Document:

Unassociated Document

 

EXECUTION COPY

 

INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT (“Agreement”) is made as of December 1, 2011, by and among: (i) Radiant Logistics, Inc., a Delaware corporation (the “Company”); (ii) Caltius Partners IV, LP, a Delaware limited partnership (together with its successors and assigns, “Caltius Partners”); and (iii) Caltius Partners Executive IV, LP, a Delaware limited partnership (together with its successors and assigns, “Caltius Executive” and together with Caltius Partners, the “Investors”).

RECITALS

 

A.           Pursuant to an Investment Agreement dated as of the date hereof (including all schedules and exhibits thereto, as from time to time amended, restated, supplemented or otherwise modified from time to time, the “Investment Agreement”) by and among the Company, the Investors and the Subsidiaries of the Company, the Investors are investing the aggregate sum of $10,000,000 in the Company and its Subsidiaries in return for senior subordinated notes of the Company and its Subsidiaries (the “Notes”) and, in connection therewith, the Company is issuing to the Investors up to 600,000 shares (the “Shares”) of common stock of the Company, par value $0.001 per share (the “Common Stock”).

 

B.           The execution and delivery of this Agreement is a condition precedent to the consummation of the Investors’ obligations under the Investment Agreement.

 

NOW, THEREFORE, the parties hereto agree as follows:

1.           Definitions. As used in this Agreement, the following terms shall have the following respective meanings:

1.1           “Affiliates” means, when used with respect to a specified Person, (a) another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified, (b) another Person that directly or indirectly owns Equity Interests representing 5% or more of the total voting power of the voting Equity Interests (on a fully diluted basis) of such Person (whether or not currently exercisable), and (c) any officer, director or management employee of a Person who would be an affiliate pursuant to clause (a) or (b) of this definition.

1.2           “Applicable Law” means any applicable Federal, state, foreign or local law, ordinance, order, decree, regulation, rule or requirement of any governmental authority.

1.3           “Consolidated” means the consolidation in accordance with GAAP of the accounts or other items as to which such term applies.

  

  

  

1.4           “Equity Interests” of any Person means any and all shares of capital stock, ownership, membership or profit sharing interest (however designated), participation or other equivalents (however designated) of capital stock of such Person (if such Person is a corporation), any and all equivalent ownership interests in such Person (if such Person is other than a corporation), any securities convertible into or exchangeable for any of the foregoing and any and all warrants, options or other rights to purchase any of the foregoing.

1.5           “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

1.6           “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

1.7           “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.

1.8           “GAAP” means U.S. generally accepted accounting principles, consistently applied, for the period or periods in question.

1.9           “Person” means any natural person, corporation, business trust, limited liability company, joint venture, association, company, partnership or government, or any agency or political subdivision thereof.

1.10           “Registrable Securities” means the Shares, together with any Equity Interests of the Company issued or issuable as a dividend or other distribution with respect to, or in exchange for or in replacement of, the Shares, whether by stock split, recapitalization, merger, consolidation or otherwise, until the registration rights granted by this Agreement with respect to the Shares and such other Equity Interests have terminated in accordance with this Agreement.

1.11           “Requisite Investors” means, as of any date of determination, the holders of at least a majority of the Shares held by all Investors on such date.

1.12           “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

1.13           “SEC” means the U.S. Securities and Exchange Commission or any successor governmental authority.

2.           Put Right.

2.1           The Requisite Investors shall have the right (the “Put Right”) to cause the Company to redeem all of the Shares then held by all Investors (or any other Equity Interests into which such Shares may have been converted or for which such Shares may have been exchanged) as provided in this Section 2.

  

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2.2           The Requisite Investors shall have the right to exercise the Put Right at any time on or after the Put Trigger Date by providing written notice to the Company (the “Put Notice”).  The term “Put Trigger Date” shall mean the earliest of (a) the date on which the Common Stock is no longer listed and registered, quoted or eligible for quotation, as applicable, on one of the following: (i) the NYSE, (ii) the NYSE Amex, (iii) NASDAQ, (iv) OTC Bulletin Board, (v) OTCQX or (vi) OTCQB, (b) 90 days following written notice from the Investors regarding the Company’s failure to timely file all reports required by the Exchange Act if the Company has not cured such failure within such 90-day period, and (c) the Company is unable to register the Shares pursuant to Section 3 and the Company has not cured such inability within 30 days following written notice from the Investors.

2.3           Upon delivery of the Put Notice, the Company and the Requisite Investors shall negotiate in good faith to determine the fair market value of the Shares (the “Fair Market Value”).  If the Company and Investors are unable to agree on the Fair Market Value of the Shares within 15 days after the Company’s receipt of the Put Notice, then the Fair Market Value of the Shares shall be determined as follows.  An investment banking firm of recognized national or regional standing (each, an “Investment Bank”) selected jointly by the Company and the Requisite Investors or, if the Company and the Requisite Investors cannot agree on an Investment Bank within five days after the date either the Company or the Requisite Investors requested that one is selected, each of the Company and the Requisite Investors shall select an Investment Bank and direct such two firms to designate a third Investment Bank within five days after being so directed whose determination of the Fair Market Value of the Shares shall be final and binding on the Company and Investors.  The Investment Bank so agreed to by the Company and the Requisite Investors or the third Investment Bank so selected is hereinafter referred to as the “Arbitrator.”  The Company and the Requisite Investors shall submit their respective valuations and other relevant data to the Arbitrator, and shall use their respective commercially reasonable efforts to cause the Arbitrator to deliver to the Company and the Requisite Investors, as promptly as practicable, and in any event no later than 14 days after its engagement, a written report setting forth in reasonable detail the Arbitrator’s calculation and determination of Fair Market Value of the Shares, which valuation and report shall be an amount no lower than the lowest proposed valuation and no higher than the highest proposed valuation and shall be final and binding upon the Company and the Investors.  The costs of the engagement of such Arbitrator shall be borne 50% by the Company and 50% by the Investors.

2.4           Notwithstanding anything to the contrary herein, in any determination of the Fair Market Value of the Shares: (a) no discount shall be made for reasons of illiquidity, lack of control or similar factors; and (b) no discount shall be applied or taken to reflect any actual or potential changes in the management of the Company and its Subsidiaries, or any impact on the Company or its Subsidiaries related thereto, that has occurred or may occur from and after the date of determination of Fair Market Value, or in connection with or related to any transaction occurring at the time of such determination.

  

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2.5           Within 90 days after the determination of the Fair Market Value of the Shares, the Company shall purchase from the Investors, and the Investors shall sell to the Company, the Shares, at a mutually agreeable time and place (the “Put Closing”).  At the Put Closing (a) the Investors shall deliver to the Company the certificates representing the Shares or an affidavit of loss in a form reasonably satisfactory to the Company and (b) the Company shall pay to the Investors an amount equal to the Fair Market Value for the Shares by wire transfer of immediately available funds pursuant to written instructions provided by the Investors to the Company at least two business days prior to the Put Closing.

2.6           If the funds of the Company legally available for the redemption of the Shares in connection with any Put Closing are insufficient to redeem all of the Shares, then (a) those funds which are legally available therefor shall be used to redeem as many Shares as possible and allocated on a pro rata basis among the Investors, (b) until all of the Shares are redeemed, the Company shall not voluntarily redeem any other Equity Interests of the Company or voluntarily prepay any indebtedness for borrowed money of the Company or any of its Subsidiaries and (c) the Company shall promptly issue to each Investor a one-year subordinated promissory note on terms and conditions acceptable to the Requisite Investors and similar to those contained in the Notes (as defined in the Investment Agreement), in the principal amount equal to the Fair Market Value for any Shares that have not been redeemed, bearing interest at the rate of interest applicable to the Notes (regardless of whether such Notes remain outstanding), or the highest rate permitted by Applicable Law, whichever is lower, and the Company shall use 100% of its cash flow in excess of expenses in the ordinary course of business to make mandatory prepayments on a quarterly basis, to the extent doing so would not (i) cause a default under any material agreement to which the Company is a party, or (ii) result in a violation of Applicable Law.

2.7           At any time prior to the date that is 30 days following the date that the Fair Market Value of the Shares is finally determined in accordance with this Section 2, the Requisite Investors may rescind their exercise of the Put Right upon written notice to the Company.  Any such rescission shall not affect the right of the Requisite Investors to exercise the Put Right granted herein at any time thereafter prior to termination of this Section 2.  Notwithstanding any provision of this Agreement to the contrary, the fees and costs of any Arbitrator retained to determine Fair Market Value in connection with the exercise of the Put Right following any such rescission shall be borne by the Investors.

2.8           Termination.  The right of the Requisite Investors to issue a Put Notice shall terminate upon the earliest of (a) the date on which the Investors no longer own any Shares and (b) the tenth anniversary of the date of this Agreement.

  

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3.           Registration Rights.

