EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.8
THIS
EXECUTIVE EMPLOYMENT AGREEMENT entered into and effective as of July 25, 2005
(“Effective Date”), by and between IFT CORPORATION, a Delaware Corporation
(“Company”) and Xxxxxxx X. Xxxxxx (“Executive”).
W
I T N E S S E T H:
WHEREAS,
Company acknowledges that Executive has been working for the Company since
January 28, 2005 and is currently the President and Chief Operating Officer
of
the Company; and
WHEREAS,
Company wishes to continue Executive’s employment and Executive wishes to accept
such continued employment, subject to the terms and conditions hereinafter
set
forth.
NOW
THEREFORE, the parties hereto, in consideration of the premises and mutual
promises contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, agree as
follows:
1. EMPLOYMENT
TERM.
Company hereby agrees to employ the Executive, and the Executive hereby accepts
such employment for a period beginning on the Effective Date and ending January
31, 2009, unless sooner terminated in accordance with Section 6 hereof
(“Employment Period”).
2. POSITION;
DUTIES.
During the Employment Period, Executive shall hold the title and position of
President and Chief Operating Officer of the Company and shall have the duties
and responsibilities usually vested in such capacity, as determined from time
to
time by the Chief Executive Officer, Chairman of the Board, Board of Directors,
and By-laws.
3. MANNER
OF PERFORMANCE.
Executive shall serve the Company and devote all his business time, his best
efforts and all his skill and ability in the performance of his duties
hereunder. Executive shall carry out his duties in a competent and professional
manner, to the reasonable satisfaction of the Chief Executive Officer, Chairman
of the Board and Board of Directors of the Company, shall work with other
Executives of the Company and generally promote the best interests of the
Company and its stockholders. Executive shall not, in any capacity engage in
any
activity which is, or may be, contrary to the welfare, interest or benefit
of
the business now or hereafter conducted by the Company.
4. COMPENSATION
AND RELATED MATTERS.
Executive’s compensation for his services shall be as follows:
4.1 Base
Compensation.
During the Employment Period, Executive shall receive an annual base salary
(the
"Annual Base Salary") of $300,000, payable in accordance with the Corporation’s
normal payroll practices. Executive’s Annual Base Salary shall automatically
increase to $350,000 when, during any calendar year of his Employment Term,
he
causes $6 Million in sales to occur directly or indirectly by his efforts with
a
25% gross profit margin. Gross profit margin is calculated by taking Gross
Profit and dividing it by Total Sales Revenue. Notwithstanding the foregoing,
at
the sole discretion of the Corporation’s Board of Directors, the Gross Profit
Margin requirement may be decreased or waived entirely. The term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as
adjusted from time to time.
4.2 Annual
Bonus.
As determined by the Compensation Committee of the Board of Directors, Executive
shall be eligible for bonus consideration (“Bonus”) as and if bonuses are paid
to other Executives on an annual basis.
4.3 Awards.
During the Employment Period, Executive shall be entitled to earn awards under
equity or other plans or programs that the Company may from time to time, in
its
discretion, determine to put into effect. The administrator of these plans
or
programs shall determine the terms, conditions, performance criteria and
restrictions of the awards.
4.4 Transaction
Bonus.
During the Employment Period, upon consummation of a Change in Control, in
addition to any other payments or benefits applicable thereto under this
Agreement, Executive shall be entitled to a Transaction Bonus equal to three
and
one half percent (3 ½ %) of the “Transaction Value”, which means the aggregate
consideration paid in respect of the Transaction, payable in one lump sum
concurrent with the consummation of the Transaction; provided Executive is
still
employed by the Company.
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4.5 Compensation
and Benefit Programs.
