EXHIBIT 10.8
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of October 6, 1998,
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between ACN Operating, LLC, a Delaware limited liability company t/b/k/a Audio
Communications Network, LLC (the "Company"), and Xxxxx Xxxxx ("Executive").
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This Agreement is being entered into in connection with the
consummation of the transactions contemplated by the Investor Securities
Purchase Agreement dated as of the date hereof (as in effect from time to time,
the "Investor Securities Purchase Agreement") by and among ABRY Broadcast
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Partners III, L.P. ("ABRY"), ACN Holdings, LLC ("Holdings LLC"), the Company,
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Executive, and the other parties thereto. The execution and delivery of this
Agreement are conditions precedent to ABRY's obligation to consummate the
transactions contemplated by the Investor Securities Purchase Agreement. Each
capitalized term which is used and not otherwise defined in this Agreement has
the meaning which the Investor Securities Purchase Agreement assigns to that
term.
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment. The Company will employ Executive, and Executive
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accepts employment with the Company, upon the terms and conditions set forth in
this Agreement, for the period beginning on the date of this Agreement and
ending as provided in Section 5 (the "Employment Period").
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2. Position and Duties. During the Employment Period, Executive
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will serve as the Executive Vice President for Business Development of the
Company and its Subsidiaries and render such managerial, analytical,
administrative, marketing and other executive services to the Company and its
Subsidiaries, if any, as are from time to time necessary in connection with the
management and affairs of the Company and its Subsidiaries, subject to the
authority of the Managers of Holdings LLC (the "Board") and to the provisos set
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forth in the following sentence. Executive will devote his best efforts and
approximately thirty-three percent (33%) of substantially all of his business
time and attention (provided that Executive shall also be allowed permitted
vacation periods and reasonable periods of illness or other incapacity) to the
business and affairs of the Company and its Subsidiaries, if any; provided that
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Executive may continue to serve as chairman of Suncom Communications, LLC and
Avalon Cable Holdings, LLC and its Subsidiaries ("Avalon"); and provided further
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that, without limiting Section 9, during the Employment Period, Executive will
not directly or indirectly own, manage, control, participate in, consult with,
render services for, or in any other manner engage in the business of providing
business music programming and ancillary communications products and services
including broadcast data delivery, satellite delivered cable television channels
for commercial customers (other than on behalf of Avalon), audio marketing and
in-store advertising service to a diverse customer base that includes, among
others, restaurants, retailers, supermarkets and business offices (the
"Business") other than (i) on behalf of the Company or any Subsidiary thereof or
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(ii) as a passive owner of less than 5% of
the outstanding stock of a corporation of any class which is publicly traded, so
long as Executive has no direct or indirect participation in the business of
such corporation. Executive will report to the Board. Executive will perform his
duties and responsibilities to the best of his abilities in a diligent,
trustworthy, businesslike and efficient manner.
3. Base Salary, Bonus and Benefits.
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(a) Base Salary. During the Employment Period, Executive will be paid
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$75,000 per annum as base compensation for services (as in effect from time to
time, the "Base Salary"). The Board may review, and in its sole discretion
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otherwise may increase, the Base Salary as and when the Board deems appropriate
if and when the size and scope of the Company and its Subsidiaries and/or scope
of Executive's duties increases beyond its currently expected size and scope.
The Base Salary will be payable in regular installments in accordance with the
general payroll practices of the Company and its Subsidiaries. In addition,
during the Employment Period, Executive will be entitled to participate in all
of the employee benefit programs for which senior executive employees of the
Company and its Subsidiaries are generally eligible, including without
limitation health insurance, dental insurance, life insurance, pension and
profit-sharing plans.
(b) Reimbursement of Expenses. The Company will reimburse Executive
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for all reasonable expenses incurred by him in the course of performing his
duties under this Agreement and which are consistent with the Company's policies
in effect from time to time with respect to travel, entertainment and other
business expenses, subject to the Company's requirements with respect to
reporting and documentation of such expenses.
