EXHIBIT 10.33
INDEMNIFICATION, DIRECTOR AND FOUNDERS AGREEMENT
This
Indemnification and
Founders Agreement,
made and entered into as of
this 8th day of
November, 2006
("Agreement"),
by and between
Summit Global
Logistics, Inc. (formerly, Aerobic Creation Inc.) , a
Delaware corporation (the
"Company"), Maritime Logistics US Holdings Inc., a Delaware
corporation ("MLI"),
and Raymer McQuiston (the "Indemnitee" or "Mr. McQuiston").
WHEREAS, the
Company is or intends
to be a third party
logistics
provider; and MLI is a logistics company that the Company has
acquired as of the
date hereof through its wholly-owned acquisition subsidiary, and MLI and its
founders have raised
on behalf of the Company funds sufficient to finance the
acquisition of
certain logistics companies, and MLI intends to acquire
additional logistics
companies,
if and when, such opportunities present
themselves;
WHEREAS,
the Indemnitee is a founder of MLI ("Founder"), and as a
condition to the founders, including the Founder, entering
into this Agreement,
the Reorganization,
Acquisitions,
and Financings (each as defined in that
certain private
placement memorandum
dated October 23, 2006), the Company has
agreed to pay a
premium to the founders of MLI in the event of a change in
control (not
approved by the Board ) of the Company prior to the fifth year
anniversary of this Agreement;
WHEREAS,
highly competent
persons are reluctant to serve corporations as
directors, officers
or in other capacities unless they are provided with
adequate protection
through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of
their service
to and activities on behalf of the corporation;
WHEREAS,
the current
impracticability of obtaining adequate insurance and
the uncertainties
relating to indemnification have increased the difficulty
of
attracting and retaining such persons;
WHEREAS,
it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the
fullest extent
permitted by
applicable
law so that they will
serve or continue to
serve the
Company free from undue concern that they will not be so
indemnified; and
WHEREAS,
Indemnitee is willing
to serve, continue to serve and to take on
additional service
for or on behalf of the Company on the condition that
Indemnitee be indemnified to the fullest extent permitted.
NOW,
THEREFORE,
in consideration of the premises and the covenants
contained herein,
the Company and
Indemnitee do hereby
covenant and agree
as
follows:
ARTICLE I
DEFINITIONS
For
purposes of this Agreement the following terms shall have the
meanings
indicated:
1.01
"BOARD" shall mean the Board of Directors of the Company.
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1.02
"CORPORATE STATUS"
describes the status
of a person who is or was a
director, officer,
employee, agent, trustee or fiduciary of the
Company or of
any other corporation,
partnership, joint venture, trust, employee benefit plan
or other Enterprise
which such
person is or was
serving at the request
or on
behalf of the Company.
1.03
"COURT" means the Court of Chancery of the
State of Delaware,
the
court in which the Proceeding in respect of which indemnification is sought by
the Indemnitee
shall have been
brought or is pending,
or another court having
subject matter jurisdiction and personal jurisdiction over the
parties.
1.04
"DISINTERESTED
DIRECTOR" means a
director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
1.05
"ENTERPRISE"
shall mean the Company and any other corporation,
partnership, joint
venture, trust, employee benefit plan or other enterprise of
which Indemnitee is or was serving at the express written request
of the Company
as a director, officer, employee, agent, trustee or fiduciary.
1.06
"EQUITY INCENTIVE PLAN" shall mean the Summit Global Logistics,
Inc.
2006 Equity Incentive Plan, annexed as Exhibit A hereto.
1.07
"EXPENSES"
shall include, without limitation, all reasonable
attorneys' fees,
retainers, court
costs, transcript
costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges,
postage, delivery service fees, facsimile transmission
charges, and all other
disbursements
or expenses of the types customarily
incurred in connection with prosecuting, defending, preparing to prosecute or
defend, investigating or being or preparing to be a witness in a
Proceeding.
1.08 "GOOD
FAITH" shall mean Indemnitee having acted in good faith and
in
a manner Indemnitee
reasonably
believed to be in or not opposed to the best
interests of the Company or, in the case of an Enterprise which is an employee
benefit plan, the best interests of the participants or beneficiaries of said
plan, as the case may be, and, with respect to any Proceeding
which is criminal
in nature, having had
no reasonable cause to believe Indemnitee's conduct was
unlawful.
1.09
"IMPROPER PERSONAL BENEFIT" shall include, but not be limited to,
the
personal gain in fact
by reason of a person's Corporate Status of a financial
profit, monies or
other advantage
not also accruing to the benefit of the
Company or to the
stockholders generally
and which is
unrelated to his
usual
compensation including, but not limited to, (i) in
exchange for the exercise of
influence over the
Company's affairs, (ii) as a result of the
diversion of
corporate opportunity,
or (iii) pursuant to the use or communication of
confidential or inside
information for the
purpose of generating a profit from
trading in the Company's securities. Notwithstanding the foregoing,
"Improper
Personal Benefit" shall not include any benefit, directly or
indirectly, related
to actions taken in order to evaluate, discourage, resist, prevent or
negotiate
any transaction
with or proposal from
any person or entity seeking control of,
or a controlling interest in, the Company.
