof", "herein", "hereby",
"hereto", "hereunder" and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Section, Schedule, Exhibit and clause references are to this Agreement unless
otherwise specified.
2. The Merger; Conversion of Shares.
2.1. Subject to the terms and conditions hereof, at the Effective
Time, Consolidated will be merged with and into Holding in accordance with the
Delaware Corporation Law, the separate existence of Consolidated (except as may
be continued by operation of law) shall cease, and Holding shall continue as the
surviving corporation of the Merger.
2.2. Concurrent with the Closing or within one business day
thereafter, the parties hereto shall cause the Merger to be effected by filing
the Certificate of Merger with the Secretary of State of the State of Delaware.
Concurrent with the Closing or within one business day thereafter, the parties
hereto shall cause a similar instrument to be filed with the Secretary of State
of the State of Arizona.
2.3. The Merger shall have the effects set forth in Section 259 of
the Delaware Corporation Law.
2.4. Subject to the terms and conditions of this Agreement, at the
Effective Time, by virtue of the Merger and without any action on the part of
Consolidated, Holding, any Consolidated Stockholder, or any holder of any
Holding Shares, each Consolidated Share then issued and outstanding shall be
converted into 20 Merger Holding Preferred Shares.
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2.5. At the Closing, Holding shall deliver the Holding Promissory
Note to the Consolidated Stockholders.
3. Contribution of Consolidated Assets.
Immediately subsequent to the Merger, Holding will contribute all of
the Consolidated Assets to Amercon Acquisition, Inc., a Delaware corporation all
of the issued and outstanding stock of which is owned by Holding, and such
entity shall assume all of the obligations of Consolidated or Holding under
leases of property included in the Consolidated Assets, under other contracts
assigned to and assumed by Holding in the Merger as part of the Consolidated
Assets, and all other liabilities and obligations to which the Consolidated
Assets are subject.
4. Post-Closing Adjustments.
4.1. To the extent the Closing Balance Sheet (adjusted to add back
any reserves reflected for uncollectible accounts receivable and any amounts
accrued on account of expenses of Consolidated to be reimbursed by Amertranz
pursuant to Section 19.1) reflects that Consolidated's Net Worth on September
30, 1996 was less than the Net Worth Target, the Consolidated Stockholders shall
refund to Holding the full amount by which Consolidated's Net Worth as so
reflected on the Closing Balance Sheet is less than the Net Worth Target. Such
refund shall be made within 30 days following the presentation of the Closing
Balance Sheet (unless a dispute regarding the Closing Balance Sheet is submitted
to arbitration in accordance with the provisions of this Agreement, in which
event any refund shall be made within 10 days following the arbitration award),
and shall be made by the Consolidated Stockholders in cash and, to the extent
such cash refund is not made, by reducing the principal balance of any
obligations from Holding to the Consolidated Stockholders evidenced by a
promissory note.
4.2. To the extent the Closing Balance Sheet (adjusted to add back
any reserves reflected for uncollectible accounts receivable and any amounts
accrued on account of expenses of Consolidated to be reimbursed by Amertranz
pursuant to Section 19.1) reflects that Consolidated's Net Worth on September
30, 1996 was more than the Net Worth Target, Holding shall cause the full amount
by which Consolidated's Net Worth as so reflected on the Closing Balance Sheet
is more than the Net Worth Target to be paid to the Consolidated Stockholders
within 30 days following the presentation of the Closing Balance Sheet (unless a
dispute regarding the Closing Balance Sheet is submitted to arbitration in
accordance with the provisions of this Agreement, in which event any such
payment shall be made within 10 days following the arbitration award).
4.3. Accounts Receivable and Accounts Payable.
4.3.1. After the 120th calendar day following the Closing Date,
Holding may, at its discretion, assign to the Consolidated Stockholders any
account receivable included in the accounts receivable reflected on the Closing
Balance Sheet (adjusted to add back any reserves reflected for uncollectible
accounts receivable) which has not been paid in full in accordance with its
terms, regardless of whether such non-payment is as a result of a default by
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the account debtor, set-off, counter-claim, dispute or otherwise. Holding shall
not assign to the Consolidated Stockholders any such account receivable (or
portion thereof) which Holding has compromised or settled for less than the full
amount thereof, unless the Consolidated Stockholders have agreed to such
compromise or settlement. Upon assignment of any such accounts receivable to the
Consolidated Stockholders and the payment therefor as hereinafter provided, the
Consolidated Stockholders shall have the absolute right to pursue any lawful
remedy against the account debtor to collect such debt. As payment for any
accounts receivable (or portions thereof) assigned to the Consolidated
Stockholders as hereinabove provided, the Consolidated Stockholders shall pay to
Holding the full face amount of such accounts receivable. Such payment shall be
made within five days following the assignment of such accounts receivable to
the Consolidated Stockholders, and shall be made in cash and, to the extent such
cash payment is not made, by reducing the principal balance of any obligations
from Holding to the Consolidated Stockholders evidenced by a promissory note.
4.3.2. If, within 120 calendar days following the Closing Date,
the Amertranz Group collects on account of accounts receivable included in the
accounts receivable reflected on the Closing Balance Sheet (adjusted to add back
any reserves reflected for uncollectible accounts receivable) more than the
amount so reflected on the Closing Balance Sheet, the Amertranz Group shall pay
to the Consolidated Stockholders the full face amount of such excess collections
less all reasonable amounts expended by the Amertranz Group (including
collection fees, court costs and attorneys fees) in collecting such excess
amount and less taxes due on such excess amount. Unless otherwise clearly
identifiable, such costs of collection shall be determined by dividing the costs
of collection for all accounts receivable included in the net accounts
receivable reflected on the Closing Balance Sheet by a fraction, the numerator
of which is the amount of such excess collections and the denominator of which
is the total of all collections on account of accounts receivable included in
the net accounts receivable reflected on the Closing Balance Sheet. Such payment
by the Amertranz Group to the Consolidated Stockholders shall be made within
five days following the determination thereof.
4.3.3. If, by the first anniversary of the Closing Date, it is
finally determined by the Amertranz Group and the Consolidated Stockholders that
the aggregate amount required to be paid on account of accounts payable of
Consolidated as of September 30, 1996 is less than the amount of accounts
payable reflected on the Closing Balance Sheet (excluding any amounts accrued on
account of expenses of Consolidated to be reimbursed by Amertranz pursuant to
Section 19.1), the Amertranz Group shall pay to the Consolidated Stockholders
the full amount of such difference. Such payment by the Amertranz Group to the
Consolidated Stockholders shall be made within five days following the
determination thereof. If, at any time after the first anniversary of the
Closing Date but before the second anniversary of the Closing Date, the
Amertranz Group receives an invoice or other demand or request for payment on
account of any of the accounts payable with respect to which the Amertranz Group
paid the Consolidated Stockholders pursuant to the first sentence of this
Section 4.3.3 and the Amertranz Group pays on such invoice, demand or request,
then the Consolidated Stockholders shall pay to Holding the full amount so paid
by the Amertranz Group pursuant to such invoice, demand or request. Such payment
by the Consolidated Stockholders to the Amertranz Group shall be made within
five days following request therefor by the Amertranz Group.
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4.3.4. If, by the first anniversary of the Closing Date, it is
finally determined by the Amertranz Group and the Consolidated Stockholders that
the aggregate amount required to be paid on account of accounts payable of
Consolidated as of September 30, 1996 is more than the amount of accounts
payable reflected on the Closing Balance Sheet (excluding any amounts accrued on
account of expenses of Consolidated to be reimbursed by Amertranz pursuant to
Section 19.1), the Consolidated Stockholders shall pay to Holding the full
amount of such difference. Such payment by the Consolidated Stockholders to
Holding shall be made within five days following the determination thereof.
4.3.5. The post-Closing adjustments set forth in this Section
4.3 shall be aggregated together so that a net amount payable by the Amertranz
Group to the Consolidated Stockholders or by the Consolidated Stockholders to
the Amertranz Group shall be determined.
4.4. Any dispute concerning the post-Closing adjustments set forth
in this Section shall be submitted to binding arbitration in accordance with
Section 25.
5. Earn-Out.
5.1. Within 120 days following the end of each of the Earn-Out
Years, Holding shall compile and present to the Consolidated Stockholders the
calculation of Freight Gross Profit with respect to such Earn-Out Year. Such
calculation shall be subject to audit by the Consolidated Stockholders which
will be concluded within 60 days following presentation thereof to the
Consolidated Stockholders. Any dispute concerning such calculation shall be
submitted to binding arbitration in accordance with Section 25. If the Freight
Gross Profit for such Earn-Out Year equals or exceeds the Earn-Out Target,
Holding shall issue to the Consolidated Stockholders, within 75 days following
the presentation of such calculation, 16,667 Merger Holding Common Shares in
proportion to their respective holdings of Consolidated Shares.
5.2. If, during any of the Earn-Out Years, without the consent of
David W. Hockersmith, the Amertranz Group eliminates one or more services
provided to customers as of the date hereof, and, as a result of such
elimination of service, one or more customers included in the Earn-Out Accounts
terminate their relationships with the Amertranz Group, the calculation of
Freight Gross Profit for such Earn-Out Year shall include the Freight Gross
Profit with respect to each such customer for the 12-month period immediately
preceding the date such customer terminated its relationship with the Amertranz
Group. Any dispute concerning the inclusion of any such customer or account in
the calculation of Freight Gross Profit shall be submitted to binding
arbitration in accordance with Section 25.
