ASSET PURCHASE AGREEMENT Conformed Copy
ASSET PURCHASE AGREEMENT dated as of April 13, 1999 (the "Agreement"),
by and between CHRYSALIS HOTELS & RESORTS, CORP., a Florida corporation
("CHRYSALIS"), and Xxxxx Xxxxx, a single person, Xxxxx Xxxxxxx and Xxxxxxxx
Xxxxxxx, husband and wife, Xxxxx Xxxxxxxxxx, a single person, Xxxxx X. Xxxxx and
Xxxxxxx Xxxxx Xxxxx, husband and wife, Xxxxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxxx,
husband and wife, Xxxx X. Xxxxxxx and Xxxxxxx Xxxxxxx, husband and wife
(collectively, the "XXXXXXX GROUP").
RECITALS
A. CHRYSALIS desires to acquire certain assets of XXXXXXX GROUP (the
"Acquired Assets" as defined in Section 1.1), all on the terms and subject to
the conditions hereinafter set forth.
B. KRISTAL GROUP desires to sell such assets to CHRYSALIS, on the terms
and subject to the conditions hereinafter set forth.
INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and
the mutual representations, warranties, covenants and agreements contained
herein, CHRYSALIS and XXXXXXX GROUP hereby agree as follows:
ARTICLE I
ACQUISITION AND DISPOSITION OF ACQUIRED ASSETS
1.1 Acquired Assets. Subject to the terms and conditions of this
Agreement, at the Closing (as defined below), XXXXXXX GROUP shall sell, convey,
transfer, assign and deliver to CHRYSALIS, and CHRYSALIS shall purchase, acquire
and accept from XXXXXXX GROUP, certain assets owned by XXXXXXX GROUP as follows:
1.1.1 XXXXXXX GROUP Intellectual Property. "XXXXXXX GROUP"
Intellectual Property" which shall mean all the intellectual property (except as
expressly stated below) of XXXXXXX GROUP owned, licensed or otherwise used in
the business conducted by XXXXXXX GROUP for the microfilm, et al, scanning
device design, all hardware design, and computer programming code and software
owned by XXXXXXX GROUP including but not limited to any and all Software needed
to allow the scanning/digitizing/reading device to operate in a reliable and
commercial manner, programs software (as more fully described in Schedule
1.1.1(A), including the trademarks and (and any other trademarks), and including
without limitation the intellectual property listed on or related to the
intellectual property listed on Schedule 1.1.1(A), in both machine readable
and/or human readable form, and including: (i) rights to, and any rights to
apply for and/or register, patents and patent applications, copyrights,
trademarks, trade secrets and all other proprietary rights relating to such
intellectual property, (ii) records and files relating to manufacturing, quality
control, sales, marketing and customer support and designs for such intellectual
property, (iii) Derivative Works of such XXXXXXX GROUP Intellectual Property,
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and (iv) all related Documentation. "Derivative Work" means any translation
(including any translation into other computer languages), portation,
modification, correction, addition, extension, upgrade, improvement,
compilation, abridgment or other form prepared by or for XXXXXXX GROUP and
presently in the possesssion of or under the control of XXXXXXX GROUP in which
the XXXXXXX GROUP Intellectual Property has been recast, transformed, or
adopted. "Documentation" means any and all software, hardware and firmware
listings, fully commented and updated source code, complete system built
software and instructions related to the XXXXXXX GROUP Intellectual Property in
the posssession or under the control of XXXXXXX GROUP, and any and all user,
technical and business documentation related to the XXXXXXX GROUP Intellectual
Property in the possession or under the control of XXXXXXX GROUP in both machine
readable and/or human readable form.
1.1.2 Other Assets. "Other Assets" shall mean all of XXXXXXX
GROUP's hardware patents, rights to hardware patents, customer lists, contracts,
agreements, licenses or license agreements, commitments, warranties, claims and
other existing and inchoate rights, but excluding without limitation, cash,
marketable securities, receivables and rights relating to contractual
obligations.
All of the above shall be referred to as the "Acquired Assets."
