<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) SEPTEMBER 10, 1999
GeoLogistics CORPORATION
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 333-42607 22-3438013
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
13952 DENVER WEST PARKWAY, GOLDEN, COLORADO 80401
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(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (303) 704-4400
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 10, 1999, GeoLogistics Corporation, a Delaware
corporation (the "Company"), and its wholly-owned subsidiary, GeoLogistics
Americas, Inc., a Delaware corporation ("Americas"), sold all of the assets
of the business of GeoLogistics Air Services, Inc. (the "GLAS Business") to
FDX Logistics, Inc. (formerly as FDX Global Logistics, Inc.), a Delaware
corporation (the "Purchaser"), pursuant to an Asset Purchase Agreement, dated
as of August 6, 1999 (the "Purchase Agreement"), by and among the Company,
Americas, GeoLogistics Air Services, Inc. ("GLAS"), a Delaware corporation,
FDX Corporation, a Delaware corporation, and the Purchaser. Pursuant to the
terms of the Purchase Agreement, Purchaser transferred all of its right to
receive and take title to the assets of the GLAS Business (the "Assets") to
its wholly-owned direct subsidiary, Caribbean Transportation Services, Inc.
Pursuant to the Purchase Agreement, the Company sold substantially all of the
Assets for aggregate cash consideration of $115,768,361. The Assets consisted
primarily of customer lists, business records, warehouse and computer
equipment, intellectual property, contract rights under service agreements
for freight handling and cargo-aircraft transportation, facility leases,
licenses, cash and trade accounts receivables relating to the provision of
airfreight services between the United States, on the one hand, and Puerto
Rico and the Dominican Republic, on the other. The consideration for the sale
of assets was determined by arm's length negotiations among the parties.
There is no material relationship between the Company and its affiliates,
officers and directors (or any associate of any such officers or directors),
on the one hand, and the Purchaser and its affiliates, officers and
directors, on the other. The proceeds of the disposition of the GLAS Assets
will be applied by the Company to fund the $10,000,000 escrow account
contemplated by the Purchase Agreement, pay fees and expenses associated with
the transaction and reduce revolving debt that was secured by the GLAS Assets.
The Purchase Agreement is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
ITEM 5. OTHER EVENTS.
In connection with the application of the proceeds of the disposition of
the GLAS Business by the Company, the Company and certain of its subsidiaries
entered into Amendment No. 4 (the "Amendment") to its Amended and Restated
Loan Agreement dated as of October 28, 1997 (as previously amended by
Amendment No. 1 dated December 12, 1997, Amendment No. 2 dated as of July 10,
1998, and Amendment No. 3 dated as of February 26, 1999, the "Loan
Agreement"). Pursuant to the terms of the Amendment, (a) the domestic
commitment under the Loan Agreement was reduced from $100,000,000 to
$50,500,000 and the UK commitment under the Loan Agreement was reduced from
$30,000,000 to $20,000,000, provided that the aggregate obligations
outstanding under the domestic commitment and the UK commitment will not
exceed $50,500,000 at any time, (b) the supplemental commitment under the
Loan Agreement was reduced from $30,500,000 to $15,000,000, (c) (1) the
definition of Domestic Borrowing Base was amended to provide that the
domestic borrowing base, and as a result the maximum amount that the Company
may borrow under the domestic portion of the Loan Agreement, will be equal to
the sum of (A) 50% of the eligible receivables of Americas and its restricted
subsidiaries, (B) 65% of other domestic eligible receivables and (C) 100% of
the sponsor
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collateral then effective instead of 85% of the Company's domestic
receivables and (2) the definition of UK Borrowing Base was amended to
provide that the UK borrowing base, and as a result the maximum amount that
the Company may borrow under the UK portion of the Loan Agreement, will be
equal to 65% of the UK eligible receivables instead of 80% of the UK eligible
receivables and (d) the maturity date under the Loan Agreement was shortened
to March 31, 2000, upon which date all of the obligations under the Loan
Agreement will be due and payable in full. In addition, the Amendment
included the following changes, among others: (a) the base rate margin was
increased to 2% per annum, (b) the Eurodollar rate margin was increased to
3.50% per annum, (c) a Change of Control Event (as defined in the Amendment)
will constitute an event of default under the Loan Agreement, (d) the letter
of credit sublimit was reduced from $60,000,000 to $30,000,000, (e) the
Company and the other borrowers under the Loan Agreement must repay the
outstanding obligations under the Loan Agreement upon the disposition,
subject to certain qualifications, of (1) the capital stock of any borrower
under the Loan Agreement or any of its active subsidiaries, (2) substantially
all of the assets of a division of the Company or any of its active
subsidiaries or (3) the sale of an individual asset having a value in excess
of $5,000,000, (f) the Company's debt restrictions were amended to add an
additional category of permitted debt consisting of no more than $19,500,000
of "supplemental loans" (or other loans made by the Company's shareholders
outside of the Loan Agreement) that are subordinated to other debt under the
Loan Agreement and unsecured, (g) the covenant relating to EBITDA of the
Company was amended to provide that EBITDA for the three month period ended
December 31, 1999 will not be less than a deficit of $500,000 and (h) the
interest charge coverage ratio covenant was deleted.
The Amendment is attached hereto as Exhibit 10.2 and is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired: Not applicable.
(b) Pro Forma Financial Statements: The Registrant will file the
required financial statements and pro forma financial information in accordance
with Regulation S-X by an amendment to this Form 8-K not later than 60 days from
the date this Form 8-K is required to be filed.
(c) Exhibits: The following documents are filed as exhibits to this
report:
EXHIBIT NO. DESCRIPTION
10.1 Asset Purchase Agreement dated as of August
6, 1999 among GeoLogistics Air Services,
Inc., GeoLogistics Americas, Inc., and
GeoLogistics Corporation, and FDX Logistics,
Inc. (formerly FDX Global Logistics, Inc.)
and FDX Corporation.
10.2 Amendment No. 4, dated as of September 10,
1999, to the Amended and Restated Loan
Agreement dated as of October 28, 1997 (as
previously
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amended by an Amendment No. 1 dated December
12, 1997, an Amendment No. 2 dated as of
July 10, 1998, and an Amendment No. 3 dated
as of February 26, 1999, the "Loan
Agreement"), among GeoLogistics Corporation,
GeoLogistics Services, Inc., GeoLogistics
Americas, Inc., The Bekins Company, ILLCAN,
Inc., ILLSCOT, Inc., GeoLogistics Limited,
and ING (U.S.) Capital Corporation (now
known as ING (U.S.) Capital LLC and referred
to as "ING Capital"), and ING Bank, N.V.
(London, England Branch).
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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.
GEOLOGISTICS CORPORATION
Date: September 17, 1999 By: /s/ Ronald Jackson
--------------------------------
Ronald Jackson
Vice President and General Counsel
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EXHIBIT INDEX
EXHIBIT
10.1 Asset Purchase Agreement dated as of August 6,
1999 among GeoLogistics Air Services, Inc.,
GeoLogistics Americas, Inc., and GeoLogistics
Corporation, and FDX Logistics, Inc. (formerly
FDX Global Logistics, Inc.) and FDX Corporation.
10.2 Amendment No. 4, dated as of September 10,
1999, to the Amended and Restated Loan
Agreement dated as of October 28, 1997 (as
previously amended by an Amendment No. 1 dated
December 12, 1997, an Amendment No. 2 dated as
of July 10, 1998, and an Amendment No. 3 dated
as of February 26, 1999, the "Loan Agreement"),
among GeoLogistics Corporation, GeoLogistics
Services, Inc., GeoLogistics Americas, Inc.,
The Bekins Company, ILLCAN, Inc., ILLSCOT,
Inc., GeoLogistics Limited, and ING (U.S.)
Capital Corporation (now known as ING (U.S.)
Capital LLC and referred to as "ING Capital"),
and ING Bank, N.V. (London, England Branch).
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EXECUTION COPY
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ASSET PURCHASE AGREEMENT
dated as of August 6, 1999
among
GEOLOGISTICS AIR SERVICES, INC.,
GEOLOGISTICS AMERICAS, INC.,
and
GEOLOGISTICS CORPORATION
and
FDX GLOBAL LOGISTICS, INC.
and
FDX CORPORATION
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ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience only.
<TABLE>
<CAPTION>
Section Page
No. No.
-- --
<S> <C>
1. Definitions; Rules of Construction . . . . . . . . . . . . . . . . . . . .1
2. Purchase of GLAS Assets. . . . . . . . . . . . . . . . . . . . . . . . . .7
3. Assumption of Liabilities. . . . . . . . . . . . . . . . . . . . . . . . .8
4. Consideration; Post Closing Adjustment . . . . . . . . . . . . . . . . . .8
5. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6. Representations and Warranties of GLAS, Americas and Holding . . . . . . 11
7. Representations and Warranties of the Purchaser. . . . . . . . . . . . . 26
8. Covenants of GLAS, Americas and Holding. . . . . . . . . . . . . . . . . 28
9. Covenants of the Purchaser . . . . . . . . . . . . . . . . . . . . . . . 35
10. Conditions Precedent to Obligations of GLAS, Americas and
Holding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11. Conditions Precedent to Obligations of the Purchaser . . . . . . . . . . 38
12. Non-Compete and Non-Solicitation Covenants; Purchaser
Undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
14. No Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
15. Nature of Representations and Warranties . . . . . . . . . . . . . . . . 47
16. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
17. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
18. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
19. Exclusivity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
20. Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 49
21. Effect of Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
22. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
23. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
24. Enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
25. Binding Agreement; Assignment. . . . . . . . . . . . . . . . . . . . . . 52
26. Entire Agreement; Modification . . . . . . . . . . . . . . . . . . . . . 52
27. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
28. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
</TABLE>
SCHEDULES
<TABLE>
<S> <C>
Schedule 1.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .GLAS Assets
Schedule 1.1A. . . . . . . . . . . . . . . . . . . . CAS-D Freight Handling Agreement
Schedule 1.1B. . . . . . . . . . . . . . . . . . . . . . June 30, 1999 Current Assets
Schedule 1.1C. . . . . . . . . . . . . . . . . . . . . . . Freight Handling Agreement
</TABLE>
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<TABLE>
<S> <C>
Schedule 1.1D. . . . . . . . . . . . . . . . . . . .June 8, 1999 Kitty Hawk Agreement
Schedule 1.1E. . . . . . . . . . . . . . . . . . . .May 28, 1999 Kitty Hawk Agreement
Schedule 6.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . GLAS Jurisdictions
Schedule 6.3 . . . . . . . . . . . . . . . . . . . .Bank Accounts; Powers of Attorney
Schedule 6.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GLAS Approvals
Schedule 6.10. . . . . . . . . . . . . . . . . . . Exceptions to Title of GLAS Assets
Schedule 6.11. . . . . . . . . . . . . . . . GLAS Licenses, Trademarks and Tradenames
Schedule 6.13. . . . . . . . . . . . . . . . . . . . . . . .GLAS Financial Statements
Schedule 6.15. . . . . . . . . . . . . . . . . . . . . . . . .Undisclosed Liabilities
Schedule 6.16. . . . . . . . . . . . . . . . . . . . . . . . . . GLAS Facility Leases
Schedule 6.17. . . . . . . . . . . . . . . . . . . . . . . .Exceptions to GLAS Assets
Schedule 6.18. . . . . . . . . . . . . . . . . . . . Material Adverse Changes to GLAS
Schedule 6.20. . . . . . . . . . . . . . . . . . . GLAS Agreements and Authorizations
Schedule 6.21. . . . . . . . . . . . . . . .Exceptions to Compliance with Regulations
Schedule 6.22. . . . . . . . . . . . . . . . . . . . . . . . . . . . .GLAS Litigation
Schedule 6.23. . . . . . . . . . . . . . . . . . . . . . . . .GLAS Insurance Policies
Schedule 6.25. . . . . . . . . . . . . . . . . . . . . . . GLAS Employment Agreements
Schedule 6.26. . . . . . . . . . . . . GLAS Employee Benefit Plans and Employee Loans
Schedule 6.27. . . . . . . . . . . . . . . . . . . . . .GLAS Environmental Exceptions
Schedule 6.28. . . . . . . . . . . . . . . . . . . . . . . . . . . Business Relations
Schedule 6.32. . . . . . . . . . . . . . . . . . . . . . . . . Affiliate Transactions
Schedule 7.5 . . . . . . . . . . . . . . . . . . . . . . .Purchaser Approvals Exhibit
Schedule 7.8 . . . . . . . . . . . . . . . . . . . . . . . . . . Purchaser Litigation
Schedule 8.13. . . . . . . . . . . . . . . . . . . . . . . . . . . . .GLAS Facilities
Schedule 11.4. . . . . . . . . . . . . . . . . . . . . . . . . GLAS Required Consents
</TABLE>
EXHIBITS
<TABLE>
<S> <C>
Exhibit A Assumption Agreement
Exhibit B Bill of Sale
Exhibit C Escrow Agreement
Exhibit D Announcements
Exhibit E FDX Officer's Certificate
Exhibit F FDX Secretary's Certificate
Exhibit G Geo Officer's Certificate
Exhibit H Geo Secretary's Certificate
</TABLE>
ii
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of the 6th day of August, 1999 among GEOLOGISTICS AIR
SERVICES, INC., a Delaware corporation ("GLAS"); GEOLOGISTICS AMERICAS, INC.,
a Delaware corporation ("Americas"); GEOLOGISTICS CORPORATION, a Delaware
corporation ("Holding"); FDX GLOBAL LOGISTICS, INC., a Delaware corporation
(the "Purchaser"); and FDX CORPORATION, a Delaware corporation (the "Parent").
EXPLANATORY STATEMENT
GLAS is a direct wholly-owned subsidiary of Americas and an indirect
wholly-owned subsidiary of Holding. Holding and Americas desire to cause GLAS
(or Americas or such other wholly-owned subsidiary of Holding to which the GLAS
Assets (as hereinafter defined) may hereafter be transferred pursuant to the
terms of this Agreement) to sell and the Purchaser desires to purchase the
assets used in the business of GLAS on the terms and conditions hereinafter set
forth.
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:
150-DAY RECEIVABLES - The accounts receivable of GLAS that, as
reflected in the reports of GLAS as of July 31, 1999 and supported by the
accounts receivable detail subledger, were due and payable for a period
exceeding 150 days following the invoice date, in each case reduced to
reflect any amounts received by GLAS with respect to such receivable prior to
the Closing Date and all reductions and compromises made with respect to such
receivable prior to the Closing Date.
ACCOUNTING FIRM - As defined in SECTION 4.4.1.
AFFILIATE - Any person or entity that directly, or indirectly through
one of more intermediaries, controls or is controlled by or is under common
control with the person or entity specified. For purposes of this definition,
control of the person or entity means the power, direct or indirect, to direct
or cause the direction of the management and policies of such person or entity
whether by Contract or otherwise.
AGREEMENT - As defined in the Preamble hereof and including the
Exhibits and Schedules thereto.
ASSUMED OBLIGATIONS - As defined in SECTION 3.
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ASSUMPTION AGREEMENT - The Assumption Agreement substantially in the
form attached hereto as EXHIBIT A, together with such other good and sufficient
instruments of assumption, in form and substance reasonably acceptable to GLAS
and the Purchaser, as shall be effective to cause the Purchaser to assume the
Assumed Obligations.
BILL OF SALE - The Bill of Sale substantially in the form attached
hereto as EXHIBIT B, together with such other good and sufficient instruments of
conveyance, assignment and transfer, in form and substance reasonably acceptable
to GLAS and the Purchaser, as shall be effective to vest in the Purchaser good
title to the GLAS Assets.
CARIBBEAN ISLANDS - Anguilla, Antigua and Barbuda, Aruba, the Bahamas,
Barbados, Bermuda, Bonaire, British Virgin Islands, Cayman Islands, Curacao,
Dominica, Dominican Republic, Grenada, Guadeloupe, Haiti, Jamaica, Martinique,
Montserrat, Netherlands Antilles, Puerto Rico, Saba, Saint Kitts and Nevis,
Saint Lucia, Saint Maarten/St. Martin, Saint Vincent and The Grenadines, St.
Barthelemy, St. Eustatius, Trinidad and Tobago, Turks & Caicos Island and U.S.
Virgin Islands.
CAS - Caribbean Air Services, Inc., a Delaware corporation.
CAS-D FREIGHT HANDLING AGREEMENT - The Freight Handling Agreement
attached hereto as SCHEDULE 1.1A, dated January 1, 1996, between CAS, Caribbean
Air Services Dominica, Inc., a corporation organized under the laws of Puerto
Rico, and such corporation's stockholders.
CERCLA - The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder.
CERCLIS - The Comprehensive Environmental Response and Liability
Information System, as provided for by 40 C.F.R. Section 300.5.
CLAIM - As defined in SECTION 13.5.
CLOSING - The closing of the transactions contemplated by this
Agreement.
CLOSING BALANCE SHEET - As defined in SECTION 4.4.1.
CLOSING DATE - The date that is five business days following the
expiration of the waiting period under the HSR Act, but in any event, no later
than October 31, 1999, unless the only unsatisfied condition to Closing other
than conditions relating to Closing certificates or other conditions that can
only be satisfied at the Closing, is the expiration or termination of the
waiting period under the HSR Act, in which case no later than December 31, 1999,
in each case as may otherwise be mutually agreed to by the parties in writing.
CLOSING FINANCIAL STATEMENTS DELIVERY DATE - As defined in SECTION
4.4.1.
CODE - The Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder.
2
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CONTRACTS - As defined in SECTION 6.20.
CURRENT ASSETS AMOUNT - The sum of any positive cash balance, trade
accounts receivables, prepaid expenses and miscellaneous receivables, in each
case other than (i) receivables due from Affiliates of GLAS and (ii)
miscellaneous receivables constituting (a) deferred income taxes, (b) accounting
fees due from AmerTranz Worldwide Holding Corp. or any of its Affiliates and (c)
miscellaneous intercompany receivables and net of allowances for doubtful
accounts, and each as reflected in the Closing Balance Sheet and calculated in a
manner that is consistent with the column entitled "Assets to be Assumed by
Purchaser" on SCHEDULE 1.1.B attached hereto.
DEFICIENCY - The amount, if any, by which the Current Assets Amount is
less than $13,549,454.
DETERMINATION DATE - As defined in SECTION 4.4.1.
EMPLOYEE BENEFIT PLANS - As defined in SECTION 6.26(i).
ENVIRONMENTAL CLAIM - With respect to any person, any written or
oral notice, claim, demand or other communication (collectively, a "claim")
by any other person alleging or asserting such person's liability for
investigatory costs, cleanup costs, Governmental or Regulatory Authority
response costs, damages to natural resources or other property, personal
injuries, fines or penalties arising out of, based on or resulting from (a)
the presence, or Release into the environment, of any Hazardous Material at
any location, whether or not owned by such person, or (b) circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law. The term "Environmental Claim" shall include, without
limitation, any claim by any Governmental or Regulatory Authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the presence of Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety or the environment.
ENVIRONMENTAL LAW - Any law or order relating to the regulation or
protection of human health, safety or the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes.
ERISA - The Employee Retirement Income Security Act of 1974, as
amended, and the regulations issued thereunder.
ESCROW AGREEMENT - The Escrow Agreement substantially in the form
attached hereto as EXHIBIT C.
ESCROW AMOUNT - As defined in SECTION 4.1.2.
3
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EXCHANGE ACT - The Securities Exchange Act of 1934, as amended.
FACILITY LEASES - The current leases entered into by GLAS, CAS or
other parties with respect to leased office, warehouse, and terminal space and
other real property utilized in the conduct of the GLAS Business.
FREIGHT HANDLING AGREEMENT - The Cargo Aircraft Charter Agreement
dated July 1, 1998 between Tradewinds Airlines, Inc. and GLAS as attached hereto
as SCHEDULE 1.1C.
GAAP - United States generally accepted accounting principles.
GEOLOGISTICS GROUP - Holding, Americas and GLAS, collectively.
GLAS - As defined in the introductory paragraph of this Agreement.
