Document:

Exhibit 10.4

 

 

 

 

 

 

CEO Employment Agreement

Between

U.S. Premium Beef, LLC

And

Steven D. Hunt

Employment Years   2010 - 2015

THIS EMPLOYMENT AGREEMENT (“Agreement”) made effective as of
the 1st day of September, 2009, is made by and between U.S. Premium Beef, LLC,
a Delaware limited liability company (“USPB”), and Steven D. Hunt (“Chief
Executive Officer” or “CEO”).

1.         Employment and Term of Agreement.  

(a)          Employment.  USPB will employ CEO as the chief
executive officer of USPB under this Agreement from September 1, 2009 (the “Effective
Date”) until August 29, 2015 (the “Expiration Date”) or the date the employment
is otherwise terminated as provided in this Agreement (“Termination Date”).  

(b)          Term of Agreement.  Employment under this Agreement
starts on September 1, 2009 and continues until the Expiration Date or the
Termination Date, whichever is earlier.  This Agreement is effective September
1, 2009 and continues until the payments under this Agreement have been made
and the obligations have been discharged or fulfilled.  For clarity: CEO’s
employment terminates on the Expiration Date or the Termination Date, whichever
is earlier; the compensation provisions under Section 3(a) through Section 3(e)
terminate when the compensation has been paid; CEO’s rights to exercise phantom
units and purchase phantom units under Section 3(f) continue for 18 months
after the Expiration Date or Termination Date, whichever is earlier, and if not
exercised or purchased by that time, those rights are then terminated; Section
5 continues until the payments under that section have been made which include
payments under Section 5(b) continuing for 18 months after termination of CEO’s
employment with USPB; Section 6(a) continues until 18 months after termination
of CEO’s employment with USPB; Sections 6(b) through Section 6(e), Section 7
and Section 8 survive termination of this Agreement.

2.          Location of Employment.  CEO’s principal place of
employment shall be at the principal offices of USPB located in Kansas City,
Missouri, or at another location as mutually agreed by USPB and CEO.

3.          Compensation.  CEO shall be paid compensation
for services as provided in this Section 3.  All compensation paid under
this Agreement will be paid to CEO less necessary deductions and withholdings.

                                                                        

SIGNATURE
COPY

June
15, 2009

 

 

 

 

	

USPB/Steven D.
Hunt

			
		CEO Employment Agreement

	

2010-2015

		

 

(a)          Annual Salary.  CEO shall be paid by USPB a base
annual salary of $775,000 for employment years September 1, 2009 through August
28, 2010 (“YR 2010”), August 29, 2010 through August 27, 2011(“YR 2011”), and
August 28, 2011 through August 25, 2012 (“YR 2012”); and $825,000 for
employment years August 26, 2012 through August 31, 2013 (“YR 2013”), September
1, 2013 through August 30, 2014 (“YR 2014”), and August 31, 2014 through August
29, 2015 (“YR 2015”) during the term of CEO’s employment under this Agreement,
pro-rated for partial years, payable on USPB’s normal payroll dates.

(b)          Incentive Cap.  The compensation provided in Sections
3(c) (Annual Incentive), 3(d) (Long-Term Incentive), and 3(e) (Full-Term
Incentive), and including any incentive compensation under Section 5
(Compensation Upon Termination) as it pertains to incentive compensation,
specifically Section 5(a), clauses (2), (3), and (4) and Section 5 (c), clauses
(3), (4), and (5); shall be subject to a cumulative annual cap (referred to as
“Incentive Cap”) pro-rated over the term of this Agreement not to exceed
$2,000,000 per year averaged over the term (whether the term extends to the
Expiration Date or through an earlier Termination Date),  provided, however,
that for purposes of Section 5(c) (Termination By USPB For Other Than Cause,
Death or Disability or By CEO For Good Reason), the proration term shall extend
through the Expiration Date.  For example, other than an earlier termination
under Section 5(c), if this Agreement is earlier terminated after four (4)
years the Incentive Cap would be $2,000,000 per year averaged over four (4)
years or $8,000,000).  An example of the incentive compensation under Sections
3(c), 3(d), and 3(e) is provided on Exhibit A.  For employment years YR 2010,
YR 2011, YR 2013 and YR 2014 the Incentive Cap for those years will be
$2,000,000.  For YR 2012, any incentive compensation that exceeded the
Incentive Cap in the prior two years and the incentive compensation for the
year ending YR 2012 will be paid to CEO providing the amount does not exceed the
Incentive Cap of $2,000,000 per year averaged over the first three years of YR
2010, YR 2011, and YR 2012.  For the year YR 2015, any incentive compensation
that exceeded the Incentive Cap in prior years plus the incentive compensation
for the year YR 2015 shall be paid to CEO subject to an Incentive Cap of
$2,000,000 per year averaged over the six years of the term, YR 2010, YR 2011,
YR 2012, YR 2013, YR 2014, and YR 2015.

 

                                                                      

	

 

			
		 2 
	
SIGNATURE
COPY

		
	

 

			 	June
15, 2009

 

 

 

 

	

USPB/Steven D.
Hunt

			
		CEO Employment Agreement

	

2010-2015

		

 