6. Closing.
The Closing shall take place at the offices of Troop Meisinger
Steuber & Pasich, LLP, 10940 Wilshire Boulevard, Los Angeles, California, on the
Closing Date at 10:00 a.m., local time, or at such other time and place as shall
be agreed upon by the parties hereto. Time is of the essence of this Agreement.
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7. Representations and Warranties of the Amertranz Group.
Holding and Amertranz, jointly and severally, represent and warrant
to the Consolidated Stockholders as follows:
7.1. Existence and Good Standing. Each is: (i) is a corporation duly
organized, validly existing, and in good standing under the laws of Delaware;
(ii) has the corporate power and authority to own, lease, and operate its
properties and carry on its business as now being conducted by it; and (iii) is,
or has filed for qualification to be, duly licensed, qualified and authorized to
do business as a foreign corporation in, and in good standing in, each
jurisdiction in which failure to be so licensed, qualified, authorized, or in
good standing will have a material adverse effect on the business or properties
(owned, leased, or operated) of such entity, and is not aware of any reason for
which any such filing for qualification will not be effective without cost above
customary filing fees and expenses.
7.2. Holding Capitalization. Holding's authorized capital stock
consists exclusively of 15,000,000 Holding Common Shares and 2,500,000 shares of
Preferred Stock. Holding Common Shares were the subject of Holding's
Registration Statement of Form S-1, Registration No. 333-03613, declared
effective by the SEC on June 28, 1996, and have been registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934. The Merger Holding Shares,
when issued in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid, nonassessable, and free of preemptive
rights, with no personal liability attaching to the ownership thereof.
7.3. Power and Authority; Authorization. Each of Holding and
Amertranz has full power and authority to enter into, execute and deliver this
Agreement, and to perform each of its obligations hereunder. The execution,
delivery, and performance of this Agreement by each of Holding and Amertranz
have been duly authorized and approved by the Board of Directors of each
respective entity subject to all contingencies set forth herein. This Agreement
has been, and each of the Exhibits hereto and other documents required hereunder
(if applicable) will be, on the Closing Date, duly executed and delivered by or
on behalf of each of Holding and Amertranz and are the legal, valid, and binding
obligations of each such entity in accordance with their respective terms,
subject (as to the enforcement of remedies) to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and (as to the
availability of equitable remedies) to the discretion of the equity tribunal
having jurisdiction.
7.4. No Violations. The execution, delivery, and performance of this
Agreement by each of Holding and Amertranz (i) will not violate (with or without
the giving of notice or the lapse of time, or both) or require any registration,
qualification, consent, approval, or filing under (except as set forth in
Section 7.5), any law, ordinance or regulation binding on any such entity, and
(ii) will not
(a) conflict with, require any consent or approval under, result in the
breach of any provision of, constitute a default under, result in the
acceleration of the performance of its obligations under, cause or
allow for the termination of, or
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(b) result in the creation of any claim, lien, charge, or encumbrance
upon, the Merger Holding Shares or any of such entity's properties,
assets, or businesses, pursuant to
its certificate of incorporation or by-laws, any debt instrument, mortgage, deed
of trust, license, permit, franchise, lease, contract, or other instrument or
agreement to which such entity or any of its subsidiaries is a party, or any
judgment, order, writ or decree of any court, arbitrator or governmental agency
by which such entity or any of its assets or properties is bound. Neither
Holding nor Amertranz nor any of their respective subsidiaries, assets or
properties is subject to or bound or affected by any article of incorporation or
by-law provision, debt instrument, mortgage, deed of trust, license, permit,
franchise, lease, contract, other instrument or agreement, judgment, order,
writ, decree, injunction, law, statute, ordinance or regulation, or any other
restriction of any kind or character, which would prevent such entity from
entering into, or performing its obligations under, this Agreement, except for
such instruments the violation(s) of which can be cured at an aggregate
immaterial cost or expense to such entity and, with or without being cured, will
not prevent such entity from continuing its business in the ordinary course.
7.5. Approvals Required. Except for any filing with the Secretary of
State of Delaware to effect or reflect the Merger, any filing with the SEC to
register any Merger Holding Common Shares under the Securities Act, no approval,
authorization, consent, order or other action of, or filing with, any person,
firm or corporation, or any court, administrative agency or other governmental
authority, is required by the Amertranz Group in connection with the execution
and delivery by the Amertranz Group of this Agreement or the performance by the
Amertranz Group of the transactions described herein.
7.6. Knowledge of Adverse Conditions. Except for information
included in material filed by Holding with the SEC, and general present and
future economic conditions, to the knowledge of the Amertranz Group, there are
no present or future conditions, state of facts or circumstances which has
affected or may in the aggregate have a material adverse effect upon the
business or prospects of Holding or Amertranz taken as a whole.
7.7. Accuracy of Representations. All representations and warranties
with respect to the Amertranz Group are true and correct as of the date hereof.
This Agreement does not contain any untrue statement of a material fact with
respect to the Amertranz Group or omit to state any material fact with respect
to the Amertranz Group necessary to make the statements contained herein not
misleading.
8. Representations and Warranties of Consolidated and the Consolidated
Stockholders.
Consolidated and the Consolidated Stockholders, jointly and
severally, represent and warrant to the Amertranz Group and as follows:
8.1. Existence and Good Standing. Consolidated: (i) is a
corporation duly organized, validly existing, and in good standing under the
laws of Arizona; (ii) has the corporate power and authority to own, lease, and
operate its properties and carry on its business as now
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being conducted by it; and (iii) is, or has filed for qualification to be, duly
licensed, qualified and authorized to do business as a foreign corporation in,
and in good standing in, each jurisdiction in which failure to be so licensed,
qualified, authorized, or in good standing will have a material adverse effect
on the business or properties (owned, leased, or operated) of Consolidated, and
is not aware of any reason for which any such filing for qualification will not
be effective without cost above customary filing fees and expenses.
8.2. Capitalization. Consolidated's authorized capital stock
consists exclusively of 100,000 Consolidated Shares, of which 1,000 are issued
and outstanding. Prior to the Closing, all issued and outstanding Consolidated
Shares are held of record and beneficially by the Consolidated Stockholders in
such amounts as set forth on Schedule 8.2 attached hereto. All outstanding
Consolidated Shares are duly authorized, validly issued, fully paid,
nonassessable, and free of preemptive rights, with no personal liability
attaching to the ownership thereof.
8.3. Title to Consolidated Shares. Each Consolidated Stockholder
has good and marketable title to his Consolidated Shares free and clear of any
lien, claim or encumbrance.
8.4. Options. There are no outstanding or authorized options,
warrants, calls, subscriptions, rights, convertible securities, commitments,
agreements, or understandings of any character obligating Consolidated to issue
any shares of capital stock of any class or securities convertible into, or
evidencing the right to purchase, any shares of capital stock of any class.
8.5. Subsidiaries. Consolidated has no subsidiaries and does not,
directly or indirectly, own any interest in or control any corporation,
partnership, joint venture or other business association.
8.6. Charter Documents and By-laws. Copies of Consolidated's
(i) Certificate of Incorporation, as amended to date,
certified within 30 days prior to the date hereof by the Secretary of State of
its state of its incorporation,
(ii) By-laws, as amended to date, certified by its Secretary
not more than 30 days prior to the date hereof, and
(iii) authorizations to do business as a foreign corporation
in jurisdictions other than its state of incorporation
are attached hereto as Schedule 8.6 and are complete and correct in all
respects, are in full force and effect, and Consolidated is not in violation of
any of the provisions thereof. The minute books of Consolidated previously
delivered to the Amertranz Group are complete and accurately reflect all
proceedings of its stockholders and directors (and all committees thereof).
8.7. Consolidated Power and Authority; Authorization. Consolidated
has full power and authority to enter into, execute and deliver this Agreement,
and to perform each of its obligations hereunder. The execution, delivery, and
performance of this Agreement by
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Consolidated have been duly authorized and approved by the Board of Directors
and all of the stockholders of Consolidated. This Agreement has been, and each
of the Exhibits hereto and other documents required hereunder (if applicable)
will be, on the Closing Date, duly executed and delivered by or on behalf of
Consolidated and are the legal, valid, and binding obligations of Consolidated
in accordance with their respective terms, subject (as to the enforcement of
remedies) to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and (as to the availability of equitable remedies) to the
discretion of the equity tribunal having jurisdiction.
8.8. Consolidated Stockholders' Power and Authority; Authorization.
This Agreement has been duly executed and delivered by or on behalf of each
Consolidated Stockholder and is the legal, valid, and binding obligation of such
Consolidated Stockholder in accordance with its terms, subject (as to the
enforcement of remedies) to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and (as to the availability of equitable
remedies) to the discretion of the equity tribunal having jurisdiction.
8.9. No Consolidated Violations. The execution, delivery, and
performance of this Agreement by Consolidated (i) will not violate (with or
without the giving of notice or the lapse of time, or both) or require any
registration, qualification, consent, approval, or filing under (except as set
forth in Section 8.11), any law, ordinance or regulation binding on
Consolidated, and (ii) will not
(a) conflict with, require any consent or approval under, result in the
breach of any provision of, constitute a default under, result in the
acceleration of the performance of its obligations under, cause or
allow for the termination of, or
(b) result in the creation of any claim, lien, charge, or encumbrance
upon, the Consolidated Shares or any of its properties, assets, or
businesses, pursuant to
its certificate of incorporation or by-laws, any debt instrument, mortgage, deed
of trust, license, permit, franchise, lease, contract, or other instrument or
agreement to which Consolidated is a party, or any judgment, order, writ or
decree of any court, arbitrator or governmental agency by which Consolidated or
any of its assets or properties is bound. Neither Consolidated nor any of its
assets or properties is subject to or bound or affected by any article of
incorporation or by-law provision, debt instrument, mortgage, deed of trust,
license, permit, franchise, lease, contract, other instrument or agreement,
judgment, order, writ, decree, injunction, law, statute, ordinance or
regulation, or any other restriction of any kind or character, which would
prevent Consolidated from entering into, or performing its obligations under,
this Agreement, except for such instruments the violation(s) of which can be
cured at an aggregate immaterial cost or expense to Consolidated and, with or
without being cured, will not prevent Consolidated from continuing its business
in the ordinary course.
