EXHIBIT 10.68
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT effective this 31st day of December, 2001
("Effective Date"), by and between Xxxxxxx Xxxxxxx, a resident of Monroe
County, Indiana, ("Employee"), and Syndicated Food Service Group, Inc., a
Delaware corporation ("Employer");
WITNESSETH:
WHEREAS, Employer and its direct and indirect subsidiaries are engaged
in the food service business;
WHEREAS, Employee has been employed by Xxxxxxx Food Service, Inc.,
which merged with and into Employer, and has substantial business experience and
contacts in Employer's business and related business skills which can continue
to be utilized in Employer's business;
WHEREAS, Employer has undergone a change in control and desires to
continue to employ Employee, and Employee desires to be employed by the Employer
and its affiliates, upon the terms and conditions set forth below; and
WHEREAS, as a material inducement and a condition to Employer and its
parent entity Syndicated Food Service International, Inc. f/k/a Floridino's
International Holdings, Inc. ("SFSI") entering into an Agreement and Plan of
Merger and Reorganization with different parties, including Employer ("Merger
Agreement") and the other agreements referred to therein and consummating the
transactions contemplated therein, Employee and Employer execute and deliver
this Agreement and Employee agrees to the terms, covenants and conditions
provided herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises herein contained, the parties covenant and agree as follows:
1. TERM OF EMPLOYMENT
The term of Employee's employment under this Agreement shall begin on
the Effective Date and end December 31, 2006 (the "Term") and shall be
automatically renewed for successive one (1) year terms unless either party
gives to the other written notice one hundred twenty (120) days prior to the end
of the Term or any successor Term that it desires to terminate this Agreement.
2. COMPENSATION
During the Term, Employer agrees to pay Employee, as compensation for
the services of Employee, as set forth herein, as follows:
(a) Annual Salary. For the faithful performance of the services to
be rendered by Employee during the Term, Employer shall pay Employee a sum
("Base Salary") at the rate of $150,000.00 per annum payable bi-weekly or on
such other time as Employer shall pay its other executives (but no less
frequently than monthly).
(b) Expense Reimbursement. Employee will be reimbursed no less
frequently than monthly for all business expenses he reasonably incurs on behalf
and in furtherance of Employer's business in accordance with such rules,
regulations and procedures applicable to executive and managerial employees
generally as Employer may establish and publish from time to time and provided
Employee submits vouchers for such expenses.
(c) Payroll Deductions. Employer may make appropriate deductions
from the payments described in "(a)", "(d)" and "(e)" in this Section 2 to
Employee to comply with all governmental withholding requirements or payroll
deduction elections made by Employee.
(d) Bonus Compensation. During each calendar year of the Term
beginning with the 2002 year, Employer will pay Employee an annual bonus
("Formula Bonus") for each calendar year during the Term computed in accordance
with the formula provided in Schedule 2(d) attached. Ninety percent (90%) of
the Formula Bonus is payable within thirty (30) days after the end of each
calendar year, based upon Employer's internal financial reports for that year,
with the balance payable upon completion of Employer's annual audit but in no
event later than one hundred twenty (120) days after the end of the calendar
year.
(e) Other Benefits. Employer shall provide Employee with such
benefits provided to its management personnel as determined by Employer's Board
of Directors from time to time in its sole discretion; provided that, Employer
shall provide a health insurance benefit comparable to any health insurance
benefit provided by Xxxxxxx Food Service, Inc. immediately prior to the date
hereof. In addition, Employer will continue to pay premiums at levels currently
in place on insurance on life of Employee on the policy issued by Northwestern
Mutual Life Insurance Company, until the earlier of the termination of this
Agreement or June 23, 2005, subject to the provisions of Section 5 below.
(f) Vacation. During each calendar year of the Term beginning with
the 2002 year, Employee shall be entitled to five (5) weeks of annual paid
vacation to be taken at such times as are consistent with the needs of Employer.
Unused vacation days for any year of the Term may be accrued by Employee and
taken in later years in addition to the vacation applicable to the later year.
