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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made and
entered into as of this 7th day of December, 1998 by and between Lahaina
Acquisitions, Inc., a Colorado corporation (the "SELLER"), and Mongoose
Investments, LLC, a Georgia limited liability company (the "PURCHASER").
RECITALS:
WHEREAS, Seller desires to sell to Purchaser, and Purchaser
desires to buy from Seller, 1,250,000 shares of the no par value per share
common stock ("Common Stock") of the Seller, 1,910,000 shares of the no par
value per share Series A Preferred Stock ("Preferred Stock") of the Seller and
the Note (as defined below) of Seller, and in consideration therefor, Purchaser
shall deliver all the stock of Beachside Commons I, Inc. ("Beachside Stock")
owned by Purchaser, and upon the terms and subject to the conditions
hereinafter set forth (the "ACQUISITION").
NOW, THEREFORE, in consideration of the mutual promises,
agreements and covenants set forth herein, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending legally to be bound,
hereby agree as follows:
1. Definitions. For purposes of this Agreement and the Schedules
attached hereto, the following terms shall have the meaning specified or
referred to below unless the context requires otherwise:
(a) Acquisition. Has the meaning assigned to such terms in
the Recitals.
(b) AFFILIATE. With respect to any Person, another Person
controlling, controlled by, or under common control with such a designated
Person and shall include, by way of illustration and without limiting the
generality of the foregoing, any association, partnership, trust, corporation,
enterprise or other entity in which such Person is a director, officer, limited
partner or general partner or in which such designated Person together with
Affiliates of such designated Person own in the aggregate a beneficial interest
in assets, profits or losses equal to at least ten percent (10%) thereof.
(c) BREACH. A Breach of a representation, warranty, covenant,
obligation or other provision of this Agreement will be deemed to have occurred
if there is or has been any inaccuracy in or breach of, or any failure to
perform or comply with such representation, warranty, covenant, obligation or
other provision.
(d) CODE. The Internal Revenue Code of 1986, as amended.
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(e) CONTEMPLATED TRANSACTIONS. Collectively, all of the
transactions contemplated by this Agreement.
(f) CONTRACT. Any agreement or contract, whether written or
oral, that is legally binding, including any commitment to purchase, to which
the Company is a party.
(g) ENCUMBRANCE. Any mortgage, charge, claim, equitable
interest, lien, option, pledge, security interest, right of first refusal or
other encumbrance.
(h) ERISA. The Employee Retirement Income Security Act of
1974, as amended, or any successor law, and the regulations and rules issued
pursuant to that act or to any successor law.
(i) ERISA Affiliate. Has the meaning assigned to such term in
Section 5. 1 6(a) hereof.
(j) FINANCIAL STATEMENTS. Collectively, the Seller's most
recent Form 10-K and 10-Q filed with the Securities and Exchange Commission.
(k) GAAP. At any particular time, generally accepted
accounting principles as in effect in the United States at such time; provided,
however, that, if it was permissible to use more than one principle at such
time in respect of a particular accounting matter, GAAP shall refer to the
principle which was then employed by the Company.
(1) IRS. The Internal Revenue Service.
(m) LIABILITIES. Collectively, any debt, obligation, or tax
of any nature or other liability as determined pursuant to GAAP.
(n) LOSS OR LOSSES. Have the meanings assigned to such terms
in Section 13(a) hereof.
(o) MATERIALITY. The terms "MATERIAL," "IN ALL MATERIAL
RESPECTS, "MATERIAL CHANGES" and like or similar phrases shall mean, as
the context requires, events or circumstances which do or could give rise to
negative economic consequences in an aggregate amount of at least ten thousand
dollars ($10,000).
(p) NOTE. A demand promissory note of Lahaina dated the date
hereof in the face amount of $700,000 payable to Mongoose.
(q) PERSON. Any individual, corporation, general or limited
partnership, limited liability company, limited liability partnership, joint
venture, estate, trust, association, organization, governmental body, or other
entity or body.
(r) PLANS. Has the meaning assigned to such term in Section
5.16(a) hereof.
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(s) PROCEEDING. Any action, arbitration, audit, complaint,
investigation, petition, litigation or suit (whether civil, criminal,
administrative, investigative or informal) commenced, brought, conducted, or
heard by or before, or otherwise involving, any governmental body or
administrator or any arbitrator.
(t) PROPERTIES. Has the meaning assigned to such term in
Section 7.9 hereof.
(u) RECIPIENT. Has the meaning assigned to such term in
Section 25 hereof.
