EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 29h day of
September, 2009 by and between Signature Exploration and Production Corp.,
a Delaware corporation (hereinafter called the "Company"), and Xxxxxx Xxxxxx
(hereinafter called the "Executive").
Recitals
A. The Board
of Directors of the Company (the "Board") desires to assure the Company of the
Executive's continued employment in an executive capacity and to compensate him
therefore.
B. The Board
has determined that this Agreement will reinforce and encourage the Executive's
continued attention and dedication to the Company.
C. The
Executive is willing to make his services available to the Company on the terms
and conditions hereinafter set forth.
Agreement
NOW,
THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties agree as follows:
1. Employment.
1.1 Employment and Term.
The Corporation hereby agrees to employ the Executive as its Chief
Financial Officer, in such capacity, agrees to provide services to the
Corporation for the period beginning on September 29, 2009 and ending September
29, 2012 (the “TERMINATION
DATE") (or such later date as may be agreed to by the parties within 120
days prior to the Termination Date) (the “EMPLOYMENT
PERIOD").
1.2 Duties of
Executive. The Executive shall serve as the Chief Financial
Officer of the Company and shall have powers and authority superior to any other
officer or employee of the Company or of any subsidiary of the Company. Subject
to the preceding sentence, during the term of Employment, the Executive shall
diligently perform all services as may be reasonably assigned to him by the
Board, and shall exercise such power and authority as may from time to time be
delegated to him by the Board. The Executive shall be required to
report solely to, and shall be subject solely to the supervision and direction
of the Board at duly called meetings thereof, and no other person or group shall
be given authority to supervise or direct Executive in the performance of his
duties. In addition, the Executive shall regularly consult with the
Chairman of the Board with respect to the Company's business and
affairs. The Executive shall devote his working time and attention as
he deems appropriate to the business and affairs of the Company (excluding any
vacation and sick leave to which the Executive is entitled), render such
services to the best of his ability, and use his reasonable best efforts to
promote the interests of the Company. It shall not be a violation of this
Agreement for Xx. Xxxxxx to engage in other business activities including, but
not limited to those activities related to Xxxxxx X. Xxxxxx, P.A. and other
business ventures that Xx. Xxxxxx may become involved in during the term of this
Agreement. It shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or teach at
educational institutions, and (C) manage personal investments, so long as
such activities do not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in accordance with
this Agreement.
1.3 Place of
Performance. In connection with his employment by the Company,
the Executive shall be based at the Company's principal executive offices except
for travel reasonably necessary in connection with the Company's
business.
2. Compensation.
2.1 Base
Salary. Commencing on the effective date of this Agreement,
the Executive shall receive a base salary at the annual rate of not less than
$30,000 (the "Base Salary") during the term of this Agreement, with such Base
Salary payable in installments consistent with the Company's normal payroll
schedule, subject to applicable withholding and other taxes. The Executive shall
be deemed to have earned an increase of his Base Salary to total $100,000 if the
Company’s monthly revenues exceed $50,000 and an additional $20,000
increase in his Base Salary shall be deemed earned if the Company’s monthly
revenues exceed $100,000.
2.2 Restricted Stock
Grant.
(a) As
compensation for entering into this Agreement, the Company hereby grants and
issues to the Executive 3,600,000 shares of the common stock of the Company that
is currently traded on the Over The Counter Bulletin Board under the symbol
SXLP. The stock is restricted as defined by the Rules and Regulations
promulgated under the Securities Act of 1933, as amended. The shares
are fully paid and non-assessable.
(b) Lock-up
and Contribution. The shares issued pursuant to section 2.2(a) (the
“Employment Shares”) shall be subject to the terms and conditions of this
section 2.2(b). The Employment Shares shall be represented by 36
certificates (the “Certificates”) of 100,000 shares each. All
Certificates not delivered to the Executive shall be held by the
Company. One Certificate representing 100,000 shares shall be
delivered to the Executive on the 30th of each
month beginning October 30, 2009. In the event the Executive’s
employment pursuant to this agreement is terminated for any reason, the
Employment Shares represented by Certificates still held by the Company are
hereby contributed by the Executive back to the Company for
cancellation. This lock-up provision shall not be applicable to any
stock held by the Executive prior to entering into this agreement.