1.10
"INDEPENDENT
COUNSEL" means a law firm, or a member of a
law firm,
that is experienced in
matters of corporation
law and may include law firms or
members thereof
that are regularly retained by the Company but not
any other
party to the Proceeding giving rise to a claim for
indemnification
hereunder.
Notwithstanding the foregoing, the term "Independent Counsel"
shall not include
any person who, under the standards of professional conduct then prevailing and
applicable to such
counsel, would have a
conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee's
rights
under this Agreement.
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1.11
"OFFICER" means the president, vice presidents, treasurer, assistant
treasurer(s),
secretary, assistant
secretary and such other executive officers
as are appointed by the board of directors of the Company or
Enterprise, as the
case may be.
1.12
"PROCEEDING"
includes any action, suit, arbitration, alternate
dispute resolution
mechanism,
investigation
(including any internal corporate
investigation),
administrative hearing
or any other actual, threatened or
completed proceeding, whether civil, criminal, administrative or
investigative,
other than one initiated by Indemnitee. For purposes of the foregoing
sentence,
a "Proceeding" shall
not be deemed to have been initiated by Indemnitee
where
Indemnitee seeks,
pursuant to Article VIII of this Agreement, to enforce
Indemnitee's rights under this Agreement.
ARTICLE II
TERM OF AGREEMENT
This
Agreement shall continue until and terminate
upon the later of: (i)
ten (10) years after
the date that
Indemnitee shall have
ceased to serve as a
director, officer,
employee, agent, trustee or fiduciary of the
Company or of
any other Enterprise;
or (ii) the final termination of all pending Proceedings
in respect
of which Indemnitee is granted rights of indemnification or
advancement of expenses hereunder and of any proceeding
commenced by
Indemnitee
pursuant to Article VIII of this Agreement relating thereto.
ARTICLE III
SERVICES BY INDEMNITEE, NOTICE OF PROCEEDINGS
3.01
SERVICES. Indemnitee agrees to serve or continue to serve as a
Director or
Officer of the Company for so long as he is duly elected or
appointed. Indemnitee
may at any
time and for any
reason resign from such
position (subject to any other contractual obligation or any obligation
imposed
by operation of law).
3.02
NOTICE OF PROCEEDING. Indemnitee agrees promptly to notify the
Company in writing
upon being served
with any summons, citation, subpoena,
complaint, indictment,
information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder,
but the omission so to
notify the Company shall not relieve
the Company from its obligations hereunder.
ARTICLE IV
INDEMNIFICATION
4.01 IN
GENERAL. To the
fullest extent
permitted by
applicable law, in
connection with any
Proceeding,
the Company shall indemnify, and advance
Expenses, to Indemnitee as provided in this Agreement.
4.02
PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE
COMPANY.
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 4.02 if, by reason of Indemnitee's Corporate Status, Indemnitee is, or
is threatened to be made, a party to or is otherwise involved in
any Proceeding,
other than a Proceeding by or in the right of the Company.
Indemnitee
shall be
indemnified against Expenses, judgments, penalties, fines and amounts paid in
settlement, actually
and reasonably
incurred by Indemnitee or on Indemnitee's
behalf in connection with such Proceeding or any claim, issue or
matter therein,
if Indemnitee
acted in Good Faith
and such Indemnitee
has not been
adjudged
during the course of such
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Proceeding to have derived an Improper Personal Benefit from the
transaction or
occurrence forming the basis of such Proceeding.
4.03
PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY.
(a)
Indemnitee shall be entitled to the rights of indemnification
provided
in this Section 4.03 if, by reason of Indemnitee's Corporate
Status, Indemnitee
is, or is threatened
to be made,
a party to or is
otherwise involved in any
Proceeding brought by
or in the right of the
Company to procure a judgment in
its favor.
Indemnitee
shall be indemnified against Expenses, judgments,
penalties, and amounts
paid in settlement,
actually and reasonably incurred by
Indemnitee or on
Indemnitee's
behalf in connection with such Proceeding if
Indemnitee acted in
Good Faith and such Indemnitee has not been adjudged during
the course of such Proceeding to have derived an Improper
Personal Benefit
from
the transaction
or occurrence forming the basis of such Proceeding.
Notwithstanding the foregoing, no such indemnification shall be
made in respect
of any claim, issue or
matter in such Proceeding as to which Indemnitee shall
have been adjudged to be liable to the Company if applicable
law prohibits such
indemnification;
provided, however,
that, if applicable law so permits,
indemnification shall
nevertheless be made
by the Company in such event if and
only to the extent
that the Court which
is considering
the matter shall so
determine.
4.04
INDEMNIFICATION
OF A PARTY
WHO IS WHOLLY OR PARTLY SUCCESSFUL.
Notwithstanding any
other provision
of this Agreement, to the extent that
Indemnitee is, by
reason of Indemnitee's
Corporate Status, a party to or is
otherwise involved in
and is successful,
on the merits or
otherwise,
in any
Proceeding, Indemnitee
shall be indemnified, to the maximum extent permitted by
law, against all
Expenses, judgments,
penalties,
fines, and amounts paid in
settlement, actually
and reasonably
incurred by Indemnitee or on Indemnitee's
behalf in connection
therewith. If
Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to
one or more but
less than all claims,
issues or matters in such Proceeding, the Company shall
indemnify Indemnitee,
to the maximum extent permitted by law, against all
Expenses, judgments,
penalties, fines, and amounts paid in settlement, actually
and reasonably
incurred by Indemnitee or on Indemnitee's behalf in connection
with each successfully
resolved claim,
issue or matter.