Employee will provide Employer with one (1) month advance notice of any vacation
of more than one (1) week's duration.
3. DUTIES
(a) Duties. Employee accepts employment with Employer as general
branch manager and regional procurement director and agrees to act in such
capacity on the terms and conditions herein set forth, and further agrees that
during the Term, he will devote his full business time and attention to the
rendition of services on behalf of Employer or any affiliates of Employer as
determined by its Board of Directors or an officer designated by it
("Designee"). Employee shall not, during the Term, be engaged in any other
business activity. Without diminishing the obligations of Employer hereunder,
Employer understands that Employee owns a facility in Jasonville, Indiana, which
may be utilized in the processing of food for sale or distribution and
acknowledges that Employee's ownership of that facility and the conduct of food
processing operations at the facility do not, in and of themselves, constitute
or amount to a breach of this Agreement or conflict with any of the terms of
this Agreement.
(b) Policies. Employee agrees that in the rendition of services
under this Agreement, and in all aspects of his employment, he will comply with
such reasonable policies, standards and regulations of the Employer as are from
time to time established by Employer and noticed to Employee.
(c) Office and Support. Employee will based in, and perform his
employment duties out of, Employer's subsidiary facility in Bloomington,
Indiana, subject to the provision at the conclusion of this Section 3(c), or
such other facility of Employer or any of its affiliates as indicated by the
Designee. Employer will provide Employee with an office and support staff so
that Employee may comfortably and efficiently discharge the duties of his
employment. Employee shall not be responsible for performance of the duties
customarily performed by a controller. Employer will invest sufficient working
capital during the course of the year so that, subject to the general
conditions, by December 31, 2002 the annualized gross revenues will be
$24,000,000. Employee shall perform duties for Employer at places other than
Bloomington, Indiana as indicated by Employer; provided that Employee shall not
be required to be absent from Bloomington, Indiana for more than forty-five (45)
weekdays during any year of the Term; absences in excess of that number of days
will be subject to separate agreement which will require Employer to fund travel
costs for Employee's spouse.
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(d) Reporting. During the Term, Employee will report to the
Designee, who initially is Xxxxxxx Xxxxxx. Unless Employer and Employee agree in
writing to other arrangements, all directions and communications from Employer
to Employee will be handled by the Designee.
4. FEES AND INVENTIONS
All fees, compensation, monies and other things of value received or
realized as a result of the rendition of services by Employee shall belong to or
be paid and delivered to Employer. Employee agrees that any inventions, patents,
or copyrights related to Employer's business which are conceptualized, realized,
or otherwise developed by Employee during the Term shall be deemed to be the
property of Employer and Employee shall deliver and otherwise turn over such
property to Employer.
5. TERMINATION OF EMPLOYMENT
(a) Termination by Employer. Employer has the right to terminate
this Agreement, at any time in its sole discretion without prior notice (except
as may be specifically provided below) (i) for "Cause" or (ii) without Cause for
any or no reason, subject to the provisions of Section 5(d) hereof.
"Cause" as used herein means the occurrence of one or more of the
following events:
(i) In the event Employee shall be adjudicated guilty of
fraud, dishonesty or other acts of misconduct in the rendering of services on
behalf of Employer by final judgment of a court of competent jurisdiction;
(ii) In the event Employee shall fail or refuse to faithfully
or diligently perform the provisions of this Agreement or the usual and
customary duties of his employment as set forth in this Agreement and the same
is not cured within ten (10) days from notice thereof;
(iii) In the event Employee breaches any of the covenants
provided in this Agreement;
(iv) In the event Employee shall become (without having
obtained the prior written consent of the Employer) a holder of five (5%) of the
issued and outstanding voting securities of a Competitor of Employer, a director
of a Competitor of Employer, or an officer, agent, consultant or employee of a
Competitor or breaches Section 6 or 7 below, it being understood that a
"Competitor" is a business in the wholesale food distribution business and that
commencement or continuation of manufacturing operations at Employee's facility
in Jasonville, Indiana shall not be deemed Cause under this Section 5(a)(iv); or
(v) In the event of any wilful or repeated failure to comply
with any of the rules and policies legally established by Employer.