(c) Sale
Limitations. The shares issued pursuant to section 2.2(a) (the
“Employment Shares”) shall be subject to the terms and conditions of this
section 2.2(c). These shares are subject to the volume limitations
set forth by the Securities Act Rule 144 which states the shares must
be held for six months before they can be sold and sales are limited to one
percent (1%) of outstanding shares per 90 day period. In addition,
the Executive agrees not to sell more than five (5%) of the daily volume of the
stock.
3. Expense Reimbursement and
Other Benefits.
3.1 Expense
Reimbursement. During the term of Executive's employment
hereunder, the Company, upon the submission of reasonable supporting
documentation by the Executive, shall reimburse the Executive for all reasonable
expenses actually paid or incurred by the Executive in the course of and
pursuant to the business of the Company, including expenses for travel and
entertainment.
3.2 Vacation. During
the Initial Term, the Executive shall be entitled to paid vacation in accordance
with the most favorable plans, policies, programs and practices of the Company
and its subsidiaries as in effect at any time hereafter with respect to other
key executives of the Company and its subsidiaries; provided, however, that in no
event shall Executive be entitled to fewer than four weeks paid vacation per
year.
4. Termination.
4.1 Termination for
Cause. Notwithstanding anything contained to the contrary in
this Agreement, this Agreement may be terminated by the Company for
Cause. As used in this Agreement, "Cause" shall only mean (i) an
act or acts of personal dishonesty taken by the Executive and intended to result
in substantial personal enrichment of the Executive at the expense of the
Company, (ii) subject to the following sentences, repeated violation by the
Executive of the Executive's material obligations under this Agreement which are
demonstrably willful and deliberate on the Executive’s part and which are not
remedied in a reasonable period of time after receipt of written notice from the
Company, or (iii) the conviction of the Executive for any criminal act
which is a felony. Upon any determination by the Company's Board of
Directors that Cause exists under clause (ii) of the preceding sentence, the
Company shall cause a special meeting of the Board to be called and held at a
time mutually convenient to the Board and Executive, but in no event later than
ten (10) business days after Executive's receipt of the notice contemplated by
clause (ii). Executive shall have the right to appear before such
special meeting of the Board with legal counsel of his choosing to refute any
determination of Cause specified in such notice, and any termination of
Executive's employment by reason of such Cause determination shall not be
effective until Executive is afforded such opportunity to appear. Any
termination for Cause pursuant to clause (i) or (iii) of the first sentence of
this Section 4.1 shall be made in writing to Executive, which notice shall set
forth in detail all acts or omissions upon which the Company is relying for such
termination. Upon any termination pursuant to this Section 4.1, the
Executive shall be entitled to be paid his Base Salary to the date of
termination and the Company shall have no further liability hereunder (other
than for reimbursement for reasonable business expenses incurred prior to the
date of termination).
4.2 Disability. Notwithstanding
anything contained in this Agreement to the contrary, the Company, by written
notice to the Executive, shall at all times have the right to terminate this
Agreement, and the Executive's employment hereunder, if the Executive shall, as
the result of mental or physical incapacity, illness or disability, fail to
perform his duties and responsibilities provided for herein for a period of more
than sixty (60) consecutive days in any 12-month period. Upon any
termination pursuant to this Section 4.2, the Executive shall be entitled to be
paid his Base Salary to the date of termination and the Company shall have no
further liability hereunder (other than for reimbursement for reasonable
business expenses incurred prior to the date of termination).
