SUBSCRIPTION AGREEMENT
This Subscription Agreement (this "Agreement") is made as of the date
of its acceptance set forth on the signature page below by and between
International Logistics Limited, a Delaware corporation (the "Company"), and
Roger E. Payton, an individual subscribing for warrants to purchase shares of
the Company's capital stock pursuant hereto (the "Management Investor").
Certain capitalized terms that are used herein are defined in Section 7 of this
Agreement. Capitalized terms used but not defined herein shall have the
meanings ascribed to them under the Stockholders Agreement.
1. GRANT OF WARRANTS.
(a) Upon the execution of this Agreement, the Management
Investor will receive from the Company, and the Company will grant to the
Management Investor, warrants which, subject to the provisions hereof,
accord to the Management Investor the right to purchase (upon the vesting
of such warrants) up to __________ shares of Common Stock from the Company
(the "Warrants"). The Management Investor's receipt of such Warrants shall
constitute a subscription for such Warrants and shall be evidenced by the
Management Investor's completion of the "Management Investor Election" form
attached hereto. The Management Investor will deliver to the Company the
full purchase price for the Shares purchased upon exercise of the Warrants
by check, wire transfer, bank draft or money order made payable to
"International Logistics Limited". The purchase price per share for Shares
purchased upon exercise of the Warrants is the Warrant Purchase Price. The
Management Investor agrees to enter into the Stockholders Agreement and the
Registration Rights Agreement concurrently with the receipt of the Warrants
pursuant to this Agreement.
(b) In connection with the grant and receipt of the Warrants
hereunder, the Management Investor represents and warrants to the Company
that:
(i) The Management Investor understands that (A) the
Securities have not been registered under the Securities Act, nor
qualified under the securities laws of any other jurisdiction, (B) the
Warrants are non-transferable, (C) the Securities cannot be resold
unless they subsequently are registered under the Securities Act and
qualified under applicable state securities laws, unless the Company
determines that exemptions from such registration and qualification
requirements are available, and (D) except as otherwise set forth in
the Stockholders Agreement and the Registration Rights Agreement, the
Management Investor has no right to require such registration or
qualification;
(ii) The Securities to be acquired by the Management
Investor pursuant to this Agreement will be acquired for the
Management Investor's own account and not with a view to, or intention
of, distribution thereof in violation of the Securities Act, or any
applicable state securities laws, and the Securities will not be
disposed of in contravention of the Securities Act or any applicable
state securities laws;
(iii) The Management Investor has substantial knowledge
and experience in financial and business matters, has specific
experience making investment decisions of a similar nature, and is
capable, without the use of a financial advisor, of utilizing and
analyzing the information made available in connection with the
acquisition of the Securities and of evaluating the merits and risks
of an investment in the Securities. The Management Investor will
provide the Company, upon request, with such information concerning
any prior investment experience, business or professional experience
and other information as the Company may deem necessary to further
evaluate the foregoing representations;
(iv) The Management Investor has carefully reviewed and
understands the risks of, and other considerations relating to, an
investment in the Securities;
(v) The Management Investor understands that his investment
in the Securities is subject to significant economic risk, including
the relative illiquidity resulting from the fact that the Securities
(A) have not been registered under the Securities Act and, therefore,
cannot be sold unless they are subsequently registered under the
Securities Act or they are sold pursuant to an exemption from such
registration, and (B) are subject to additional restrictions as
provided herein. The Management Investor is able to bear such
economic risk of his investment in the Securities for an indefinite
period of time;
(vi) The Management Investor has had an opportunity to ask
questions and receive answers concerning the terms and conditions of
the offering of the Securities and has had full access to such other
information concerning the Company as he or she has requested.