3.1           Demand Registrations.  With a view to making available to the Investors the benefits of Rule 144 of the Securities Act and any other rule or regulation of the SEC that may at any time permit an Investor to sell Equity Interests of the Company to the public without registration or pursuant to a registration on Form S-3, until the first anniversary of the date of this Agreement, the Company shall: (a) make and keep public information available as required for Rule 144(c) under the Securities Act; (b) use its best efforts to file with the SEC in a timely manner all reports and other documents required of the Company to be filed under the Securities Act and the Exchange Act; and (c) furnish to any Investor, upon request, a written statement by the Company as to its compliance with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company as such Investor may reasonably request to avail itself of any similar rule or regulation of the SEC allowing it to sell any such securities without registration.  Until the first anniversary of this Agreement, if the Company fails to remain in compliance with Rule 144(c) for a period of 30 days or more, the Requisite Investors shall have the right, at any time and from time to time thereafter, to request registration under the Securities Act of all or part of their Registrable Securities on Form S-1 or, if available, on Form S-3.  Each request for such registration shall specify the number of Registrable Securities requested to be registered and the minimum desired price per Share in such offering.  All registrations requested pursuant to this Section 3.1 are referred to herein as “Demand Registrations”.

(a)           Priority on Demand Registrations.  The Company will not include in any Demand Registration any Equity Interests which are not Registrable Securities without the prior written consent of the Requisite Investors.  If a Demand Registration is an underwritten offering arranged by the Investors and the managing underwriters advise the Company in writing that in their opinion the number of Registrable Securities and other securities requested to be included therein exceeds the number of Registrable Securities and other securities which can be sold in such offering without adversely affecting the marketability of the offering, the Company will include in such registration, prior to the inclusion of any securities which are not Registrable Securities, the number of Registrable Securities requested to be included which in the opinion of such underwriters can be sold without adversely affecting the marketability of the offering, pro rata among the Investors.

(b)           Selection of Underwriters.  The Requisite Investors shall select the investment bankers and managers to administer any Demand Registration.

(c)           Deferral of Registration.  Notwithstanding the foregoing, if the Company furnishes to the Requisite Investors a certificate signed by the President of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its stockholders generally for such registration statement to be filed, the Company shall have the right to defer such filing for a period of not more than 60 days after receipt of the request of the Requisite Investors; provided, however, that the Company may not utilize the right set forth in this Section 3.1(c) more than once in any 12-month period.

3.2           Piggyback Registrations.

(a)           Right to Piggyback.  Whenever the Company proposes to register any of its securities under the Securities Act (other than pursuant to a Demand Registration, a registration on Form S-8 or Form S-4 or any successor form, a registration covering only an employee benefit plan (as defined in Rule 405 of the Securities Act) or a registration covering only securities proposed to be issued in exchange for securities or assets of another corporation) and the registration form to be used may be used for the registration of Registrable Securities (a “Piggyback Registration”), the Company will give prompt written notice to the Investors and, subject to Section 3.2(b), shall include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 15 days after the day on which the Company’s notice is delivered to the Investors.

  

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(b)           Priority on Subsequent Registrations.  If a Piggyback Registration is an underwritten registration, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of the offering, the Company will include in such registration only the amount of securities which the managing underwriters have advised can be sold, and will allocate such amount, first, the amount of securities the Company proposes to sell and second, pro rata among the Registrable Securities requested to be included in such registration and all other securities requested to be included in such registration.

(c)           Deferral of Registration.  Notwithstanding the foregoing, if the Company furnishes to the Requisite Investors a certificate signed by the President of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its stockholders generally for such registration statement to be filed, the Company shall have the right to defer such filing for a period of not more than 60 days after receipt of the request of the Requisite Investors; provided, however, that the Company may not utilize the right set forth in this Section 3.2(c) more than once in any 12-month period.

3.3           Undertakings of the Company.  The Company agrees not to effect any public sale or distribution (including sales pursuant to Rule 144) of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities, during the seven days prior to and during the 90-day period beginning on the effective date of any underwritten Demand Registration or any underwritten Piggyback Registration (except as part of such underwritten registration or pursuant to registrations on Form S-8 or Form S-4 or any successor form, a registration covering only an employee benefit plan (as defined in Rule 405 of the Securities Act) or a registration covering only securities proposed to be issued in exchange for securities or assets of another corporation), unless the underwriters managing the registered public offering otherwise agree.

3.4           Registration Procedures.  Whenever the Investors have requested that any Registrable Securities be registered pursuant to this Agreement, the Company will use its best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition therefor, and pursuant thereto, the Company will, as expeditiously as possible, do all of the following:

(a)           Registration Statement.  Prepare and file with the SEC a registration statement with respect to such Registrable Securities within 90 days after any  written request for registration and use its best efforts to cause such registration statement to become effective (provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company will furnish to the counsel selected by the Requisite Investors copies of all such documents proposed to be filed, which documents will be subject to the review and approval of such counsel) and use its best efforts to avoid the issuance of (or if issued, obtain the withdrawal of) any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction as soon as possible;

  

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(b)           Amendments & Supplements.  Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof, which period shall not be less than six months;

(c)           Furnish Copies. Furnish to each Investor such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities covered by such registration statement;

(d)           Blue Sky Compliance. Use its best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such United States jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify for this subparagraph, (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction);

(e)           Notifications.  Notify each Investor at any time when a registration statement related thereto is effective under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, in light of the circumstances then existing, and, at the request of any such seller, the Company will prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading;

(f)           Listing.  Cause all such Registrable Securities to be listed on a securities exchange or quoted on an automated inter-dealer quotation system on which similar Equity Interests issued by the Company are then listed;

(g)           Transfer Agent; Registrar.  Provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement;

  

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(h)           Underwriting Agreements, Etc.  In the event of an underwritten public offering, enter into and perform its obligations under such customary agreements (including underwriting agreements in customary form) and take all such other actions as the Requisite Investors or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, effecting a stock split or a combination of shares);

(i)           Supply Information.  Make available for inspection by any Investor, any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant or other agent retained by any Investor or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement; and

(j)           Obtain Cold Comfort Letter.  Obtain a cold comfort letter from the Company’s independent public accountants in customary form, and covering such matters as are customarily given or covered by independent public accountants in an underwritten public offering of securities, addressed to the Investors.

3.5           Registration Expenses.  All expenses other than underwriting discounts and commissions relating to Registrable Securities incurred in connection with the registration, filings or qualifications pursuant to Section 3.1 and Section 3.2 above, including, without limitation, all registration, filing and qualification fees, printing and accounting fees, listing fees and expenses, fees and expenses of compliance with securities or blue sky laws, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel for the Investors shall be borne by the Company.  Underwriting discounts and commissions relating to Registrable Securities will be borne and paid ratably by the Investors.

3.6           Indemnification Provisions.

           (a)           Indemnity of Investors.  The Company agrees to indemnify, to the extent permitted by law, each Investor, its officers and directors and each Person who controls such Investor (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company or any underwriter by such Investor expressly for use therein or by such Investor’s failure to deliver to the Company in writing the information and affidavits required by subsection (b) of this Section 3.6 after the Company has furnished such Investor with a sufficient number of copies of the registration statement or prospectus or any amendments or supplements thereto, or any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any federal or state securities law or any rule or regulation promulgated thereunder in connection with any such registration statement.

  

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(b)           Disclosure and Indemnification by Investors.  In connection with any registration statement in which an Investor is participating, each such Investor will furnish to the Company in writing such information and affidavits relating to disclosure concerning such Investor required to be included in the registration statement as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, will indemnify the Company, its directors and officers and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue or alleged untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Investor; provided, however, that the obligation to indemnify will be several, not joint and several, among the Investors; and provided, further, however that the liability of each Investor will be in proportion to and limited to the net amount received by such Investor from the sale of Registrable Securities pursuant to such registration statement.

(c)           Notice and Defense.  Any person entitled to indemnification hereunder will: (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification; and (ii) unless in the reasonable opinion of such indemnified party's counsel a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party.  The failure to give timely notice will not relieve the receiving party of any obligation unless such delay unduly prejudices such party's ability to defend such claim.  If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld).  An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim.

(d)           Continuing and Surviving Obligations; Right of Contribution.  The indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, or controlling person of such indemnified party and will survive the transfer of securities after the completion of the offering.  The Company also agrees to make such provisions, as are reasonably requested by any indemnified party, for contribution to such party in the event the Company’s indemnification is unavailable for any reason.

3.7.          Other Registration Provisions.  Notwithstanding the provisions of this Section 3, at any time the Company is caused to file, secure effectiveness of, or maintain the effectiveness of, a registration statement covering Registrable Securities, the following provisions shall apply:

  

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(a)           The Company may: (i) reduce the number of Registrable Securities to be included in such registration statement to only such number of shares as may be permitted under Rule 415 or other applicable rules under the Securities Act; and (ii) delay the filing of such registration statement for up to an additional sixty (60) days (but not to be used more than once in any 12-month period without the written consent of the Investors) if the Company determines that such a delay is necessary either: (x) to obtain additional financial statements for inclusion in such registration statement as a result of an acquisition or probable acquisition of a “significant subsidiary” as such term is defined by the SEC in Regulation S-X; or (y) in order to complete or otherwise bring to fruition a material business combination or proposed material corporate transaction which in a pending status would render difficult the completion of a registration statement in accordance with applicable SEC regulations.