(b) Termination by Employee. Employee has the right to terminate
this Agreement (i) by prior written notice to the Company at any time for "Good
Reason", or (ii) with ninety (90) days prior written notice to Employer for an
effective date of termination to occur after the eighteen (18) months
anniversary from the Effective Date ("Restrictive Term") for any or no reason (a
"Voluntary Termination"). Notwithstanding anything to the contrary contained
herein, Employer may accelerate the effective date of Voluntary Termination to
any date including, but not limited to, the date on which notice from Employee
is received by Employer. Following a notice of Voluntary Termination, Employee
agrees to fulfill his duties hereunder and shall cooperate fully in completion
and turnover of all matters involving Employee until such termination becomes
effective, unless otherwise consented to by Employer.
"Good Reason" as used herein shall mean (other than as a result of
Employee's failure to perform his duties and responsibilities in accordance with
this Agreement) (i) a material reduction in, or the assignment of duties to the
Employee which would be materially inconsistent with, the Employee's
responsibilities, duties and authorities described
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herein or (ii) the non-payment by Employer to Employee of Base Salary or Formula
Bonus. In order to be qualified as Good Reason, the events described in
subparagraphs (i) and (ii) above shall continue unremedied for a period of
twenty (20) business days after Employee has given written notice to Employer
specifying in reasonable detail the relevant acts or omissions of type described
in this paragraph. It is expressly understood and agreed that unless Employee
provides the written notice described in the immediately preceding sentence
within twenty (20) business days after Employee knows or has reason to know of
the occurrence of any act or omission of the type described in this paragraph,
Employee shall be deemed to have consented thereto and such particular act or
omission shall no longer constitute or be capable of constituting Good reason
for purposes of this Agreement.
(c) Illness or Disability. In the event of illness or other
incapacity which continues for a period of more than thirty (30) days or for
the aggregate of ninety (90) days during a three hundred sixty (360) day period,
Employer shall have the right, on ten (10) days notice to Employee, to terminate
this Agreement. In such event, the Employer shall be obligated to pay to
Employee any accrued and unpaid Base Salary up to the date of termination.
However, if prior to the date specified in such notice, Employee's illness or
incapacity shall have terminated, and he shall have taken up and performed his
duties as required hereunder, Employee shall be entitled to resume employment
hereunder as though such notice had not been given.
(d) Effect of Termination.
(i) In the event that this Agreement is terminated by
Employer with Cause or if there is a Voluntary Termination by Employee, then the
Employer shall have no further obligations hereunder or otherwise with respect
to Employee's employment hereunder, except for payment of the Base Salary and
benefits accrued until the date of termination.
(ii) In the event that Employer terminates this Agreement
without Cause or if Employee terminates this Agreement for Good Reason, Employee
shall be entitled to receive (A) Base Salary for the remainder of the Term, (B)
Formula Bonus for the year of termination; and (C) continuing health care
coverage for the balance of the Term and life insurance premium payments under
Section 2(e) above. It is understood that items (A) and (B) will be payable at
the same time as when it would otherwise become payable hereunder.
Notwithstanding any termination of this Agreement for any reason,
Employee's obligations set forth in Sections 6, 7 and 8 survive termination.
(e) Penalty for Termination by Employee During the Restrictive
Term. In the event that for any reason, other than for Good Reason, Employee
terminates this Agreement during the Restrictive Term, all obligations of
Employer under this Agreement shall terminate and Employee shall be obliged to
pay Employer the sum of $200,000 ("Early Termination Fee"). It is expressly
acknowledged by Employee, that in the event that any Early Termination Fee is
owed by him to Employer, Employer and its affiliates have the right, but not the
obligation, to offset such amount from any amounts owed by Employer and/or its
affiliates to Employee under a certain Promissory Note, dated the Effective Date
in the original principal amount of $1,266,420, a copy of which is attached
hereto as Exhibit A.