Without limiting the generality of the foregoing, the Management
Investor has been provided with copies of the Stockholders Agreement
and the Registration Rights Agreement and has had an opportunity to
review and ask questions and receive satisfactory answers concerning
the terms and conditions of such Stockholders Agreement and
Registration Rights Agreement;
(vii) The Management Investor is a resident and
domiciliary of the state or other jurisdiction hereinafter set forth
opposite the Management
Investor's signature and the Management Investor has no present
intention of becoming a resident of any other state or
jurisdiction. If the Management Investor is a resident and
domiciliary of a state that requires the Company to ascertain certain
other information regarding the Management Investor, the Company ma
attach a page to this Agreement containing additional representations
to be made by the Management Investor in connection with the
Management Investor's investment in the Securities, and by signing
this Agreement, the Management Investor shall be deemed to have made
such additional representations to the Company;
(viii) This Agreement, the Stockholders Agreement and the
Registration Rights Agreement constitute the legal, valid and binding
obligations of the Management Investor, enforceable in accordance with
their respective terms, and the execution, delivery and performance of
this Agreement, the Stockholders Agreement and the Registration Rights
Agreement by the Management Investor does not and will not conflict
with, violate or cause a breach of any agreement, contract or
instrument to which the Management Investor is a party or any order,
judgment or decree to which the Management Investor is subject; and
(ix) The Management Investor has not received and is not
relying upon any written offering literature or prospectus other than
the Stockholders Agreement and the Registration Rights Agreement, and
has not received and is not relying upon any oral representations
which are in any manner inconsistent with the written information
contained in such document.
(c) The Management Investor further acknowledges and agrees
that:
(i) none of (A) the grant of the Warrants to the Management
Investor or (B) any provision contained herein shall entitle the
Management Investor to remain in the employment of the Company or
affect the right of the Company to terminate the Management Investor's
employment at any time for any reason;
(ii) the Company shall have no duty or obligation to
disclose to the Management Investor and the Management Investor shall
have no right to be advised of, any material information regarding the
Company, its Subsidiaries or Affiliates at any time prior to, upon or
in connection with the repurchase of the Securities upon the
termination of the Management Investor's employment with the Company
or as otherwise provided hereunder;
(iii) the Management Investor is to be an officer of the
Company, and has a high degree of familiarity with the business and
assets of the Company and the prospects of such business;
(iv) the Company is entering into this Agreement in reliance
upon the Management Investor's representations and warranties herein;
(v) all information which the Management Investor has
provided to the Company concerning the Management Investor, his or her
financial position and knowledge of and experience with financial and
business matters is correct and complete as of the date set forth at
the end of this Agreement, and if there should be any material change
in such information prior to the closing of this offering, the
Management Investor will immediately provide the Company with such
information; and
(vi) the Management Investor is aware of the provisions of
Section 83(b) of the Internal Revenue Code of 1986, and the
regulations promulgated thereunder and has consulted with his or her
tax advisor as to the advisability of filing an election under said
Section. The Management Investor acknowledges that the Management
Investor has received independent tax advice with respect to tax
consequences resulting from the transactions contemplated herein.
(d) The Company and the Management Investor acknowledge and
agree that this Agreement has been executed and delivered and the Warrants
have been granted hereunder, in connection with and as a part of the
compensation and incentive arrangements between the Company and the
Management Investor.
2. AGREEMENT WITH RESPECT TO THE STOCKHOLDERS AGREEMENT,
REGISTRATION RIGHTS AGREEMENT AND WARRANT AGREEMENT. The Management Investor
acknowledges and agrees that Securities are being issued (or granted) hereunder
pursuant to, and are subject in all respects to, this Agreement as well as the
Registration Rights Agreement, the Stockholders Agreement and the Warrant
Agreement, the terms and conditions of which are incorporated herein as if set
forth fully herein. The Management Investor acknowledges and agrees to all the
terms and conditions of this Agreement and such Stockholders Agreement,
Registration Rights Agreement and Warrant Agreement, including the rights of
repurchase, tag-along and drag-along rights, rights of first refusal, vesting
requirements, restrictions on transfer and other provisions set forth herein and
in such Stockholders Agreement, Registration Rights Agreement and Warrant
Agreement. The Management Investor acknowledges that the certificates
evidencing the Shares shall be imprinted with a legend providing notice of such
restrictions substantially in the form set forth herein and in Section 10 of the
Stockholders Agreement. The Management Investor is aware that, except as
expressly provided in the Registration Rights Agreement, the Management Investor
has no right to require registration of any of the Securities and must bear the
economic risk of illiquid Securities. The Management Investor is also aware of
and familiar with the provisions of the Stockholders Agreement relating to the
management of the Company and the provisions regarding the election of members
to the Board.