(c) Bonus. In addition to the Base Salary, the Board may in its sole
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discretion award a bonus (the "Bonus") to Executive following the end of each
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fiscal year during the Employment Period as the Board deems appropriate, in an
amount (if any) determined by the Board in its sole discretion based on the
Company's acquisition activity during such fiscal year. The Bonus, if awarded,
for a fiscal year will be paid in a single payment within (30) days after
delivery of the audited financial statements for such fiscal year have been
reviewed by the Board.
(d) Use of Company Automobile. During the Employment Period, in
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addition to all other compensation and benefits payable to Executive hereunder,
Executive shall have use of a company automobile. Executive shall be
responsible for all gasoline, insurance, repairs, maintenance and other expenses
incurred in connection with the services rendered hereunder. Executive
acknowledges and agrees that the Company may report the foregoing automobile
usage as additional compensation to Executive, if the Company believes the same
may be required by applicable law.
4. Vacation Days. Executive shall be entitled to four (4) weeks of
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paid vacation during each year of the Employment Period, in addition to legal
holidays; provided, however, that no such vacation time shall accrue or be
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earned to the extent that such accrual or earning would cause Executive's
accrued or earned, but unused, vacation time to exceed four (4) weeks.
Executive shall make best efforts to schedule vacations so as not to conflict
with the conduct of the Company's business, and Executive shall give to the
Board adequate advance notice of his planned absences.
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5. Termination.
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(a) The Employment Period will continue until the earlier of: (i) the
fifth anniversary of the date hereof; or (ii Executive's resignation, death or
disability or other incapacity (as determined by the Company in good faith) or
until the Employment Period is terminated by the Company for any reason or for
no reason (provided that the Company shall not terminate the Employment Period
in bad faith). For the purposes of this Agreement, "Cause" shall mean (i) the
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commission of a felony or a crime involving moral turpitude or the commission
of any other act or omission involving dishonesty, disloyalty or fraud with
respect to Holdings LLC or any of its Subsidiaries, (ii) conduct tending to
bring Holdings LLC or any of its Subsidiaries into substantial public disgrace
or disrepute, (iii) substantial and repeated failure to perform duties as
reasonably directed by the Board, (iv) gross negligence or willful misconduct
with respect to Holdings LLC or any of its Subsidiaries, (v) substantial
underperformance in carrying out Executive's duties under this Agreement, or
(vi) any material breach of or misrepresentation by Executive or the Company
under this Agreement or any Related Agreement (as defined below). For the
purposes of this Agreement, "Related Agreements" means the Members Agreement,
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the Registration Agreement, the Investor Securities Purchase Agreement, the LLC
Agreement and the Management Securities Repurchase Agreement to which Executive
is a party, each dated as of the date hereof among the Company (except for the
LLC Agreement) and its members, and each as in effect from time to time. For
purposes of this Agreement, "disability" means the inability of Executive to
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perform his duties hereunder for 120 days during any 12-month period.
(b) In the event of Executive's resignation, death, disability or
other incapacity or the termination of the Employment Period by the Company for
Cause or effective upon a Sale of the Company (as that term is defined in the
Members Agreement), Executive will not be entitled to receive his Base Salary or
any fringe benefits or Bonus for periods after the termination of the Employment
Period. In the event of termination of the Employment Period by the Company for
any other reason or for no reason, Executive will be entitled to receive his
Base Salary (at the rate then in effect) and fringe benefits described in
paragraph 3(a) for a period of six months thereafter (so long as Executive is
not in breach of Section 7, 8 or 9 hereof).
6. Resignation as Officer or Director. Upon the termination of the
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Employment Period, Executive will resign each position (if any) that he then
holds as an officer, director or manager of the Company, Holdings LLC, or any of
its Subsidiaries (including, without limitation, his membership on the Board).
