EMPLOYMENT AGREEMENT, dated as of August ___, 2003,
between Tango Pacific, Inc., an Oregon corporation
(the "Company") to be incorporated, and Xxxx Xxxxxx
(the "Executive").
Introduction
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The Company recognizes that the future growth, profitability and success of the
Company's business will be substantially and materially enhanced by the
employment of the Executive by the Company.
The Company desires to employ the Executive and the Executive has indicated
his willingness to provide his services, on the terms and conditions set forth
herein.
NOW, THEREFORE, on the basis of the foregoing premises and in consideration
of the mutual covenants and agreements contained herein, the parties hereto
agree as follows:
Section 1. Employment.
(a) The Company hereby agrees to employ the Executive and the
Executive hereby accepts employment with the Company, on the terms and subject
to the conditions hereinafter set forth. Subject to the terms and conditions
contained herein, the Executive shall serve as the President of the Sales
Division for Company and, in such capacity, shall report directly to the Chief
Executive Officer (the "C.E.O.") and shall have such duties as are typically
performed by the President of Sales for the corporation, together with such
additional duties, commensurate with the Executive's position as President of
the Company, as may be assigned to the Executive from time to time by the
C.E.O.; provided, however, the C.E.O. shall in its sole discretion, have the
right at any time to remove the Executive from his position as President of the
Company and in such event the C.E.O. shall, after consultation with the
Executive, reasonably determine the Executive's new title and responsibilities
and to whom the Executive will report; provided, further, that in the event of
any such changes, Executive's compensation and benefits shall remain unchanged
and that the Executive's position shall be at the senior management level. The
principal location of the Executive's employment shall be at location to be
determined with executive office located in Portland, Oregon, although the
Executive understands and agrees that he may be required to travel from time to
time for business reasons. If the Executive is elected or appointed with his
consent to be a director or officer of the Company during the term of this
Agreement, he shall serve in such capacity or capacities without additional
compensation.
(b) The Executive shall devote his best efforts and his full
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company and its Subsidiaries. Executive shall perform his duties,
responsibilities and functions to the Company and its Subsidiaries hereunder to
the best of his abilities in a diligent, trustworthy, businesslike and efficient
manner.
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(c) For purposes of this Agreement, "Subsidiaries" shall mean any
corporation or other entity of which the securities or other ownership interests
having the voting power to elect a majority of the board of directors or other
governing body are, at the time of determination, owned by the Company directly
or through one or more subsidiaries.
(d) For the purposes of this Agreement, one "month" shall be
defined as one calendar month and therefore shall not necessarily be exactly
thirty days in length.
Section 2. Term. Unless terminated pursuant to Section 6 hereof,
the Executive's employment hereunder shall commence on the date hereof and shall
continue during the period ending on the third anniversary of the date hereof
(the "Initial Term"). Thereafter, the Employment Term shall extend automatically
for consecutive periods of one year unless either party shall provide notice of
termination not less than 30 days prior to an anniversary date of this
Agreement. The Initial Term, together with any extension pursuant to this
Section 2, is referred to herein as the "Employment Term." The Employment Term
shall terminate upon any termination of the Executive's employment pursuant to
Section 6.
Section 3. Compensation. During the Employment Term, the Executive
shall be entitled to the following compensation and benefits contingent on the
Transition Period provisions described in Section 3(e):
(a) Salary. As compensation for the performance of the Executive's
services hereunder, the Executive shall receive a salary (the "Salary") of one
hundred fifty four thousand dollars ($154,000.00) per annum to be paid by the
Company, with increases, if any, as may be approved in writing by the Board of
Directors. The Salary shall be payable in accordance with the payroll practices
of Pacific Print Works, LLC, as the same shall exist from time to time.
(b) Stock. Over the course of this three-year Agreement, the Executive
is entitled to receive warrants to purchase a total of 2,000,000 shares of
Company stock at the price of $.001 per share, with said warrants to be provided
to the Executive in periodic pro-rata disbursements in such manner as deemed
reasonable by the C.E.O.
