EXHIBIT 10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), is made and entered into as of
July 25, 2013, by and between Graham Corporation, a Delaware corporation with
its principal place of business at 20 Florence Avenue, Batavia, New York 14020
(the “Company”), and Jennifer Condame, currently residing at
                     (the “Executive”).

WHEREAS, the Company and the Executive desire to enter into this Agreement to
describe the employment relationship and obligations of the parties.

NOW, THEREFORE, the parties hereto, intending to be legally bound and in
consideration of the mutual covenants herein contained, agree as follows:

1. Employment. The Company hereby agrees to continue to employ the Executive and
the Executive hereby accepts continued employment as the Controller and Chief
Accounting Officer of the Company, upon the terms and conditions hereinafter set
forth.

2. Duties.

(a) The Executive shall have authority and responsibility for the efficient and
effective functioning of the day-to-day financial and accounting operations,
including establishing and maintaining financial policies, procedures, controls,
and reporting systems as the Company’s Chief Accounting Officer, and shall
report directly to the Company’s Chief Financial Officer. The Executive shall
perform such duties generally consistent with Executive’s title and as may from
time to time be required of the Executive by the Chief Financial Officer, the
President and Chief Executive Officer or the Board of Directors (the “Board”) of
the Company. The Executive’s office shall be located at the Company’s principal
place of business in Batavia, New York. The Executive agrees to travel to the
extent reasonably necessary for the performance of her duties. The Executive
shall devote her full time to the business and affairs of the Company and shall
use her best efforts, skill and ability in performing her duties on behalf of
the Company.

(b) The Executive agrees that the Company, in its discretion, may apply for and
procure in its own name and for its own benefit, life insurance on the life of
the Executive in any amount or amounts considered advisable, and that she shall
have no right, title or interest therein. The Executive further agrees to submit
to any medical or other examination and to execute and deliver any application
or other instrument in writing, reasonably necessary to effectuate such
insurance, provided such actions do not materially harm the Executive’s ability
to otherwise obtain or retain personal life insurance.

3. Term.

(a) Except as otherwise provided in this Agreement to the contrary, this
Agreement shall be and remain in effect during the period of employment (the
“Term”) established under this Section 3.

(b) Except as provided in Section 3(c), beginning on the effective date of this
Agreement, the Term shall be for one year and shall be automatically extended
for one additional year each day (such that while this Agreement is in effect
the remaining Term shall never be less or greater than one year) that this
Agreement is in effect, unless either the Company, or the Executive,
respectively, elects not to extend the Term further by giving written notice to
the other party, in which case the Term shall end on the first

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anniversary of the date on which such written notice is given; provided,
however, that in any event, the Term shall end on the last day of the month in
which the Executive attains the age of 65.

(c) Notwithstanding anything herein contained to the contrary, (i) this
Agreement may be terminated during the Term as provided for herein and
(ii) nothing in this Agreement shall mandate or prohibit a continuation of the
Executive’s employment following the expiration of the Term upon such terms and
conditions as the Company and the Executive may mutually agree upon.

4. Base Compensation. As the base compensation for all services to be rendered
by the Executive to the Company, the Company agrees to pay to the Executive, and
the Executive shall accept, a salary at a rate of $154,500 per annum, payable in
arrears in equal monthly installments of $12,875 each, subject to such
deductions and withholdings as may be required by law. Periodically, the
President and Chief Executive Officer and the Board will review the salary of
the Executive, taking into consideration such factors as the Executive’s
performance and such other matters as it deems relevant and, in its discretion
alone, may increase the salary of the Executive to such rate as the Board deems
proper; provided that the Company shall in no event be required to grant any
such increase.

5. Incentive Compensation.

(a) Bonus. The Executive shall be eligible to receive bonuses and awards under
the Company’s bonus plans or arrangements as may be in effect from time to time,
including the Company’s Annual Executive Cash Bonus Plan, as may be from time to
time determined by the Board or a committee thereof.