GLAS ASSETS - All of the assets of GLAS as a going concern of every
kind and nature, real, personal or mixed, tangible or intangible, wherever
located including those listed on SCHEDULE 1.1 and 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 transportation services);
all equipment, vehicles, parts, tools, computers and computer equipment, and
other assets; 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 "Caribbean Air Services", and all service marks
utilized in connection therewith; all local, 800 and international telephone
and telefax numbers utilized by GLAS in connection with its businesses; all
pre-paid expenses, credits, deferred charges and security deposits; the
leases for GLAS's facilities, including all furniture, fixtures and equipment
used in or held for use in each such facility or in connection therewith
(subject to dispositions or replacements prior to Closing in the ordinary
course of business); all of GLAS's rights under the Freight Handling
Agreement; all of GLAS's rights under the CAS-D Freight Handling Agreement
(including the right to receive commissions thereunder); all of GLAS's rights
under the Kitty Hawk Agreements; all vendor, customer and sales
representative contracts of GLAS in connection with its business; all other
contracts of GLAS in connection with its business; all governmental licenses
or authorizations with respect to the conduct of the GLAS Business; all other
licenses pursuant to which any assets used in the GLAS Business are used; all
of GLAS's cash on hand, cash in depositories, cash equivalents, accounts
receivables (excluding any (i) accounts receivables due from Holding or any
Holding Affiliates and (ii) miscellaneous receivables constituting (a)
deferred income taxes, (b) accounting fees due from AmerTranz Worldwide
Holding Corp. or any of its Affiliates and (c) miscellaneous intercompany
receivables, each as calculated in a manner that is consistent with the
column entitled "Assets to be Assumed by Purchaser" on SCHEDULE 1.1.B
attached hereto), books, records, manuals and other materials (in any form or
medium), including, without limitation, advertising material, price lists,
correspondence, mailing lists, purchasing materials and records, personnel
records, quality control records and procedures, research and development
files, intellectual property disclosures, media materials and accounting
records and all other tangible and intangible assets as necessary for the
operation of the GLAS Business.
4
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GLAS BUSINESS - The business heretofore operated by GLAS.
GLAS SHARES - All of the issued and outstanding shares of Common Stock
of GLAS, par value $1.00 per share.
GOVERNMENTAL OR REGULATORY AUTHORITY - Any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state,
territory, county, city or other political subdivision.
HAZARDOUS MATERIAL - (i) any petroleum or petroleum products,
flammable explosives, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and transformers or
other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls (PCBs); (ii) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants" or words of similar import under any Environmental Law; and
(iii) any other chemical or other material or substance, exposure to which is
now or hereafter prohibited, limited or regulated by any Governmental or
Regulatory Authority under any Environmental Law.
HOLDING'S ACCOUNTANT - As defined in SECTION 4.4.1.
HOLDING - As defined in the introductory paragraph of this
Agreement.
HSR ACT - The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
INDEBTEDNESS - With respect to any person or entity, all obligations
of such person or entity, (i) for borrowed money, (ii) evidenced by notes,
bonds, debentures or similar instruments, (iii) for the deferred purchase price
of goods or services (other than trade payables or accruals incurred in the
ordinary course of business), (iv) under capital leases, (v) for obligations of
GLAS to Holding or any of Holding's subsidiaries, and (vi) in the nature of
guarantees of the obligations described in clauses (i) through (v) above of any
other person.
INDEMNITEE - As defined in SECTION 13.5.
INDEMNITOR - As defined in SECTION 13.5.
JUNE 30 BALANCE SHEET - The unaudited balance sheet of GLAS prepared
in connection with the unaudited balance sheet of Holding as of June 30, 1999.
KITTY HAWK AGREEMENTS - The ACMI Aircraft Services Agreement, dated as
of June 8, 1999, between Kitty Hawk International, Inc. and GLAS and the ACMI
Aircraft Services Agreement, dated as of May 28, 1999, between Kitty Hawk
International, Inc. and GLAS, copies of which are attached hereto as
SCHEDULE 1.1D and 1.1E.
LICENSES - As defined in SECTION 6.20.
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LIENS - Any mortgage, pledge, assessment, security interest, lease,
lien, adverse claim, levy, charge or other encumbrance of any kind, or any
conditional sale Contract, title retention Contract or other Contract to give
any of the foregoing.
MARKED INVENTORY - As defined in SECTION 9.5.
NAMES - As defined in SECTION 9.5.
NPL - The National Priorities List under CERCLA.
NYSE - The New York Stock Exchange, Inc.
ORDER - With respect to any person or entity, any judgment, order,
writ or decree of any court, arbitrator or governmental agency by which such
person or entity or any of its assets or properties is bound.
OVERDUE 150-DAY RECEIVABLES SCHEDULE - As defined in SECTION 13.1.2.
PARENT - As defined in the introductory paragraph of this Agreement.
PLAN AFFILIATE - As defined in SECTION 6.26(iii).
PURCHASE PRICE - As defined in SECTION 4.1.
PURCHASER - As defined in the introductory paragraph of this
Agreement.
RELEASE - Any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including, without limitation, the movement of Hazardous
Materials through ambient air, soil, surface water, ground water, wetlands, land
or subsurface strata.
REGULATIONS - Any laws, statutes, ordinances, regulations, rules,
court decisions and orders of any foreign, federal, state or local government
and any government department or agency including without limitation
environmental laws, energy, motor vehicle and aviation safety, public utility,
zoning, building and health codes, occupational safety and health regulations
and laws relating to employment practices, employee documentation, terms and
conditions of employment and wages and hours.
RESTRICTED AFFILIATES - Each of TCW Special Credits Fund V - The
Principal Fund, OCM Principal Opportunities Fund, L.P., Oaktree Capital
Management, LLC, William E. Simon & Sons, LLC and Logistical Simon, L.L.C.
SEC - United States Securities and Exchange Commission.
SEC FILED MATERIAL - The following documents filed by Holding with the
SEC: Annual Report on Form 10-K for the fiscal year ended December 31, 1998,
Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 and Quarterly
Report on Form 10-Q for the quarter ended June 30, 1999.
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SECURITIES ACT - The Securities Act of 1933, as amended.
SURPLUS - The amount, if any, by which the Current Assets Amount
exceeds $13,549,454.
TAX - Any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Section 59A of the Code),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not and any expenses incurred in
connection with the determination, settlement or litigation of any Tax
liability.
TAX RETURN - Any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
TERMINATION FEE - As defined in SECTION 20.2.1.
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 GLAS
shall mean the knowledge of the chief executive officer, senior vice president
of operations, and vice president-controller of GLAS after due and reasonable
inquiry, references to "knowledge" of Holding shall mean the knowledge of the
chief executive officer of Holding after due and reasonable inquiry and the
actual knowledge of the general counsel of Holding and references to "knowledge"
of Americas shall mean the actual knowledge of the general counsel of Americas.
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. PURCHASE OF GLAS ASSETS.
On the terms and subject to the conditions set forth in this
Agreement, GLAS hereby agrees to sell, transfer and assign to the Purchaser and
the Purchaser hereby agrees to purchase from GLAS, on the Closing Date, all of
the right, title and interest of GLAS in and to the GLAS Assets free and clear
of all Liens. The Purchaser, at its option, may designate one or
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more direct or indirect subsidiaries of the Purchaser to purchase the GLAS
Assets and to which GLAS will sell, transfer and assign the GLAS Assets,
PROVIDED, that the Purchaser and the Parent remain obligated for their
obligations under this Agreement.
3. ASSUMPTION OF LIABILITIES.
The Purchaser shall assume no liabilities, contingent or otherwise, of
GLAS, Americas or Holding for Indebtedness, refunds, payables, litigation, fines
or penalties, employee obligations, Tax liabilities or otherwise, except for
liabilities arising after the Closing pursuant to the following (the "Assumed
Obligations"): (i) the Freight Handling Agreement, the CAS-D Freight Handling
Agreement and the Kitty Hawk Agreements, and (ii) the leases and other
agreements included in the GLAS Assets for which the Purchaser receives the
benefit following the Closing, whether by direct assignment or pursuant to
SECTION 8.9.
4. CONSIDERATION; POST CLOSING ADJUSTMENT.
4.1. CONSIDERATION. The consideration for the GLAS Assets
(the "Purchase Price") shall be $115,768,361 (subject to adjustment pursuant to
SECTION 4.4 hereof) paid as follows:
4.1.1. $105,768,361 paid at the Closing by wire transfer
of immediately available funds in accordance with instructions provided by
Holding to the Purchaser.
4.1.2. $10,000,000 (as adjusted pursuant to the next
succeeding sentence, the "Escrow Amount") which shall consist initially of cash
to be paid at the Closing by wire transfer of immediately available funds to the
Escrow Agent (as such term is defined in the Escrow Agreement), which cash funds
may be replaced by an irrevocable standby letter of credit issued by any of Bank
of America, N.A., Citibank, N.A., The Chase Manhattan Bank or The First National
Bank of Chicago which shall be in an amount equal to the amount required to be
on deposit on the date that the letter of credit is issued, shall name the
Purchaser or its permitted assignee as beneficiary, shall expire no earlier than
the first anniversary of the Closing Date and shall be satisfactory to the
Purchaser in its sole discretion and shall be otherwise subject to the terms of
the Escrow Agreement. The Escrow Amount shall be held in accordance with the
terms of the Escrow Agreement for the satisfaction of (i) any claims for
indemnification pursuant to SECTION 13.1 hereof and (ii) any payment obligations
of Holding and Americas pursuant to SECTION 4.4.2 hereof, until the first
anniversary of the Closing Date, subject to the terms of the Escrow Agreement;
PROVIDED, HOWEVER, that subject to the terms of the Escrow Agreement, (i) on the
date that is six months following the Closing Date, the Escrow Amount shall be
reduced to the lesser of (A) $7,500,000 or (B) the balance of the escrow account
as of such date, (ii) on the date that is nine months following the Closing
Date, the Escrow Amount shall be reduced to the lesser of (A) $5,000,000 or (B)
the balance of the escrow account as of such date and (iii) on the first
anniversary of the Closing Date, the remaining balance of the Escrow Amount
shall be released; PROVIDED, that any reduction or release of any portion of the
Escrow Amount pursuant to this SECTION 4.1.2 shall be made only in accordance
with the Escrow Agreement.
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4.2. The Purchaser shall be entitled to the benefit of all
prepaid rents, utility bills, license fees and other prepaid expenses of GLAS as
of the Closing Date.
4.3. GLAS and the Purchaser covenant and agree with each
other that they will negotiate in good faith to jointly allocate the total
purchase price among the GLAS Assets. The parties hereto further covenant and
agree with each other that none of them will take a position on any Tax Return,
before any governmental agency charged with the collection of Tax or in any
judicial proceeding that is in any manner inconsistent with the terms of this
SECTION 4.3 or such allocation of the Purchase Price without the written consent
of the other parties. GLAS and the Purchaser agree that each shall timely file
Treasury Form 8594 "Asset Acquisition Statement" as required under Section 1060
of the Code based upon the allocation of the purchase price of the GLAS Assets
as set forth in this Agreement.
4.4. POST-CLOSING ADJUSTMENT.
4.4.1. CLOSING BALANCE SHEET. As promptly as practicable
after the Closing Date (but in no event more than sixty (60) days after the
Closing Date) (such date, the "Closing Financial Statements Delivery Date"), the
Purchaser will prepare and deliver to Holding a balance sheet of GLAS as of the
close of business on the day immediately preceding the Closing Date (the
"Closing Balance Sheet"). The Closing Balance Sheet shall be accompanied by a
certificate of the Vice President - Controller of the GLAS Business as
constituted by the Purchaser as of such date to the effect that the Closing
Balance Sheet present fairly, in accordance with GAAP and the accounting
practices of GLAS applied on a basis consistent with the Financial Statements
for the year ended December 31, 1998, the financial condition of GLAS as of the
close of business on the day immediately preceding the Closing Date. The Closing
Balance Sheet will be prepared in accordance with GAAP, applied on a basis
consistent with the Financial Statements for the year ended December 31, 1998.
Holding and a firm of independent public accountants designated by Holding
("Holding's Accountant") will be entitled to reasonable access during normal
business hours to the relevant records and working papers of the GLAS Business
as constituted by the Purchaser to aid in their review of the Closing Balance
Sheet. The Closing Balance Sheet shall be deemed to be accepted by Holding and
shall be conclusive for the purposes of the adjustment described in
SECTIONS 4.4.2 and 4.4.3 hereof except to the extent, if any, that Holding or
Holding's Accountant shall have delivered, within thirty (30) days after the
date on which the Closing Balance Sheet is delivered to Holding, a written
notice to Purchaser stating each and every item to which Holding takes
exception, specifying in reasonable detail the nature and extent of any such
exception (it being understood that any amounts not disputed as provided herein
shall be paid promptly). If a change proposed by Holding is disputed by
Purchaser, then Purchaser and Holding shall negotiate in good faith to resolve
such dispute. If, after a period of thirty (30) days following the date on
which Holding gives Purchaser notice of any such proposed change, any such
proposed change still remains disputed, then Purchaser and Holding hereby agree
that KPMG LLP (the "Accounting Firm") shall resolve any remaining disputes. The
Accounting Firm shall act as an arbitrator to make a determination with respect
to the issues that are disputed by the parties, based on presentations by
Holding and Purchaser, and by independent review of the Accounting Firm if
deemed necessary in the sole discretion of the Accounting Firm, which
determination shall be limited to only those issues still in dispute. The
decision of the Accounting Firm shall be final and binding and shall be in
accordance with the provisions of this SECTION 4.4.1. The fees and expenses of
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the Accounting Firm, if any, shall be paid equally by Purchaser and Holding.
The date on which the Current Assets Amount is finally determined pursuant to
this SECTION 4.4.1 is referred to hereinafter as the "DETERMINATION DATE."
4.4.2. In the event that there is a Deficiency with
respect to the Current Assets Amount, Holding, GLAS and Americas shall pay to
Purchaser, as an adjustment to the Purchase Price, an aggregate amount equal to
the Deficiency. Any payments required to be made by Holding pursuant to this
SECTION 4.4.2 shall be made within ten (10) days of the Determination Date by
wire transfer from the Escrow Amount of immediately available funds to an
account designated by Purchaser.
4.4.3. In the event that there is a Surplus with respect
to the Current Assets Amount, Parent and Purchaser shall pay to Holding or its
designee, as an adjustment to the Purchase Price, an amount equal to the
Surplus. Any payments required to be made by Purchaser pursuant to this
SECTION 4.4.3 shall be made within ten (10) days of the Determination Date by
wire transfer of immediately available funds to an account designated by
Holding.
5. CLOSING.
5.1. The Closing shall take place at the offices of Milbank,
Tweed, Hadley & McCloy LLP at 601 S. Figueroa Street, 30th Floor, Los Angeles,
California 90017 on the Closing Date at 8:00 a.m., local time, or at such other
time and place as shall be agreed upon by the parties hereto.
5.2. Subject to the provisions of SECTION 8.9, at the
Closing (i) GLAS will assign and transfer to the Purchaser all of its right,
title and interest in and to the GLAS Assets (free and clear of all Liens), by
delivery of the Bill of Sale, duly executed by GLAS, (ii) the Purchaser will
assume from GLAS the due payment, performance and discharge of the Assumed
Obligations by delivery of the Assumption Agreement, duly executed by the
Purchaser, and the parties shall deliver the opinions, certificates and other
contracts, documents and instruments required to be delivered by them,
respectively, as set forth in SECTIONS 10 and 11.
5.3. If, prior to the Closing, any of the GLAS Assets are
destroyed or damaged or taken in condemnation, the insurance proceeds or
condemnation award with respect thereto shall be a GLAS Asset. At the
Closing, GLAS, Americas and Holding shall pay or credit to the Purchaser any
such insurance proceeds or condemnation awards received by it on or prior to
the Closing and shall assign to or assert for the benefit of the Purchaser
all of its rights against any insurance companies, Governmental or Regulatory
Authorities and others with respect to such damage, destruction or
condemnation. As and to the extent that there is available insurance under
policies maintained by GLAS, Americas and Holding or their respective
Affiliates, predecessors and successors in respect of any Assumed Obligation,
except for any such insurance proceeds with respect to which the insured is
directly or indirectly self-insured or has agreed to indemnify the insurer,
GLAS, Americas and Holding shall cause such insurance to be applied toward
the payment of such Assumed Obligation. The provisions of this SECTION 5.3
shall not affect the right of the Purchaser not to close the transactions
contemplated by this
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Agreement if the condition to its obligations hereunder contained in SECTION
11.1 has not been fulfilled.
5.4. Time is of the essence of this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF GLAS, AMERICAS AND
HOLDING.
GLAS, Americas and Holding, jointly and severally, represent and
warrant to the Purchaser as follows:
6.1. HOLDING AND AMERICAS EXISTENCE AND GOOD STANDING. Each
of Holding and Americas is a corporation duly organized, validly existing, and
in good standing under the laws of Delaware, 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 is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is necessary under the applicable law as a result of the conduct
of its business or ownership or leasing of its properties, and in which failure
to be so qualified or in good standing will have a material adverse effect on
its business or properties (owned, leased, or operated).
6.2. GLAS EXISTENCE AND GOOD STANDING. GLAS is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware and has the corporate power and authority to own, lease, and
operate its properties and carry on its business as now being conducted by it.
GLAS is duly qualified to do business as a foreign corporation and is in good
standing, unless otherwise indicated, in each jurisdiction listed as such on
Schedule 6.2 attached hereto as of the date hereof. As of the Closing Date,
GLAS will become duly qualified to do business as a foreign corporation and will
be in good standing in each jurisdiction listed as such on Schedule 6.2 attached
hereto.
6.3. BANK ACCOUNTS; POWERS OF ATTORNEY. SCHEDULE 6.3 sets
forth (i) the name of each financial institution in which GLAS maintains an
account or safe deposit box and the names of all persons authorized to draw
thereon or have access thereto; and (ii) the names of all persons, if any,
holding powers of attorney from GLAS and a summary statement of the terms
thereof.
6.4. CONDUCT OF BUSINESS. The GLAS Business as presently
conducted is only conducted through GLAS and is not conducted through Holding or
any other subsidiary of Holding or any other entity affiliated with Holding,
Americas or GLAS.
6.5. SUBSIDIARIES. GLAS has no subsidiaries and does not,
directly or indirectly, own, or have any contract or agreement or understanding
to acquire, any interest in or control any corporation, partnership, joint
venture or other business association.
6.6. CHARTER DOCUMENTS AND BY-LAWS. The copies of GLAS's,
Americas' and Holding's (i) Certificate of Incorporation, as amended to date,
and (ii) By-laws, as amended to date, that have been previously provided to the
Purchaser are complete and correct in all respects, are in full force and
effect, and none of GLAS, Americas or Holding is in violation of any of the
provisions of its Certificate of Incorporation or By-laws.
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6.7. POWER AND AUTHORITY; AUTHORIZATION. Each of GLAS,
Americas and Holding has full power and authority to enter into, execute and
deliver this Agreement, and to perform its respective obligations hereunder.
The execution, delivery, and performance of this Agreement by GLAS, Americas and
Holding, in accordance with the terms of this Agreement, have been duly
authorized and approved by the Board of Directors and stockholder of GLAS and
the respective Board of Directors of Holding and Americas and no other corporate
approval of GLAS, Americas or Holding is required. 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 GLAS, Americas and Holding and are the legal, valid, and
binding obligations of 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. GLAS is a wholly-owned direct subsidiary of Americas and a
wholly-owned indirect subsidiary of Holding.
6.8. NO VIOLATIONS. The execution, delivery, and
performance of this Agreement and each of the Exhibits hereto and other
documents required hereunder (if applicable) and consummation of any of the
transactions contemplated hereby and herein by each of GLAS, Americas and
Holding (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 any regulation or Order binding on it (other than any required
filings under the HSR Act or federal securities laws), and (ii) will not
(a) conflict with, require any consent or approval
(other than as set forth in SECTION 6.9) under, result (with or without the
giving of notice or the lapse of time or both) 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, require GLAS,
Americas or Holding to obtain any consent, approval or action of, or make any
filing with or give any notice to any person as a result or under the terms of,
or
(b) result (with or without the giving of notice or
the lapse of time or both) in the creation of any claim or Lien upon GLAS,
Americas, Holding, the GLAS Assets or the GLAS Business, 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 by which
it is bound (other than 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), or Order.
6.9. APPROVALS REQUIRED. Except for any filing required
under the HSR Act and except as set forth on SCHEDULE 6.9, no approval,
authorization, consent, clearance, order or other action of, or filing (other
than notice) with, any person, firm or corporation, or any court, administrative
agency or other governmental authority, is required by GLAS, Americas or Holding
in connection with the execution and delivery by it of this Agreement or the
performance by it of the transactions described herein.