(c) Transition Period. The transition period (the "Transition Period")
shall run from the time this Agreement has been entered into until the date of
October 12, 2003. If, during the Transition Period, the Company experiences a
month wherein the Company's total sales revenue exceeds five-hundred thirty
thousand dollars ($530,000) and all Expenses have been paid, then at the
conclusion of the Transition Period on October 12, 2003, the compensation
provisions (the "Compensation") described in Sections 3(a), (b), (c), (e) and
(f) shall take effect. Otherwise, the Executive shall not receive any
Compensation from the conclusion of the Transition Period on October 12, 2003
until such time as the Company experiences a month wherein the Company's total
sales revenue exceed five-hundred thirty thousand dollars ($530,000) and all
Expenses have been paid. During the Transition Period, the Executive shall not
receive the Compensation, but shall instead receive the following:
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(1) A monthly salary in the amount of one-thousand one-hundred five
dollars ($1,105) less the cost of the benefits, as described in Section 3(d) of
this Agreement, to be provided to the Executive;
(2) The Benefits as described in Section 3(d) of this Agreement.
(3) During the Transition Period, the Executive shall receive three
hundred thousand shares of Company stock the Company will assist the Executive
in selling in a reasonable manner.
(d) Tax Withholdings. All amounts payable to Executive as
compensation hereunder shall be subject to all legally required withholding by
the Company.
Section 4. Exclusivity. During the Employment Term, the Executive
shall devote his full time to the business of the Company, shall faithfully
serve the Company, shall in all respects conform to and comply with the lawful
and reasonable directions and instructions given to him by the Board of
Directors in accordance with the terms of this Agreement, shall use his best
efforts to promote and serve the interests of the Company and shall not engage
in any other business activity, whether or not such activity shall be engaged in
for pecuniary profit, except that the Executive may (i) participate in the
activities of professional trade organizations related to the business of the
Company, (ii) engage in personal investing activities, and (iii) participate in
the activities set forth on Schedule I; provided that activities set forth in
these clauses (i), (ii) and (iii), either singly or in the aggregate, do not
interfere in any material respect with the services to be provided by the
Executive hereunder.
Section 5. Reimbursement for Expenses. The Executive is authorized to
incur reasonable expenses in the discharge of the services to be performed
hereunder, including expenses for travel, entertainment, lodging and similar
items in accordance with the Company's expense reimbursement policy, as the same
exists from time to time. The Company shall reimburse the Executive for all such
proper expenses upon presentation by the Executive of itemized accounts of such
expenditures in accordance with the financial policy of the Company, as in
effect from time to time.
Section 6. Termination and Default.
(a) Death. The Executive's employment shall automatically terminate upon
his death and upon such event, the Executive's estate shall be entitled to
receive the amounts accrued but not paid to the Executive through the date of
the Executive's death.
(b) Disability. If the Executive is unable to perform the duties
required of him under this Agreement because of illness, incapacity, or physical
or mental disability, the Employment Term shall continue and the Company shall
pay all compensation required to be paid to the Executive hereunder, unless the
Executive is unable to perform the duties required of him under this Agreement
due to such disability for an aggregate of 120 days (whether or not consecutive)
during any 12-month period during the term of this Agreement.
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(c) Cause. The Company may terminate the Executive's employment at any
time, with or without Cause. In the event of termination pursuant to this
Section 6(c) for Cause, the Company shall deliver to the Executive written
notice setting forth the basis for such termination, which notice shall
specifically set forth the nature of the Cause which is the reason for such
termination. Termination of the Executive's employment hereunder shall be
effective upon delivery of such notice of termination. For purposes of this
Agreement, "Cause" shall mean: (i) any material breach of this Agreement by the
Executive, but only if such material breach shall not have been corrected by the
Executive within 30 business days of receipt by the Executive of written notice
from the Company of the occurrence of such material breach; (ii) the Executive's
repeated failure (except where due to a disability contemplated by subsection
(b) hereof), neglect or refusal to perform his duties hereunder; (iii) any
willful or intentional act or omission by the Executive that has the effect of
injuring the reputation or business of the Company or its affiliates in any
material respect; (iv) any habitual lateness or continued or repeated absence
from the Company, unless such lateness or absence is (A) approved or excused by
the Board of Directors or (B) is the result of the Executive's illness,
disability or incapacity (in which event the provisions of Section 6(b) hereof
shall control); (v) use of illegal drugs by the Executive or repeated
drunkenness; (vi) the Executive being convicted of, or pleading guilty or nolo
contendere to a felony, misdemeanor (other than, if applicable, minor traffic
violations) or crime of moral turpitude; or (vii) the commission by the
Executive of an act of dishonesty, fraud or embezzlement against the Company.
The determination as to the occurrence of any event, act or omission enumerated
in this Section 6(c) shall solely be made by the Board of Directors acting in
good faith.
