EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (the “Agreement”), made this 29th day of October 2009,
between Secure America Acquisition Corporation (the “Company”) and Xxxxxxx X.
Xxxxx (“Executive”).
WHEREAS,
the Company has entered into a Contribution Agreement, dated September 2, 2009
(the “Contribution Agreement”), whereby the Company has agreed to contribute the
Contribution Property (as defined in the Contribution Agreement) in exchange for
the issuance of a certain percentage of the membership interests of Ultimate
Escapes Holdings, LLC (“Ultimate Escapes”), all as more fully set forth in the
Contribution Agreement (such transaction is the “Contribution” and the effective
date of such Contribution is the “Closing Date”);
WHEREAS,
Executive is currently a member of one of the members of Ultimate Escapes (or an
affiliate of such member of Ultimate Escapes), and subject to the closing of the
transactions contemplated by the Contribution Agreement, such transactions are
of substantial benefit to Executive; and
WHEREAS,
prior to the Contribution, Executive has been employed by Ultimate Escapes as
its Chairman, and following the Contribution, Executive and the Company desire
that Executive be employed by the Company, on such terms and subject to such
conditions as are set forth herein.
NOW,
THEREFORE, in consideration of the mutual covenants and promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, the parties agree as
follows:
1. Term of
Employment. The Company hereby agrees to employ Executive, and
Executive agrees to work for the Company, upon the terms set forth in this
Agreement, for the period commencing as of the Closing Date (the “Commencement
Date”) and ending on the one (1) year anniversary of the Commencement Date,
unless sooner terminated in accordance with the provisions of Section 4 or
extended as hereinafter provided (such period, as it may be extended or
terminated, is the “Agreement Term”). Beginning on the first
anniversary of the Commencement Date, and on each anniversary of the
Commencement Date thereafter, the Agreement Term shall extend for an additional
one year period from the then current expiration date of the Agreement Term
unless, at least 60 days prior to the anniversary of the Commencement Date or 60
days prior to the anniversary of each Commencement Date thereafter, either
Executive or the Company provides written notice to the other party electing not
to extend the Agreement Term.
2. Title;
Capacity. The Company will employ Executive, and Executive
agrees to work for the Company, as its Chairman (“Chairman”) to perform the
duties and responsibilities inherent in such position and such other duties and
responsibilities as the Company’s Chief Executive Officer shall from time to
time reasonably assign to him. The Company shall take all reasonable
action to cause Executive to be elected to the Board. Upon any
termination of employment, Executive shall be deemed to have resigned and, if
required by the Chief Executive Officer or the Board of Directors (the “Board”),
Executive hereby agrees to immediately execute a resignation letter to the Chief
Executive Officer or the Board.
3. Compensation and
Benefits.
3.1. Salary. The
Company shall pay Executive an annual base salary of $375,000, less applicable
payroll withholdings (the “Base Salary”), which shall be payable in accordance
with the Company’s customary payroll practices. Thereafter, the Base
Salary shall be subject to annual review and increase as determined by the Board
on the anniversary of the Commencement Date each year of the Agreement
Term.
3.2. Bonus. During
each year of the Agreement Term, Executive shall be eligible to receive a cash
bonus (such bonus is referred to as the “Bonus”) and such bonus, if any, shall
be determined in the sole discretion of the Board and based on such factors as
the Board establishes. Additionally, Executive may receive a
pro-rated Bonus, if one is awarded, for any portion of a year in which Executive
was employed by the Company, provided, however, that Executive shall not be
entitled to any bonus in the event that Executive is terminated for “Cause” (as
such term is defined below). Any such Bonus shall be payable at such
times as bonuses are paid to other executives of the Company, but not later than
60 days after the end of each fiscal year of the Company.
3.3. Equity. Executive
shall be eligible to receive equity incentives, in an amount to be determined by
the Board, or a committee thereof, in its sole discretion, which equity
incentives shall be granted to Executive and shall vest ratably as determined by
the Board. Any such incentives shall and may be further accelerated
or forfeited as set forth in an equity agreement entered into between the
parties in connection with this Agreement.