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6.10. TITLE TO PROPERTY AND RELATED MATTERS. On the date
hereof, GLAS has, and on the Closing Date will have, good and marketable title
to all of the GLAS Assets (other than assets listed on SCHEDULE 6.17 hereof,
which shall be transferred to GLAS prior to the Closing to the extent required
pursuant to SECTION 11.9 and assets subject to leases included in SCHEDULE 6.16
or SCHEDULE 6.20), of any kind or character, free and clear of all Liens, except
those set forth in SCHEDULE 6.10, and all such assets and properties are
reflected on the June 30 Balance Sheet (subject to dispositions or replacements
occurring following June 30, 1999 and prior to Closing in the ordinary course of
business). Except as set forth in such Schedules and except for matters that
may arise in the ordinary course of business, GLAS's material assets and GLAS's
use thereof conform in all respects to all applicable Regulations relating to
their construction, use and operation, and are in good operating condition and
repair, reasonable wear and tear excepted. To the best of the knowledge of
Holding, Americas and GLAS, there does not exist any condition or agreement that
materially interferes with the use of such material assets in the conduct of its
business in the ordinary course. GLAS has no interest in real property other
than as lessee of certain facilities pursuant to leases included on SCHEDULE
6.16 and in leasehold improvements included in the GLAS Assets.
6.11. LICENSES; TRADEMARKS; TRADE NAMES. SCHEDULE 6.11
contains a true and complete list and brief description of all licenses,
registered trademarks, registered trade names, registered service marks,
copyrights, patents or applications for any of the foregoing, and all other
proprietary rights required or used in the GLAS Business, other than licenses to
use "off-the-shelf" commercial software included with the equipment that
constitute part of the GLAS 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 GLAS Business, and there is no restriction on the
transfer thereof.
6.12. [INTENTIONALLY OMITTED]
6.13. FINANCIAL STATEMENTS. The financial statements of GLAS
attached hereto as SCHEDULE 6.13 (including the audited financial statements of
GLAS for the year ended December 31, 1998) (and the financial statements to be
delivered pursuant to SECTION 8.3, when delivered, will be) accurate and
complete in all material respects and fairly present (and, to the extent
applicable, its predecessor's) financial position of GLAS, as the case may be,
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 (except as specifically indicated on such Schedule), and all such
unaudited financial statements have been prepared in conformity with GAAP
applied on a basis consistent with that of prior periods (except as specifically
indicated on such Schedule), except that such unaudited financial statements do
not contain footnotes and 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. GLAS has
always used the fiscal year ending December 31 as its taxable year. No
representation or warranty is made with respect to financial projections
concerning the operations of GLAS which GLAS, Americas and Holding have
previously delivered to the Purchaser. Holding, Americas and GLAS have
maintained the books
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and records of GLAS in a manner sufficient to permit preparation of financial
statements in accordance with GAAP. The foregoing financial statements,
including the notes thereto, have been prepared from the books and records of
GLAS and are in all material respects in accordance with the books and
records of Holding, Americas and GLAS.
6.14. ACCOUNTS RECEIVABLE. The accounts receivable included
in the GLAS Assets have arisen from bona fide sales transactions by GLAS in the
ordinary course of business consistent with past practices.
6.15. UNDISCLOSED LIABILITIES. Except as disclosed in the
financial statements referred to in SECTION 6.13, as of the dates referred to in
such financial statements GLAS has no liabilities or obligations of any kind,
whether accrued, absolute, contingent or otherwise, and whether or not required
to be disclosed on or reserved against a balance sheet prepared in conformity
with GAAP, and since the date of the last such financial statement, GLAS has
incurred no such liability or obligation other than (i) as set forth on SCHEDULE
6.15, (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 to the GLAS Business.
6.16. FACILITIES.
(i) FACILITIES. GLAS does not own any real property.
SCHEDULE 6.16 contains a complete and accurate description of the following
terms of all Facility Leases: (a) a general description of the leased property,
(b) the term thereof, (c) the applicable rent, and (d) any requirements for the
consent of third parties to assignments thereof. All Facility Leases are valid,
binding and enforceable in accordance with their terms and are in full force and
effect. Except as set forth in SCHEDULE 6.16, no event exists which (whether
with or without notice, lapse of time or both or the happening or occurrence of
any other event) would constitute a default thereunder on the part of GLAS which
would terminate or cause a material liability under any Facility Leases; and, to
the knowledge of GLAS, there exists no occurrence of any event which (whether
with or without notice, lapse of time or both or the happening or occurrence of
any other event) would constitute a default thereunder by any other party.
GLAS, Americas and Holding have delivered true and correct copies of the
Facility Leases to the Purchaser prior to the date hereof.
(ii) ACTIONS. There are no pending condemnation
proceedings, administrative proceedings or other actions against GLAS with
respect to any of the Facility Leases, or, to the knowledge of Holding, Americas
and GLAS, pending or threatened condemnation proceedings, administrative
proceedings or other actions with respect to any of the Facility Leases.
(iii) LEASES OR OTHER AGREEMENTS. Except for Facility
Leases listed in SCHEDULE 6.16, GLAS has not entered into any leases, subleases,
licenses, occupancy agreements, options, rights, concessions or other agreements
or arrangements written or oral, with respect to the areas of facilities or real
property leased to GLAS used in connection with the GLAS Business.
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(iv) FACILITY LEASES AND LEASED REAL PROPERTY. With
respect to each Facility Lease, GLAS enjoys peaceful and undisturbed possession
of all the real property it leases, subject to the rights of the fee owners and
the terms of the Facility Leases, and GLAS has performed all the obligations
required to be performed by it through the date hereof.
(v) CERTIFICATE OF OCCUPANCY. GLAS has received all
required approvals of governmental authorities (including permits and a
certificate of occupancy or other similar certificate permitting lawful
occupancy by GLAS of the Leased Facilities) required in connection with GLAS's
operation of the Leased Facilities.
(vi) UTILITIES. All of the Leased Facilities are supplied
with utilities (including water, sewage, disposal, electricity and telephone)
and other services necessary for the operation of the Leased Facilities as
currently operated, and, to the knowledge of Holding, Americas and GLAS, there
is no condition which could be reasonably expected to result in the termination
of any such utility services.
(vii) IMPROVEMENTS, FIXTURES AND EQUIPMENT. None of the
leasehold improvements is subject to any commitment or other arrangement for
their sale or use by an Affiliate of Holding, Americas or GLAS, or any third
party that would materially interfere with the use thereof.
(viii) NO SPECIAL ASSESSMENT. None of Holding, Americas and
GLAS has received notice of any special assessment relating to any of the Leased
Facilities or any portion thereof and, to the knowledge of Holding, Americas and
GLAS, there is no pending or threatened special assessment with respect thereto.
6.17. GLAS ASSETS. SCHEDULE 1.1 contains an accurate list
of each of the GLAS Assets with a current book value in excess of $1,000.
Except as disclosed on SCHEDULE 6.17, the GLAS Assets include all assets
necessary for the conduct of the GLAS Business as presently being conducted.
6.18. MATERIAL ADVERSE CHANGE. Except as set forth in
SCHEDULE 6.18 or the SEC Filed Material, or as otherwise reflected herein, since
March 31, 1999, the GLAS Business has been operated in the ordinary course and
there has not been:
(i) Any actual or, to the knowledge of Holding, Americas
and GLAS, any threatened, material adverse change in the business, condition
(financial or otherwise), results of operations, prospects, properties, assets
or liabilities of GLAS, except for the general effects of present economic
conditions or conditions affecting the freight forwarding industry generally;
(ii) Any material damage, destruction or casualty loss
(whether or not covered by insurance) affecting GLAS, the GLAS Assets,
properties, operations or business (present or prospective);
(iii) Any statute, rule, regulation or order adopted
(including orders of regulatory authorities with jurisdiction over GLAS or its
business) that materially and
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adversely affects GLAS, the GLAS Assets or the GLAS Business, other than any
statute, rule, regulation or order affecting the freight forwarding industry
generally;
(iv) Any increase in, or commitment to increase, the wage,
salary, commissions, bonus, employee benefit rate or other compensation payable
by GLAS or to become payable by GLAS to any of GLAS's employees other than
increases made in the ordinary course of business consistent with past
practices; PROVIDED, HOWEVER, that this paragraph shall not restrict or limit
GLAS in any way from hiring additional personnel who are required for its
operations in the usual course of business consistent with past practices;
(v) Any Lien placed on any of the GLAS Assets;
(vi) Any sale, assignment, transfer, lease, disposition
of, or agreement to sell, assign, transfer, lease, or dispose of, any of the
GLAS Shares or the GLAS Assets, except for dispositions of personal property in
the ordinary course of business and the merger of GLAS into Americas between the
date hereof and the Closing as contemplated by the second proviso to
SECTION 8.2(i) hereof;
(vii) Any acquisition or lease by GLAS 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;
(viii) Any entering into of any collective bargaining
agreement or commitment by GLAS or any liability incurred by GLAS to any labor
organization or other material change in employee relations;
(ix) Any capital expenditure by GLAS in excess of $100,000
or outside the ordinary course of business;
(x) Any change by GLAS in the nature of its business or
its methods, principles or practices of accounting;
(xi) To the knowledge of Holding, Americas and GLAS, the
loss by GLAS, or any pending or threatened loss by GLAS, of any supplier(s),
vendor(s), customer(s) or employee(s), which loss (individually or in the
aggregate) has had or is reasonably expected to have a material adverse effect
on GLAS's financial condition, results of operation or prospects;
(xii) (a) Any Indebtedness in an aggregate principal amount
exceeding $250,000 incurred by GLAS with respect to the conduct of the GLAS
Business other than Indebtedness owed to Holding or any subsidiary of Holding,
or (b) any voluntary purchase, cancellation, prepayment or complete or partial
discharge in advance of a scheduled payment date with respect to, or waiver of
any right of GLAS under, any Indebtedness of or owing to GLAS with respect to
the conduct of the GLAS Business other than Indebtedness owed to Holding or any
subsidiary of Holding.
(xiii) Any declaration or payment of any dividend in respect
of the GLAS Shares or other payment to the stockholders of GLAS in their
capacity as such.
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(xiv) Any entering into, any amendment, modification,
termination (partial or complete) or granting of a waiver under or giving any
consent with respect to (a) any Contract which is required (or had it been in
effect on the date hereof would have been required) to be disclosed pursuant to
SECTION 6.20 or (b) any License included on SCHEDULE 6.20.
(xv) Any other events or conditions of any character that
may reasonably be expected to have a material adverse effect on GLAS or its
business or financial condition, except for any event, circumstance or market
condition occurring as a result of general economic or financial conditions or
other developments which are not unique to GLAS but also affect other persons
who participate or are engaged in the lines of business in which GLAS
participates or is engaged.
(xvi) Any agreements or commitments to do any of the
foregoing.
6.19. TAX MATTERS. GLAS, Americas and Holding have filed
(or will timely file) all Tax Returns required to be filed by applicable law
(either separately or as part of a consolidated, combined or unitary group)
with respect to the GLAS Business or GLAS's earnings and assets for periods
ending on or prior to the time and date of the Closing. All such Tax Returns
were (and, as to Tax Returns not filed as of the date hereof, will be) true,
complete and correct and filed on a timely basis. GLAS, Americas and Holding
have paid all Taxes that are due, or claimed or asserted by any taxing authority
to be due from Holding, Americas and GLAS for the periods covered by the Tax
Returns filed by GLAS, Americas or Holding. GLAS, Americas and Holding have
established (and until the Closing Date will maintain) on their books and
records reserves adequate to pay all Taxes not yet due and payable in respect of
operations and transactions through the time and date of the Closing. There are
no Tax Liens upon the assets of GLAS except Liens for Taxes not yet due.
Holding, Americas and GLAS have complied (and until the Closing Date will
comply) with all applicable laws, rules, and regulations relating to the payment
and withholding of Taxes (including withholding and reporting requirements under
Code Sections 1441 through 1464, 3401 through 3406, 6041 and 6049 and similar
provisions under any other laws) and have, within the time and in the manner
prescribed by law, withheld from employee wages and paid over to the proper
Governmental and Regulatory Authorities all required amounts. No audits or
other administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Tax Returns of Holding, Americas or GLAS that relate to
the GLAS Business, or GLAS's earnings or assets. Holding, Americas and GLAS
have made available (or, in the case of Tax Returns to be filed on or before the
Closing Date, will make available) to the Purchaser complete and accurate copies
of all Tax Returns filed by or on behalf of GLAS for all axable years ending on
or prior to the Closing Date with respect to the GLAS Business, or GLAS's
earnings and assets. There is no issue raised with respect to the GLAS Business
by any Tax authority in writing that, if determined adversely, would result in
the assessment of any deficiency for a Tax or interest or penalties in
connection therewith. None of GLAS, Americas and Holding has agreed to any
extension of the statute of limitations in connection with any Tax matter.
6.20. AGREEMENTS AND AUTHORIZATIONS. SCHEDULE 6.20
contains a true and complete list and brief description of all written or oral
contracts, agreements, mortgages,
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obligations, understandings, arrangements, restrictions, and other
instruments ("Contracts") to which GLAS is a party or by which GLAS or its
assets may be bound involving required payments in excess of $150,000 by GLAS
in any consecutive 12-month period. SCHEDULE 6.20 also contains a true and
complete list of all licenses, permits, authorizations, franchises and agency
arrangements necessary to operate the GLAS Business as heretofore operated
("Licenses"), except for such Licenses which, if not obtained, would not
materially and adversely affect the GLAS Business. True and correct copies
of all items set forth on such Schedule have been made available to the
Purchaser. Except as disclosed on such Schedule, each such Contract and
License is valid, binding in full force and effect. No event has occurred
which would constitute (whether with or without notice, lapse of time or the
happening or occurrence of any other event) a material default by GLAS under
any of the Contracts or Licenses set forth in such Schedule. There is no
material default by the other parties to such Contracts or Licenses.
6.21. COMPLIANCE; GOVERNMENTAL AUTHORIZATIONS. Except as
set forth on SCHEDULE 6.21: (i) GLAS has heretofore complied with and is in
compliance with all Regulations and Orders which, if not complied with, would
materially and adversely affect the GLAS Business; (ii) GLAS has all federal,
state, local and foreign governmental Licenses which if not obtained would
materially and adversely affect the GLAS Business; and (iii) such Licenses are
in full force and effect. None of GLAS, Americas and Holding knows of any
violation of any such Licenses which is expected to materially and adversely
affect the GLAS Business. No proceedings are pending or, to the knowledge of
Holding, Americas and GLAS, threatened to revoke or limit the use of such
Licenses.
6.22. LITIGATION. Except as set forth in SCHEDULE 6.22,
there is no Order, and there are no actions, suits, claims, or legal,
administrative or arbitration proceedings, or to the knowledge of Holding,
Americas and GLAS, investigations, against Holding, Americas or GLAS with
respect to or affecting or which may be reasonably expected to affect the GLAS
Assets or the GLAS Business, whether at law or in equity, or before or by any
federal, state, municipal, local or foreign courts, tribunals, arbitrations or
other governmental department, commission, board, bureau, agency or
instrumentality, which (i) could reasonably be expected to result in the
issuance of an Order restraining, enjoining or otherwise prohibiting or making
illegal the closing of any of the transactions contemplated by this Agreement or
which could be reasonably be expected to have a material adverse effect on the
validity and enforceability of this Agreement or the ability of Holding,
Americas and GLAS to perform their obligations hereunder or otherwise result in
a material diminution of the benefits contemplated by this Agreement to the
Purchaser, or (ii) if determined adversely to GLAS, Americas or Holding, as
applicable, could reasonably be expected to result in (a) any injunction or
other equitable relief that would interfere with the GLAS Business or (b)
individually or in the aggregate in respect of other such actions or
proceedings, damages, fines, fees, penalties and other costs by GLAS exceeding
$50,000 that are not insured. None of GLAS, Americas and Holding knows of a
threat of, or any fact, circumstances or other basis for, any such action, suit,
claim, investigation or proceeding. Except as set forth in SCHEDULE 6.22, GLAS
is not in default with respect to or subject to any Order and there are no
unsatisfied judgments against GLAS or the GLAS Assets. To the knowledge of
Holding, Americas and GLAS, there is no reasonable likelihood of a determination
adverse to GLAS in any pending actions, suits, claims, investigations or legal,
administrative or
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arbitration proceedings that would have a material adverse effect on the GLAS
Business. GLAS, the GLAS Assets and the GLAS Business are not subject to any
Order.
6.23. INSURANCE. Attached hereto as SCHEDULE 6.23 is a
list of all insurance policies of GLAS setting forth the name of the insurer, a
description of the policy, the amount of coverage, the amount of the premium and
the expiration date of the policy. All of GLAS's insurable properties and
assets are insured with reputable and financially sound insurers, and have been
consistently insured since the date on which GLAS acquired such assets, for
GLAS's benefit, under such policies of fire, casualty, and other insurance as
are customarily obtained to cover comparable properties and assets by businesses
in the region in which such properties and assets are located, in amounts, scope
and coverage which are adequate, customary and reasonable in light of existing
conditions. Each insurance policy relating to the insurance referred to in this
Section is valid and enforceable. GLAS has not failed to give any notice or to
present any claim under any insurance policy in a due and timely fashion, nor
has it permitted a lapse in any of its insurance policies at any time since its
incorporation.
6.24. BANKRUPTCY. None of GLAS, Americas and Holding has
any knowledge or expectation that any petition for relief will be filed by GLAS,
Americas or Holding or any case commenced against either of them under the
Bankruptcy Code or any similar federal or state statute, and none of GLAS,
Americas and Holding has applied for or consented to the appointment of, or
taking of possession by, a receiver, custodian, trustee or liquidator of itself
or any of their respective properties or made a general assignment for the
benefit of creditors.
6.25. EMPLOYEES. Neither GLAS nor any of its employees is
subject to any confidentiality, non-competition or labor agreement or collective
bargaining agreement; no petition for certification or union election is pending
with respect to the employees of GLAS, to the knowledge of GLAS, Holding or
Americas; no union or collective bargaining representative has sought such
certification or recognition with respect to the employees of GLAS at any time
during the past three years; and, to the knowledge of Holding, Americas and
GLAS, there has been no agreement or commitment to do or enter into any of the
foregoing. There is no labor strike or labor disturbance pending or threatened
against GLAS nor is any grievance currently being asserted. GLAS is not
currently engaging, and has not engaged, in any unfair labor practice. There is
no unfair labor practice charge or complaint against GLAS pending before the
National Labor Relations Board or any other domestic or foreign governmental
agency and, to the knowledge of Holding, Americas or GLAS, there are no facts or
information that could give rise thereto. Except as set forth on SCHEDULE 6.25,
GLAS has not entered into any written or oral employment agreement or become
obligated under any other document, policy or practice which gives to any person
a right to employment for a fixed term or compensation in a fixed amount,
including severance payments. SCHEDULE 6.25 also includes accurate and complete
copies of all written and detailed descriptions of all oral employment
arrangements disclosed on such Schedule. To the knowledge of Holding, Americas
and GLAS, all of GLAS's employees required to be authorized by the United States
Immigration and Naturalization Service to work in the United States are so
authorized, and GLAS has made a good faith effort to comply with all
verification requirements of the United States Immigration and Naturalization
Service with respect to such authorization to work in the United States. GLAS
is neither in breach of, nor has taken any action which would constitute a
breach of, any oral or written agreements or understandings respecting
employment. All obligations of GLAS, whether arising by operation
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of law, by contract, by past custom or practice or otherwise, with respect to
salaries, vacation pay, holiday pay, bonuses and other forms of compensation
which were payable to its officers, directors or employees as of the date
hereof (including all required and due taxes, insurance and withholding
thereon) have been paid as of the date hereof. GLAS's relationship with its
employees is good, and, as of the date hereof, none of Holding, Americas and
GLAS has received any information which would lead it to believe that a
material number of GLAS's employees will or may cease to be employees of GLAS
prior to the Closing. GLAS has received no written notice of any
investigation of any federal, state or local agency responsible for the
enforcement of labor or employment laws to conduct an investigation with
respect to or relating to GLAS that could be reasonably expected to have a
material adverse effect on the GLAS Assets or the GLAS Business and no such
investigation is known to be in progress. GLAS is in compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours except for such failures to be
in compliance as would not reasonably be expected to have a material advere
effect on the GLAS Business. There have been no resignations or terminations
of employment of any of GLAS's key officers or employees nor does GLAS,
Americas or Holding know of any pending or threatened resignations or
terminations of employees that would have a material adverse effect on the
GLAS Business.
6.26. EMPLOYEE BENEFIT PLANS.
(i) Except as set forth on SCHEDULE 6.26, GLAS does not
sponsor nor is it a party to (a) any employee benefit plan (as defined in
Section 3(3) of ERISA), (b) any employee welfare benefit plan (as defined in
Section 3(1) of ERISA), (c) any employment contract, written or unwritten or,
(d) any other bonus, incentive compensation, deferred compensation, pension,
profit sharing, stock purchase, stock option, stock appreciation, phantom stock,
leave of absence, layoff, vacation, day or dependent care, legal services,
cafeteria, life, health, disability, worker compensation, severance or other
employee benefit plan, practice, policy or arrangement of any kind, whether
written or oral. All such employee benefit plans, employee welfare plans,
arrangements and employment contracts which GLAS does sponsor or is a party to
are hereafter collectively referred to as "Employee Benefit Plans." GLAS has
not scheduled or agreed upon future increases of benefit levels (or the creation
of new benefits) with respect to any Employee Benefit Plan, and no such
increases or benefits have been proposed or made the subject of representations
to GLAS employees under circumstances which make it reasonable to expect that
such increases or benefits will be granted.
