EXHIBIT 2.16
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated as of the 1st day
of October, 1996, by and between XXXXXX'X MERGER CORP., a Delaware corporation
(the "COMPANY") and XXXXX X. XXXXXX ("XXXXXX"), whose principal residence is
Xxxxx #0, Xxxxxxxxx, XX 00000.
WITNESSETH:
WHEREAS, the Company is engaged in the business (the "BUSINESS") of
manufacturing, distributing, marketing and selling prepared food products and
related products and services; and
WHEREAS, Xxxxxx is skilled and experienced in the Business; and
WHEREAS, the Company desires to employ Xxxxxx and recognizes that
certain inducements must be offered to Xxxxxx in order for the Company to retain
Xxxxxx'x services; and
WHEREAS, Xxxxxx and the Company are desirous of entering into an
agreement providing for the employment by the Company of Xxxxxx upon the terms
provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, agreements and promises contained herein, the parties agree as
follows:
1. Employment. Company hereby employs Xxxxxx and Xxxxxx hereby accepts
employment by the Company. Xxxxxx may be elected or appointed a director or
officer of the Company or any subsidiary or affiliate thereof during the term
hereof but only with Xxxxxx'x prior consent.
2. Term. The term hereof shall commence on the date hereof and shall
continue until September 30,1997, unless sooner terminated in accordance with
the provisions of Section 6 hereof. The period from the date hereof to the date
of this Agreement's expiration or sooner termination shall be deemed the "TERM".
At the end of the Term, Xxxxxx will resign from all offices and directorships.
3. Duties.
(a) Xxxxxx agrees to perform such duties and tasks as the
Company may from time to time reasonably request, subject to the direction of
the Company's Board of Directors, Chairman and Chief Executive Officer,
including managing the sales and marketing of the Business in its current
market. Xxxxxx further agrees to comply with all policies, obey willingly all
rules, regulations and instructions of the Company, and to faithfully,
diligently and competently perform to the best of his ability all of the duties
assigned, or refrain from such activities proscribed by the Company, subject,
however, to the supervision and control of the Board of Directors of the
Company. Xxxxxx shall devote all of his business time, energy and skill to his
duties hereunder, shall not accept employment of any kind from, perform duties
for, or render services to any person other than the Company, without the prior
written consent of the Company.
(b) Nothing herein shall preclude the Board of Directors of
the Company from changing Xxxxxx'x title and duties if such change is in the
Company's best interests; provided, however, that at all times during that part
of the Term that Xxxxxx is employed as a fill-time employee of the Company,
Xxxxxx shall be employed as an executive of the Company with appropriate and
commensurate compensation as provided in Section 4 below.
4. Compensation.
(a) Base Salary. During that part of the Term that Xxxxxx is
employed as a full-time employee of the Company, the Company shall pay to Xxxxxx
compensation equal to an annual base salary (the "BASE SALARY") at the rate of
FIFTY THOUSAND AND NO/100ths DOLLARS ($50,000.00) per annum, payable in
accordance with the Company's normal payroll periods, less normal payroll
deductions. The Company shall reimburse Xxxxxx for all approved expenses
necessarily and reasonably incurred by Xxxxxx in connection with the Business,
against presentation of proper receipts or other proof of expenditure, and
subject to such reasonable guidelines or limitations provided to Xxxxxx, and
which are to be applied prospectively only as the Board of Directors of the
Company may impose.
(b) Bonuses. Xxxxxx may receive such other bonuses or
additional compensation as the Board may approve, from time to time, in its sole
and absolute discretion.
(c) Limitations. All bonuses, if any, shall only be paid as
such may be permitted by any applicable loan documents to which the Company may
be a party or bound.
5. Benefits. During that part of the Term in which Xxxxxx is employed
as a full-time employee of the Company, Xxxxxx shall be entitled to participate
in any profit sharing plan, retirement plan, group life insurance plan or other
insurance plan or medical expense plan maintained by the Company for its
employees, and two (2) weeks paid vacation per year and reasonable sick leave.
Such benefits shall not be subject to execution, attachment or similar process
except as an offset to claims by the Company against Xxxxxx or as otherwise
required by law.
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6. Termination.