4.3 Death. In
the event of the death of the Executive during the term of his employment
hereunder, the Company shall pay to the estate of the deceased Executive an
amount equal to the sum of (x) any unpaid amounts of his Base Salary to the
date of his death, plus (y) six months of Base Salary, and the Company
shall have no further liability hereunder (other than for reimbursement for
reasonable business expenses incurred prior to the date of the Executive's
death).
4.4 Termination Without
Cause. At any time the Company shall have the right to
terminate Executive's employment hereunder by written notice to Executive;
provided, however, that the Company shall (i) pay to Executive any unpaid
Base Salary accrued through the effective date of termination specified in such
notice, and (ii) pay to the Executive in a lump sum, in cash within 30 days
after the date of employment termination, an amount equal to the product of
(x) the sum of the Executive’s then Base Salary plus the amount of the
highest annual bonus or other incentive compensation payment theretofore made by
the Company to the Executive, multiplied times
(y) one. The Company shall be deemed to have terminated the
Executive's employment pursuant to this Section 4.4 if such employment is
terminated (i) by the Company without Cause, or (ii) by the Executive
voluntarily for "Good Reason." For purposes of this Agreement, "Good
Reason" means
(a) the
assignment to the Executive of any duties inconsistent in any respect with the
Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
1.2 of this Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(b) any
failure by the Company to comply with any of the provisions of Section 2,
Section 3, Section 7 or Section 17 of this Agreement, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice thereof given
by the Executive;
(c) any
purported termination by the Company of the Executive's employment otherwise
than as expressly permitted by this Agreement;
(d) any
failure by the Company to comply with and satisfy Section 10(c) of this
Agreement; or
(e) any
termination by the Executive for any reason during the three-month period
following the effective date of any "Change in Control".
For
purposes of this Section 4.4, any good faith determination of "Good Reason" made
by the Executive shall be conclusive.
5. Change in
Control. For purposes of this Agreement, a “Change in Control”
shall mean:
(a) The
acquisition (other than by or from the Company), at any time after the date
hereof, by any person, entity or "group", within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50%or more of either the then outstanding shares of common
stock or the combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of directors;
or
(b) All
or any of the individuals who, as of the date hereof, constitute the Board (as
of the date hereof the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the
election of the directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board; or
(c) Approval
by the stockholders of the Company of (A) a reorganization, merger or
consolidation with respect to which persons who were the shareholders of the
Company immediately prior to such reorganization, merger or consolidation do
not, immediately thereafter, own more than 50% of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged or consolidated company's then outstanding voting securities, (B) a
liquidation or dissolution of the Company, or (C) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
(d) The
approval by the Board of the sale, distribution and/or other transfer or action
(and/or series of sales, distributions and/or other transfers or actions from
time to time or over a period of time), that results in the Company's ownership
of less than 50% of the Company's current assets.
6. Restrictive
Covenants.
6.1 Nondisclosure. During
his employment and for twelve (12) months thereafter, Executive shall not
divulge, communicate, use to the detriment of the Company or for the benefit of
any other person or persons, or misuse 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 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, "Confidential Information" means all material
information about the Company's business 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) after the date hereof, and not generally known.
6.2 Nonsolicitation of
Employees. While employed by the Company and for a period of
six (6) months thereafter, Executive shall not directly or indirectly, for
himself or for any other person, firm, corporation, partnership, association or
other entity, attempt to employ or enter into any contractual arrangement with
any employee or former employee of the Company, unless such employee or former
employee has not been employed by the Company for a period in excess of six
months.
6.3 Injunction. It
is recognized and hereby acknowledged by the parties hereto that a breach by the
Executive of any of the covenants contained in Section 6.1, 6.2 or 6.3 of
this Agreement will cause irreparable harm and damage to the Company, the
monetary amount of which may be virtually impossible to ascertain. As
a result, the Executive recognizes and hereby acknowledges that the Company
shall 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 this Section 6 by the Executive or any of his affiliates, associates,
partners or agents, either directly or indirectly, and that such right to
injunction shall be cumulative and in addition to whatever other remedies the
Company may possess.
7. Other
Matters.