(ii) With respect to each Employee Benefit Plan, GLAS has
delivered to Purchaser correct and complete copies, including amendments, of the
following (to the extent applicable): (a) the current and most recent prior
Employee Benefit Plan and contract documents (including any related trust
agreements, service provider agreements, insurance contracts, or agreements with
investment managers), (b) the current and most recent prior Summary Plan
Descriptions or similar descriptions of Employee Benefit Plans not subject to
ERISA, (c) the two most recently filed Form 5500s and schedules thereto, (d) the
two most recent IRS determination letters, (e) the two most recent allocation or
actuarial reports and (f) any employee handbook(s) which refer to such Employee
Benefit Plan.
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(iii) The assets of GLAS are not subject to any Liens under
ERISA or the Code, and no event has occurred, and no condition exists, which
would subject GLAS or its assets to a future liability or Lien on account of any
Controlled Group Benefit Plan. A Controlled Group Benefit Plan means any
Employee Benefit Plan which GLAS or any entity which must be considered together
with GLAS under Code Section 414(b), (c), (m) or (o) (a "Plan Affiliate"), now
maintains or contributes to or ever maintained or contributed to.
(iv) No Employee Benefit Plan is or at any time was
subject to Title IV of ERISA, nor has GLAS ever sponsored or contributed to any
plan that at any time was subject to Title IV of ERISA. No event has occurred
and there exists no condition or circumstances in connection with any Employee
Benefit Plan or any Controlled Group Benefit Plan under which GLAS or any Plan
Affiliate, directly or indirectly (through any indemnification agreement or
otherwise), could reasonably be expected to be subject to any risk of material
liability under Section 409 of ERISA, Section 502(i) of ERISA, Title IV of ERISA
or Section 4975 of the Code.
(v) Each Employee Benefit Plan is, and has at all times
been, administered and operated in material compliance with its terms and
applicable law, including without limitation the Code and ERISA and with all
other applicable laws, regulations, orders and prohibited transactions
exemptions. Each Employee Benefit Plan which GLAS currently sponsors or
contributes to can be amended or terminated at any time without liability to
GLAS.
(vi) GLAS has performed all obligations required to be
performed by it with respect to each Employee Benefit Plan under any law or by
the terms of each such Plan. Contributions and other payments required to be
made by GLAS to any Employee Benefit Plan ending before, at, or within the
calendar year containing the Closing Date have been made or reserves adequate
for such contributions or payments have been or will be set aside therefore and
have been or will be reflected in financial statements of GLAS in accordance
with GAAP. There are no material outstanding liabilities of any Employee
Benefit Plan (other than routine benefit claims made in the ordinary course).
(vii) There are no actions, investigations or claims of any
kind (other than routine benefit claims made in the ordinary course) pending or,
to the knowledge of Holding, Americas and GLAS, threatened, with respect to any
Employee Benefit Plan. There have been no audits or investigations of any
Employee Benefit Plan by any governmental agency except as set forth on SCHEDULE
6.26. There are no pending or threatened claims by or on behalf of any Employee
Benefit Plan, by any person covered thereby, or otherwise, which allege
violations of law and which could reasonably be expected to result in liability
on the part of the Purchaser.
(viii) Each Employee Benefit Plan that is intended to
constitute a qualified plan under Section 401(a) of the Code is, and has at all
times been, qualified in form and operation under Section 401(a) and is the
subject of a favorable determination letter from the IRS.
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(ix) Except as required by ERISA Sections 601-608, no
Employee Benefit Plan provides health, medical or similar benefits to retirees
or other former employees or their beneficiaries.
(x) The closing of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee of GLAS to
severance pay or any other payment (including parachute payments) from GLAS,
except as expressly provided in this Agreement, or (ii) accelerate the time of
payment or vesting or funding or increase the amount of compensation due any
such employee except as expressly provided in this Agreement.
(xi) Except as set forth on SCHEDULE 6.26, no loan is
outstanding between GLAS and any employee of GLAS. No employer securities,
employer real property or other employer property is included in the assets of
any Employee Benefit Plan.
(xii) Each Employee Benefit Plan covers only employees (or
former employees or beneficiaries) of GLAS, so that the transactions
contemplated by this Agreement will require no spin-off of assets and
liabilities or other division or transfer of rights with respect to any such
plan.
(xiii) All categories of earned and unpaid bonuses or other
similar payments to employees of GLAS pursuant to the Employee Benefit Plans,
and the date on which such bonuses are due or scheduled to be paid, are set
forth on SCHEDULE 6.26, and GLAS has made adequate reserve and has sufficient
cash resources for payment of such bonuses as and when they become due.
6.27. ENVIRONMENTAL.
6.27.1. GLAS has operated its business and maintained
its assets (owned or leased) in compliance with all applicable environmental
laws and regulations in all material respects, and no order has been issued,
claim made or, to the knowledge of Holding, Americas and GLAS, threatened in
respect of any environmental matter. All environmental reports directed to
or obtained by GLAS, that are in the possession of GLAS, Holding or Americas,
relating to the GLAS Business have been disclosed to the Purchaser.
6.27.2. GLAS has obtained all Licenses which are
required under applicable Environmental Laws in connection with the conduct
of the business or the GLAS Assets. Each of such Licenses is in full force
and effect. GLAS has conducted the business in compliance in all material
respects with the terms and conditions of all such Licenses and with any
applicable Environmental Law. In addition, except as set forth in SCHEDULE
6.27:
(i) No order has been issued, no Environmental Claim
has been filed, no penalty has been assessed and no investigation or review
is pending or, to the knowledge of Holding, Americas and GLAS, threatened by
any Governmental or Regulatory Authority with respect to any alleged failure
by GLAS to have any License required under applicable Environmental Laws in
connection with the conduct of the business or with respect to any
generation, treatment, storage, recycling, transportation, discharge,
disposal or Release of any Hazardous Material in connection with the
business, and, to the knowledge of Holding,
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Americas and GLAS, there are no facts or circumstances in existence which
could reasonably be expected to form the basis for any such order,
Environmental Claim, penalty or investigation.
(ii) GLAS does not own, operate or lease a treatment,
storage or disposal facility on any of the real property occupied by GLAS
requiring a permit under the Resource Conservation and Recovery Act, as amended,
or under any other comparable state or local law; and, without limiting the
foregoing, (a) no polychlorinated biphenyl is present, (b) no asbestos or
asbestos-containing material is present, (c) there are no underground storage
tanks or surface impoundments for Hazardous Materials, active or abandoned, and
(d) no Hazardous Material has been Released in a quantity reportable under, or
in violation of, any Environmental Law or otherwise Released, in the cases of
clauses (a) through (d), at, on or under any such real property during any
period that GLAS owned, operated or leased such property.
(iii) No Hazardous Material generated in connection with
the operation of the business has been recycled, treated, stored, disposed of or
Released by GLAS at any location.
(iv) No oral or written notification of a Release of a
Hazardous Material in connection with the operation of the business has been
filed by or on behalf of GLAS, and no site or facility now or previously owned,
operated or leased by GLAS on any of the real property is listed or proposed for
listing on the NPL, CERCLIS or any similar state or local list of sites
requiring investigation or clean-up.
(v) No Liens have arisen under or pursuant to any
Environmental Law on any site or facility owned, operated or leased by GLAS on
any of the real property, and no federal, state or local Governmental or
Regulatory Authority action has been taken or, to the knowledge of Holding,
Americas and GLAS, is in process that could subject any such site or facility to
such Liens, and GLAS would not be required to place any notice or restriction
relating to the presence of Hazardous Materials at any such site or facility in
any deed to the real property on which such site or facility is located.
(vi) There have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by, or that are in
the possession of, GLAS, Americas, or Holding in relation to any site or
facility now or previously owned, operated or leased by GLAS on any of the real
property which have not been delivered to the Purchaser prior to the execution
of this Agreement. To the knowledge of GLAS, Americas and Holding, there are no
present or past events, facts, conditions, activities, practices, incidents,
actions or plans which may interfere with or prevent compliance by GLAS with
requirements, conditions, restrictions or stipulations of Environmental Laws
affecting GLAS, the GLAS Assets and the GLAS Business (except such noncompliance
as could not be reasonably expected to have a material adverse effect on the
GLAS Business), or which may give rise to any common law or statutory liability
under Environmental Laws or form the basis of any Environmental Claim against
GLAS or the Purchaser, assuming the Purchaser complies with all Environmental
Laws, that could reasonably be expected to have a material adverse effect on the
GLAS Business.
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6.28. BUSINESS RELATIONSHIPS.
6.28.1. Except as set forth on SCHEDULE 6.28, to the
knowledge of Holding, Americas and GLAS, GLAS's relationships with its
suppliers, vendors, representatives and customers is satisfactory, and to the
knowledge of Holding, Americas and GLAS, 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 GLAS's relationship with any such party so as to have a
material adverse effect on the business, operations, or condition (financial or
otherwise) of GLAS, and since March 31, 1999, there have been no material
adverse changes in pricing or material adverse changes in volume of business in
the aggregate.
6.28.2. None of GLAS, Americas and Holding has received
any written notice, nor does GLAS, Americas or Holding have any reason to
believe, that any of the 25 largest customers of GLAS for 1998 (i) has ceased,
or will cease, to use the services of GLAS, (ii) has substantially reduced or
will substantially reduce, the use of GLAS's services, or (iii) has sought, or
is seeking, to materially reduce the price it will pay for GLAS's services, as
of the date of this Agreement.
6.28.3. None of GLAS, Americas and Holding has received
any written notice that any supplier of transportation services (other than
ground transportation suppliers) or supplier of ground handling services for
which GLAS is not able to obtain substantially equivalent services on
substantially the same, or no less favorable, price and terms to GLAS from
another supplier, that the supplier providing such notice (i) has ceased, or
will cease, to provide services to GLAS, (ii) has substantially reduced or will
substantially reduce the quality or quantity of the services it provides to
GLAS, or (iii) has sought or is seeking, a material increase in the price of its
services to GLAS, in each case the effect of which could reasonably be expected
to have a material adverse effect on the GLAS Business.
6.29. KNOWLEDGE OF ADVERSE CONDITIONS. To the knowledge of
Holding, Americas and GLAS, there are no present or future conditions, state of
facts or circumstances which have affected or may in the aggregate have a
material adverse effect upon the business or prospects of GLAS taken as a whole,
except for the general effects of present economic conditions or conditions
affecting the freight forwarding industry generally.
6.30. YEAR 2000. To the knowledge of GLAS, the computer
systems owned by GLAS (including without limitation all software, hardware,
workstations and related components, automated devices, embedded chips and other
date sensitive equipment such as security systems, alarms, elevators and HVAC
systems) are Year 2000 Compliant or will be Year 2000 Compliant or replaced, if
necessary, by December 31, 1999 except where such failure could not reasonably
be expected to have a material adverse effect on the GLAS Business. The term
"Year 2000 Compliant" as used herein means, with respect to an entity, that the
computer systems of such entity (1) are capable of recognizing, processing,
managing, representing, interpreting and manipulating correctly date related
data for dates earlier and later than January 1, 2000, including, but not
limited to, calculating, comparing, sorting, storing, tagging and sequencing,
without resulting in or causing logical or mathematical errors or
inconsistencies
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in any user-interface functionalities or otherwise, including data input and
retrieval, data storage, data fields, calculations, reports, processing, or
any other input or output, (2) have the ability to provide date recognition
for any data element (including, but not limited to, date-related data
represented without a century designation, date-related data whose year is
represented by only two digits and date fields assigned special values), (3)
have the ability to correctly interpret data, dates and time into and beyond
the year 2000, (4) have the ability not to produce noncompliance in existing
information, nor otherwise corrupt such data into and beyond the year 2000,
(5) have the ability to correctly process after January 1, 2000 data
containing dates before that date, and (6) have the ability to recognize all
"leap years," including February 29, 2000, each to the extent necessary for
the proper conduct of the business of such entity taken as a whole. GLAS has
made contingency plans in the event that its computer systems are not able to
interface with computer systems that are not Year 2000 Compliant. GLAS has
inquired of all such third parties whose failure to be Year 2000 Compliant
would be materially or significantly adverse to GLAS or the GLAS Business,
and all such third parties have represented that they are Year 2000 Compliant
or will be Year 2000 Compliant by December 31, 1999.
6.31. ACCURACY OF REPRESENTATIONS. All representations and
warranties with respect to GLAS, Americas and Holding are true and correct as of
the date hereof. This Agreement does not contain, and no statement contained in
the Schedules or in any certificate, list or writing furnished by or on behalf
of GLAS, Americas or Holding to the Purchaser pursuant to any provision of this
Agreement contains, any untrue statement of a material fact with respect to
GLAS, Americas or Holding or omit to state any material fact with respect to
GLAS, Americas or Holding necessary to make the statements contained herein or
therein not misleading. All matters and facts known to GLAS, Americas and
Holding that are material to the GLAS Assets and GLAS Business (other than the
general effects of present economic conditions or conditions affecting the
freight forwarding industry generally) have been disclosed to the Purchaser.
6.32. AFFILIATE TRANSACTIONS. Except for such matters as
are disclosed or the impacts of which are otherwise reflected in the financial
statements referred to in SECTION 6.13 or, to the extent such transactions have
arisen following June 30, 1999, such matters as would be disclosed or the
impacts of which would otherwise be reflected in financial statements covering
such subsequent periods and except as disclosed on SCHEDULE 6.32, (i) neither
Holding nor Americas nor any officer, director or Affiliate of GLAS or Americas
or Holding provides, directly or indirectly, any assets, services or facilities
used or held for use in connection with the GLAS Business, and (ii) the GLAS
Business does not provide, directly or indirectly, any assets, services or
facilities to Holding or Americas or any such officer, director or Affiliate
thereof.
7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Parent and the Purchaser, jointly and severally, represent and
warrant to GLAS, Americas and Holding as follows:
7.1. PARENT EXISTENCE AND GOOD STANDING. The Parent is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware, and has the corporate power and authority to own, lease, and
operate its properties and carry on its business as now being conducted by it.
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7.2. PURCHASER EXISTENCE AND GOOD STANDING. The Purchaser
is a corporation duly organized, validly existing, and in good standing under
the laws of Delaware, and has the corporate power and authority to own, lease,
and operate its properties and carry on its business as now being conducted by
it.
7.3. POWER AND AUTHORITY; AUTHORIZATION. The Parent and
the Purchaser each have full power and authority to enter into, execute and
deliver this Agreement, and to perform each of their respective obligations
hereunder. The execution, delivery, and performance of this Agreement by the
Parent and the Purchaser, in accordance with the terms of this Agreement, have
been duly authorized and approved by the board of directors of the Parent and
the board of directors of the Purchaser and no other approval of the Purchaser,
the Parent or their respective stockholders is required. 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 the Parent and the Purchaser and are the legal, valid, and binding
obligations of the Parent and the Purchaser 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 the Parent and the Purchaser (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 either the Parent or the Purchaser (other than any required filings under the
HSR Act) 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 their respective obligations under, cause
or allow for the termination of, or
(b) result in the creation of any claim or Lien upon any
of its properties, assets, or businesses, pursuant to
their respective certificates of incorporation or by-laws, any debt instrument,
mortgage, deed of trust, license, permit, franchise, lease, contract, or other
instrument or agreement to which the Parent or the Purchaser is a party or by
which either is bound (other than 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), or any judgment, order, writ or decree of any court,
arbitrator or governmental agency by which the Parent or the Purchaser or any of
their respective assets or properties is bound.
7.5. APPROVALS REQUIRED. Except for any filing required
under the HSR Act, and as set forth on SCHEDULE 7.5, no approval, authorization,
consent, clearance, order or other action of, or filing with, any person, firm
or corporation, or any court, administrative agency or other governmental
authority, or any governmental or non-governmental trade group,
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is required by the Parent or the Purchaser in connection with the execution
and delivery by the Parent and the Purchaser of this Agreement or the
performance by the Parent and the Purchaser of the transactions described
herein.
7.6. ACCURACY OF REPRESENTATIONS. All representations and
warranties set forth herein with respect to the Parent and the Purchaser 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 Parent or the Purchaser
or omit to state any material fact with respect to the Parent or the Purchaser
necessary to make the statements contained herein not misleading.
7.7. FINANCING. The Purchaser has sufficient cash and/or
available credit facilities to pay the Purchase Price and to make all other
necessary payments of fees and expenses in connection with the transactions
contemplated by this Agreement.
7.8. LITIGATION. Except as set forth in SCHEDULE 7.8,
there is no Order, and there are no actions, suits, claims, or legal,
administrative or arbitration proceedings, or to the knowledge of the Purchaser,
investigations, against the Purchaser whether at law or in equity, or before or
by any federal, state, municipal, local, foreign courts, tribunals, arbitrations
or other governmental department, commission, board, bureau, agency or
instrumentality, which could reasonably be expected to result in the issuance of
an Order restraining, enjoining or otherwise prohibiting or making illegal the
closing of any of the transactions contemplated by this Agreement or which could
reasonably be expected to have a material adverse effect on the validity and
enforceability of this Agreement or the ability of the Parent or the Purchaser
to perform its obligations hereunder. The Purchaser does not know of a threat
of, or any fact, circumstances or other basis for, any such action, suit, claim,
investigation or proceeding.
8. COVENANTS OF GLAS, AMERICAS AND HOLDING.
Each of GLAS, Americas and Holding covenants and agrees as follows:
8.1. 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 Purchaser concerning the Purchaser 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, it will (i) return to the
Purchaser 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) except as required by law or as otherwise provided herein, 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 as required to comply with federal securities laws, will
not make any announcement thereof or disclose such negotiations to any other
party other than its professional advisors and lenders. Concurrent with the
execution hereof, the parties shall issue the respective announcements attached
hereto as EXHIBIT D. If GLAS, Americas or Holding is advised by its outside
legal counsel that it is required by law or by the rules and regulations of the
SEC to make any further disclosure, it will first advise the
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Purchaser of the content of the proposed disclosure, and the time and place
that the disclosure will be made, and the parties will endeavor to make such
disclosure jointly. This covenant shall survive termination of this Agreement.
8.2. Prior to the Closing Date, GLAS will conduct its
business only in the ordinary course consistent with past practices except as
provided in this SECTION 8.2. Without limiting the generality of the foregoing,
Holding, Americas and GLAS will:
(i) Use commercially reasonable efforts to (a) preserve
intact the present business organization and reputation of the GLAS Business,
(b) keep available (subject to dismissals and retirements in the ordinary course
of business consistent with past practice) the services of the GLAS employees,
(c) maintain the GLAS Assets in good working order and condition, ordinary wear
and tear excepted, (d) maintain the good will of customers, suppliers, lenders
and other persons to whom GLAS sells goods or provides services or with whom
GLAS otherwise has significant business relationships in connection with the
GLAS Business, and (e) not make any distribution of GLAS Assets to Holding;
PROVIDED, HOWEVER, that Holding and GLAS may use all or part of GLAS's cash on
hand and cash in depositories prior to the Closing to reduce Indebtedness or
other amounts owing to Holding and its subsidiaries, whether on hand or in
depositories as of the date hereof or received prior to the Closing as a result
of any increases in cash of GLAS between the date hereof and the Closing,
including increases that result from payments received in respect of accounts
receivable existing as of the date hereof or created hereafter; PROVIDED,
FURTHER, that GLAS may merge into Americas so long as such merger is consummated
no earlier than the business day prior to Closing and the surviving entity
assumes all obligations of GLAS to Purchaser under this Agreement, including the
obligation of GLAS to deliver any documents pursuant to SECTION 11 of this
Agreement.
(ii) Except to the extent required by applicable law, (a)
cause the GLAS Business books and records to be maintained in the usual, regular
and ordinary manner, and (b) except in the ordinary course of business, not
permit any material change in any pricing, investment, accounting, financial
reporting, inventory, credit, allowance or tax practice or policy of GLAS that
would adversely affect the GLAS Business, the GLAS Assets or the Assumed
Obligations. Nothing contained herein shall require GLAS, Americas or Holding
to disclose to the Purchaser, or allow the Purchaser to have access to, any
customer pricing information of GLAS.
(iii) Not make any Tax election with respect to the GLAS
Assets or GLAS Business without the prior consent of the Purchaser, which
consent will not be unreasonably withheld.
