AGREEMENT
AGREEMENT
This
Agreement (this “Agreement”)
is
executed as of June 12, 2006 (the “Effective
Date”)
by and
among Xxxx Xxxxx (the “Executive”),
Glossy Finish, LLC, a New York limited liability company (“Glossy
Finish”),
on
the one hand, and SuperStock, Inc., a corporation organized under the laws
of
the State of Florida (the “Company”),
and
a21, Inc., a corporation formed under the laws of the State of Texas
(“a21”).
WHEREAS,
the
Executive, the Company and a21 entered into a written agreement dated May 1,
2005 (the “Employment
Agreement”)
relating to the employment of the Executive by the Company and a21;
and
WHEREAS,
the
Executive is no longer employed by the Company or a21, and the Company, a21
and
the Executive desire to terminate their respective rights, liabilities and
obligations, if any, under the Employment Agreement, as provided
herein.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants and agreements set forth
below, and for other good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, the parties hereto agree
as
follows:
W
I T N E S S E T H
1. Termination
of Employment, Severance, Consulting Services.
(a) The
Employee’s employment with the Company and a21 is hereby terminated as of May
25, 2006 (the “Termination
Date”).
The
Company and a21 will, in the aggregate, pay the Executive severance (the
“Severance”)
equal
to twelve (12) month’s salary, in the amount of One Hundred Twenty Thousand
Dollars ($120,000), paid in installments, at such intervals as the Company
regularly makes payments to employees generally, over such twelve (12) month
period (the “Severance
Period”).
In
addition, the Company and a21 will, in the aggregate, pay the Executive an
amount equal to his accrued and unused vacation days (the “Vacation
Pay”)
as of
the Termination Date. The Vacation Pay will be paid to the Executive by the
Company in a lump sum after the Effective Date but no later than the Company’s
next ordinary scheduled payroll payment. Executive understands and agrees that
the Company will deduct from the Severance and the Vacation Pay all federal,
state and/or local withholding taxes and other deductions the Company is
required by law to make from its wage payments to employees. The Executive
hereby resigns, effective immediately, as a director of a21 and from each and
every other position he may hold at the Company and/or a21. In the event that
the Executive breaches any material provision of this Agreement, the Severance
payments hereunder shall be immediately cancelled, if the Company has provided
written notice to the Executive and had provided a period of ten (10) days
to
cure such breach, if capable of cure.
(b) In
addition to the Severance payment set forth in Section 1(a), the Company and
a21
will accelerate, as of the Effective Date, the vesting of 62,500 of the
Executive’s unvested shares of restricted stock provided for as the “Bonus” in
paragraph 3(b) of the Employment Agreement and 100,000 of the Executive’s
unvested stock options as provided for in paragraph 3(c) of the Employment
Agreement. All remaining unvested shares of restricted stock and stock options
will be cancelled on the Termination Date. In the event that the Executive
breaches any material provision of this Agreement, all of the Executive’s
outstanding shares of restricted stock referred to in the first sentence of
this
Section 1(b) and unexercised stock options shall be immediately cancelled,
if
the Company has provided written notice to the Executive and has provided a
period of ten (10) days to cure such breach , if capable of cure.
(c) The
Company agrees that all of the Executive’s vested stock options may be exercised
by the Executive until the earlier of, as the case may be (i) the date such
vested stock options would otherwise have expired by their terms (assuming
for
this purpose the Executive was still employed by a21), or (ii) May 25, 2007
(the
“Option
Expiration Date”).
After
the Option Expiration Date, all of the Executive’s unexercised stock options
shall be cancelled.
(d) The
Executive acknowledges and agrees that all right, title and interest in and
to
the approximately 1,205 images he photographed while an employee of the Company
(some or all of which are currently part of the “PureStock” brand) are the sole
and exclusive property of the Company and shall be deemed “work made for hire”
as such term is defined under the copyright laws of the United States. To the
extent that any such copyrightable works may not, by operation of law, be works
for hire, the Executive agrees to and hereby does assign to the Company or
its
designees ownership of all copyrights, registrations and similar protection
which may be available for those Products. The Executive hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as his agents and attorneys-in-fact to act for and in his behalf, and in his
place and stead, to execute and file any and all applications or documents
and
to do all other lawfully permitted acts to further the prosecution and issuance
of copyrights and/or other intellectual property rights with respect to such
Products with the same legal force and effect as if executed by Executive.