8.10. No Consolidated Stockholder Violations. The execution,
delivery, and performance of this Agreement by each Consolidated Stockholder (i)
will not violate (with or without the giving of notice or the lapse of time, or
both) or require any registration, qualifica-
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tion, consent, approval, or filing under (except as set forth in Section 8.11),
any law, ordinance or regulation binding on such Consolidated Stockholder, and
(ii) will not
(a) conflict with, require any consent or approval under, result in the
breach of any provision of, constitute a default under, result in the
acceleration of the performance of its obligations under, cause or
allow for the termination of, or
(b) result in the creation of any claim, lien, charge, or encumbrance
upon, the Consolidated Shares owned by such Consolidated Stockholder
pursuant to
any debt instrument, mortgage, deed of trust, license, permit, franchise, lease,
contract, or other instrument or agreement to which such Consolidated
Stockholder is a party, or any judgment, order, writ or decree of any court,
arbitrator or governmental agency by which such Consolidated Stockholder or any
of his assets or properties is bound. Neither such Consolidated Stockholder, nor
any of his assets or properties is subject to or bound or affected by any debt
instrument, mortgage, deed of trust, license, permit, franchise, lease,
contract, other instrument or agreement, judgment, order, writ, decree,
injunction, law, statute, ordinance or regulation, or any other restriction of
any kind or character, which would prevent such Consolidated Stockholder from
entering into, or performing his obligations under, this Agreement.
8.11. Approvals Required. Except for any filing in its state of
incorporation to effect or reflect the Merger and as set forth on Schedule 8.11,
no approval, authorization, consent, order or other action of, or filing with,
any person, firm or corporation, or any court, administrative agency or other
governmental authority, is required by Consolidated in connection with the
execution and delivery by Consolidated or the Consolidated Stockholders of this
Agreement or the performance by Consolidated or the Consolidated Stockholders of
the transactions described herein.
8.12. Title to Property and Related Matters. On the date hereof,
Consolidated has, and on the Closing Date will have, good and marketable title
to all material assets and properties owned by it at the date of this Agreement
as reflected on the June 30 Balance Sheet (subject to dispositions or
replacements prior to Closing in the ordinary course of business), or acquired
by it after the date of this Agreement and reflected on the Closing Balance
Sheet, of any kind or character, free and clear of any liens or encumbrances,
except those set forth in Schedule 8.12. Except as set forth in such Schedule
and except for matters that may arise in the ordinary course of business,
Consolidated's material assets are in good operating condition and repair,
reasonable wear and tear excepted. To the best of the knowledge of Consolidated,
there does not exist any condition or agreement that materially interferes with
the use thereof in the conduct of the Consolidated Business in the ordinary
course. Such assets and properties are all of the assets used in the operation
of the Consolidated Business. Consolidated has no interest in real property
other than as lessee of facilities located in Los Angeles, California, Newark,
New Jersey, and Scottsdale, Arizona, pursuant to leases included on Schedule
8.21.
8.13. Licenses; Trademarks; Trade Names. Schedule 8.13 contains a
true and complete list and brief description of all licenses, registered
trademarks, registered trade
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<PAGE>
names, registered service marks, copyrights, patents or applications for any of
the foregoing required or used in the Consolidated Business, other than licenses
to use "off-the-shelf" commercial software included with the equipment that
constitute part of the Consolidated Assets (none of which licenses are
material). Except as listed on such Schedule and such licenses to use
"off-the-shelf" commercial software, no license, trademark, trade name, service
mark, copyright, is required or used in the Consolidated Business.
8.14. Bank Accounts. Schedule 8.14 is a complete and correct list
of all cash and cash equivalents and of each bank account and safe deposit box
maintained by Consolidated, and the names of bank contacts and all persons
authorized to withdraw funds, sign checks or otherwise deal with such cash, cash
equivalents, accounts and safe deposit boxes.
8.15. Financial Statements. All financial statements of
Consolidated delivered or to be delivered to the Amertranz Group prior to the
Closing pursuant to the terms hereof and all other financial materials regarding
Consolidated delivered to the Amertranz Group are (or will be when delivered)
accurate and complete in all material respects and fairly present Consolidated's
financial position as at the dates set forth therein and the results of its
operations for the periods reflected therein. All such audited financial
statements have been prepared in conformity with GAAP applied on a basis
consistent with that of prior periods. All such unaudited financial statements
have been prepared in conformity with GAAP applied on a basis consistent with
that of prior periods, except that such unaudited financial statements will not
contain footnotes and will contain reasonable estimates, subject to adjustment,
of accruals, deferrals, and reserves consistent with past practices. Without
limiting the generality of the foregoing, such financial statements do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make such financial statements not misleading. Consolidated
has always used the fiscal year ending December 31 as its taxable year.
8.16. Undisclosed Liabilities. Except as disclosed in the financial
statements referred to in Section 8.15, as of the dates referred to in such
financial statements Consolidated has no known liabilities or obligations of any
kind, whether accrued, absolute, contingent or otherwise, and whether or not
required to be disclosed on a balance sheet prepared in conformity with GAAP,
and since the date of the last such financial statement, Consolidated has
incurred no such liability or obligation other than (i) as set forth on Schedule
8.16, (ii) in the ordinary course of business and in amounts consistent with
historic business operations, and (iii) liabilities which, individually or in
the aggregate, are not material.
8.17. Accounts Receivable. Consolidated has delivered to Holding,
as Schedule 8.17, an accurate and complete aging schedule of Consolidated's
accounts receivable as at June 30, 1996 and September 30, 1996, respectively.
8.18. Accounts Payable. Consolidated has delivered to Holding, as
Schedule 8.18, an accurate and complete aging schedule of Consolidated's
accounts payable as at June 30, 1996 and September 30, 1996, respectively.
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8.19. Material Adverse Change. Except as set forth in Schedule 8.19
or as otherwise reflected herein, since June 30, 1996, the business of
Consolidated has been operated in the ordinary course and there has not been:
(i) To the knowledge of Consolidated, any material adverse
change in the business, condition (financial or otherwise), results of
operations, prospects, properties, assets, liabilities, earnings, net worth, or
prospects thereof, except for the general effects of present economic conditions
or conditions affecting the freight forwarding industry generally;
(ii) To the knowledge of Consolidated, any material damage,
destruction or casualty loss (whether or not covered by insurance) affecting
Consolidated or its assets, properties or business;
(iii) Any declaration, setting aside, or payment of any
dividend or other distribution in respect of any shares of capital stock of
Consolidated, or any direct or indirect redemption, purchase or other
acquisition of any such stock;
(iv) To the knowledge of Consolidated, any statute, rule,
regulation or order adopted (including orders of regulatory authorities with
jurisdiction over Consolidated or its business) that materially and adversely
affects Consolidated or its business;
(v) Any increase in, or commitment to increase, the wage,
salary, commissions, bonus, employee benefit rate or other compensation payable
or to become payable to any of Consolidated's employees, provided, however, that
this paragraph shall not restrict or limit Consolidated in any way from hiring
additional personnel who are required for its operations in the usual course of
business consistent with past practices; or the entering into of any employment
contract, bonus, stock option, profit sharing, pension, incentive, retirement or
other similar arrangement or plan with, any officer, employee or other party;
(vi) Any incurrance of any obligation or liability
(contingent or otherwise), except customary trade or business obligations
incurred in the ordinary course of its business, none of which were entered into
for inadequate consideration;
(vii) Any discharge or satisfaction of any lien or
encumbrance or the payment of any obligation or liability (contingent or
otherwise), including intercompany obligations and liabilities, except (a)
current liabilities included in the June 30 Balance Sheet, and (b) current
liabilities incurred since June 30, 1996 in the ordinary course of its business;
(viii) Any lien, charge, security interest, or other
encumbrance placed on any of its assets or properties;
(ix) Any sale, assignment, transfer, lease, disposition of,
or agreement to sell, assign, transfer, lease, or dispose of, any of its assets
or properties, except for dispositions of personal property in the ordinary
course of business;
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(x) Any acquisition or lease of any assets or property of any
other party except for supplies in the ordinary course of business and
acquisitions of personal property in the ordinary course of business;
(xi) Any cancellation or compromise of any debt or claim or
waiver or release of any rights;
(xii) Any entering into of any collective bargaining
agreement or commitment or incurrance of any liability to any labor
organization;
(xiii) Any capital expenditure or any commitment therefor;
(xiv) Any change in the nature of its business or its method
of accounting;
(xv) Other than in the ordinary course of business, any
transaction, contract, or commitment which may not be terminated by Consolidated
at will at any time without, for all such transactions, contracts, or
commitments, material cost or expense to Consolidated;
(xvi) The loss of any supplier(s), vendor(s) or customer(s),
which loss (individually or in the aggregate) has had or is reasonably expected
to have a material adverse effect on Consolidated's financial condition, results
of operation, business or prospects;
(xvii) Any issuance or sale by Consolidated or agreement by
Consolidated to sell or pledge any of its securities, nor have any proxies been
given with respect to Consolidated's securities;
(xviii) To the knowledge of Consolidated, any other events or
conditions of any character specifically related to the business or operations
of Consolidated that may reasonably be expected to have a material adverse
effect on Consolidated or its business or financial condition, except for the
general effects of present economic conditions.