8.3. FINANCIAL STATEMENTS AND REPORTS; FILINGS.
(i) As promptly as practicable and in any event no later
than 45 days after the end of each fiscal quarter ending after the date hereof
and before the Closing Date (other than the fourth quarter), 90 days after the
end of each fiscal year ending after the date hereof and before the Closing
Date, or 30 days after the end of each calendar month ending after the date
hereof and before the Closing Date, as the case may be, GLAS will deliver to the
Purchaser true and complete copies of the unaudited balance sheet, and the
related unaudited
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statement of operations, of the GLAS Business, as of and for the fiscal year
then ended or as of and for the fiscal quarter or month and the portion of
the fiscal year then ended, as the case may be, together with the notes, if
any, relating thereto, which quarterly and annual financial statements shall
be prepared in accordance with GAAP on a basis consistent with the prior
financial statements of GLAS. Monthly financial statements will be
preliminary and may not be in accordance with GAAP.
(ii) As promptly as practicable, GLAS will deliver to
Purchaser true and complete copies of such other financial statements, reports
and analyses relating to the GLAS Business as may be prepared or received by
GLAS or as Purchaser may otherwise reasonably request.
(iii) As promptly as practicable, GLAS will deliver copies
of all license applications and other filings made by GLAS in connection with
the operation of the GLAS Business after the date hereof and before the Closing
Date with any Governmental or Regulatory Authority (other than routine,
recurring filings made in the ordinary course of business consistent with past
practice).
8.4. EMPLOYEE MATTERS. Except as may be required by law,
prior to the Closing, Holding, Americas and GLAS will refrain from directly or
indirectly:
(i) Making any representation or promise, oral or
written, to any GLAS employee concerning any benefit plan, except for statements
as to the rights or accrued benefits of any GLAS employee under the terms of any
benefit plan.
(ii) Except as required by any employment agreement set
forth on SCHEDULE 6.25 or in conjunction with promotions of employees in the
ordinary course of business, making any increase in the salary, wages or other
compensation in excess of 5% of any GLAS employee's salary, wage or other
compensation or outside of the ordinary course of business consistent with past
practice, or any increase in the salary, wages or other compensation of any GLAS
employee whose annual salary is, or after giving effect to such change would be,
$50,000 or more.
(iii) Except as required by any employment agreement set
forth on SCHEDULE 6.25 or as set forth on SCHEDULE 6.26, adopting, entering into
or becoming bound by any benefit plan, employment-related contract or agreement
or collective bargaining agreement with respect to the GLAS Business or any of
the GLAS employees, or amending, modifying or terminating (partially or
completely) any such benefit plan, employment-related contract or agreement or
collective bargaining agreement, except to the extent required by applicable law
and, in the event compliance with legal requirements presents options, only to
the extent that the option which GLAS reasonably believes to be the least costly
is chosen.
(iv) Except as required by any employment agreement set
forth on SCHEDULE 6.25 or as set forth on SCHEDULE 6.26, establishing or
modifying any (a) targets, goals, pools or similar provisions in respect of any
fiscal year under any benefit plan or any employment-related contract or other
compensation arrangement with or for GLAS employees, or (b) salary ranges,
increase guidelines or similar provisions in respect of any benefit plan or
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any employment-related contract or other compensation arrangement with or for
GLAS employees.
(v) Discouraging any employee of the GLAS Business from
remaining with the GLAS Business.
8.5. Holding, Americas and GLAS will: (i) within five
business days following the date hereof, make all filings under the HSR Act with
respect to the transactions contemplated hereby; (ii) use all commercially
reasonable efforts to cooperate with the Purchaser in (a) determining which
other filings are required to be made prior to the Closing Date with, and which
other consents, approvals, permits or authorizations are required to be obtained
prior to the Closing Date from, Governmental or Regulatory Authorities in
connection with the execution and delivery of this Agreement and the closing of
the transactions contemplated hereby, and (b) timely making all such filings and
timely seeking all such consents, approvals, permits or authorizations; (iii)
promptly seek and use commercially reasonable efforts to obtain all such
consents, approvals, permits or authorizations necessary to assign or transfer
any Contracts which constitute GLAS Assets in accordance herewith; (iv) use
commercially reasonable efforts to cooperate with the Purchaser in transferring
the Puerto Rico tax exemption to the Purchaser on or after the Closing Date;
(v) use all commercially reasonable efforts to provide the Purchaser with such
assistance and information as the Purchaser may reasonably request regarding the
GLAS Employee Benefit Plans and enrollment therein to assist Purchaser in
obtaining employee benefit plans for the GLAS employees retained by the
Purchaser or its Affiliates on or after the Closing, provided that nothing
herein shall obligate any of Holding, Americas or GLAS to provide any
information regarding any GLAS Employee that any of Americas or Holdings
reasonably believes is confidential; and (vi) use all commercially reasonable
efforts to take, or cause to be taken, all other actions and do, or cause to be
done, all other things necessary, proper or appropriate to close the
transactions contemplated by this Agreement. Holding, Americas and GLAS will
provide prompt notification to the Purchaser when any such consent, approval,
action, filing or notice referred to in the first sentence of this SECTION 8.5
is obtained, taken, made or given, as applicable, and will advise the Purchaser
of any communications (and, unless precluded by law, provide copies of any such
communications that are in writing) with any Governmental or Regulatory
Authority or other person regarding any of the transactions contemplated by this
Agreement. Holding, Americas and GLAS will take all commercially reasonable
actions necessary or appropriate to cause the prompt expiration or termination
of any applicable waiting period under the HSR Act in respect of the
transactions contemplated hereby, including requesting early termination of such
waiting periods, complying as promptly as practicable with any requests for
additional information and assisting the Purchaser in responding to any such
requests for additional information.
8.6. Holding, Americas and GLAS jointly and severally
undertake to (i) pay all liabilities of GLAS, other than the Assumed
Obligations, in accordance with their terms, and (ii) pay, within 15 days
following the Closing Date or earlier if required by law or pursuant to any
applicable Employee Benefit Plan of GLAS, all employee bonus, sales incentive
and other compensation arrangements and obligations accrued or incurred by GLAS
prior to the Closing, other than any severance obligations, in accordance with
GLAS's Employee Benefit Plans; PROVIDED, HOWEVER, that to the extent any GLAS
employee who is hired by the Purchaser (or a subsidiary or Affiliate of the
Purchaser) following the Closing elects to retain vacation time
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accrued while employed by GLAS and the Purchaser (or such subsidiary or
Affiliate of Purchaser) agrees to provide such accrued vacation time to such
employee, GLAS will pay to the Purchaser the dollar value of such accrued
vacation time in accordance with the terms of GLAS's Employee Benefit Plans
but in any event not later than 15 days following the Closing Date. If, in
the reasonable judgment of the Purchaser, the failure of Holding, Americas
and GLAS to pay any such liability has or may have an adverse impact on the
GLAS Business after the Closing Date, then, following five days' advance
written notice to Holding, which notice shall contain a description of such
liability with reasonable specificity and during which five-day period
Holding does not certify to the Purchaser that such liability is legitimately
in dispute, the Purchaser may pay such liability and recover the amount so
paid from Holding.
8.7. GLAS, Americas and Holding will (a) provide the
Purchaser and any person who is considering providing financing to the Purchaser
to finance all or any portion of the purchase price (it being understood that
the transactions contemplated by this Agreement are not contingent on the
Purchaser obtaining any form of financing) and their respective officers,
directors, employees, agents, counsel, accountants, financial advisors,
consultants and other representatives (collectively, "Representatives") with
full access, upon reasonable prior notice and during normal business hours, to
the employees and such other officers, employees and agents of GLAS, Americas
and Holding who have any responsibility for the conduct of the GLAS Business, to
GLAS's, Americas' and Holding's accountants and to the GLAS Assets, and (b)
furnish the Purchaser and such other persons with all such information and data
(including without limitation copies of Contracts, Licenses, Employee Benefit
Plans and other GLAS Business books and records) concerning the GLAS Business,
the GLAS Assets and the Assumed Obligations as the Purchaser or any of such
other persons reasonably may request in connection with such investigation.
Nothing contained herein shall require GLAS, Americas or Holding to disclose to
the Purchaser prior to the Closing, or allow the Purchaser to have access to
prior to the Closing, any customer pricing information of GLAS.
8.8. If, following the Closing, any customer of GLAS
claims a refund of amounts previously paid to GLAS for services performed prior
to the Closing, GLAS, Americas and Holding undertake to deal with such
customer(s) in good faith and to exercise commercially reasonable efforts to
satisfy such customer(s).
8.9. Notwithstanding anything herein to the contrary, the
parties hereto acknowledge and agree that at the Closing GLAS will not assign to
the Purchaser any contract, agreement or other right which by its terms requires
the consent of any other party unless such consent has been obtained prior to
the Closing. With respect to each such unassigned contract, agreement or right,
after the Closing GLAS shall continue as the prime contracting party and, if
requested by Purchaser, shall use its commercially reasonable efforts to obtain
the consent of all required parties to the assignment of such contract,
agreement or right, but the Purchaser shall be entitled to the benefits of such
contract, agreement or right accruing after the Closing to the extent that GLAS
may provide the Purchaser with such benefits without violating the terms of such
contract, agreement or right.
8.10. Prior to the Closing, Holding will, and will cause
its subsidiaries to, transfer to GLAS all of their respective right, title and
interest in and to the assets described on SCHEDULE 6.17; PROVIDED that this
SECTION 8.10 shall be deemed to be satisfied for all purposes
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of this Agreement in the event of any merger of GLAS with Americas pursuant
to the second proviso of SECTION 8.2.1.
8.11. From and after the Closing Date and until the fifth
anniversary of the Closing Date, Holding, Americas and their respective
subsidiaries shall not, and shall not permit any of the Restricted Affiliates
to, and Roger Payton shall not use the name "GeoLogistics Air Services" or
"GLAS" in the conduct of their business. The parties acknowledge and agree that
nothing contained herein shall restrict the ability of Holding, Americas and
their respective subsidiaries and Affiliates to use the name "GeoLogistics" or
any other name containing the name "GeoLogistics."
8.12. (a) GLAS shall retain all liability and
responsibility for fulfilling any applicable federal and/or state COBRA and
continuation of coverage requirements with respect to GLAS's current or former
employees and their dependents, PROVIDED that the Parent and Purchaser shall pay
all costs and expenses associated with such coverage and all costs and expenses
incurred by Holding, Americas or GLAS or any Employee Benefit Plan maintained by
Holding, Americas or GLAS in respect of such coverage and PROVIDED further that
Parent and Purchaser shall procure and make employee benefit plans available to
the GLAS employees hired by Parent or Purchaser as promptly as practicable
following the Closing Date and in no event later than the later of ninety (90)
days following the Closing Date or December 31, 1999.
(b) With respect to any employee pension benefit plan (as
defined in section 3(2) of ERISA) in which GLAS employees are participants, GLAS
will take such steps as are necessary (i) to allocate to the participants'
accounts of any employees who accept offers to be employed by Purchaser after
the Closing Date any employer contributions, forfeitures, investment earnings or
losses, or other such amounts to the extent required to be allocated to
participants accounts under the terms of such plans, and (ii) to facilitate the
transfer of such participants' account balances to such accounts and employee
pension benefit plans designated by such participants.
8.13. Following the Closing, Holding and its subsidiaries
agree to continue to lease to Purchaser the facilities listed on SCHEDULE 8.13
at the rates set forth thereon until the earlier of (a) the date on which the
Purchaser notifies Holding and its subsidiaries, as applicable, that it wishes
to vacate such premises and (b) September 30, 1999.
8.14. None of GLAS, Americas and Holding contemplates
terminating the employment of enough GLAS employees so as to constitute a "plant
closing" or "mass layoff" as such terms are defined under Worker Adjustment and
Retraining Act of 1988 ("WARN") at any time prior to the Closing Date. GLAS,
Americas and Holding will deliver any notices required with respect to any
"plant closing" or "mass layoff" under WARN so long as such notices are
requested by Purchaser or Parent and provided that nothing contained herein
shall constitute any obligation on the part of Holding, Americas or GLAS with
respect to any WARN liabilities that may arise as a result of the failure of
Parent or Purchaser to provide sufficient notice to Holding, Americas or GLAS
with respect to a proposed "plant closing" or "mass layoff" to permit Holding,
Americas or GLAS to give sufficient WARN notices.
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9. COVENANTS OF THE PURCHASER.
The Purchaser covenants and agrees as follows:
9.1. Prior to the Closing, it will hold in strict
confidence and not disclose to others (except to rating agencies, its
professional advisors and lenders, it being understood that the transactions
contemplated by this Agreement are not contingent on the Purchaser obtaining any
form of financing), and will not use or permit others to use, any data or
information obtained from the GeoLogistics Group concerning the GeoLogistics
Group 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,
it will (i) return to the GeoLogistics 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) except as required by law or
as otherwise provided herein, 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 by the rules
and regulations of the SEC and NYSE or with the consent of the GeoLogistics
Group, whose consent shall not be unreasonably withheld, will not make any
announcement thereof or disclose such negotiations to any other party other than
its professional advisors and lenders. Concurrent with the execution hereof,
the parties shall issue the respective announcements attached hereto as Exhibit
D. If the Purchaser is advised by its outside legal counsel that it is required
by law or by the rules and regulations of the SEC or NYSE to make any further
disclosure, it will first advise Holding of the content of the proposed
disclosure, and the time and place that the disclosure will be made, and the
parties will endeavor to make such disclosure jointly. This covenant shall
survive termination of this Agreement. Except as specifically superseded
herein, the provisions of the confidentiality agreement previously executed by
the Purchaser with respect to the transactions contemplated by this Agreement
shall survive the execution and termination of this Agreement and the Closing.
9.2. The Purchaser will (i) within five business days
following the date hereof make all filings and pay the requisite filing fee
under the HSR Act with respect to the transactions contemplated hereby; (ii) use
all commercially reasonable efforts to cooperate with the GeoLogistics Group in
(a) determining which other filings are required to be made prior to the Closing
Date with, and which other consents, approvals, permits or authorizations are
required to be obtained prior to the Closing Date from, Governmental or
Regulatory Authorities in connection with the execution and delivery of this
Agreement and the closing of the transactions contemplated hereby, (b) timely
making all filings and timely seeking all such consents, approvals, permits or
authorizations, and (c) seeking all such consents, approvals, permits or
authorizations necessary to assign or transfer any Contracts which constitute
GLAS Assets; and (iii) use all commercially reasonable efforts to take, or cause
to be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to close the transactions contemplated by this
Agreement. The Purchaser will take all commercially reasonable actions
necessary or appropriate to cause the prompt expiration or termination of any
applicable waiting period under the HSR Act in respect of the transactions
contemplated hereby,
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including requesting early termination of such waiting periods, complying as
promptly as practicable with any requests for additional information and
assisting the GeoLogistics Group in responding to any such request for
additional information.
9.3. Following the Closing, the Purchaser will pay all of
the Assumed Obligations as and when due.
9.4. Following the Closing, the Purchaser will cooperate
with the GeoLogistics Group and its representatives and will provide the
GeoLogistics Group and its representatives with all information and access to
personnel reasonably requested in connection with the preparation of financial
statements (including independent audits) and federal and state tax returns of
GLAS, Holding, and Holding's other subsidiaries.
9.5. From and after the Closing, neither Purchaser nor any
of its Affiliates will use the name "GeoLogistics Air Services" or "GLAS" or any
confusingly similar names (collectively, the "Names"); PROVIDED, HOWEVER, that
the Purchaser may have as of the Closing a quantity of preprinted stationery,
invoices, receipts, forms, packaging materials and other supplies in inventory
(collectively, the "Marked Inventory") which bear the Names. GLAS, Americas and
Holding hereby grant, and shall cause its post-Closing Affiliates to grant, to
Purchaser a paid-up license to use the Names in connection with the exhaustion
of such Marked Inventory in the ordinary course of business. The Purchaser
agrees to exhaust such Marked Inventory in the ordinary course of business as
soon as is reasonably practicable after the Closing, but in any event within
four months following the Closing.
9.6. The Purchaser agrees that it will offer employment to
all employees of GLAS beginning on the Closing Date and will accept any and all
liability that may arise with respect to severance obligations to such
employees, whether arising pursuant to contract, benefit plans or employment
policies, law or otherwise or pursuant to WARN.
9.7. The Purchaser and the Parent hereby agree not to (a)
settle or compromise any claim with respect to any 150-Day Receivable for an
amount less than 90% of the amount due with respect to such receivable or (b)
sell, transfer or assign any 150-Day Receivable without the prior written
consent of Holding, which shall not be unreasonably withheld or delayed.
9.8. The Purchaser and the Parent hereby agree to use
their commercially reasonable efforts to cause all amounts outstanding with
respect to each 150-Day Receivable to be paid in full prior to four months
following the Closing.
9.9. Parent and Purchaser shall use their commercially
reasonable efforts to take all such action reasonably required by Kitty Hawk
International, Inc., including without limitation providing a substitute letter
of credit in form and substance reasonably satisfactory to Kitty Hawk
International, Inc., to cause the letter of credit dated July 19, 1999 provided
by GLAS to Kitty Hawk International, Inc. to be released effective upon the
Closing.
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10. CONDITIONS PRECEDENT TO OBLIGATIONS OF GLAS, AMERICAS AND
HOLDING
The GeoLogistics 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
Holding in its judgment (which judgment will not be unreasonably exercised), any
of which conditions may be waived in writing, in whole or in part, by Holding:
10.1. The representations and warranties made by or on
behalf of the Purchaser and Parent contained in this Agreement or in any
certificate or document delivered by, or at the direction of, the Purchaser or
Parent to GLAS, Americas or Holding pursuant to the provisions hereof shall be
true at and as of the time of the Closing as though such representations and
warranties were made at and as of such time.
10.2. The Purchaser and Parent 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 it prior to or at
the Closing.
10.3. Holding shall have received a certificate signed by
the chief executive officer of the Purchaser and a vice president of Parent and
dated the Closing Date in substantially the form attached hereto as EXHIBIT E,
to the effect that the conditions specified in SECTIONS 10.1 through 10.2
inclusive have been fulfilled.
10.4. The waiting period applicable to the transactions
contemplated hereby under the HSR Act shall have expired or been terminated and
all necessary clearances pursuant to the HSR Act shall have been obtained, and
there shall be no Order or Regulation restricting, enjoining or making illegal
the closing of the transactions contemplated under this Agreement.
10.5. Holding, GLAS and the Purchaser shall have obtained
(i) all required consents for the assignment by GLAS to the Purchaser of all of
the customer agreements listed on SCHEDULE 6.20 and the Kitty Hawk Agreements,
(ii) the consent or clearance of the required governmental bodies as listed on
SCHEDULE 6.9 and SCHEDULE 7.5 for the conclusion of the transactions
contemplated by this Agreement and (iii) the consent of the lenders under that
certain Amended and Restated Loan Agreement dated as of October 28, 1997 by and
among Holding, certain subsidiaries of Holding and the Lenders party thereto, as
amended.
10.6. The letter of credit dated July 19, 1999 issued by
ING Capital LLC and provided by GLAS to secure the payment of GLAS's obligations
pursuant to the Kitty Hawk Agreements shall have been released and terminated
and Holding and GLAS shall have received releases and novations for all
obligations of Holding, GLAS and any subsidiary of Holding with respect to the
assets listed on SCHEDULE 6.17 hereto.
10.7. Holding shall have received the following:
10.7.1. A certificate from the Secretary of State (or
similar office) of the Purchaser's jurisdiction of incorporation and Parent's
jurisdiction of incorporation, dated at
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or about the Closing Date, to the effect that the Purchaser and Parent are in
good standing under the laws of said jurisdiction.
10.7.2. A secretary's certificate for each of the
Purchaser and Parent in substantially the form attached hereto as EXHIBIT F.
10.7.3. The opinion of George W. Hearn, counsel to the
Purchaser, dated the Closing Date, in the form and substance reasonably
satisfactory to Holding.
10.7.4. The duly executed Assumption Agreement.
10.8. The Purchaser or the Parent shall have delivered to
Holding all of the exhibits and schedules required herein to be delivered by the
Purchaser or the Parent, and copies of the documents referred to therein to the
extent required to be delivered to Holding, Americas or GLAS, each duly
executed, if required, and such exhibits, schedules and documents shall have
been reasonably acceptable to Holding. All proceedings to be taken on the part
of the Purchaser or the Parent in connection with the transactions contemplated
by this Agreement and all documents incident thereto shall be reasonably
satisfactory in form and substance to Holding and Holding shall have received
copies of all such documents and other evidences as Holding may reasonably
request in order to establish the consummation of such transactions and the
taking of all proceedings in connection therewith.
11. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER.
The Purchaser'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 Purchaser
in its judgment (which will not be unreasonably exercised), any of which
conditions may be waived in writing, in whole or in part, by the Purchaser:
11.1. The representations and warranties by GLAS, Americas
and Holding contained in this Agreement or in any certificate or document
delivered by, or at the direction of GLAS, Americas or Holding to the Purchaser
pursuant to the provisions hereof shall be true in all material 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. GLAS, Americas and Holding 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.
11.3. The Purchaser shall have received a certificate
signed by the President of Holding, the Vice President of Americas and the
President and Chief Executive Officer of GLAS and dated the Closing Date in
substantially the form attached hereto as Exhibit G, to the effect that the
conditions specified in SECTIONS 11.1 through 11.2 inclusive have been
fulfilled.
11.4. Subject to the provisions of SECTION 8.9, Holding,
GLAS, Americas and the Purchaser shall have obtained the consent or clearance,
in form and substance
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satisfactory to the Purchaser, of the required governmental bodies and third
parties as listed on SCHEDULE 6.9 and SCHEDULE 7.5 for the conclusion of the
transactions contemplated by this Agreement and such consents shall not be
subject to the satisfaction of any condition that has not been satisfied or
waived and shall be in full force and effect; PROVIDED, HOWEVER, that
notwithstanding the provisions of SECTION 8.9, the Purchaser's obligation to
close the transactions pursuant to this Agreement is contingent on the
GeoLogistics Group obtaining, prior to the Closing, all required consents for
the assignment by GLAS to the Purchaser of all of the customer agreements and
other agreements listed on SCHEDULE 11.4.
11.5. The waiting period applicable to the transactions
contemplated hereby under the HSR Act shall have expired or been terminated and
all necessary clearances pursuant to the HSR Act shall have been obtained, and
there shall be no Order or Regulation restricting, enjoining or making illegal
the closing of the transactions contemplated under this Agreement which could
reasonably be expected to otherwise result in a material diminution of the
benefits of the transactions contemplated by this Agreement to the Purchaser,
and there shall not be pending or threatened any action or proceeding in, before
or by any Governmental or Regulatory Authority which could reasonably be
expected to result in the issuance of any such Order or the enactment,
promulgation or deemed applicability to the Purchaser or the transactions
contemplated by this Agreement of any such Regulation.
11.6. The Purchaser shall have received the following:
11.6.1. The duly executed Bill of Sale.
11.6.2. Certificates from the Secretary of State of
Delaware, dated at or about the Closing Date, to the effect that each of GLAS
and Holding is in good standing under the laws of the state of Delaware.
11.6.3. A secretary's certificate for each of GLAS,
Americas and Holding dated at or about the Closing Date in substantially the
form attached hereto as EXHIBIT H.
11.6.4. The opinion of Milbank, Tweed, Hadley & McCloy
LLP, counsel to GLAS and Holding, dated the Closing Date, in form and substance
reasonably satisfactory to the Purchaser.
11.6.5. Subject to the provisions of SECTION 8.9, for each
of the Facility Leases, an estoppel certificate, a consent to assignment from
the lessor thereunder in form and substance reasonably satisfactory to the
Purchaser.
11.6.6. The duly executed Escrow Agreement.
11.6.7. If Holding and Americas have elected to cause
GLAS to merge with Americas as contemplated by the second proviso of SECTION
8.2.1, a copy of the Certificate of Merger certified by the Secretary of State
of the State of Delaware evidencing that such merger has been consummated.
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11.7. The employment agreement between the Purchaser (or
its subsidiary) and Richard A. Faieta executed on or prior to the date hereof
and effective as of the Closing Date shall be in full force and effect, and
Richard A. Faieta shall not be in breach thereof and shall not be disabled in a
manner that renders him incapable of performing his duties under such employment
agreement or deceased on the Closing Date.
11.8. The Purchaser shall have received certificates of
each of the Chief Financial Officers of Americas and Holding certifying that
after giving effect to the transactions contemplated by this Agreement, Holding,
Americas and GLAS, respectively, will be solvent.
11.9. All of the items listed on SCHEDULE 6.17 shall have
been transferred and assigned to GLAS, free and clear of all Liens; PROVIDED,
that this SECTION 11.9 shall be deemed to be satisfied for all purposes of this
Agreement in the event of any merger of GLAS with Americas pursuant to the
second proviso of SECTION 8.2.1.
11.10. GLAS, Americas or Holding shall have delivered to the
Purchaser all of the exhibits and schedules required herein to be delivered by
GLAS, Americas or Holding, and copies of the documents referred to therein to
the extent required to be delivered to the Purchaser, each duly executed, if
required, and such exhibits, schedules and documents shall have been reasonably
acceptable to the Purchaser. All proceedings to be taken on the part of GLAS,
Americas or Holding in connection with the transactions contemplated by this
Agreement and all documents incident thereto shall be reasonably satisfactory in
form and substance to the Purchaser and the Purchaser shall have received copies
of all such documents and other evidences as Purchaser may reasonably request in
order to establish the consummation of such transactions and the taking of all
proceedings in connection therewith.
12. NON-COMPETE AND NON-SOLICITATION COVENANTS; PURCHASER
UNDERTAKINGS.
12.1. NON-COMPETITION. Each of Holding, Americas, GLAS and
Roger Payton, on its or his own behalf, undertakes severally, and not jointly,
that it or he will not directly or indirectly, own, manage, operate, join,
control or participate in the ownership, management, operation or control of or
be connected as a partner, consultant or otherwise with, any business or
organization which, directly or indirectly, competes with, or in any way
interferes with, the GLAS Business to Puerto Rico or the Dominican Republic from
the United States or from Puerto Rico or the Dominican Republic to the United
States as now constituted or the transportation, logistics and supply chain
management services of the Purchaser and its subsidiaries to Puerto Rico or the
Dominican Republic from the United States or from Puerto Rico or the Dominican
Republic to the United States (each a "Competitive Business"); PROVIDED that (a)
nothing herein shall be construed or deemed to apply to the independent agents
of Holding, Americas, GLAS or their respective subsidiaries or to restrict the
ability of such agents to provide freight forwarding, transportation, logistics
and supply chain management services between the United States, on the one hand,
and Puerto Rico and the Dominican Republic, on the other, (b) Holding, Americas,
GLAS and their respective subsidiaries may continue to provide freight
forwarding, transportation, logistics and supply chain management services to
and from Puerto Rico or the Dominican Republic so long as such shipments do not
have an origin or destination in the United States, and (c) Holding, Americas,
GLAS and their respective subsidiaries may provide freight forwarding,
transportation, logistics and supply chain
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management services between the United States, on the one hand, and Puerto
Rico or the Dominican Republic, on the other, so long as such business is
generally incidental to the international business of Holding, Americas and
GLAS and either (i) gross sales revenue received by Holding, GLAS and
Americas for such business does not exceed, in the aggregate for all such
entities, $3,000,000 per year or (ii) the Purchaser has agreed, in writing,
to allow Holding, Americas, GLAS and their respective subsidiaries to provide
such business; PROVIDED, HOWEVER, that for any service permitted pursuant to
CLAUSE (b) to be provided by Holding, Americas, GLAS and their respective
subsidiaries, Holding, Americas, GLAS and their respective subsidiaries shall
engage the Purchaser or its subsidiaries to provide such service so long as
the Purchaser or such subsidiaries elect to provide such services and such
service is provided to Holding, Americas, GLAS or the applicable subsidiary
by the Purchaser or its subsidiaries at a rate that is (x) no less favorable
than the rate charged by the Purchaser or its subsidiaries, as applicable, to
their other freight forwarder customers for comparable services during
substantially the same period of time from the same point of origin to the
same point of destination and (y) equal to or less than the rate that would
be charged by a third party to Holding, Americas, GLAS or the applicable
subsidiary for such service, which rate shall, to the extent known to
Holding, Americas or GLAS, be disclosed to the Purchaser by Holding, Americas
or GLAS; PROVIDED, FURTHER, that for any service permitted pursuant to CLAUSE
(c) to be provided by Holding, Americas, GLAS and their respective
subsidiaries, Holding, Americas, GLAS and their respective subsidiaries shall
engage the Purchaser or its subsidiaries to provide such service so long as
such service is provided to Holding, Americas, GLAS or the applicable
subsidiary by the Purchaser or its subsidiaries at a rate that is no less
favorable than the rate charged by the Purchaser or its subsidiaries, as
applicable, to their other freight forwarder customers for comparable
services during substantially the same period of time from the same point of
origin to the same point of destination. The restrictions contained in this
SUBSECTION 12.1 shall automatically terminate and be of no further effect (i)
on the date that is five years following the Closing Date with respect to
Holding, Americas and GLAS and (ii) on April 30, 2001 with respect to Roger
Payton. In the event that Holding, Americas or GLAS is acquired, whether by
merger, consolidation, sale of more than 50% of the issued and outstanding
capital stock of such entity, sale of substantially all of the assets of such
entity, or otherwise, by a Person that provides, whether directly or through
an Affiliate, freight forwarding, transportation, logistics, or supply chain
management services between the United States, on the one hand, and Puerto
Rico or the Dominican Republic, on the other, the restrictions contained in
this SUBSECTION 12.1 shall not apply to any such Person or its Affiliates
other than Holding, Americas and GLAS. In addition, nothing contained in
this SUBSECTION 12.1 shall prevent Holding, Americas or GLAS from owning any
interest in any Person engaged in a Competitive Business if Holding, Americas
or GLAS, as applicable, does not Control such Person engaged in the
Competitive Business and if such interests were received in consideration of
the sale or transfer of all or any part of the assets or business of Holding,
Americas, GLAS or any of their subsidiaries and, under such circumstances,
the restrictions contained in this SUBSECTION 12.1 shall not apply to any
such Person engaged in such Competitive Business. For purposes of the
foregoing sentence, "Control" means (x) the possession, directly or
indirectly, of the power to direct the management or policies of a Person,
whether through ownership or voting of securities, by contract or otherwise
or (y) the ownership of 50% or more of the voting securities of a Person.
The Purchaser shall, upon 30 days' prior written notice to Holding but in no
event more than two times in any fiscal year, have the right to cause its
independent accountants or
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outside counsel to inspect the books and records of Holding, Americas and
GLAS related to the business specified in CLAUSE (c) above to verify
compliance with CLAUSES (c)(i) and (c)(ii) above; PROVIDED that such
independent accountant or outside counsel shall be required to execute a
confidentiality agreement in form and substance reasonably satisfactory to
the Purchaser and Holding. Notwithstanding anything to the contrary herein,
this SUBSECTION 12.1 shall not prohibit the ownership by Holding, Americas or
GLAS or any of their respective Affiliates of 5% or less of any class of
securities registered under the Securities Exchange Act of 1934, as amended.
12.2. NON-SOLICITATION; NON-INTERFERENCE; CONFIDENTIALITY.
Each of (x) Holding, Americas and GLAS undertakes that, for a period of three
years after the Closing Date, it will not, and none of Holding, Americas and
GLAS's respective subsidiaries or the Restricted Affiliates will, either on
their own account or jointly with any third party or on behalf of any other
person, firm or corporation and (y) Roger Payton undertakes that for the period
beginning on the Closing Date and ending on April 30, 2001 he will not, either
on his own account or jointly with any third party or on behalf of any other
person, firm or corporation: (i) directly or indirectly solicit or attempt to
solicit the employment of any person or persons who are or were employed in the
GLAS Business immediately prior to the Closing Date or during the six months
immediately preceding the Closing Date; (ii) cause or attempt to cause any
supplier to the GLAS Business to terminate or materially reduce its services to
the Purchaser or any of its Affiliates with respect to its freight forwarding
business between the United States, on the one hand, and Puerto Rico or the
Dominican Republic, on the other; or (iii) disclose (unless otherwise disclosed
by others prior thereto, or compelled by judicial or administrative process to
disclose) or use any confidential or secret information relating to the GLAS
Business or any client, customer or supplier of the GLAS Business.
12.3. PURCHASER UNDERTAKINGS. In order to prevent Rick
Faieta, Dave Irwin, Lynn Turman, Pedro Orpi, Gloria Tollinche and Brian Weston
from misusing any confidential or proprietary information relating to the
international business of Holding or any of its subsidiaries gained while
employed by Holding or any of its subsidiaries, the Purchaser undertakes that
none of Purchaser or its subsidiaries will, for a period of one year following
the Closing Date, directly or indirectly, own, manage, operate, join, control or
participate in the ownership, management, operation or control of or be
connected as a partner, consultant or otherwise with, any business or
organization which, directly or indirectly, competes with, or in any way
interferes with, the freight forwarding, transportation, logistics and supply
chain management services provided by Holding or its subsidiaries to the
customers listed on SCHEDULE 12.3 hereto from and to points of origin and/or
destination outside of the United States and Canada, including but not limited
to freight forwarding, transportation, logistics and supply chain management
services to and from Puerto Rico or the Dominican Republic so long as such
shipments do not have an origin or destination in the United States or Canada.
For purposes of this SECTION 12.3 only, in the event that Purchaser assigns its
rights under this Agreement to a wholly-owned subsidiary, or assigns, transfers
or sells all or substantially all of the assets constituting the GLAS Business
to any Affiliate of Parent after the date hereof, this SECTION 12.3 shall apply
only to such wholly-owned subsidiary or Affiliate and not to the Purchaser or
its other subsidiaries; PROVIDED, that in all events this SECTION 12.3 shall
apply to Purchaser and each Affiliate of Purchaser that employs any or all of
Rick Faieta, Dave Irwin, Lynn Turman, Pedro Orpi, Gloria Tollinche and Brian
Weston.
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12.4. DEFINITION OF PUERTO RICO AND DOMINICAN REPUBLIC.
For purposes of this SECTION 12, all references to Puerto Rico and the Dominican
Republic shall include the islands and countries of the Caribbean Islands.
12.5. INJUNCTIVE RELIEF AND ENFORCEMENT. In the event of
breach by Holding, Americas or GLAS of the terms of SECTIONS 12.1, 12.2 or 12.3,
the Geologistics Group or Purchaser, as applicable, shall be entitled to
institute legal proceedings to obtain damages for such breach, or to enforce the
specific performance of this Agreement and to enjoin the breaching party from
any further violation of SECTIONS 12.1, 12.2 and 12.3 and to exercise such
remedies cumulatively or in conjunction with all other rights and remedies
provided at law. The parties hereto acknowledge, however, that the remedies at
law for any breach by any of them of the provisions of SECTION 12.1, 12.2 and
12.3 may be inadequate. In addition, in the event the undertakings set forth in
SECTIONS 12.1, 12.2 and 12.3 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of extending for too great a period
of time or by reason of being too extensive in any other respect, each such
undertaking shall be interpreted to extend over the maximum period of time for
which it may be enforceable and to the maximum extent in all other respects as
to which it may be enforceable and enforced as so interpreted, all as determined
by such court in such action.
13. INDEMNIFICATION.
13.1. INDEMNIFICATION BY HOLDING, AMERICAS AND GLAS.
13.1.1. Holding, Americas and GLAS, jointly and severally,
hereby agree to indemnify and hold harmless the Purchaser and its shareholders,
Affiliates, parent or subsidiary corporations or their or its directors,
officers, agents and employees (collectively the "Purchaser Indemnitees"), from
and against any and all Losses (as hereinafter defined) (other than those Losses
attributable to 150-Day Receivables), to the extent such Losses arise out of,
result from, or are in connection with: (i) any breach by GLAS, Americas or
Holding of any of the terms of this Agreement, (ii) any breach of any warranty
or representation of GLAS, Americas or Holding made in this Agreement as of the
Closing Date or pursuant to this Agreement, or (iii) any failure by GLAS,
Americas or Holding to perform or comply with any of their covenants or
obligations under this Agreement, (iv) the operation of the GLAS Assets or the
GLAS Business prior to the Closing, or (v) any debts, liabilities or obligations
of GLAS to third parties other than the Assumed Obligations.
13.1.2. (a) Subject to the provisions of subsection (b)
below, Holding, Americas and GLAS, jointly and severally, hereby agree to
indemnify and hold harmless the Purchaser Indemnitees in an amount equal to
(x) the aggregate amount of 150-Day Receivables of GLAS that are outstanding as
of the Closing Date, LESS (y) the sum of (i) any allowances for doubtful
accounts and unapplied cash in respect thereof on the Closing Date Balance Sheet
and (ii) any amounts received by the Parent or the Purchaser, their respective
Affiliates or any Purchaser Indemnitee in respect of such 150-Day Receivables
prior to the payment of any such claim for indemnification; PROVIDED, that the
amount payable, if any, with respect to 150-Day Receivables shall be determined
with reference to the Overdue 150-Day Receivables Schedule prepared in
accordance with subsection (b) below and, to the extent any claim is made by the
Purchaser or any Purchase Indemnitee under this Section 13.1.2 in respect
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of any such receivable, such receivable shall be sold, transferred and
assigned to Holding, and all books, records, documents and other information
related thereto and all rights to payment in respect of such receivable
received by Parent, Purchaser, their respective Affiliates or any Purchaser
Indemnitee subsequent to the date on which payment is made by Holding,
Americas or GLAS with respect to such claim (which payments shall be remitted
to Holding promptly upon receipt by Parent, Purchaser, their respective
Affiliates or any Purchaser Indemnitee) shall be delivered, sold, transferred
and assigned to Holding, simultaneously with the payment by Holdings,
Americas or GLAS to Purchaser or any Purchaser Indemnitee of amounts in
respect of such claim by Purchaser in accordance with this SECTION 13.1.2;
PROVIDED, FURTHER, that, in no event may any claim be made by Purchaser or
any Purchaser Indemnitee prior to the date that is four (4) months following
the Closing Date and, notwithstanding anything to the contrary contained in
this Agreement, in the event the Purchaser fails to comply with SECTION 9.7
with respect to any such 150-Day Receivable, no amounts of indemnity shall be
payable as a result of any claims made by the Purchaser or Purchaser
Indemnitee in respect of such 150-Day Receivable.
(b) As promptly as practicable after the date that is four months
following the Closing Date, the Purchaser will prepare and deliver to Holding a
schedule setting forth each receivable constituting a 150-Day Receivable that as
of such date remains fully or partially unpaid (the "OVERDUE 150-DAY RECEIVABLES
SCHEDULE"), which schedule shall contain, with respect to each such receivable,
the amount of such receivable, a description of such receivable with reasonable
specificity, and the amount, if any, received by the Parent or the Purchaser,
their respective Affiliates or any Purchaser Indemnitee in payment or compromise
of such receivable. The Overdue 150-Day Receivables Schedule shall be
accompanied by a certificate of the Vice President - Controller of the GLAS
Business as constituted by the Purchaser as of such date to the effect that the
Overdue 150-Day Receivables Schedule has been duly prepared in accordance with
the books and records of such entity. Holding's Accountant will be entitled to
reasonable access during normal business hours to the relevant records and
working papers of the GLAS Business as constituted by the Purchaser to aid in
their review of the Overdue 150-Day Receivables Schedule. The Overdue 150-Day
Receivables Schedule shall be deemed to be accepted by Holding and shall be
conclusive for the purposes of the payment described in the preceding paragraph
except to the extent, if any, that Holding or Holding's Accountant shall have
delivered, within thirty (30) days after the date on which the Overdue 150-Day
Receivables Schedule is delivered to Holding, a written notice to Purchaser
stating each and every item to which Holding takes exception, specifying in
reasonable detail the nature and extent of any such exception (it being
understood that any amounts not disputed as provided herein shall be paid
promptly). If a change proposed by Holding is disputed by Purchaser, then
Purchaser and Holding shall negotiate in good faith to resolve such dispute.
If, after a period of thirty (30) days following the date on which Holding gives
Purchaser notice of any such proposed change, any such proposed change still
remains disputed, then Purchaser and Holding hereby agree that Accounting Firm
shall resolve any remaining disputes. The Accounting Firm shall act as an
arbitrator to make a determination with respect to the issues that are disputed
by the parties, based on presentations by Holding and Purchaser and by
independent review of the Accounting Firm, if deemed necessary in the sole
discretion of the Accounting Firm, which determination shall be limited to only
those issues still in dispute. The decision of the Accounting Firm shall be
final and binding and shall be in accordance with the provisions of this
SECTION 13.1.2. The
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fees and expenses of the Accounting Firm, if any, shall be paid equally by
Purchaser and Holding.