Nothing contained in this Agreement precludes the Executive and the Company
from
entering into a photographer agreement after the Effective Date with regard
to
images the Executive creates after the Effective Date.
(e) The
Company and/or a21 may from time to time during the Severance Period ask the
Executive to provide consulting and/or advisory services. The Executive agrees
to provide such consulting and/or advisory services as the Company and/or a21
may reasonably request, at such times, in such locations and in such manner
as
the Executive and the Company or a21 shall mutually agree. The Executive need
not provide any such consulting and/or advisory services after he has commenced
substantially full-time employment with another employer. The Executive shall
not receive any compensation from the Company and/or a21 for these services
but
the Company or a21, as applicable, will reimburse the Executive for reasonable
out of pocket expenses incurred by the Executive in connection with any services
provided pursuant to this Section 1(f), provided,
however,
that
any such expense shall be approved in advance by the Company or a21, as
applicable.
2. Consideration.
The
Employment Agreement is hereby cancelled and terminated and none of the parties
thereto shall have any obligations to each other under the Employment Agreement,
except as set forth in this Agreement. Executive hereby acknowledges and agrees
that the provisions of the Employment Agreement relating to any severance
payments that Executive would be entitled to receive thereunder are cancelled
and hereby terminated, and that except as provided in this Agreement, Executive
has no legal or other entitlement to the arrangements described in the
Employment Agreement, and that the Company’s agreement to make such payments and
provide the other consideration specified in this Agreement, is sufficient
consideration for the general release, non-solicitation and non-competition
terms set forth respectively in Sections 5, 7 and 8 below.
3. Sale
of Stock.
(a) The
Executive represents that he, directly or through Glossy Finish, currently
holds
approximately 1,682,000 shares (of which 62,500 will be forfeited in accordance
with the terms pursuant to which they were granted to the Executive ) of common
stock of a21 (the “Executive
Stock”)
and
holds options and warrants (the “Executive
Options”)
to
acquire approximately 1,934,000 shares (of which 100,000 will be forfeited
in
accordance with the terms pursuant to which they were granted to the Executive)
of common stock of a21 (the Executive Stock and the Executive Options,
collectively, “Executive
Securities”).
(b) The
Executive and Glossy Finish hereby agree that from the period commencing from
the Effective Date and ending on May 25, 2007 (the “Lock-Up
Period”),
neither of them shall make any sales of Executive Stock except for (i) the
sale
of up to three hundred thousand (300,000) shares (as described in the last
sentence of this Section 3(b) made in a non-market transaction to a third party
in a private transaction (a “Third
Party Sale”)
and
(ii) such sales as are reasonably required to provide a sufficient amount of
cash for the Executive to satisfy the income taxes attributable to exercise
of
Executive Options on a cashless basis. As soon as reasonably practical after
the
execution and delivery of this Agreement, the Company agrees that it will use
its commercially reasonable efforts to facilitate and assist the Executive
and/or Glossy Finish in selling up to three hundred thousand (300,000) shares,
acquired after the Effective Date, as a result of the exercise of stock options,
of Executive Stock in the aggregate in a Third Party Sale during the Lock-Up
Period.
(c) The
Executive hereby covenants and agrees that he may only exercise Executive
Options on a cashless basis during the Lock-Up Period. This means the Executive
may exercise stock options without first paying to the Company the aggregate
strike price, which is defined as the strike price times the number of
share-options being exercised. For purposes of this Agreement, a “cashless”
basis exercise means that Executive as part of an option exercise is permitted
to trade option-shares of a21 common stock in exchange for actual shares of
a21,
Inc. common stock using the Executive’s stock option exercise by using the
“spread” between the strike price and market price to cover the aggregate strike
price that is required to be paid with regard to such option exercise. This
is
represented with the following formula: the difference between the strike price
and market price, divided by the market price. For example, if the Executive
exercises an option on one share of a21, Inc. common stock, having a strike
price of $0.25, when the then-market price of a21, Inc. common stock is $1.00,
the Executive would receive ¾ of one share of a21 common stock in return
(i.e.