3.4. Fringe
Benefits. Executive shall be entitled to participate in all
benefit programs that the Company establishes and makes available to its senior
executives at the Chairman level or lower. Executive shall also be
entitled to take fully paid vacation in accordance with Company policy, which
shall be no more than four (4) weeks per calendar year.
3.5. Reimbursement of
Expenses. The Company shall reimburse Executive for such
reasonable and necessary business expenses incurred by Executive while Executive
is employed by the Company, which are directly related to the furtherance of the
Company’s business. Executive must submit any request for
reimbursement no later than ninety (90) days following the date that such
business expense is incurred in accordance with the Company’s reimbursement
policy regarding same and business expenses must be substantiated by appropriate
receipts and documentation. The Company may request additional documentation or
a further explanation to substantiate any business expense submitted for
reimbursement, and retains the discretion to approve or deny a request for
reimbursement. If a business expense reimbursement is not exempt from
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), any
reimbursement in one calendar year shall not affect the amount that may be
reimbursed in any other calendar year and a reimbursement (or right thereto) may
not be exchanged or liquidated for another benefit or payment. Any
business expense reimbursements subject to Section 409A of the Code shall be
made no later than the end of the calendar year following the calendar year in
which such business expense is incurred by Executive.
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3.6. Indemnification and
Directors and Officers Insurance. The Company shall indemnify
Executive to the same extent as the Company indemnifies its officers and
directors under its charter and bylaws. The Company shall purchase
and maintain in full force and effect at all times during Executive’s employment
and for a period of eighteen (18) months thereafter, policies of directors and
officers insurance covering Executive for all actions Executive takes on the
Company’s behalf during Executive’s employment.
4. Termination of Employment
Period. The Agreement Term shall terminate upon the earlier to
occur of any of the following:
4.1.
Termination of the Agreement
Term. At the expiration of the Agreement Term, but only if
appropriate notice is provided pursuant to Section 1.
4.2.
Termination for
Cause. At the election of the Company, for
Cause. For the purposes of this Section 4.2, “Cause” for termination
shall be deemed to exist upon the occurrence of any of the
following:
4.2.1. a
determination by the Chief Executive Officer or the Board of Directors that
Executive has engaged in dishonesty, gross negligence or misconduct that is
injurious to the Company or its affiliates;
4.2.2. Executive’s
conviction or entry of nolo contendere (or international equivalent) to any
felony or crime involving moral turpitude, fraud or embezzlement of Company
property;
4.2.3. Executive’s
material breach of this Agreement, which, if curable, has not been cured by
Executive within thirty (30) calendar days after Executive shall have received
written notice from the Company stating with reasonable specificity the nature
of such breach,
4.2.4. Any
breach by Executive, Private Escapes Holdings, LLC or any of its affiliates of
the Contribution Agreement or the Third Amended and Restated Contribution
Agreement dated July 21, 2009 by and between Private Escapes Holdings, LLC, a
Delaware limited liability company (as assignee in interest to Private Escapes
Premier, LLC, a Colorado limited liability company) on behalf of itself and
certain of its affiliates, and Ultimate Escapes Holdings, LLC, a Delaware
limited liability company, on behalf of itself and all of its affiliates,
together with all other related amendments, supplements, agreements, documents
and/or instruments, and all annexes, appendices, exhibits and/or schedules
thereto, as amended); or
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4.2.5. Executive’s
material breach of any of the terms of the restrictive covenants set forth in
Section 6 below, which, if curable, has not been cured by Executive within
thirty (30) calendar days after Executive shall have received written notice
from the Company stating with reasonable specificity the nature of such
breach.
4.3. Termination by the Company
Without Cause. At the election of the Company, without Cause,
at any time, upon 30 days notice to Executive.