1.2 Liabilities. CHRYSALIS shall not assume or be deemed to have
assumed, or to have any obligations with respect to, any liabilities or
obligations of XXXXXXX GROUP of any nature whatsoever, whether such other
liabilities and obligations arose or arise before or after, or mature before or
after, the Closing (the "Retained Liabilities").
1.3 Purchase Price and Payment. The purchase price (the "Purchase
Price") for the Acquired Assets shall consist of the following:
1.3.1 Stock Issuance. At Closing, CHRYSALIS shall deliver to
the XXXXXXX GROUP 6,000,000 shares of common stock of CHRYSALIS ("CHRYSALIS"
Common Shares") as follows:
NUMBER OF
XXXXXXX GROUP CHRYSALIS SHARES
------------- ----------------
Xxxxx Xxxxx 1,500,000
Xxxxx & Xxxxxxxx Xxxxxxx 1,500,000
Xxxxx Xxxxxxxxxx 1,300,000
Xxxxx X. and Xxxxxxx Xxxxx Xxxxx 1,100,000
Xxxxxxx X. and Xxxxxxxx X. Xxxxxx 500,000
Xxxx X. and Xxxxxxx Xxxxxxx 100,000
TOTAL 6,000,000
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Immediately after the Closing, CHRYSALIS will place the Acquired Assets into a
newly-formed, wholly-owned subsidiary known as CybeRecord Inc. (the
"Subsidiary"), and shall cause the Subsidiary to commence operations
immediately. Also, immediately after closing, CHRYSALIS Board of Directors shall
cause a special shareholders meeting to be convened for the purposes of amending
the corporation's articles and bylaws, as necessary, to establish a board of
directors of five individuals, and to elect directors to a term of office that
shall commence immediately upon election. These obligations shall survive
closing.
1.4 Closing and Delivery of Acquired Assets. The closing of the
transaction (the "Closing") and delivery of the Acquired Assets will take place
upon execution of this Agreement (the "Closing Date"), at such date or place as
agreed to by the parties hereto.
1.5 Conveyance of Acquired Assets. The sale, conveyance, transfer,
assignment and delivery to CHRYSALIS of the Acquired Assets, as herein provided,
shall be effected by such bills of sale, endorsements, assignments and other
instruments of transfer and conveyance as may be necessary to vest in CHRYSALIS
the right, title and interest of XXXXXXX GROUP in and to the Acquired Assets,
free and clear of all liens, claims, charges and encumbrances, except as
otherwise provided in this Agreement. Such documents shall include, without
limitation, a Xxxx of Sale and an Assignment of Rights in the forms attached
hereto as Schedules 1.5(A) and (B), respectively. XXXXXXX GROUP shall, at the
Closing or at any time or from time to time after the Closing, upon request,
perform or cause to be performed such acts, and execute, acknowledge and deliver
or cause to be executed, acknowledged and delivered such documents, as may be
reasonably required or requested to effectuate the sale, conveyance, transfer,
assignment and delivery to CHRYSALIS of any of the Acquired Assets or for the
performance by XXXXXXX GROUP of any of its obligations hereunder.