For purposes of
this
Section 4.04 and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or
matter.
4.05
INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any other
provision of this
Agreement,
to the extent that
Indemnitee
is, by reason of
Indemnitee's Corporate Status, a witness in any Proceeding,
Indemnitee shall
be
indemnified against
all Expenses actually and reasonably incurred by Indemnitee
or on Indemnitee's behalf in connection therewith.
ARTICLE V
ADVANCEMENT OF EXPENSES
Notwithstanding any
provision to the contrary in Article VI and to
the
fullest extent provided by applicable law, the Company (acting
through the Chief
Executive Officer)
shall advance all reasonable Expenses which, by reason of
Indemnitee's Corporate
Status, were incurred by or on behalf of
Indemnitee in
connection with any Proceeding, within thirty (30) days after the
receipt by the
Company of a statement or statements from Indemnitee requesting such advance or
advances, whether
prior to or after final disposition of such Proceeding.
Such
statement or
statements shall
reasonably
evidence the Expenses incurred by
Indemnitee and shall
include or be preceded or accompanied by an undertaking by
or on behalf of
Indemnitee to repay
any Expenses
if it shall
ultimately
be
determined that
Indemnitee
is not entitled to be indemnified against such
Expenses. Any advance and undertakings to repay pursuant to this
Article V shall
be unsecured and interest free. Advancement of Expenses pursuant to
this Article
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V shall not require
approval of the Board of Directors or the stockholders of
the Company, or of any
other person or body. The Secretary of the Company shall
promptly advise the Board in writing of the request for advancement
of Expenses,
of the amount and other details of the advance and of the
undertaking
to make
repayment pursuant to this Article V.
ARTICLE VI
PROCEDURES
FOR DETERMINATION OF ENTITLEMENT
TO INDEMNIFICATION AND DEFENSE OF CLAIMS
6.01
INITIAL REQUEST. To obtain indemnification under this Agreement
(other than
advancement of Expenses pursuant to Article V),
Indemnitee
shall
submit to the Company a written request, including therein or therewith such
documentation and
information as is
reasonably available
to Indemnitee and is
reasonable necessary
to determine whether and to what extent
Indemnitee
is
entitled to indemnification. The Secretary of the Company shall
promptly advise
the Board in writing that Indemnitee has requested
indemnification.
6.02
METHOD OF
DETERMINATION. A
determination (if required by applicable
law in the specific case) with respect to Indemnitee's entitlement to
indemnification shall
be made (a) by the Board by a majority vote of a quorum
consisting of Disinterested Directors, or (b) in the event
that a quorum of the
Board consisting
of Disinterested Directors is not obtainable or, even if
obtainable, such
quorum of Disinterested Directors so directs, by Independent
Counsel in a written opinion to the Board, a copy of which shall be
delivered to
Indemnitee, or (c) by
the holders of a majority of the votes of the outstanding
stock at the time entitled to vote on matters other than the
election or removal
of directors, voting as a single class, including the stock of the
Indemnitee.
6.03
SELECTION, PAYMENT,
DISCHARGE, OF
INDEPENDENT COUNSEL. In the event
the determination of entitlement to indemnification is to be made
by Independent
Counsel pursuant to
Section 6.02 of this
Agreement, the
Independent
Counsel
shall be selected, paid, and discharged in the following
manner:
(a) The
Independent Counsel
shall be selected by the Board, and the
Company shall give written notice to Indemnitee advising Indemnitee
of the identity of the Independent Counsel so selected.
(b) Following the initial selection described in clause (a) of
this
Section 6.03,
Indemnitee
may, within seven (7) days after such
written notice of selection has been given, deliver to the Company
a
written objection to such selection. Such objection may be asserted
only on the ground that the Independent Counsel so selected does
not
meet the requirements of "Independent Counsel" as defined in
Section
1.10 of this
Agreement, and the
objection shall set forth with
particularity the
factual basis of such assertion. Absent a proper
and timely
objection,
the person so selected shall act as
Independent
Counsel. If
such written objection is made, the
Independent Counsel so selected may not serve as Independent
Counsel
unless and until a
court has determined
that such objection is
without merit.
(c) Either the Company
or Indemnitee
may petition a Court if the
parties have been unable to agree on the selection of Independent
Counsel within twenty (20) days after submission by Indemnitee of a
written request for indemnification pursuant to Section 6.01 of
this
Agreement. Such
petition may request a determination whether an
objection to the party's selection is without merit and/or
seek the
appointment as Independent
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Counsel of a person selected by the Court or by such other person
as
the Court shall designate. A person so appointed shall act as
Independent Counsel under Section 6.03 of this Agreement.
(d) The Company shall pay any and all reasonable fees of
Independent
Counsel and
expenses incurred by such Independent Counsel in
connection with acting
pursuant to this Agreement, and the Company
shall pay all reasonable fees and expenses incident to the
procedures of this Section 6.03, regardless of the manner in
which
such Independent Counsel was selected or appointed.