Election of Executive as
Director. Contemporaneously herewith, the Board is appointing
Executive to fill the position of Chairman of the
Board. For so long as the Executive continues to serve as the
Company’s Chief Financial Officer, the Company shall cause the nomination of the
Executive as Chairman of the Board of the Company at each stockholder meeting at
which election of directors is considered and otherwise use its
best efforts to cause the election of the Executive as Chairman of
the Board of the Company.
8. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
9. Notices: Any
notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given when delivered by hand or when
deposited in the United States mail, by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
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If
to the Company:
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Signature
Exploration and Production Corp.
000
Xx. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
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If
to the Executive:
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Xxxxxx
Xxxxxx
0000
Xxxxx Xxxxx Xxxxx
Xxxxxxxxxx,
Xxxxxxx 00000
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with a copy
to:
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Xxxx
Xxxxxx, Attorney at Law
0000
X. 0000 X.
Xxxxxxxx
Xxxxx, Xxxx 00000
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or to
such other addresses as either party hereto may from time to time give notice of
to the other in the aforesaid manner.
10. Successors.
(a) This
Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal
representatives.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.
(c) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used
in this Agreement, "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets which assumes and agrees to perform
this Agreement by operation of law or otherwise.
11. 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, all of which are
inserted conditionally on their being valid in law, and, in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid, this Agreement shall be construed as
if such invalid word or words, phrase or phrases, sentence or sentences, clause
or clauses, or section or sections had not been inserted. If such
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.
12. Waivers. The
waiver by either party hereto of a breach or violation of any term or provision
of this Agreement shall not operate nor be construed as a waiver of any
subsequent breach or violation.
13. Damages. Nothing
contained herein shall be construed to prevent the Company or the Executive from
seeking and recovering from the other damages sustained by either or both of
them as a result of its or his breach of any term or provision of this
Agreement.
14. No Third Party
Beneficiary. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any person (other than
the parties hereto and, in the case of Executive, his heirs, personal
representative(s) and/or legal representative) any rights or remedies under or
by reason of this Agreement.
15. Full
Settlement. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this
Agreement. The Company agrees to pay, to the full extent permitted by
law, all legal fees and expenses which the Executive may reasonably incur as a
result of any contest (regardless of the outcome thereof) by the Company or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to
Section 16 of this Agreement), plus in each case interest at the applicable
Federal rate provided for in Section 7872(f)(2) of the Code.
16. Certain Reduction of
Payments by the Company.
(a) Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit
of the Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (a "Payment"), would be
nondeductible by the Company for Federal income tax purposes because of Section
280G of the Code, then the aggregate present value of amounts payable or
distributable to or for the benefit of the Executive pursuant to this Agreement
(such payments or distributions pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced to the Reduced
Amount. The "Reduced Amount" shall be an amount expressed in present
value which maximizes the aggregate present value of Agreement Payments without
causing any Payment to be nondeductible by the Company because of Section 280G
of the Code. Anything to the contrary notwithstanding, if the Reduced
Amount is zero and it is determined further that any Payment which is not an
Agreement Payment would nevertheless be nondeductible by the Company for Federal
income tax purposes because of Section 280G of the Code, then the aggregate
present value of Payments which are not Agreement Payments shall also be reduced
(but not below zero) to an amount expressed in present value which maximizes the
aggregate present value of Payments without causing any Payment to be
nondeductible by the Company because of Section 280G of the Code. For
purposes of this Section 16, present value shall be determined in accordance
with Section 280G(d)(4) of the Code. Any amount which is not paid in
the taxable year in which it was originally scheduled to be paid as a result of
the postponement thereof pursuant hereto shall be payable in the next succeeding
taxable year in which such payment will not result in the disallowance of a
deduction pursuant to either Section 162(m) or 280G of the Code; provided,
however, that all postponed payments shall be placed in a Rabbi trust or similar
vehicle for the benefit of the Executive in such a way that the amounts so
transferred are not taxable to such person or deductible by the Company until
payment from such vehicle to the Executive is made. In the event a
payment has been made to the Executive, but then disallowed as a deduction by
the Internal Revenue Service and return of the payment is required into the
trust, said payment to the Executive shall be treated as a loan and said payment
to the trust shall be treated as repayment of said loan. The Company
shall not pledge, hypothecate or otherwise encumber any amounts held in the
trust or other similar vehicle for the benefit of the Executive
hereunder.
