EXECUTIVE MANAGEMENT AGREEMENT
This Agreement is made and entered into as of the 31st day of
October, 1996, by and between International Logistics Limited, a Delaware
corporation (the "Company"), and William E. Simon & Sons, L.L.C., a limited
liability company organized under the laws of the state of Delaware ("Simon").
Capitalized terms, not defined herein, shall have the meaning ascribed to them
in the Amended and Restated Stockholders Agreement dated as of October 31, 1996
by and among the Company and each of the Holders listed on Exhibit A thereto.
W I T N E S S E T H:
WHEREAS, the Company desires to enter into a management agreement
with Simon for the provision of executive management services.
WHEREAS, Simon is willing and able to provide the Company with
executive management services.
NOW THEREFORE, in consideration of the premises and of other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
SECTION 1. SERVICES
A. The Company hereby retains Simon to provide the Company with
executive management services as provided herein. Such services shall include
consultation, advice and direct management assistance to the Company with
respect to operations, strategic planning, financing and other aspects of the
business of the Company. Simon shall devote such time as is reasonably
necessary to provide such services.
B. Simon accepts the appointment provided in Section 1.A above and
agrees to provide executive management services to the Company in accordance
with the terms hereof.
SECTION 2. CONSIDERATION
A. BASE FEE. In consideration of the executive management services
to be provided by Simon to the Company, and provided there exists no continuing
or uncured material event of default under the material terms of indebtedness
of the Company or any of its Subsidiaries, the Company shall pay and Simon
shall be entitled to receive a management fee of $350,000 per year, which shall
be payable in arrears on a pro rata basis upon the completion of each fiscal
quarter of the Company (the "Base Fee"). The Base Fee shall be paid by wire
transfer of immediately available funds, to such account or accounts as shall
be designated from time to time by Simon. All payments with respect to the
Base Fee by the Company shall be subject to applicable restrictions contained
in the Company's and its Subsidiaries' debt and equity financing agreements.
If any such restrictions prohibit any payments with respect to the Base Fee
hereunder which the Company is otherwise obligated to make, the Company shall
make such payments as soon as it is permitted to do so under such restrictions.
B. EXPENSES. In addition to the Base Fee, Simon shall also be
entitled to reimbursement for all reasonable out-of-pocket expenses incurred by
Simon or its personnel in connection with the performance of Simon's duties
hereunder, which amounts shall be so reimbursed when invoices with respect
thereto are submitted by Simon to the Company.
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SECTION 3. TERM
This Agreement shall take effect as of the date first above written
and shall continue until automatically terminated by the first to occur of (i)
a Qualified Public Offering; (ii) a Sell-Down Event; (iii) a WES&S Purchase
Default; (iv) a WES&S Funding Default; or (v) Termination of the Agreement by
the Board as a result of criminal misconduct or fraud by Simon. Unless
terminated as set forth in clauses (i) through (v) above or pursuant to Section
4(c), this Agreement shall take effect from the date hereof and shall remain in
effect until May 2, 2000. This Agreement shall thereafter be renewed, subject
to approval by the Board, for successive annual periods unless the Company or
Simon terminates this Agreement by 90 days' notice to the other party prior to
the commencement of a renewal period.
SECTION 4. MISCELLANEOUS
A. Any notice required or desired to be given hereunder shall be in
writing and shall be personally served or shall be deemed given three business
days after deposit in the United States mail, registered or certified, postage
and fee prepaid, and addressed as follows:
If to the Company:
International Logistics Limited
310 South Street, P.O. Box 1913
Morristown, NJ 07962-1913
Attention: Roger E. Payton
If to Simon:
William E. Simon & Sons, L.L.C.
10990 Wilshire Boulevard, Suite 1750
Los Angeles, CA 90024
Attention: Michael Lenard
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B. This Agreement shall be binding upon the successors and assigns
of the parties hereto, including but not limited to any corporation or other
entity into which the Company is merged, liquidated or otherwise combined,
unless the Company shall be sold in its entirety.
C. If at any time (1) all Persons that presently directly, or
indirectly through one or more intermediaries, control Simon no longer control
Simon or (2) both Michael B. Lenard and William E. Simon Jr. are no longer
affiliated with Simon or any of its affiliates or subsidiaries, then this
Agreement shall terminate unless extended by mutual consent of Simon and the
Company. For the purposes of this Agreement, (1) "Person" shall mean an
individual, partnership, corporation, association, joint stock company, trust,
joint venture, unincorporated organization or governmental entity and (2)
"control" shall mean (a) direct or indirect ownership of 50% or more of the
members' capital interests of Simon (or the economic value thereof), (b) direct
or indirect ownership by Simon of its assets under circumstances whereby not
more than 50% of the value of such assets has been pledged or sold to persons
other than Simon or (c) possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of Simon, whether
through the ownership of voting securities or by agreement or otherwise.
D. This Agreement shall not be amended except by a written
instrument executed by the parties.
E. This Agreement is made under and shall be construed in
accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date above written.
INTERNATIONAL LOGISTICS LIMITED
By: /s/ Roger E. Payton
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WILLIAM E. SIMON & SONS, L.L.C.
By: /s/ Michael B. Lenard
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