13.2. INDEMNIFICATION BY THE PURCHASER AND THE PARENT. The
Purchaser and the Parent hereby agree to indemnify and hold harmless GLAS,
Americas and Holding and their respective shareholders, Affiliates, directors,
officers, agents and employees (collectively "Seller Indemnitees"), 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 the Purchaser or the Parent of any
of the terms of this Agreement, (ii) any breach of any warranty or
representation of the Purchaser or the Parent made herein or pursuant to this
Agreement, (iii) any failure by the Purchaser or the Parent to perform or comply
with any of its covenants or obligations under this Agreement, (iv) the
operation of the Purchaser's business, and the operation by the Purchaser of the
GLAS Assets and the GLAS Business after the Closing, or (v) the payment of the
Assumed Obligations.
13.3. 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 (net of the net tax costs, if any, of the indemnified party
from the realization of such indemnification payment), insurance proceeds,
proceeds of subrogation 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 applicable to the Indemnitee for the taxable year preceding
the taxable year of the Indemnitee in which claim for verification is made.
13.4. Except as provided in the sentence next immediately
following, no indemnification shall be made to any Purchaser Indemnitee under
this SECTION 13, except to the extent the aggregate amount of Losses by all
Purchaser Indemnitees exceeds $500,000 and, similarly, no indemnification shall
be made to any Seller Indemnitee under this SECTION 13 except to the extent the
aggregate amount of Losses by all Seller Indemnitees exceeds $500,000 (such
$500,000 amounts are each the "Threshold"); and the maximum liability of any
indemnifying party pursuant to all claims for indemnification under this Section
and all breaches of this Agreement shall be $20,000,000 in the aggregate (the
"Maximum"). The Threshold and Maximum limitations set forth in this Section
shall not apply to claims for indemnification for breaches of the
representations and warranties set forth in SUBSECTIONS 6.7, 6.8, 6.9, 6.10,
6.19, 6.25, 6.26, 6.27, 7.3, 7.4 and 7.5, and the covenants set forth in
SUBSECTIONS 8.1, 9.1, 9.3, 17.2, SECTION 12 or SECTION 17, or any obligation of
Holding, Americas or GLAS to the Purchaser under SUBSECTION 8.6 or 13.1.2, and
in each case any amounts payable thereon by any party hereto in respect of any
such claim under SECTION 13.1.2 or Loss shall not be included in determining
whether any Threshold or Maximum has been exceeded. All amounts paid by the
Purchaser to Holding, Americas or GLAS pursuant to SECTION 20.2.2 shall be
credited against amounts payable by the Purchaser to GLAS, Americas or Holding
for indemnification hereunder.
13.5. Whenever any claim for indemnification is made, or
any suit or proceeding is instituted, which if meritorious or which if
prosecuted successfully would entitle a
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party to indemnification under this SECTION 13 (a "Claim"), the person
seeking indemnification (the "Indemnitee"), shall promptly notify the party
from whom indemnification is sought (the "Indemnitor ") of the Claim and,
when known, the facts constituting the basis for such Claim. In the event of
any such Claim for indemnification hereunder resulting from or in connection
with any Claim by a third party, the notice shall specify, if known, the
amount or an estimate of the amount of the liability arising therefrom. The
Indemnitee shall not settle or compromise any Claim by a third party for
which it is entitled to indemnification hereunder without the prior written
consent of the Indemnitor, which shall not be unreasonably withheld or
delayed.
13.6. In connection with any Claim which may give rise
to indemnification hereunder resulting from or arising out of any Claim (or
legal proceeding) by a person other than an Indemnitee, the Indemnitor, at
its sole cost and expense, may, upon written notice to the Indemnitee, assume
the defense of any such Claim (including legal proceedings in connection
therewith). If the Indemnitor assumes the defense of any such Claim (or
legal proceeding), the Indemnitor shall select counsel reasonably acceptable
to the Indemnitee to conduct the defense of such Claims (or legal
proceedings) and at the sole cost and expense of the Indemnitor(s) shall take
all steps necessary in the defense or settlement thereof. The Indemnitor(s)
shall not consent to a settlement of, or the entry of any judgment arising
from, any such Claim (or legal proceeding), without the prior written consent
of the Indemnitee, which shall not be unreasonably withheld or delayed;
PROVIDED, HOWEVER, that such consent shall not be required if such settlement
or judgment provides solely for the payment of monetary damages for which the
Indemnitee will be indemnified in full and an unconditional release of
liability of the Indemnitee with respect to such Claim. The Indemnitee shall
be entitled to participate in (but not control) the defense of any such
action, with its own counsel and at its own expense. If the Indemnitor does
not assume the defense against any such Claim (or litigation resulting
therefrom) within 30 days after the date the Indemnitee notifies the
Indemnitor of such Claim: (a) the Indemnitee may (upon written notice
delivered to the Indemnitor) defend against such Claim (or litigation) in
such manner as it may deem appropriate, including, but not limited to,
settling such Claim, after giving notice of the same to the Indemnitor(s), on
such terms as the Indemnitee may deem appropriate, and (b) the Indemnitor(s)
shall be entitled to participate in (but not control) the defense against
such Claim, with its counsel and at its own expense. If the Indemnitor
thereafter seeks to question the manner in which the Indemnitee defended
against such Claim or the amount or nature of any such settlement, the
Indemnitor shall have the burden to prove by a preponderance of the evidence
that the Indemnitee did not defend against or settle such Claim in a
reasonably prudent manner. Notwithstanding anything to the contrary
contained in this Agreement, in the event that the Indemnitee had a
reasonable opportunity, but failed in good faith to mitigate any loss with
respect to any Claim, including but not limited to the failure to use
commercially reasonable efforts to recover under a policy of insurance or
under a contractual right of set-off or indemnity, amounts of indemnity
payable to such Indemnitee shall be reduced by the amount by which such
Indemnitee could have reduced such loss had such Indemnitee not failed to use
commercially reasonable efforts to mitigate such loss.
13.7. After the Closing, to the extent permitted by law and
except for any Loss that is finally determined to have been the result of
fraudulent conduct, the indemnities set forth in this SECTION 13 shall be the
exclusive remedies of the Parent, the Purchaser, GLAS, Americas and Holding and
their respective officers, directors, employees, agents and Affiliates for any
misrepresentation, breach of warranty or nonfulfillment or failure to be
performed of any
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<PAGE>
covenant or agreement contained in this Agreement, and the parties shall not
be entitled to a rescission of this Agreement or to any further
indemnification rights or claims of any nature whatsoever in respect thereof,
all of which the parties hereto hereby waive.
14. NO BROKERAGE.
14.1. Other than the obligations of Holding to Merrill
Lynch & Co., Inc., none of GLAS, Americas and Holding 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. Holding agrees to indemnify and hold the
Purchaser harmless against and in respect of any such obligation or liability
based on agreements, arrangements, or understandings claimed to have been made
by Holding, Americas or GLAS with any third party.
14.2. Other than the obligations of Purchaser to Morgan
Stanley Dean Witter, the Purchaser has not 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. The Purchaser agrees to indemnify and hold GLAS, Americas and Holding
harmless against and in respect of any such obligation or liability based on
agreements, arrangements, or understandings claimed to have been made by the
Purchaser with any third party.
15. 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, 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.
16. NOTICES.
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:
GLAS, Americas and Holding: Roger E. Payton
GeoLogistics Corporation
13952 Denver West Parkway, Suite 150
Golden, Colorado 80401
Fax (303) 704-4410
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With a copy to: Eric H. Schunk
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street
Los Angeles, California 90017
Fax (213) 629-5063
The Purchaser: Joseph C. McCarty
FDX Global Logistics, Inc.
6075 Poplar Avenue
Memphis, Tennessee 38119
Fax (901) 395-7585
With a copy to: Ami P. Kelley
FDX Global Logistics, Inc.
6075 Poplar Avenue
Memphis, Tennessee 38119
Fax (901) 395-5325
The Parent: Kenneth R. Masterson
FDX Corporation
6075 Poplar Avenue
Memphis, Tennessee 38119
Fax (901) 395-5034
Any party may change its address for notice or payment purposes by giving notice
to the other parties as hereinabove provided.
17. EXPENSES.
17.1. Except as otherwise provided herein, 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.
17.2. Each party hereto shall pay all income, franchise and
other taxes measured by net or gross income, capital or assets which may be
required as a result of the transactions contemplated hereby.
18. SURVIVAL.
Except as set forth in SECTION 13 and 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 24 months
following the Closing Date, except for breaches of the representations and
warranties set forth in SECTIONS 6.7, 6.19, 6.26, 6.27, 7.3 and 7.6, and the
covenants set forth in SECTIONS 4, 8.1 and 9.1, which shall survive until the
expiration of all applicable statutes of limitation with respect thereto, and
the representations and warranties set forth in SECTION 6.27, which shall
survive until the expiration of all applicable statutes of
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limitation with respect thereto or to derivative claims arising from
environmental conditions existing at the time of the Closing.
19. EXCLUSIVITY.
Until the Closing Date or termination of this Agreement, Holding,
Americas and GLAS 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 GLAS Assets, the GLAS Shares or the GLAS Business in
whole or in part, whether directly or indirectly, through purchase, merger,
consolidation, or otherwise. Notwithstanding the above, Holding, Americas and
GLAS may, directly or indirectly, furnish information and access, in each case
only in response to unsolicited requests therefor, to any reputable,
unaffiliated, third party person, entity or group pursuant to confidentiality
agreements, and may participate in discussions and negotiate with such entity or
group concerning any merger, sale of the GLAS Assets, sale of the GLAS Shares or
similar transaction involving GLAS, if (i) such person, entity or group has
submitted an unsolicited, written, bona fide proposal to Holding's Board of
Directors relating to any such transaction (an "Alternative Proposal"), (ii)
Holding's Board of Directors by a majority vote determines in its good faith
judgment, based as to legal matters on the written advice of legal counsel, that
failing to take such action would result in a substantial risk of liability for
a breach of the Board of Directors' fiduciary duty, and (iii) Holding's Board of
Directors shall have determined, after consultation with its legal advisors and
after review of a written opinion from its financial advisors, that the terms of
such Alternative Proposal are principally superior to the terms set forth in
this Agreement and that such Alternative Proposal is reasonably capable of being
financed (a "Superior Proposal"). Holding shall provide a copy of any such
written proposal to the Purchaser immediately after receipt thereof and shall
keep the Purchaser fully informed of the status and details of such Alternative
Proposal.
20. TERMINATION OF AGREEMENT.
20.1. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing, by
written notice from the party terminating the Agreement to the other party, as
follows:
20.1.1. BY MUTUAL CONSENT. By the mutual written consent
of Holding and the Purchaser.
20.1.2. BY EITHER PARTY. At any time before the Closing,
by Holding or the Purchaser, in the event of a material breach hereof by the
non-terminating party if such non-terminating party fails to cure such breach
within five business days following written notification thereof by the
terminating party.
20.1.3. BY HOLDING. By Holding, if (i) in accordance with
SECTION 19, in the exercise of the good faith judgment of Holding's Board of
Directors as to its fiduciary duties to its stockholders imposed by law based on
the written opinion of outside counsel, the Board of Directors of Holding
authorizes GLAS to enter into a binding written agreement covering a transaction
that constitutes a Superior Proposal and GLAS and Holding provide
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<PAGE>
written notification to the Purchaser in accordance with SECTION 19, and (ii)
the Purchaser, within 10 business days following receipt of GLAS's written
notification of its intention to enter into a binding agreement for a
Superior Proposal, does not make an offer that the Board of Directors of
Holding determines, in good faith after consultation with its financial
advisors, is at least as favorable, from a financial point of view, to the
stockholders of Holding as the Superior Proposal, and (iii) GLAS and Holding
pays the Termination Fee to the Purchaser.
20.2. EFFECT OF TERMINATION AND ABANDONMENT.
20.2.1. If this Agreement is terminated by Holding
pursuant to SECTION 20.1.3, then, within seven days following such termination,
the GeoLogistics Group shall pay to the Purchaser, by wire transfer of
immediately available funds, a fee of $3,000,000 (the "Termination Fee").
Holding and GLAS each acknowledges that the agreements contained in this SECTION
20.2.1 are an integral part of the transactions contemplated in this Agreement,
and that, without these agreements, the Purchaser would not enter into this
Agreement; accordingly, if the GeoLogistics Group fails to promptly pay the
amount due pursuant to this Section, and, in order to obtain such payment, the
Purchaser commences a suit which results in a judgment against Holding or GLAS
for the Termination Fee, the GeoLogistics Group shall pay to the Purchaser its
costs and expenses (including reasonable attorneys' fees) in connection with
such suit, together with interest on the amount of the Termination Fee at the
rate of 12% per annum from the date the Termination Fee was required to be paid.
20.2.2. In the event of termination of this Agreement
pursuant to this SECTION 20, or if the Closing shall not have occurred on or
before the Closing Date, all obligations of the parties hereto shall
terminate, except the obligations of the parties set forth in this SECTION
20.2 and except for the provisions of SECTIONS 8.1, 9.1, 17, 20, 23, 24, 25,
and 26. If the Closing shall not have occurred on or before the Closing
Date, or in the event of termination of this Agreement for any reason other
than pursuant to SECTIONS 20.1.1 or 20.1.3, nothing herein shall prejudice
the ability of the non-terminating party from seeking damages from any other
party for any willful breach of this Agreement, including reasonable
attorneys' fees and the right to pursue any remedy at law or in equity.
21. 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.
22. 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
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<PAGE>
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.
23. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with,
the laws of the State of New York without regard to conflict of law principles.
24. ENFORCEMENT.
Any suit, action or proceeding with respect to this Agreement, shall
be brought in the state and federal courts located in New York. 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.
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.
25. 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. The Purchaser may assign its
rights hereunder to any direct or indirect wholly-owned subsidiary of the
Purchaser or in connection with any financing arrangement that the Purchaser or
such wholly-owned subsidiary may enter into, PROVIDED, that the Parent and
Purchaser shall remain obligated for all obligations to GLAS, Americas and
Holding hereunder. GLAS may assign its rights and obligations hereunder
pursuant to a merger by GLAS with and into Americas or any other wholly-owned
subsidiary of Holding.
26. 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, except as otherwise provided herein, all
prior negotiations, correspondence,
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<PAGE>
understandings and agreements, 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. The disclosure schedules delivered by Holding,
Americas and GLAS may be amended, supplemented or modified by Holding,
Americas and GLAS at any time prior to the Closing without any liability to
Holding, Americas and GLAS other than that the Purchaser shall have the right
for five business days after such amendment, supplement or modification of
any of the disclosure schedules to terminate this Agreement based upon such
amendment, supplement or modification if such amendment, supplement or
modification reveals a matter which would cause the representations and
warranties of GLAS, Americas and Holding to not be true in all material
respects.
27. FURTHER ASSURANCES.
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. Such actions shall include but not be limited
to access to books, records, documents and other information, cooperation from
each parties' respective employees, officers, directors, advisors and agents as
may be reasonably necessary for Purchaser to run the GLAS Business and for GLAS
and/or Holding and the Purchaser to prepare any filings required by any
Governmental or Regulatory Authority.
28. COUNTERPARTS.
This Agreement may be executed in counterparts, all of which taken
together shall constitute one instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
GLAS:
GEOLOGISTICS AIR SERVICES, INC.
By: /s/ Roger Payton
----------------
Name:
Title:
AMERICAS:
GEOLOGISTICS AMERICAS, INC.
By: /s/ Roger Payton
----------------
Name:
Title:
HOLDING:
GEOLOGISTICS CORPORATION
By: /s/ Roger Payton
----------------
Name:
Title:
THE PURCHASER:
FDX GLOBAL LOGISTICS, INC.
By: /s/ Joseph C. McCarty
---------------------
Name:
Title:
PARENT:
FDX CORPORATION
By: /s/ James S. Hudson
-------------------
Name:
Title:
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And, solely with respect to Sections 8.11, 12.1
and 12.2, in his individual capacity:
/s/ Roger Payton
-------------------
Name: Roger Payton
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AMENDMENT NO. 4
This Amendment No. 4 (this "Amendment") dated as of September 10, 1999
is entered into with reference to the Amended and Restated Loan Agreement dated
as of October 28, 1997 (as previously amended by an Amendment No. 1 dated
December 12, 1997, an Amendment No. 2 dated as of July 10, 1998, and an
Amendment No. 3 dated as of February 26, 1999, the "Loan Agreement") among
GeoLogistics Corporation, a Delaware corporation (acting under its former name,
"International Logistics Limited", and referred to herein as the "Company"),
GeoLogistics Services, Inc., a Delaware corporation (acting under its former
name, "Matrix International Logistics, Inc."), GeoLogistics Americas, Inc., a
Delaware corporation (acting under its former name, "LEP Profit International,
Inc.", and referred to herein as the "GeoLogistics Americas"), The Bekins
Company, a Delaware corporation, ILLCAN, Inc., a Delaware corporation, and
ILLSCOT, Inc., a Delaware corporation (collectively, the "Domestic Borrowers"),
GeoLogistics Limited, a company organized under the Laws of England (acting
under its former name, "LEP International Limited") ("LEP UK" and collectively
with the Domestic Borrowers, "Borrowers"), and ING (U.S.) Capital Corporation
(now known as ING (U.S.) Capital LLC and referred to as "ING Capital") as sole
initial Lender and as Administrative Agent, and ING Bank, N.V. (London, England
Branch), as facilitator of the UK Commitment (and not as a "Lender").
RECITALS
A. Pursuant to Amendment No. 1, the Borrowers have designated Bekins Van
Lines Co., a Nebraska corporation ("BVL"), as an additional Domestic
Borrower under the Loan Agreement.
B. Pursuant to Amendment No. 3, the Borrowers have also designated Bekins
Van Lines, LLC, a Delaware limited liability company ("New Bekins") and
GeoLogistics Network Solutions, Inc., a Delaware corporation ("Network
Solutions"), as additional Domestic Borrowers under the Agreement.
C. ING (U.S.) Capital, LLC has succeeded to ING (U.S.) Capital
Corporation as a Lender and as Administrative Agent under the Loan
Agreement.
D. The Company proposes to sell the assets of GeoLogistics Air Services,
Inc. ("GLAS") for cash, and to use the funds generated thereby to reduce
the outstanding Obligations in the manner set forth herein.
E. In connection with such sale, the parties intend that the Domestic
Commitment shall hereafter be $50,500,000, and that the U.K. Commitment
shall hereafter be $20,000,000 (provided that the obligations outstanding
under the Domestic Commitment and the UK Commitment shall not be greater
than $50,500,000 at any time) and to shorten the Maturity Date to March 31,
2000, upon which date all of the Obligations shall be due and payable in
full.
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F. As provided herein, the $15,500,000 portion of the Supplemental Loan
made by ING Capital which is supported by the Supplemental Collateral shall
be repaid in full, and the Supplemental Collateral shall instead support a
$15,500,000 portion of the Obligations under the Domestic Commitment and
the U.K. Commitment.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS. Capitalized terms used in this Amendment are used with
the meanings set forth for those terms in the Loan Agreement.
2. TRANSACTIONAL AGREEMENTS.
(a) APPLICATION OF GLAS SALE PROCEEDS. Concurrently with the
effectiveness of this Amendment, the Company shall cause the proceeds of
the sale of the assets of GLAS to be paid to the Administrative Agent for
application to the Obligations in the following order of priority:
(i) first to fund the $10,000,000 escrow required by the
GLAS Purchase Agreement;
(ii) second to pay transactional expenses associated with
the GLAS Purchase Agreement and this Amendment;
(iii) third to the repayment of all outstanding Domestic
Loans (and all breakage and Eurodollar Rate interest associated
therewith);
(iv) fourth to the repayment in full of all outstanding U.K.
Loans (and all breakage and Eurodollar Rate interest associated
therewith);
(v) fifth to the repayment in full of a $15,500,000 portion
of the Supplemental Loans (and all breakage and Eurodollar Rate
interest associated therewith); and
(vi) finally to the Company for purposes consistent with the
terms of the Loan Agreement.
(b) COMMITMENTS AFTER GLAS PAYMENTS. After giving effect to such
payments, the parties stipulate and agree that (x) the Domestic Commitment
shall be $50,500,000, (y) the U.K. Commitment shall be $20,000,000, and the
Supplemental Commitment shall be reduced to $15,000,000, in each case as
further detailed herein, and that each Lender shall hold the following
interests in each such Commitment:
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<TABLE>
<CAPTION>
DOMESTIC U.K.