(e) Upon the due commencement of any judicial proceeding or
arbitration pursuant to Section 8.02 of this Agreement,
Independent
Counsel shall
be discharged and relieved of any further
responsibility in such capacity (subject to the applicable
standards
of professional conduct then prevailing).
6.04
COOPERATION.
Indemnitee shall cooperate with the person, persons or
entity making the
determination with
respect to
Indemnitee's
entitlement to
indemnification under
this Agreement, including providing to such person,
persons or
entity upon reasonable advance request any documentation or
information which is
not privileged or otherwise protected from disclosure and
which is reasonably
available to Indemnitee and reasonably necessary to such
determination.
Any costs or expenses (including attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating with the
person, persons
or entity making such determination shall be borne by the Company
(irrespective
of the determination as to Indemnitee's entitlement to indemnification)
and the
Company hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
6.05
DEFENSE OF CLAIM. With
respect to any Proceeding to which Indemnitee
shall have requested indemnification in accordance with Section
6.01:
(a) The Company will
be entitled to
participate in the
defense at
its own expense.
(b) Except as otherwise provided below, the Company jointly with
any
other indemnifying party will be entitled to assume the defense
with
counsel reasonably satisfactory to Indemnitee. After notice from
the
Company to the Indemnitee of its election to assume the defense of
a
suit, the Company will
not be liable to the
Indemnitee under
this
Agreement for any legal or other expenses subsequently incurred by
the Indemnitee
in connection with the defense of the
Proceeding
other
than reasonable costs of investigation or as otherwise
provided below.
The Indemnitee
shall have the right
to employ his
own counsel in such
Proceeding
but the fees and
expenses of such
counsel incurred after
notice from the Company of its assumption of
the defense shall be at the expense of the Indemnitee unless (i)
the
employment of counsel by the Indemnitee has been authorized by the
Company, (ii) the
Indemnitee shall have
concluded reasonably
that
there may be a conflict of interest between the Company and the
Indemnitee in the
conduct of the
defense of such
action and such
conclusion is confirmed in writing by the Company's outside counsel
regularly employed by
it in connection with
corporate matters or
(iii) the Company shall not in fact have employed counsel to assume
the defense of such Proceeding, in each of which cases the fees
and
expenses of counsel
shall be at the
expense of the
Company. The
Company shall
not be entitled to assume the defense of any
Proceeding brought by
or in the right of the Company or as to which
the
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Indemnitee shall have made the conclusion provided for in (ii)
above
and such conclusion
shall have been so
confirmed by the
Company's
said outside counsel.
(c) Notwithstanding any provision of this Agreement to the
contrary,
the Company shall not
be liable to indemnify the Indemnitee under
this Article of any amounts paid in settlement of any Proceeding or
claim effected without
its written consent.
The Company shall
not
settle any Proceeding
or claim in any manner which would impose any
penalty, limitation or
disqualification
of the Indemnitee for
any
purpose
without the Indemnitee's written consent. Neither the
Company nor the Indemnitee will unreasonably withhold their consent
to any proposed settlement.
6.06
PAYMENT. If it is determined that Indemnitee is entitled to
indemnification not
covered by defense of the claim afforded under Section 6.05
above, payment
to Indemnitee shall be made within ten (10) days after such
determination.
ARTICLE VII
PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS
7.01
BURDEN OF PROOF. In making a determination with respect to
entitlement to indemnification hereunder, the person or persons or
entity making
such determination
shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for
indemnification
in accordance with
Section 6.01 of this
Agreement, and the
Company shall have
the burden of proof to overcome that presumption in connection
with the making
by any person, persons or entity of any determination contrary to that
presumption.
7.02
EFFECT OF OTHER PROCEEDINGS. The termination of any Proceeding
or of
any claim,
issue or matter therein, by judgment, order, settlement or
conviction, or upon a
plea of guilty or of NOLO CONTENDERE or its equivalent,
shall not (except as otherwise expressly provided in this Agreement) of
itself
adversely affect
the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not act in Good Faith.
7.03
RELIANCE AS SAFE HARBOR. For purposes of any determination of Good
Faith, Indemnitee
shall be deemed to
have acted in Good Faith if Indemnitee's
action is based on the records or books of account of the
Enterprise,
including
financial statements,
or on information
supplied to Indemnitee by the Officers
of the Enterprise
in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or
reports made to
the Enterprise by an independent certified public accountant or by
an appraiser
or other expert selected with reasonable care by the Enterprise.
The provisions
of this Section 7.03
shall not be deemed to be exclusive or to limit in any way
the other
circumstances in which
the Indemnitee may be
deemed to have met the
applicable standard of conduct set forth in this Agreement.
7.04
ACTIONS OF OTHERS. The
knowledge and/or actions, or failure to act,
of any director, Officer, employee, agent, trustee or fiduciary of the
Enterprise shall not
be imputed to Indemnitee for purposes of determining the
right to indemnification under this Agreement.
ARTICLE VIII
REMEDIES OF INDEMNITEE
8.01
APPLICATION. This Article VIII shall apply in the event of a
Dispute.