(a) Upon the death or resignation of Xxxxxx, this Agreement
and Xxxxxx'x and his heir's, executor's and administrator's entitlement to
compensation and other benefits and rights hereunder (other than compensation
and other benefits which shall have accrued up to the date of death or
resignation) shall automatically terminate. Notwithstanding Xxxxxx'x resignation
hereunder, Xxxxxx will continue to be bound by the terms and conditions of
Section 8 hereof. Any resignation pursuant to this Section shall be deemed
ineffective if Xxxxxx'x termination under Section 6(c) hereof is imminent.
(b) The Company may, at its option, terminate this Agreement
upon written notice to Xxxxxx if Xxxxxx, because of physical or mental
incapacity or disability, fails in any material respect to perform the services
required of him hereunder or is unable to perform his duties hereunder for a
continuous period of 30 days or any 60 days out of any twelve month period. Upon
such termination, all obligations hereunder of the Company shall cease, except
for compensation and other benefits and rights hereunder which shall have
accrued up to the date of termination. If within ten (10) days of the written
notice referred to above, Xxxxxx notifies the Company in writing that he
disputes the Company's determination of his disability, the Company and Xxxxxx
shall, within five days of Xxxxxx'x notice, each name a physician who is a
member of the American Medical Association ("AMA"), who shall select a third
physician who is a member of AMA to examine Xxxxxx. The decision of the third
physician shall be certified in writing to the Company and Xxxxxx, and said
decision shall be binding and conclusive upon the Company and Xxxxxx. If Xxxxxx
shall fail to notify Company within the ten (10) day period herein prescribed
that he disputes the Company's determination of disability, then the Company's
determination thereof shall be final and conclusive and Xxxxxx'x employment
shall terminate. Xxxxxx will submit to the appropriate medical examinations.
(c) The Company may, at its option, immediately terminate this
Agreement due to a material breach hereof by Xxxxxx or for "JUST CAUSE."
Notwithstanding anything herein to the contrary, in the event of a termination
for either of such reasons, all obligations of any nature of the Company, except
for compensation which will have accrued up to the date of termination, shall
terminate. "JUST CAUSE" hereunder shall be limited to one of the following
grounds:
(i) The Company fails to reach eighty per cent (80%)
of its operating income budget over any given nine month period;
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(ii) Willful failure to follow customer prescribed
quality control procedures;
(iii) Any material conflict of interest, except a
material conflict of which the Company has been notified and the
Company has agreed to allow;
(iv) Employee's use of Company's proprietary
information for his own benefit or in a way adverse to Company's
interests;
(v) Employee's rendering of assistance to any
person's, organization's or entity's competitive efforts with Company;
(vi) Employee has materially breached any of the
provisions of this Agreement;
(vii) Employee's refusal, after notice thereof, to
perform specific directives of the Board of Directors which are
consistent with the scope and nature of Employee's duties and
responsibilities as set forth herein;
(viii) Dishonesty of Employee at any time directly or
indirectly and materially affecting the Company;
(ix) Habitual drunkenness or use of drugs (unless
medically prescribed) which interferes with the performance of
Employee's obligations hereunder;
(x) Employee's engagement at any time in any act of
fraud, embezzlement or Employee's admission or conviction of or plea of
nolo contendere to a felony or of any crime at any time involving moral
turpitude, fraud, or misrepresentation;
(xi) Any gross or willful misconduct of Employee at
any time resulting in loss to the Company, substantial damage to the
Company's reputation, or theft or defalcation from the Company;
(xii) Any intentional act of Employee having the
purpose or effect of materially injuring the reputation, business or
business relationships of the Company; or
(xiii) Any breach by Employee of his fiduciary duty
or duty of loyalty to the Company, or the restrictive covenants
contained in Section 8 hereof or of any policy, written or unwritten,
of the
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Company (e.g., prohibition of sexual harassment in the work place or
discrimination in hiring practices).
(d) In the event that the Company desires to relieve Xxxxxx of
his employment duties hereunder for any reason other than in Sections 6(a), 6(b)
and 6(c), then, the Company may immediately terminate Xxxxxx under this Section
by giving Xxxxxx written notice, and by paying Xxxxxx the Base Salary and
benefits which would otherwise be payable hereunder for the shorter of (i) the
six (6) months immediately following the delivery of such notice and (ii) the
amount of time left during the Term until the next applicable termination date.