ARTICLE II
REPRESENTATION AND WARRANTIES
2.1 Representations and Warranties of XXXXXXX GROUP. XXXXXXX GROUP
represents and warrants to CHRYSALIS on execution of this Agreement and on the
Closing Date as follows:
2.1.1 XXXXXXX GROUP Intellectual Property. XXXXXXX GROUP owns
all the XXXXXXX GROUP Intellectual Property used or under development in XXXXXXX
GROUP's business as currently conducted. Schedule 1.1.1(A) lists: (i) all
patents, copyrights, trademarks, trade names, service marks, and any
applications therefor included in the XXXXXXX GROUP Intellectual Property,
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together with a list of all of XXXXXXX GROUP's hardware and software products;
and (ii) all licenses, sublicenses and other agreements to which XXXXXXX GROUP
is a party and pursuant to which XXXXXXX GROUP or any other person is authorized
to use any of the XXXXXXX GROUP Intellectual Property or other trade secrets of
XXXXXXX GROUP, and includes the identities of the parties thereto, a description
of the nature and subject matter thereof, and certain terms thereof. XXXXXXX
GROUP is not, nor as a result of the execution, delivery or performance of
XXXXXXX GROUP's obligations hereunder will be, in violation of any license,
sublicense or agreement described in Schedule 1.1.1(A). XXXXXXX GROUP: (i) is
the sole and exclusive owner or licensee of, with all right, title and interest
in and to (free and clear of any liens and encumbrances), the XXXXXXX GROUP
Intellectual Property; and (ii) has sole and exclusive rights to use of the
XXXXXXX GROUP Intellectual Property. XXXXXXX GROUP is not contractually
obligated to pay any compensation to any third party, nor is any third party
otherwise entitled to any compensation, with respect to XXXXXXX GROUP's use of
the XXXXXXX GROUP Intellectual Property. The manufacture, sale or use of any
product or process as now used or offered by XXXXXXX GROUP does not infringe any
copyright, trade secret, trademark, service xxxx, trade names, firm names, logo,
trade dress or any patent of any person. No adverse claims with respect to the
XXXXXXX GROUP's Intellectual Property have been asserted or, to the knowledge of
XXXXXXX GROUP, threatened by any person, nor are there any valid grounds for any
bona fide claims (i) to the effect that the manufacture, sale or issue of any
product or process as now used or offered for sale by XXXXXXX GROUP infringes or
will infringe on any copyright, trade secret, trademark, service xxxx, logo,
trade dress or patent of any person, (ii) against the use by XXXXXXX GROUP of
any trade secrets, copyrights, trademarks, trade names, firm names, logos, trade
dress patents, technology, know-how, processes or computer software programs and
applications used in the business of XXXXXXX GROUP relating to the Properties as
currently conducted, or (iii) challenging the ownership, validity or
effectiveness of any of the XXXXXXX GROUP Intellectual Property. All granted and
issued patents and all registered trademarks listed on Schedule 1.1.1(A) and all
copyrights held by XXXXXXX GROUP are valid, enforceable and subsisting. To
XXXXXXX GROUP's knowledge, there is and has been no material unauthorized use,
infringement or misappropriation of any of the XXXXXXX GROUP Intellectual
Property by any third party, employee or former employee.
2.1.2 Disclosure. No representation or warranty made by
XXXXXXX GROUP in this Agreement, nor any document, written information,
statement, financial statement, certificate or exhibit prepared and furnished by
XXXXXXX GROUP or its representatives pursuant hereto or in connection with the
transactions contemplated hereby, when taken together, contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statements or facts contained herein or therein not misleading in light
of the circumstances under which they were furnished.
2.1.3 Reliance. The foregoing representations and warranties
are made by XXXXXXX GROUP with the knowledge and expectation that CHRYSALIS is
placing reliance thereon.
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2.2 Representations and Warranties of CHRYSALIS. CHRYSALIS represents
and warrants to XXXXXXX GROUP as follows:
2.2.1 Organization, Standing and Power. CHRYSALIS is a
corporation duly organized, validly existing and in good standing under the laws
of Florida, has all requisite power and authority to own, lease and operate its
properties and to carry on its businesses as now being conducted, and is duly
qualified and in good standing to do business in each jurisdiction in which a
failure to so qualify would have a material adverse effect on the Business
Condition of CHRYSALIS.
2.2.2 Authority. The execution, delivery, and performance of
this Agreement by CHRYSALIS has been duly authorized by all necessary action of
the Board of Directors of CHRYSALIS. CHRYSALIS has duly and validly executed and
delivered this Agreement, and this Agreement constitutes a valid, binding and
enforceable obligation of CHRYSALIS in accordance with its terms.
2.2.3 Disclosure. No representation or warranty made by
CHRYSALIS in this Agreement, nor any document, written information, statement,
financial statement, certificate or exhibit prepared and furnished or to be
prepared and furnished by CHRYSALIS or its representatives pursuant hereto or in
connection with the transactions contemplated hereby, when taken together,
contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements or facts contained herein or therein not
misleading in light of the circumstances under which they were furnished.