(b) Long-Term Incentive Compensation. The Executive shall be eligible to
participate in any long-term incentive compensation plan generally made
available to similarly situated executive officers of the Company in accordance
with and subject to the terms of such plans, including the Company’s Annual
Stock-Based Long-Term Incentive Award Plan for Senior Executives, as may from
time to time be determined by the Board of a committee thereof.

(c) Other Compensation. The Company may, upon recommendation of the Board or a
committee thereof, award to the Executive such other bonuses and compensation as
it deems appropriate and reasonable.

6. Benefits. During the term of this Agreement, the Company shall provide the
following benefits to the Executive:

(a) Medical. The Company will provide the Executive health coverage for herself
and her family in accordance with the Company’s health and medical insurance
plans, as the same may be in effect from time to time. The Executive shall be
responsible for paying the employee portion of the premiums for such health and
medical insurance plans.

(b) Vacation. The Executive shall be entitled to vacation in accordance with the
Company’s general vacation policies and practices as may be in effect from time
to time.

(c) General Benefits. The Executive shall be entitled to participate in all
employee benefit plans and arrangements of the Company that may be in effect
from time to time and as may from time to time be made available to the other
similarly situated executive officers of the Company, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements.

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(d) No Limitation of Company’s Rights. Nothing in this Section 6 shall be
construed to limit or restrict the complete discretion of the Company to amend,
modify or terminate any employee benefit plan or plans of the Company where such
action generally affects plan participants or employees, including the
Executive.

(e) Insurance. The Company shall provide Executive with $2,500 per annum for the
purpose of Executive procuring a term insurance policy that names such person(s)
of Executive’s choosing as beneficiary(ies).

7. Travel Expenses. The Company shall pay or reimburse the Executive for all
reasonable and necessary traveling and other expenses incurred or paid by the
Executive in connection with the performance of her duties under this Agreement
upon presentation of expense statements or vouchers and such other supporting
information as the Company may from time to time reasonably request. However,
the amount available for such traveling and other expenses may be fixed in
advance by the Company.

8. Termination. This Agreement shall terminate prior to the Term expiration
date, hereinabove set forth, in the event that the Executive shall die or the
Board shall reasonably determine that the Executive has become disabled, or if
the Executive’s employment shall be terminated for cause or without cause, as
hereinafter provided.

(a) Disability. The Board may determine that the Executive has become disabled,
for purposes of this Agreement, in the event that the Executive shall fail,
because of illness or incapacity, to render for three successive months, or for
shorter periods aggregating three months or more in any period of twelve months,
services of the character contemplated by this Agreement; and thereupon this
Agreement and all rights of the Executive hereunder shall be deemed to have been
terminated as of the end of the calendar month in which such determination is
made.

(b) For Cause. The Board may dismiss the Executive for cause in the event that
it determines that there has been willful misconduct by the Executive in
connection with the performance of her duties hereunder, or any other conduct on
the part of the Executive which has been materially injurious to the Company;
and thereupon this Agreement shall terminate effective upon the delivery to the
Executive of 30-day written notice that the Board has made such determination.
For purposes of this Agreement, “cause” shall be determined only by a good faith
finding thereof by the Board, which shall afford the Executive the opportunity
to appear before it prior to finalizing any such determination. If the Executive
in good faith contests a termination for cause, the Company will pay all
reasonable legal fees and other expenses incurred by the Executive, as the
Executive is billed for such costs, within ten days of periodic submission to
the Company of statements of charges of attorneys and statements of other
expenses incurred by the Executive in connection with such challenge. The
Executive will reimburse the Company for all such costs if it should be
determined by a court of final adjudication that the Executive did not act in
good faith in bringing such challenge.