LENDER PRO RATA SHARE COMMITMENT COMMITMENT
------ -------------- ---------- ----------
<S> <C> <C> <C>
ING Capital LLC 18% $9,090,000 $3,600,000
Fleet Capital Corp. 18% $9,090,000 $3,600,000
Key Corporate Capital, Inc. 18% $9,090,000 $3,600,000
Harris Trust & Savings Bank 16.5% $8,332,500 $3,300,000
LaSalle Bank National Association 16.5% $8,332,500 $3,300,000
BankBoston, N.A. 13% $6,565,000 $2,600,000
<CAPTION>
SUPPLEMENTAL LENDER PRO RATA SHARE SUPPLEMENTAL COMMITMENT
------------------- -------------- -----------------------
ING Capital LLC 100.0% $15,000,000
</TABLE>
(c) BENEFITS OF THE SPONSOR COLLATERAL. Pursuant to the Amended and
Restated Sponsor Collateral Agreement, from and after the effective date of
this Amendment, in addition to the other Collateral, the Lenders under the
Domestic Commitment and the U.K. Commitment shall be entitled to the
benefits of the Sponsor Collateral. Upon payment in full of the
Obligations under the Domestic Commitment and UK Commitment and the
termination of those Commitments, the Sponsor Collateral may then be
applied to the Obligations outstanding under the Supplemental Commitment.
(d) RELEASE OF GLAS. The Administrative Agent shall release the Lien
of the Loan Documents upon the capital stock and assets of GLAS upon but
only upon the concurrent receipt of proceeds of the Disposition of the
assets of GLAS as contemplated by this Amendment. Thereafter, GLAS shall
have no Obligations or other liability under any Loan Document.
3. DEFINITIONS - AMENDMENTS TO SECTION 1.1. Section 1.1 of the Loan
Agreement is hereby amended so that the following definitions read in full as
follows (or, where any term set forth below is not now defined, to add such term
to Section 1.1):
"BASE RATE MARGIN" means 2.00% per annum.
"CHANGE OF CONTROL EVENT" means the occurrence of any of the following
events with respect to the Company:
(i) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
other than one or more Permitted Holders, is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that for purposes of this clause (i) such person shall be
deemed to have "beneficial ownership" of all shares that such person
has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or
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<PAGE>
indirectly, of more than 50% of the total voting power of the then
outstanding common stock of the Company;
(ii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the board of directors
of the Company (together with any new directors whose election of such
board of directors or whose nomination for election by the
shareholders of the Company was approved by a vote of 66 2/3% of the
directors of the Company then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the board of directors of the
Company then in office; or
(iii) the merger or consolidation of the Company with or into
another Person or the merger of another Person with or into the
Company (unless in connection with an Investment permitted hereunder
in which the Company is the survivor), or the sale of all or
substantially all the assets of the Company to another Person (in each
case other than a Person that is controlled by the Permitted Holders);
or
(iv) The sale, transfer or other disposition by any Sponsor
of capital stock (other than to another Sponsor) which results in
failure of either Sponsor to own, beneficially and of record, and
control the power to vote, 100% of the capital stock of the Company
owned by it as of the Closing Date.
"DOMESTIC BORROWING BASE" means, as to each Domestic Borrower and as
of any date of determination, an amount determined by the Administrative
Agent with reference to the most recent Borrowing Base Certificate equal to
the sum without duplication of (a) 50% of the Domestic Eligible Receivables
of GeoLogistics Americas, Inc. and its Restricted Subsidiaries (other than
any future Subsidiary created to conduct the project cargo business), plus
(b) 65% of the Domestic Eligible Receivables of each other Domestic
Borrower and their Restricted Subsidiaries (and of any future Subsidiary of
GeoLogistics Americas, Inc. created to conduct the project cargo business),
plus (c) 100% of the amount of the Sponsor Collateral then effective,
provided that upon ten (10) Business Days' prior written notice to the
Company, the Administrative Agent may from time to time, in its good-faith
discretion in accordance with prudent asset-based lending practices, and
the Administrative Agent shall, upon the direction of the Majority Lenders
(each acting in its good-faith discretion in accordance with prudent
asset-based lending practices), establish such reasonable reserves against
the Domestic Borrowing Base as it deems necessary and proper, including,
reasonable reserves for existing Liens and Rights of Others.
"DOMESTIC COMMITMENT" means, subject to Section 2.3, $50,500,000.
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<PAGE>
"EBITDA" means, for any period, the sum, for the Company and its
consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with Generally Accepted Accounting Principles),
of the following: (a) net income (excluding extraordinary and unusual items
and income or loss attributable to equity in Affiliates) for such period
plus (b) Interest Charges plus (c) income taxes payable or accrued plus (d)
depreciation and amortization for such period plus (e) all other non-Cash
charges; minus (f) that portion of net income arising out of the sale of
assets outside of the ordinary course of business (to the extent not
previously excluded under clause (a) of this definition), in each case to
the extent included in determining net income for such period, provided
that EBITDA shall not be reduced by restructuring charges incurred
following August 1, 1999 except to the extent that actual cash
restructuring charges are in an aggregate amount which exceeds $18,000,000.
"EURODOLLAR RATE MARGIN" means 3.50% per annum.
"GLAS ESCROW" means the $10,000,000 escrow contemplated by Section
4.1.2 of the GLAS Purchase Agreement.
"GLAS HOLDBACK LETTER OF CREDIT" means a Letter of Credit in an amount
not in excess of $10,000,000 issued to FDX Corporation or its designee in
a form acceptable to the Administrative Agent issued in lieu of the
maintenance by the Company of the GLAS Escrow.
"GLAS PURCHASE AGREEMENT" means the Asset Purchase Agreement dated as
of August 6, 1999 among GeoLogistics Air Services, Inc., GeoLogistics
Americas, Inc., the Company and FDX Global Logistics, Inc. and FDX
Corporation, as in effect on the date of this Amendment.
"MATURITY DATE" means March 31, 2000.
"NET CASH PROCEEDS" means with respect to any Disposition or any
offerings or issuance of Indebtedness of the Company or its Restricted
Subsidiaries, the gross proceeds received by the Company and its Restricted
Subsidiaries from such Disposition or offering or issuance in Cash
(including Cash received as the proceeds of Property obtained in such
Disposition as and when received) net of escrows, holdbacks, reserves,
brokerage commissions, legal expenses and other transactional costs payable
by the Company and its Restricted Subsidiaries with respect to such
Disposition.
"UK BORROWING BASE" means, as of any date of determination, an amount
determined by the Administrative Agent with reference to the most recent
Borrowing Base Certificate equal to the sum of 65% of UK Eligible
Receivables, provided that upon ten (10) Business Days' prior written
notice to the Company, the Administrative Agent may from time to time, in
its good-faith discretion in accordance with prudent asset-based lending
practices, and the Administrative Agent shall, upon the direction of the
Majority Lenders (each acting in its good-faith discretion in accordance
with prudent
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<PAGE>
asset-based lending practices), establish such reasonable reserves against
the UK Borrowing Base as it deems necessary and proper, including,
reasonable reserves for existing Liens and Rights of Others.
"UK COMMITMENT" means, subject to Section 2.3, $20,000,000.
4. REDUCTION TO LETTERS OF CREDIT SUBLIMIT - AMENDMENT TO SECTION
2.5(a)(III). Section 2.5(a)(iii) is hereby amended to read in full as follows:
"(iii) the aggregate effective face amount of all Letters of Credit
then outstanding (including Letters of Credit issued in Canadian Dollars,
BPS or other currencies as provided below) shall not exceed $30,000,000,
plus the aggregate effective amount of any outstanding GLAS Holdback Letter
of Credit."
5. ARRANGEMENTS CONCERNING LETTERS OF CREDIT EXPIRIES. Each of the
Lenders hereby agrees that those of the Letters of Credit heretofore issued
under the Loan Agreement with expiry dates occurring after March 31, 2000 may
remain outstanding under the Loan Agreement notwithstanding Section 2.5(c),
provided that the same are cash collateralized in accordance with Section 2.5(c)
on the Maturity Date. In addition, provided that no Default or Event of Default
then exists, the Administrative Agent may in its discretion permit the issuance
of Letters of Credit having terms not longer than one year, or the extension of
the term of any outstanding Letter of Credit so that the term thereof is not
longer than one year, provided that the issuance or extension of any such Letter
of Credit shall not be deemed an extension of the Maturity Date (upon which date
the Borrowers shall provide cash collateral for each such Letter of Credit in
the amount thereof and pursuant to arrangements acceptable to the Administrative
Agent). The Borrowers shall not request the issuance of any Letter of Credit
except to the extent that the same is required in the ordinary course of the
business of that Borrower and its Restricted Subsidiaries (including without
limitation for the purpose of supporting insurance programs, customs duties and
tax obligations, bid bonds, cargo handling arrangements and similar purposes,
and such other purposes as may reasonably be approved by the Administrative
Agent).
6. AMENDMENT TO SECTION 3.1(c)(vii). Section 3.1(c)(vii) of the Loan
Agreement is hereby amended to read in full as follows:
"[Intentionally Omitted - See Section 10.1(p)]"
7. AMENDMENT TO SECTION 3.1(d). Section 3.1(d) of the Loan Agreement is
hereby amended to read in full as follows:
"(d) MANDATORY PREPAYMENTS. Concurrently with the making of any
Disposition, the Company and the Borrowers shall (i) repay the outstanding
Obligations in an amount which is equal to the Net Cash Proceeds of the
sale of such
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<PAGE>
Disposition, and (ii) prepare and deliver to the Administrative Agent a
revised Borrowing Base Certificate giving pro forma effect to such
Disposition demonstrating in any event their compliance with
Sections 3.1(c)(iv) and 3.1(c)(v). Concurrently with the receipt by the
Company or any of its Subsidiaries after September 10, 1999 of any Net Cash
Proceeds of the sale or other issuance of Indebtedness, the Borrowers
shall repay the outstanding Obligations in the amount of such Net Cash
Proceeds. Concurrently with the release of any funds to the Company or any
of its Subsidiaries from the GLAS Escrow, the Borrowers shall repay the
outstanding Obligations in the amount of the funds so released."
8. AMENDMENT TO SECTION 3.3 - COMMITMENT FEES. From and after the
effective date of this Amendment, Commitment Fees shall accrue at the rate of
0.50% per annum, and Section 3.3 of the Loan Agreement is hereby amended to read
in full as follows:
"3.3 COMMITMENT FEES. From the Closing Date, the Borrowers shall pay
commitment fees to the Administrative Agent for the account of the Lenders
according to their Pro Rata Shares, provided that the liability of LEP UK
shall be limited as set forth in Section 12.28. The commitment fees shall
be payable quarterly in arrears on each Quarterly Payment Date and on the
earlier of the Maturity Date or the date upon which the Commitments are
terminated or reduced in accordance with Section 2.3. Commitment fees
shall accrue at the rate of 0.50% per annum with respect to the Average
Unused Commitment."
9. SECTION 7.4 - REVISIONS TO DISPOSITION COVENANT. Section 7.4 of the
Loan Agreement is hereby amended to read in full as follows:
"7.4 DISPOSITION OF PROPERTY. Make any Disposition of its Property,
whether now owned or hereafter acquired, except (a) a Disposition to the
Company or to a wholly owned Restricted Subsidiary in compliance with all
Laws (including applicable tax Laws); and (b) other Dispositions made when
no Default or Event of Default exists or would result therefrom, provided
that the Company and the Borrowers shall concurrently repay the outstanding
Obligations in the amounts required by Section 3.1(d)."
10. SECTION 7.12 - ADDITIONAL SUPPLEMENTAL LOAN DEBT BASKET. Section 7.12
of the Loan Agreement is hereby amended to add a new clause (n) thereto read in
full as follows:
"(n) additional unsecured Indebtedness incurred following September
10, 1999, in an a principal amount not to exceed $19,500,000 incurred by
the Company or any of the Domestic Borrowers, and unsecured Contingent
Obligations with respect to any such Indebtedness, which Indebtedness and
Contingent Obligations:
(y) shall be subordinate in all respects to the Supplemental
Loans and Supplemental Letters of Credit existing on September 10,
1999 and in any event shall be subordinated to the Obligations under
the Domestic
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<PAGE>
Commitment and the UK Commitment in the same manner, and to the same
extent as the Supplemental Commitment; and
(z) may consist of additional "Supplemental Loans" or loans made
by the Sponsors outside of this Agreement (provided in each case that
the same are subordinated as aforesaid).
No Lender shall be deemed to have committed to provide any
portion of any Supplemental Loan of the type described in this clause (n)."
11. REVISIONS TO EBITDA COVENANT. Section 7.15 of the Loan Agreement is
hereby amended to read in full as follows:
"7.15 EBITDA. Permit EBITDA for the three month period ending on
December 31, 1999 to be less than a deficit of $500,000.
12. DELETION OF INTEREST CHARGE COVERAGE RATIO COVENANT. Section 7.16 of
the Loan Agreement is hereby deleted in its entirety:
13. INVESTMENTS AND ACQUISITIONS. Section 7.6 of the Loan Agreement is
hereby amended to read in full as follows (in lieu of the text set forth in
Section 8 of Amendment No. 3):
"7.6 INVESTMENTS AND ACQUISITIONS. Make any Acquisition or enter
into any agreement to make any Acquisition, or make or suffer to exist any
Investment which is not in existence on the date of this Agreement and
disclosed in Schedule 7.6 except: (a) Investments consisting of Cash
Equivalents; (b) Investments by the Company in any Restricted Subsidiary
and by any Restricted Subsidiary in the Company or in any other Restricted
Subsidiary so long as any such investment is documented under a Drop-Down
Note or otherwise evidenced in a manner satisfactory to the Administrative
Agent; (c) Investments by any Borrower in its Active Subsidiaries or by the
Subsidiaries of any Active Subsidiary of the Company in such Active
Subsidiary, so long as any such Investment shall be documented under a
Drop-Down Note; (d) [reserved]; (e) [reserved]; and (f) Investments by the
Borrowers in Unrestricted Subsidiaries made following December 31, 1998 and
when no Default or Event of Default has occurred and remains continuing,
the aggregate amount of which are not in excess of $20,000,000.
Investments by, and Acquisitions made through, Unrestricted Subsidiaries
shall not in and of themselves be deemed to be Investments or Acquisitions
by the Company."
14. EBITDA OF GEOLOGISTICS AMERICAS. The Loan Agreement is hereby amended
to delete former the Section 7.20 thereto (regarding the EBITDA of GeoLogistics
Americas), which Section was added by Amendment No. 3.
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<PAGE>
15. CONDITIONAL COVENANTS IN AMENDMENT NO. 3. The covenant set forth in
Section 15(iv) of Amendment No. 3 hereto (regarding $10,000,000 Single Weekly
Availability) is hereby deleted.
16. ADDITIONAL EVENT OF DEFAULT. Section 10.1 of the Loan Agreement is
hereby amended to add thereto a new clause (p) as an additional Event of
Default, to read in full as follows:
"(p) The occurrence for any reason of any Change of Control Event."
17. CONFIRMATION OF PARTICIPATION AGREEMENT. Each of the Lenders confirms
that the Participation Agreement remains in full force and effect and applies to
the Loan Agreement, as amended hereby.
18. REPRESENTATION. Borrowers represent and warrant that except to the
extent cured hereby, no Default or Event of Default has occurred and remains
continuing.
19. CONDITIONS PRECEDENT. The following shall be conditions precedent to
the effectiveness of this Amendment:
(a) Each of the guarantors of the obligations of Borrowers under the
Loan Agreement shall have consented hereto in writing.
(b) Borrowers shall have paid to the Administrative Agent, for the
ratable account of the Lenders in accordance with their respective Pro Rata
Shares (as in effect immediately prior to the effectiveness of this
Amendment), an amendment fee of $252,500.
(c) The Administrative Agent shall have received written consents to
its execution and delivery of this Amendment from each of the Lenders.
(d) the proposed sale of GLAS shall have occurred (or shall
concurrently occur), yielding net cash proceeds to the Company of
approximately $100,000,000, and in any event sufficient to repay all of
items listed in clauses (i) through (v) of Section 2(a) of this Amendment;
(e) The Borrowers shall have delivered replacement Notes to each of
the Lenders giving effect to the reductions of the Commitments described
above
(f) The Sponsors shall have entered into an Amended and Restated
Sponsor Collateral Agreement in the form of Exhibit A.
(g) The Administrative Agent and the Lenders shall have received the
favorable written legal opinion of Milbank, Tweed, Hadley & McCloy in the
form attached to this Amendment as Exhibit B.
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<PAGE>
20. CONFIRMATION. This Amendment is one of the Loan Documents. Except
to the extent expressly modified hereby, the terms of the Loan Documents are
hereby confirmed. Without limitation on the foregoing, each of the other
additional representations, warranties, covenants, Events of Default and other
requirements of the previous Amendments to the Loan Agreement (except to the
extent heretofore or hereby modified) are hereby confirmed.
[THIS SPACE INTENTIONALLY LEFT BLANK - SIGNATURE PAGES TO FOLLOW]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above by their duly authorized representatives.
GEOLOGISTICS CORPORATION
By: /s/ Terry G. Clarke
---------------------------
Terry G. Clarke, Treasurer
THE BEKINS COMPANY
GEOLOGISTICS SERVICES, INC. (formerly Matrix International Logistics, Inc.)
ILLCAN, INC.
ILLSCOT, INC.
GEOLOGISTICS AMERICAS, INC. (formerly LEP Profit International, Inc.)
BEKINS VAN LINES, LLC
and
GEOLOGISTICS NETWORK SOLUTIONS, INC.
By: /s/ Terry G. Clarke
---------------------------
Terry G. Clarke, Assistant Treasurer of each
of the foregoing
BEKINS VAN LINES CO.
By: /s/ Terry G. Clarke
---------------------------
Title:
-------------------------
GEOLOGISTICS LIMITED (formerly LEP International Limited)
By: /s/ Ronald Jackson
---------------------------
Ronald Jackson, Assistant Secretary
LENDERS:
ING (U.S) CAPITAL, LLC formerly known as
ING (U.S.) CAPITAL CORPORATION,
individually and as Administrative Agent
By:/s/ Michael W. Adler
---------------------------
Michael W. Adler, Managing Director
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<PAGE>
ING BANK, N.V. (London Branch),
as primary lender under the UK Commitment
but not as a "Lender"
By: /s/ Cliff Haddy
---------------------------
Name:
Title:
By: /s/ Christopher Steane
---------------------------
Name:
Title:
The undersigned hereby consent to the foregoing amendment and confirm that their
guarantees of the Obligations under the Loan Agreement described above (as
amended hereby), and the Liens granted to secure such guarantees, remain in full
force and effect.
LIW HOLDINGS CORP.
GEOLOGISTICS CO.
LEP FAIRS, INC.
BAY AREA MATRIX, INC.
L.A. MATRIX, INC.
SOUTHWEST MATRIX, INC.
MATRIX CT, INC.
and
AIR FREIGHT CONSOLIDATORS INTERNATIONAL, INC.
By: /s/ Terry G. Clarke
---------------------------
Terry G. Clarke
Assistant Treasurer of each of the foregoing
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<PAGE>
CONSENT OF LENDER
Reference is made to the AMENDED AND RESTATED LOAN AGREEMENT (as
previously amended by an Amendment No. 1 dated December 12, 1997, an Amendment
No. 2 dated July 10, 1998, the "Loan Agreement" and an Amendment No. 3 dated
February 26, 1999) among GeoLogistics Corporation, a Delaware corporation
(acting under its former name, "International Logistics Limited", and referred
to herein as the "Company"), GeoLogistics Services, Inc., a Delaware corporation
(acting under its former name, "Matrix International Logistics), Inc."), LEP
Profit International, Inc. a Delaware corporation, The Bekins Company, a
Delaware corporation, ILLCAN, Inc., a Delaware corporation, and ILLSCOT, Inc., a
Delaware corporation (collectively, the "Domestic Borrowers"), GeoLogistics
Limited, a company organized under the Laws of England (acting under its former
name, "LEP International Limited") ("LEP UK" and collectively with the Domestic
Borrowers, "Borrowers"), and ING (U.S.) Capital Corporation ("ING Capital") as
sole initial Lender and as Administrative Agent, and ING Bank, N.V. (London,
England Branch), as facilitator of the UK Commitment (and not as a "Lender").
Pursuant to Amendment No. 1, the Borrowers have designated Bekins Van
Lines Company, a Nebraska corporation ("BVL"), as an additional Domestic
Borrower under the Loan Agreement. Pursuant to Amendment No. 3, the Borrowers
have also designated Bekins Van Lines, LLC, a Delaware limited liability company
("New Bekins") and GeoLogistics Network Solutions, Inc., a Delaware corporation
("Network Solutions"), as additional Domestic Borrowers under the Agreement.
The undersigned Lender hereby consents to the execution, delivery and
performance of the Amendment No. 4 to the Loan Agreement, substantially in the
form presented to the undersigned as a draft.
-------------------------------
Name of Lender
By:
----------------------------
Title:
-------------------------
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Exhibit A - Amended and Restated Sponsor Collateral Agreement
Exhibit B - Form of Legal Opinion
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