2.2.4 Control. Upon Closing, the XXXXXXX GROUP shall own a
controlling interest of CHRYSALIS stock. XXXXXXX GROUP will own 6,000,000 shares
and 1,500,000 options. The XXXXXXX GROUP will own no less than fifty-three
percent (53%) of the outstanding stock of CHRYSALIS.
2.2.5 Reliance. The foregoing representations and warranties
are made by CHRYSALIS with the knowledge and expectation that XXXXXXX GROUP is
placing reliance thereon.
ARTICLE III
CONDITIONS PRECEDENT
3.1 Conditions of Obligation of CHRYSALIS. The obligation of CHRYSALIS
to effect the purchase is subject to the satisfaction of the following
condition:
3.1.1 Transfer Agreement. XXXXXXX GROUP shall have executed,
and delivered to CHRYSALIS, a Transfer Agreement by which XXXXXXX GROUP shall
have irrevocably assigned and transferred to CHRYSALIS any and all right, title
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and interest they may hold or may have held in the CHRYSALIS Intellectual
Property and shall have released CHRYSALIS from any and all claims relating
thereto.
3.1.2 Employment Agreements. As a condition precedent to the
obligation of CHRYSALIS to perform hereunder, each of the executive officers of
XXXXXXX GROUP shall sign at the Closing employment agreements with XXXXXXX GROUP
which shall contain terms and conditions acceptable to CHRYSALIS, including,
without limitation, acceptable non-competition agreements.
ARTICLE IV
ADDITIONAL AGREEMENTS
In addition to the foregoing, CHRYSALIS and XXXXXXX GROUP each agree to
take the following actions after the execution of this Agreement.
4.1 Expenses. Whether or not this Agreement is closed, except as
specifically provided in this Agreement, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expense.
4.2 Additional Agreements. In case at any time after the Closing Date,
any further action is reasonably necessary or desirable to carry out the
purposes of this Agreement, the proper representatives of each party to this
Agreement shall take all such necessary action, e.g., in the case of any
documents required to effectuate the transfer of the Acquired Assets, or to make
any governmental filings.
4.3 Taxes. Any sales or use or similar tax or levy arising from the
transactions contemplated by this Agreement shall be the sole responsibility of
CHRYSALIS and CHRYSALIS shall indemnify XXXXXXX GROUP from and against any
liability arising in connection therewith; provided, however, that XXXXXXX GROUP
shall pay any and all state, local, provincial, United States or Canadian income
tax or excise taxes imposed on or assessed against XXXXXXX GROUP as a result of
this transaction, and XXXXXXX GROUP shall indemnify CHRYSALIS from and against
any and all liability arising in connection therewith.
4.4 Brokers and Finders. XXXXXXX GROUP will be responsible for and pay
any fees that may be owed to any broker previously retained (or who claims to
have been retained) by XXXXXXX GROUP, and shall hold CHRYSALIS harmless from any
liability arising from such claim(s) with the exception of Xxxxxx Xxxxxxx who
will receive 50,000 shares of Chrysalis from Chrysalis immediately following the
closing of this transaction.
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4.5 Documentation. XXXXXXX GROUP shall provide to CHRYSALIS
documentation containing all specifications and design of any and all hardware
and the source code and the object code of the XXXXXXX GROUP Intellectual
Property, where appropriate.
ARTICLE V
INDEMNIFICATION
5.1 Indemnification Relating to Agreement.
5.1.1. XXXXXXX GROUP hereby agrees to defend, indemnify, and
hold CHRYSALIS harmless from and against, and to reimburse CHRYSALIS with
respect to, any and all losses, damages, liabilities, claims, judgments,
settlements, fines, costs, and expenses (including attorneys' fees)
("Indemnifiable Amounts") of every nature whatsoever incurred by CHRYSALIS by
reason of or arising out of or in connection with (i) any breach, or any claim
(including claims by parties other than CHRYSALIS) that would, if true,
constitute a breach by XXXXXXX GROUP of any representation, warranty, or
covenant of XXXXXXX GROUP contained in this Agreement or in any agreement,
certificate or other document delivered to CHRYSALIS pursuant to the provisions
of this Agreement, and (ii) the failure, partial or total, of XXXXXXX GROUP to
perform any agreement or covenant required by this Agreement.