(c) Without Cause. The Executive may resign without cause at any time upon 30
days’ written notice to the Company, in which event the Company’s obligation to
compensate her ceases on the effective date of her termination except as to
amounts due to her under Section 8(c)(i). The Company may dismiss the Executive
without cause at any time upon 30-days’ written notice to the Executive. In the
event that the Company dismisses the Executive other than for cause, or if the
Executive resigns because of a material breach of this Agreement by the Company
(which Executive may do only if such breach remains materially uncured after the
Executive has provided 30 days prior written notice to the Board), and the
Executive’s dismissal or resignation qualifies as a “separation from service”
for purposes of Section 409A of the Internal Revenue Code of 1986, as amended,
and the

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Treasury Regulations and other official guidance issued thereunder
(collectively, “Section 409A”), then the Company shall provide to the Executive:

(i) payment of the compensation due to her through the effective date of the
termination of the Executive’s employment, within ten business days following
such effective date of the termination of the Executive’s employment;

(ii) continuation of the Executive’s salary for twelve months following the
effective date of the termination of the Executive’s employment at the higher of
the rate specified in Section 4 or the Executive’s then-current annualized
salary, which salary continuation shall be paid monthly in accordance with the
Company’s regular payroll practices; and

(iii) payment of any Accrued Bonus (as defined below), to be paid as soon as
administratively practicable after the six-month anniversary of the effective
date of the termination of the Executive’s employment. Accrued Bonus shall mean
any amount of bonus with respect to any year prior to the year in which
dismissal without cause occurs (“Prior Bonus Year”) calculable by applying the
formula prescribed by the Company’s incentive compensation plan as it existed on
December 31 of such Prior Bonus Year and employing in the application of such
formula the goals, ratios and weighting percentages and other variable figures
which the Bonus Plan calls for the Company’s Board or any committee thereof to
determine annually (“Bonus Plan Variables”) which the Company’s Board of
Directors or any committee thereof adopted for purposes of the Bonus Plan prior
to December 31 of such Prior Bonus Year. Notwithstanding any other provision of
this Section, no Accrued Bonus shall be payable pursuant to this Section 8(c)
for any Prior Bonus Year with respect to which a bonus amount was paid to and
accepted by the Executive.

Notwithstanding anything to the contrary, to the extent that any payments under
Section 8(c) are subject to a six-month waiting period under Section 409A, any
such payments that would be payable before the expiration of six months
following the Executive’s separation from service but for the operation of this
sentence shall be made during the seventh month following the Executive’s
separation from service.

(d) In the event that the provisions of this Section 8(c) are triggered, the
Executive shall resign from all offices and directorships of the Company and of
all subsidiaries and affiliates of the Company, upon payment to the Executive of
the amount referred to in Section 8(c)(i).

(e) Release of Claims. The Company’s obligation to provide the payments under
this Section 8 is conditioned upon the Executive’s execution of an enforceable
release of all claims (and upon the expiration of all applicable rescission
periods contained in such release) and her compliance with all provisions of
this Agreement. If the Executive chooses not to execute such a release (or
rescinds such release) or fails to comply with these provisions, then the
Company’s obligation to compensate her ceases on the effective date of her
termination except as to amount due to her under Section 8(c)(i).

(f) Return of Confidential Documentation. Upon termination of her employment for
any reason whatsoever, the Executive shall return to the Company all working
papers, computer equipment, notebooks, strategic plans and other confidential
documents and information, in any form whatsoever.

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9. Change in Control. In the event a person begins a tender or exchange offer,
circulates a proxy to stockholders, or takes other steps seeking to effect a
Change in Control (as defined below), the Executive agrees that she will not
voluntarily leave the employ of the Company, and will render the services
contemplated under this Agreement, until such person has either abandoned or
terminated his or its efforts to effect a Change in Control or until three
months after a Change in Control has occurred. For the purposes of this
Agreement, the term “Change in Control” shall mean:

(a) any “person” within the meaning of Section 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), other than the Company, a
subsidiary, or any employee benefit plan(s) sponsored by the Company or any
subsidiary, is or has become the “beneficial owner,” as defined in Rule 13d-3
under the Exchange Act, directly or indirectly, of 25 percent or more of the
combined voting power of the outstanding securities of the Company ordinarily
having the right to vote at the election of directors;

(b) individuals who constitute the Board on the effective date of this Agreement
(the “Incumbent Board”) have ceased for any reason to constitute at least a
majority thereof (or a majority of the Board as then constituted), provided that
any person becoming a director subsequent to the effective date of this
Agreement whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
director without objection to such nomination) shall be, for purposes of this
Plan, considered as though such person were a member of the Incumbent Board;

(c) the closing of a reorganization, merger or consolidation of the Company,
other than one with respect to which all or substantially all of those persons
who were the beneficial owners, immediately prior to such reorganization, merger
or consolidation, of outstanding securities of the Company ordinarily having the
right to vote in the election of directors own, immediately after such
transaction, more than three-quarters of the outstanding securities of the
resulting corporation ordinarily having the right to vote in the election of
directors;

(d) the closing of a sale or other disposition of all or substantially all of
the assets of the Company, other than to a subsidiary; or

(e) the complete liquidation and dissolution of the Company.