4.4. Death or
Disability. The Agreement shall terminate upon Executive’s
death or disability. If Executive shall be disabled so as to be
unable to perform the essential functions of Executive’s position under this
Agreement with or without reasonable accommodation, the Chief Executive Officer
or the Board may remove Executive from any responsibilities and/or reassign
Executive to another position with the Company during the period of such
disability, and Executive will continue to receive the same Base Salary and
benefits then in effect set forth in this Agreement for a period of twelve (12)
months, and such reassignment shall not trigger a Good Reason termination as
provided herein. Notwithstanding any such removal or reassignment,
Executive’s employment may be terminated by the Company at any time
thereafter. Nothing in this Section 4.4 shall be construed to waive
Executive’s rights, if any, under existing law, including, without limitation,
the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans
with Disabilities Act, 42 U.S.C. §12101 et
seq. Notwithstanding the foregoing, if and only to the extent
that Executive’s disability is a trigger for the payment of deferred
compensation, as defined in Section 409A of the Code, “disability” shall have
the meaning set forth in Section 409A(a)(2)(C) of the Code.
4.5. Voluntary Termination by
Executive. At the election of Executive, upon not less than 30
days’ prior written notice by Executive to the Company.
4.6. Voluntary Termination by
Executive for Good Reason. At the election of Executive, for
Good Reason (as defined herein), at any time upon 30 days’ prior written notice
by Executive. As used in this Agreement, “Good Reason” means if the
Company, without Executive’s written consent, fails to cure any one or more of
the events or circumstances listed below within ten (10) calendar days after
receiving written notice from Executive:
4.6.1. any
failure by the Company to pay Executive the compensation and benefits to which
Executive is entitled in any material way, including any reduction of more than
twenty five percent (25%) in compensation including Base Salary, or payments and
benefits to which Executive is entitled under this Agreement including, without
limitation, the obligation to purchase and keep in force a policy of directors
and officers liability insurance;
4.6.2. any
other material breach by the Company of the material terms of this Agreement;
or
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5. Effect of
Termination.
5.1. Termination for Cause, at
the Election of Executive. In the event that Executive’s
employment is terminated for Cause pursuant to Section 4.2 or at the election of
Executive pursuant to Section 4.5 the Company shall have no further obligations
under this Agreement other than to pay to Executive the compensation and
benefits, including payment for accrued but untaken vacation days, otherwise
payable to Executive under Section 3 through the last day of Executive’s actual
employment by the Company (“Accrued Obligations”).
5.2. Termination by the Company
Without Cause, by Executive for Good Reason or for Death or
Disability. In the event that the Company terminates
Executive’s employment without Cause pursuant to Section 4.3, Executive
terminates Executive’s employment for Good Reason, pursuant to Section 4.6, or
by death or disability pursuant to Section 4.4, the Company, in addition to the
Accrued Obligations, shall continue to pay to Executive his annual Base Salary
then in effect for a period of six (6) months on a regular payroll
basis. In addition, the Company shall continue Executive’s coverage
under and its contributions towards Executive’s health care, dental, disability
and life insurance benefits on the same basis as immediately prior to the date
of termination, except as provided below, for six (6) months from the last day
of Executive’s employment; provided, however, continuation coverage under the
Company’s health and dental policies is subject to Executive’s valid election
for such continuation coverage in accordance with section 4980B of the
Code. If the Company is not able to provide Executive benefit
continuation coverage under the plans as set forth above, the Company shall pay
Executive an amount equal to the employer portion of the applicable premiums for
the relevant period. Notwithstanding the foregoing, subject to any
overriding laws, the Company shall not be required to provide any health care,
dental, disability or life insurance benefit otherwise receivable by Executive
if Executive is actually covered or becomes covered by an equivalent benefit (at
the same cost to Executive, if any) from another source. Any such
benefit made available to Executive shall be reported to the
Company. The benefits provided for in this Section 5.2 are
conditioned upon the execution and delivery by Executive of a release of all
claims against the Company in conformance with applicable law and in form and
substance satisfactory to the Company (the “Release”) no later than 45 days
following Executive’s termination. To the extent required by Section
409A of the Code, the first installment of such Base Salary in the amount of
three (3) months’ Base Salary shall be payable on the first business day
following the effective date of termination, and the remainder shall be payable
in accordance with the Company’s regular payroll procedures
thereafter. If Section 409A of the Code is not applicable at the time
of such termination, such Base Salary continuation shall commence immediately
after the date of the Release.