5.1.2. CHRYSALIS agrees to defend, indemnify, and hold XXXXXXX
GROUP harmless from and against, and to reimburse XXXXXXX GROUP with respect to,
any and all Indemnifiable Amounts of every nature whatsoever incurred by XXXXXXX
GROUP by reason of or arising out of or in connection with (i) any breach, or
any claim (including claims by parties other than XXXXXXX GROUP) that would, if
true, constitute a breach by CHRYSALIS of any representation, warranty, or
covenant of CHRYSALIS contained in this Agreement (including, but not limited
to, CHRYSALIS's obligations with respect to the Assumed Contracts) or in any
agreement, certificate or other document delivered to XXXXXXX GROUP pursuant to
the provisions of this Agreement, and (ii) the failure, partial or total, of
CHRYSALIS to perform any agreement or covenant required by this Agreement.
5.2 Third Party Claims. For the purposes of this Section 5.2, a party
seeking indemnification pursuant to Section 5.1 shall be referred to as the
"Indemnified Party" and a party to whom such notice is addressed shall be
referred to as the "Indemnitor." With respect to any claims or demands by third
parties, whenever an Indemnified Party shall have received a written notice that
such a claim or demand has been asserted or threatened, the Indemnified Party
shall notify the Indemnitor of such claim or demand and of the facts within the
Indemnified Party's knowledge that relate thereto within a reasonable time after
receiving such written notice. The Indemnitor shall then have the right to
contest, negotiate or settle any such claim or demand through counsel of their
own selection, satisfactory to the Indemnified Party and solely at their own
cost, risk, and expense. Notwithstanding the preceding sentence, the Indemnitor
shall not settle, compromise, or offer to settle or compromise any such claim or
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demand without the prior written consent of an Indemnified Party, which consent
shall not be unreasonably withheld. By way of illustration and not limitation,
it is understood that an Indemnified Party may object to a settlement or
compromise which includes any provision which in its reasonable judgment may
have an adverse impact on or establish an adverse precedent for the Business
Condition of an Indemnified Party or any of its Subsidiaries. An Indemnified
Party shall not have the right to object to a settlement which consists solely
of the payment of a monetary damage amount and which is fully indemnified by
XXXXXXX GROUP. If the Indemnitor fails to given written notice to an Indemnified
Party of its intention to contest or settle any such claim or demand within
twenty (20) calendar days after the Indemnified Party has notified the
Indemnitor that any such claim or demand has been made in writing and received
by the Indemnified Party, or if any such notice is given but any such claim or
demand is not promptly contested by the Indemnitor, the Indemnified Party shall
have the right to satisfy and discharge the same by payment, compromise, or
otherwise, and the Indemnitor shall be entirely liable therefor to the
Indemnified Party under this indemnity. The Indemnified Party may also, if it so
elects and entirely within its own discretion, defend any such claim or demand
if the Indemnitor fails to give notice of their intention to contest or settle
and such claim or demand, in which event the Indemnitor shall be required to
indemnify the Indemnified Party and its affiliates for any and all costs,
losses, liabilities, and expenses whatsoever, including without limitation
attorneys' and other professional fees, that the Indemnified party may sustain,
suffer, incur, or become subject to as a result of the Indemnified Party's
decision to defend any such claim or demand.
ARTICLE VI
MISCELLANEOUS
6.1 Entire Agreement. Notwithstanding anything to the contrary, this
Agreement, including the agreements, exhibits and schedules delivered pursuant
to this Agreement, contain all of the terms and conditions agreed upon by the
parties relating to the subject matter of this Agreement and supersedes all
prior agreements, negotiations, correspondence, undertakings, and communications
of the parties, whether oral or written, respecting that subject matter.
6.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York as applied to agreements
entered into and entirely to be performed within that state.