(d) Good Reason. The Executive may terminate his employment for "Good
Reason" following a Substantial Breach (as hereinafter defined), but only if
such Substantial Breach shall not have been corrected by the Company within 30
days of receipt by the Company of written notice from the Executive to the Board
of Directors of the occurrence of such Substantial Breach, which notice shall
specifically set forth the nature of the Substantial Breach which is the reason
for such resignation. The term "Substantial Breach" means (i) the failure by the
Company to pay to the Executive the Salary and the Bonus, if any, in accordance
with Sections 3(a) and 3(b) hereof; (ii) the failure by the Company to allow the
Executive to participate in the Company's employee benefit plans generally
available from time to time to senior executives of the Company; or (iii) the
failure of any successor to all or substantially all of the business and/or
assets of the Company to assume this Agreement; provided, however, that the term
"Substantial Breach" shall not include a termination of the Executive's
employment hereunder pursuant to Section 6(a), (b) or (c) hereof. The date of
termination of the Executive's employment under this Section 6(d) shall be the
effective date of any resignation specified in writing by the Executive, which
shall not be less than 30 days after receipt by the Board of Directors of
written notice of such resignation; provided that such resignation shall not be
effective pursuant to this Section 6(d), and the Substantial Breach shall be
deemed to have been cured, if such Substantial Breach is corrected by the
Company during such 30-day period.
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(e) Payments. In the event that the Executive's employment terminates
for any reason, the Company shall pay to the Executive all amounts accrued but
unpaid hereunder through the date of termination in respect of Salary or
unreimbursed expenses. In the event the Executive's employment is terminated by
the Company without Cause or by the Executive with Good Reason, in addition to
the amounts specified in the foregoing sentence, (i) the Executive shall
continue to receive the Salary (less any applicable withholding or similar
taxes) at the rate in effect hereunder on the date of such termination
periodically, in accordance with the Company's prevailing payroll practices, for
a period of 6 months following the date of such termination (the "Severance
Term"), (ii) to the extent permissible under the Company's health plans, the
Executive shall continue to receive any health benefits provided to him as of
the date of such termination in accordance with Section 3(c) hereunder during
the Severance Term; provided, however, the Company's obligations pursuant to
this sentence shall be contingent upon the Executive signing a release agreement
reasonably satisfactory to the Company, that releases the Company, its officers,
directors, employees, stockholders and affiliates from all claims and
liabilities through the termination date other than the payment obligations in
this Section 6(e). In the event the Executive accepts other employment or
engages in his own business prior to the last date of the Severance Term, the
Executive shall forthwith notify the Company and the Company shall be entitled
to set off from amounts due the Executive under this Section 6(e) the amounts
paid to the Executive in respect of such other employment or business activity.
Amounts owed by the Company in respect of the Salary or reimbursement for
expenses under the provisions of Section 5 hereof shall, except as otherwise set
forth in this Section 6(e), be paid promptly upon any termination.
Notwithstanding the foregoing, all payments by the Company pursuant to the
second sentence of this Section 6(e) may be immediately terminated and recovered
by the Company in the event the Executive materially breaches Sections 7 or 8 of
this Agreement.
(f) Survival of Operative Sections. Upon any termination of the
Executive's employment, the provisions of Sections 6(e) and 7 through 20 of this
Agreement shall survive to the extent necessary to give effect to the provisions
thereof.
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Section 7. Secrecy and Non-Competition.
(a) No Competing Employment. The Executive acknowledges that the
agreements and covenants contained in this Section 7 are essential to protect
the value of the Company's business and assets and by his current employment
with the Company and its Subsidiaries, the Executive has obtained and will
obtain such knowledge, contacts, know-how, training and experience and there is
a substantial probability that such knowledge, know-how, contacts, training and
experience could be used to the substantial advantage of a competitor of the
Company and to the Company's substantial detriment. Therefore, the Executive
agrees that for the period commencing on the date of this Agreement and ending
on the 18 month anniversary of the termination of the Executive's employment
hereunder (such period is hereinafter referred to as the "Restricted Period")
with respect to any geographical area in which the Company or its Subsidiaries
engage or plan to engage in business during the Employment Term, the Executive
shall not participate or engage, directly or indirectly, for himself or on
behalf of or in conjunction with any person, partnership, corporation or other
entity, whether as an employee, agent, officer, director, shareholder, partner,
joint venturer, investor or otherwise, in any business activities if such
activity consists of any activity undertaken or expressly contemplated to be
undertaken by the Company or any of its Subsidiaries or by the Executive at any
time during the Employment Term.