For purposes of this Article, "Dispute", shall mean any of the
following events:
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(a) a determination is made pursuant to Article VI of this
Agreement
that Indemnitee
is not entitled to indemnification under this
Agreement;
(b) advancement of Expenses is not timely made pursuant to Article
V
of this Agreement;
(c) the determination
of entitlement to be made pursuant to Section
6.02 of this Agreement
has not been made
within sixty (60) days
after receipt by the Company of the request for
indemnification;
(d) payment of
indemnification is not made pursuant to Section 4.05
of this Agreement
within ten (10) days after receipt by the Company
of a written request therefor; or
(e)
notice of election by
the Company to assume
defense of a claim
as provided for in
Section 6.05 or payment of indemnification, as
the case may be, is not given or made within ten (10) days after a
determination
has been made that Indemnitee is entitled to
indemnification or
such determination
is deemed to have been
made
pursuant to Article VI of this Agreement.
8.02
ADJUDICATION. In the event of a Dispute, Indemnitee shall be
entitled
to an adjudication in an appropriate Court of Indemnitee's entitlement to such
indemnification or
advancement
of Expenses. Alternatively, Indemnitee, at
Indemnitee's option,
may seek an award in
arbitration
to be conducted by a
single arbitrator pursuant to the rules of the American Arbitration
Association.
Indemnitee shall commence such proceeding seeking an adjudication
or an award in
arbitration within one
hundred eighty (180)
days following
the date on which
Indemnitee first has
the right to commence
such proceeding pursuant to this
Section 8.02. The Company shall not oppose Indemnitee's right to seek any such
adjudication or award in arbitration.
8.03 DE
NOVO REVIEW.
In the event that a
determination
shall have been
made pursuant to Article VI of this Agreement that Indemnitee is
not entitled to
indemnification, any
judicial proceeding or
arbitration commenced
pursuant to
this Article VIII
shall be conducted
in all respects as a DE NOVO trial,
or
arbitration, on the
merits and Indemnitee
shall not be prejudiced by reason of
that adverse determination. In any such proceeding or
arbitration, the
Company
shall have
the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
8.04
COMPANY BOUND. If a
determination shall
have been made or deemed to
have been made
pursuant to Article VI
of this Agreement
that Indemnitee is
entitled to indemnification, the Company shall be bound by such
determination in
any judicial
proceeding or arbitration absent (i) a misstatement by
Indemnitee
of a material fact,
or any omission of a material fact necessary to make
Indemnitee's statement not materially misleading, in connection
with the request
for indemnification,
or (ii) a prohibition of such indemnification under
applicable law.
8.05
PROCEDURES
VALID. The Company shall be precluded
from asserting in
any judicial
proceeding or arbitration commenced pursuant to this Article
VIII
that the procedures and presumptions of this Agreement are not valid,
binding
and enforceable
and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this
Agreement.
8.06
EXPENSES OF ADJUDICATION. In the event that Indemnitee,
pursuant to
this Article VIII,
seeks a judicial
adjudication of or an award in arbitration
to enforce
Indemnitee's rights under, or to recover damages for breach of,
this
Agreement, Indemnitee shall be entitled to
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recover from the Company, and shall be indemnified by the
Company against,
any
and all expenses
(of the types
described in the definition of Expenses in
Section 1.07 of this Agreement) actually and reasonably
incurred by
Indemnitee
in such adjudication or arbitration, but only if Indemnitee
prevails therein. If
it shall be determined in such adjudication or arbitration that Indemnitee is
entitled to receive part but not all of the indemnification or advancement of
Expenses sought,
the expenses
incurred by Indemnitee
in connection with
such
adjudication or arbitration shall be appropriately prorated.
ARTICLE IX
NON-EXCLUSIVITY, INSURANCE, SUBROGATION
9.01
NON-EXCLUSIVITY.
The rights of indemnification and to receive
advancement of
Expenses as provided by this Agreement shall not be deemed
exclusive of any other
rights to which
Indemnitee may at any
time be entitled
under applicable
law, the Certificate of Incorporation, the By-Laws, any
agreement, a vote of shareholders or a resolution of directors, or
otherwise. No
amendment, alteration,
rescission
or replacement of this Agreement or any
provision hereof shall
be effective as to Indemnitee with respect to any action
taken or omitted by such Indemnitee in Indemnitee's
Corporate Status prior to
such amendment, alteration, rescission or replacement.
9.02
INSURANCE. The Company
may maintain an insurance policy or policies
against liability arising out of this Agreement or otherwise.
9.03
SUBROGATION.
In the event of any
payment under this Agreement, the
Company shall be
subrogated to the
extent of such payment to all of the rights
of recovery of
Indemnitee, who shall
execute all papers
required and take all
action necessary to secure such rights, including execution of such
documents as
are necessary to enable the Company to bring suit to enforce such
rights.