3. REPURCHASE PROVISIONS APPLICABLE TO THE SECURITIES.
(a) CALL. If at any time the Management Investor's employment
with the Company is terminated by either the Company or the Management Investor
for any reason, then the Company or its designee(s) (which designee(s) may be
any person or entity that shall have been approved by the Board pursuant to the
terms of the Stockholders Agreement) shall have the exclusive and irrevocable
option (a "Call"), exercisable in its sole discretion, to repurchase the
Securities (i.e. all of the Shares and the Warrants that have not been cancelled
and terminated pursuant to the Warrant Agreement), in whole or in part, that are
then owned by the Management Investor or any transferee. The Company may
exercise the Call for all or any portion of the Securities subject to such
repurchase hereunder by delivering written notice (a "Repurchase Notice") to the
holder or holders of such Securities within 30 days of the Management Investor's
Termination. The Repurchase Notice will set forth the number of Shares and
Warrants to be acquired from each holder, the aggregate consideration to be paid
for such Shares and Warrants and the time and place for the closing of the
transaction. The Management Investor and any transferee thereof shall be
obligated to resell the Securities as provided in this Section 3.
The number of Shares and Warrants to be repurchased by the
Company shall first be satisfied to the extent possible from the Shares and
Warrants held by the Management Investor. If the number of Shares then held by
the Management Investor is less than the total number of Shares the Company has
elected to purchase, or if the number of Warrants then held by the Management
Investor is less than the total number of Warrants the Company has elected to
purchase, the Company shall purchase the remaining Shares or Warrants, as the
case may be, elected to be purchased from the Management Investor's transferees,
pro rata according to the number of Shares (with respect to Shares to be
purchased) and Warrants (with respect to Warrants to be purchased) held by such
other transferees as of the Date of Termination (determined as nearly as
practicable to the nearest Share or Warrant, as the case may be).
The consummation of the purchase or purchases of such Securities
pursuant to the Company's exercise of its Call shall take place on the date and
in the manner designated by the Company in the Repurchase Notice; provided,
however, that the Company may consummate its purchase of such Securities
pursuant to its exercise of its Call by delivering payment for such Securities
being repurchased by it along with the Repurchase Notice. The Company will pay
for the Securities to be purchased by it pursuant to the exercise of its Call by
delivery of a check in an amount equal to the applicable repurchase price for
the Securities being repurchased. The Company will, in connection with such
repurchase, be entitled to receive customary representations and warranties from
the sellers regarding such sale and to require that all sellers' signatures be
guaranteed.
Notwithstanding anything to the contrary contained herein, all
repurchases of Securities by the Company shall be subject to applicable
restrictions contained in the Delaware General Corporation Law and in the
Company's and its Subsidiaries' debt
and equity financing agreements. If any such restrictions prohibit the
repurchase of Securities hereunder which the Company is otherwise entitled to
make, the Company may make such repurchases as soon as it is permitted to do
so under such restrictions and the time period for exercise of its rights
hereunder shall be tolled during any such period of disability. The Company
shall pay interest on any portion of the Securities being repurchased subject
to the restrictions set forth in this paragraph, with such interest accruing
at an annual rate of 10%, and with such interest being paid on the date that
such restricted portion of the Securities is repurchased.
(b) PUT. If at any time the Management Investor's employment
with the Company is terminated by either the Company or the Management Investor
for any reason, then the Management Investor shall have the exclusive and
irrevocable option (a "Put"), exercisable in the Management Investor's sole
discretion, to sell to the Company, or at the option of the Company, its
designee(s) (which designee(s) may be any person or entity that shall have been
approved by the Board pursuant to the terms of the Stockholders Agreement), the
Securities (i.e. all of the Shares and the Warrants that have not been cancelled
and terminated pursuant to the Warrant Agreement), in whole or in part, that are
then owned by the Management Investor. The Management Investor may elect to
sell all or any portion of the Securities subject to sale hereunder by
delivering written notice (a "Put Notice") to the Company within 60 days of the
Management Investor's Termination. The Put Notice will set forth the number of
Shares and Warrants to be sold to the Company, the aggregate consideration to be
received for such Shares and Warrants and the time and place for the closing of
the transaction. The Company or its designee(s) (which designee(s) may be any
person or entity that shall have been approved by the Board pursuant to the
terms of the Stockholders Agreement) shall be obligated to repurchase the
Securities as provided in this Section 3.
The consummation of the sale of such Securities pursuant to the
Management Investor's exercise of the Put shall take place on the date and in
the manner designated by the Management Investor in the Put Notice. The Company
will, in connection with such sale by the Management Investor, be entitled to
receive customary representations and warranties from the sellers regarding such
sale and to require that all sellers' signatures be guaranteed.