(b) Nondisclosure of Confidential Information. The Executive, except in
connection with his employment hereunder, shall not disclose to any person or
entity or use, either during the Employment Term or at any time thereafter, any
information not in the public domain or generally known in the industry, in any
form, acquired by the Executive while employed by the Company or any predecessor
to the Company's business or, if acquired following the Employment Term, such
information which, to the Executive's knowledge, has been acquired, directly or
indirectly, from any person or entity owing a duty of confidentiality to the
Company or any of its Subsidiaries or affiliates or any non-public third party
information which is subject to an obligation of confidentiality to which the
Company is bound, relating to the Company, its Subsidiaries or affiliates or any
non-public third party information which is subject to an obligation of
confidentiality to which the Company is bound, including but not limited to
information regarding customers, vendors, suppliers, trade secrets, training
programs, manuals or materials, technical information, contracts, systems,
procedures, mailing lists, know-how, trade names, improvements, price lists,
financial or other data (including the revenues, costs or profits associated
with any of the Company's products or services), business plans, code books,
invoices and other financial statements, computer programs, software systems,
databases, discs and printouts, plans (business, technical or otherwise),
customer and industry lists, correspondence, internal reports, personnel files,
sales and advertising material, telephone numbers, names, addresses or any other
compilation of information, written or unwritten, which is or was used in the
business of the Company or any Subsidiaries or affiliates thereof. The Executive
agrees and acknowledges that all of such information, in any form, and copies
and extracts thereof, are and shall remain the sole and exclusive property of
the Company, and upon termination of his employment with the Company, the
Executive shall return to the Company the originals and all copies of any such
information provided to or acquired by the Executive in connection with the
performance of his duties for the Company, and shall return to the Company all
files, correspondence and/or other communications received, maintained and/or
originated by the Executive during the course of his employment.
(c) No Interference. During the Restricted Period, the Executive shall
not, whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization (other than the
Company), directly or indirectly solicit, endeavor to (i) induce or attempt to
induce any employee of the Company or any Subsidiary to leave the employ of the
Company or such Subsidiary, or in any way interfere with the relationship
between the Company or any Subsidiary and any employee thereof, (ii) hire any
person who was an employee or manager of the Company or any Subsidiary at any
time during the Employment Term or (iii) induce or attempt to induce any
customer, supplier, licensee, licensor, franchisee or other business relation of
the Company or any Subsidiary to cease doing business with the Company or such
Subsidiary, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any
Subsidiary (including, without limitation, making any negative or disparaging
statements or communications regarding the Company or its Subsidiaries).
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(d) Inventions, etc. The Executive hereby sells, transfers and assigns
to the Company or to any person or entity designated by the Company all of the
entire right, title and interest of the Executive in and to all inventions,
ideas, disclosures and improvements, whether patented or unpatented, and
copyrightable material, made or conceived by the Executive, solely or jointly,
during his employment by the Company which relate to methods, apparatus,
designs, products, processes or devices, sold, leased, used or under
consideration or development by the Company, or which otherwise relate to or
pertain to the business, functions or operations of the Company or which arise
from the efforts of the Executive during the course of his employment for the
Company. The Executive shall communicate promptly and disclose to the Company,
in such form as the Company requests, all information, details and data
pertaining to the aforementioned inventions, ideas, disclosures and
improvements; and the Executive shall execute and deliver to the Company such
formal transfers and assignments and such other papers and documents as may be
necessary or required of the Executive to permit the Company or any person or
entity designated by the Company to file and prosecute the patent applications
and, as to copyrightable material, to obtain copyright thereof. Any invention
relating to the business of the Company and disclosed by the Executive within
one year following the termination of his employment with the Company shall be
deemed to fall within the provisions of this paragraph unless proved to have
been first conceived and made following such termination.
(e) Enforcement. The Executive acknowledges and agrees that the
covenants set forth in Section 7 hereof are reasonable and valid in geographical
and temporal scope and in all other respects. If a court of competent
jurisdiction makes a final determination that the restrictions stated in Section
7 are invalid or unenforceable, the parties hereto agree that the maximum
period, scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area.
Section 8. Injunctive Relief. Without limiting the remedies available to
the Company, the Executive acknowledges that a breach of any of the covenants
contained in Section 7 hereof will result in material irreparable injury to the
Company or its Subsidiaries or affiliates for which there is no adequate remedy
at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of such a breach or threat thereof, the Company
shall be entitled to obtain a temporary restraining order and/or a preliminary
or permanent injunction, without the necessity of proving irreparable harm or
injury as a result of such breach or threatened breach of Section 7 hereof,
restraining the Executive from engaging in activities prohibited by Section 7
hereof or such other relief as may be required specifically to enforce any of
the covenants in Section 7 hereof.