(c)           Annual Incentive Plan. In addition to CEO’s base
Annual Salary, if CEO is employed by USPB on the last day of any employment
year (except as otherwise provided in this Agreement), CEO shall be paid an
annual incentive compensation, (“Annual Incentive”) equal to two percent (2.0%)
of the sum of the total financial benefits to USPB (“USPB Total Benefits”) that
exceed $25,000,000.  USPB Total Benefits are: (1) audited fiscal year-end USPB
earnings before tax; and (2) two times the fiscal year USPB grid premiums which
is the net sum of all USPB member grid premiums and discounts calculated through
all USPB grids at all plants, taking into account all calculators including,
but not limited to, base price, dressing percent, quality grade, outlier
cattle, A/V, Natural, per head category premiums, and other specific
categories, less the base price calculator excluding any set base price
premium.  (Example, if 25 cents per cwt. is paid to a member for one head of
cattle over the western Kansas reported USDA average, then 25 cents per cwt.
times the weight of the head of cattle would be added to the net grid
premium.)  This calculation shall be based on the actual cattle delivered by
USPB members to National Beef Packing Company, LLC or its successor under the
Cattle Purchase and Sale Agreement unless one of the following two events
occur:  (1) the member cattle delivery requirements are reduced below the
fiscal year requirements of 98% delivery; or (2) the penalties for nondelivery
are reduced below fiscal year 2009 levels.  If either member delivery
requirements are reduced below 98% or the penalties for nondelivery are reduced
below the fiscal year 2009 levels, then the fiscal year grid premiums under
clause (2) above shall be adjusted to reflect the grid premium per head of
cattle actually delivered multiplied times the number of USPB delivery rights
held by members.  In no event shall the nondelivery penalties paid by members
be included in the net sum of all USPB member grid premiums under clause (2)
above.  The Annual Incentive is subject to the following:

(1)              
Any Annual Incentive accruing with respect to an employment year
shall be payable, on or before the date (the “Annual Incentive Payment Date”)
that is sixty (60) days following the end of the employment year or, if later,
ten (10) days following receipt by the USPB Board of Directors, of all completed
financial statements that are relevant to the calculation of the Annual
Incentive, but in no event later than March 15th of the calendar year first
occurring after the end of the employment year to which the Annual Incentive
relates.

(2)              
For purposes of calculating any Annual Incentive under this
Section 3(c), or any Long-Term Incentive under Section 3(d), USPB’s Total
Benefits shall be determined by USPB’s accountants using generally accepted
accounting principles consistently applied to the fiscal year.

(d)        Long-Term Incentive Plan. 
In addition to CEO’s base
Annual Salary and Annual Incentive, CEO shall, (except as otherwise provided in
this Agreement), if CEO is employed by USPB through the end of YR 2012, be paid
long-term incentive compensation calculated as described in clause (1) below,
and if CEO is employed by USPB as of the end of YR 2015 be paid an additional
long-term incentive compensation, calculated as described in clause (2) below
(in both cases referred to as “Long-Term Incentive”):

(1)              
the Long-Term Incentive to be paid as a result of CEO’s
employment on August 25, 2012 shall be equal to one and one-quarter percent
(1.25%) of the amount by which USPB’s Total Benefits from YR 2010, YR 2011, and
YR 2012, exceed $100,000,000 but are equal to or less than $130,000,000; plus
seventy-five one hundredths of a percent (0.75%) of the amount by which USPB’s
Total Benefits from YR 2010, YR 2011, and YR 2012 exceed $130,000,000, subject
to clause (3) below; and

(2)              
the Long-Term Incentive to be paid as a result of CEO’s
employment on August 29, 2015 shall be equal to one and one-quarter percent
(1.25%) of the amount by which USPB’s Total Benefits from YR 2013, YR 2014, and
YR 2015, exceed $100,000,000 but are equal to or less than $130,000,000; plus
seventy-five one hundredths of a percent (0.75%) of the amount by which USPB’s
Total Benefits from YR 2013, YR 2014, and YR 2015 exceed $130,000,000, subject
to clause (3) below; and

(3)              
any Long-Term Incentive accruing under this Agreement shall be
payable, on or before the date (“Long-Term Incentive Payment Date”) that is
sixty (60) days following the last day of YR 2012 or YR 2015, respectively, or,
if later, ten (10) days following receipt by USPB’s Board of Directors, of all
completed financial statements that are relevant to the calculation of the
applicable Long-Term Incentive, but in no event later than March 15th of the
calendar year first occurring after the end of the respective employment year.

 

                                                                  

	

 

			
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SIGNATURE
COPY

		
	

 

			 	June
15, 2009

 

 

 

	

USPB/Steven D.
Hunt

			
		CEO Employment Agreement

	

2010-2015

		

 

(e)           Full-Term Incentive Plan.
 In addition to any other
payments paid under this agreement, CEO shall be paid full-term incentive
compensation (“Full-Term Incentive”) in the amount of $775,000 if CEO is
employed under this Agreement through the end of YR 2012, and additionally,
$825,000 if CEO is employed under this Agreement through the end of YR 2015,
except as otherwise provided in this Agreement.  Any Full-Term Incentive
accruing under this Agreement shall be payable, on or before the date that is
sixty (60) days following the last day of YR 2012 or YR 2015, respectively, or if
agreed to by CEO, a later date coinciding with payments under Section 3(c)
(Annual Incentive) or Section 3(d) (Long-Term Incentive) for employment through
the end of YR 2012, and employment through the end of YR 2015, but in no event
later than March 15 of the calendar year first occurring after the end of the
respective employment year.

(f)          Phantom Units Plan.  Effective as of the date of this
Agreement, CEO is granted phantom unit rights to phantom Class A Units of USPB
with an exercise price or purchase price of $55 per unit subject to reduction
under clause (4) below, and phantom Class B Units of USPB with an exercise
price or purchase price of $0 (the $55 per Class A Unit and $0 per Class B Unit
referred to as the “Exercise Price” or “Unit Purchase Price”) as provided in
this paragraph (f).  CEO has 20,000 phantom Class A Units minus any phantom
Class A Units purchased or exercised prior to September 1, 2009, and 20,000
phantom Class B Units minus any phantom Class B Units exercised or purchased
prior to September 1, 2009.  The phantom Class A Units granted under this
Agreement less (any prior exercised or purchased phantom Class A Units and) any
Class A Units exercised or purchased under this Agreement are the “Available
Phantom Class A Units.”  The phantom Class B Units granted under this Agreement
less (any prior exercised or purchase of Class B Units and) any Class B Units
exercised or purchased under this Agreement are the “Available Class B Units.” 
The rights of exercise and purchase of the phantom unit rights are:

(1)              
Appreciation Rights.  CEO shall exercise the phantom units
by written notice of the Chair of the Board of Directors of USPB.  Upon
exercise of the phantom units, CEO shall be paid the amount that the weighted
average trading price of the units (“Market Unit Price”) exceeds the Exercise
Price per unit times the number of phantom units exercised, not to exceed the
number of Available Phantom Class A Units and the Available Phantom Class B
Units.  