Notwithstanding anything to the contrary contained herein, all
sales of Securities by the Management Investor to the Company shall be subject
to applicable restrictions contained in the Delaware General Corporation Law and
in the Company's and its Subsidiaries' debt and equity financing agreements. If
any such restrictions prohibit the repurchase of Securities hereunder which the
Company is otherwise obligated to make as a result of the Management Investor's
exercise of the Put, the Company shall make such repurchases as soon as it is
permitted to do so under such restrictions and the time period for exercise of
the Management Investors rights hereunder shall be tolled during any such period
of disability. The Management Investor shall be entitled to receive, and the
Company shall pay, interest on any portion of the Securities being sold subject
to the restrictions set forth in
this paragraph, with such interest accruing at na annual rate of 10%, and
with such interest being paid on the date that such restricted portion of the
Securities is repurchased.
(c) CALL AND PUT PRICE. The repurchase price applicable to the
exercise by the Company of its Call right described in Section 3(a) above and by
the Management Investor of the Put right described in Section 3(b) above shall
be as follows:
(i) WARRANTS. If the Management Investor's employment with
the Company is terminated for Cause or as a result of the resignation of the
Management Investor (other than a resignation resulting from a diminution in
responsibility), then the aggregate repurchase/sale price for the Warrants shall
be equal to zero dollars ($0.00). If the Management Investor's employment
agreement with the Company is terminated in any other manner, then the aggregate
repurchase/sale price for the Warrants shall be equal to the Warrant Market
Value as of the Date of Termination. Such repurchase/sale price shall be paid
by the Company by check, wire transfer, bank draft or money order (subject to
the obligations of the Management Investor as set forth in Section 3(a)) within
60 days after the Date of Termination.
(ii) SHARES. If the Management Investor's employment with
the Company is terminated for Cause or as a result of the resignation (other
than a resignation resulting from a diminution in responsibility) of the
Management Investor, then the repurchase/sale price per Share shall be equal to
the LOWER of cost or the Fair Market Value as of the Date of Termination, with
such amount to be paid (subject to the obligations of the Management Investor as
set forth in Section 3(a)) within two years after the Date of Termination. If
the Management Investor's employment is terminated as a result of the expiration
of his Employment Agreement or as a result of the death or Disability of the
Management Investor, then the repurchase/sale price per share shall be equal to
the Fair Market Value as of the Date of Termination, with such amount (subject
to the obligations of the Management Investor as set forth in Section 3(a)) to
be paid within 90 days (60 days if termination is caused by the death or
Disability of the Management Investor) after the Date of Termination. If the
Management Investor's employment is terminated in any other manner, then the
repurchase price per share shall be the HIGHER of cost or the Fair Market Value
as of the Date of Termination, with such amount to be paid (subject to the
obligations of the Management Investor as set forth in Section 3(a)) within 60
days after the Date of Termination.
(d) IPO ADJUSTMENT TO CALL OR PUT PRICE FOR TERMINATION WITHOUT
CAUSE. If (i) the Company terminates the Management Investor's employment
without Cause, (ii) the Put or Call is exercised, (iii) within 180 days of the
payment of the repurchase price with respect to the exercise of the Put or Call,
the Company files a registration statement with the Commission in connection
with an Initial Public Offering and (iv) at the consummation of such Initial
Public Offering, the initial public offering price per share with respect to
such Initial Public Offering (the "IPO Price") is higher than the Fair Market
Value as of the Date of Termination, then the IPO Price shall replace the Fair
Market Value in the computation of the repurchase/sale price referred to in
Section 3(c) above. Within 60 days of the consummation of such Initial Public
Offering, subject to the foregoing conditions, the Company shall pay the
Management Investor the difference, if any, between the repurchase/sale amount
as computed using the IPO Price and such repurchase/sale amount as computed
using the Fair Market Value.