(v) RELATED PERSON. (i) Any person related by blood, adoption
or marriage to any Seller, (ii) any corporation or other entity in which any
such person, or any Seller, director or officer has, directly or indirectly, at
least a five percent (5%) beneficial interest in the capital stock or other
type of equity interest in such corporation or other entity, or (iii) any
partnership in which any of the foregoing parties is a general or limited
partner.
(w) SUBSIDIARY. With respect to any Person, any corporation,
association or other business entity of which more than fifty percent (50%) of
the total voting power of shares of stock (or equivalent ownership or
controlling interest) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other subsidiaries of that Person or a combination thereof.
(x) TAX RETURN. Any return, report, form or other documents
or information filed with or submitted to, or required to be filed with or
submitted to, any governmental body in connection with the determination,
assessment, collection or payment of any Tax (including all filings with
respect to employment-related Taxes).
(y) THREATENED. A Proceeding, claim, dispute or other matter
will be deemed to have been Threatened with respect to a Person, if such Person
has received any demand, statement or other notice with respect to such
Proceeding, claim, dispute or other matter.
2. Closing; Purchase and Sale of Common Stock, the Preferred
Stock and the Note.
(a) At the Closing, (x) Seller, in reliance on the
representations, warranties and covenants of Purchaser contained herein and
subject to the terms and conditions of this Agreement, shall sell to Purchaser
the Common Stock, the Preferred Stock and the Note; and (y) Purchaser, in
reliance on the representations, warranties and covenants of Seller contained
herein and subject to the terms and conditions of this Agreement, shall
purchase the Common Stock, the Preferred Stock and the Note from Seller by
delivering the Beachside Stock to Seller.
(b) Delivery of the Common Stock, the Preferred Stock and the
Note. At the Closing, Seller shall deliver to Purchaser, free and clear of all
Encumbrances thereon of every kind, the certificates for the shares of Common
Stock, the certificates for shares of Preferred Stock and the Note.
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(c) Delivery of Beachside Stock. At the Closing, Purchaser
shall deliver to Seller, free and clear of all Encumbrances thereon of every
kind, the certificates for the shares of Beachside Stock.
(d) Closing. The Closing shall take place at the Atlanta
offices of Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP, Atlanta, Georgia, on December 7,
1998 (the "Closing Date") at 10:00 A.M., or at such other time and place as
shall be mutually agreed upon by Purchaser and Seller.
3. [RESERVED].
4. [RESERVED].
5. Representations and Warranties of the Seller. Seller
represents and warrants to Purchaser as follows:
5.1 Organization, Standing, Qualification and Capitalization.
Seller is a corporation duly organized, validly existing and in good standing
under the laws of Colorado, and has all requisite corporate power and authority
to conduct its business as presently conducted and to own and lease the
properties and assets used in connection therewith. A complete and accurate
copy of (i) the Articles of Incorporation of Seller and (ii) the By-Laws of
Seller and all amendments thereto, have been delivered to Purchaser. Seller is
not required to be qualified to do business as a foreign corporation in any
state.
5.2 Capitalization; Ownership of Common Stock and Related
Matters. The total authorized capital stock of Seller the Company consists of
800,000,000 shares of Common Stock of which 996,500 shares are issued and
outstanding and 10,000,000 shares of Preferred Stock, none of which are
outstanding. All outstanding shares were duly authorized and validly issued and
are fully paid and non-assessable and the shares of Common Stock and Preferred
Stock to be issued and delivered pursuant to this Agreement will be duly
authorized, validly issued, fully paid and non-assessable. There are no shares
of capital stock of the Seller issued and outstanding except for such shares.
None of such shares was issued in violation of any preemptive or preferential
right. There are currently no stock options outstanding. Seller is not and, at
the Closing, will not be a party to or bound by any written or oral Contract or
agreement which grants to any Person an option or right of first refusal or
other right of any character to acquire at any time, or upon the happening of
any stated events, shares of capital stock or other securities of the Seller
whether or not presently issued or outstanding.
5.3 Subsidiaries of Seller. Seller does not own any shares of
any corporation nor has any interest in any partnership, limited liability
company, joint venture or other legal entity.
5.4 Financial Statements. Seller has delivered to Purchaser
true, complete and accurate copies of the Financial Statements. The Financial
Statements have been prepared in accordance with GAAP, except as otherwise
disclosed therein, applied on a basis consistent with that of the preceding
fiscal years.
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5.5 Properties. Seller has good and marketable title to all
its assets, free and clear of all Encumbrances of any nature whatsoever.