6. COVENANT NOT TO SOLICIT
(a) Covenant Period. During the Term and for four (4) years
thereafter ("Covenant Period"), Employee covenants that he shall not, directly
or indirectly, induce, influence, combine or conspire with, or attempt to
induce, influence, combine or conspire with any of the officers, directors,
consultants, agents or employees of Employer to terminate their employment with
or compete against (i) Employer, or (ii) any of its present or future
subsidiaries, affiliates, successors or assigns, or (iii) any of the
customers of Employer to terminate their relationship with Employer. During the
Term and Covenant Period, Employee covenants that he shall not, directly or
indirectly, divert or attempt
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to divert any or all of such customers' business with Employer or with any of
its present or future subsidiaries, affiliates, successors or assigns.
(b) Employees. The term "employees" of Employer as used in this
Agreement shall include any full time, part time or contract employee of
Employer, or any of its subsidiaries or affiliates engaged in the wholesale food
distribution business.
(c) Customers. The term "customers" of Employer as used in this
Agreement shall be defined and construed to mean any and all persons, firms,
corporations, partnerships, associations or other entities with which Employer
has dealt in the usual course of the wholesale food distribution business (as
defined in Section 7 below),"notwithstanding that such persons, firms,
corporations, partnerships, associations or other entities may have been induced
to become customers and give their patronage to Employer by the efforts and
solicitations of Employee, or someone acting on his behalf, either during the
usual hours of employment of Employee or otherwise.
7. COVENANT NOT TO COMPETE
Employee acknowledges that Employer is in a competitive
business with a national and international market, and that the public
perception of Employee's continued and exclusive association with Employer under
this Agreement is of a high degree of importance to Employer. Therefore, during
the longer of (a) the Term and a period of four (4) years immediately after the
termination hereof for any reason or (b) five (5) years immediately after the
termination hereof for any reason whatsoever ("Non-Compete Period"), subject
however to the provisions of Section 5(c) above, Employee shall not engage or be
interested, directly or indirectly, whether alone or together with or on behalf
of or through any other person or entity, whether as sole proprietor, partner,
stockholder, agent, officer, director, employee, technical advisor, lender,
trustee, beneficiary, or otherwise, in any phase of any business any part of
which consists of the sale and distribution (including related transportation)
through salespersons or showroom facilities to restaurants, cafes bars, hotels,
schools, colleges and institutions (as the word "institutions" is customarily
defined in the wholesale grocery business), of foods, packaged or otherwise,
groceries, restaurant supplies and equipment such as cookware, glassware and
dinnerware, smallwares and other commercial kitchen equipment, janitorial
supplies, paper products, consumable store or supplies of every nature and
description purchased or purchasable by such customers, or the manufacture of
any such products or of design services for restaurant construction or
remodeling and restaurant furniture, fixtures and equipment ("wholesale food
distribution business"); including any business of a kind in whole or in part
similar to the wholesale food distribution business that may be engaged in by
Employer or any of its affiliates during the Non-Compete Period in any State
where Employer conducts its wholesale food distribution business through
maintenance of a warehouse or by location of a customer where food is delivered
("Territory"); (ii) divert, solicit or take away any customers of Employer, or
any employee of Employer, for the purposes of engaging in any activities
competitive with the wholesale food distribution business of Employer anywhere
within the Territory; or (iii) attempt to convert or solicit any client or
staffing person with which Employee has had any contact as a result of
Employee's relationship with Employer, its subsidiaries, affiliates and related
companies.
8. CONFIDENTIALITY
(a) Confidential Information. In the course of Employee's
employment, Employer may disclose or make known to Employee, and Employee may be
given access to or become acquainted with, certain information, trade secrets or
both, including but not limited to procedures, formulations, methods, systems,
documentation, facilities, policies, marketing, pricing, customer lists and
leads, and other information and know-how, all relating to, or useful in,
Employer's business and which Employer considers proprietary and maintains
confidential (collectively "Confidential Information"). Confidential Information
shall not include information which Employer releases to the public or is
otherwise in the public domain.