(b)           The Company’s obligation to register the Registrable Securities in Section 3 shall extend only to the inclusion of the Registrable Securities in an eligible registration statement filed under the Securities Act.  The Company shall have no obligation to assure the terms and conditions of distribution, to obtain a commitment from an underwriter relative to the sale of the Registrable Securities or to otherwise assume any responsibility for the manner, price or terms of the distribution of the Registrable Securities.

(c)           The Company’s obligations to register the Registrable Securities in Section 3 shall extend only to the inclusion of the Registrable Securities in a registration statement to the extent permissible under Rule 415 or other applicable rules under the Securities Act.

(d)           At any time when a registration statement effected pursuant to Section 3 is effective, upon written notice from the Company to the Investors that the Company has determined in good faith that the sale of the Registrable Securities pursuant to such registration statement would require disclosure of non-public material information, the Investors shall suspend sales of Registrable Securities pursuant to such registration statement until such time as the Company notifies them that such material information has been disclosed to the public or has ceased to be material, or that sales pursuant to such registration statement may otherwise be resumed; provided, however, that any such suspension of sales shall not cover a period of more than 60 days within any twelve month period.

3.8           Termination of Piggyback Registration Rights.  The right of the Investors to request inclusion of Registrable Securities in any registration pursuant to Section 3.2 shall terminate upon the earlier to occur of (a) the date on which the Investors no longer own any Registrable Securities and (b) the tenth anniversary of the date of this Agreement.

4.           Financial Reports.

4.1           Delivery of Financial Reports.  During any period in which the Company is no longer subject to the reporting requirements under the Exchange Act, the Company agrees to furnish to the Investors the following:

  

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(a)           within 90 days after the end of each fiscal year, the Consolidated and consolidating balance sheets and related statements of operations, stockholders’ equity and cash flows, showing the financial condition of the Company and its Subsidiaries, as of the close of such fiscal year and the results of its operations during such year, such Consolidated statements to be audited by an independent public accountant of recognized national or regional standing acceptable to the Investors, and accompanied by an opinion of such accountant (which shall not be qualified in any material respect) that such financial statements fairly present the financial condition, results of operations and cash flows of the Company and its Subsidiaries on a Consolidated basis in accordance with GAAP; and

(b)           within 45 days after the end of each fiscal quarter of each fiscal year, the Consolidated and consolidating balance sheet and related statements of operations, stockholders’ equity and cash flows showing the financial condition of the Company and its Subsidiaries, as of the close of such fiscal quarter and the results of its operations during such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the preceding fiscal year, all in reasonable detail and all certified by its chief financial officer as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Company and its Subsidiaries on a Consolidated basis in accordance with GAAP (but without footnotes), subject to normal year-end audit adjustments, together with a quarterly management summary description of operations.

4.2           Termination.  The obligations of the Company under this Section 4 shall terminate as to each Investor on the date on which such Investor no longer owns any Equity Interests of the Company.

5.           Miscellaneous.

5.1           Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties as contemplated herein.  The rights of an Investor under this Agreement may be assigned (but only with all related obligations) by an Investor to any transferee of the Shares; provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee executes a Joinder Agreement in the form of Exhibit A attached hereto agreeing to be bound by and subject to the terms and conditions of this Agreement.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

5.2           Expenses. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys fees, costs and disbursements in addition to any other relief to which a party may be entitled.  Notwithstanding any provision to the contrary, the provisions of this Section 5.2 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby and thereby, or the invalidity or unenforceability of any term or provision of this Agreement.

  

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5.3           Governing Law.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN DELAWARE.

5.4           WAIVER OF JURY TRIAL.

(a)           EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.  EACH PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.4.

(b)           IN THE EVENT THAT THE WAIVER OF JURY TRIAL SET FORTH ABOVE IS NOT ENFORCEABLE, AND EACH PARTY TO SUCH ACTION DOES NOT SUBSEQUENTLY WAIVE IN AN EFFECTIVE MANNER UNDER APPLICABLE LAW ITS RIGHT TO A TRIAL BY JURY, THE PARTIES HERETO HEREBY ELECT TO PROCEED AS FOLLOWS:

 

(i)           WITH THE EXCEPTION OF THE ITEMS SPECIFIED IN CLAUSE (b) BELOW, ANY CONTROVERSY, DISPUTE OR CLAIM (EACH, A “CONTROVERSY”) BETWEEN THE PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT WILL BE RESOLVED BY A REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF SECTIONS 638, ET SEQ. OF THE CALIFORNIA CODE OF CIVIL PROCEDURE (“CCP”), OR THEIR SUCCESSOR SECTIONS, WHICH SHALL CONSTITUTE THE EXCLUSIVE REMEDY FOR THE RESOLUTION OF ANY CONTROVERSY, INCLUDING WHETHER THE CONTROVERSY IS SUBJECT TO THE REFERENCE PROCEEDING.  EXCEPT AS OTHERWISE PROVIDED ABOVE, VENUE FOR THE REFERENCE PROCEEDING WILL BE IN ANY COURT IN WHICH VENUE IS APPROPRIATE UNDER APPLICABLE LAW (THE “COURT”).

  

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(ii)           THE MATTERS THAT SHALL NOT BE SUBJECT TO A REFERENCE ARE THE FOLLOWING: (A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN REAL OR PERSONAL PROPERTY; (B) EXERCISE OF SELF HELP REMEDIES (INCLUDING SET-OFF); (C) APPOINTMENT OF A RECEIVER; AND (D) TEMPORARY, PROVISIONAL OR ANCILLARY REMEDIES (INCLUDING WRITS OF ATTACHMENT, WRITS OF POSSESSION, TEMPORARY RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS). THIS AGREEMENT DOES NOT LIMIT THE RIGHT OF ANY PARTY TO EXERCISE OR OPPOSE ANY OF THE RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) AND (B) OR TO SEEK OR OPPOSE FROM A COURT OF COMPETENT JURISDICTION ANY OF THE ITEMS DESCRIBED IN CLAUSES (C) AND (D).  THE EXERCISE OF, OR OPPOSITION TO, ANY OF THOSE ITEMS DOES NOT WAIVE THE RIGHT OF ANY PARTY TO A REFERENCE PURSUANT TO THIS AGREEMENT.

 

(iii)           THE REFEREE SHALL BE A RETIRED JUDGE OR JUSTICE SELECTED BY MUTUAL WRITTEN AGREEMENT OF THE PARTIES.  IF THE PARTIES DO NOT AGREE WITHIN 10 DAYS OF A WRITTEN REQUEST TO DO SO BY ANY PARTY, THEN, UPON REQUEST OF ANY PARTY, THE REFEREE SHALL BE SELECTED BY THE PRESIDING JUDGE OF THE COURT (OR HIS OR HER REPRESENTATIVE).  A REQUEST FOR APPOINTMENT OF A REFEREE MAY BE HEARD ON AN EX PARTE OR EXPEDITED BASIS, AND THE PARTIES AGREE THAT IRREPARABLE HARM WOULD RESULT IF EX PARTE RELIEF IS NOT GRANTED.

 

(iv)           EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE REFEREE SHALL DETERMINE THE MANNER IN WHICH THE REFERENCE PROCEEDING IS CONDUCTED INCLUDING THE TIME AND PLACE OF HEARINGS, THE ORDER OF PRESENTATION OF EVIDENCE, AND ALL OTHER QUESTIONS THAT ARISE WITH RESPECT TO THE COURSE OF THE REFERENCE PROCEEDING.  ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR TRIAL, SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT THAT WHEN ANY PARTY SO REQUESTS, A COURT REPORTER WILL BE USED AT ANY HEARING CONDUCTED BEFORE THE REFEREE, AND THE REFEREE WILL BE PROVIDED A COURTESY COPY OF THE TRANSCRIPT.  THE PARTY MAKING SUCH A REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY THE COURT REPORTER.  SUBJECT TO THE REFEREE’S POWER TO AWARD COSTS TO THE PREVAILING PARTY, THE PARTIES WILL EQUALLY SHARE THE COST OF THE REFEREE AND THE COURT REPORTER AT TRIAL.