(2)              
Market Unit Price.  The “Market Unit Price” shall equal
the weighted average price of the previous 20,000 non-conditional unit
transaction prices of the prior sales of USPB Class A Units and/or Class B
Units, from Unitholders to unaffiliated third parties.  The weighted average
price shall be for the unit transactions of 20,000 units of USPB Class A and/or
Class B Units occurring immediately prior to the CEO’s notice of exercise.  

If the transactions
of the Class A and Class B Units are linked, then the transaction price shall
be based on the linked Class A and Class B Unit Price allocated to the Class A
Units and Class B Units according to the percentage of profits and losses
allocated by USPB to Class A Units and Class B Units, respectively, under the
USPB LLC Agreement, Section 3.6(b).  

 

                                                                

	

 

			
		4 
	
SIGNATURE
COPY

		
	

 

			 	June
15, 2009

 

 

 

	

USPB/Steven D.
Hunt

			
		CEO Employment Agreement

	

2010-2015

		

 

If the number of
exercised phantom Class A Units and phantom Class B Units are not equal and/or
the Market Unit Price is based in part or in whole on sales of linked USPB
Class A Units and Class B Units, then:  the Market Unit Price for phantom Class
A Units is the percentage of the linked Market Unit Price that is the same as
the percentage of profits and losses allocated to the Class A Units at the time
of exercise; and the Market Unit Price for phantom Class B Units is the
percentage of the linked Market Unit Price that is the same as the percentage
of profits and losses allocated to the Class B Units at the time of exercise.

If the CEO is
exercising an unequal number of phantom Class A Units and phantom Class B
Units, whether only phantom Class A Units, only phantom Class B Units, or an
unequal combination, and 20,000 separate Class A Units or Class B Units for
which the Market Unit Price will be determined have not transferred, then the
Market Unit Price shall be established first, from the appropriate separate Class
A Unit or Class B Unit transactions, and then, from the number of linked Class
A Unit and Class B Unit transactions so that in combination 20,000 unit
transactions are utilized to determine the Market Unit Price.

(3)              
Exercise.  CEO shall be entitled to exercise phantom unit
rights at CEO’s election, at the time and under the conditions, and with the
same consequences as if CEO held similar unqualified options to purchase USPB
Class A or Class B Units acquired at the same time as the phantom unit rights. 
In either case, payment shall be made to CEO by 90 days after the notice of
exercise of the phantom unit rights, but in no event later than March 15th of
the calendar year first occurring after the end of the calendar year in which
the notice is given.  

(4)              
Asset Sale Distribution Rights.  Should USPB liquidate
some or all of USPB’s assets and distribute the proceeds to unitholders, CEO
shall be paid an amount equal to the distribution to unitholders of Class A or
Class B Units on a per unit basis for the number of CEO’s Available Phantom
Class A Units and Available Phantom Class B Units without any deduction.  Of
the distributions to Class A Unitholders, the first $55 per Class A Unit of
such cumulative distributions shall not be paid to CEO per Available Phantom Class
A Unit and cumulative distributions in excess of $55 per Class A Unit shall be
paid to CEO without deduction.  The Exercise Price of phantom Class A Units
under this Section 3(f) shall be reduced by the distributions to Class A
Unitholders up to the cumulative first $55 per Class A Unit.  The amount under
this clause (4) shall be paid at the time distributions are made to the
unitholders.  If USPB Class A or Class B Units are redeemed as part of the
distribution, the corresponding proportional number of Available Phantom Class
A Units or Available Phantom Class B Units shall be deemed to be exercised as
part of the distribution.

 

	

 

			
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SIGNATURE
COPY

		
	

 

			 	June
15, 2009

 

 

 

	

USPB/Steven D.
Hunt

			
		CEO Employment Agreement

	

2010-2015

		

 

(5)              
Ownership Interest Distribution Rights.  If USPB
distributes ownership rights of another entity to its unitholders, CEO shall be
granted phantom ownership rights in proportion to the Available Phantom Class A
Units and Available Phantom Class B Units held by CEO to the total issued units
or, at the election of CEO, actual ownership rights corresponding to the
phantom units as if the Available Phantom Class A Units are Available Phantom
Class B Units were purchased by CEO under clause (6) and were issued to CEO
prior to the time of ownership right distribution.  If USPB units are redeemed
as part of the distribution, the corresponding amount of Available Phantom
Class A Units and Available Phantom Class B Units shall be deemed to be
exercised as part of the distribution.

(6)              
Purchase Rights.  Effective as of termination of this
Agreement until 18 months after termination of this Agreement, or within 10
days prior to an event that is a liquidation or an event under which
liquidation distributions would be made by USPB to Class A Unitholders, and at
the election of CEO; or, upon mutual agreement of CEO and USPB; CEO may
purchase the number of USPB Class A Units at the Unit Purchase Price
corresponding to the Available Phantom Class A Units held by CEO.  At the
election of CEO, CEO may purchase the number of USPB Class B Units at the Unit
Purchase Price corresponding to the Available Phantom Class B Units held by
CEO.  USPB shall pay the costs of appraisal of USPB Class A Units and USPB
Class B Units, if CEO purchases all Available Phantom Class A Units or all
Available Phantom Class B Units.  Upon purchase, USPB will grant CEO the same
rights, privileges, allocations, distributions, liquidating distributions, and
transferability of the Class A Units and Class B Units purchased by CEO as
other holders of Class A Units and Class B Units, which may require special
allocations as provided in the USPB LLC Agreement, Section 3.3(h).  CEO may
designate the purchased Class A Units or Class B Units to be held by CEO’s
Designated Beneficiary identified under Section 3(h), providing CEO retains
control over voting rights and any right to transfer the Class A or Class B
Units during the time CEO is employed by USPB.  The purchase of Class A Units
or Class B Units under this clause (6) shall reduce the corresponding number of
Available Phantom Class A Units and Available Phantom Class B Units held by
CEO.