(e) BENEFIT OF SALE OF COMMON STOCK OR ASSETS FOR TERMINATION
WITHOUT CAUSE. If (i) the Company terminates the Management Investor's
employment without Cause, (ii) the Put or Call is exercised and (iii) within 180
days of the payment of the repurchase price with respect to the exercise of the
Put or Call, the Company sells more than 80% of the Common Stock of the Company
to a third party (which is not an Affiliate of any Person who, prior to such
sale, "controls" the Company), then the Company shall pay to such selling
Management Investor for each Share sold pursuant to the Put or Call an amount
equal to the amount, if any, by which the price per share of the shares of
Common Stock of the Company sold in such sale exceeds the price per Share for
each Share sold pursuant to the Put or Call. If (i) the Company terminates the
Management Investor's employment without Cause, (ii) the Put or Call is
exercised and (iii) within 180 days of the payment of the repurchase price with
respect to the exercise of the Put or Call, the Company sells all or
substantially all of the assets of the Company to a third party (which is not an
Affiliate of any Person who, prior to such sale, "controls" the Company), then
the Company shall pay to such selling Management Investor for each Share sold
pursuant to the Put or Call an amount equal to the amount, if any, by which the
amount paid per share to holders of shares of Common Stock of the Company
receiving a payment subsequent to such sale of assets (after adjustment for the
Shares of the Management Investor purchased pursuant to the Put or Call) exceeds
the price per Share for each Share sold pursuant to the Put or Call. Any
amounts payable pursuant to this Section 3(e) shall be paid to the Management
Investor, subject to the restrictions referenced in this Agreement, within 60
days after the consummation of the sale of Common Stock or assets, as
applicable.
4. TRANSFER RESTRICTIONS. The Management Investor shall hold the
Securities subject to the terms of the Stockholders Agreement, the Registration
Rights Agreement, the Warrant Agreement and the terms of this Agreement. As
provided in the Stockholders Agreement, the Shares may be transferred in certain
limited circumstances. As also provided in the Stockholders Agreement and the
Warrant Agreement, no Warrants may be transferred. Any transferee of any
Securities shall take those Securities subject to the terms of the Stockholders
Agreement, the Registration Rights Agreement, the Warrant Agreement and this
Agreement, including, without limitation, the repurchase rights set forth in
Section 3 of this Agreement. Any such transferee must, upon the request of the
Company, execute an agreement agreeing to be bound by the Stockholders
Agreement, the Registration Rights Agreement, the Warrant Agreement and this
Agreement and must agree to such other waivers, limitations and restrictions as
the Company may reasonably require. The Company shall not, and shall not permit
any transfer agent or registrar for any shares of the Company's capital stock
to, transfer upon the books of the Company any shares of the Company's capital
stock originally issued hereunder or pursuant hereto in any manner except
in accordance with this provision, and any purported transfer not in compliance
herewith shall be void.
5. SECURITIES LAW RESTRICTIONS AND OTHER RESTRICTIONS ON TRANSFER OF
SHARES.
(a) The Management Investor is advised that federal and state
securities laws govern and restrict the Management Investor's right to offer,
sell or otherwise dispose of any Securities unless the Management Investor's
offer, sale or other disposition thereof is registered under the Securities Act
and state securities laws, or in the opinion of the Company's counsel, such
offer, sale or other disposition is exempt from registration or qualification
thereunder. The Management Investor agrees that the Management Investor will
not offer, sell or otherwise dispose of any such Securities in any manner which
would: (i) require the Company to file any registration statement with the
Commission (or any similar filing under state law) or to amend or supplement any
such filing or (ii) violate or cause the Company to violate the Securities Act,
the rules and regulations promulgated thereunder or any other state or federal
law. The certificates for any Shares will bear such legends as the Company
deems necessary or desirable in connection with the Securities Act or other
rules, regulations or laws.
(b) The certificates representing the Shares will bear the following
legends:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAW, AND SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THE SAME ARE REGISTERED AND QUALIFIED IN
ACCORDANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR IN THE
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY SUCH REGISTRATION
AND QUALIFICATION ARE NOT REQUIRED."
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THAT CERTAIN
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, DATED AS OF NOVEMBER 7,
1996, A SUBSCRIPTION AGREEMENT, DATED AS OF _______________, 1996, AND A
SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT DATED AS OF
NOVEMBER 7, 1996 COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY AND WILL BE FURNISHED TO THE HOLDER ON REQUEST TO THE SECRETARY OF
THE COMPANY. SUCH SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT,
SUBSCRIPTION AGREEMENT AND SECOND AMENDED AND RESTATED REGISTRATION RIGHTS
AGREEMENT PROVIDE, AMONG OTHER THINGS, FOR CERTAIN RESTRICTIONS ON VOTING,
SALE, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES EVIDENCED BY THIS CERTIFICATE AND THAT SUCH SECURITIES MAY BE
SUBJECT TO PURCHASE BY THE COMPANY AS WELL AS CERTAIN OTHER PERSONS UPON
THE OCCURRENCE OF CERTAIN EVENTS. ANY ISSUANCE, SALE, ASSIGNMENT, TRANSFER
OR OTHER DISPOSITION OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE TO
PERSONS WHO ARE NOT A PARTY TO SUCH AMENDED AND RESTATED STOCKHOLDERS
AGREEMENT SHALL BE NULL AND VOID."