Any benefit which would have accrued during such time period shall be deemed to
have so accrued on the appropriate date. The payments and benefits payable to
Xxxxxx under this Section shall be Xxxxxx'x sole and exclusive remedies.
Notwithstanding such termination, Xxxxxx will continue to be bound by the terms
and conditions of Section 8 hereof
7. Effect of Termination. Notwithstanding anything to the contrary
contained herein, should Xxxxxx'x employment with the Company be terminated for
any reason whatsoever, Xxxxxx will no longer have an office at the Company's
places of business, and will not visit such places.
8. Restrictive Covenant. In addition to Xxxxxx'x covenants contained in
Section 12 of the Agreement and Plan of Reorganization dated as of the date
hereof among the Company, Xxxxxx, his wife, Atlantic Beverage Company, Inc.
("ABEV"), Xxxxxx'x Farm, Inc. and Xxxxxx'x Sausage, Inc.:
(a) Nondisclosure. Xxxxxx acknowledges that he has been and
will be entrusted with trade secrets, marketing, operating and strategic plans,
customer and supplier lists, proprietary information and other confidential or
specialized data and/or information relative to the Business of the Company and
its predecessors, whether now existing or to be developed or created after the
date hereof (collectively, "TRADE SECRETS"). Xxxxxx covenants and agrees that he
shall at all times during the Term and thereafter hold in strictest confidence
any and all Trade Secrets that may have come or may come into his possession or
within his knowledge concerning or related to the products, services, processes,
businesses, suppliers, customers and clients of the Company or its affiliates
and their predecessors. Xxxxxx further covenants and agrees that neither he nor
any person or enterprise controlled by him will for any reason, directly or
indirectly, for himself or for the benefit of any other person or enterprise,
use, copy, divulge or otherwise disseminate or disclose any of the Trade Secrets
owned or used by, or licensed to, Xxxxxx or any of his affiliates or otherwise
relating to Xxxxxx, the Company or the Business, provided that Xxxxxx may
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disclose Trade Secrets pursuant to an order by a court of competent
jurisdiction, provided, further, that Xxxxxx shall give the Company notice of
such order and any court pleading requesting such disclosure, in order to
provide the Company with an opportunity to prevent such disclosure or procure an
appropriate protective order.
(b) Customers and Trade Secrets. Xxxxxx acknowledges that
customers and customer accounts and Trade Secrets of Xxxxxx and the Company will
at all times be the sole and separate property of the Company, in which Xxxxxx
has no rights whatsoever, and all activities of or work performed by Xxxxxx for
or on behalf of the Company in the future will be performed solely for the
benefit of the Company and the goodwill resulting from such efforts by Xxxxxx is
and at all times will be the sole and separate property of the Company, which
goodwill is intended to be protected, in part, by this Section.
(c) Non-Solicitation: Non-Hire. Xxxxxx agrees that from the
date hereof and continuing for a period (the "NON-COMPETE PERIOD") of four (4)
years after the later of (i) the date his consulting or employment relationship
with the Company terminates or (ii) he does not own, directly or indirectly,
more than 50,000 shares of the common stock of ABEV, neither he nor any person
or enterprise controlled by him will solicit or hire or contract with, for
employment, consulting or any other reason, any person who was employed by the
Company or Xxxxxx or any of the Company's affiliates as a manager, sales person,
officer, office head, buyer, accountant/controller or other key employee at any
time within one (1) year prior to the time of the act of solicitation, or hire.