10. Covenants of Executive. The Executive acknowledges that: (i) the business of
the Company and its affiliates, as currently conducted and as conducted from
time to time throughout the term of this Agreement (collectively, the
“Business”), is conducted by and is proposed to be conducted by the Company on a
world-wide basis (the “Company’s Market”); (ii) the Business involves providing
design, engineering and manufacture of certain vacuum and heat transfer
equipment, including but not limited to steam condensers, steam jet ejectors,
shell and tube heat exchangers, plate and frame heat exchangers, Heliflow heat
exchangers, liquid ring vacuum pumps and rotary piston pumps; (iii) the Company
has developed trade secrets and confidential information concerning the
Business; and (iv) the agreements and covenants contained in this Section 10 are
essential to protect the Business. In order to induce the Company to enter into
this Employment Agreement, the Executive covenants and agrees that:

(a) Agreement Not To Compete. For a period of 18 months after the termination of
Executive’s employment with the Company for any reason (such period of time
hereinafter referred to as the “Restricted Period”), neither the Executive nor
any entity of which 20 percent or more of the beneficial ownership is held by
the Executive or a person related to the Executive by blood

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or marriage (“Controlled Entity”) will, anywhere in the Company’s Market,
directly or indirectly own, manage, operate, control, invest or acquire an
interest in, or otherwise engage or participate in, whether as a proprietor,
partner, stockholder, director, officer, member manager, employee or otherwise
any business which competes in the Company’s Market with the Business, without
the prior written consent of the Company. Notwithstanding any other provisions
of this Agreement, the Executive may make a passive investment in any
publicly-traded company or entity in an amount not to exceed five percent of the
voting stock of any such company or entity.

(b) Agreement Not To Interfere in Business Relationships.

(i) During the Restricted Period, neither the Executive nor any Controlled
Entity will directly or indirectly solicit, induce or influence any customer, or
any other person which has a business relationship with the Company or any
affiliate, or which had on the date of this Agreement such a relationship with
the Company or any affiliate, to discontinue or reduce the extent of such
relationship with the Company or any affiliate in the Company’s Market.

(ii) During the Restricted Period, neither the Executive nor any Controlled
Entity will (1) directly or indirectly recruit, solicit or otherwise induce or
influence any stockholder or employee of the Company or any of its affiliates to
discontinue such employment or other relationship with the Company or any
affiliate, or (2) employ or seek to employ, or cause any business which competes
in the Company’s Markets to employ or seek to employ for any reason, any person
who is then (or was at any time within six months prior to the date the
Executive or such business employs or seeks to employ such person) employed by
the Company or any affiliate without the prior written consent of the Company.