During the term of Executive’s employment hereunder, Executive shall be entitled
to participate in the following plans as they may exist from time to time during
the term hereof, to wit, any and all medical, dental, hospitalization,
accidental death and dismemberment, disability, travel and life insurance plans,
and any and all other plans as offered by the Company from time to time to
its
Executives, including savings, pension, profit-sharing, stock options, and
deferred compensation plans, subject to the general eligibility and
participation provisions set forth in such plans.
4.6 Vacation
Time and Other Benefits.
Executive shall be entitled to three weeks of vacation without loss of
compensation each year during the Employment Period. For the purposes of this
Section 4.6, a year shall begin on January 28, 2005. Vacation will be taken
at
such times as the Executive and the Corporation shall mutually determine and
provided that no vacation time shall interfere with the duties required to
be
rendered by Executive hereunder. Notwithstanding the foregoing, as an officer
of
Corporation, Executive is expected to utilize his vacation time judiciously
and
so as not to jeopardize the business of the Corporation. Unused vacation may
not
be carried forth to the next calendar year without prior written consent by
the
Corporation, except that no written consent is required for carrying over a
maximum of seven (7) days to any subsequent year.
4.7 Expense
Reimbursement.
The Corporation shall also provide the Executive reasonable reimbursement of
out-of-pocket expenses incurred by him in connection with his duties hereunder,
upon submission of appropriate documentation, and a “No Cost” vehicle during the
Employment Term.
4.8 Withholding
Taxes.
Company shall have the right to deduct or withhold from all payments due to
Executive hereunder any and all sums required for any and all federal, social
security, state and local taxes, assessments or charges now applicable or that
may be enacted and become applicable in the future.
4.9 Adjustments.
If the outstanding shares of common stock of the Company are increased,
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed in respect of such shares of common stock (or any
stock or securities received with respect to such common stock), through merger,
consolidation, sale or exchange of all or substantially all of the properties
of
the Company, reorganization, recapitalization, reclassification, stock dividend,
stock split, reverse stock split, spin-off or other distribution with respect
to
such shares of common stock (or any stock or securities received with respect
to
such common stock), then the number of shares of common stock shall be equitably
and appropriately adjusted. Adjustments under this Section 4.9 will be made
by
the applicable authority, whose determination as to what adjustments will be
made and the extent thereof will be final, binding and conclusive. No fractional
interests will be issued from any such adjustments. Notice of any adjustment
shall be given by Company to Executive and shall be final and binding on
Executive.
5. NON-DISCLOSURE
AND RELATED MATTERS.
5.1 Non-Disclosure.
The Executive shall not at any time during the
term hereof or thereafter divulge, communicate, or use in any way, any
Confidential Information (as hereinafter defined) pertaining to the business
of
the Company. Any Confidential Information or data now or hereafter acquired
by
the Executive with respect to the business of the Company (which shall include,
but not be limited to information concerning the Company’s financial condition,
prospects, technology, customers, suppliers, sources of leads and methods of
doing business) shall be deemed a valuable, special and unique asset of the
Company that is received by the Executive in confidence and as a fiduciary,
and
Executive shall remain a fiduciary to the Company with respect to all of such
information. For purposes of this Agreement, the term “Confidential Information”
includes, but is not limited to, information disclosed to the Executive or
known
by the Executive as a consequence of or through his employment by the Company
(including information conceived, originated, discovered or developed by the
Executive) prior to or after the date hereof, and not generally known, about
the
Company or its business. Notwithstanding the foregoing, nothing herein shall
be
deemed to restrict the Executive from disclosing Confidential Information to
the
extent required by law provided that prior to disclosing any such information
required by law, Executive shall give prior written notice thereof to Company
and provide Company with the opportunity to contest the disclosure. The
Executive shall not disclose, without limitation as to time, Confidential
Information to any person, firm, Company, association or other entity for any
purpose or reason whatsoever, except (i) to authorized representatives of the
Company, (ii) during the Employment Period, such information may be disclosed
by
the Executive as is specifically required by Company in the course of performing
his duties for the Company, and (iii) to counsel and other advisers of Company
subject to Company’s prior approval and provided that such advisers agree to the
confidentiality provisions of this Section 5.1.