9.04 NO
DUPLICATIVE
PAYMENT. The Company shall not be liable
under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
ARTICLE X
FOUNDERS AGREEMENT
10.1
FOUNDERS FUNDAMENTAL TRANSACTION PAYMENT. As a condition to the
founders entering into this Agreement, the Reorganization, Acquisitions, and
Financings (each as defined in that certain private placement memorandum dated
October 23,
2006), if a Fundamental Transaction occurs (that has not been
approved by the Board of Directors of the Company) at any time on or prior
to
the end of Year 5, and, in connection therewith, the purchase price
per share of
Common Stock
offered to the
holders of the Common
Stock (the "Sale Price
Per
Share") equals or
exceeds Ten United
States Dollars (US$10) per share (the
"Initial Share
Price"), then the Company shall pay to the Founder,
promptly
following the
occurrence
of the Fundamental Transaction, an amount in
immediately available funds equal to the product of the amount by
which the Sale
Price Per Share of the Common Stock in the Fundamental Transaction exceeds the
Initial Share Price multiplied by the number of issued and
outstanding shares of
Common Stock
owned by the Founder, or the Founder's wholly-owned limited
liability company,
that were received as
merger consideration
as of the date
hereof as set forth in
Schedule A hereto (the "Shares"). For purposes of
calculating the Founders Fundamental Transaction Payment, the Sale Price Per
Share of the Common
Stock shall be capped at Thirty United Sates Dollars
(US$30). The Company or its successor shall pay the Founder the
amount herein no
later than ten (10) days after the closing of the Fundamental
-- 9
<PAGE>
Transaction. For
purposes of this Section 10.1, "Fundamental Transaction" means
that the Company shall, directly or indirectly, in one or more related
transactions effected after the Effective Date consolidate or merge
with or into
(whether or not the Company is the surviving corporation) another Person;
sell,
assign, transfer, convey or otherwise dispose of all or
substantially all of the
properties or assets
of the Company to
another Person; be the subject of a
purchase, tender or
exchange offer by another Person that is accepted by the
holders of more
than 50% of the
outstanding
shares of voting stock of the
Company; consummate a
stock purchase
agreement or other
business
combination
(including, without limitation, a reorganization, recapitalization, spin-off or
scheme or arrangement)
with another Person
whereby such other Person acquires
more than the 50% of the outstanding shares of common stock of the
Company; or
reclassify or change
the outstanding shares of common stock of the Company
(other than a change in par value, or from par value to no par
value, or from no
par value to par value, or as a result of a subdivision or combination). In
addition, a "Fundamental Transaction" shall occur if, after
the Effective Date,
any "person" or "group" (as these terms are used for purposes of
Sections 13(d)
and 14(d) of the Exchange Act) shall become the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the
aggregate ordinary
voting power
represented by issued and outstanding common
stock of the Company. This founder's payment is not conditioned on
employment in
the Company.
ARTICLE XI
DIRECTORS AGREEMENT
11.01
APPOINTMENT. The stockholders of the Company and the Company as
sole
stockholder of MLI, hereby appoints Mr. McQuiston as a director of each of
the
Company and MLI, and as a member of the acquisitions committee, with the full
power and authority to act on behalf of such board of directors, to the extent
permitted by law. Mr. McQuiston is appointed the Secretary of the
Company, MLI,
AMR Investments, Inc.,
Summit International Logistics, Inc., TUG USA, Inc.,
AmeRussia Shipping Inc., and SeaMaster Logistics, Inc.
11.02
TERM. This Agreement shall commence as of the date hereof, and
shall
continue in effect thereafter until terminated by either party.
11.03 COMPENSATION. As compensation for Mr. McQuiston's services
hereunder, the Company shall pay Mr. McQuiston at the usual and
customarily fees
and rates of such other directors that provide services to the Company. The
Company shall reimburse Mr. McQuiston for all out-of-pocket
expenses incurred in
discharging his
responsibilities as a
director and committee member, and under
this Agreement.
On or about the date
hereof, or as soon as administratively
practicable thereafter, Director shall receive grants under the
Equity Incentive
Plan as follows:
(i)
NON-QUALIFIED STOCK
OPTIONS. A grant of a
Nonqualified Stock Option,
as defined
in the Equity
Incentive Plan, in
respect of 136,000 shares of
Common
Stock, pursuant to an
option grant agreement
annexed as Exhibit B
hereto, in
consideration for his services on the acquisition committee.
(ii) STOCK
APPRECIATION
RIGHTS. A grant of 102,000 Stock Appreciation
Rights,
as defined in the
Equity Incentive
Plan, each in respect
of one
share of
Common Stock,
pursuant to a Stock Appreciation Rights grant
agreement
annexed as Exhibit C hereto. The parties intend that such
grant
cover the
approximate combined federal and state
-- 10
<PAGE>
income
tax liability associated with both (i) the number of shares of
Common
Stock with respect to which the Nonqualified Stock Option is
exercised
and (ii) the number of
shares of Common Stock
underlying
the
exercise
of the Stock Appreciation Rights used to pay for the tax
liability
under clause (i).
All such grants and/or
awards shall conform to the terms and conditions of the
Equity Incentive Plan and the annexed grant agreements between the Director and
the Company. In its
discretion,
the Committee or
Compensation
Committee, as
defined in the Equity Incentive Plan, may make additional awards to
the Director
from time to time. If the Equity Incentive Plan is terminated for any reason
whatsoever, whether by
the Company or any other Person, the Director shall be
entitled to the
benefits due to him under Exhibits B and C, respectively,
hereto,
notwithstanding the
termination
of such Plan.
For purposes of the
immediately preceding
sentence, the termination of the Equity
Incentive Plan
shall result in all unvested Nonqualified Stock Options and Stock
Appreciation
rights granted to the Director under Exhibits B and C,
respectively, to be fully
vested and exercisable.
