Trans-Pharma Corporation
Page
1
EXHIBIT
10.7
Trans-Pharma
Corporation
0000
Xxxxxxxxx Xxxxxx, Xxxxx 000
Xx
Xxxxx,
XX 00000
September
17, 2007
Xx.
Xxxx
Xxxxxxxx, Chief Executive Officer
Palladium
Capital Advisors, LLC
000
Xxxx
Xxxxxx
Xxxxx
000
Xxx
Xxxx,
XX 00000
Dear
Xx.
Xxxxxxxx:
The
undersigned, Trans-Pharma Corporation, a Nevada corporation ("Corporation"),
by
this letter confirms its agreement (the "Agreement") with Palladium Capital
Advisors, LLC (the "Broker-Dealer" or “you”), regarding
the
Broker-Dealer acting as a placement agent in connection with an offering of
up
to $5.0 million of units consisting of shares of common stock and warrants
to
purchase common stock (the
"Units") under
the
terms set forth in those certain Subscription Agreements, in the form attached
hereto as Exhibit
A,
and all
exhibits and supplements thereto (the "Offering Materials") prepared by
Corporation and delivered to you for distribution to the offerees. The Units
are
to be offered on a "Best Efforts, Minimum- Maximum" basis with respect to all
Units. The Units will be offered and sold in accordance with 17 CFR 203.506
("Rule 506"), promulgated under Regulation D of the Securities Xxx 0000, as
amended.
Upon
execution and delivery of subscription documents (the "Subscription Documents"),
which shall be in the form of the Subscription Documents included in the
Offering Materials, the subscribers for Units shall, upon acceptance thereof
by
Corporation (which acceptance shall be in Corporation’s sole discretion), become
Unit Holders pursuant to the terms set forth in the Offering Materials. The
offering of the Units shall begin when the Offering Materials are first made
available to you by Corporation and shall continue until the termination date,
and through the end of any extension, unless the offering has been terminated
as
of any earlier time (the "Subscription Period").
Section
1. Appointment
of Agent. On
the
basis of the representations, warranties and covenants contained in this
Agreement, but subject to the terms and conditions herein set forth, you are
hereby appointed as non-exclusive selling agent of Corporation for the Units
offered under the Offering Materials. The appointment shall continue until
the
earliest of (i) 120 days from the date of this Agreement, or (ii) the
termination of the Subscription Period, or (iii) the sale of all of the Units,
or (iv) the termination of the offering of Units by Corporation for any reason,
whichever occurs first. Subject to the performance by Corporation of all of
its
obligations under this Agreement, and to the completeness and accuracy of all
of
its representations and warranties contained in this Agreement, you agree to
use
your best efforts during the Subscription Period to find subscribers for the
Units.
Section
2. Definitions. Certain
terms used herein are defined in the Offering Materials and shall have the
same
meanings given therein.
Section
3. Representations,
Warranties and Covenants of Corporation.
Corporation represents, warrants and covenants, to the best of its knowledge,
that:
a. Corporation
is a corporation duly and validly organized and in good standing under the
laws
of the State of Nevada and has full power and authority to conduct the business
described in the Offering Materials.
b. Corporation
will deliver to you a reasonable number of copies of the Offering Materials,
and
the information made available to each offeree pursuant to subsection 3(i)
hereof shall be sufficient to comply with, and conform to, the requirements
of
Rule 506.
c. All
action required to be taken by Corporation to offer and sell the Units to
qualified subscribers has been or will be taken.
d. Upon
payment of the subscription amount specified in the Subscription Documents,
acceptance by Corporation of the subscriptions from qualified subscribers (which
acceptance shall be at the sole discretion of Corporation), and delivery by
the
subscribers for Units of such additional documents as may reasonably be required
by Corporation, such subscribers will become Unit Holders.