(c) Notwithstanding any other provision contained herein, the Company
may refuse to register any transfer of Securities if the registration of such
transfer would require the Company to register any class of equity securities
with the Commission under the Securities Exchange Act (except in connection with
an effective registration statement under the Securities Act).
(d) Unless otherwise set forth in the Stockholders Agreement or the
Registration Rights Agreement, the Management Investor may not effect any Public
Sale or distribution of any Shares or other equity securities of the Company, or
any Warrants or other securities convertible into or exchangeable or exercisable
for any of the Company's equity securities, during the ten days prior to and the
120 days after the effectiveness of any underwritten public offering of any
class of the Company's equity securities, except as part of such underwritten
public offering or if otherwise consented to by the Company in writing prior to
such sale or distribution.
6. DEFINITIONS.
"AFFILIATE" means with respect to any Person, any other Person that
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. For the purposes
of this definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities or by agreement or otherwise.
"BOARD" means the board of directors of the Company.
"CAUSE" shall have the meaning set forth in the Employment Agreement.
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON STOCK" means the Company's common stock, par value $0.001 per
share, or in the event that the outstanding Common Stock is hereafter changed
into or exchanged for different stock or securities of the Company, such other
stock or securities.
"DATE OF TERMINATION" shall have the meaning set forth in the
Employment Agreement.
"DISABILITY" shall have the meaning set forth in the Employment
Agreement.
"EMPLOYMENT AGREEMENT" means the Employment Agreement dated as of May
2, 1996, by and between the Management Investor and the Company.
"FAIR MARKET VALUE" means the fair market value (as determined by a
nationally recognized investment banking, valuation or appraisal firm of the
Company's choice paid for by the Company) of the Company's common shares (or
other securities if in the context of untraded securities distributed in
connection with a Qualified Sale) divided by the number of such shares, as
determined on a fully-distributed basis without regard to liquidity or size
relative to the number of shares outstanding.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
"PUBLIC SALE" means any sale pursuant to a registered public offering
under the Securities Act or any sale to the public pursuant to Rule 144
promulgated under the Securities Act (if and as modified by Rule 701(c) under
the Securities Act) effected through a broker, dealer or market maker.
"QUALIFIED SALE" shall mean (i) any sale of all or substantially all
of the assets of the Company or (ii) any sale, merger or liquidation of the
Company with or into any entity (other than OCM Principal Opportunities Fund,
L.P., TCW Special Credits Fund V - The Principal Fund, Logistical Simon, L.L.C.,
or any Affiliate of the foregoing) whereby such entity shall obtain (A) at least
a majority of the voting stock of the surviving entity and (B) the right to
elect a majority of the surviving entity's board of directors.
"REGISTRATION RIGHTS AGREEMENT" means the Second Amended and Restated
Registration Rights Agreement dated as of November 7, 1996 by and among the
Company and the Investors listed in Exhibit A thereto, as the same may be
amended from time to time.
"SECURITIES" means the Shares and the Warrants.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
"SHARES" means, with respect to the Management Investor, (a) any
shares of Common Stock of the Company purchased by the Management Investor upon
exercise of the Warrants and (b) any shares of the capital stock of the Company
issued in respect of any of the securities described in clause (a) above,
whether by way of stock dividend, stock split, merger, consolidation,
reorganization or other recapitalization. Except as otherwise expressly
provided in the Stockholders Agreement, each subsequent holder of the Shares
shall succeed to all rights and obligations hereunder attributable to the
Management Investor as a holder of Shares.
"STOCKHOLDERS AGREEMENT" means the Second Amended and Restated
Stockholders Agreement dated as of November 7, 1996 by and among the Company and
the Holders listed in Exhibit A thereto, as the same may be amended from time to
time.