  

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(v)           THE REFEREE SHALL BE REQUIRED TO DETERMINE ALL ISSUES IN ACCORDANCE WITH EXISTING APPLICABLE CASE LAW AND STATUTORY LAW.  THE RULES OF EVIDENCE APPLICABLE TO PROCEEDINGS AT LAW IN THE COURT WILL BE APPLICABLE TO THE REFERENCE PROCEEDING.  THE REFEREE SHALL BE EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF, ENTER EQUITABLE ORDERS THAT WILL BE BINDING ON THE PARTIES AND RULE ON ANY MOTION THAT WOULD BE AUTHORIZED IN A COURT PROCEEDING.  THE REFEREE SHALL ISSUE A DECISION IN THE FORM OF A REASONED STATEMENT AT THE CLOSE OF THE REFERENCE PROCEEDING WHICH DISPOSES OF ALL CLAIMS OF THE PARTIES THAT ARE THE SUBJECT OF THE REFERENCE.  PURSUANT TO CCP SECTION 644, SUCH DECISION SHALL BE ENTERED BY THE COURT AS A JUDGMENT OR AN ORDER IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE COURT AND ANY SUCH DECISION WILL BE FINAL, BINDING AND CONCLUSIVE.  THE PARTIES RESERVE THE RIGHT TO APPEAL FROM THE FINAL JUDGMENT OR ORDER OR FROM ANY APPEALABLE DECISION OR ORDER ENTERED BY THE REFEREE.  THE PARTIES RESERVE THE RIGHT TO FINDINGS OF FACT, CONCLUSIONS OF LAWS, A WRITTEN STATEMENT OF DECISION, AND THE RIGHT TO MOVE FOR A NEW TRIAL OR A DIFFERENT JUDGMENT, WHICH NEW TRIAL, IF GRANTED, IS ALSO TO BE A REFERENCE PROCEEDING UNDER THIS PROVISION.

5.5           Jurisdiction; Consent to Service of Process.

(a)           Each of the parties hereby irrevocably and unconditionally submits, for itself, its Subsidiaries and its property, to the nonexclusive jurisdiction of any court in the County of Los Angeles or Federal court of the United States of America sitting in the County of Los Angeles, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the Shares, or for recognition or enforcement of any judgment and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in the State of California or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Applicable Law.  Nothing in this Agreement shall affect any right that the Investors may otherwise have to bring any action or proceeding relating to this Agreement or the Shares against the Company, its Subsidiaries or their respective properties in the courts of any jurisdiction.

(b)           The Company hereby irrevocably and unconditionally waives on behalf of itself and its Subsidiaries, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit action or proceeding arising out of or relating to this Agreement or the Shares in any California state or Federal court.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(c)           Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 5.9.  Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by Applicable Law.

5.6           Specific Performance.  In addition to any and all other remedies that may be available at law in the event of any breach of this Agreement, each Investor shall be entitled to specific performance of the agreements and the obligations of the other parties hereto and to such other injunctive or other equitable relief as maybe granted by a court of competent jurisdiction.

  

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5.7           Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile transmission, e-mail in pdf format or similar electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.

5.8           Titles and Subtitles.  The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.

5.9           Notices.  Notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows: if to the Company, 405 114th Avenue S.E., Bellevue, WA 98004, Attention: Chief Financial Officer (Facsimile No. (425) 462-0768); and if to any Investor, c/o Caltius Capital Management, LP, 11766 Wilshire Blvd., Suite 850 Los Angeles, CA 90025, Attention: Greg Howorth and Gavin Bates (Facsimile No. 310-996-9577).

 

5.10         Severability.  In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any way, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction).  The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

5.11         Aggregation of Registrable Securities.  All Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliates may apportion such rights as among themselves in any manner they deem appropriate.

5.12         Entire Agreement.  This Agreement constitutes the entire contract between the parties relative to the subject matter hereof.  Any other previous agreement among the parties with respect to the subject matter hereof is superseded by this Agreement.  Nothing in this Agreement, expressed or implied, is intended to confer upon any party, other than the parties hereto and thereto and the indemnified persons identified in Section 3, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

  

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5.13         Delays or Omissions.  No failure or delay of an Investor in exercising any power or right hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Investors hereunder are cumulative and are not exclusive of any rights or remedies that it would otherwise have.  No waiver of any provision of this Agreement or consent to any departure by the Company or its Subsidiaries therefrom shall in any event be effective unless the same shall be permitted pursuant to this Section 5.13, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice or demand on the Company or its Subsidiaries in any case shall entitle the Company or its Subsidiaries to any other or further notice or demand in similar or other circumstances.  Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the parties hereto.

{Signatures appear on the following page.}

  

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IN WITNESS WHEREOF, the parties have executed this Investor Rights Agreement as of the date first written above.

	
COMPANY:

	  
	
RADIANT LOGISTICS, INC.

	  
	
By:

	
/s/ Bohn H. Crain

	  	
Name:

	  	
Title:

	  
	
INVESTORS:

	  
	
CALTIUS PARTNERS IV, LP

	
By:  CP IV, LP, its general partner

	  
	
By:

	
/s/ Gregory J. Howorth   

	  	
Name:

	  	
Title:

	  
	
CALTIUS PARTNERS EXECUTIVE IV, LP

	
By:  CP IV, LP, its general partner

	  
	
By:

	
/s/ Gregory J. Howorth

	  	
Name:

	  	
Title:

 

  

 

  

EXHIBIT A

 

Form of Joinder Agreement

 

The undersigned hereby agrees, effective as of the date hereof, to become a party to that certain Investor Rights Agreement (the “Agreement”) dated as of December 1, 2011, by and among Radiant Logistics, Inc. (the “Company”) and the other parties named therein, and for all purposes of the Agreement, the undersigned shall be included within the term Investor (as defined in the Agreement).  The address and facsimile number to which notices may be sent to the undersigned is as follows:

 

	
 

    

	 	  
	
 

 

	 	  
	
 

     

	 	  
	
 

    

	 	  
	
 

Facsimile No:_________________

	 	  
	  	 	
    

	  	 	
[NAME OF UNDERSIGNED]Unassociated Document

EXECUTION VERSION

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) dated this 1st day of December, 2011 is between Radiant Global Logistics, Inc., a Washington corporation with a place of business at 405 114th Avenue SE, Third Floor, Bellevue, Washington  98004 (the “Company”), and Jonathan Fuller, an individual residing at 14493 S.P.I.D. #323, Corpus Christi, Texas  78418 (the “Executive”).

 

RECITALS

 

WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, upon the terms and conditions set forth in this Agreement; and

 

WHEREAS, the Company and Executive have agreed to enter into this Agreement in consideration for, and in connection with, that certain Asset Purchase Agreement (the “Asset Purchase Agreement”) dated as of November 15, 2011 by and between, among others, the Executive, ISLA International, Ltd. (“ISLA”) and the Company.

 

NOW, THEREFORE, in consideration of the foregoing, the mutual and dependent promises hereinafter set forth, and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, do hereby agree as follows:

 

ARTICLE 1

 

EMPLOYMENT AND TERM

 

1.1           Employment/Title.  The Company hereby agrees to employ the Executive and the Executive hereby accepts employment as Vice President – Mexico Markets of the Company under the terms and conditions set forth in this Agreement.  The Executive shall report to the Chief Executive Officer and Board of Directors of the Company or such other person as the Chief Executive Officer or Board of Directors shall designate, for the performance of his duties, and shall have responsibility for such duties as are customarily associated with his position and such other executive level duties and responsibilities, consistent therewith and with the status of a senior level executive of the Company, as may be assigned to the Executive by the Chief Executive Officer of the Company or the Board of Directors of the Company or such other person as the Board of Directors shall designate.  The Executive shall not be required to live in Laredo, Texas, and in that regard shall only be required to be present in Laredo, Texas for an amount of time sufficient to discharge the Executive’s duties and responsibilities under this Agreement. 

  

  

  

1.2           Employment/Duties.  During the Term (as defined in Section 1.4 hereof), Executive shall continue to faithfully devote substantially all of his working time, attention and skill to the performance of his duties.  Executive shall conduct himself at all times so as to advance the best interests of the Company, and shall not undertake or engage in any other business activities or affiliations which conflict or interfere with the performance of his services hereunder without the prior written consent of the Chief Executive Officer or Board of Directors of the Company.  Executive also agrees that he shall not usurp or misappropriate, either to himself, or to any other person or entity, any corporate or other opportunities that would otherwise be available to the Company. Notwithstanding the above and for avoidance of doubt, these duties are not meant to preclude Executive’s management of his personal investments and commitments not related to the business of the Company; provided, that such time devoted thereto shall not interfere in any material respect with Executive’s duties hereunder.

 

1.3           Effective Date.  Executive will commence work immediately on the date hereof (the “Effective Date”).

 

1.4           Term.  This Agreement shall remain in force and effect for a term commencing on the Effective Date hereof and expiring on the fourth annual anniversary of the Effective Date (the “Initial Term”), or such earlier date the employment relationship is terminated pursuant to Section 5 hereof.  This Agreement may be extended at the election and agreement of the Company and Executive (a “Renewal Term”).  The Initial Term and any Renewal Term are collectively referred to as the “Term.”

 

ARTICLE 2

 

COMPENSATION

 

2.1           Base Salary.  For the first twelve (12) month period during the Term of this Agreement, the Executive shall be paid an annual base salary of One Hundred Fifty Thousand Dollars ($150,000), with annual increases of 3% over the base salary for the immediately preceding twelve (12) month period for each succeeding twelve (12) month period during the Term (the “Base Salary”); provided that the Executive will not be entitled to the increase for a particular 12-month period if the Laredo Business has not achieved a Modified Gross Profit Contribution for the most recently ended Earn-Out Period equal to 100% of the Base Targeted Amount for such Earn-Out Period, as provided in section 3.1(b)(iii)(C) of the Asset Purchase Agreement.  If Executive fails to receive an increase and at the end of any subsequent Earn-Out Period the aggregate Modified Gross Profit Contribution for all completed Earn-Out Periods is equal to or greater than the aggregate Base Targeted Amounts for all completed Earn-Out Periods, the foregone increase will be granted for all future 12-month periods. The Executive’s annual Base Salary shall be payable in equal installments in accordance with the Company’s general salary payment policies but no less frequently than monthly. For the purposes of this Section 2.1, the terms “Laredo Business”, “Modified Gross Profit Contribution”, “Earn-Out Period”, “Earn-Out Payment Date” and “Base Targeted Amount” shall have the meanings ascribed thereto in the Asset Purchase Agreement.