e. All
information and financial statements provided to potential purchasers describing
Corporation, the transaction contemplated hereunder and/or Corporation’s
business, operations, assets, liabilities and receivables, including but not
limited to the Offering Materials (collectively, the “Materials”), will not
contain any untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not materially misleading. Corporation
acknowledges and agrees that you will be using, and relying upon, Corporation
to
furnish you with the Materials, and you will be using, and relying upon, such
Materials supplied by Corporation, its officers, agents, and others and any
other publicly available information without any independent investigation
or
verification thereof or independent appraisal by you of Corporation or its
business or assets. You do not assume responsibility for the accuracy or
completeness of the Materials, including but not limited to any disclosure
materials related to the transaction contemplated hereunder. Corporation shall
keep
you fully
informed of any events that might have a material effect on the financial
condition of Corporation.
f. This
Agreement has been duly and validly authorized, executed, and delivered by
or on
behalf of Corporation and constitutes a valid and binding agreement of
Corporation.
g. Execution
by Corporation of a subscriber’s Subscription Documents will be duly and validly
authorized by or on behalf of Corporation and will constitute a valid and
binding agreement of Corporation.
h. The
execution and delivery of this Agreement and the incurrence of the obligations
set forth herein and the consummation of the transactions contemplated in this
Agreement and the Offering Materials will not constitute a breach or default
under:
(i) |
any
instruments by which Corporation is bound;
or
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(ii)
|
any
order, rule or regulation (applicable to Corporation) issued by any
court,
governmental body or administrative agency having jurisdiction over
Corporation.
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i. Corporation
shall make available, during the Subscription Period and prior to the sale
of
any Units, to each purchaser or his purchaser representative(s) or both:
(i) such
information (in addition to that contained in the Offering Materials) concerning
the offering of Units, Corporation, and any other relevant matters, as
Corporation possesses or can acquire without unreasonable effort or expense;
and
(ii) the
opportunity to ask questions of, and receive answers from, Corporation
concerning the terms and conditions of the offering of the Units, and to obtain
any additional information, to the extent Corporation possesses the same or
can
acquire it without unreasonable effort or expense, necessary to verify the
accuracy of the information furnished to the purchaser or his purchaser
representative(s).
j. With
respect to those activities undertaken by it, Corporation has endeavored to
ensure that the offering and sale of Units complies, in all respects, with
the
requirements of the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, and the securities or "blue sky" laws of
any
state or jurisdiction in which an offer and/or sale takes
place.
k.
There
is
no litigation or proceeding at law or in equity before any federal or state
authority against Corporation wherein an unfavorable decision, ruling, or
finding would materially and adversely affect the business, operations or
financial condition or income of Corporation or any proposed Corporation
investment, and neither the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, nor the fulfillment of
or
compliance with the terms hereof will conflict with, or result in a breach
of,
any of the terms, provisions, or conditions of any agreement or instrument
to
which Corporation is a party.
l. Corporation
will endeavor in good faith to qualify, or assist you in qualifying, the Units
for offer and sale, or to establish, or assist you in establishing, the
exemption of the offer and sale of the Units from qualification or registration
under the applicable securities or "blue sky" laws of such jurisdictions as
you
may reasonably designate, and will promptly notify you, orally or in writing
(but if orally then prompt written confirmation shall be delivered to you),
as
each jurisdiction is so qualified or as an exemption from registration or
qualification is established therein; provided, however, that Corporation shall
not be obligated to do business or to qualify as a dealer in any jurisdiction
in
which it is not so qualified.
m. Corporation
will pay all expenses in connection with the printing and delivery to you in
reasonable quantities of copies of the Offering Materials and the qualification
of the Units under the securities or "blue sky" laws.
n. As
compensation for your services, Corporation will pay you a sales commission
equal to (i) seven percent (7%) of the gross proceeds received by Corporation
from the Units placed by you (the “Cash Fee”) and (ii) three-year warrants to
purchase a number of shares of common stock equal to three percent (3%) of
the
number of shares included within the Units placed by you; provided, however,
that immediately prior to each closing of the offering of the Units you shall
subscribe for that number of Units equal in value to the Cash Fee payable to
you
with respect to such closing and acknowledge that you will not be entitled
to
any sales commissions with respect to Units purchased by you using any portion
of the Cash Fee pursuant to this Section 3(n).
