Exhibit 10.17
EXECUTIVE MANAGEMENT AGREEMENT
This Agreement is made and entered into as of the 1st day of November,
1997 by and between International Logistics Limited, a Delaware corporation (the
"Company), TCW Special Credits Fund V - The Principal Fund ("TCW") and Oaktree
Capital Management, LLC ("Oaktree," and together with TCW, the "Oaktree
Entities"). Capitalized terms, not defined herein, shall have the meaning
ascribed to them in the Third Amended and Restated Stockholders Agreement dated
as of September 30, 1997 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
the Oaktree Entities for the provision of executive management services.
WHEREAS, the Oaktree Entities are 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 the Oaktree Entities 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. The Oaktree Entities shall devote such time as is
reasonably necessary to provide such services.
B. The Oaktree Entities accept the appointment provided in Section
1.A above and agree 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 the Oaktree Entities 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 the Oaktree Entities 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 allocated as follows: (i) 53.7%, or $187,950 per year, to TCW and
(ii) 46.3%, or $162,050 per year, to Oaktree. 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 the Oaktree Entities. 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
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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, the Oaktree Entities
shall also be entitled to reimbursement for all reasonable out-of-pocket
expenses incurred by the Oaktree Entities or their personnel in connection with
the performance of the Oaktree Entities' duties hereunder, which amounts shall
be so reimbursed when invoices with respect thereto are submitted by the Oaktree
Entities to the Company.
SECTION 3 TERM
A. 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) an OCM Entity Purchase Default; (iii)
an OCM Entity Funding Default; or (iv) Termination of the Agreement by the Board
as a result of criminal misconduct or fraud by the Oaktree Entities. Unless
terminated as set forth in clauses (i) through (iv) above, 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 the Oaktree Entities
terminates this Agreement by 90 days' notice to the other party prior to the
commencement of a renewal period.
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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
330 South Mannheim Road, Suite 200
Hillside, IL 60162
Attention: Roger E. Payton
If to the Oaktree Entities:
TCW Special Credits Fund V - The Principal Fund
c/o Oaktree Capital Management, LLC
550 South Hope Street, 22nd Floor
Los Angeles, CA 90071
Attention: Vincent J. Cebula
Oaktree Capital Managemnet, LLC
550 South Hope Street, 22nd Floor
Los Angeles, CA 90071
Attention: Vincent J. Cebula
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. This Agreement shall not be amended except by a written
instrument executed by the parties.
D. 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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Roger E. Payton
President and Chief Executive Officer
TCW SPECIAL CREDITS FUND V - THE
PRINCIPAL FUND
By: TCW ASSET MANAGEMENT COMPANY
Its General Partner
By: /s/ STEPHEN J. KAPLAN
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Stephen J. Kaplan
Autorized Signatory
By: /s/ VINCENT J. CEBULA
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Vincent J. Cebula
Authorized Signatory
OAKTREE CAPITAL MANAGEMENT, LLC
By: /s/ STEPHEN A. KAPLAN
-------------------------------
Stephen A. Kaplan
Principal
By: /s/ VINCENT J. CEBULA
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Vincent J. Cebula
Managing Director
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