"SUBSIDIARY" means any corporation of which the Company owns, directly
or through one or more intermediaries, securities having a majority of the
ordinary voting power in electing the board of directors of such corporation.
"WARRANT AGREEMENT" means that warrant certificate (#___), executed by
the Company as of ___________, 1996, certifying that the Management Investor has
been granted the Warrants by the Company.
"WARRANT MARKET VALUE" means the amount by which the Fair Market Value
multiplied by the number of common shares underlying the Warrants exceeds the
Warrant Purchase Price multiplied by the number of common shares underlying the
Warrants. If the Warrant Purchase Price is greater than or equal to the Fair
Market Value, then the "Warrant Market Value" shall equal $0.00.
"WARRANT PURCHASE PRICE" has the meaning set forth in the Warrant
Agreement.
7. NOTICES. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given and made and served either by personal delivery
to the person for whom it is intended or if deposited, postage prepaid,
registered or certified mail, return receipt requested, in the United States
mail:
If to the Company, addressed to:
International Logistics Limited
330 S. Mannheim Road
Hillside, IL 60162
Attention: Chief Executive Officer
With copies to:
Milbank, Tweed, Hadley & McCloy
601 S. Figueroa St.
Suite 3100
Los Angeles, California 90017
Attention: Eric H. Schunk, Esq.
If to the Management Investor, addressed to:
the Management Investor at his address shown on the stock records
of the Company, or at such other address as the Management
Investor may specify by written notice to the Company.
8. MISCELLANEOUS.
(a) Upon its acceptance by the Company, this Agreement shall be
binding upon and inure to the benefit of the Company and its successors and
assigns and the Management Investor and the Management Investor's executors
or administrators, personal representatives, heirs, legatees and
distributees.
(b) This Agreement shall be governed by and construed in
accordance with the local law, and not the law of conflicts, of the State
of Delaware.
(c) In any conflict between the terms and provisions of this
Agreement and the terms and provisions of the Stockholders Agreement, the
Warrant Agreement or the Registration Rights Agreement, the terms and
provisions of the Stockholders Agreement, the Warrant Agreement or
Registration Rights Agreement, as the case may be, shall govern.
(d) No course of dealing or any delay or failure to exercise any
right, power or remedy hereunder on the part of any party hereto shall
operate as a waiver of or otherwise prejudice such party's rights, powers
or remedies.
(e) Notwithstanding anything in this Agreement, the Company
shall not be obligated to issue, grant or sell any Securities to any Person
if, in the judgment of the Board, such issuance or sale may violate Federal
or applicable state securities laws or regulations or may require the
Company to register or qualify any such Securities under any Federal or
state securities laws, or require the Company or any
of its agents or representatives to register or qualify with any
governmental agency or organization, pursuant to such laws or regulations.
(f) This Agreement supersedes all prior discussions and
agreements between the parties with respect to the subject matter hereof between
the parties and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.
9. JOINT SIGNATORIES; SUCCESSORS AND ASSIGNS. If this Agreement is
signed by more than one Person or entity, then the obligations of the
undersigned shall be joint and several, and the acknowledgements,
representations, warranties and agreements herein contained shall be deemed to
be made by and be binding upon each such Person or entity. This Agreement shall
survive the death or disability of the undersigned and shall be binding upon the
undersigned's heirs, executors, administrators, successors and assigns.
10. ACCREDITED INVESTOR. Please initial all boxes which apply to
you.
/ / I will be a director or executive officer of the Company;
/ / I am a natural person whose individual net worth, or joint
net worth with my spouse, exceeds $1 million;
/ / I am a natural person and had individual (NOT JOINT) income
in excess of $200,000 in each of the two most recent years
and reasonably expect to reach the same income level in the
current year;
/ / I am a natural person and had joint income (together with my
spouse) in excess of $300,000 in each of the two most recent
years and reasonably expect to reach the same income level
in the current year;
/ / I am a person who is subscribing to purchase $_________ or
more of the Securities, and this investment does not exceed
10% of my personal net worth or my joint net worth with my
spouse;
/ / The undersigned is an organization described in Section
501(c)(3) of the Internal Revenue Code of 1986 as amended
(I.E., tax exempt entities), a corporation, a trust, a
Massachusetts or similar business trust, or a partnership,
not formed for the specific purpose of acquiring Securities,
with total assets in excess of $5 million and the investment
decisions of which are directed by one or more persons able
to make the representation set forth in Section 9(e) above;
/ / The undersigned is an employee benefit plan within the
meaning of Title I of the Employment Retirement Income
Security Act of 1974, the investment decisions of which are
made by a plan fiduciary, as defined in Section 9(21) of
such Act, which is either a bank, a savings and loan
association, an insurance company, or a registered
investment advisor;
/ / The undersigned is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income
Security Act of 1974, which either has total assets in
excess of $5 million or is a self-directed plan, the
investment decisions of which are made solely by one or more
persons able to make the representations contained in
Section 9(e) above and who fits into one of the above
categories; or
/ / The undersigned is an entity in which all of the equity
owners are accredited investors, falling into one or more of
the categories described above.