(b) Disclosure. During the Term and at all times thereafter,
Employee covenants that he shall not in any manner, either directly or
indirectly, divulge, disclose or use, except in the course of performing his
duties and obligations to Employer under this Agreement, any Confidential
Information or proprietary data of Employer which
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Employee is aware of or becomes aware of, whether in the course of performing
obligations under this Agreement or otherwise through his relationship with
Employer, its current or future subsidiaries or affiliates, without the prior
written consent of Employer. Information in the public domain or disclosed
pursuant to valid subpoena, court order or order of administrative agency shall
not be considered to be disclosed in violation of this Agreement provided that
Employee gives Employer notice of the relevant subpoena or order in advance of
disclosing the information
(c) Return of Materials. All equipment, documents, memoranda,
reports, records, files, materials, samples, books, correspondence, hard drives,
disks, lists, other written and graphic records, and the like (collectively,
"Materials"), affecting or relating to the business of Employer or its
subsidiaries and/or affiliates, which Employee shall prepare, use, construct,
observe, possess or control shall be and remain Employer's sole property or in
Employer's exclusive custody and must not be removed from the premises of
Employer except as directed by Employer's Board of Directors in writing.
Promptly upon termination of employment for any reason whatsoever or otherwise
upon request of any officer of Employer, the Materials and all copies thereof in
the custody or control of Employee shall be immediately delivered to Employer.
9. ENFORCEABILITY OF RESTRICTIVE COVENANTS
The parties intend that the covenants contained in Sections 6, 7 and 8
shall be construed as a series of identical (other than as to geography)
separate covenants as to each state, possession and territory of the United
States of America. If, in any judicial proceedings, a court shall refuse to
enforce any of the other separate covenants deemed included in those sections,
then such unenforceable covenant shall be amended to relate such lesser period
or geographical area as shall be enforceable or, if deemed appropriate by such
court, deemed eliminated from these provisions for the purpose of those
proceedings to the extent necessary to permit the remaining separate covenants
to be enforced or enforceable. In the event Employer should bring any legal
action or other proceeding against Employee for enforcement of Sections 6, 7 or
8, the calculation of the Non-Compete Period shall not include the period of
time commencing with the filing of legal action or other proceeding to enforce
Sections 6, 7 or 8 through the date of final judgment or final resolution,
including all appeals, if any, or such legal action or other proceedings.
10. INJUNCTION.
Employer and Employee recognize and acknowledge that a breach by
Employee of any of the covenants contained in Section 6, 7 and 8 of this
Agreement may cause irreparable harm and damage to Employer, the monetary amount
of which may be virtually impossible to ascertain. As a result, Employee
recognizes and acknowledges that Employer may be entitled to an injunction from
any court of competent jurisdiction enjoining and restraining any violation of
any or all of the covenants contained in Sections 6, 7 and 8 of this Agreement
by Employee, his employees, associates, partners or agents, either directly or
indirectly, and that the right to injunction is in addition to, and not in lieu
of, any other remedies Employer may have either in law or in equity.
11. THIRD PARTY BENEFICIARY.
This Agreement is also for the benefit of SFSI, which is expressly made
a third-party beneficiary of this Agreement and that has all the rights granted
to Employer under the terms and conditions hereof.
12. DAMAGES
Nothing contained herein shall be construed to prevent Employer or
Employee from seeking and recovering from the other damages sustained as a
result of the breach or violation of any term or provision of this Agreement. In
the event that either party brings suit for the collection of any damages
resulting from, or the injunction of any action constituting a breach or
violation of any of the terms or provisions of this Agreement, then the party
found to have caused damage to the other shall pay all reasonable court costs
and attorneys' fees of the damaged party.
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13. DEATH OF EMPLOYEE
In the event of Employee's death during the term of this Agreement,
this Agreement shall terminate immediately and Employee's legal representative
shall be entitled to receive Employee's accrued and unpaid Base Salary up to the
date of Employee's death and the pro rata Formula Bonus for the year in which
the death occurs, at the same time as when it would otherwise become payable
hereunder.