(7)              
Anti-dilution.  CEO’s phantom unit rights under this
paragraph (f) shall not be diluted by actions of USPB including transfer of
assets to another entity or issuance of units such that the number of
unexercised phantom unit rights held by CEO at the time of a dilution event
under this paragraph (f) shall be increased so that CEO’s phantom unit rights
are not diluted.  For purposes of this clause (7), USPB’s issuance to CEO under
this paragraph (f), issuance of additional units at or above the Market Unit Price,
or the issuance of debt instruments or preferred units with fixed (interest
like) returns shall not be considered dilution of CEO’s phantom unit rights.

(g)        Other Benefits. CEO shall be entitled to paid
vacations, personal and sick days consistent with the policy of USPB.  CEO
shall receive other compensation as approved by the Board of Directors and
shall participate in all fringe benefits approved by the Board of Directors
(including, without limitation, group medical, life, disability and accidental
death and dismemberment insurance) and benefit plans which shall be available
from time to time to management employees of USPB.  

 

 

	

 

			
		6 
	
SIGNATURE
COPY

		
	

 

			 	June
15, 2009

 

 

 

	

USPB/Steven D.
Hunt

			
		CEO Employment Agreement

	

2010-2015

		

 

(h)        Beneficiary If CEO Is Deceased.  If CEO has deceased: 
(1) during the term of this Agreement, or (2) after this Agreement expires or
is terminated, the payments due or payable to CEO shall be paid to the CEO’s
beneficiary (referred to as the “Designated Beneficiary”) as provided in this
Section 3(h).   If the CEO has deceased, the Designated Beneficiary shall have
the authority of the CEO under Section 3(f)(3) to exercise the phantom unit
rights and under Section 3(f)(6) to purchase Available Phantom Class A Units
and Available Class B Units.

The Designated Beneficiary is Mary F. Hunt, if she is then
living, primary beneficiary; or if Mary F. Hunt is not then living, the
Trustee, serving as such, of the Steven D. Hunt Trust under Trust Agreement
dated February 11, 2005, secondary beneficiary.  If Mary F. Hunt is the
Designated Beneficiary and she deceases prior to all of the payments and rights
under this Section 3(h) being completed, then the Trustee identified above
shall be the Designated Beneficiary under this Section 3(h).  Mary F. Hunt  may
be replaced by the Trustee as the Designated Beneficiary if the Trustee
notifies USPB in writing that the Trustee is assuming the duties of Designated
Beneficiary, whether due to Mary F. Hunt being unable, incapacitated or
otherwise.  Upon receipt of the written notice, the Trustee shall then replace
Mary F. Hunt as the Designated Beneficiary.  Upon request, the Chair of the
Board of Directors will acknowledge the Trustee as second beneficiary upon
receipt of proper notification.  CEO shall notify the Chair of the Board of
Directors in writing as to who is the Trustee and the contact information for
the Trustee, as well as any change in the Trustee.  The Trustee as the
secondary beneficiary shall be entitled to receive the payments due or payable
to CEO and the Trustee shall have the authority of the CEO under Section
3(f)(3) to exercise the phantom unit rights and under Section 3(f)(6) to
purchase Available Phantom Class A Units and Available Phantom Class B Units,
provided the Company has been notified in writing of the Trustee and there is
demonstration that the Trustee is duly authorized to act as such.  

CEO may change the Designated Beneficiary by submitting a
written change of beneficiary form to the Chair of the Board of Directors to be
included in the minutes of the Board of Directors.  If the Board of Directors
is unable to determine or locate the Designated Beneficiary in the two
functions of:  (1) to whom or what entity should payments due or payable to CEO
be paid; and (2) who shall have the authority of the CEO under Section 3(f)(3)
to exercise the phantom unit rights, then the Designated Beneficiary shall be
deemed to be the estate of the CEO as to the entity to which the payments
should be made, and the administrator of CEO’s estate shall have the authority
of the CEO under Section 3(f)(3).

(i)            Reimbursement Of Business Expenses. During his
employment under this Agreement, CEO shall also be reimbursed by USPB for
reasonable business expenses actually incurred or services provided under this
Agreement, upon presentation of expense statements or other supporting
information within 60 days after the expense is incurred.  In no event will any
expense be reimbursed later than December 31st of the calendar year first
following the calendar year in which the expense was incurred.

(j)            Renegotiation Due to Change in Business.  USPB and CEO
agree to renegotiate the terms and conditions of this Section 3 to be effective
for the remainder of the term of the Agreement after August 31, 2012 if during
CEO’s employment under this Agreement if a material change in the business of
USPB occurs, in which: 

 

 

	

 

			
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SIGNATURE
COPY

		
	

 

			 	June
15, 2009

 

 

 

	

USPB/Steven D.
Hunt

			
		CEO Employment Agreement

	

2010-2015

		

 

(i)                revenues of National Beef Packing Company, LLC or its successor
increase by more than 50% in a fiscal year over the average revenue of the
prior two fiscal years;

(ii)               USPB enters a joint venture by merger, acquisition, contract or
otherwise in which USPB is not a majority owner;  

(iii)              the source of revenues of USPB or National Beef Packing Company,
LLC or its successor change more than 50% from the source of revenues in fiscal
year 2009; 

(iv)             
an adverse event such as widespread disease or widespread
calamity which prohibits or materially changes the ability of the members as a
whole to deliver cattle to USPB; or

(v)               other material change events of the same scope and magnitude as
those listed in clauses (i) to (iv).