11.04
D&O INSURANCE.
During the entirety of Term, the Company shall cause
Mr. McQuiston to be covered by and named as an insured or as a
member of a class
of insured under any
policy or contract of
insurance obtained by
it to insure
its directors and officers against personal liability for acts or omissions
in
connection with
service as an officer
or director of the Company or service in
other capacities at
its request ("D&O Insurance Coverage"). The D&O Insurance
Coverage provided to
Mr. McQuiston
shall be of the same
scope and on the same
terms and conditions
as the coverage (if any) provided to other officers or
directors of the Company and shall continue for six (6) years and
for so long as
Mr. McQuiston shall be subject to personal liability relating to such service.
Attached hereto as
EXHIBIT D is a true and accurate copy of the D&O Insurance
Coverage.
11.05 EPLI
INSURANCE.
During the entirety of
the Term, the Company shall
cause Mr. McQuiston to be covered by and named as an insured or as
a member of a
class of insured under
any policy or contract
of insurance
obtained by it to
insure its
directors and officers against personal liability for acts or
omissions in
connection
with service as a
director or officer of the Company,
where such personal
liability could arise
under or in connection
with, or be
attributable to, the
Company's employment practices and procedures ("EPLI
Insurance Coverage").
The EPLI Insurance
Coverage provided to Mr. McQuiston
shall be of the same scope and on the same terms and conditions as the coverage
(if any) provided
to other officers or directors of the Company and shall
continue for so long
as Mr. McQuiston
shall be subject to
personal liability
relating to such service.
11.06
BROWN RUDNICK
BERLACK ISRAELS LLP. The parties
acknowledge
that
Director is serving on the board as an individual and not as a partner of Brown
Rudnick Berlack Israels LLP. Director, as of the date hereof, does not
and will
no longer provide legal representation to the Company. The Company
confirms that
it has been advised of
the danger that the
attorney-client
privilege may not
cover some communications, such as business advice.
Specifically, N.Y. Op.
589
(1988) requires that a lawyer serving on the board of a client
advise the client
of the danger that the privilege may not cover some communications.
The Company
acknowledges and
consents to Brown
Rudnick Berlack Israels LLP and Director
representing
competitors in the
Company's industry,
or clients who deal
with
those competitors. Director will not perform legal
-- 11
<PAGE>
work for the Company,
be involved
in the billing of the
Company or
supervise
others doing
so. Director will recuse himself from Company or board
deliberations concerning the selection of outside counsel and
payment of fees to
Brown Rudnick Berlack
Israels LLP,
litigation
being handled by Brown
Rudnick
Berlack Israels
LLP, disputes/matters dealing with other clients of Brown
Rudnick Berlack Israels LLP in connection with the Company.
The
attorney-client
privilege does not
extend to actions Director takes as a board member. If
Director is asked to give legal advice during the board
meeting, he should not
give it, but seek the opinion of someone who does provide
legal representation
to the Company. Mr.
McQuiston's Founder
shares are less than 1% of the Company
on a fully diluted basis. Brown Rudnick Berlack Israels LLP
has agreed that Mr.
McQuiston may purchase $25,000 of Common Stock pursuant to the
private placement
memorandum dated October 23, 2006.
ARTICLE XII
GENERAL PROVISIONS
12.01
SUCCESSORS AND
ASSIGNS. This
Agreement shall be binding upon the
Company and its
successors
and assigns and shall inure to the benefit of
Indemnitee and
Indemnitee's
legal representatives,
heirs,
executors and
administrators.
12.02
SEVERABILITY. If any provision or provisions of this Agreement
shall
be held to be invalid, illegal or unenforceable for any reason
whatsoever:
(a) the validity,
legality and enforceability of the remaining
provisions of this Agreement (including without limitation, each
portion of any
Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable,
that is not
itself invalid,
illegal or
unenforceable) shall
not in any way be
affected or impaired thereby; and
(b) to the fullest extent possible, the provisions of this
Agreement
(including, without
limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid,
illegal
or
unenforceable,
that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the
intent
manifested by the provision held invalid, illegal or
unenforceable.
12.03 NO
ADEQUATE REMEDY.
The parties
declare that it is
impossible to
measure in money the damages which will accrue to either party by reason of a
failure to perform any of the obligations under this Agreement. Therefore, if
either party shall
institute any action or proceeding to enforce the provisions
hereof, such party
against whom such
action or proceeding
is brought
hereby
waives the claim or defense that the other party has an adequate
remedy at law,
and such party
shall not urge in any
such action or
proceeding
the claim or
defense that the other party has an adequate remedy at law.
12.04
HEADINGS. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute
part of this
Agreement or to affect the construction thereof.
12.05
MODIFICATION AND WAIVER. No supplement, modification or amendment
of
this Agreement
shall be binding unless executed in writing by both of the
parties hereto.
No waiver of any of
the provisions of this Agreement shall be
deemed or shall constitute a waiver of any
-- 12
<PAGE>
other provisions
hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
12.06
INTEGRATION. This Agreement, unless otherwise provided herein,
shall
form the entire
agreement between the
parties and shall
supersede all prior
agreements, oral discussions, promises and representations,
whether in writing
or otherwise.