  

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2.2           Stock Option Program.  In addition to Base Salary, as part of the Executive’s overall compensation, the Executive will be eligible to participate in the Stock Option Plan (the “Plan”) of Radiant Logistics, Inc. (the “Parent”).  As such, the Executive will initially be granted options (the “Options”) to purchase sixty-four thousand five hundred (64,500) shares of the Parent's Common Stock (the “Shares”).  For so long as the Executive remains continuously employed by the Company, the Options shall vest ratably over a five (5) year period with twenty percent (20%) of the Options becoming vested annually on the anniversary date of the Effective Date.  All Options granted as of the Effective Date and thereafter, if any, shall at all times be subject to the terms and conditions of the Plan and the related award agreement.  Additional options to purchase shares of the Parent’s Common Stock may be awarded from time to time at the sole discretion of the Company and the Parent.

The price at which the Executive’s initial Options or any portion thereof, may be exercised, shall be fixed at the fair market value of the Parent’s Common Stock as of the Effective Date and shall be determined by the Parent in good faith and in accordance with Section 409A of the Internal Revenue Code and the Treasury Regulations issued thereunder.

 

2.3           Benefits.

 

(a)           The Executive will, during the Term, be permitted to participate in such pension, profit sharing, bonus, life insurance, hospitalization, major medical, and other employee benefit plans of the Company that may be in effect from time to time, as may be offered to other senior employees at comparable levels and rank of employment, to the extent Executive is eligible under the terms of those plans.  The Company may alter, modify, add to or delete its executive benefit plans as they apply to such comparable level and rank of employees at such times and in such manner as the Company determines appropriate, without recourse by Executive so long as such changes are applied in a substantially uniform manner to such comparable level and rank of employees.

 

(b)           During the Term the Company will continue to pay the lease on the condominium at 9114 McPherson Drive (Tuscany Luxury Townhomes), Laredo, Texas, or similar housing (the “Condo”), and allow the Executive to use the Condo when he is in Laredo in the same way and to the same extent that the Executive used the Condo when he was employed with ISLA.

 

(c)           Executive shall be entitled to receive annual vacation in accordance with the Company’s policies applicable to its senior employees at comparable levels and rank of employment, which in any event shall not be less than three (3) weeks.  The Executive shall also be entitled to the paid holidays and other paid leave set forth in the Company’s policies.  Vacation days during any calendar year that are not used by the Executive during such calendar year may, at the election of the Company’s Board of Directors, either be carried over and used in the subsequent calendar year (however, not to exceed two (2) weeks), or may be paid to Executive in cash at the end of the calendar year. For purposes of determining the amount of vacation to which the Executive is entitled, he shall be deemed to have been employed with the Company continuously for 16 years prior to the commencement of the Initial Term.

 

(d)           The Executive shall also be entitled to received a monthly auto allowance of Five Hundred Dollars ($500.00). 

  

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2.4           Business Expenses.  Subject to and in accordance with the Company’s policies and procedures, and, upon presentation of itemized accounts, the Executive shall be reimbursed by the Company for reasonable and necessary business-related expenses, which expenses are incurred by the Executive on behalf of the Company, including airfare between the Executive’s home (wherever he may choose to live within the continental United States) and Laredo. 

 

ARTICLE 3

 

PROPRIETARY INFORMATION

 

3.1           Confidential and Proprietary Information.  Executive acknowledges that he is in a relationship of confidence and trust with the Company and will come into possession of Confidential Information (as defined in the Asset Purchase Agreement), which could constitute a major asset of the Company, the Parent or their respective affiliates and be of significant commercial value, the use, misappropriation or disclosure of which would cause a breach of trust and could cause irreparable injury to the Company, Parent or their respective affiliates (all of the aforementioned information is hereinafter collectively referred to as “Proprietary Information”).

 

3.2           Non-Disclosure.  Executive acknowledges that all Proprietary Information shall be the sole property of the Company, Parent, their respective affiliates and their successors and assigns.  Executive further acknowledges that it is essential for the proper protection of the business of the Company and Parent that such Proprietary Information be kept confidential and not disclosed to third parties or used for the benefit of Executive.  Accordingly, Executive agrees that during the Term and thereafter for so long as the information remains Proprietary Information, to keep in confidence and trust all Proprietary Information, and not to use, disclose, disseminate, publish, copy, or otherwise make available, directly or indirectly, except in the ordinary course of the performance of Executive’s duties under this Agreement or the Asset Purchase Agreement, any Proprietary Information except as expressly authorized in writing by the Company or Parent; provided, however, that Executive shall be relieved of his obligation of nondisclosure hereunder if Proprietary Information is required to be disclosed by any applicable judgment, order or decree of any court or governmental body or agency having jurisdiction or by any law, rule or regulation, provided that in connection with any such disclosure, Executive shall give the Company and Parent reasonable prior written notice of the disclosure of such information pursuant to this exception and shall cooperate with the Company and Parent to permit the Company or Parent to seek confidential treatment for such information from any authority requiring delivery of such information; provided further, however, that if Company or Parent has not obtained such confidential treatment by the date Executive is required by such authority to disclose the Proprietary Information, Executive shall be free to provide such disclosure and there shall be no violation of or damages determined under this Agreement or otherwise for Executive’s disclosure action and compliance with or pursuant to such authority.

 

3.3           Return of Proprietary Information.  Executive agrees that when he ceases to be employed by the Company, whether such cessation of employment shall be for any reason or for no reason, with or without cause, voluntary or involuntary, or by termination, resignation, disability, retirement or otherwise, Executive shall deliver to the Company all documents, property, including without limitation, computers, telephones, and mobile devices, and data of any nature owned by the Company pertaining to the Proprietary Information.

  

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3.4           Works made for Hire.  Executive further recognizes and understands that Executive’s duties at the Company may include the preparation of materials, including without limitation written or graphic materials, and that any such materials conceived or written by Executive shall be done as “work made for hire” as defined and used in the Copyright Act of 1976, 17 U.S.C. §§ 1 et seq.  In the event of publication of such materials, Executive understands that since the work is a “work made for hire”, the Company will solely retain and own all rights in said materials, including right of copyright.

 

3.5           Disclosure of Works and Inventions.  In consideration of the promises set forth herein, Executive agrees to disclose promptly to the Company’s Board of Directors, any and all works, inventions, discoveries and improvements authored, conceived or made by Executive during the period of employment and related to the business or activities of the Company, and Executive hereby assigns and agrees to assign all of Executive’s interest in the foregoing to the Company or to its Board of Directors.  Executive agrees that, whenever he is requested to do so by the Company, Executive shall sign any and all applications, assignments or other instruments which the Company shall deem necessary to enable the Company to apply for and obtain Letters Patent or Copyrights of the United States or any foreign country or to otherwise protect the Company’s interest therein.  Executive hereby appoints an authorized officer of the Company as Executive’s attorney in fact to sign documents on his behalf for this purpose.  Such obligations shall continue beyond the termination or nonrenewal of Executive’s employment with respect to any works, inventions, discoveries and/or improvements that are authored, conceived of, or made by Executive during the period of Executive’s employment, and shall be binding upon Executive’s successors, assigns, executors, heirs, administrators or other legal representatives.

 

ARTICLE 4

 

COMPETITION

 

4.1           Non-Competition and Non-Solicitation Covenants.

 

(a)           In recognition of the consideration received by the Executive under this Agreement and under the Asset Purchase Agreement, the sufficiency of which is acknowledged by Executive, Executive covenants and agrees with the Company that during the Non-Compete Term (as defined below) he will not, without the prior written consent of the Company, which may be withheld or given in its sole discretion, directly or indirectly, or individually or collectively within the continental United States of America and Mexico, engage in any activity or act in any manner, including but not limited to, as an individual, owner, sole proprietor, founder, associate, promoter, partner, joint venturer, shareholder (other than as the record or beneficial owner of less than five percent (5%) of the outstanding shares of a publicly traded corporation), officer, director, trustee, manager, employer, employee, licensor, licensee, principal, agent, salesman, broker, representative, consultant, advisor, investor or otherwise, for the purpose of establishing, operating, assisting or managing any business or entity that is engaged in activities competitive with the transportation and logistics business of the Company.