14. NOTICE
Unless otherwise specifically provided herein, notice required or
permitted to be given under this Agreement shall be sufficient if in writing and
if sent by certified mail, return receipt requested, to the parties, at the
addresses set forth opposite their name on the signature pages hereto (or such
other address as any party hereto shall hereafter specify by notice in writing
to the other party hereto).
15. SUBSIDIARIES AND AFFILIATES; ASSIGNABILITY
All references herein to Employer shall include its current and future
subsidiaries, affiliates, successors and assigns. This Agreement is assignable
by Employer to any of its subsidiaries, affiliates or successors in interest in
its sole discretion but assignment shall not relieve Employer of any obligation
under this Agreement. This Agreement cannot be assigned by Employee.
16. SURVIVAL
Except as otherwise provided in this Agreement, the provisions of
Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16 and 17 shall survive and
remain in effect in accordance with their respective terms in the event this
Agreement or any portion hereof is terminated for any reason whatsoever.
17. WAIVERS
The failure or delay of a party at any time to require performance by
the other of any provision of this Agreement, even if known, shall not affect
the right to require performance of that provision or to exercise any right,
power or remedy hereunder, and any waiver by a party of any breach of any
provision of this Agreement should not be construed as a waiver of any
continuing or succeeding breach of such right, power or remedy under this
Agreement. No notice to or demand on a party in any case, shall, of itself,
entitle such party to any other or further notice or demand in similar or other
circumstances.
18. REMEDIES CUMULATIVE
No remedy herein conferred upon any party is intended to be exclusive
of any other remedy, and each and every such remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law hi equity or by statute or otherwise. No single or partial
exercise by any party of any right, power or remedy hereunder shall preclude any
other or further exercise hereof.
19. MISCELLANEOUS PROVISIONS
(a) Governing Law and Venue. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Indiana. Any disputes with respect to the interpretation of this Agreement or
the rights and obligations of the parties hereto shall be exclusively brought in
the U.S. District Court for the Southern District of Indiana or if such Court
lacks subject matter jurisdiction, in the state courts of Indiana, in Xxxxxx
County. Each party waives any right to object to the jurisdiction or venue of
either of such Courts or to claim that such Courts are an inconvenient forum.
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(b) Headings. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.
(c) Binding Effect. This Agreement shall be binding upon and shall
operate for the benefit of the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
(d) Attorney's Fees. Should it become necessary for any party to
institute legal action to enforce the terms and conditions of this Agreement,
the prevailing party shall be awarded a reasonable attorneys' fee, which shall
include a reasonable attorneys' fee for any appellate proceedings, expenses,
including any accounting expenses, and costs, from the other party hereto if
such party was an adverse party to such litigation.
(e) Severability. The invalidity or unenforceability, in whole or
in part, of any covenant, promise or undertaking, or any section, subsection,
paragraph, sentence, clause, phrase or word of any provisions of this Agreement
shall not affect the validity or enforceability of the remaining portions
thereof.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth in the first paragraph of this Agreement above.
Address: 000 Xxxxxxx Xxxx, Xxxxx 000 EMPLOYER:
Xxxxxxx Xxxxx, XX 00000
Fax No.: 000-000-0000 By: /s/ Xxxxxxx X. Xxxxxx
Attn.: Xxxxxxx X. Xxxxxx ----------------------------
Xxxxxxx X. Xxxxxx, CEO
Address: 0000 Xxxxxx Xxx EMPLOYEE:
Xxxxxxxxxxx, XX 00000
Fax No.: 000-000-0000 By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxx
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GUARANTY
Syndicated Transportation Service Group, Inc. ("STSI"), an affiliate of
Employer, in consideration of the services to be provided by Employee to
Employer under the foregoing Employment Agreement, guarantees the payment
obligations of Employer under the foregoing Employment Agreement.
Address: 000 Xxxxxxx Xxxx, Xxxxx 000 SYNDICATED TRANSPORTATION
Xxxxxxx Xxxxx, XX 00000 XXXXXXX GROUP, INC.
Fax No.: 000-000-0000
Attn.: Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx, CEO