12.07
NOTICES. All notices,
requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if (i)
delivered by hand and
receipted for by the party to whom said
notice or other
communication shall
have been directed, (ii) sent by prepaid commercial
overnight courier, or
(iii) mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so
mailed:
If to
Indemnitee/Founder, to: As shown with Indemnitee's
Signature below.
If to the
Company, to:
Summit Global Logistics, Inc.
547 Boulevard
Kenilworth, New Jersey 07033
Attention: President
or to such other address as may have been furnished to Indemnitee
by the Company
or to the Company by Indemnitee, as the case may be.
12.08
GOVERNING LAW. The parties agree that this Agreement shall be
governed by, and
construed and enforced
in accordance
with, the laws of the
State of Delaware without application of the conflict of laws principles
thereof.
12.09
REPRESENTATIONS
AND WARRANTIES.
In order to induce
Indemnitee to
enter into this
Agreement, the Company
represents
and warrants to
Indemnitee
that as of the date of this Agreement:
(a) The Company
has full power, authority and legal right to
execute,
deliver and perform its obligations under this Agreement;
(b) The Company has taken all necessary actions to authorize the
execution,
delivery and performance of this Agreement;
(c) This Agreement has been duly executed and delivered on behalf
of
the
Company;
(d) This Agreement constitutes the legal, valid, and binding
obligation
of the Company; and
(e) The Company has authorized, to the fullest extent possible
under
existing
applicable law, the indemnification provisions herein in favor
of
Indemnitee
including, without limitation, by appropriate vote, as required
by applicable law or charters and by-laws, of the shareholders and
directors
of the Company, and by inclusion in each of the its charter
and/or
by-laws, the appropriate provisions.
-- 13
<PAGE>
IN WITNESS
WHEREOF, the parties
hereto have executed this Agreement as of
the date first set forth above.
SUMMIT GLOBAL LOGISTICS, INC.
By: ___________________________
Name:__________________________
Title:
INDEMNITEE
_______________________________
Raymer McQuiston
35 William Penn Road
Warren, NJ 07059
-- 14
<PAGE>
SCHEDULE A
229,658
<PAGE>
EXHIBIT A
SUMMIT GLOBAL LOGISTICS, INC.
2006 EQUITY INCENTIVE PLAN
1. PURPOSE AND ELIGIBILITY. The purpose of this 2006 Equity
Incentive Plan (the
"Plan") of Summit Global Logistics, Inc., a Delaware corporation
(the "COMPANY")
is to provide stock options, stock issuances and other equity
interests in the
Company (each, an "AWARD") to (a) Employees, officers, Directors, consultants,
independent contractors, and advisors of the Company or any Parent
or Subsidiary
thereof, and (b) any
other Person who is
determined
by the Committee of the
Board of Directors of the Company (the "BOARD") to have made (or is
expected to
make) contributions
to the Company or any
Parent or Subsidiary
thereof. Any
person to whom an Award has been granted under the Plan is called a
"PARTICIPANT."
Additional definitions
are contained in Section 2 and
certain
other Sections of the Plan.
2. CERTAIN DEFINITIONS.
a.
"AFFILIATE" shall mean
i. any
Person which
directly or
indirectly
beneficially
owns
(within the
meaning of Rule 13d-3 promulgated under the
Exchange Act) securities or other equity interests possessing
more than 50% of the aggregate voting power in the election of
directors (or
similar governing body) represented by all
outstanding securities of the Company; or
ii. any Person
with respect to which the Company beneficially owns
(within the
meaning of Rule 13d-3 promulgated under the
Exchange Act) securities or other equity interests possessing
more than 50% of the aggregate voting power in the election of
directors (or similar
governing body) represented by, or more
than 5% of the aggregate value of, all outstanding securities
or other equity interests of such Person.
b. "BASE
SALARY" shall mean a Participant's "Base Salary" as such term is
defined in the Employment Agreement.
c.
"BUSINESS ENTITY" shall mean (i) the Company or (ii) any Parent or
Subsidiary thereof.
d.
"BUSINESS ENTITY LOCATION" means a Business Entity office
consisting of
one or more buildings within 25 miles of each other.
e. "CAUSE"
shall mean, "Cause," as defined in the Participant's Employment
Agreement or Director's Agreement, and in the absence of such
definition, Cause
shall mean,
as determined by the Committee in its sole discretion, the
Participant's
i.
material act of dishonesty with respect to the Business Entity
that employs the Participant;
ii. conviction
for a felony, gross
misconduct
that is likely to
have a material
adverse effect on the business and affairs of
the Business Entity that employs the Participant; or
<PAGE>
iii. other misconduct,
such as excessive
absenteeism or failure to
comply with the rules of the Business Entity that employs the
Participant.
f.
"CHANGE IN
CONTROL" shall mean the occurrence of the first step,
including, but not
limited to, commencement of negotiations, in a process that
results in any one of the following events:
i. the
acquisition by any individual, entity or group (within the
meaning of Section
13(d)(3) or
14(d)(2) of the Securities
Exchange Act of 1934,
as amended) (the
"Act") of
beneficial
ownership (within the meaning of Rule 13d-3 of the Act)