7. Confidential Information. The Executive acknowledges that the
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information, observations and data that have been or may be obtained by him
during his employment or other relationship or interaction with the Company,
Holdings LLC, or any Subsidiary or predecessor thereof or of any such Subsidiary
(each of the Company, Holdings LLC, or any other Subsidiary or any such
predecessor being an "ACN-Related Company" and collectively they are the "ACN-
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Related Companies", including Audio Communications Network, Inc.), prior to and
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after the date of this Agreement concerning the business or affairs of the ACN-
Related Companies (collectively, "Confidential Information") are and will be the
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property of the ACN-Related Companies. Therefore, Executive agrees that he will
not disclose to any unauthorized Person or use for his own account any
Confidential Information without the prior written consent of Holdings LLC (by
the action of the
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Board), unless and to the extent that (x) the aforementioned matters become
generally known to and available for use by the public other than as a result of
Executive's acts or omissions to act or (y) disclosure of the aforementioned
matters is required under federal or state law or a duly issued subpoena. In the
event any disclosure pursuant to clause (y) above is made, Executive will give
the Company reasonable prior notice thereof and will permit the ACN-Related
Companies to resist or limit the scope of the disclosure to be made. Executive
will deliver to or cause to be delivered to Holdings, LLC at the termination of
the Employment Period, or at any other time any ACN-Related Company may request,
all memoranda, notes, plans, records, reports, computer tapes and software and
other documents and data (and copies thereof) containing or relating to
Confidential Information or the business of any ACN-Related Company, which he
may then possess or have under his control.
8. Non-Compete, Non-Solicitation.
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(a) Non-Compete. Executive acknowledges that during his employment or
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other relationship or interaction with the ACN-Related Companies, he has and
will become familiar with trade secrets and other confidential information
concerning such Persons, and with investment opportunities relating to the
Business, and that his services have been and will be of special, unique and
extraordinary value to the foregoing entities. Therefore, Executive agrees
that, during the Employment Period and for six (6) months thereafter (the
Employment Period and such six month period being the "Noncompete Period"), he
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will not directly or indirectly own, manage, control, participate in, consult
with, render services for, or in any other manner engage in any business, or as
an investor in or lender to any business (in each case including, without
limitation, on his own behalf or on behalf of another entity) which constitutes
or is competitive with all or part of the Business, as defined in Section 2
above, in any market in which any ACN-Related Company is operating or is
considering operating (including pursuant to any potential acquisitions), at any
given point in time during the Employment Period or as of the end of the
Employment Period if the Employment Period has ended; provided that for purposes
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of this Section 8(a), but not for purposes of Section 8(b), the Noncompete
Period will terminate at the end of the Employment Period if the Employment
Period is terminated by the Company other than for Cause or Executive's
disability. Nothing in this Section 8 will prohibit Executive from being a
passive owner of less than 5% of the outstanding stock of a corporation engaged
in a competing business described above of any class which is publicly traded,
so long as Executive has no direct or indirect participation in the business of
such corporation. By initialing in the space provided below, Executive
acknowledges that he has read carefully and had the opportunity to consult with
legal counsel regarding the provisions of this Section 8(a). ______ [initial]
(b) Non-Solicitation. During the Noncompete Period, Executive will
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not directly or indirectly (i) induce or attempt to induce any employee or full-
time independent contractor of any ACN-Related Company, to leave the employ or
contracting relationship with such entity, or in any way interfere with the
relationship between any such entity and any employee or full-time independent
contractor thereof, (ii) solicit for employment or as an independent contractor
any person who was an employee or full-time independent contractor of any ACN-
Related Company, at any time during the Employment Period, or (iii) induce or
attempt to induce any customer, supplier or other business relation of ACN-
Related Company, to cease doing business with such entity or in any way
interfere with the relationship between any such customer, supplier or other
business relation and such entity. By initialing in the space provided below,
Executive
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acknowledges that he has read carefully and had the opportunity to consult with
legal counsel regarding the provisions of this Section 8(b). ______ [initial].
9. Enforcement. The Company and Executive agree that if, at the
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time of enforcement of Section 7 or 8, a court holds that any restriction stated
in any such Section is unreasonable under circumstances then existing, then the
maximum period, scope or geographical area reasonable under such circumstances
will be substituted for the stated period, scope or area. Because Executive's
services are unique and because Executive has access to information of the type
described in Sections 7 and 8, the Company and Executive agree that money
damages would be an inadequate remedy for any breach of Section 7 or 8.