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Section 9. Extension of Restricted Period. In addition to the remedies
the Company may seek and obtain pursuant to Section 8 of this Agreement, the
Restricted Period shall be extended by any and all periods during which the
Executive shall be found by a court to have been in violation of the covenants
contained in Section 7 hereof.
Section 10. Representations and Warranties of the Executive. The
Executive represents and warrants to the Company as follows:
(a) This Agreement, upon execution and delivery by the Executive, will
be duly executed and delivered by the Executive and (assuming due execution and
delivery hereof by the Company) will be the valid and binding obligation of the
Executive enforceable against the Executive in accordance with its terms.
(b) Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby nor the performance of this
Agreement in accordance with its terms and conditions by the Executive (i)
requires the approval or consent of any governmental body or of any other person
or (ii) conflicts with or results in any breach or violation of, or constitutes
(or with notice or lapse of time or both would constitute) a default under, any
agreement, instrument, judgment, decree, order, statute, rule, permit or
governmental regulation applicable to the Executive. Without limiting the
generality of the foregoing, the Executive is not a party to any employment,
non-competition, non-solicitation, no hire or similar agreement that restricts
in any way the Executive's ability to engage in any business or to solicit or
hire the employees of any person.
(c) Executive hereby acknowledges and represents that he fully
understands the terms and conditions contained herein.
The representations and warranties of the Executive contained in this
Section 10 shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
Section 11. Successors and Assigns; No Third-Party Beneficiaries. This
Agreement shall inure to the benefit of, and be binding upon, the successors and
assigns of each of the parties, including, but not limited to, the Executive's
heirs and the personal representatives of the Executive's estate; provided,
however, that neither party shall assign or delegate any of the obligations
created under this Agreement without the prior written consent of the other
party. Notwithstanding the foregoing, the Company shall have the unrestricted
right to assign this Agreement and to delegate all or any part of its
obligations hereunder to any of its Subsidiaries, affiliates and successors
(including to an entity into which the Company merges), but in such event such
assignee shall expressly assume all obligations of the Company hereunder and the
Company shall remain fully liable for the performance of all of such obligations
in the manner prescribed in this Agreement. Nothing in this Agreement shall
confer upon any person or entity not a party to this Agreement, or the legal
representatives of such person or entity, any rights or remedies of any nature
or kind whatsoever under or by reason of this Agreement.
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Section 12. Waiver and Amendments. Any waiver, alteration, amendment or
modification of any of the terms of this Agreement shall be valid only if made
in writing and signed by the parties hereto; provided, however, that any such
waiver, alteration, amendment or modification is consented to on the Company's
behalf by the Board of Directors. No waiver by either of the parties hereto of
their rights hereunder shall be deemed to constitute a waiver with respect to
any subsequent occurrences or transactions hereunder unless such waiver
specifically states that it is to be construed as a continuing waiver.
Section 13. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired,
unless the provisions held invalid, illegal or unenforceable shall substantially
impair the benefits of the remaining provisions hereof.
Section 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
Section 15. Notices.
(a) All communications under this Agreement shall be in writing and
shall be delivered by hand or mailed by overnight courier or by registered or
certified mail, postage prepaid:
(i) if to the Executive, at 00000 X XX Xxx Xxxxxx Xxxxxx., Xxxxxxxx,
Xxxxxx 00000 or at such other address as the Executive may have furnished the
Company in writing.
(ii) if to the Company, at 00000 X XX Xxx Xxxxxx Xxxxxx., Xxxxxxxx,
Xxxxxx 00000 marked for the attention of the Board of Directors, or at such
other address as it may have furnished in writing to the Executive.
(b) Any notice so addressed shall be deemed to be given: if delivered by
hand, on the date of such delivery; if mailed by courier, on the first business
day following the date of such mailing; and if mailed by registered or certified
mail, on the third business day after the date of such mailing.
Section 16. Section Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof, affect the meaning or interpretation of
this Agreement or of any term or provision hereof.
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Section 17. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto regarding the employment of
the Executive. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties relating to the subject matter of this Agreement including any prior
oral or written Employment Agreement between the Company and the Executive (the
"Existing Employment Agreement"). The Existing Employment Agreement shall be of
no further force or effect. No promises, covenants or representations of any
character or nature other than those expressly stated herein have been made to
induce either party to enter into this Agreement.
Section 18. Construction. The parties hereto agree that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied in the construction or interpretation of
this Agreement.
Section 19. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.
Section 20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TANGO PACIFIC, INC.
By: _________________________
Name:
Title:
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Xxxx Xxxxxx