5.3. Separation from
Service. Notwithstanding anything set forth in Sections 4 and
5 of this Agreement, a termination of employment shall be deemed not to have
occurred until such time as Executive incurs a “separation from service” with
the Company in accordance with Section 409a(a)(2)(A)(v) of the Code and the
applicable provisions of Treasury Regulation Section 1.409A-3.
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6. Non-disclosure and
Non-competition.
6.1.
Proprietary
Information.
6.1.1. Executive
agrees that all information and know-how, whether or not in writing, of a
private, secret or confidential nature concerning the Company’s business or
financial affairs (collectively, “Proprietary Information”) is and shall be the
exclusive property of the Company. By way of illustration, but not
limitation, Proprietary Information may include inventions, products, processes,
methods, techniques, formulas, designs, drawings, slogans, tests, logos, ideas,
practices, projects, developments, plans, research data, financial data,
personnel data, computer programs and codes, and customer and supplier
lists. Executive will not disclose any Proprietary Information to
others outside the Company except in the performance of Executive’s duties or
use the same for any unauthorized purposes without written approval by an
officer of the Company, either during or after Executive’s employment, unless
and until such Proprietary Information has become public knowledge or generally
known within the industry without the fault of Executive, or unless otherwise
required by law.
6.1.2. Executive
agrees that all files, letters, memoranda, reports, records, data, sketches,
drawings, laboratory notebooks, program listings, or other written,
photographic, electronic or other material containing Proprietary Information,
whether created by Executive or others, which shall come into Executive’s
custody or possession, shall be and are the exclusive property of the Company to
be used by Executive only in the performance of Executive’s duties for the
Company.
6.1.3. Executive
agrees that Executive’s obligation not to disclose or use information, know-how,
records and tangible property of the types set forth in Sections 6.1.1 and 6.1.2
above, also extends to such types of information, know-how, records and tangible
property of subsidiaries and joint ventures of the Company, customers of the
Company or suppliers to the Company or other third parties who may have
disclosed or entrusted the same to the Company or to Executive in the course of
the Company’s business.
6.2.
Inventions.
6.2.1. Disclosure. Executive
shall disclose promptly to an officer or to attorneys of the Company in writing
any idea, invention, work of authorship, whether patentable or unpatentable,
copyrightable or uncopyrightable, including, but not limited to, any computer
program, software, command structure, code, documentation, compound, genetic or
biological material, formula, manual, device, improvement, method, process,
discovery, concept, algorithm, development, secret process, machine or
contribution (any of the foregoing items hereinafter referred to as an
“Invention”) Executive may conceive, make, develop or work on, in whole or in
part, solely or jointly with others. The disclosure required by this
Section applies (a) during the period of Executive employment with the Company;
(b) with respect to all Inventions whether or not they are conceived, made,
developed or worked on by Executive during Executive’s regular hours of
employment with the Company; (c) whether or not the Invention was made at the
suggestion of the Company; (d) whether or not the Invention was reduced to
drawings, written description, documentation, models or other tangible form; and
(e) whether or not the Invention is related to the general line of business
engaged in by the Company.
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6.2.2. Assignment of Inventions to
Company; Exemption of Certain Inventions. Executive hereby
assigns to the Company, without royalty or any other further consideration,
Executive’s entire right, title and interest in and to all Inventions which
Executive conceives, makes, develops or works on during employment and for one
year thereafter, except those Inventions that Executive develops entirely on
Executive’s own time after the date of this Agreement without using the
Company’s equipment, supplies, facilities or trade secret information unless
those Inventions either (a) relate at the time of conception or reduction to
practice of the Invention to the Company's business, or actual or demonstrably
anticipated research or development of the Company; or (b) result from any work
performed by Executive for the Company.
6.2.3. Records. Executive
will make and maintain adequate and current written records of all
Inventions. These records shall be and remain the property of the
Company.