8.20. Tax Matters. Consolidated and the Consolidated Stockholders
have filed all foreign, federal, state and local tax or related returns and
reports due or required to be filed with respect to Consolidated's business and
earnings, which reports accurately reflect in all material respects the amount
of taxes due. Consolidated and the Consolidated Stockholders have paid all taxes
or assessments that have become due with respect to Consolidated's business and
earnings, other than taxes or charges being contested in good faith or not yet
finally determined. Complete and correct copies of the income tax returns of
Consolidated, together with attached schedules, for the five fiscal years ending
December 31, 1991 through December 31, 1995, as filed with all federal and state
taxing authorities, signed by an officer of Consolidated, and all audit reports
received by Consolidated during the last five years and issued by any taxing
authority, and all consents and agreements entered into during the last five
years with any taxing authority, were supplied to Holding prior to the date
hereof. All information reported on such returns is true, accurate, and
complete. The federal income tax returns required to be filed by
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Consolidated have either been examined by the Internal Revenue Service, or the
period during which any assessments may be made has expired without waiver or
extension for all years through the fiscal year ended December 31, 1993, and any
deficiencies or assessments claimed or made have been paid or settled.
Consolidated has not adopted a plan of complete liquidation under the Code or
filed a consent pursuant to Section 341(f) of the Code. Consolidated is not a
party to and there are no (i) pending or threatened action, proceeding, or
assessment against Consolidated or the Consolidated Stockholders for the
collection of taxes with respect to Consolidated's business and earnings, by any
governmental authority (federal, state, local or foreign), or (ii) pending
reviews or examinations by any taxing authority of any return or report filed by
Consolidated. There are no tax liens or governmental claims with respect to any
properties owned by Consolidated. Consolidated and the Consolidated Stockholders
have duly and timely elected for Consolidated to be taxed under subchapter S of
the Code as of January 1, 1986, and such election has been in effect since such
date, is in effect on the date hereof, and will be in effect as of the Closing.
Neither Consolidated nor any Consolidated Stockholder nor any other party has
taken any action to terminate such election and neither Consolidated nor the
Consolidated Stockholders have received a notice from the Internal Revenue
Service notifying that Consolidated's Subchapter S election has been terminated.
8.21. Agreements and Authorizations. Schedule 8.21 contains a true
and complete list and brief description of all written or oral contracts,
agreements, mortgages, obligations, understandings, arrangements, restrictions,
and other instruments to which Consolidated is a party or by which Consolidated
or its assets may be bound involving payments in any consecutive 12-month period
or otherwise representing annualized costs to Consolidated of $25,000 or more or
representing aggregate payments by Consolidated of $25,000 over the term of any
such agreement or arrangement (without regard to the amount of annualized
payments or costs). Schedule 8.21 also contains a true and complete list and
brief description of all governmental licenses, permits, authorizations and
material non-governmental franchises and agency arrangements necessary to
operate the Consolidated Business as heretofore operated. True and correct
copies of all items set forth on such Schedule have been made available to the
Amertranz Group. No event has occurred that (whether with or without notice,
lapse of time or the happening or occurrence of any other event) would
constitute a material default by Consolidated under any of the agreements or
arrangements set forth in such Schedule. Consolidated is not aware of any
material default by the other parties to such agreements. In addition, no
material violations have occurred pursuant to any loan agreements to which
Consolidated is a party.
8.22. Compliance; Governmental Authorizations. To the knowledge of
Consolidated: (i) Consolidated has heretofore complied with all U.S. and foreign
federal, state, local or foreign laws, ordinances, regulations and orders
applicable to its business, including without limitation, federal and state
securities laws and federal and state aviation, shipping, and trucking laws
that, if not complied with, would materially and adversely affect its business;
(ii) Consolidated has all federal, state, local and foreign governmental
licenses and permits necessary for the conduct of its business; and (iii) such
licenses and permits are in full force and effect. Consolidated knows of no
violations of any such licenses or permits. No proceedings are pending or, to
Consolidated's knowledge, threatened to revoke or limit the use of such licenses
or permits.
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8.23. Litigation. Except as set forth in Schedule 8.23, except for
claims of vendors the accounts of which are included in the payables included in
the latest dated financial statements referred to in Section 8.15 and incurred
since such date as set forth in Section 8.16, there are no actions, suits,
claims, investigations or legal, administrative or arbitration proceedings
pending against Consolidated or any of its assets or business, whether at law or
in equity, or before or by any federal, state, municipal, local, foreign or
other governmental department, commission, board, bureau, agency or
instrumentality, nor does Consolidated know of a threat of, or any basis for,
any such action, suit, claim, investigation or proceeding.
8.24. Employees. Neither Consolidated nor any of its employees is
subject to any collective bargaining agreement, no petition for certification or
union election is pending with respect to the employees of Consolidated, and no
union or collective bargaining representative has sought, to the knowledge of
Consolidated, such certification or recognition with respect to the employees of
Consolidated at any time during the past three years.
8.25. Severance Obligations. Consolidated does not have any
obligation to past or present employees for any severance payments or benefits.
8.26. ERISA. Neither Consolidated nor any entity that together with
Consolidated is treated as a single employer pursuant to the provisions of
ERISA, sponsors any employee benefit plan subject to the provisions of ERISA,
and none of the employees of Consolidated participate in any such plan.
8.27. Environmental. Consolidated has operated its business and
maintained its assets (owned or leased) in compliance with all applicable
environmental laws and regulations in all material respects.
8.28. Business Relationships. To the knowledge of Consolidated,
Consolidated's relationships with its suppliers, vendors, representatives and
customers is satisfactory, and to the knowledge of Consolidated, there is no
occurrence which, with or without the giving of notice or the lapse of time or
both, would constitute a default under any agreement or arrangement with any
such party or would adversely affect the Subsidiary's relationship with any such
party so as to have a material adverse effect on the business, operations, or
condition (financial or otherwise) of Consolidated.
8.29. Books and Records. Consolidated has made available to Holding
and its representatives all of Consolidated's tax, accounting, corporate and
financial books and records, whether in written, electronic or other form. All
such books and records are complete and correct, have been maintained on a
current basis, and fairly reflect the basis for Consolidated's financial
condition and results of operations as set forth in the June 30 Balance Sheet.
8.30. Knowledge of Adverse Conditions. To the knowledge of
Consolidated, there are no present or future conditions, state of facts or
circumstances which has affected or may in the aggregate have a material adverse
effect upon the business or prospects of Consolidated taken as a whole.
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8.31. Accuracy of Representations. All representations and
warranties with respect to Consolidated and the Consolidated Stockholders are
true and correct as of the date hereof. This Agreement does not contain any
untrue statement of a material fact with respect to Consolidated and the
Consolidated Stockholders or omit to state any material fact with respect
thereto necessary to make the statements contained herein not misleading.
8.32. Investment Intent. The Merger Holding Shares being acquired
by each Consolidated Stockholder are being acquired for investment purposes only
and not with a view to public resale or distribution, and will not be sold or
distributed without registration under applicable federal and state securities
laws or exemption therefrom.
9. Covenants of the Amertranz Group.
Each of Holding and Amertranz covenants and agrees as follows:
9.1. Prior to the Closing, it will hold in strict confidence and
not disclose to others (except its professional advisors and lenders), and will
not use or permit others to use, any data or information obtained from
Consolidated concerning Consolidated or its business, except as required by law
and except to the extent such information can be obtained from public or
published information or trade sources. If the transactions contemplated by this
Agreement are not concluded, each will (i) return to Consolidated all such data
or information then held by it or its representatives and will continue to
maintain such information in strict confidence as set forth above, and (ii) not
disclose to any other party (except its professional advisors and lenders who
have a "need to know"), the existence of this Agreement or any letters of intent
with respect thereto. It will maintain all negotiations and other information
with respect to the transactions contemplated herein in confidence and, except
as required by law, will not make any announcement thereof or disclose such
negotiations to any other party other than its professional advisors and
lenders. If it is required by law to make any such disclosure, it will first
advise Consolidated of the content of the proposed disclosure, and the time and
place that the disclosure will be made. This covenant shall survive termination
of this Agreement.
9.2. At the Closing, Amertranz will agree to employ each of the
Consolidated Stockholders pursuant to the terms of the respective Employment
Agreements.
9.3. Following the Closing and prior to any re-assignment to the
Consolidated Stockholders, the Amertranz Group will continue to collect all
accounts receivable reflected on the Closing Balance Sheet with the same effort
Consolidated has heretofore generally expended to collect its other accounts
receivable.
9.4. The Amertranz Group will pay (i) all taxes, penalties and
interest due with respect to revenues of Consolidated earned after September 30,
1996, and (ii) all taxes, penalties and interest assessed on Holding or
Amertranz in respect of the Merger and the transactions contemplated by this
Agreement (except as set forth in Section 10.8).
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10. Covenants of Consolidated and the Consolidated Stockholders.