(c) Confidentiality. During the Restricted Period, neither the Executive nor any
Controlled Entity will directly or indirectly disclose to anyone, or use or
otherwise exploit for the Executive’s or any Controlled Entity’s own benefit or
for the benefit of anyone other than the Company, any confidential information,
including, without limitation, any confidential “know-how”, trade secrets,
customer lists, details of customer contracts, pricing policies, operational
methods, marketing plans or strategies, product development techniques or plans,
business acquisition plans and new personnel acquisition plans of the Company or
any affiliate related to the Business or any portion or phase of any scientific,
engineering or technical information, design, process, procedure, formula,
improvement, discovery, invention, machinery or device of the Company or any
affiliate, whether or not in written or tangible form (all of the preceding is
hereinafter referred to as “Confidential Information”). The term “Confidential
Information” does not include, and there shall be no obligation hereunder with
respect to, information that becomes generally available to the public or the
Company’s competitors other than as a result of a disclosure by the Executive or
a Controlled Entity or any agent or other representative thereof. Neither the
Executive nor any Controlled Entity shall have any obligation hereunder to keep
confidential any Confidential Information to the extent disclosure is required
by law, or determined in good faith by the Executive to be necessary or
appropriate to comply with any legal or regulatory order, regulation or
requirement; provided, however, that in the event disclosure is required by law,
the Executive or the Controlled Entity concerned shall provide the Company with
prompt advance written notice of such requirement so that the Company may seek
an appropriate protective order. It is understood that in any new employment,
the Executive may use her ordinary skill and non-confidential knowledge, even
though said skill and non-confidential knowledge may have been gained at the
Company. The Executive’s obligations under this Section 10(c) shall be in
addition to, not in substitution for,

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any common law fiduciary duties the Executive has to the Company regarding
information acquired during the course of her employment.

(d) Intellectual Property. The Executive shall communicate to the Company full
information concerning all inventions, improvements, discoveries, formulas,
processes, systems of organization, management procedures, software or computer
applications (hereinafter, collectively, “Intellectual Property”) made or
conceived by her either solely or jointly with others while in the employ of the
Company, whether or not perfected during her period of employment and which
shall be within the existing or contemplated scope of the Company’s business
during her employment. The Executive will assist the Company and its nominees in
every way at the Company’s expense in obtaining patents for such Intellectual
Property as may be patentable in any and all countries and the Executive will
execute all papers the Company may desire and assignments thereof to the Company
or its nominees and said Intellectual Property shall be and remain the property
of the Company and its nominees, if any, whether patented or not or assigned or
not.

(e) Survival of Covenants. In the event of a termination of this Agreement, the
covenants and agreements contained in this Section 10 shall survive, shall
continue thereafter, and shall not expire unless and except as expressly set
forth in this Section.

(f) Remedies. The parties to this Agreement agree that (i) if either the
Executive or any Controlled Entity breaches any provision of this Section 10,
the damage to the Company and its affiliates will be substantial, although
difficult to ascertain, and money damages will not afford an adequate remedy,
and (ii) if either the Executive or any Controlled Entity is in breach of this
Agreement, or threatens a breach of this Agreement, the Company shall be
entitled in its own right and/or on behalf of one or more of its affiliates, in
addition to all other rights and remedies as may be available at law or in
equity, to (1) injunctive and other equitable relief to prevent or restrain a
breach of this Agreement and (2) may require the breaching party to pay damages
as the result of any transactions constituting a breach hereof.

11. Indemnification of Executive. In the event the Executive is terminated for
any reason, (a) the Company will hold harmless and indemnify the Executive for
all third party claims, actions or other proceedings against the Executive
initiated either prior to the termination of employment or thereafter which
relate to duties performed in good faith by the Executive while employed by the
Company; and (b) the Company will retain the Executive as named insured under
any directors’ and officers’ insurance policies it may have, for acts of the
Executive during the time she served as an officer of the Company. Additionally,
all reasonable legal and other costs incurred by the Executive to defend herself
will be paid by the Company, as the Executive is billed for such costs, within
ten days of periodic submission to the Company of statements of charges of
attorneys and statements of other expenses incurred by the Executive in
connection with such defense.

12. Effect of Waiver. The waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any
subsequent breach thereof.

13. Notice. Any and all notices provided for herein shall be in writing and
shall be physically delivered or mailed by registered or certified mail, return
receipt requested to the parties at their respective addresses set forth
hereinabove. Either party may from time to time designate a different address
for notices to be sent to such party by giving the other party due notice of
such different address.

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14. Validity. If any part of this Agreement shall be found to be invalid or
unenforceable, the same shall be deemed to be severable and the remaining
portions of this Agreement shall remain in full force and effect.