4.          Termination.

(a)          Termination Upon Permanent Disability. 
The employment
of CEO may be terminated by USPB on at least thirty (30) days prior written
notice if the Board of Directors determines that the CEO has become permanently
disabled.  CEO shall be deemed to be “permanently disabled,” as used in this
Section, if CEO has been substantially unable to discharge his duties and
obligations under this Agreement by reason of illness, accident, or disability
for a period of 180 days in any twelve-month period.  Any disputes concerning
the nature or extent of CEO’s disability will be determined by a neutral
physician at the expense of USPB.

(b)          Termination Upon Death. 
The employment of CEO shall
automatically terminate on the date of CEO’s death.

(c)           Termination For Cause. 
The employment of CEO may be
terminated immediately by USPB for cause upon written notice from the Chair of
the Board of Directors to the CEO after a Board determination that cause for
termination exists as provided in this paragraph.  The written notice shall
provide reasonable detail regarding the basis for the termination decision. 
USPB shall have “cause” to terminate CEO, as used in this Subsection, only if
CEO has, and the Board of Directors has determined by resolution that CEO has: 

(1)              
refused or failed, after reasonable written notice that the
refusal or failure would constitute a default under this Agreement, to carry
out any reasonable and material order of the Board of Directors given to him in
writing; 

(2)              
been guilty of a willful breach of the terms of this Agreement; 

(3)              
demonstrated gross negligence or willful misconduct in the
execution of his material assigned duties; 

 

                    

	

 

			
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SIGNATURE
COPY

		
	

 

			 	June
15, 2009

 

 

 

	

USPB/Steven D.
Hunt

			
		CEO Employment Agreement

	

2010-2015

		

 

(4)              
been convicted of a felony or other serious crime; 

(5)              
engaged in fraud, embezzlement or other illegal conduct to the
detriment of USPB; 

(6)              
intentionally imparted confidential information relating to USPB to
a third party, other than in the course of carrying out CEO’s duties, which as
resulted in material damage to USPB; or

(7)              
otherwise fails to reasonably perform his duties and obligations
as contemplated under this Agreement.

(d)         Termination By USPB Other Than For Cause, Death, Or
Disability. 
In addition to the circumstances set forth above in Sections
4(a), 4(b) and 4(c), USPB may terminate CEO’s employment for any reason or no
reason and with or without cause upon thirty (30) days prior written notice to
CEO.

(e)          Termination By CEO Other Than For Good Reason. 
CEO
may terminate his employment under this Agreement for any reason or no reason
upon thirty (30) days prior written notice to USPB.

(f)          Termination By CEO For Good Reason. 
CEO may terminate
his employment immediately at any time for good reason (as hereinafter defined)
upon written notice to USPB.  For purposes of this Subsection, “good reason”
shall mean the occurrence of any of the following:  

(1)              
a significant reduction or adverse alteration in the duties, authorities
or responsibilities as CEO;

(2)              
removal of CEO from, or any failure to re-appoint CEO to, any
titles, offices or positions held by CEO; 

(3)              
a significant reduction by USPB in CEO’s incentive compensation
as provided in this Agreement; or 

(4)              
a material and willful breach by USPB of any of its obligations
to CEO under this Agreement.

5.          Compensation Upon Termination.

(a)              
Termination Upon Death Or Permanent Disability.  If
CEO’s employment is terminated pursuant to Section 4(a) or 4(b) above, CEO
shall be entitled to, and USPB’s obligation under this Agreement shall be
limited to: 

 

 

	

 

			
		9 
	
SIGNATURE
COPY

		
	

 

			 	June
15, 2009

 

 

 

	

USPB/Steven D.
Hunt

			
		CEO Employment Agreement

	

2010-2015

		

 

(1)              
the payment of salary accrued under Section 3(a) to the date of
the termination plus continued monthly payment of salary under Section 3(a)
through the date (“Deemed Termination Date”) that is the earlier of the first
anniversary of the termination or the Expiration Date; 

(2)              
if termination occurs under Section 4(a), provision of fringe
benefits listed in Section 3(g), through the Deemed Termination Date, but
excluding vacation pay, personal and sick days, vehicle, telecommunications,
and 401K contributions, (subject to any necessary consent of applicable
insurers which, if consent is not obtained within 30 days after termination,
then the cash value of the monthly premiums at the date of termination shall be
paid to CEO in equal monthly payments), through the Deemed Termination Date; 

(3)              
payment of the Annual Incentive in the amounts and at the times
provided under Section 3(c) through the employment year in which the Deemed
Termination Date occurs pro-rated for the last employment year based upon the
period through the Deemed Termination Date; 

(4)              
payment of the Long-Term Incentive is as provided in Section
3(d)(1) (less any amounts paid) and Section 3(d)(2) that would have accrued if
the CEO had remained employed under this Agreement through the end of YR 2015,
with payments to be made at the same times specified in Section 3(d)(3); 

(5)              
payment of the Full-Term Incentive under Section 3(e) within
thirty (30) days following the termination, that would have been paid if CEO
had remained employed under this Agreement through the end of YR 2012 (less any
amounts paid) and YR 2015, pro-rated based upon the period of CEO’s employment
under this Agreement through the Deemed Termination Date versus the period of employment
under this Agreement through the Expiration Date;

(6)              
payments under this Section 5(a)(3), (4) and (5) are subject to
the Incentive Cap under Section 3(b) and USPB shall make payments that exceed
the Incentive Cap subject to the $2,000,000 per year Incentive Cap average in
YR 2012 and YR 2015 as provided in Section 3(b).