5.6 Taxes.
(a) Seller has duly and timely filed all Tax Returns which
were required to be filed by it, and paid, or has recorded adequate reserves on
the Financial Statements for the payment of, all Taxes shown on all Tax
Returns. All Tax Returns are true, correct and complete in all material
respects.
5.7 Litigation. There is no litigation, Proceeding or
governmental investigation pending or Threatened, or judgment against or
related to Seller or its properties, assets or business.
5.8 Intellectual Property Rights.
(a) Seller has no patents or patent applications,
trademarks, service marks, logos, trade names (whether registered or
unregistered) or applications for registration and registrations therefor, or
internet domain names or 1-800 and 1-888 telephone numbers; or any copyrights
(whether registered or unregistered) or applications for registration and
registrations therefor.
5.9 Contracts and Commitments. Seller has no Contracts other
than this Agreement.
5.10 [Reserved].
5.11 Absence of Undisclosed Liabilities. There are no
material Liabilities or obligations of Seller either accrued, absolute,
contingent or otherwise, including, but not limited to, any Liabilities for
Taxes due or to become due, except to the extent reflected on the Financial
Statements.
5.12 Absence of Default. Seller is not in default in the
performance, observance or fulfillment of any obligation, covenant or condition
contained in any debenture or note, or contained in any conditional sale or
equipment trust agreement, or loan or other borrowing agreement to which Seller
is a party.
5.13 Existing Condition. Since January 1, 1998, there has not
been any material adverse change in the business, operations, prospects,
properties, assets, liabilities, or condition, financial or otherwise, of
Seller.
5.14 Restrictions. Seller is not subject to any charter or
other corporate restriction, any agreement or any judgment, order, writ,
injunction or decree, which materially and adversely affects or, so far as
Seller can now foresee, may in the future materially and adversely affect, the
business, operations, prospects, properties, Assets, Liabilities, or condition,
financial or otherwise, of Seller.
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5.15 Employee Benefits.
Seller does not maintain, and have not maintained, any bonus,
deferred compensation, incentive compensation, stock purchase, stock option,
severance or termination pay, hospitalization or other medical, life or other
insurance, supplemental unemployment benefits, profit sharing, pension, or
retirement plan, program, agreement or arrangement, or other employee benefit
plan, program, agreement or arrangement (other than arrangements involving the
payment of wages) sponsored, maintained or contributed to or required to be
contributed to by Seller or by any trade or business, whether or not
incorporated (an "ERISA AFFILIATE") that together with Seller would be deemed a
"SINGLE EMPLOYER" within the meaning of Section 4001(a)(14) of ERISA, for the
benefit of any current or former employee, director, partner or independent
contractor of Seller or any ERISA Affiliate, whether formal or informal and
whether legally binding or not (the "PLANS") with respect to which Seller or
any ERISA Affiliate has or may in the future have any liability or obligation
to contribute or make payments of any kind.
5.16 Bank Accounts and Directors and Officers. Seller has
provided Purchaser with a true and complete list of the name and location of
each bank or other financial institution in which Seller has an account, each
safety deposit box or custody agreement and the names of the Persons authorized
to draw thereon or to withdraw therefrom and the names of all directors and
officers of Seller.
5.17 Compliance with Laws and Instruments. Seller has
complied with and is not in default under, or in violation of, any material
laws, ordinances, rules or regulations or orders (including, without
limitation, any safety, health, wage, hour, employment and trade laws,
ordinances, rules, regulations and orders) applicable to its business which
materially and adversely affects or, so far as Seller can foresee, may in the
future materially and adversely affect its business or condition, financial or
otherwise.
5.18 Environmental Compliance. Seller is not in violation of
any environmental laws.
5.19 [Reserved].
5.20 Validity of Contemplated Transactions. Neither the
execution and delivery of this Agreement by Seller nor the consummation by
Seller of the transactions provided for herein or therein will conflict with,
violate, or result in a breach, default or the creation of any Encumbrance
pursuant to, any agreement to which Seller is a party or by which it is bound
or any law, order, judgment or decree or any provision of the Articles of
Incorporation or Bylaws of Seller or any Contract to which Seller is a party.
Seller has the full power and legal authority to execute this
Agreement and to consummate and perform the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby and thereby are within the corporate
power of Seller and has been duly authorized by all necessary corporate action
on the part of Seller. This Agreement has been duly executed and delivered by
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Seller and constitutes the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.
5.21 Disclosure. No representation or warranty by Seller in
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state any material fact necessary to make any
statement herein or therein not misleading.