Therefore, in the event of a breach or threatened breach of Section 7 or 8, any
ACN-Related Company may, in addition to other rights and remedies existing in
their favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any violations of, the provisions of Section 7 or 8, without posting a bond or
other security. The provisions of Sections 7, 8 and 9 are intended to be for the
benefit of the Company, Holdings LLC, and its Subsidiaries, and their respective
successors and assigns, each of which may enforce such provisions and each of
which (other than the Company) is an express third-party beneficiary of such
provisions and this Agreement generally. Sections 7, 8 and 9 will survive and
continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period. By initialing in the space provided
below, Executive acknowledges that he has read carefully and had the opportunity
to consult with legal counsel regarding the provisions of this Section 9.
______ [initial]
10. Representations. Executive represents and warrants to Holdings
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LLC and its Subsidiaries that Executive is not a party to or bound by any
employment agreement, noncompete agreement or confidentiality agreement with any
other Person, other than Avalon Cable Holdings, LLC and/or any of its
Subsidiaries or Affiliates.
11. Key-Man Life Insurance. If the Board determines that the Company
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and/or one or more of its Subsidiaries should purchase a "key-man" insurance
policy on the life of Executive, then Executive agrees to submit to any
requested physical examination in connection with Holdings LLC's or any
Subsidiary's purchase of such a key-man insurance policy. Executive agrees to
cooperate fully in connection with the underwriting, purchase and/or retention
of any such key-man insurance policy by Holdings LLC or any of its Subsidiaries.
12. Miscellaneous.
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(a) Notices. All notices, demands or other communications to be given
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or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable overnight courier service (charges
prepaid), or mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the address indicated below:
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Notices to Executive:
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Xxxxx Xxxxx
The Excelsior
000 Xxxx 00xx Xxxxxx, Xxx. 00X
Xxx Xxxx, XX 00000
with a copy (which shall not constitute notice to Executive) to:
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Xxxx Marks & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
Notices to the Company:
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ACN Operating, LLC
0 Xxxxxx Xxxxx, Xxxxx X
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxx, President
with copies (which shall not constitute notice to any ACN-Related
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Company) to:
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ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
(b) Amendment and Waiver. No modification, amendment or waiver of any
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provision of this Agreement will be effective unless such modification,
amendment or waiver is approved in writing by the Company, Executive and ABRY,
if ABRY then holds any Equity Securities of Holdings LLC. The failure of any
party to enforce any of the provisions of this Agreement will in no way be
construed as a waiver of such provisions and will not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
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(c) Severability. Without limiting Section 8, whenever possible, each
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provision of this Agreement will be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect the validity, legality or enforceability of any
other provision of this Agreement in such jurisdiction or affect the validity,
legality or enforceability of any provision in any other jurisdiction, but this
Agreement will be reformed, construed and enforced in that jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained in
this Agreement.
(d) Entire Agreement. Except as otherwise expressly set forth herein,
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this agreement and the other agreements referred to herein embodies the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersedes and preempts any prior understandings, agreements
or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
(e) Successors and Assigns. This Agreement will bind and inure to the
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benefit of and be enforceable by the Company and Executive and their respective
assigns; provided that Executive may not assign his rights under this Agreement
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without the prior written consent of each of the Company and ABRY, if ABRY then
holds any Equity Securities of Holdings LLC.
(f) Counterparts. This Agreement may be executed simultaneously in
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two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.
(g) Descriptive Headings; Interpretation. The descriptive headings of
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this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement.
(h) GOVERNING LAW. ALL ISSUES AND QUESTIONS CONCERNING THE
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CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT WILL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE
OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT PROVISION OR
RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD
CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK TO BE
APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW
YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF
UNDER THAT JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE
SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.
(i) Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES,
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TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN
ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT
OR ANY ANCILLARY AGREEMENT
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OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.
(j) No Strict Construction. The parties hereto have participated
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jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Executive Employment
Agreement as of the date first written above.
ACN OPERATING, LLC
t/b/k/a AUDIO COMMUNICATIONS NETWORK, LLC
By:
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Name:
Title:
/s/ DAVOD IMGER
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XXXXX XXXXX
The undersigned, being the parent company of the "Company" referred to
in this Agreement, hereby unconditionally guarantees the payment and performance
of the Company's obligations under this Agreement.
ACN HOLDINGS, LLC
By: /s/ XXXX XXXXXX
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Name: XXXX XXXXXX
Title: VICE PRESIDENT
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