[($1.00-$.25)/$1.00)]).
(d) The
Executive and Glossy Finish hereby agree that they shall not make any sale
of
the Executive Securities while in possession of any material non-public
information about a21, the Company or any of their respective Affiliates (as
defined herein), and that all sales of the Executive Securities shall be
disposed of in compliance with applicable state and federal securities
laws.
4. No
Other Payments.
The
Executive acknowledges that as of the date hereof, the Company and a21 have
made
or have agreed in this Agreement to make all payments to the Executive as
required under the Employment Agreement or otherwise for wages that the
Executive has earned to the date hereof including any bonuses, if any; has
paid
or has agreed in this Agreement to pay to the Executive all accrued vacation
pay
to which he is entitled, if any; and has reimbursed or has agreed in this
Agreement to reimburse the Executive for all expenses he incurred on behalf
of
the Company and a21 to the date hereof and was entitled to be reimbursed for;
and, except as provided in this Agreement, the Company and a21 currently owes
him no other payments of any kind and of any nature. Without limiting the
generality of the foregoing, except as provided in this Agreement, the Executive
hereby relinquishes any and all right he may have under the Employment Agreement
to receive cash payments, shares and options including, without limitation,
under the provisions of Sections 3(a), 3(b) and 3(c) of the Employment
Agreement. The Company and a21 similarly relinquish any rights under the
Employment Agreement except as provided for in this Agreement. The Executive
will submit to the Company within five (5) business days after the Effective
Date expense reimbursement vouchers for all appropriate expenses he incurred
on
behalf of the Company prior to May 25, 2006. The Company will reimburse
Executive within five (5) business days after its receipt of such expense
reimbursement vouchers for all appropriate expenses not yet reimbursed.
5. General
Release.
(a) Except
for the obligations undertaken by the Company and a21 under this Agreement,
Executive hereby covenants and agrees and releases the Company and a21, and
all
of its respective Affiliates (as defined below), and their respective employees,
officers, directors and agents, from any and all claims or demands the Executive
(or Executive’s respective successors and assigns) has or hereafter can, shall
or may have based on the Executive’s employment by the Company and a21, any
events that may have occurred during the course of his employment or the
termination of that employment, or any other matters or claims of any kind
or
nature from the beginning of the world to the Effective Date (including without
limitation, those arising out of or which may hereafter be claimed to arise
out
of the Employment Agreement or Executive’s status as a shareholder of the
Company or a21). Without limiting the generality of the foregoing, the scope
of
this release includes (but is not limited to) a release of any and all claims
for unpaid wages or other compensation, breach of contract, wrongful discharge,
disability benefits, health and medical insurance provided by the Company or
a21
(other than benefits provided by third parties) sick leave and employment
discrimination. Executive acknowledges and agrees that he is specifically
releasing any rights or claims he may have under: the Age Discrimination in
Employment Act, which prohibits discrimination in employment based on age;
Title
VII of the Civil Rights Act of 1964, which prohibits discrimination in
employment based on race, color, national origin, religion or sex; the Equal
Pay
Act, which prohibits paying men and women unequal pay for equal work; Title
I of
the Americans with Disabilities Act; the New York Human Rights Law; the New
York
City Human Rights Law; and all other federal, state and local laws and
regulations prohibiting discrimination in employment. Executive acknowledges
and
agrees that this release covers not only claims that he knows about, but also
claims that he might not know about. Executive covenants and agrees that the
release set forth in this Section 5 shall be binding upon his successors and
assigns. By signing this Agreement, Executive acknowledges and agrees that
he is
forever giving up his rights to make any of the claims or demands mentioned
above. For purposes of this Agreement, “Affiliate” means any entity that
controls, is controlled by, or is under common control with the Company and
a21.
