Item 1.01
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Entry into a Material Definitive Agreement.
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On
December 31, 2007, ABX Holdings, Inc. (ABX Holdings), ABX Air, Inc. (ABX Air) and certain former shareholders of Cargo Holdings International, Inc. (the Significant Shareholders) entered into a Securities
Purchase Agreement, pursuant to which the Significant Shareholders may loan ABX Holdings and ABX Air $61 million (the Significant Shareholder Loans). Also on December 31, 2007, ABX Holdings, ABX Air, the Significant Shareholders and
Wells Fargo Bank, National Association (the Escrow Agent) entered into an Escrow Agreement pursuant to which the Significant Shareholders deposited the $61 million into an escrow account (the Escrowed Funds). The Escrowed
Funds may only be used to pay off a portion of the Note, dated August 15, 2003, in the original principal amount of $92,948,714, originally issued by ABX Air to Airborne, Inc. (now DHL) (the DHL Note). The Escrow Agreement provided
that the Escrowed Funds would be available to ABX Holdings and ABX Air until April 29, 2008, which period may be extended until July 29, 2008 under certain circumstances (the Funding Deadline), if DHL demands prepayment of the
DHL Note prior to the Funding Deadline. On January 14, 2008, ABX Air received a demand for prepayment of the Note from DHL. ABX Air has not made a draw upon the Escrowed Funds because it does not believe, and disputes, that DHL has the right to
demand prepayment.
On March 17, 2008, ABX Holdings, ABX Air and the Significant Shareholders entered into a First Amendment to Escrow
Agreement (the Escrow Amendment), in which they extended the Funding Deadline until January 31, 2009.
On January 18,
2008, ABX Holdings, ABX Air and CHI Acquisition Corp. entered into a First Amendment to Credit Agreement (the Credit Amendment) to the Credit Agreement dated December 31, 2007, among ABX Air, ABX Holdings and Acquisition, with
SunTrust Bank as Administrative Agent, Regions Bank as Syndication Agent and the other lenders from time to time a party thereto (the Credit Agreement). The Credit Amendment provided that a demand by DHL to pay the DHL Note would not
constitute an event of default under the Credit Agreement if (1) the Escrow Agreement is in full force and effect at the time of such demand, (2) within 15 business days (or such later date as may be reasonably agreed to by SunTrust Bank,
the Administrative Agent under the Credit Agreement) of receipt of DHLs demand, $61 million is distributed to ABX Holdings, ABX Air or DHL pursuant to the Escrow Agreement and (3) 100% of such distribution is used to pay the DHL Note.
Subsequent to the effective date of the Credit Amendment, SunTrust Bank, as Administrative Agent, agreed to extend until March 17, 2008, the date by which a distribution of the Escrowed Funds must be made to ABX Holdings, ABX Air or DHL
following a payment demand by DHL to avoid an event of default under the Credit Agreement (the Required Distribution Date). ABX Holdings received confirmation from SunTrust Bank, as Administrative Agent, that, effective March 17,
2008, in conjunction with the Escrow Amendment, SunTrust Bank, as Administrative Agent, has agreed to extend the Required Distribution Date on an interim basis until April 9, 2008, while it requests a formal amendment from the bank group
further extending the Required Distribution Date until January 15, 2009.
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Summaries of the material terms of the Securities Purchase Agreement, the Credit Agreement and the Escrow
Agreement were included in, and copies of them were attached as exhibits to, the Current Report on Form 8-K of ABX Holdings dated December 31, 2007, and filed on January 7, 2008. A summary of the material terms of the Credit Amendment was
included in, and a copy attached as an exhibit to, the Current Report on Form 8-K of ABX Holdings dated January 18, 2008 and filed on January 25, 2008. The foregoing summary of the Escrow Amendment does not purport to be complete and is
qualified in its entirety by reference to the Escrow Amendment, a copy of which is attached as Exhibit 10.1 hereto and is incorporated by reference herein.