(b)         Termination By USPB For Cause Or By CEO For Other Than
Good Reason. 
If CEO’s employment is terminated by USPB pursuant to Section
4(c) above, or if CEO terminates his employment pursuant to Section 4(e) above,
USPB’s obligation hereunder shall be limited to the payment of salary accrued
under Section 3(a) to the date of the termination, and the payment of
noncompetition compensation under Section 5(d), unless CEO is terminated pursuant
to Section 4(c)(4) or Section 4(c)(5) in which case noncompetition compensation
will not be paid.

(c)          Termination By USPB Other Than For Cause, Death or
Disability; Termination By CEO For Good Reason. 
If CEO’s employment is
terminated pursuant to Section 4(d) or 4(f) above, CEO shall be entitled to,
and USPB’s obligation under this Agreement shall be limited to: 

 

                                                                 

	

 

			
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(1)              
the payment of the salary accrued under Section 3(a) to the date
of the termination plus continued monthly payment of salary under Section 3(a)
through the Expiration Date;

(2)              
provision of fringe benefits listed in Section 3(g) through the
Expiration Date, but excluding vacation pay, personal and sick days, vehicle,
telecommunications, and 401K contributions, (subject to any necessary consent
of applicable insurers which, if consent is not obtained within 30 days after
termination, then the cash value of the monthly premiums at the date of
termination shall be paid to CEO in equal monthly payments);  

(3)              
payment of the Annual Incentive in the amounts and at the times
provided under Section 3(c) as if CEO has remained employed through the
Expiration Date; 

(4)              
payment of the Long-Term Incentive at the amounts provided in
Section 3(d)(1) (less any amounts paid) and Section 3(d)(2) that would have
accrued if the CEO had remained employed under this Agreement through the end
of YR 2015, with payments to be made at the same times specified in Section
3(d)(3); 

(5)              
the payment of the Full-Term Incentive at the times and in the
amounts under Section 3(e) as if CEO had remained employed through the end of
YR 2012 (less any amounts paid) and through the end of  YR 2015; 

(6)              
payments under this Section 5(c)(3),(4) and (5) are subject to
the Incentive Cap under Section 3(b) and USPB shall make payments that exceed
the Incentive Cap subject to the $2,000,000 per year Incentive Cap average in
YR 2012 and YR 2015 as provided in Section 3(b); and

(7)              
payment of the noncompetition compensation under Section 5(d).

(d)         Noncompetition Compensation.  In the event that CEO’s
employment is terminated (including by expiration of this Agreement), other
than by death or permanent disability under Section 4(a) or Section 4(b) or for
cause under Sections 4(c)(4) or 4(c)(5), and CEO is not employed by USPB or one
of the USPB Entities (defined in Section 7(a)); then USPB shall provide
noncompetition compensation for each of the eighteen (18) months first
following the termination of employment of CEO with USPB, provided USPB may
terminate noncompetition compensation prior to the end of the eighteen month period
if the Board of Directors determines the CEO violated the noncompetition
restriction in Section 6(a) or any of the remaining obligations under Section
6.  The period in which noncompetition compensation is provided, from start to
expiration or earlier termination, is the “Noncompetition Period.” 
Noncompetition compensation shall be paid during the Noncompetition Period as
follows:    

 

  

	

 

			
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(1)              
Monthly Payments.  USPB shall pay CEO an additional
month’s salary in an amount equal to the annual Base Salary that would be paid
to CEO under this Agreement if CEO was employed or CEO’s Base Salary at the
time of termination, whichever is greater, divided by twelve (12), which
payments shall be paid at normal salary payment intervals in effect for USPB’s
management personnel at the date of termination; and 

(2)              
Group Benefits.  USPB shall also provide to CEO the
benefits provided to other employees of USPB such as group medical, life,
disability, and accidental death and dismemberment insurance, but excluding
paid vacations, personal and sick days, allowances, telecommunications
equipment or services, expense reimbursement (except on prior written
approval), or 401K contributions, subject to any necessary consent of
applicable insurers.  If the consent of the applicable insurers is not received
within 30 days or in the event any applicable law or any benefit plan referred
to in Section 3(g)  prohibits or otherwise precludes the provision of the
benefits to CEO, the cash value of the current premiums will be distributed to
CEO in equal monthly payments during the Noncompetition Period. The value of
any prohibited or precluded benefits shall be equal to the sum of the amount of
premium, payment, or contribution that USPB would have made on behalf of the
CEO for the benefits during the Noncompetition Period.

6.         Certain CEO Covenants. CEO expressly covenants and
agrees to and with USPB as set forth in this Section:

(a)       Noncompetition.  CEO recognizes and
acknowledges that he has knowledge of USPB and
its affiliates (including National Beef Packing Co., LLC and entities owned or
controlled by National Beef Packing Co., LLC and its affiliates), their
operations, strategies and plans (collectively the “Affiliates”) which was
acquired during his employment with USPB.  During the employment term and for a
period of eighteen (18) months after the termination of the CEO’s employment
with USPB, CEO shall not, without the written consent of USPB, within the
United States of America, participate through management or control or consult
or be employed by any business or enterprise, other than USPB and its
Affiliates, which is engaged in the beef packing or processing industry that
involves any business activity that competes with the business of USPB and its
Affiliates.

	

 

			
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(b)       Confidential Information.
CEO recognizes the interests
of USPB and its Affiliates in maintaining the confidential nature of its
respective proprietary information.  CEO shall not, during the Employment Term
or at any time after the termination of employment with the USPB, in any manner
that does not promote the interests of USPB and its Affiliates, directly or
indirectly, publish, disclose or use, or authorize anyone else to publish,
disclose or use, any secret, confidential or proprietary information of USPB,
or its Affiliates which USPB and its Affiliates intend to be maintained as
confidential information that is in the public domain through no fault of CEO,
which is information acquired by CEO in connection with CEO’s employment with
USPB or work with the USPB prior to the date of this agreement and relates to
any aspect of the operations, activities, research, investigations or
obligations of USPB, or its Affiliates, including confidential material or
information relating to the business, customers, suppliers, trade or industrial
practices, trade secrets, technology, know-how or intellectual property of USPB
and its Affiliates (collectively, the “Confidential Information”). Confidential
Information does not include all records, files, data, documents and the like
relating to suppliers, customers, costs, prices, systems, methods, personnel,
equipment and other materials relating to USPB, or the its Affiliates
(including, but not limited to, the Confidential Information), shall be and
remain the sole property of USPB or its Affiliates.  Any disclosure of
Confidential Information by the CEO shall include appropriate protection for
the type of information to protect USPB’s interests in the Confidential
Information.  Upon termination of CEO’s employment with USPB, CEO shall not
remove from USPB’s premises, or retain, any of the Confidential Information
materials described in this Section.  