5.22 Corporate Records. The stock records and minute books of
Seller finished to Purchaser by Seller fully reflect all issuances, transfers
and redemptions of its capital stock, correctly show the total number of shares
of its capital stock issued and outstanding on the date hereof, correctly show
all corporate action taken by the directors and shareholders of Seller
(including action taken by consent without a meeting) and contains true and
correct copies or originals of its articles of incorporation and all amendments
thereto, its by-laws as amended and currently in force and the minutes of all
meetings or consent actions of its directors and shareholders.
6. Representations and Warranties of Purchaser. Purchaser
represents and warrants to Seller that:
6.1 Organization, Good Standing and Authority. Purchaser is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Georgia, and has all requisite corporate power
and authority to conduct its business as presently conducted and to own and
lease the properties and assets used in connection therewith. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby are within the power of Purchaser and have been duly
authorized by all necessary action on the part of Purchaser. This Agreement to
which Purchaser is a party constitutes the legal, valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with its terms.
6.2 Validity of Contemplated Transactions. Neither the
execution and delivery of this Agreement by Purchaser nor the consummation by
Purchaser of the transactions provided for herein or therein will conflict
with, violate, or result in a breach of or default under any Contract to which
Purchaser is a party or by which it or its assets are bound or any law, order,
judgment or decree or any provision of the charter or operating agreement of
Purchaser or any Contract to which Purchaser is a party.
6.3 Litigation. There is no pending action or Proceeding that
has been commenced against Purchaser and that may have the effect of
preventing, delaying, or making illegal the Contemplated Transactions and, to
the best knowledge of Purchaser, no such action or Proceeding has been
threatened.
6.4 INVESTMENT REPRESENTATIONS. The Common Stock and
Preferred Stock being delivered pursuant to the provisions of this Agreement
will be held by Purchaser for its own account and not with a view to, or for
resale in connection with, the distribution thereof.
7. [Reserved].
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8. Conditions Precedent to Purchaser's Obligations. All
obligations of Purchaser under this Agreement are subject to the fulfillment,
prior to or at the Closing Date, of each of the following conditions:
8.1 Representations and Warranties. Seller's representations
and warranties contained in this Agreement or in any list, certificate or
document delivered pursuant to the provisions hereof or in connection with the
Contemplated Transactions shall be true and correct at and as of the Closing
Date as though such representations and warranties were made at and as of such
time (except to the extent that they are stated therein to be true as of some
other date).
8.2 Compliance with Agreements and Conditions. Seller shall
have performed or complied with all agreements and conditions required by this
Agreement to be performed or complied with by them prior to or at the Closing
Date.
8.3 Certificate of Seller. Seller shall have delivered to
Purchaser a certificate, executed by Seller, dated as of the Closing Date,
certifying in such detail as Purchaser may reasonably request to (a) the
fulfillment and satisfaction of the conditions specified in Sections 8.1 and
8.2 above, and (b) the absence of any adverse change in the business of the
Seller prior to the Closing Date.
8.4 [Reserved].
8.5 [Reserved].
8.6 Approval of Counsel. All steps to be taken and all
resolutions, papers and documents to be executed, and all other legal matters
in connection with the purchase and sale of the Common Stock and Preferred
Stock and related matters, shall be subject to the reasonable approval of
Purchaser's counsel.
8.7 Certificates. Seller shall have furnished to Purchaser
(a) copies of the Articles of Incorporation of Seller, (b) copies of the
By-Laws of Seller, and (c) a certificate of the Secretary of Seller relating to
the incumbency and corporate proceedings in connection with the consummation
of the Contemplated Transactions, and the absence of changes in the Company's
Articles of Incorporation and By-Laws.
9. Conditions Precedent to Seller's Obligations. All obligations
of Seller under this Agreement are subject to the fulfillment, prior to or at
the Closing Date, of each of the following conditions:
9.1 Representations and Warranties. Purchaser's
representations and warranties contained in this Agreement or in any
certificate or document delivered pursuant to the provisions hereof or in
connection with the Contemplated Transactions shall be true and correct at and
as of the Closing Date as though such representations and warranties were made
at and as of such time.
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9.2 Compliance with Agreements and Conditions. Purchaser
shall have performed and complied with all agreements and conditions required
by this Agreement to be performed or complied with by it prior to or at the
Closing Date.
9.3 Certificate of Purchaser. Purchaser shall have delivered
to Seller a certificate, dated the Closing Date, certifying in such detail as
Seller may reasonably request to the fulfillment and satisfaction of the
conditions specified in Sections 9.1 and 9.2 above.