Consolidated and the Consolidated Stockholders each covenants and
agrees as follows:
10.1. Prior to the Closing, it will hold in strict confidence and
not disclose to others (except its professional advisors and lenders), and will
not use or permit others to use, any data or information obtained from the
Amertranz Group concerning the Amertranz Group or its business, except to the
extent such information can be obtained from public or published information or
trade sources. If the transactions contemplated by this Agreement are not
concluded, it will (i) return to the Amertranz Group all such data or
information then held by it or its representatives and will continue to maintain
such information in strict confidence as set forth above, and (ii) not disclose
to any other party (except its professional advisors and lenders who have a
"need to know"), the existence of this Agreement or any letters of intent with
respect thereto. It will maintain all negotiations and other information with
respect to the transactions contemplated herein in confidence and, except as
required by law or with the consent of the Amertranz Group, will not make any
announcement thereof or disclose such negotiations to any other party other than
its professional advisors and lenders. If it is required by law to make any such
disclosure, it will first advise Holding of the content of the proposed
disclosure, and the time and place that the disclosure will be made. This
covenant shall survive termination of this Agreement.
10.2. Prior to the Closing Date, Consolidated will not engage in
any prac- tice, take or omit to take any action, or enter into any transaction
outside the ordinary course of business.
10.3. Prior to the Closing Date, it will continue to operate the
Consolidated Business and Consolidated's properties in the ordinary course of
business, and will preserve, and enforce, in the ordinary course of business,
all rights with respect thereto, including its present operations, physical
facilities, working conditions, and relationships with lessors, licensors,
suppliers, customers and employees.
10.4. Prior to the Closing Date, without the prior written consent
of Holding, Consolidated will not authorize any salary, bonus, or compensation
increase, other than in the ordinary course of its business and consistent with
prior practice, or any dividends or loans to officers or directors.
10.5. During the period commencing on the date hereof and ending on
the Closing Date, it will (i) provide the Amertranz Group and its
representatives with full access during normal business hours to all of
Consolidated's properties, assets, books, records, contracts, leases, mortgages,
commitments, instruments and agreements upon one-day's notice, (ii) provide the
Amertranz Group and its representatives with such tax, financial and operating
data and other information with respect to Consolidated's business and
properties as the Amertranz Group shall from time to time reasonably request
upon one-day's notice, and (iii) permit the Amertranz Group and its
representatives to consult with Consolidated's representatives, officers,
employees, bank-
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ers, attorneys, accountants, and, with the prior knowledge, and in the presence,
of the chief executive officer of Consolidated, suppliers, and customers.
10.6. Consolidated and the Consolidated Stockholders shall assist
and cooperate with the Auditor in the conduct and preparation of Consolidated's
June 30 Audit and the Closing Audit and shall instruct Consolidated's
accountants, employees and other agents to assist and cooperate with the Auditor
in the conduct and preparation of Consolidated's June 30 Audit and the Closing
Audit.
10.7. At the Closing, each of the Consolidated Stockholders will
agree to be employed by Amertranz pursuant to the terms of the respective
Employment Agreements.
10.8. Immediately following the Closing, the Consolidated
Stockholders will file appropriate federal, state and local tax returns with
respect to Consolidated's business and earnings, for all periods from and after
the period covered by the latest such returns filed by Consolidated through
September 30, 1996. The Consolidated Stockholders will pay, in a timely manner,
all taxes, penalties and interest due with respect to such periods. In addition,
the Consolidated Stockholders will pay, in a timely manner, (i) all taxes,
penalties and interest with respect to all revenues of Consolidated for all
periods through the September 30, 1996 (to the extent not yet paid), (ii) all
costs (including professional expenses) of any tax audit with respect to periods
through September 30, 1996, and (iii) all taxes, penalties and interest assessed
on Consolidated or the Consolidated Stockholders in respect of the Merger and
the transactions contemplated by this Agreement.
11. Conditions Precedent to Obligations of the Amertranz Group.
The Amertranz Group's obligation to close the transactions pursuant
to this Agreement is contingent on the fulfillment, at or prior to the Closing
Date, of each of the following conditions to the reasonable satisfaction of the
Amertranz Group in the Amertranz Group's judgement, which judgement will not be
unreasonably exercised), any of which conditions may be waived in writing, in
whole or in part, by the Amertranz Group:
11.1. The representations and warranties made by or on behalf of
Consolidated or the Consolidated Stockholders contained in this Agreement or in
any certificate or document delivered by, or at the direction of, Consolidated
or the Consolidated Stockholders to the Amertranz Group pursuant to the
provisions hereof shall be true in all respects at and as of the time of the
Closing as though such representations and warranties were made at and as of
such time.
11.2. Consolidated and the Consolidated Stockholders shall have
each per- formed and complied in all material respects with all covenants,
agreements, and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
11.3. Consolidated shall have delivered to the Amertranz Group all
of the exhibits and schedules required herein to be delivered by Consolidated or
the Consolidated Stockholders, and copies of the documents referred to therein,
each duly executed, if required,
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and each such exhibit, schedule and document shall have been reasonably
acceptable to the Amertranz Group.
11.4. Since June 30, 1996, no material adverse change in the
condition (fi- nancial or otherwise), business, earnings or, to the knowledge of
Consolidated or the Consolidated Stockholders, prospects of Consolidated has
occurred, except as disclosed on Schedule 8.19.
11.5. The transactions contemplated by this Agreement shall have
been duly approved by the Board of Directors and stockholders of Consolidated,
as required by the laws of its state of incorporation.
11.6. The Amertranz Group shall have received a certificate signed
by the chief executive officer of Consolidated and each of the Consolidated
Stockholders and dated the Closing Date, to the effect that the conditions
specified in Sections 11.1 through 11.5 inclusive have been fulfilled.
11.7. Consolidated shall have obtained the consent of all required
gov- ernmental bodies and all third parties as required for the conclusion of
the transactions contemplated by this Agreement, including approval of third
parties under leases of property included in the Consolidated Assets and under
other assignable contracts assigned to and assumed by Amertranz or Holding as
part of the Consolidated Assets.
11.8. Consolidated's June 30 Audit shall have been completed and
the results thereof presented to Consolidated and the Amertranz Group.
11.9. The Amertranz Group shall have received the following:
11.9.1. A certificate from the Secretary of State (or similar
office) of Consolidated's jurisdiction of incorporation, dated at or about the
Closing Date, to the effect that Consolidated is in good standing under the laws
of said jurisdiction.
11.9.2. An incumbency certificate for Consolidated signed by
all of the officers thereof dated at or about the Closing Date.
11.9.3. A certified Certificate of Incorporation (or similar
instru- ment) of Consolidated, as amended to date, dated at or about the Closing
Date, and a copy of Consolidated's By-laws, if any, certified by its Secretary
dated at or about the Closing Date.
11.9.4. Resolutions of the Board of Directors and
stockholders of Consolidated, certified by its Secretary dated at or about the
Closing Date, authorizing the transactions contemplated under this Agreement.
11.9.5. No later than five days before the Closing Date,
Consolidated's: (i) audited financial statements for the 12-month period ended
June 30, 1996; (ii) unaudited financial statements for the fiscal years ended
December 31, 1991, 1992, 1993, 1994 and 1995, each certified by the chief
financial officer of Consolidated, and each prepared in
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<PAGE>
accordance with GAAP applied on a consistent basis with prior periods, except
that such unaudited financial statements will not contain footnotes and will
contain reasonable estimates, subject to adjustment, of accruals, deferrals, and
reserves consistent with past practices; and (iii) unaudited monthly interim
financial statements for the periods July 1, 1996 through the last day of the
month ending more than 15 days prior to the Closing Date, each certified by the
chief financial officer of Consolidated and each prepared in accordance with
GAAP applied on a consistent basis with prior periods, except that such
unaudited financial statements will not contain footnotes and will contain
reasonable estimates, subject to adjustment, of accruals, deferrals, and
reserves consistent with past practices.
11.9.6. An estoppel certificate from each landlord of real
property included in the Consolidated Assets, in form and substance satisfactory
to Holding.
11.9.7. An opinion of Consolidated's counsel, dated the
Closing Date, in the form attached hereto as Exhibit D.
11.9.8. All other instruments, documents and certificates as
are required to be delivered by or on behalf of Consolidated or the Consolidated
Stockholders pursuant to the provisions of this Agreement or that may be
reasonably requested in furtherance of the provisions of this Agreement.
12. Conditions Precedent to Obligations of Consolidated and the
Consolidated Stockholders.
Consolidated's and the Consolidated Stockholders' obligations to
close the transactions pursuant to this Agreement is contingent on the
fulfillment, at or prior to the Closing Date, of each of the following
conditions to the reasonable satisfaction of Consolidated in Consolidated's
judgement, which judgement will not be unreasonably exercised, any of which
conditions may be waived in writing, in whole or in part, by Consolidated:
12.1. The representations and warranties by the Amertranz
contained in this Agreement or in any certificate or document delivered by, or
at the direction of the Amertranz Group to Consolidated pursuant to the
provisions hereof shall be true in all respects at and as of the time of the
Closing as though such representations and warranties were made at and as of
such time.
12.2. The Amertranz Group shall have performed and complied in all
material respects with all covenants, agreements, and conditions required by
this Agreement to be performed or complied with by them prior to or at the
Closing.
12.3. The Amertranz Group shall have delivered to Consolidated all
of the exhibits and schedules required herein to be delivered by the Amertranz
Group, and copies of the documents referred to therein, each duly executed, if
required, and such exhibits, schedules and documents shall have been reasonably
acceptable to Consolidated.