(d) Non-Competition by Xxxxxx. During the Non-Compete Period,
Xxxxxx agrees that neither he nor any person or enterprise controlled by him
will become a stockholder, director, officer, agent, employee or representative
of or consultant to a corporation or member of a partnership. engage as a sole
proprietor in any business, act as a consultant to any of the foregoing or
otherwise engage, directly or indirectly, in any enterprise which competes with
the Business in any geographic area in which Xxxxxx does business on the date
the Term ends, which area Xxxxxx acknowledges includes the States described in
EXHIBIT A hereof; provided, however, that the foregoing shall not prohibit the
ownership of less than two percent (2%) of the outstanding shares of the stock
of any corporation engaged in any business, which shares are regularly traded on
a national securities exchange or in any over-the-counter market. The Non-
Compete Period shall be extended for that period of time during which Xxxxxx is
in violation of the covenants contained in this Section. In consideration of the
covenants contained herein, the Company shall pay to Xxxxxx on the first through
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fourth anniversaries hereof (i.e., on October 1, 1997, 1998, 1999 and 2000), a
lump sum payment equal to $25,000.
(e) Survival. The provisions of this Section shall survive the
termination of this Agreement and Xxxxxx'x employment with the Company,
irrespective of the reason therefor.
9. Relief Reformation: Severability. Xxxxxx agrees that the covenants
herein are separate and are reasonable in their scope and duration and may be
enforced by specific performance or otherwise. Xxxxxx shall not raise any issue
of reasonableness as a defense in any proceeding to enforce any of such
covenants. Notwithstanding the foregoing, in the event that a covenant included
herein shall be deemed by any court to be unreasonably broad in any respect, the
Court which makes such finding shall modify such covenant for the purpose of
making such covenant reasonable in scope and duration. The validity, legality or
enforceability of the remaining provisions hereof shall not be affected by any
such modification.
10. Inventions. Xxxxxx shall and hereby assigns to the Company his
entire right, title and interest in all discoveries, processes, recipes and
improvements, patentable or otherwise, trade secrets and ideas, writings and
copyrightable material, which have been or may be conceived by Xxxxxx or
developed or acquired by him during the term hereof and the Non-Compete Period,
which may pertain directly or indirectly to the Business. Xxxxxx agrees to
promptly and fully disclose in writing all such developments. Xxxxxx
acknowledges that all Trade Secrets and other ideas relating to the Business
which were conceived by Xxxxxx before the date hereof have been assigned by
Xxxxxx to the Company. Xxxxxx will, upon the Company's request, execute,
acknowledge and deliver to the Company all instruments and do all other acts
which are necessary or desirable to enable the Company to file and prosecute
applications for, and to acquire, maintain and enforce all letters, patents,
trademark registrations, or copyrights or enforce all rights in any intangible
or intellectual property in all countries.
11. Remedies. Xxxxxx acknowledges that any breach hereof by him will
cause irreparable harm to the Company, that such harm will be difficult if not
impossible to ascertain. Therefore, if any action or proceeding is commenced by
or on behalf of the Company to enforce the provisions hereof, the Company shall
be entitled to equitable relief including injunction, against any actual or
threatened breach hereof, and any damages arising therefrom including, without
limitation, reasonable fees of its attorneys and their support staff and all
other costs and expenses incurred in connection therewith without bond. Neither
the right to obtain such relief nor the obtaining of such relief shall be
exclusive of or preclude the Company from any other remedy. Xxxxxx hereby waives
the claim or defense to an action for
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equitable relief by the Company that the Company has an adequate remedy at law
or has not been or is not being irreparably injured by such breach. FURTHERMORE,
EACH PARTY HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE OF ANY NATURE ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION HEREWITH. INSTEAD ANY
DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
12. Insurance. The Company may, at its election and for its benefit,
insure Xxxxxx against disability, accidental loss or death and Xxxxxx shall
submit to such physical examinations and supply such information as may be
required in connection therewith.
13. Assignment. Xxxxxx acknowledges that the services to be rendered by
him hereunder are unique and personal and that Xxxxxx may not assign any of his
rights or delegate an)' of his duties or obligations hereunder to any other
person or entity, whether by voluntary or involuntary assignment or transfer.
This Agreement shall be binding upon and inure to the benefit of the successors
and assigns of the Company, and the heirs, executors, administrators and
personal representatives of Xxxxxx, and shall be assignable by the Company to
any entity acquiring substantially all of the assets of the Company.
14. Notices. All notices, demands and communications required or
permitted to be given hereunder shall be sufficient if in writing and shall be
deemed to have been duly given on the date received if delivered personally or
two days after the date such notice, demand or communication is sent if sent by
first class, certified or registered mail, return receipt requested, postage
pre-paid and addressed, or one day after the date such notice, demand or
communication is sent if sent by overnight courier service to Xxxxxx at his
residence set forth above, or to the Company at its principal place of business,
or to such other person at such location as either party hereto may subsequently
designate in a similar manner.