(c)        Return of Information.  Upon termination of CEO’s
employment with USPB for whatever reason, CEO shall return to or leave all
Confidential Information with USPB and its Affiliates, without making or
retaining copies of the Confidential Information, including all documents,
records, notebooks and other repositories containing Confidential Information.

(d)        Breach of Covenants. 
If CEO breaches any of the
covenants and agreements contained in this Section 6, then, in addition to any
other rights or remedies of USPB, USPB shall have at its option the following
specific rights and remedies: (1) CEO’s right to any payments pursuant to
Section 5(d) may be terminated by USPB; (2) USPB shall have the right to
enforce any legal or equitable remedy (including injunctive relief) that may be
available to USPB; and (3) USPB shall be entitled to relief as necessary to
remedy any willful breach of the covenants and agreements under this Section
that injures USPB or its Affiliates.

(e)        Covenants Survive Termination.  Except to the extent
otherwise expressly limited to a restricted period in Section 6(a), all
covenants and provisions contained in this Section 6 shall survive any
termination of CEO’s employment with Company.

7.          Indemnification.

 

	

 

			
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(a)         Indemnified Claims.  USPB shall, to the extent
not expressly prohibited by the Delaware Limited Liability Company Act as set
forth in the Delaware Code commencing with Section 18-101 of the Delaware Code,
indemnify CEO against reasonable expenses, including attorneys' fees, and
against loss or liability incurred by or asserted against CEO in a legal matter
or proceeding in which CEO is a party or is threatened to be made a party
because CEO is, or was, an officer or employee of USPB or an affiliate of USPB
(specifically including, but not limited to, any acts of the CEO related to
affiliates of USPB, National Beef Packing Co., LLC and its affiliates, with
USPB and all of these entities referred to as “USPB Entities”).  USPB’s
obligation to indemnify and hold harmless includes,
but is not limited to, all pending and future litigation and claims against the
USPB Entities, its officers, employees and directors which may impose liability
on CEO including those claims against the USPB Entities, and claims relating to
investigations relating to tort claims against the USPB Entities, deceptive
trade practices and anti-competitive conduct of the USPB Entities, or their
officers, employees and directors. The expenses against which CEO is
indemnified include, but are not limited to, all reasonable attorney fees and
other costs associated with legal representation for representation and costs
that are not reasonably covered by the USPB Entities.  USPB shall
advance amounts to cover expenses, or pay expenses, that are included in the
foregoing indemnity, upon request from the CEO. These indemnification rights
shall not be deemed to exclude any rights to which the CEO may otherwise be
entitled.   The foregoing right to indemnification shall:  (1) inure to the CEO
whether or not he is an officer or employee of the USPB Entities at the time
the liability or expenses are asserted, imposed or incurred and whether or not
the claim asserted is based on matters which pre-date this Indemnification
Agreement; and (2) extend to the CEO's heirs and legal representatives in the
event of the CEO's death.  

(b)         Exclusions from Indemnification.  The right to
indemnification in Subsection 8(a) does not include any liability or expense
relating to a matter in which the CEO is finally adjudged to have breached or
failed to perform a duty that CEO owes to the USPB Entities and the breach or
failure to perform constitutes any of the following:  (1) a willful failure to
deal fairly with the USPB Entities, or USPB or its members in connection with a
matter in which the CEO has a material conflict of interest; (2) a violation of
the criminal law, unless the CEO had reasonable cause to believe that CEO’s
conduct was lawful or no reasonable cause to believe that CEO’s conduct was
unlawful; (3) a transaction from which the CEO derived an improper personal
profit; or (4) willful misconduct.   Determination of whether the CEO is
entitled to the indemnification provided for above shall be made as provided in
the Delaware Limited Liability Company Act.

(c)         Insurance.  USPB further agrees that during the term
of the Employment Agreement and for a period of six (6) years after termination
of the Employment Agreement, USPB shall maintain in full force and effect a
director’s and officer’s insurance policy insuring the CEO against liability
asserted and incurred by the CEO in the CEO’s capacity as an officer, manager,
employee or agent of USPB Entities or arising from the CEO’s status as an
officer, manager, employee or agent of USPB Entities.  The insurance shall be
in  amounts and contain terms and conditions as are reasonable and customary
for a company of the size and scope of USPB participating in the industry and
business in which USPB is engaged, all as determined by the mutual agreement of
USPB and the CEO. 

(d)         Claims After Termination of Employment.  If CEO is no
longer employed by USPB and existing or new claims are made against USPB
Entities or the CEO, the CEO shall be paid (at a daily rate equal to CEO’s Base Salary at the time of termination
divided by 260) for all time spent as a witness, for depositions, and similar
pre-approved claim-related expenses to defend against an indemnified claim. 
The USPB Entities shall promptly make information of USPB Entities available to
CEO to defend the claims which may impose liability on CEO.         

8.         Other Provisions.

(a)         Successors and Assigns.  This Agreement shall
be binding on and inure to the benefit of any successor of USPB.  Any successor
shall absolutely and unconditionally assume all of USPB’s obligations under
this Agreement.