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<PAGE>
12.4. Since June 30, 1996, no material adverse change in the
condition (fi- nancial or otherwise), business, earnings or, to the knowledge of
the Amertranz Group, prospects of Holding has occurred, except as disclosed in
material filed by Holding with the SEC.
12.5. The transactions contemplated by this Agreement shall have
been duly approved by the respective Boards of Directors of Holding and
Amertranz, as required by the Delaware Corporation Law.
12.6. Consolidated shall have received a certificate signed by the
President of Holding, and dated the Closing Date, to the effect that the
conditions specified in Sections 12.1 through 12.5 inclusive have been
fulfilled.
12.7. Consolidated shall have obtained the consent of all required
gov- ernmental bodies and all third parties as required for the conclusion of
the transactions contemplated by this Agreement, including approval of third
parties under leases of property included in the Consolidated Assets and under
other assignable contracts assigned to and assumed by Amertranz or Holding as
part of the Consolidated Assets.
12.8. The Consolidated Stockholders shall have received the
following:
12.8.1. An opinion of the Amertranz Group's counsel, dated
the Closing Date, in the form attached hereto as Exhibit E.
12.8.2. All other instruments, documents and certificates as
are required to be delivered by or on behalf of the Amertranz Group pursuant to
the provisions of this Agreement or that may be reasonably requested in
furtherance of the provisions of this Agreement.
13. Registration Rights.
13.1. Right to Piggyback.
13.1.1. If Holding proposes to register any securities of
Holding under the Securities Act on any registration form (otherwise than for
the registration of securities to be offered and sold by Holding pursuant to (i)
an employee benefit plan, (ii) a dividend or interest reinvestment plan, (iii)
other similar plans or (iv) reclassification of securities, mergers,
consolidations and acquisitions of assets) permitting a secondary offering or
distribution, not less than 90 days prior to each such registration Holding
shall give to the Consolidated Stockholders written notice of such proposal
which shall describe in detail the proposed registration and distribution
(including those jurisdictions where registration or qualification under the
securities or blue sky laws is intended) and, upon the written request of both
of the Consolidated Stockholders furnished within 30 days after the date of any
such notice, proceed to include in such registration such Merger Holding Common
Shares ("Piggy-Back Shares") as have been requested by the Consolidated
Stockholders to be included in such registration. The Consolidated Stockholders
shall in their request describe briefly the proposed disposition of such shares
of Common Stock. Holding will in each instance use its best efforts to cause all
such Piggy-Back
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<PAGE>
Shares to be registered under the Securities Act and qualified under the
securities or blue sky laws of any jurisdiction requested by the Consolidated
Stockholders, all to the extent necessary to permit the sale or other
disposition thereof (in the manner stated in such request) by the Consolidated
Stockholders.
13.1.2. If the managing underwriter, who shall be selected by
Holding advises Holding in writing that, in its opinion, the inclusion of the
Piggy-Back Shares with the securities being registered by Holding would
materially adversely affect the distribution of all such securities, then
Holding will include in such registration (i) first, the securities Holding
proposes to sell and (ii) second, the Piggy-Back Shares requested to be included
in such registration, pro rata among the Consolidated Stockholders.
13.2. Selection of Underwriter; Participation in Underwritten
Registrations. Each of the Consolidated Stockholders agrees to the selection by
Holding of the underwriter to manage such registration and to execute an
underwriting agreement with such underwriter that is in customary form. No
Consolidated Stockholder may participate in any registration hereunder which is
underwritten unless such Consolidated Stockholder (i) agrees to sell his
Piggy-Back Shares on the basis provided in any underwriting arrangements
approved by Holding, and (ii) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements; provided that no holder of
Piggy-Back Shares included in any underwritten registration shall be required to
make any representations or warranties to Holding or the underwriters other than
representations and warranties regarding the Consolidated Stockholder and the
Consolidated Stockholders' intended method of distribution.
13.3. Withdrawal of Registration. Nothing in this Section shall be
deemed to require Holding to proceed with any registration of its securities
after giving the notice as provided herein; provided, however, that Holding
shall pay all expenses incurred pursuant to such notice (in accordance with
Section 13.6).
13.4. Registration and Qualification Procedures. Whenever Holding
is required by the provisions of this Section to use its best efforts to effect
the registration of any of its securities under the Securities Act, Holding
will, as expeditiously as is possible:
(i) prepare and file with the SEC a registration statement
with respect to such securities in connection with which Holding will give the
Consolidated Stockholders, their counsel and accountants the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and records and
such opportunities to discuss the business of Holding with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of the Consolidated Stockholders' counsel, to
conduct a reasonable investigation within the meaning of the Securities Act;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as
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<PAGE>
may be necessary to keep such registration statement effective and the
prospectus current and to comply with the provisions of the Securities Act with
respect to the sale of all securities covered by such registration statement
whenever the Consolidated Stockholders shall desire to sell the same; provided,
however, Holding shall have no obligation to file any amendment or supplement at
its own expense more than nine months after the effective date of such
registration statement;
(iii) furnish to the Consolidated Stockholders such number of
copies of preliminary prospectuses and prospectuses and each supplement or
amendment thereto and such other documents as they may reasonably request in
order to facilitate the sale or other disposition of the securities owned by
them in conformity with (i) the requirements of the Securities Act and (ii) the
proposed method of distribution;
(iv) use its reasonable best efforts to register or qualify
the securities covered by such registration statement under the securities or
blue sky laws of such jurisdictions within the United States as the Consolidated
Stockholders shall reasonably request, and do such other reasonable acts and
things as may be required of it to enable the Consolidated Stockholders to
conclude the sale or other disposition in such jurisdictions of the securities
owned by them; provided, however, that Holding shall not be required to (a)
qualify as a foreign corporation or consent to a general and unlimited service
of process in any such jurisdiction, (b) subject itself to any material taxation
in any such jurisdiction, or (iii) qualify as a dealer in securities;
(v) furnish, at the request of the Consolidated Stockholders,
on the date such securities are delivered to the underwriters for sale pursuant
to such registration or, if such securities are not being sold through
underwriters, on the date the registration statement with respect to such
securities become effective, (a) an opinion, dated such date, of counsel
representing Holding for the purposes of such registration, addressed to the
underwriters, if any, and to the Consolidated Stockholders, covering such legal
matters with respect to the registration in respect of which such opinion is
being given as the Consolidated Stockholders may reasonably request and are
customarily included in such opinions, and (b) letters, dated respectively, (1)
the effective date of the registration statement and (2) the date such
securities are delivered to the underwriters, if any, for sale pursuant to such
registration, from a firm of independent certified public accountants of
recognized national standing selected by Holding, addressed to the underwriters,
if any, and to the Consolidated Stockholders, covering such financial,
statistical and accounting matters with respect to the registration in respect
of which such letters are being given as the Consolidated Stockholders may
reasonably request and are customarily included in such letters;
(vi) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders as soon as reasonably practicable, but not later than 16 months after
the effective date of the registration statement, an earnings statement covering
a period of at least 12 months beginning after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act;
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(vii) cause all such Piggy-Back Shares to be listed on each
securities exchange on which similar securities issued by Holding are then
listed and to be qualified for trading on each system on which similar
securities issued by Holding are from time to time qualified;
(viii) provide a transfer agent and registrar for all such
Piggy-Back Shares not later than the effective date of such registration
statement and thereafter maintain such a transfer agent and registrar; and
otherwise cooperate with the Consolidated Stockholders and the managing
underwriter to facilitate the timely preparation and delivery of certificates
representing Piggy-Back Shares to be sold and not bearing any restrictive
legends, and enable such Piggy-Back Shares to be in such denominations and
registered in such names as the managing underwriter may reasonably request at
least two business days prior to any sale of Piggy-Back Shares to the
underwriters;
(ix) enter into and perform an underwriting agreement with
the managing underwriter, if any, containing customary (i) terms of offer and
sale of the securities, payment provisions, underwriting discounts and
commissions, and (ii) representations, warranties, covenants, indemnities, terms
and conditions;
(x) notify the Consolidated Stockholders during any time when
a prospectus relating to the registration is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, and at the request of the Consolidated Stockholders promptly prepare and
furnish to the Consolidated Stockholders a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they are made;
(xi) keep the Consolidated Stockholders advised in writing as
to the initiation and progress of any registration under this Section.
13.5. Holdback Agreements.
13.5.1. If any registration pursuant to this Section is in
connection with an underwritten public offering, each of the Consolidated
Stockholders agrees, if so required by the managing underwriter, not to effect
any public sale or distribution of Piggy-Back Shares (other than as part of such
underwritten public offering) during the period beginning 15 days prior to the
effective date of such registration statement and ending on the 90th day (or
such longer period of time as may be requested by the managing underwriter
(which period shall in no event exceed 180 days)) after the effective date of
such registration statement; provided, however, that each person that is an
officer, director, or beneficial owner of five percent or more
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<PAGE>
of the outstanding shares of Holding Common Shares enters into such an agreement
on similar terms.
13.5.2. Holding agrees not to effect any public sale or
distribution of its equity securities or securities convertible into or
exchangeable or exercisable for any of such securities during the 15 days prior
to or 90 days (or such longer period of time as may be requested by the managing
underwriter (which period shall in no event exceed 180 days)) after any
underwritten registration pursuant this Section has become effective, except as
part of such underwritten registration and except pursuant to registrations on
Form S-8 or S-4 or any successor or similar forms thereto.