(b) Except
for the obligations undertaken by the Executive under this Agreement, the
Company and a21, their officers, directors, and employees to the extent
permitted by law, for good and valuable consideration, the receipt of which
is
hereby acknowledged, hereby forever remise, release and discharge the Executive,
and his or its subsidiaries, divisions, stockholders, directors, officers,
managers, employees, agents, and heirs from all debts, demands, actions, causes
of action, suits, dues, sum and sums of money, accounts, reckonings, bonds,
specialties, covenants, contracts, controversies, agreements, promises, doings,
omissions, variances, damages, extents, executions and liabilities and any
and
all other claims of every kind, nature and description whatsoever (upon any
legal or equitable theory, whether contractual, common-law, statutory, federal,
state local or otherwise) whether known or unknown which against the Executive
and his affiliates, successors, agents, servants, beneficiaries, employees,
attorneys or assigns, the Company and a21 now has, may have, or ever had, from
the beginning of the world to the Effective Date, including, without limitation,
all statutory, tort, contract and other claims that were or could have been
asserted and any and all matters which in any way relate to or arise out of
the
Company’s or a21’s relationship with the Executive. This release covers claims
the Company and a21 is or is not currently aware of. This release includes,
but
is not limited to, all claims for compensatory damages, punitive damages,
attorneys’ fees, expenses and costs or other compensation of any kind, including
any claims which were or might have been asserted by the Company or a21 or
on
their behalf.
6. No
Lawsuits.
The
parties represent and warrant that they have not filed (whether recently or
otherwise) any claim or lawsuit against the other party or any of their
respective Affiliates, or any of their employees, officers or directors based
on
the actions of the other party or their respective Affiliates or any of their
employees, officers or directors, in connection with the Executive’s employment
and the termination of his employment with the Company and a21. Each party
covenants and agrees that they will never file a lawsuit asserting any claims
that such party has released in Section 5 above.
7. Non-Solicitation.
(a) Non-Solicitation
of Employees.
The
Executive hereby agrees that for a period of one (1) year after the Termination
Date, he shall not, directly or indirectly through any other individual, person
or entity, employ, solicit or induce any individual who is, or was at any time
during the last twelve (12) months of the Executive’s employment by the Company,
an employee of the Company to terminate or refrain from renewing or extending
his or her employment by the Company or to become employed by or enter into
a
contractual relationship with the Executive or any other individual, person
or
entity. For the purposes of this Agreement the “Company” shall be deemed to
include the Company and each of its Affiliates. The foregoing provision shall
not preclude an enterprise of which Executive is an employee from hiring any
of
the foregoing individuals, provided,
however,
that
Executive has not otherwise breached the foregoing provisions of this Section
7(a).
(b) Non-Solicitation
of Suppliers or Vendors.
The
Executive hereby agrees that for a period of one (1) year after the Termination
Date, he shall not, directly or indirectly through any other individual, person
or entity, solicit, persuade or induce any individual, person or entity which
is, or at any time while Executive was employed by the Company was, a supplier
of any product or service to the Company, or vendor of the Company (whether
as a
distributor, agent, commission agent, employee or otherwise), to terminate,
reduce or refrain from renewing or extending his, her or its contractual or
other relationship with the Company. The foregoing provision does not preclude
any enterprise of which Executive is an employee from doing business with the
foregoing persons, provided however that Executive has not otherwise breached
the foregoing provisions of this Section 7(b).
(c) Non-Solicitation
of Customers.
The
Executive hereby agrees that for a period of one (1) year after the Termination
Date, he shall not, directly or indirectly through any other individual, person
or entity, solicit, persuade or induce any individual, person or entity which
is, or at any time during the Employment Period was, a customer of the Company
to terminate, reduce or refrain from renewing or extending its contractual
or
other relationship with the Company in regard to the purchase of products or
services manufactured, marketed or sold by the Company, or to become a customer
of or enter into any contractual or other relationship with the Executive or
any
other individual, person or entity in regard to the purchase of products or
services similar or identical to those manufactured, marketed or sold by the
Company. The foregoing provision does not preclude any enterprise of which
Executive is an employee from doing business with the foregoing persons,
provided however that Executive has not otherwise breached the foregoing
provisions of this Section 7(c).