6.2.4. Patents. Subject
to Section 6.4, Executive will assist the Company in obtaining, maintaining and
enforcing patents and other proprietary rights in connection with any Invention
covered by Section 6.1. Executive further agrees that Executive’s
obligations under this Section 6.2.4 shall continue beyond the termination of
Executive’s employment with the Company, but if Executive is called upon to
render such assistance after the termination of such employment, Executive shall
be entitled to a fair and reasonable rate of compensation for such
assistance. Executive shall, in addition, be entitled to
reimbursement of any expenses incurred at the request of the Company relating to
such assistance.
6.2.5. Prior Contracts and
Inventions; Information Belonging to Third Parties. Executive
represents that there are no contracts to assign Inventions between any other
person or entity and Executive. Executive further represents that (a)
Executive is not obligated under any consulting, employment or other agreement
which would affect the Company’s rights or my duties under this Agreement, (b)
there is no action, investigation, or proceeding pending or threatened, or any
basis therefor known to Executive involving Executive’s prior employment or any
consultancy or the use of any information or techniques alleged to be
proprietary to any former employer, and (c) the performance of Executive’s
duties as an Executive of the Company will not breach, or constitute a default
under any agreement to which Executive is bound, including, without limitation,
any agreement limiting the use or disclosure of proprietary information acquired
in confidence prior to engagement by the Company. Executive will not,
in connection with Executive’s employment by the Company, use or disclose to the
Company any confidential, trade secret or other proprietary information of any
previous employer or other person to which Executive is not lawfully
entitled.
6.3.
Non-competition and
Non-solicitation.
6.3.1. As
Executive: During Executive’s employment and for a period of
one (1) year after the termination of Executive’s employment with the Company
for any reason, Executive will not, absent the Company’s prior written approval,
directly or indirectly, individually or on behalf of any other person or entity,
whether as principal, agent, stockholder (other than as the holder of not more
than 1% of the combined voting power of the outstanding stock of a public
company), officer or director of any corporation or other business entity, or as
a trustee, fiduciary or in any other similar representative
capacity, solicit any person or entity that engages in (a) providing
luxury destination club vacation opportunities or (b) the ownership and/or
operation of a business of providing luxury destination club vacation
opportunities. Such period is hereafter referred to as the “Executive Non-Compete
Period”. Executive acknowledges and agrees that his salary
sufficiently compensates, and has been determined in the understanding that
Executive will comply with, the non-compete obligations set forth
herein.
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6.3.2. As
Seller: Executive acknowledges that he has received
significant consideration as part of the Contribution Agreement, and that, as a
result, Executive agrees that for a period of thirty (30) months after the
Closing Date, Executive will not, absent the Company’s prior written approval,
directly or indirectly, individually or on behalf of any other person or entity,
whether as principal, agent, stockholder (other than as the holder of not more
than 1% of the combined voting power of the outstanding stock of a public
company), officer or director of any corporation or other business entity, or as
a trustee, fiduciary or in any other similar representative
capacity, solicit any person or entity that engages in (a) providing
luxury destination club vacation opportunities or (b) the ownership and/or
operation of a business of providing luxury destination club vacation
opportunities. Such period is hereafter referred to as the “Seller Non-Compete
Period.”
6.3.3. During
Executive’s employment with the Company and until the conclusion of the Seller
Non-Compete Period and the Executive Non-Compete Period, Executive will not,
directly or indirectly, recruit, solicit or induce, or attempt to recruit,
solicit or induce any employee or employees of the Company to terminate their
employment with, or otherwise cease their relationship with, the
Company.
6.3.4. During
Executive’s employment with the Company and until the conclusion of the Seller
Non-Compete Period and the Executive Non-Compete Period, Executive will not,
directly or indirectly, solicit, divert or take away, or attempt to solicit,
divert or take away, the business or patronage of any of the clients, customers
or accounts, or prospective clients, customers or accounts, of the
Company.
6.4. If
any restriction set forth in this Section 6 is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities, it shall be interpreted to extend
only over the maximum period of time or range of activities as to which it may
be enforceable.