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5.2 Ownership
of Developments.
All copyrights, patents, trade secrets, or other intellectual property rights
associated with any ideas, concepts, techniques, inventions, processes or works
of authorship developed or created by Executive during the course of performing
work for the Company or its customers (collectively, the “Work Product”) shall
belong exclusively to the Company and shall, to the extent possible, be
considered a work made by the Executive for hire for the Company within the
meaning of Title 17 of the United States Code. To the extent the Work Product
may not be considered work made by the Executive for hire for the Company,
the
Executive agrees to assign, and automatically assign at the time of creation
of
the Work Product, without any requirement of further consideration, any right,
title, or interest the Executive may have in such Work Product. Upon the request
of the Company, the Executive shall take such further actions, including
execution and delivery of instruments of conveyance, as may be appropriate
to
give full and proper effect to such assignment. All of the foregoing shall
also
be deemed Confidential Information for the purposes of Section 5.1
above.
5.3 Books
and Records.
All books, records, and accounts relating in any manner to the Company (i.e.,
financial information, customer, supplier, vendor identity, etc.), whether
prepared by the Executive or otherwise coming into the Executive’s possession,
shall be the exclusive property of the Company and shall be returned immediately
to the Company on termination of the Executive’s employment hereunder or
otherwise on the Company’s request at any time.
5.4 Definition
of Company.
Solely for purposes of this Agreement, the term “Company” also shall include any
existing or future subsidiaries of the Company that are operating during the
time periods described herein and any other entities that directly or
indirectly, through one or more intermediaries, control, are controlled by
or
are under common control with the Company during the periods described
herein.
5.5 Acknowledgment
by Executive.
The Executive acknowledges and confirms that (i) the restrictive covenants
contained in this Section 5 are reasonably necessary to protect the legitimate
business interests of the Company, and (ii) the restrictions contained in this
Section 5 (including without limitation the geographic area and length of the
term of the provisions of this Section 5) are not overbroad, overlong, or unfair
and are not the result of overreaching, duress or coercion of any kind. The
Executive acknowledges and confirms that his special knowledge of the business
of the Company is or will be such as would cause the Company serious injury
or
loss if he were to use such ability and knowledge to the benefit of a competitor
or were to compete with the Company in violation of the terms of this Section
5.
The Executive further acknowledges that the restrictions contained in this
Section 5 are intended to be, and shall be, for the benefit of and shall be
enforceable by, the Company’s successors and assigns and shall be enforced to
the fullest extent of the law applicable at the time that Company deems it
necessary or advisable to enforce the restrictive covenants and other provisions
of this Section 5.
5.6
Injunctive
Relief; Damages.
Because of the difficulty of measuring economic losses to the Company as a
result of a breach of the foregoing covenants in this Section 5, and because
of
the immediate and irreparable damage that could be caused to the Company for
which it would have no other adequate remedy, the Executive agrees that the
foregoing covenants may be enforced by the Company in the event of breach by
the
Executive, by injunctions and restraining orders. Nothing herein shall be
construed as prohibiting the Company from pursuing any other available remedy
for such breach or threatened breach, including the recovery of
damages.
5.7 Severability;
Reformation; Independent Covenants.
The covenants in this Section 5 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of
any
other covenant. Moreover, in the event any court of competent jurisdiction
shall
determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions
be
enforced to the fullest extent which the court deems reasonable, and the
Agreement shall thereby be reformed. Each covenant and agreement of Executive
in
this Section 5 shall be construed as an agreement independent of any other
provision in this Agreement, and the existence of any claim or cause of action
by the Executive against the Company (including the affiliates thereof), whether
predicated on this Agreement or otherwise, shall not constitute a defense to
the
enforcement by the Company of such covenants or agreements. It is specifically
agreed that the periods of restriction during which the agreements and covenants
of the Executive made in this Section 5 shall be effective, shall be computed
by
extending such periods by the amount of time during which the Executive is
in
violation of any provision of Section 5. The covenants contained in this Section
5 shall not be affected by any breach of any other provision hereof by any
party
hereto.