o. If
at any
time prior to the completion of a transaction an event occurs which
would cause
the
Materials (as supplemented or amended) to contain an untrue statement of a
material fact or to omit to state a material fact necessary in order to make
the
statements therein, in light of the circumstances under which they were made,
not misleading, Corporation will notify you immediately of such event. If any
event relating to or affecting Corporation shall occur during the Subscription
Period, as a result of which it is necessary, in the opinion of your counsel
and
counsel to Corporation, to amend or supplement the Offering Materials so that
it
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of
the
circumstances under which they are made, not misleading, Corporation shall
forthwith prepare and furnish to you a reasonable number of copies of an
amendment or amendments of, or supplement or supplements to, the Offering
Materials, which you shall promptly deliver to all offerees then being
solicited. For purposes of this subsection o., Corporation will furnish such
information with respect to Corporation as you may from time to time reasonably
request.
p. Corporation
will deliver to you such reports and documents as Corporation is required,
under
the terms of the Offering Materials or any document referred to therein, to
furnish to its prospective investors.
Section
4. Representations,
Warranties and Covenants of the Broker-Dealer.
The
Broker-Dealer represents, warrants and covenants, to the best of its knowledge,
that:
a. It,
or
any person acting on its behalf, will not offer any of the Units for sale,
or
solicit any offers to subscribe for or buy any Units, or otherwise negotiate
with any person with respect to the Units, on the basis of any communications
or
documents, except the Offering Materials, the information provided by
Corporation pursuant to Section 3(i), or any other documents and any transmittal
letter reasonably satisfactory in form and substance to Corporation and counsel
to Corporation.
b. It,
or
any person acting on its behalf, shall not use any form of general solicitation
or general advertising in the course of any offer or sale of the Units
including, but not limited to:
(i) any
advertisement, article, notice or other communication published in any
newspaper, magazine, website, or similar media or broadcast over television
or
radio; and
(ii) any
seminar or meeting whose attendees have been invited by any general solicitation
or general advertising.
c. It,
or
any person acting on its behalf, shall solely make offers to sell Units to,
solicit offers to subscribe for or purchase any Units from, or otherwise
negotiate with respect to the Units with, persons whom it has reasonable grounds
to believe and does believe are "accredited investors" within the meaning of
17
CFR 230.501(a).
In
making
or soliciting such offers, or so negotiating, Broker-Dealer will comply with
the
provisions of the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, and the securities or "blue sky" laws of the
jurisdiction in which it makes or solicits such offers, or so
negotiates.
d. It
will
exercise reasonable care to assure that the purchasers are not underwriters
within the meaning of Section 2(11) of the Securities Act of 1933, as amended.
In that connection, it will:
(i) Make
reasonable inquiry to determine that each purchaser is acquiring the Units
for
his own account; and
(ii) Assist
Corporation to obtain from the purchaser a signed written agreement (contained
in the Subscription Documents) that the Units will not be sold without
registration under the Securities Act of 1933, as amended, unless an opinion
of
counsel that an exemption therefrom is available, satisfactory in form and
substance to Corporation or counsel, is delivered in accordance with such
agreement.
e. It
will
assist Corporation to have the purchaser(s) furnish Corporation with information
in sufficient detail (in the form of the Investor Questionnaire, a copy of
which
is included in the Offering Materials), with respect to each purchaser of Units,
in order to demonstrate to Corporation that such purchaser satisfies the
requirements of Rule 506, as outlined in Section 4(c) above.
f. If
a
prospective purchaser uses or consults a purchaser representative (as that
term
is defined in 17 CFR 230.501(h)) in connection with the offering of the Units,
it will assist Corporation to obtain from the prospective purchaser, prior
to
the closing of the offering of the Units, the prospective purchaser's written
acknowledgment that he has used such person(s) in connection with evaluating
the
merits and risks of the prospective investment and such representative's written
consent so to act, as well as a description of the education and experience
of
such representative(s).
g. It
will
offer and sell the Units only in those jurisdictions in which it, or any other
person or entity acting in its behalf, is properly registered, and it will
comply with all laws, rules and regulations related to its activities on behalf
of Corporation pursuant to this Agreement.
h. It
is a
securities broker-dealer registered and in good standing with the Securities
and
Exchange Commission and is a member of the NASD.
i. This
Agreement has been duly and validly authorized, executed, and delivered by
or on
behalf of the
Broker-Dealer
and
constitutes a valid and binding agreement of the Broker-Dealer.