13.6. Registration Expenses. If Holding is required by the
provisions of this Section to use its best efforts to effect the registration or
qualification under the Securities Act or any state securities or blue sky laws
of any of the Piggy-Back Shares, Holding shall pay all expenses in connection
therewith, including (i) all expenses incident to filing with the National
Association of Securities Dealers, Inc., (ii) registration fees, (iii) printing
expenses, (iv) accounting and legal fees and expenses, (v) expenses of any
special audits incident to or required by any such registration or
qualification, and (vi) expenses of complying with the securities or blue sky
laws of any jurisdictions in connection with such registration or qualification;
provided, however, Holding shall not be liable for (1) any discounts or
commissions to any underwriter attributable to Piggy-Back Shares being sold; (2)
any stock transfer taxes incurred in respect of the Piggy-Back Shares being
sold; or (3) the legal fees of any Consolidated Stockholder.
13.7. Securities Indemnification.
13.7.1. In connection with any registration or qualification
of securities under this Section, Holding agrees to indemnify the Consolidated
Stockholders against all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) caused by any untrue, or alleged
untrue, statement of a material fact contained in any registration statement,
preliminary prospectus, prospectus or notification or offering circular (as
amended or supplemented if Holding shall have furnished any amendments or
supplements thereto) or caused by any omission, or alleged omission, to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses are caused by any untrue statement or alleged
untrue statement or omission or alleged omission based upon information
furnished in writing to Holding by either of the Consolidated Stockholders or
any underwriter expressly for use therein.
13.7.2. In connection with any registration or qualification
of securities under this Section, the Consolidated Stockholders, jointly and
severally, agree to indemnify Holding and each officer, director and controlling
person of Holding against all losses, claims, damages, liabilities and expenses
(including the costs of reasonable investigation) caused by any untrue, or
alleged untrue, statement of a material fact contained in any registration
statement, preliminary prospectus, prospectus or notification or offering
circular (as amended or supplemented if any of the Consolidated Stockholders
shall have furnished information for any amendments or supplements thereto) or
caused by any omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statements therein
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not misleading, but only to the extent such losses, claims, damages, liabilities
or expenses are caused by any untrue statement or alleged untrue statement or
omission or alleged omission based upon information furnished in writing to
Holding by any of the Consolidated Stockholders expressly for use therein.
13.7.3. Any person entitled to indemnification hereunder will
(i) give reasonably prompt written notice to the indemnifying party of any claim
with respect to which it seeks indemnification and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
13.7.4. The indemnification provided for under this Section
will remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
person of such indemnified party and will survive the transfer of Piggy-Back
Shares.
13.7.5. The parties agree to make such provisions, as are
reasonably requested by any indemnified party, for contribution to such party in
the event indemnification is unavailable for any reason. Such right to
contribution shall be in such proportion as is appropriate to reflect the
relative fault of and benefits to Holding on the one hand and the Consolidated
Stockholders on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits to the
indemnifying party and indemnified parties shall be determined by reference to,
among other things, the total proceeds received by the indemnifying party and
indemnified parties in connection with the offering to which such losses,
claims, damages, liabilities or expenses relate. The relative fault of the
indemnifying party and indemnified parties shall be determined by reference to,
among other things, whether the action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission or
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or the indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The parties hereto agree that it would not be just or equitable if
contribution pursuant hereto were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in this Section. No person found guilty of any
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
found guilty of such fraudulent misrepresentation.
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14. Restriction on Transfer of Merger Holding Shares.
Each of the Consolidated Stockholders agrees that he will not,
directly or indirectly, offer, sell, contract to sell, or otherwise dispose of
(or announce any offer, sale, contract of sale or other disposition) any Merger
Holding Shares for a period of 12 months following the Closing Date.
15. Indemnification.
15.1. Indemnification by the Amertranz Group. Holding and Amertranz
hereby agree to jointly and severally indemnify and hold harmless Consolidated,
its shareholders, directors, officers, agents and employees, from and against
any and all Losses (as hereinafter defined), to the extent such Losses arise out
of, result from, or are in connection with: (i) any breach by the Amertranz
Group of any of the terms of this Agreement, (ii) any failure of any warranty or
representation of the Amertranz Group made herein, or (iii) any failure by the
Amertranz Group to perform or comply with any of their covenants or obligations
under this Agreement.
15.2. Indemnification by the Consolidated Stockholders. The
Consolidated Stockholders hereby agree to jointly and severally indemnify and
hold harmless Holding and Amertranz, their respective shareholders, directors,
officers, agents and employees, from and against any and all Losses, to the
extent such Losses arise out of, result from, or are in connection with: (i) any
breach by Consolidated or the Consolidated Stockholders of any of the terms of
this Agreement, (ii) any failure of any warranty or representation of
Consolidated or the Consolidated Stockholders made herein, or (iii) any failure
by Consolidated or the Consolidated Stockholders to perform or comply with any
of its covenants or obligations under this Agreement except for actions or
omissions by Consolidated controlled by the Amertranz Group.
15.3. For purposes of this Agreement, "Losses" shall mean the
aggregate of any and all payments for claims, liabilities, suits, actions,
demands, charges, damages, losses, costs, or expenses (including reasonable
attorneys' fees, expert witness fees and court costs) of every kind and nature
incurred by the indemnified party, net of all reserves with respect to such
item, tax benefits, insurance proceeds and any indemnity, contribution or other
similar payment from third parties. Tax benefits will be considered to be
realized for purposes of this Section in the year in which an indemnity payment
occurs, taking into account the present value of any such tax benefits, and the
amount of tax benefits shall be determined by assuming the person entitled to be
indemnified is in the maximum applicable foreign, federal, state and local
income tax bracket.
15.4. Except as hereinafter set forth, indemnification shall only
be available to any indemnified party to the extent its Losses exceed $25,000 in
the aggregate, the maximum liability of any indemnifying party pursuant to all
claims for indemnification under this Section and all breaches of this Agreement
shall be $1,500,000 in the aggregate. The minimum and maximum limitations set
forth in this Section shall not apply to (i) claims for indemnification for
breaches of the representations and warranties set forth in Sections 8.20 and
8.27 and the covenants set forth in Sections 9.4 and 10.8, (ii) breaches of
Holding's obligations with respect
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to the Earn-Out, (iii) claims under Section 4, (iv) claims for indemnification
under Section 13.7, and (v) breaches of the respective Employment Agreements.
15.5. If any claim is made, or any suit or proceeding is
instituted, which, if valid or prosecuted successfully would entitle a party to
indemnification under this Section (a "Claim"), the indemnified party shall
promptly give notice thereof to the others in writing. At the election of the
indemnifying party, the indemnifying party shall, at its own cost and expense,
assume the defense of such Claim or participate either directly or through their
counsel with the indemnified party in the resolution, by litigation or
otherwise, of any Claim. The indemnified party agrees to cooperate (and to cause
parties within its control to cooperate) with the indemnifying party in
determining the validity of any Claim or assertion of any Losses including
giving (and causing parties within its control to give) the indemnifying party
full access to information within its possession. The indemnified party agrees
that it will not (and will cause parties within its control not to) settle any
Claim without the prior written consent of the indemnifying party and to
exercise its best efforts to avoid or minimize the Losses resulting from any
Claim.
15.6. In addition to any other remedies available to the Amertranz
Group therefor, and except as otherwise provided in Section 4.3, all amounts
with respect to which the Amertranz Group is entitled to indemnification
pursuant to the terms and conditions of this Section, unless otherwise paid to
the Amertranz Group, shall be set off against and will reduce the next
installment(s) payable to the Consolidated Stockholders pursuant to the terms of
any obligations from Holding to the Consolidated Stockholders evidenced by a
promissory note. All amounts so set off shall be deemed paid to and received by
the Consolidated Stockholders pursuant to the terms of any such promissory
note(s). To the extent the then outstanding balance of any such promissory
note(s) is not sufficient for such purpose, the number of Merger Holding Common
Shares next issuable pursuant to the Earn-Out shall be reduced by the number of
shares determined by dividing (a) the amount payable for such indemnification by
(b) the average of the closing market price for Holding Common Shares on (1) the
date the Claim is made, and (2) the date the Claim is finally adjudicated or
otherwise determined to be valid.
16. No Brokerage.
None of the parties hereto has incurred any obligation or
liability, contingent or otherwise, for brokerage fees, finder's fees, agent's
commissions, or the like in connection with this Agreement or the transactions
contemplated hereby. Each party hereto agrees to indemnify and hold the other
party hereto harmless against and in respect of any such obligation or liability
based on agreements, arrangements, or understandings claimed to have been made
by such party with any third party.
17. Nature of Representations and Warranties.
All of the parties hereto are executing and carrying out the
provisions of this Agreement in reliance on the representations, warranties,
covenants and agreements contained in this Agreement or at the closing of the
transactions contemplated hereunder, and any investigation that they might have
made or any other representations, warranties, covenants, agreements,
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promises or information, written or oral, made by the other party or any other
person shall not be deemed a waiver of any breach of any such representation,
warranty, covenant or agreement.
18. Notices and Payments.
All notices, writings and other communications required or
permitted to be given pursuant to this Agreement shall be in writing, and if
such notices are hand-delivered or faxed, return fax acknowledgement requested,
to the address set forth below, they shall be deemed to have been received on
the business day so delivered or transmitted; if such notices are transmitted by
overnight courier, to the address set forth below, they shall be deemed to have
been received on the business day following the date on which so transmitted,
provided that any notice, writing or other communication received after 5:00
p.m., Eastern Time, shall be deemed to have been received on the next business
day:
Amertranz Group: Amertranz Worldwide, Inc.