  

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(b)           In recognition of the consideration received by the Executive under this Agreement and under the Asset Purchase Agreement, the sufficiency of which is acknowledged by Executive, Executive covenants and agrees with the Company that during the Non-Compete Term (as defined below), he will not, without the prior written consent of the Company which may be withheld or given in its sole discretion, act in any manner, including but not limited to, as an individual, owner, sole proprietor, founder, associate, promoter, partner, joint venturer, shareholder (other than as the record or beneficial owner of less than five percent (5%) of the outstanding shares of a publicly traded corporation), officer, director, trustee, manager, employer, employee, licensor, licensee, principal, agent, salesman, broker, representative, consultant, advisor, investor or otherwise, directly or indirectly: (i) solicit, counsel or attempt to induce any person who is then in the employ of the Company, or who is then providing services as a consultant or agent of the Company, to leave the employ of or cease providing services, as applicable, to the Company, or employ or attempt to employ any such person or persons who at any time during the preceding one (1) year was in the employ of, or provided services to, the Company; or (ii) solicit, bid for or perform for any of the then current customers of the Company (defined as a customer who has done business with the Company within a year) any services of the type the Company performed for such customer at any time during the preceding one (1) year period.

 

(c)           Non-Compete Term.  The “Non-Compete Term” shall mean the period commencing on the Effective Date and ending on the later of: (i) the fifth anniversary of the Effective Date; or (ii) the two year anniversary following the termination of Executive’s employment by the Company. The restrictive Non-Compete Term shall be deemed to be extended for any period in which the Executive is in violation of any restrictive covenant so that the Company shall have the full benefit of the proscriptive period.

 

(d)           Inclusion of Parent.  For the purposes of this Article 4, the term “Company” shall include the Parent, and each of the subsidiaries and affiliates of the Parent and the Company.

 

4.2           Blue Pencil Rule.  The Executive and the Company desire that the provisions of this Article 4 be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.  The parties agree that Executive is a key executive of the Company.  If a court of competent jurisdiction, however, determines that any restrictions imposed on the Executive in this Article 4 are unreasonable or unenforceable because of duration, geographic area or otherwise, the Executive and Company agree and intend that the court shall enforce this Article 4 to the maximum extent the court deems reasonable and that the court shall have the right to strike or change any provisions of this Article 4 and substitute therefor different provisions to effect the intent of this Article 4 to the maximum extent possible.

 

4.3           Injunctive Relief.  The Executive acknowledges that the injury that would be suffered by the Company as a result of a breach of the provisions of any provision of Article 4 of this Agreement would be irreparable and that an award of monetary damages to the Company for such a breach would be an inadequate remedy.  Consequently the Company will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provisions of Article 4 of this Agreement, and the Company will not be obligated to post bond or other security in seeking such relief.

  

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4.4           Company Violation.   If prior to the fourth anniversary of the date hereof the Company terminates the Executive’s employment with the Company and fails to comply, in all material respects, with  the requirements of either of Sections 5.1(a), (b) or (c) of this Agreement, whichever is applicable, or if the Executive terminates his employment in accordance with Section 5.1(d) and the Company fails to comply, in all material respects, with the requirements of Section 5.1(d)(ii) relating to continued payment of all Base Salary and bonus, if any, and continuation of all benefits, then without limiting any other rights and remedies that may be available to the Executive at law or in equity, all obligations of the Executive under this Agreement, including but not limited to Articles 3 and 4 of this Agreement, shall terminate automatically.

 

ARTICLE 5

 

TERMINATION OF EMPLOYMENT AND SEVERANCE BENEFITS

 

5.1           Events of Termination. For purposes of this Article 5 and, in particular, the payments provided under Sections 5.1(c) and (d), the term “Termination of Employment” shall mean that, as of a given date, the Executive and the Employer reasonably anticipate that no further services will be performed after such date.

 

(a)           Death or Disability.  In the event Executive dies or becomes disabled during the term of this Agreement, his employment hereunder shall automatically terminate.

 

(i)           In the case of Executive’s death or disability, the Company shall pay to Executive or his estate, personal representative or beneficiary, as the case may be not later than 10 days after the Executive dies or becomes disabled: (i) any Base Salary earned but unpaid at the date of termination; (ii) any unpaid accrued benefits of the Executive through the date of termination; (iii) any unreimbursed expenses for which Executive shall not have been reimbursed as provided in Article 2; and (iv) any accrued but unpaid bonus, if any, through the date of termination.

 

(ii)           For the purpose of this Agreement, “disability” or “disabled” shall mean the inability of the Executive, due to physical or mental illness or disease, to perform the functions then performed by such Executive for one hundred twenty (120) substantially consecutive days, accompanied by the likelihood, in the opinion of a physician chosen by the Executive or his guardian and reasonably acceptable to the Company, that the disabled Executive will be unable to perform such functions within the reasonably foreseeable future; provided, however, that the foregoing definition shall not include a disability for which the Company is required to provide reasonable accommodation pursuant to the Americans with Disabilities Act or other similar statute or regulation.  If any question shall arise as to whether during any period Executive has suffered a disability, Executive may, and at the request of the Company will, submit to the Company a certification in reasonable detail completed by a physician selected by Executive or his guardian to whom the Company has no reasonable objection, as to whether Executive, after such physician’s examination, was found to be disabled in such physician’s reasonable clinical judgment and such certification shall include the physician’s opinion, which for the purposes of this Agreement shall be conclusive of the issue.  If such question shall arise and Executive shall fail to submit to examination by such physician, the Company’s determination of such issue shall be binding on Executive.

  

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(b)           By the Company for Cause.  This Agreement may be terminated by the Company for “Cause” at any time.

 

(i)           For the purposes hereunder, the term “Cause” shall mean the following:  (a) Executive’s material (1) intentional falsification of the books and records of the Company, (2) misappropriation or embezzlement of funds or property of the Company, (3) attempt to obtain any personal profit from any transaction in which the Executive has an interest that is adverse to the Company, (4) breach of the duty of loyalty and fidelity to the Company, or (5) other similar material dishonesty with respect to the Company;  (b) any intentional or grossly negligent act or omission that causes the Company to be in violation of governmental regulations that subjects the Company either to material sanctions by governmental authority or to material civil liability to its employees or third parties; (c) material breach of any material provision of this Agreement by the Executive that, if subject to cure, is not cured within fifteen (15) days after receiving written notice thereof; (d) material neglect or refusal to perform the duties assigned to the Executive pursuant to this Agreement that, if subject to cure, is not cured within fifteen (15) days after receiving written notice thereof; (e) conviction of, or plea of nolo contendere to, a felony; (f) gross or willful misconduct of Executive with respect to the Company that, if subject to cure, is not cured within fifteen (15) days after receiving written notice thereof; or (g) in the event the “Laredo Business” fails to generate “Modified Gross Profit Contribution” at least equal to 50% of the “Base Targeted Amount” for any given Earn-Out Period as determined on the applicable Earn-Out Payment Date.  Upon termination of Executive’s employment hereunder for Cause as specified in subsection (i)(a) – (i)(g) above, the Company shall have no further obligation or liability to Executive under this Agreement other than the payment of (i) Base Salary earned but unpaid at the date of termination, (ii) any unpaid accrued benefits of the Executive, and (iii) reimbursement for any expenses for which the Executive shall not have been reimbursed as provided in Article 2. The Company shall pay such amounts to Executive not later than 10 days after the date of termination.  

 

(ii)           For the purposes of this subsection 5.1(b), the terms “Laredo Business”, “Modified Gross Profit Contribution”, “Earn-Out Period”, “Earn-Out Payment Date” and “Base Targeted Amount” shall have the meaning ascribed thereto in the Asset Purchase Agreement.

  

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(c)           By the Company for other than Cause.  This Agreement may be terminated by the Company for other than “Cause” at any time.

 

(i)           Upon termination of Executive’s Employment hereunder by the Company for other than Cause, Executive shall be entitled to receive from the Company continuation of payment of all Base Salary and bonus, if any, and continuation of all benefits which Executive would have been entitled to receive had his employment not terminated, at the same times as such payments would otherwise have been made pursuant to Article 2 hereof through the remainder of the Term if, and only if, the Executive signs a valid general release of all claims against the Company, its affiliates, subsidiaries, officers, directors, and agents, the form of which is attached as Exhibit A. Notwithstanding the foregoing, the Executive will not be required to sign or deliver the release unless the Company also signs and delivers the release.  For the avoidance of doubt, such release shall not contain any release of claims or rights under the Asset Purchase Agreement, all such claims and rights being independent of all claims and rights under this Agreement.

 

(d)           By Executive For Good Reason.  Executive may terminate his employment by the Company for “Good Reason” at any time upon at least thirty (30) days’ written notice to the Company and a right to cure, setting forth in reasonable detail the nature of such good reason.

 

(i)           For the purposes hereunder, the term “Good Reason” shall mean, the occurrence of any act or omission by the Company that is not consented to in writing by the Executive, which constitutes a material breach of any material term or provision of this Agreement, which breach continues for more than fifteen (15) days after written notice of such material breach to Company.