Section
5. Conditions
of the Obligations of Corporation.
The
obligations of Corporation to pay fees or issue warrants under this Agreement
are subject to the accuracy of and compliance with your representations,
warranties and covenants set forth in Section 4, and to the performance by
you
of your obligations hereunder.
Section
6. Representations,
Warranties and Agreements to Survive Delivery.
All
representations, warranties and agreements by either Corporation or
Broker-Dealer contained in this Agreement shall remain operative and in full
force and effect, and shall survive the closing of the offering of the Units.
Upon termination of this Agreement, Corporation shall have no further
obligations to Broker-Dealer other than with respect to fees payable to
Broker-Dealer as provided herein and the provisions of indemnification set
forth
in Annex A, which shall survive the termination or expiration of this
Agreement.
Section
7. Indemnification.
(a) Corporation
agrees to provide indemnification as set forth in Annex A attached hereto and
made a part hereof.
(b) The
Broker-Dealer agrees to indemnify, defend and hold Corporation and its officers,
directors, shareholders and agents harmless against any and all loss, liability,
damage and expense whatsoever, in an amount up to but in no event exceeding
the
Cash Fee actually received by to the Broker-Dealer hereunder, whether or not
resulting in any liability, that may be incurred under applicable securities
laws, at common law, or otherwise and which is based upon or arises out
of:
(1) any
violation by Broker-Dealer or its agents of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, or any state
securities statutes, unless such violation is attributable to actions,
misrepresentations or omissions of Corporation; or
(2) any
breach of any representation, warranty or covenant made by Broker-Dealer in
this
Agreement.
Section
8. Relief. The
Broker-Dealer agrees that a breach or threatened breach on its part of any
agreement contained in this Agreement will cause such damage to Corporation
as
will be irreparable, and, for that reason, the Broker-Dealer further agrees
that
Corporation shall be entitled as a matter of right to an injunction, by any
court of competent jurisdiction, restraining any further violation of such
covenants by the Broker-Dealer or its employees, partners, officers or agents.
The right of injunction shall be cumulative and in addition to whatever other
remedies Corporation may have, including, specifically, recovery of damages.
The
Broker-Dealer also agrees to pay reasonable attorney's fees incurred by
Corporation in successfully proving that the Broker-Dealer breached any of
the
terms of this Agreement.
Section
9. Notices.
All
communications under this Agreement shall be in writing, and, if sent to you,
shall be mailed, delivered or telegraphed and confirmed to you at the address
initially set forth above or as changed by you in a written notice to
Corporation, or if sent to Corporation, shall be mailed, delivered or
telegraphed and confirmed to it at the address set out in the letterhead
above.
Section
10. Parties.
This
Agreement shall inure to the benefit of, and be binding upon, you, any person
which controls you, and your successors, and upon Corporation and its
representatives and successors. This Agreement and its conditions and provisions
are for the sole and exclusive benefit of the parties and their representatives
and successors, and for the benefit of no other person, firm or
corporation.
Section
11. Relationship
of Parties.
It is
not the intention of the parties to create, nor shall this Agreement be
construed as creating, a partnership, joint venture, agency relationship or
association other than as specifically set forth herein, or to render the
parties liable as partners, co-venturers, or principals. In their relations
with
each other under this Agreement, the parties shall not be considered fiduciaries
or to have established a confidential relationship other than as specifically
set forth herein but rather shall be free to act on an arm's length basis in
accordance with their own respective self-interest, subject, however, to the
obligation of the parties to act in good faith in their dealings with each
other
with respect to activities hereunder.
Section
12. Entire
Agreement.
This
Agreement evidences the entire agreement between Corporation and the
Broker-Dealer, and represents a merger of all preceding agreements between
the
parties hereto pertaining to the subject matter hereof.