2001 Marcus Avenue
Lake Success, New York 11042
Fax (516) 326-2248
Attn: Mr. Stuart Hettleman
and Mr. Stuart Hettleman
112 East 25th Street
Baltimore, Maryland 21218
Fax (410) 338-1105
With a copy to: Zelig Robinson, Esquire
Gordon, Feinblatt, Rothman,
Hoffberger & Hollander, LLC
233 East Redwood Street
Baltimore, Maryland 21202
Fax (410) 576-4167
Consolidated and the
Consolidated Stockholders: Mr. David W. Hockersmith
Mr. Douglas E. Hockersmith
10775 East Mary Katherine
Scottsdale, Arizona 85259
Fax (602) 661-1702
With a copy to: David H. Sands, Esquire
Troop Meisinger Steuber & Pasich, LLP
10940 Wilshire Boulevard
Los Angeles, California 90024
Fax (310) 443-8545
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<PAGE>
All payments hereunder shall be delivered to the above addresses. Any party may
change its address for notice or payment purposes by giving notice the other
parties as hereinabove provided.
19. Expenses.
19.1. Each party hereto shall be responsible for and bear all of
its own costs and expenses (including the expenses of its representatives)
incurred at any time in connection with negotiation, due diligence and closing
the transaction described herein; provided, however, that Holding shall
reimburse Consolidated for fees in the amount of up to $1,500 incurred to
Miller, Wagner & Co. and the fees incurred in conducting Consolidated's June 30
Audit and the Closing Audit, unless this transaction is not closed due to the
acts or omissions of Consolidated or the Consolidated Stockholders.
19.2. Consolidated and the Consolidated Stockholders shall pay all
income taxes and other taxes based on its taxable income which may be required
as a result of the transactions contemplated hereby.
20. Survival.
Except as otherwise provided herein, the representations,
warranties, covenants and agreements herein contained shall survive the
execution, and delivery of this Agreement and the closing of the transactions
contemplated hereby, and shall continue for a period of two years following the
Closing Date, except for breaches of the representations and warranties set
forth in Sections 8.20 and 8.27 and breaches of the covenant set forth in
Section 10.8, which shall survive until the expiration of all applicable
statutes of limitation with respect thereto.
21. Exclusivity; Termination of Agreement.
21.1. Until the Closing, Consolidated and the Consolidated
Stockholders will not directly or indirectly, through any representative or
otherwise, solicit or entertain offers from, negotiate with or in any manner,
encourage, discuss, accept or consider any proposal of any other person relating
to the acquisition of the Consolidated Shares or Consolidated's assets or
business in whole or in part, whether directly or indirectly, through purchase,
merger, consolidation, or otherwise, and will immediately notify Holding
regarding any contact between Consolidated or the Consolidated Stockholders or
their respective representatives and any other person regarding any such offer
or proposal or any related inquiry.
21.2. In the event the Closing does not take place on the Closing
Date, the obligations of the parties hereto with respect to exclusivity set
forth above in this Section and to proceed to Closing will terminate.
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22. Effect of Waiver.
The failure of any party at any time or times to require
performance of any provision of this Agreement will in no manner affect the
right to enforce the same. The waiver by any party of any breach of any
provision of this Agreement will not be construed to be a waiver by any such
party of any succeeding breach of that provision or a waiver by such party of
any breach of any other provision.
23. Severability.
The invalidity, illegality or unenforceability of any provision or
provisions of this Agreement will not affect any other provision of this
Agreement, which will remain in full force and effect, nor will the invalidity,
illegality or unenforceability of a portion of any provision of this Agreement
affect the balance of such provision. In the event that any one or more of the
provisions contained in this Agreement or any portion thereof shall for any
reason be held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be reformed, construed and enforced as if such invalid, illegal
or unenforceable provision had never been contained herein.
24. Governing Law.
This Agreement shall be governed by and construed in accordance
with, the laws of the State of New York.
25. Arbitration.
Any dispute to be submitted to binding arbitration pursuant to the
terms of this Agreement shall be submitted to binding arbitration in New York,
New York in accordance with the rules and procedures of the American Arbitration
Association. The arbitrator's decision will be final and may be enforced through
any court having jurisdiction. Each party will bear its own costs and expenses
associated with such arbitration proceedings, including costs of witnesses,
travel, attorneys, and other representatives. The general costs and expenses of
the arbitration proceedings, such as the fees of the mediator or arbitrator and
the charges of the American Arbitration Association, will be divided equally
among the parties to the dispute.
26. Enforcement.
Any suit, action or proceeding with respect to this Agreement, if
brought by the Consolidated Stockholders, shall be brought in the courts of
Baltimore City or Baltimore County in the State of Maryland or in the U.S.
District Court for the District of Maryland. Any suit, action or proceeding with
respect to this Agreement, if brought by the Amertranz Group, shall be brought
in the courts of Maricopa County in the State of Arizona or in the U.S. District
Court for the District of Arizona. The parties hereto hereby accept the
exclusive jurisdiction of those courts, as set forth above, for the purpose of
any such suit, action or proceeding.
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<PAGE>
The parties hereto hereby irrevocably waive, to the fullest extent
permitted by law, any objection that any of them may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating
to this Agreement or any judgment entered by any court in respect thereof
brought as set forth above, and hereby further irrevocably waive any claim that
any suit, action or proceeding so brought, has been brought in an inconvenient
forum.
The parties hereto acknowledge and agree that any party's remedy at
law for a breach or threatened breach of any of the provisions of this Agreement
would be inadequate and such breach or threatened breach shall be per se deemed
as causing irreparable harm to such party. Therefore, in the event of such
breach or threatened breach, the parties hereto agree that, in addition to any
available remedy at law, including but not limited to monetary damages, an
aggrieved party, without posting any bond, shall be entitled to obtain, and the
offending party agrees not to oppose the aggrieved party's request for,
equitable relief in the form of specific enforcement, temporary restraining
order, temporary or permanent injunction, or any other equitable remedy that may
then be available to the aggrieved party.
27. Binding Agreement; Assignment.
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. This Agreement
shall not be assignable by any party hereto except as provided herein or with
the prior written consent of the other parties.
28. Entire Agreement; Modification.
This Agreement, which includes all schedules and exhibits hereto,
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof, superseding all prior negotiations, correspondence,
understandings and agreements, if any, between the parties; no amendment or
modification of this Agreement shall be binding on the parties unless made in
writing and duly executed by all parties. There are no oral or implied
agreements and no oral or implied warranties between the parties hereto other
than those expressed herein.
29. Further Assurances.
29.1. Each of the parties hereto agrees to execute, acknowledge,
seal and deliver, after the date hereof and after the Closing, such further
assurances, instruments and documents and to take such further actions as the
other may reasonably request in order to fulfill the intent of this Agreement
and the transactions contemplated hereby.
29.2. The parties agree that before, on, or after the Closing Date,
each will take all actions reasonably necessary or required so that the
transactions contemplated by this Agreement be accomplished in a tax-free
exchange under Section 368(a)(1) of the Code as if originally so accomplished.
The parties intend that, in the event the transactions contemplated by this
Agreement cannot be so accomplished despite all such reasonable efforts, the
transactions contemplated by this Agreement will not be amended.
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<PAGE>
30. Counterparts.
This Agreement may be executed in counterparts, all of which taken
together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
AMERTRANZ:
----------
AMERTRANZ WORLDWIDE, INC.
By: /s/ Stuart Hettleman
--------------------------------
Name: Stuart Hettleman
Its: Executive Vice President
HOLDING:
--------
AMERTRANZ WORLDWIDE HOLDING CORP.
By: /s/ Stuart Hettleman
--------------------------------
Name: Stuart Hettleman
Its: Vice President
CONSOLIDATED:
-------------
CONSOLIDATED AIR SERVICES, INC.
By: /s/ David W. Hockersmith
--------------------------------
Name: David W. Hockersmith
Its: Chief Executive Officer
CONSOLIDATED STOCKHOLDERS:
--------------------------
/s/ David W. Hockersmith
-----------------------------------
David W. Hockersmith
/s/ Douglas E. Hockersmith
-----------------------------------
Douglas E. Hockersmith
The undersigned, Assistant Secretary of Holding, hereby certifies that
the above Agreement of Merger has been adopted by Holding pursuant to subsection
(f) of Section 251 of the General Corporation Law of the State of Delaware, and,
as of the date hereof, the outstanding shares of Holding were such as to render
such subsection applicable.
October 10, 1996 /s/
-----------------------------------
Assistant Secretary
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<PAGE>
AGREEMENT OF MERGER
INDEX OF SCHEDULES AND EXHIBITS
Schedule
- - - --------
1.1 - Earn-Out Accounts
8.2 - Consolidated Stockholders' Consolidated Ownership
8.6 - Consolidated Corporate Documents
8.11 - Consolidated Approvals
8.12 - Exceptions to Title to Consolidated's Assets
8.13 - Consolidated's Licenses and Marks
8.14 - Consolidated's Bank Accounts
8.16 - Post-Financial Statement Date Consolidated Liabilities
8.17 - Consolidated's Accounts Receivable Aging Schedule
8.18 - Consolidated's Accounts Payable Schedule
8.19 - Material Adverse Changes to Consolidated
8.21 - Consolidated Agreements and Authorizations
8.23 - Consolidated Litigation
Exhibit
- - - -------
A - Employment Agreements
B - Holding Promissory Note
C - Holding Certificate of Designation
D - Consolidated's Counsel's Opinion
E - Amertranz Group's Counsel's Opinion
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