8. Non-Competition.
The
Executive hereby agrees that for a period of one (1) year after the Termination
Date, the Executive shall not, directly or indirectly, anywhere in the entire
United States, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner, director, independent contractor or in any other capacity with, or
have
any financial interest in, or aid or assist anyone else in the manufacture,
sale
or representation of products or the provision of services identical or similar
to the products and services manufactured, sold, represented or provided by
the
Company, and which products or services are marketed to the same customer base
as the products or services offered by the Company, at any time while the
Executive was employed by the Company or during the one year period after the
Termination Date, or which are included in any business plans of the Company
in
existence and under consideration at the time of termination and of which
Executive was aware. The foregoing shall not preclude Executive from being
a
passive owner of not more than 2% of the outstanding stock of any class of
stock
of any corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.
9. Confidentiality.
Executive covenants and agrees that he shall not divulge to anyone, Confidential
Information, as hereinafter defined. Executive also covenants and agrees that
he
will not disclose, disseminate or publicize, or cause or permit to be disclosed,
disseminated or publicized to any person, corporation, or other entity (with
the
exception of Executive’s immediate family, his attorneys and accountants) any of
the terms of this Agreement, including, without limitation, the amounts paid
pursuant to this Agreement, unless and only to the extent required by lawful
order or subpoena. “Confidential Information” means all information of a
confidential or proprietary nature regarding the Company and a21, their
respective businesses or properties, that the Company and a21 has furnished
or
furnishes to the Executive, whether before or after the date of this Agreement,
or is or becomes available to the Executive by virtue of the Executive’s
employment by the Company and a21, whether tangible or intangible, and in
whatever form or medium provided, as well as all information the Executive
generated that contains, reflects or is derived from such information. The
term,
“Confidential Information” shall include, but not be limited to, computer
software or data of any sort developed or compiled by the Company, a21 or any
of
their respective Affiliates, customer lists, customer requirements and
specifications, financial data, sales figures, costs and pricing figures,
marketing and other business plans, product development, marketing concepts,
personnel matters, drawings, specifications, instructions, methods, processes,
techniques, formulae or any other information relating to the Company’s or a21’s
services, products, sales, technology, research data, software and all other
know-how, trade secrets or proprietary information, or any copies, elaborations,
modifications and adaptations thereof, which are in the possession of the
Company, a21 or any of their respective Affiliates and which have not been
published or disclosed to, and are not otherwise known to, the public. The
Executive further agrees that on or before the Effective Date or at any other
time upon request, the Executive shall promptly deliver to the Company and
a21,
without retaining any copies thereof, all evidence of the Confidential
Information, including, without limitation, all notes, memoranda, records,
files
and other documents, whether tangible or intangible, and regardless of how
stored or maintained, whether on computer tapes, discs or any other form of
technology.
10. Non-Disparagement.
(a) Except
to
the extent required by law or under legal process, the Executive agrees not
to
(i) in any way publicly disparage the Company or a21, their respective
shareholders, officers, directors, or employees, (ii) act in a manner reasonably
likely to cause embarrassment or public humiliation to such entities or persons,
or (iii) make any public statement or take any action that is reasonably likely
to be adverse, inimical or otherwise detrimental to the interests of such
entities or persons.
(b) Except
to
the extent required by law or under legal process, the Company and a21 agree
to
use commercially reasonable efforts to cause its directors and executive
officers not to (i) in any way publicly disparage the Executive, his employees,
or agents, (ii) act in a manner reasonably likely to cause embarrassment or
public humiliation to such entities or persons, or (iii) make any public
statement or take any action that is reasonably likely to be adverse, inimical
or otherwise detrimental to the interests of such entities or
persons.
(c) The
Company and a21 will issue the following jointly drafted announcements: (i)
internal statement to Company and a21 employees; (ii) press release; and (iii)
a
reference statement for use in response to inquiries from prospective employers,
or others. The Company and a21, including their directors, officers, and
employees at the executive level will make no other public statements about
Executive, his employment, or the end of that employment other than are
contained in the three jointly drafted announcements, except to the extent
required by applicable law. The Company, a21, and Executive agree that as of
the
Effective Date, the parties have drafted the three joint announcements and
agreed to their content by initialing a written copy of each
announcement.
11. Non-Admission
of Liability.
This
Agreement and the release contained herein shall not be construed as evidence
or
an admission of any wrongdoing or violation of any law, regulation, rule or
agreement.