Section
13. Severability
of Provisions.
If one
or more of the provisions of this Agreement or any application thereof shall
be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof and any application thereof
shall in no way be affected or impaired.
Section
14. Governing
Law; Jurisdiction. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Nevada, without regard to conflicts of laws or principles
thereof. Each of the parties hereto agrees irrevocably consents to the
jurisdiction and venue of the federal and state courts located in Las Vegas,
Nevada.
Section
15. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
Section
16. Publication.
Upon
a
closing of a transaction contemplated hereunder, you may place advertisements
in
financial and other newspapers and journals (whether in print or on the
internet), and publicize on your own website and/or marketing materials, at
your
own expense, describing your services to Corporation hereunder with the
Corporation’s prior written consent .
[SIGNATURE
PAGE AND ANNEX A FOLLOW]
Selling
Agreement
Page
10
If
the
foregoing is in accordance with your understanding of our agreement, kindly
sign
and return to us one copy of this Agreement, whereupon this instrument will
become a binding agreement upon you and Corporation in accordance with its
terms.
Very
truly yours,
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TRANS-PHARMA
CORPORATION,
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a
Nevada Corporation
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By:
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/s/
Xxxxxx Xxxxx, Ph.D.
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Name:
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Xxxxxx
Xxxxx, Ph.D.
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Title:
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Chief
Executive Officer
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The
foregoing Agreement is hereby confirmed and accepted as of the date first set
out above.
PALLADIUM
CAPITAL ADVISORS, LLC
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By:
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/s/
Xxxx Xxxxxxxx
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Name:
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Xxxx
Xxxxxxxx
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Title:
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Chief
Executive Officer
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Address:
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000
Xxxx Xxxxxx, Xxxxx 000
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Xxx
Xxxx, XX 00000
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Selling
Agreement
Page
11
Annex
A
Indemnification
Provisions
Corporation
agrees that it will indemnify and hold harmless the Broker-Dealer, its
affiliates, and their respective directors, members, officers, employees,
agents, representatives and controlling persons (collectively the
“Broker-Dealer” and each such entity or person being an “Indemnified
Party”)
from
and against any and all losses, claims, damages and liabilities, joint or
several, as incurred, to which such Indemnified Party may become subject, and
related to or arising out of the engagement of the Broker-Dealer hereunder,
the
activities performed or omitted by or on behalf of an Indemnified Party pursuant
to this Agreement, the transactions contemplated thereby or the Broker-Dealer’s
role in connection therewith; provided
that
Corporation will not be liable to the extent that any loss, claim, damage or
liability is found in a final judgment (not subject to further appeal) by a
court to have resulted primarily from actions taken or omitted to be taken
by
the Broker-Dealer in bad faith or from the Broker-Dealer's gross negligence
or
willful misconduct in performing the services described above. Corporation
also
agrees to reimburse any Indemnified Party for all expenses (including reasonable
counsel fees and disbursements) as they are incurred in connection with the
investigation of, preparation for or defense of any pending or threatened claim,
or any action, investigation, suit or proceeding arising therefrom, whether
or
not such Indemnified Party is a party, whether or not liability resulted and
whether or not such claim, action or proceeding is initiated or brought by
or on
behalf of Corporation. Corporation also agrees that no Indemnified Party shall
have any liability (whether direct or indirect, in contract or tort or
otherwise) to Corporation or its security holders or creditors related to or
arising out of the engagement of the Broker-Dealer pursuant to, or the
performance by the Broker-Dealer of the services contemplated by, this Agreement
except to the extent that any loss, claim, damage or liability is found in
a
final judgment (not subject to further appeal) by a court to have resulted
primarily from actions taken or omitted to be taken by the Broker-Dealer in
bad
faith or from the Broker-Dealer’s gross negligence or willful
misconduct.