(b) All
determinations required to be made under this Section 16 shall be made by the
Orlando, Florida office of Xxxx Xxxxxx and Company, LLC or, at the Executive's
option, any other nationally or regionally recognized firm of independent public
accountants selected by the Executive and approved by the Company, which
approval shall not be unreasonably withheld or delayed (the "Accounting Firm"),
which shall provide (i) detailed supporting calculations both to the
Company and the Executive within twenty (20) business days of the termination of
Executive’s employment or such earlier time as is requested by the Company, and
(ii) an opinion to the Executive that he has substantial authority not to
report any excise tax on his Federal income tax return with respect to any
Payments. Any such determination by the Accounting Firm shall be
binding upon the Company and the Executive. The Executive shall
determine which and how much of the Payments shall be eliminated or reduced
consistent with the requirements of this Section 16, provided that, if the
Executive does not make such determination within ten business days of the
receipt of the calculations made by the Accounting Firm, the Company shall elect
which and how much of the Payments shall be eliminated or reduced consistent
with the requirements of this Section 16 and shall notify the Executive promptly
of such election. Within five business days thereafter, the Company
shall pay to or distribute to or for the benefit of the Executive such amounts
as are then due to the Executive under this Agreement. All fees and
expenses of the Accounting Firm incurred in connection with the determinations
contemplated by this Section 16 shall be borne by the Company.
(c) As
a result of the uncertainty in the application of Section 280G of the Code at
the time of the initial determination by the Accounting Firm hereunder, it is
possible that Payments will have been made by the Company which should not have
been made ("Overpayment") or that additional Payments which will not have been
made by the Company could have been made ("Underpayment"), in each case,
consistent with the calculations required to be made hereunder. In
the event that the Accounting Firm, based upon the assertion of a deficiency by
the Internal Revenue Service against the Executive which the Accounting Firm
believes has a high probability of success, determines that an Overpayment has
been made, any such Overpayment paid or distributed by the Company to or for the
benefit of the Executive shall be treated for all purposes as a loan ab initio
to the Executive which the Executive shall repay to the Company together with
interest at the applicable federal rate provided for in Section 7872(f)(2) of
the Code; provided, however, that no such loan shall be deemed to have been made
and no amount shall be payable by the Employee to the Company if and to the
extent such deemed loan and payment would not either reduce the amount on which
the Executive is subject to tax under Section 1 and Section 4999 of the Code or
generate a refund of such taxes. In the event that the Accounting
Firm, based upon controlling precedent or other substantial authority,
determines that an Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive together
with interest at the applicable federal rate provided for in Section 7872(f)(2)
of the Code.
17. Conflicts With Certain
Existing Arrangements. The Company agrees that (x) it
shall not hereafter acquire a “Conflicting Organization” or otherwise expand its
present business activities such that Executive could reasonably be expected to
be deemed in breach or violation of such non-competition covenants, and
(y) it shall indemnify and hold harmless the Executive from any and all
damages that Executive may hereafter suffer or incur by reason of any such
Company acquisition or expansion of business after the date hereof.
18. Indemnification. The
Company agrees to promptly execute and deliver to Executive an Indemnification
Agreement in substantially the same form as described to the Executive by Xxxx
Xxxxxx, Attorney at Law within 15 days of the date of execution of this
Agreement.
IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first above
written.
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COMPANY:
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Signature
Exploration and Production Corp.
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By:
/s/ Xxxxx
Xxxxx
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EXECUTIVE:
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/s/
Xxxxxx
Xxxxxx
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