12. Consequences
if Violation of Certain Promises.If
any
party must take legal action to enforce the terms of this Agreement, the
prevailing party will be entitled to receive reasonable attorney’s fees and
costs from the non-prevailing party. The remedy provided under this Section
12
shall not be construed to limit or exclude any other remedy available to the
parties under any other provision of this Agreement.
13. Equitable
Remedies.
Each
party recognizes that irreparable injury will result to the other party if
a
party breaches any provision of this Agreement, and the parties agree that
if
any party should engage, or directly cause any other person or entity to engage,
in any act in violation of any provision of this Agreement, then the
non-breaching party shall be entitled, in addition to any other remedies,
damages and relief as may be available under applicable law, to seek an
injunction prohibiting the breaching party from engaging in any such act or
specifically enforcing this Agreement, as the case may be. It is understood
and
agreed that no failure or delay by the non-breaching party in exercising any
right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other
or
further exercise thereof or the exercise of any right, power or privilege under
this Agreement.
14. Encouragement
to Consult with Attorney; Full Understanding of Document.
Executive acknowledges that he has been encouraged to and has consulted with
an
attorney of his own choosing before signing this Agreement. By signing this
Agreement, Executive acknowledges that he has read this Agreement thoroughly,
that he has had the opportunity to and has consulted with an attorney of his
own
choosing prior to signing, and that his agreement to the terms of this Agreement
is knowing, willing and voluntary. In connection with this Agreement, the
Company hereby agrees to pay up to Ten Thousand Dollars ($10,000) in legal
and
other fees and expenses incurred by the Executive in the negotiation and
preparation of the Agreement, upon presentation of such reasonable documentation
as the Company shall request.
15. Interpretation
and Enforcement of Agreement.
This
Agreement shall be interpreted and enforced in accordance with the laws of
the
State of Florida, without reference to its conflicts of laws principles. If
any
term or condition of this Agreement shall be held to be invalid or
unenforceable, this Agreement shall be interpreted without that term or
condition. The parties hereby irrevocably consent to the exclusive jurisdiction
of the state or federal courts sitting in Jacksonville, Florida in connection
with any controversy or claim arising out of or relating to this Agreement,
and
hereby waive any claim that such forum is inconvenient or otherwise improper.
Each party hereby agrees that any such court shall have in
personam
jurisdiction over it and consents to service of process in any matter authorized
by Florida law.
16. Successors
and Assigns.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, successors, representatives and assigns,
provided,
however,
that
this Agreement is assignable to any legal successor of the Company and a21
but
this Agreement may not be assigned by Executive. Nothing herein limits the
right
of Executive’s estate to receive all consideration provided for in this
Agreement should Executive become deceased during the Severance
Period.
17. Property.
In
addition to all materials to be returned to the Company and a21 pursuant to
Section 9 of this Agreement, the Executive hereby agrees to deliver all other
property of the Company and/or a21 or their respective Affiliates currently
in
the possession of the Executive, including, but not limited to a laptop computer
and Blackberry. The Company will provide to Executive a written and signed
receipt indicating the property that has been returned. The Company will send
to
the Executive within five (5) business days of the Effective Date all of his
personal belongings located at the Company’s offices.
18. Entire
Agreement.
This
Agreement constitutes the entire understanding and agreement between the
Executive, the Company and a21 with regard to all matters contained herein,
and
supersedes all prior agreements and understandings among the parties with
respect to its subject matter. This Agreement may not be changed or modified
except by a written agreement that has been signed by the Executive and by
a
duly authorized officer of the Company and a21.
19. Execution
in Counterparts.
This
Agreement may be signed in counterparts, each of which shall be deemed an
original and all of which taken together will constitute one and the same
instrument.
IN
WITNESS WHEREOF,
the
parties have executed, or caused to be executed by a duly authorized
representative, this Agreement as of the date and year first written
above.
SUPERSTOCK, INC. | ||
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By: | ||
Name:
Xxxxxx Xxxxxxxx
Title:
Chief Financial Officer
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a21, INC. | ||
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By: | ||
Name:
Xxxxxx X. Xxxxx
Title:
Chief Executive Officer
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EXECUTIVE | ||
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By: | ||
Xxxx
Xxxxx
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GLOSSY FINISH, LLC | ||
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By: | ||
Name:
Xxxx Xxxxx
Title:
Sole Principal
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