5.8 Survival.
The obligations of the parties under this Section 5 shall survive the
termination of this Agreement.
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6. TERMINATION
OF THE AGREEMENT.
6.1 Termination
for Cause.
The Company may terminate Executive’s employment under this Agreement for
“Cause,” at any time, for any of the following reasons: (i) Executive’s
commission of any act of fraud, embezzlement or dishonesty, (ii) Executive’s
unauthorized use or disclosure of any confidential information or trade secrets
of the Company, (iii) any intentional misconduct or violation of the Company’s
Code of Business Ethics and Conduct by Executive which has a materially adverse
effect upon the Company’s business or reputation, (iv) Executive’s continued
failure to perform the major duties, functions and responsibilities of
Executive’s position after written notice from the Company identifying the
deficiencies in Executive’s performance and a reasonable cure period of not less
than thirty (30) days or (v) a material breach of Executive’s fiduciary duties
as an officer of the Company.
6.2 Effect
of Termination for Cause.
In the event of termination of Executive for cause as set forth in Section
6.1,
or a voluntary termination by Executive, Executive shall have no right to any
bonuses, salaries, benefits or entitlements other than those accrued or required
by law or specifically provided under the terms of the applicable agreement,
instrument or plan document. Payment of any further bonuses or other salaries
claimed by Executive will be in the sole and absolute discretion of the Board
of
Directors of the Company and Executive will have no entitlement
thereto.
6.3
Disability
and Death.
If during the Employment Period Executive should die or suffer any physical
or
mental illness that renders him incapable of fulfilling his obligations under
this Agreement, and such incapacity exists or may properly and reasonably be
expected to exist for more than ninety (90) calendar days in the aggregate,
the
Company may, upon five (5) calendar days written notice to Executive, terminate
this Agreement. The determination of the Company that Executive is incapable
of
fulfilling his obligations under this Agreement shall be final and binding
in
the absence of fraud or manifest error. In the event of termination under this
Section 6.3, Executive, or his estate, shall be entitled to an amount equal
to
four (4) months’ Salary and any other accrued compensation, plus such additional
benefits, if any, as may be approved by the Company’s Board of Directors.
Executive, or his estate, shall, upon termination under the terms of this
Section 6.3, be further entitled to additional compensation, to be calculated
on
a pro rata basis according to the number of accrued vacation days, if any,
not
taken by Executive during the year defined for the purposes of vacation, in
which Executive was terminated.
6.4 Voluntary
Termination by Executive at the End of the Employment Term.
Subject to Section 6.4 of this Section 6, in the event of voluntary termination
by Executive at the end of the Employment Period, Executive shall be entitled
only to those amounts that have accrued to the date of termination or are
expressly payable under the terms of the Company’s applicable benefit plans or
are required by applicable law. The Company may, in its sole and absolute
discretion, confer such other benefits or payments as it determines, but
Executive shall have no entitlement thereto.
6.5 Termination
by Company during the Employment Term.