15. Waiver of Breach. The failure of a party at any time to require
performance by the other of any provision expressed herein shall in no way
affect such party's right thereafter to enforce such provision. Furthermore, a
waiver by a party of a breach of any provision hereof by the other party shall
not operate or be construed as a waiver of any subsequent breach by the other
party.
16. Entire Agreement; Amendments. This Agreement contains the entire
understanding of the parties with respect to its subject matter, and supersedes
all prior understandings and agreements. No party has relied on
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any statement of the other party except for those statements contained herein.
This Agreement may be amended only by a written instrument duly executed by the
parties. If any provision of this Agreement is determined to be illegal or
unenforceable, such provision will be deemed amended to the extent necessary to
conform to applicable law or, if it cannot be so amended without materially
altering the intention of the parties, it will be deemed stricken and the
remainder of the Agreement will remain in full force and effect.
17. No Conflicting Agreements. Xxxxxx represents and warrants that he
is not a party to any agreement, contract or understanding, whether employment
or otherwise, which would in any way restrict or prohibit him from undertaking
or performing employment in accordance with the terms and conditions hereof
18. Expenses upon Default. If any party defaults in the performance of
any of its covenants, agreements or obligations described herein, then in
addition to any and all other rights or remedies which the non-defaulting party
may have against the defaulting party, the defaulting party will be liable to
and will pay to the non-defaulting party a sum equal to all of the
non-defaulting party's court costs and fees of its attorneys and their support
staff and all other costs and expenses associated with such dispute incurred in
enforcing the covenants, agreements or obligations of the defaulting party
described herein.
19. Offset. Any amounts which may be due and owing from Xxxxxx to the
Company arising from or pursuant to any agreement whatsoever, shall be paid to
the Company on demand therefore, and if not so paid, such amounts may be
deducted from any amounts which the Company may owe to Xxxxxx.
20. Applicable Law. The terms and conditions of this Agreement shall be
governed by and construed in accordance with the laws of the State of Kentucky
applicable to agreements between Kentucky residents entered into and to be
performed entirely within Kentucky.
21. Consent to Jurisdiction. For those matters or disputes of any
nature arising out of, connected with, related or incidental to a party seeking
to compel action (other than payment) or cease a prohibited action, the parties
hereto hereby irrevocably submit themselves to the exclusive jurisdiction of the
courts of the State of Kentucky located in the City of Paducah, Kentucky and to
the jurisdiction of the United States District Court for the Western District of
Kentucky for the purpose of bringing any action that may be brought in
connection with the provisions hereof. The parties hereto hereby individually
agree that they shall not assert any claim that
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they are not subject to the exclusive jurisdiction of such courts, that the
venue is improper, that the forum is inconvenient or any similar objection,
claim or argument. Service of process on any of the parties hereto with regard
to any such action may be made by mailing the process to such Persons by regular
or certified mail to the address of such Person set forth herein or to any
subsequent address to which notices shall be sent.