If
the
indemnification provided for in this Agreement is for any reason held
unenforceable, Corporation agrees to contribute to the losses, claims, damages
and liabilities, as incurred by any Indemnified Person, for which such
indemnification is held unenforceable in such proportion as is appropriate
to
reflect the relative benefits to Corporation, on the one hand, and the
Broker-Dealer, on the other hand, of the transaction contemplated hereby
(whether or not the transaction is consummated). Corporation agrees that for
the
purposes of this paragraph the relative benefits to Corporation and the
Broker-Dealer of the transaction shall be deemed to be in the same proportion
that the total value of the transaction or contemplated transaction by
Corporation as a result of or in connection with the proposed transaction bears
to the fee paid or to be paid to the Broker-Dealer under this Agreement;
provided
that, to
the extent permitted by applicable law, in no event shall the Indemnified
Parties be required to contribute an aggregate amount in excess of the aggregate
fees actually paid to the Broker-Dealer under this Agreement.
Selling
Agreement
Page
12
Promptly
after receipt by an Indemnified Party of notice of any claim or the commencement
of any action, suit or proceeding with respect to which an Indemnified Party
may
be entitled to indemnity hereunder, such Indemnified Party will notify
Corporation in writing of such claim or of the commencement of such action
or
proceeding, and Corporation will
assume the defense of such action, suit or proceeding and will employ counsel
satisfactory to the Indemnified Parties and will pay the fees and disbursements
of such counsel, as incurred. Notwithstanding the preceding sentence, any
Indemnified Party will be entitled to employ counsel separate from counsel
for
Corporation and from any other party in such action, which counsel shall be
approved by the Corporation, which approval shall not be unreasonably withheld
or delayed, if such Indemnified Party reasonably determines that a conflict
of
interest exists which makes representation by counsel chosen by Corporation
not
advisable or if such Indemnified Party reasonably determines that Corporation’s
assumption of the defense does not adequately represent its interest. In such
event, the fees and disbursements of such separate counsel will be paid by
Corporation. Notwithstanding anything herein to the contrary, in no event shall
Corporation be liable for the fees and disbursements of more than one counsel
(in addition to local counsel) for all Indemnified Parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
Corporation
agrees that, without the Broker-Dealer’s prior written consent, it will not
settle, compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding in respect of which indemnification
could
be sought under the indemnification provision of this Agreement (whether or
not
the Broker-Dealer or any other Indemnified Party is an actual or potential
party
to such claim, action or proceeding), unless such settlement, compromise or
consent includes an unconditional release of each Indemnified Party from all
liability arising out of such claim, action or proceeding. The Broker-Dealer
agrees that, without Corporation’s prior written consent, it will not settle,
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding in respect of which indemnification could be sought
under the indemnification provision of this Agreement (whether or not
Corporation is an actual or potential party to such claim, action or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising
out
of such claim, action or proceeding.
Selling
Agreement
Page
13
In
the
event any Indemnified Party is requested or required to appear as a witness
in
any action, suit or proceeding brought by or on behalf of or against Corporation
or any affiliate or any participant in a transaction covered hereby in which
such Indemnified Party is not named as a defendant, Corporation agrees to
reimburse the Broker-Dealer and such Indemnified Party for all reasonable
disbursements incurred by them in connection with such Indemnified Party’s
appearing and preparing to appear as a witness, including, without limitation,
the reasonable fees and disbursements of their legal counsel, and to compensate
the Broker-Dealer and such Indemnified Party in an amount to be mutually agreed
upon.
In
the
event that any amounts due under these indemnification provisions contained
in
this Annex A are not paid within thirty days after written notice of such event
giving rise to the indemnification obligations, such amounts shall bear interest
at a rate of 1.5% per month or at the highest rate permitted under the laws
of
the State of Nevada, whichever rate is lower.
The
provisions of Annex A shall be in addition to any liability which Corporation
may otherwise have. These provisions shall be governed by the law of the State
of Nevada and shall be operative, in full force and in full effect, regardless
of any termination or expiration of this agreement.
TRANS-PHARMA
CORPORATION
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ADVISORS,
LLC
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By:
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/s/
Xxxx Xxxxxxxx
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By:
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/s/
Xxxxxx Xxxxx, Ph.D.
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Xxxxxx
Xxxxx, Ph.D.
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Chief
Executive Officer
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Chief
Executive Officer
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