10. Survival of Representations and Warranties. All
representations and warranties made by Purchaser and Seller in this Agreement
or pursuant hereto shall survive the Closing for a period of one year.
11. [Reserved].
12. Indemnification.
(a) Seller shall indemnify and hold harmless Purchaser and
its officers, directors, employees, stockholders, representatives, agents,
successors and assigns from and against any claims, actions, judgments,
damages, losses, or other Liabilities of whatsoever nature, including fines,
penalties, costs and expenses (including, without limitation, settlement costs,
any reasonable legal, accounting or other expenses incurred in connection with
investigating or defending any actions or Threatened actions and court costs)
(a "Loss" or "Losses") sustained or required to be paid by reason of, arising
out of or caused by (i) any misrepresentation or Breach of any representation
or warranty made by Seller in this Agreement, or any other certificate,
instrument or document contemplated hereby, or (ii) any Breach of or failure to
perform any covenant, agreement or obligation of Seller or the Company
contained in this Agreement, or any other certificate, instrument or document
contemplated hereby.
(b) Purchaser shall indemnify and hold harmless Seller and
its officers, directors, employees, stockholder representatives, agents,
successors and assigns from and against any Loss or Losses sustained or
required to be paid by reason of, arising out of or caused by (i) any
misrepresentation or Breach of any representation or warranty made by Purchaser
in this Agreement or any other certificate, instrument or document contemplated
hereby; or (ii) of or failure to perform any Breach of any covenant, agreement
or obligation of Purchaser contained in this Agreement, or any other
certificate, instrument or document contemplated hereby.
13. [RESERVED].
14. [RESERVED]
15. Expenses. Seller shall bear its expenses incurred in
connection with this Agreement and the transactions contemplated hereby and
thereby. Seller agrees to pay all stamp and/or transfer taxes that become due
and payable as a result of the transactions contemplated by this Agreement.
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16. Announcements. No announcements of the transactions
contemplated hereby shall be made to the general public by any of the parties
hereto or their respective officers, directors, employees, advisors, agents or
representatives, without the prior written consent of the other party unless,
in the written opinion of counsel for the disclosing party, such public
announcement is legally required and, in such event, the non-disclosing party
shall have been notified of the proposed public announcement and shall have
been given a reasonable opportunity to comment on the content thereof.
17. Cooperation; Further Actions and Assurances. Purchaser and
Seller will execute and deliver any and all documents, and will cause any and
all other action to be taken, either before or after the Closing, which may be
necessary or proper to effect or evidence the provisions of this Agreement and
the transactions contemplated hereby.
18. Counterparts. This Agreement may be executed in several
counterparts each of which is an original. This Agreement and any counterpart
so executed shall be deemed to be one and the same instrument. It shall not be
necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.
19. Governing Law; Venue. This Agreement shall be construed and
enforced in accordance with the laws of the State of Georgia without regard to
its principles of conflict of laws.
20. Section Headings and Gender. The section headings herein have
been inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof. The use of the masculine
pronoun herein when referring to any party has been for convenience only and
shall be deemed to refer to the particular party intended regardless of the
actual gender of such party.
21. Schedules and Exhibits. There are no schedules or Exhibits.
22. Notices. All notices, requests and other communications which
are required or permitted hereunder shall be sufficient if given in writing and
delivered personally or by registered or certified mail, postage prepaid, as
follows (or to such other address as shall be set forth in a notice given in
the same manner):
If to Purchaser to: Mongoose Investments, LLC
0000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
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If to Seller: Lahaina Acquisitions, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx Xxxxx, XX 00000
23. Modification and Waiver. Any of the terms or conditions of
this Agreement may be waived in writing at any time by the party which is
entitled to the benefits thereof, and this Agreement may be modified or amended
at any time by Purchaser or Seller. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by all of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof nor shall
such waiver constitute a continuing waiver.
24. Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable, this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provision or by its severance from this
Agreement.
25. Third Party Beneficiaries. Except as otherwise expressly set
forth herein, no Person shall be a third-party beneficiary of the
representations, warranties, covenants and agreements made by any party hereto.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
LAHAINA ACQUISITIONS, INC.
By: /s/ XXXXXX X. XXXXXX
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Name: XXXXXX X. XXXXXX
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Title: PRESIDENT
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MONGOOSE INVESTMENTS, LLC
By: /s/ XXXXXXX X. XXXXX
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Name: XXXXXXX X. XXXXX
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Title: MANAGING MEMBER
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