 

(ii)           In the event of the termination of the Executive’s employment with the Company by Executive for “Good Reason” as defined above, Executive shall be entitled to receive from the Company continuation of payment of all Base Salary and bonus, if any, and continuation of all benefits which Executive would have been entitled to receive had his employment not terminated, at the same times as such payments would otherwise have been made pursuant to Article 2 hereof through the remainder of the Term if, and only if, the Executive signs a valid general release of all claims against the Company, its affiliates, subsidiaries, officers, directors, and agents, the form of which is attached as Exhibit A.  Notwithstanding the foregoing, the Executive will not be required to sign or deliver the release unless the Company also signs and delivers the release.  For the avoidance of doubt, such release shall not contain any release of claims or rights under the Asset Purchase Agreement, all such claims and rights being independent of all claims and rights under this Agreement.

  

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(e)           Voluntary Termination by Executive.  The Executive may voluntarily resign or terminate his employment for other than Good Reason, provided Executive gives Company at least thirty (30) days prior written notice of his termination of employment.

 

(i)           If Executive voluntarily resigns or terminates his employment for other than Good Reason, neither Executive nor the Company shall have any further obligation or liability to one another under this Agreement except that Executive shall continue to abide by Articles 3 and 4 as provided therein and the Company will be liable to Executive for the payment of: (i) Base Salary earned but unpaid at the date of termination; (ii) any unpaid accrued benefits of the Executive; (iii) reimbursement for any expenses for which the Executive shall not have been reimbursed as provided in Article 2; and (iv) any unpaid bonus, if any, that has been earned by the Executive and accrued by the Company prior to the date of such termination.  The Company shall pay such amounts to Executive not later than 10 days after the date of termination.

 

For the avoidance of doubt, a termination of the Executive’s employment shall not have any effect on the rights or obligations of the parties to the Asset Purchase Agreement except as expressly provided in the Asset Purchase Agreement, all such rights and obligations being independent of all rights and obligations under this Agreement.

 

ARTICLE 6

 

REPRESENTATIONS OF EXECUTIVE

 

6.1           Representations of Executive.  As a material inducement to Company to execute this Agreement and the Asset Purchase Agreement, and consummate the transactions contemplated thereby, the Executive hereby makes the following representations to Company, each of which are true and correct in all material respects as of the date hereof.

 

(a)           No Prior Agreements.  Executive represents and warrants that except as provided in the Termination Agreement with Franchisor, among others, as well as the termination of any other franchises between Executive, any affiliates of Executive and Franchisor, Executive is not a party to or otherwise subject to or bound by the terms of any contract, agreement or understanding which in any manner would limit or otherwise affect Executive’s ability to perform his obligations hereunder, including without limitation any contract, agreement or understanding containing terms and provisions similar in any manner to those contained in Article 4 of this Agreement.  For the purposes hereof, the terms “Franchisor” and “Termination Agreement” shall have the meaning ascribed thereto in the Asset Purchase Agreement.

 

(b)           Review by Counsel.  Executive expressly acknowledges and represents that Executive has been given a full and fair opportunity to review this Agreement with an attorney of Executive’s choice, and that Executive has satisfied himself, with or without consulting with counsel, that the terms and provisions of this Agreement, specifically including, but not limited to, the restrictive covenant and related provisions of Article 4 hereof, are reasonable and enforceable.

  

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(c)           No Conflicts.  Executive covenants that, as of the date hereof, he is not involved in any venture or activity that could compete with Company or which could potentially interfere with his ability to perform under this Agreement.  During the Term, he will disclose to the Company, in writing, any and all interests he may have, whether for profit or compensation or not, in any venture or activity which could potentially interfere with his ability to perform under this Agreement or create a conflict of interest for him with the Company.  For purposes of this Section 6.1 only, “conflict of interest” shall mean ownership of greater than five percent (5%) of a publicly traded corporation which conducts business similar to that undertaken by the Company.

 

(d)           Executive’s Ability.  Executive represents that Executive’s experience and capabilities, and the limited provisions of Article 4, are such that he will not be prevented by Article 4 from earning his livelihood during the Non-Compete Term.  Executive acknowledges that there are a significant number of businesses for which his qualifications and experience would render him qualified for employment during the Non-Compete Term that do not constitute a competing businesses such that his ability to become employed after the termination or nonrenewal of this Agreement and during the Non-Compete Term would not be impaired.

 

ARTICLE 7

 

GENERAL PROVISIONS

 

7.1           Entire Agreement.  This Agreement, including any Exhibits to this Agreement and any definitions incorporated herein, contains the entire understanding of the parties with respect to the matters contained herein and supersedes all prior and contemporaneously made written or oral agreements between the parties relating to the subject matter hereof.  There are no oral understandings, terms, or conditions, and no party has relied upon any representation, express or implied, not contained in this Agreement.

 

7.2           Amendments.  This Agreement may not be amended in any respect whatsoever, nor may any provision hereof be waived by any party, except by a further agreement, in writing, fully executed by each of the parties.

 

7.3           Successors.  This Agreement shall be binding upon and inure to the benefit of the parties and to their respective heirs, personal representatives, successors and assigns, executors and/or administrators, provided that (a) Executive may not assign his rights hereunder (except by will or the laws of descent) without the prior written consent of the Company and (b) Company may not assign its rights hereunder without the prior written consent of Executive.

 

7.4           Captions.  The captions of this Agreement are for convenience and reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement.

  

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7.5           Notice.  All notices, consents, waivers, and other communications to the Company under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand, (b) sent by facsimile (with written confirmation of receipt), provided that a copy is mailed by registered mail, return receipt requested, or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers as a party may designate by notice to the other parties):

 

	 	
If to the Company:

	 	
Bohn H. Crain

c/o Radiant Global Logistics, Inc.

405 114th Avenue SE, Third Floor

Bellevue, WA  98004

	 	  	 	  
	 	
With a copy to:

	 	
Stephen M. Cohen, Esq.

c/o Fox Rothschild LLP

2000 Market Street; 20th Floor

Philadelphia, PA 19103

 

All notices, consents, waivers, and other communications to Executive under this Agreement must be in writing and will be deemed to have been duly given only (i) when delivered personally by hand to Fuller, (ii) when sent by facsimile (with written confirmation of transmission or receipt), or (iii) when sent by email (read receipt requested), in each case at the following addresses and facsimile numbers (or to such other address or facsimile number and email address as Fuller may have specified by notice given to the Company pursuant to this provision):

	 	  	 	  
	 	
If to the Executive:

	 	
Jonathan Fuller,

14493 S.P.I.D. #323

Corpus Christi, TX  78418

Fax: (814)284-2662

Email: jfuller@stx.rr.com

	 	  	 	  
	 	
With a copy to:

	 	
Jeff Dickerson, Esq.

c/o Branscomb PC

The Norwood Tower

114 West Seventh Street

Suite 725

Austin, Texas 78701

 

  

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7.6           Counterparts.  This Agreement may be executed in one or more copies, each of which shall be deemed an original.  This Agreement may be executed by facsimile signature and each party may fully rely upon facsimile execution; this agreement shall be fully enforceable against a party which has executed the agreement by facsimile.

 

7.7           Partial Invalidity.  The invalidity of one or more of the phrases, sentences, clauses, sections or Articles contained in this Agreement shall not affect the validity of the remaining portions so long as the material purposes of this Agreement can be determined and effectuated.

 

7.8           Applicable Law.  This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Texas without regard to principles of comity or conflicts of laws provisions of any jurisdiction.

 

7.9           Resolution of Disputes.

 

(a)           Subject to the provisions of Section 7.9(b), any dispute, difference or controversy arising under this Agreement regarding the payment of money shall be settled by arbitration.  Any arbitration pursuant to this Section 7.9 shall be held before a single arbitrator.  Except as otherwise set forth herein, each party shall bear its own expenses for counsel and other out-of-pocket costs in connection with any resolution of a dispute, difference or controversy.  Any arbitration shall take place in Dallas, Texas or at such other location as the parties may agree upon, according to the American Arbitration Association’s Employment Arbitration Rules now in force and hereafter adopted or by the parties’ further agreement or as set forth herein.  The parties agree that, in any arbitration the parties shall, to the maximum extent possible, have such rights as to the scope and manner of discovery as are permitted in the Federal Rules of Civil Procedure and consent to the entry of any order of any court of competent jurisdiction necessary to enforce such discovery.  In submitting the dispute to the arbitrators, each of the parties shall concurrently furnish, at its own expense, to the arbitrator and the other parties such documents and information as the arbitrator may request.  Each party may also furnish to the arbitrator such other information and documents as it deems relevant, with the appropriate copies and notification being concurrently given to the other party.  Neither party shall have or conduct any communication, either written or oral, with the arbitrator without the other party either being present or receiving a concurrent copy of such written communication.  The arbitrator may conduct a conference concerning the objections and disagreements between the parties, at which conference each party shall have the right to (i) present its documents, materials and other evidence (as previously provided to the arbitrator and the other parties), and (ii) to have present its or their advisors, accountants and/or counsel.  The arbitrator shall make his award in accordance with and based upon all the provisions of this Agreement, and judgment upon any award rendered by the arbitrator shall be entered in any court having jurisdiction thereof.  The fees and disbursements of the arbitrator shall be borne equally by the parties, with each party bearing its own expenses for counsel and other out-of-pocket costs.  The arbitrator is specifically authorized to award costs and attorney’s fees to the party substantially prevailing in the arbitration and shall do so in any case in which he believes the arbitration was not commenced in good faith.