6.3 Notices. All notices, requests, demands or other communications
which are required or may be given pursuant to the terms of this Agreement shall
be in writing and shall be deemed to have been duly given (i) on the date of
delivery if personally delivered by hand, (ii) upon the third business day after
such notice is (a) deposited in the United States mail, if mailed by registered
or certified mail, postage prepaid, return required, or (b) sent by a nationally
recognized overnight express courier, or (iii) by facsimile upon written
confirmation (other than the automatic confirmation that is received from the
recipient's facsimile machine) of receipt by the recipient of such notice:
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If to CHRYSALIS: Chrysalis Hotels & Resorts, Inc.
--------------- 00000 XX 0xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone No. (000) 000-0000
Fax No. (000) 000-0000
With a copy to: Xxxx X. Xxxx, P.C.
-------------- Xxxx X. Xxxx, President
000 Xxxxx Xxxxxx, 0xx XX
Xxx Xxxx, XX 00000
Telephone No. (000) 000-0000
Fax No. (000) 000-0000
If to XXXXXXX GROUP: XXXXXXX GROUP
------------------- Xxxxx Xxxxx
00 Xx Xxxxxxx Xxx
Xxx Xxxxx, XX 00000
Telephone No. (000) 000-0000
Fax No. (000) 000-0000
With a copy to: Xxxxxxx X. XxXxxxxx
-------------- Xxxxx Xxxxxx Law Firm
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone No. 000.000.0000
Fax No. 000.000.0000
Such addresses may be changed, from time to time, by means of a notice
given in the manner provided in this Section 6.3.
6.4 Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be modified rather than voided, if
possible, in order to achieve the intent of the parties to this Agreement to the
extent possible. In any event, all other provisions of this Agreement shall be
deemed valid and enforceable to the full extent.
6.5 Survival of Representations and Warranties. All representations and
warranties contained in this Agreement, including the exhibits and schedules
delivered pursuant to this Agreement, shall survive the Closing Date.
6.6 Assignment. No party to this Agreement may assign, by operation of
law or otherwise, all or any portions of its rights, obligations, or liabilities
under this Agreement without the prior written consent of the other party to
this Agreement, which consent may be withheld in the absolute discretion of the
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party asked to grant such consent. Any attempted assignment in violation of this
Section 6.6 shall be voidable and shall entitle the other party to this
Agreement to terminate this Agreement at its option.
6.7 Counterparts. This Agreement may be executed in any number of
counterparts. All such counterparts shall constitute a single document with the
same force and effect as if all Parties signing a counterpart had signed all the
other counterparts.
6.8 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
6.9 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section, Exhibit
or Schedule to this Agreement unless otherwise indicated. The words "include,"
"includes," and "including," when used therein shall be deemed in each case to
be followed by the words "without limitation." The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
6.10 No Third Party Beneficiaries. Nothing in this Agreement shall be
deemed to create in any person not a signatory to this Agreement any rights
(including rights as a third party beneficiary) under this Agreement.
IN WITNESS WHEREOF, CHRYSALIS and XXXXXXX GROUP have executed this
Agreement as of the date first written above.
CHRYSALIS HOTELS & RESORTS CORP.
By: /s/ XXXXXX XXXXXXXX
----------------------
Xxxxxx Xxxxxxxx, Chairman
XXXXXXX GROUP:
/s/ XXXXX XXXXX /s/ XXXXX X. XXXXX
---------------------------------- -------------------
Xxxxx Xxxxx Xxxxx X. Xxxxx
/s/ XXXXXXX XXXXX XXXXX /s/ XXXXXXX X. XXXXXX
---------------------------------- ----------------------
Xxxxxxx Xxxxx Xxxxx Xxxxxxx X. Xxxxxx
/s/ XXXXXXXX X. XXXXXX /s/ XXXXX XXXXXXX
---------------------------------- ------------------
Xxxxxxxx X. Xxxxxx Xxxxx Xxxxxxx
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/s/ XXXXXXXX XXXXXXX /s/ XXXXX NICZYPOURK
----------------------------------- ---------------------
Xxxxxxxx Xxxxxxx Xxxxx Niczypourk
/S/ XXXX X. XXXXXXX /s/ XXXXXXX XXXXXXX
----------------------------------- --------------------
Xxxx X. Xxxxxxx Xxxxxxx Xxxxxxx
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