Subject to Section 6.5 of this Section 6, in the event of termination by the
Company other than at the end of the Employment Term, other than for Cause
under
Section 6.1, Executive shall be entitled to (i) an amount equal to four (4)
months annual base salary paid in equal monthly installments, (ii) the product
of (I) any Awards described in Section 4.3 which Executive can show that he
reasonably would have received had Executive remained in such Executive capacity
with the Company through the end of the calendar year or four (4) months after
the Date of Termination, whichever is greater, in which occurs Executive’s Date
of Termination, multiplied by (II) a fraction, the numerator of which is the
number of days in the calendar year in which the Date of Termination occurs
through the Date of Termination and the denominator of which is 365, but only
to
the extent not previously vested, exercise and/or paid; provided that any
payments pursuant to this Section 6.5(ii) shall be made within 30 days following
the end of the calendar year in which occurs Executive’s Date of Termination;
(iii) for four (4) months following the Date of Termination, Company shall
continue to provide medical and dental benefits only to Executive on the same
basis as such benefits are provided during such period to the senior executive
officers of Company; provided, however, that if Company’s welfare plans do not
permit such coverage, Company will provide Executive the medical benefits (with
the same after tax effect) outside of such plans, and (iv) to the extent not
theretofore paid or provided, Company shall timely pay or provide to Executive
any other amounts or benefits which Executive is entitled to receive through
the
Date of Termination under any plan, program, policy or practice or contract
or
agreement, including accrued vacation to the extent unpaid (such other amounts
and benefits shall be hereinafter referred to as the "Other
Benefits").
6.6 Termination
Following Change in Control.
If the Company or any successor terminates this Agreement at any time during
the
Employment Period following a Change in Control of the Company: (i) Executive
shall be entitled to an amount equal to the Salary which would otherwise be
payable over the remaining term of this Agreement, payable in a lump sum; and
(ii) any outstanding Awards (including substituted shares of the acquiring
or
surviving Company in the case of a merger or acquisition) held by Executive
or
other benefits under any Company plan or program, which have not vested in
accordance with their terms will become fully vested and exercisable at the
time
of such termination.
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7. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
7.1 "Change
in Control" means an Ownership Change Event or series of related Ownership
Change Events (collectively, a "Transaction")
in which the stockholders of the Company immediately before the Transaction
do
not retain immediately after the Transaction, direct or indirect beneficial
ownership of more than fifty percent (50%) of the total combined voting power
of
the outstanding voting securities of the Company or, in the case of an Ownership
Change Event, the entity to which the assets of the Company were transferred.
An
"Ownership
Change Event"
shall be deemed to have occurred if any of the following occurs with respect
to
the Company: (i) the direct or indirect sale or exchange by the
stockholders of the Company of all or substantially all of the voting stock
of
the Company; (ii) a merger or consolidation in which the Company is a
party; (iii) the sale, exchange, or transfer of all or substantially all of
the assets of the Company (other than a sale, exchange or transfer to one or
more subsidiaries of the Company); or (iv) a liquidation or dissolution of
the Company. The sole exception to Change in Control and Ownership Change Event
as described above shall be any Change in Control or Ownership Change Event
that
may result from the death or incapacity of Xxxxxxx X. Xxxxx wherein his interest
is transferred to his heirs only. In such event for the purposes hereof, no
Change in Control or Ownership Change Event shall be deemed to have
occurred.
7.2 "Disability"
means Executive’s absence from his duties with Company on a full-time basis for
90 days during any consecutive twelve-month period as a result of incapacity
due
to mental or physical illness as determined by a physician selected by Company
and acceptable to Executive. If Company determines in good faith that
Executive’s Disability has occurred during the Employment Period, it may give
Executive written notice in accordance with Section 6.3 of this Agreement of
its
intention to terminate Executive’s employment. In such event, Executive’s
employment shall terminate effective on the thirtieth (30th) day after
Executive’s receipt of such notice (the "Disability Effective Date"), unless,
within the thirty (30) days after such receipt, Executive shall have been
cleared by the physician to return to work and has returned to full-time
performance of his duties.
8. ASSIGNMENT.
Executive shall not have the right to assign or delegate his rights or
obligations hereunder, or any portion thereof, to any other person.
9. GOVERNING
LAW.
This Agreement shall be governed by and construed in accordance with the laws
of
the State of Florida without regard to its conflict of laws principles to the
extent that such principles would require the application of laws other than
the
laws of the State of Florida. Venue for any action brought hereunder shall
be
exclusively in Broward County, Florida and the parties hereto waive any claim
that such forum is inconvenient.