15. Modification and Assignment. This Agreement shall not be modified or amended
except by an instrument in writing signed by the parties hereto. This Agreement
and all of its terms and conditions shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns, including but not limited to any corporation or other
entity with or into which the Company is merged or consolidated or any other
successor of the Company. The Executive agrees that she will not and may not
assign, transfer or convey, pledge or encumber this Agreement or her right,
title or interest therein, or her power to execute the same or any monies due or
to become due hereunder, this Agreement being intended to secure the personal
services of the Executive, and the Company shall not recognize any such
assignment, transfer, conveyance, pledge or encumbrance.

16. Applicable Law. This Agreement and the rights and obligations of the parties
hereunder shall be construed and interpreted in accordance with the laws of the
State of New York, without giving effect to the conflict of laws provisions
thereof. Any action or proceeding brought by either party against the other
arising out of or related to the Agreement shall be brought only in a state
court of competent jurisdiction located in the County of Monroe, State of New
York or the Federal District Court for the Western District of New York located
in Monroe County, New York and the parties hereby consent to the personal
jurisdiction and venue of said courts.

17. Prior Agreements. This Agreement shall supersede any prior employment
agreement, arrangement or understanding between the Company and the Executive,
without limitation, and shall be effective from the date specified hereinabove.

18. Business Combinations. In the event of any sale, merger or any form of
business combination affecting the Company, including without limitation the
purchase of assets or any other form of business combination, the Company will
obtain the express written assumption of this Agreement by the acquiring or
surviving entity from such combination, and failure of the Company to obtain
such an assumption will constitute a breach of this Agreement, entitling the
Executive to all payments and other benefits to be provided in the event of
termination without cause provided in Section 8.

19. Section 409A. This Agreement is intended to comply with Section 409A of the
Code to the extent its provisions are subject to that law. The parties agree
that they will negotiate in good faith regarding amendments necessary to bring
this Agreement into compliance with the terms of that Section or an exemption
therefrom as interpreted by guidance issued by the Internal Revenue Service,
taking into account any limitations on amendments imposed by Section 409A or
Internal Revenue Service guidance. The parties further agree that to the extent
the terms of this Agreement fail to qualify for exemption from or satisfy the
requirements of Section 409A, this Agreement may be operated in compliance with
Section 409A pending amendment to the extent authorized by the Internal Revenue
Service. In such circumstances the Company and the Executive will administer the
Agreement in a manner which adheres as closely as possible to the existing terms
and intent of the Agreement while complying with Section 409A.

20. Headings. The section headings of this Agreement are for convenience of
reference only and are not to be considered in the interpretation of the terms
and conditions of this Agreement.

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21. Invalidity or Unenforceability. If any term or provision of this Agreement
is held to be invalid or unenforceable, for any reason, such invalidity or
unenforceability shall not affect any other term or provision hereof and this
Agreement shall continue in full force and effect as if such invalid or
unenforceable term or provision (to the extent of the invalidity or
unenforceability) had not been contained herein. If any court determines that
any provision of Section 10 hereof is unenforceable because of the duration or
geographic scope of such provision, such court shall have the power to reduce
the scope or duration of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable.

22. Counterparts. This Agreement may be executed in any number of counterparts,
each of which for all purposes shall be deemed to be an original.

[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as of
the day and year first above written.

 

GRAHAM CORPORATION

By:   /s/ James R. Lines Name:   James R. Lines Title:   President and Chief
Executive Officer

/s/ Jennifer Condame

Jennifer Condame

STATE OF NEW YORK )

ss:

COUNTY OF MONROE )

On this 24th day of July, 2013, before me personally came James R. Lines, to me
known, who, being by me duly sworn did depose and say that the above-named
person resides in Lancaster, NY, that said person is the President and the Chief
Executive Officer of Graham Corporation, the corporation described in and which
executed the foregoing instrument; and that the above-named person signed
thereto by order of the Board of Directors of said corporation.

Notary Public

[notary stamped]

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STATE OF NEW YORK )

ss:

COUNTY OF MONROE )

On the 24th day of July, in the year 2013, before me, the undersigned, a Notary
Public in and for said State, personally appeared Jennifer Condame, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that she executed the same in her capacity, and that by her signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

Notary Public

[notary stamped]

[Signature Page to the Employment Agreement of Jennifer Condame]