22. Agreement to Arbitrate. Except for those matters described in
Section 21 above, in the event of any other dispute arising out of connected
with, related or incidental to this Agreement and the documents or instruments
delivered in connection herewith, such dispute shall be submitted to arbitration
in accordance with the terms of this Section. The party who is alleging that a
dispute exists shall send a notice of such dispute to all other parties, which
notice shall set forth in detail the dispute, the parties involved and the
position of such party with respect thereto. Within ten (10) business days after
the delivery of such a notice, counsel for the parties shall deliver a joint
request to the Managing Partner of the Cincinnati, Ohio Office of Xxxxxxx &
Xxxx, Esq., requesting such person to deliver a list of ten (10) prospective
arbitrators, all of whom such partner believes to be experienced in commercial
arbitration, along with a brief resume of each such person. The parties shall do
all things necessary to reasonably cooperate in the selection of the ten (10)
persons, including holding Xxxxxxx & Xxxx harmless from any and all claims
arising out of such selection and arbitration. If such Managing Partner
declines, the list of ten (10) shall be selected by the party asking for
arbitration receiving a list from any private dispute resolution firm with
offices in Cincinnati. The arbitrator shall be selected as follows: within three
(3) days after the list is delivered to each party, each party shall assign rank
of preference to each available arbitrator, with number one being the most
preferable and ten being the least preferable (i.e., a different rank must be
assigned to each available arbitrator) and deliver such rankings confidentially
to the person or firm which created the list; in the event of a tie, the person
or firm which created the list shall then select the arbitrator from the two
potential arbitrators which have tied. The single arbitrator with the lowest
total score shall be the arbitrator for the dispute. The arbitrator so selected
shall schedule a hearing in Paducah, Kentucky, on the disputed issues within
forty-five (45) days after his appointment, and the arbitrator shall render his
decision after the hearing, in writing, as expeditiously as is possible, and
shall be delivered to the parties. The arbitrator shall render his decision
based on written materials supplied by the parties to the arbitration in support
of their respective oral presentations at the hearing, and no party shall be
entitled to discovery in such matter. Each party shall supply a copy of any
written materials to be submitted to the arbitrator at least fifteen (15) days
prior to the scheduled hearing. The parties agree that the arbitrator shall not
have any power or authority to award punitive damages. A default judgment may
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be entered against any party who fails to appear at the arbitration hearing.
Such decision and determination shall be final and unappealable and shall be
filed as a judgment of record in any jurisdiction designated by the successful
party. The successful party shall be entitled to recover all fees, costs and
expenses incurred in connection with such arbitration. The parties hereto agree
that this paragraph has been included to rapidly and inexpensively resolve any
disputes between them with respect to the matters described above, and that this
paragraph shall be grounds for dismissal of any court action commenced by any
party with respect to a dispute arising out of such matters.
THE PARTIES AGREE THAT ANY ARBITRATION SHALL BE GOVERNED BY AND PURSUANT TO THE
FEDERAL ARBITRATION ACT, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED
THEREUNDER.
23. Exceptions to Exclusive Jurisdiction and Mandatory Arbitration.
Notwithstanding the provisions of Sections 21 and 22 hereof, in the event that
there is a third party action which may give rise to rights of indemnification
or contribution from one party(ies) to another, the parties hereto irrevocably
submit themselves to the jurisdiction of the court in which such third party
action is brought, and the party to be indemnified may, but shall not be
obligated to, bring a third party action or other appropriate proceeding to
enforce such rights of indemnification or contribution. The foregoing is not
intended to confer any rights upon any other party other than the parties
hereto.
24. Effect of Disputes. Notwithstanding the fact that there may from
time to time be disputes among the parties concerning the terms and conditions
hereof, the parties agree not to under any circumstances, disparage, criticize
or denigrate the talents, skills, prospects, abilities, integrity or character
of the other parties hereto, or such parties' management, directors, employees,
agents or representatives (including those of the Company's affiliates). Xxxxxx
further agrees that he will not, at any time after the date hereof and without
the Company's written consent, contact any past, present or prospective
customer, supplier, employee or agent or representative of his with the intent,
purpose or effect of injuring the reputation, business or business relationships
of the Company and/or its affiliates. The provisions of this Section shall
survive the execution and termination hereof, irrespective of the reason for
such termination.
25. Mutual Drafting. This Agreement is the joint product of the
Company, Xxxxxx and their respective counsel, and each provision hereof has been
subject to the mutual consultation, negotiation and agreement of such
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parties and counsel, and shall not be construed for or against any party hereto.
IN WITNESS WHEREOF, the parties hereto have entered into this
Employment Agreement as of the date first written above.
XXXXXX'X MERGER CORP.
By ____________________________ ________________________________
Xxxxxxx X. Xxxxxx, Chairman Xxxxx X. Xxxxxx
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EXHIBIT A
States included in Non-Compete
Illinois
Kentucky
Indiana
Wisconsin
Arkansas
Mississippi
Texas
Alabama
Tennessee
Missouri
Virginia
Ohio
Louisiana
Xxxxxx acknowledges that products of the Company and its predecessors have been
and are currently being sold in all of the foregoing areas.
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