10. ARBITRATION.
Any dispute between the parties to this Agreement in connection with, arising
out of or asserting breach of this Agreement, or any statutory or common law
claim by Executive relating to Executive's employment hereunder, shall be
exclusively resolved by binding statutory arbitration. Such dispute shall be
submitted to arbitration in the city of Fort Lauderdale, county of Broward,
state of Florida, before a panel of three neutral arbitrators in accordance
with
the Commercial Rules of the American Arbitration Association then in effect,
and
the arbitration determination resulting from any such submission shall be final
and binding upon the parties hereto. Judgment upon any arbitration award may
be
entered in any court of competent jurisdiction.
11. ENTIRE
AGREEMENT.
This Agreement constitutes the entire agreement between the parties hereto
with
respect to the subject matter hereof and, upon its effectiveness, shall
supersede all prior agreements, understandings and arrangements, both oral
and
written, between the Executive and the Company with respect to such subject
matter. This Agreement may not be modified in any way unless by written
instrument signed by both the Company and the Executive. No provision of this
Agreement may be modified or waived unless such modification or waiver is agreed
to in writing and signed by Executive and by a duly authorized officer of the
Company. No waiver by either party hereto at any time of any breach by the
other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior
or
subsequent time. Failure by Executive or the Company to insist upon strict
compliance with any provision of this Agreement or to assert any right Executive
or the Company may have hereunder shall not be deemed to be a waiver of such
provision or right or any other provision or right of this
Agreement.
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12. NOTICES.
All notices required or permitted to be given hereunder shall be in writing
and
shall be personally delivered by courier, sent by registered or certified mail,
return receipt requested or sent by confirmed facsimile transmission addressed
as set forth herein. Notices personally delivered, sent by facsimile or sent
by
overnight courier shall be deemed given on the date of delivery and notices
mailed in accordance with the foregoing shall be deemed given upon the earlier
of receipt by the addressee, as evidenced by the return receipt thereof, or
three (3) days after deposit in the U.S. mail. Notice shall be sent (i) if
to
Company, addressed to Corporate Secretary at Xxxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx
Xxxxx, Xxxxxxx 00000 with a copy to Xxxxx & XxXxxxx, P.A., 0000 Xxxx Xxxxxxx
Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X.
Xxxxx, Esquire, and (ii) if to Executive, to his address as reflected on the
payroll records of the Company, or to such other address as either party hereto
may from time to time give notice of to the other.
13. BENEFITS;
BINDING EFFECT.
This Agreement shall be for the benefit of and binding upon the parties hereto
and their respective heirs, personal representatives, legal representatives,
successors and, where applicable, assigns, including, without limitation, any
successor to the Company, whether by merger, consolidation, sale of stock,
sale
of assets or otherwise.
14. SEVERABILITY.
The invalidity of any one or more of the words, phrases, sentences, clauses
or
sections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part thereof.
If any invalidity is caused by length of time or size of area, or both, the
otherwise invalid provision will be considered to be reduced to a period or
area
which would cure such invalidity.
15. CONSTRUCTION.
This Agreement shall be construed without regard to any presumption or other
rule requiring construction against the party causing the drafting hereof,
each
party having been given the opportunity to be represented by counsel of their
choice in connection with the negotiation of this Agreement.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
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IFT
CORPORATION
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WITNESS
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/s/
Xxxxxxxx Xxxxx
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By:
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/s/ Xxxxxxx X. Xxxxx, CEO | ||||
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/s/
Xxxx X. Xxxxx
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Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Chief Executive Officer | ||||
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WITNESS
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EXECUTIVE:
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/s/
Xxxxxxx Xxxx
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By:
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/s/ Xxxxxxx X. Xxxxxx | ||||
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Xxxxxxx
Xxxx
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Name: |
Xxxxxxx
X. Xxxxxx
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