6.5. The
restrictions contained in this Section 6 are necessary for the protection of the
business and goodwill of the Company and are in exchange for payments made to
Executive for Executive’s ownership interest in the Company and for the
consideration received as part of the Contribution Agreement, are considered by
Executive to be reasonable for such purpose. Executive agrees that
any breach of this Section will cause the Company substantial and irrevocable
damage and therefore, in the event of any such breach, in addition to such other
remedies which may be available, the Company shall have the right to seek
specific performance and injunctive relief. The Company shall be
entitled to recover its reasonable attorneys’ fees in the event it prevails in
such an action.
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7. Other
Agreements. Executive represents that Executive’s performance
of all the terms of this Agreement as an Executive of the Company does not and
will not breach any (i) other agreement to keep in confidence proprietary
information, knowledge or data acquired by Executive in confidence or in trust
prior to Executive’s employment with the Company or (ii) other agreement to
refrain from competing, directly or indirectly, with the business of any
previous employer or any other party.
8. Notices. All
notices required or permitted under this Agreement shall be in writing and shall
be deemed effective upon (a) a personal delivery or (b) by registered or
certified mail, postage prepaid.
9. Entire
Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof, including any prior employment agreement,
whether in writing or otherwise, entered into between Executive and Ultimate
Escapes or any of its affiliates (the “Prior Employment
Agreement”). Executive hereby expressly acknowledges and agrees that,
as of the Commencement Date of this Agreement, any such Prior Employment
Agreement shall no longer be in full force and effect, and that neither party to
the Prior Employment Agreement shall have any further obligation to perform
thereunder,
including, without limitation, that Executive shall not be
entitled to receive any amounts under any such Prior Employment
Agreement. No statement, representation, warranty, covenant or
agreement of any kind not expressly set forth in this Agreement will affect, or
be used to interpret, change or restrict, the express terms and provisions of
this Agreement.
10. Amendment. This
Agreement may be amended or modified only by a written instrument executed by
both the Company and Executive.
11. Governing Law and Jury
Waiver. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Florida without regard to
principles of conflicts of laws thereunder. The parties agree to
irrevocably waive any right to trial by jury in such an action.
12. Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns, including
any corporation into which the Company may be merged or which may succeed to its
assets or business, provided, however, that the
obligations of Executive are personal and shall not be assigned by
him.
13. Taxes. All
payments required to be made by the Company to Executive under this Agreement
shall be subject to the withholding of such amounts for taxes and other payroll
deductions as the Company may reasonably determine it should withhold pursuant
to any applicable law or regulation. To the extent applicable, it is
intended that the provisions of this Agreement comply with Code Section 409A or
be exempt therefrom, and this Agreement shall be administered, and all
provisions of this Agreement shall be construed, in a manner consistent with the
requirements for avoiding taxes or penalties under Code Section
409A. In the event that any severance payments or benefits hereunder
are determined by the Company to be in the nature of nonqualified deferred
compensation payments, Executive and the Company hereby agree to take such
actions as may be mutually agreed to ensure that such payments or benefits
comply with the applicable provisions of Section 409A of the Code and the
official guidance issued thereunder. Notwithstanding the foregoing,
the Company does not guarantee the tax treatment or tax consequences associated
with any payment or benefit arising under this Agreement.
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14. Miscellaneous.
14.1. No
Waiver. No delay or omission by the Company in exercising any
right under this Agreement shall operate as a waiver of that or any other
right. A waiver or consent given by the Company on any one occasion
shall be effective only in that instance and shall not be construed as a bar or
waiver of any right on any other occasion.
14.2. Captions. The
captions of the sections of this Agreement are for convenience of reference only
and in no way define, limit or affect the scope or substance of any section of
this Agreement.
14.3. Severability. In
case any provision of this Agreement shall be invalid, illegal or otherwise
unenforceable, the validity, legality and enforceability of the remaining
provisions shall in no way be affected or impaired thereby.
14.4. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which, taken together, shall constitute one and
the same instrument.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year set forth above.
| /s/ Xxxxxxx X. Xxxxx | |||
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XXXXXXX
X. XXXXX
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SECURE
AMERICA ACQUISITION
CORPORATION
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By:
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/s/ C. Xxxxxx XxXxxxxx
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Its:
Co-CEO
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