  

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(b)           The parties acknowledge that in the case of disputes regarding matters other than the payment of money, damages may be insufficient to remedy a breach of this Agreement and that irreparable harm may result from a breach of this Agreement.  Accordingly, the parties consent to the award of preliminary and permanent injunctive relief and specific performance to remedy any material breach of this Agreement, regarding disputes other than the payment of money, without limiting any other rights or remedies to which the parties may be entitled under law or equity.  Either party may pursue injunctive relief or specific performance in any court of competent jurisdiction.

 

7.10           No Waiver.  No failure on the part of any Party to exercise, and no delay by any Party in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by any Party of any right, power or remedy hereunder, preclude any other or further exercise thereof, or the exercise of any other right, power or remedy by such Party.

 

7.11           Genders.  Any reference to the masculine gender shall be deemed to include feminine and neuter genders, and vice versa, and any reference to the singular shall include the plural, and vice versa, unless the context otherwise requires.

 

7.12           Deductions from Salary and Benefits.  The Company will withhold from any salary or benefits payable to the Executive all federal, state, local, and other taxes and other amounts as required by law, rule or regulation.

 

7.13           Survival.  Notwithstanding termination of this Agreement as provided in Article 5, the rights and obligations of Executive and the Company under Articles 3, 4 and 5 of this Agreement shall survive termination to the extent necessary to the intended preservation of such rights and obligations.

 

7.14           409A Compliance.  Notwithstanding any provision of this Agreement to the contrary, the following provisions shall apply: (i) payments following Termination of Employment, except as provided in Sections 5.1(c) and (d) are intended to comply with the short-term deferral exception to Section 409A coverage to the maximum extent applicable and shall be construed accordingly; (ii) each installment payment of severance pay under Sections 5.1(c) and (d) shall be deemed a separate payment for purposes of Section 409A of the Code; and (iii) if, as of the Termination date, the Executive is a “Specified Employee,” payments of any deferred compensation (within the meaning of Section 409A of the Code) hereunder, as applicable, shall be delayed for six months immediately following the Termination, with all such delayed payments being made on the first day of the seventh month immediately following the Termination date.  For purposes of this Agreement, “Specified Employee” shall have the meaning ascribed thereto in Treasury Regulation Section 1.409A-1(i) (applied by using the default rules contained therein).

 

[Signature pages are on the following page]

  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first set forth above.

 

IMPORTANT NOTICE:  THIS AGREEMENT RESTRICTS EXECUTIVE’S RIGHTS TO OBTAIN OTHER EMPLOYMENT FOLLOWING HIS EMPLOYMENT WITH THE COMPANY.  BY SIGNING IT, EXECUTIVE ACKNOWLEDGES THIS FACT, AND FURTHER ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY THE COMPANY TO READ THE AGREEMENT CAREFULLY, AND/OR TO CONSULT WITH COUNSEL OF HIS CHOICE CONCERNING THE LEGAL EFFECTS OF SIGNING THE AGREEMENT, PRIOR TO SIGNING IT.

 

	
RADIANT GLOBAL LOGISTICS, INC.

	  
	
By:

	
/s/ Bohn H. Crain

	  	
Bohn H. Crain, CEO

	  
	
AGREED AND ACCEPTED:

	  
	
/s/ Jonathan Fuller

	
JONATHAN FULLER

 

  

15

  

EXECUTION VERSION

EXHIBIT A

 

RELEASE

This agreement (“Agreement”) is between Jonathan Fuller (“Employee”), and Radiant Global Logistics, Inc., a Washington corporation (the “Company”).

 

1.    Employee and the Company are parties to an Executive Employment Agreement dated _______________, 2011 (the “Employment Agreement”).  Employee and the Company entered into the Employment Agreement in connection with the Asset Purchase Agreement dated ____________, 2011 among the Company, Isla International, Ltd., Employee, and Isla GP, LLC (the “Asset Purchase Agreement”).  Employee’s employment with the Company has terminated pursuant to Section 5.1(c) or (d) of the Employment Agreement.  In consideration for their mutual promises contained in this Agreement and the Employment Agreement, Employee and the Company agree as follows:

 

2.    Except as provided in Section 3 below:

 

(a)           Employee releases and forever discharges the Company and its affiliates, subsidiaries, officers, directors, and agents from any and all liability for any claims, causes of action, or demands, known or unknown, suspected or claimed, foreseeable or unforeseeable, which Employee ever had, now has, or may hereafter claim to have against the Company based, in whole or in part, on any conduct, act, or omission which occurred at any time through the date of this Agreement.  This release includes, but is not limited to, claims which arise under tort, contract or common law, or any federal, state, or local statute, regulation or ordinance, including by way of example and without limitation claims of discrimination on the basis of race, color, sex, national origin, religion, disability, age, marital status and veteran status.  To the extent that any claims in favor of Employee against the Company continue to exist despite this release, Employee hereby assigns them in full to the Company.

 

(b)           The Company releases and forever discharges Employee from any and all liability for any claims, causes of action, or demands, known or unknown, suspected or claimed, foreseeable or unforeseeable, which the Company ever had, now has, or may hereafter claim to have against Employee based, in whole or in part, on any conduct, act, or omission which occurred at any time through the date of this Agreement.  This release includes, but is not limited to, claims which arise under tort, contract or common law, or any federal, state, or local statute, regulation or ordinance.  To the extent that any claims in favor of the Company against Employee continue to exist despite this release, the Company hereby assigns them in full to Employee.

 

3.  Notwithstanding anything else in this Agreement, (i) Employee does not release or assign any rights he may have under the Asset Purchase Agreement or under Sections 5.1(c) or (d) of the Employment Agreement, and (ii) the Company does not release or assign any rights it may have under the Asset Purchase Agreement or under Articles 3 or 4 of the Employment Agreement.

  

 

  

4.    By entering into this Agreement, the parties do not admit, and each specifically denies any liability, wrongdoing or violation of any law, statute, regulations, agreement or policy.

 

5.    Employee agrees not to make any untruthful or disparaging statements, written or oral, about the Company to any of the Company’s customers, competitors, suppliers, employees, former employees, or the press or other media.  Except as herein contemplated, the Employee also agrees that the Employee will not voluntarily participate in any proceeding of any kind brought against the Company relating to this Agreement or to matters occurring during Employee’s employment with the Company, except in connection with the enforcement of his  rights under this Agreement, the Asset Purchase Agreement, or Sections 5.1(c) or (d) of the Employment Agreement.  The Company agrees not to make any untruthful or disparaging statements, written or oral, about Employee to any employer or prospective employer of Employee, or the press or other media.  Except as herein contemplated, the Company also agrees that the Company will not voluntarily participate in any proceeding of any kind brought against Employee relating to this Agreement or to matters occurring during Employee’s employment with the Company, except in connection with the enforcement of its rights under this Agreement, the Asset Purchase Agreement, or Articles 3 or 4 of the Employment Agreement.

 

6.    Employee understands and agrees that the terms of this Agreement and the Employment Agreement are confidential.

 

7.   Employee acknowledges that Employee was given a copy of this Agreement on __________, 201_ in order for Employee to consider this Agreement.   Employee further acknowledges that Employee has been advised to consult with an attorney of Employee’s choice before accepting.  Employee is not required to wait 21 days before accepting this Agreement; rather, he may accept this Agreement by returning an executed original to the Company at any time prior to the expiration of 21 days of the date this Agreement was provided to him.

 

8.    This Agreement will not become effective until 7 days after the executed Agreement is timely received by the Company.  During the 7-day period, Employee may revoke this Agreement and forfeit all benefits herein.  To be effective, any such revocation must be made within the 7-day period.  After the expiration of the 7-day period, this Agreement will be binding on both parties.

 

9.    Should any provision of this Agreement be found to be in violation of any law, or ineffective or barred for any reason whatsoever, the remainder of this Agreement shall be in full force and effect to the maximum extent permitted by law.

 

10.    The parties agree that this Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Texas without regard to principles of comity or conflicts of laws provisions of any jurisdiction.

  

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11.     The parties agree that any and all further legal proceedings between Employee and the Company, whether arising under statute, constitutions, contract, common law or otherwise, including the issue of arbitrability, will be submitted for resolution exclusively pursuant to the arbitration provision contained in the Employment Agreement.  The parties hereby waive their right to a trial of any and all claims arising out of this Agreement or breach of this Agreement.

 

12.    This Agreement may not be changed or modified, except by a written instrument signed by Employee and the Company.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first set forth above.

	
   

	  	
   

	 
	
Date

	  	
Employee

	 
	  	  	  	 
	
   

	  	
RADIANT GLOBAL LOGISTICS, INC.

	 
	
Date

	  	  	 
	  	  	
By:

	
   

	 
	  	  	
Name:

	
   

	 
	  	  	
Title:

	
    

	 

 

  

3

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