11. CERTIFICATION AS TO TAXPAYER IDENTIFICATION NUMBER AND BACKUP
WITHHOLDING AND NON-FOREIGN STATUS-SUBSTITUTE FORM W-9; SOCIAL SECURITY OR
TAX ID NUMBER. Under penalties of perjury, the Management Investor certifies by
his or her signature below that (a) the number shown on this form is his or her
correct taxpayer identification number; (b) the Management Investor is not
subject to backup withholding either because (i) the Management Investor is
exempt from backup withholding, (ii) the Management Investor has not been
notified that the Management Investor is subject to backup withholding as a
result of a failure to report all interest or dividends, or (iii) the Internal
Revenue Service has notified the Management Investor that the Management
Investor is no longer subject to backup withholding; (c) the Management Investor
is not a non-resident alien for purposes of U.S. income taxation; (d) the
Management Investor's home address (individual) or business address (entity) set
forth in this Agreement is correct; and (e) if the Management Investor becomes a
non-resident alien, the Management Investor will notify the Company within 60
days of doing so.
IF THE MANAGEMENT INVESTOR HAS BEEN NOTIFIED BY THE IRS THAT THE MANAGEMENT
INVESTOR IS PRESENTLY SUBJECT TO BACKUP WITHHOLDING, STRIKE OUT THE LANGUAGE
UNDER (b) ABOVE BEFORE SIGNING.
12. TYPE OF OWNERSHIP FOR THE SHARES TO BE ACQUIRED.
(Check the Appropriate Box)
/ / INDIVIDUAL OWNERSHIP BY UNMARRIED PERSON
/ / OWNERSHIP BY MARRIED PERSON AS SOLE AND SEPARATE PROPERTY
(if the Management Investor lives in a state which has
community property laws, signatures of both spouses may be
required)
/ / COMMUNITY PROPERTY (signatures of both spouses are required)
/ / JOINT TENANTS WITH RIGHT OF SURVIVORSHIP (both parties must
sign)
/ / TENANTS-IN-COMMON (both parties must sign)
/ / TRUST*
/ / OTHER ENTITY*
* Any Person executing this Agreement on behalf of such
entities hereby represents and agrees that: (i) he or she
is duly authorized to act on behalf of such corporation,
partnership, trust or other entity, (ii) such corporation,
partnership, trust or other entity was formed on
_________________, 19___, and (iii) he or she will provide
such information as the Company may request confirming the
authority to sign on behalf of such entity.
MANAGEMENT INVESTOR ELECTION AND SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the latest date written below.
MANAGEMENT INVESTOR:
No. of Warrants: _________ (@ $0.00/warrant)
__________________________________ __________________________________
Management Investor (Print or Type Other Investor (Print or Type Name)
Name)
__________________________________ __________________________________
Signature Signature
__________________________________ __________________________________
Social Security or Tax ID # Social Security or Tax ID #
__________________________________ __________________________________
Residence Street Address Residence Street Address
__________________________________ __________________________________
City and State Zip City and State Zip
__________________________________ __________________________________
Residence Telephone Residence Telephone
__________________________________ __________________________________
Business Name Business Name
[CONTINUED]
__________________________________ __________________________________
Business Address Business Address
__________________________________ __________________________________
City and State Zip City and State Zip
__________________________________ __________________________________
Business Telephone Business Telephone
Mail Correspondence to: Mail Correspondence to:
/ / Residence / / Business / / Residence / / Business
COMPANY:
Accepted this ____ day of _________, 1996.
INTERNATIONAL LOGISTICS LIMITED
a Delaware corporation
By:__________________________________
Its: ________________________________