(b)         Disputes.  Any dispute, controversy or claim for
damages arising in connection with this agreement shall be settled exclusively
by arbitration in Kansas City, Missouri, at a location designated by USPB by an
arbitrator selected by the parties and in accordance with the rules of the
American Arbitration Association then in effect.  The parties shall share
equally the expenses of arbitration, unless otherwise agreed.

 

	

 

			
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(c)         Governing Law.  The validity, interpretation,
construction, performance, enforcement and remedies relating to this agreement
and the rights and obligations of the parties shall be governed by the
substantive laws of the state of Kansas.

(d)         Entire Agreement.  This Agreement constitutes the
entire agreement and understanding between the CEO and USPB in reference to all
matters in this Agreement.  This Agreement replaces and rescinds any prior
agreements or understandings between CEO and USPB.

 

CEO

 

 

/s/ Steven D. Hunt                    

Steven D. Hunt

 

 

U.S. PREMIUM BEEF,
LLC

 

 

By:       /s/ Mark
Gardiner         

       Mark Gardiner,
Chair

       Board of
Directors

 

Date:    July 10,
2009               

 

 

	

 

			
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Exhibit A

Compensation Example

 

 

 

 

 

	

 

			
		A-1
	
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			 	June
15, 2009Exh 10.17-Form 10K-12/31/08

EXHIBIT 10.17

SECURITY AGREEMENT

        THIS SECURITY AGREEMENT ("Agreement") is made as of the 6th day of October, 2008, by and between SigmaSYS Corp., a Delaware corporation ("SigmaSYS"), Sandy L. Hoover, Trustee of the Exemption Trust, a sub-trust of the Robert T. Stewart Separate Property Trust dated March 17, 2003 (the "Exemption Trust"), Sandy L. Hoover, Trustee of the Sandy L. Hoover Trust, a sub-trust of the Robert T. Stewart Separate Property Trust dated March 17, 2003 (the "Q-Tip Trust" and, together with the Exemption Trust, each a "Secured Party"), and Sandy L. Hoover (the "Secured Party Representative").

        For good and valuable consideration, the receipt of which is hereby acknowledged, and intending to be legally bound, the parties agree as follows:

        1.     SigmaSYS grants to the Secured Parties a security interest in its Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of Credit Rights, Payment Intangibles and Supporting Obligations and all Proceeds, all now owned and hereafter acquired and all proceeds thereof, as well as all now existing and hereafter acquired books, records, writings, information and other property relating to, embodying, incorporating or referring to, any of the foregoing (the "Collateral"). Capitalized terms used but not defined in this Agreement have the respective meanings given them in the Delaware Uniform Commercial Code as the same may be amended from time to time.

        2.     The security interest is granted to secure the payment by inTEST Corporation, a Delaware corporation ("Parent") of (i) Parent's promissory note to the Exemption Trust dated October 6, 2008 and (ii) Parent's promissory note to the Q-Tip Trust dated October 6, 2008 (collectively, the "Notes"), which Notes have an aggregate original principal amount of $1,524,908.42 (the "Obligations"). Upon the repayment of all of the Obligations, the security interest created hereby shall terminate and all rights in and to the Collateral shall revert to SigmaSYS and the Secured Parties will, at the expense of SigmaSYS to the extent permitted by law, execute and deliver to SigmaSYS such documents as SigmaSYS reasonably requests to evidence the termination of such security interest and the release of such Collateral.

        3.     SigmaSYS hereby covenants, represents and warrants as follows:

               (a)    SigmaSYS is the sole owner of and has good and marketable title to the Collateral (or, in the case of after-acquired Collateral, at the time SigmaSYS acquires rights in the Collateral) and, except as otherwise disclosed in writing to Secured Party Representative, no person has (or, in the case of after-acquired Collateral, at the time SigmaSYS acquires rights therein, will have) any right, title, claim or interest (by way of security interest, mortgage, pledge, lien, charge or other encumbrances in), against or to the Collateral, except for:

                      (i)     any statutory lien for taxes not yet due, any statutory lien of a landlord, carrier, warehouseman, mechanic or materialman incurred for sums not yet due, purchase money claims and claims securing retail payments under capital lease agreements, and liens that are immaterial in character, amount and extend and which do not materially detract from the value or interfere with the present use of the properties they affect (the foregoing, collectively, "Permitted Encumbrances"); and

                      (ii)    liens junior in priority to the Secured Parties' security interest in the Collateral ("Junior Liens").

               (b)    The aggregate book value of the Collateral that is not subject to Junior Liens shall, as of the last day of each calendar quarter while either of the Notes remains outstanding, be not less than One Hundred Ten Percent (110%) of the aggregate outstanding principal amount of the Notes.

               (c)    SigmaSYS hereby agrees to allow, at all reasonable times, and from time to time, without the necessity of any prior notice or demand, each Secured Party by or through any of its officers, agents, attorneys, accountants, or other representative, to examine or inspect the Collateral wherever the same may be located and to examine, inspect, and make copies of SigmaSYS's books and records respecting any or all of the Collateral.

               (d)    SigmaSYS shall pay all taxes and assessments upon the Collateral promptly when due unless reasonably contested in good faith.

               (e)    To the knowledge of SigmaSYS after diligent inquiry, all information heretofore, herein or hereafter supplied to the Secured Party Representative or to either Secured Party by or on behalf of SigmaSYS with respect to the Collateral is accurate and complete in all material respects.

               (f)    The execution, delivery and performance of this Agreement are within the corporate power of SigmaSYS, have been duly authorized, are not in contravention of law or any of the terms of SigmaSYS's articles of incorporation or bylaws, or of any other indenture, agreement or undertaking to which SigmaSYS is a party or by which it is bound.

               (g)    SigmaSYS shall do, make, execute and deliver all such additional further acts, things, deeds, assurances, and instruments as Secured Party Representative may reasonably require, to assure to the Secured Parties their rights hereunder in or to the Collateral.

        4.     The following shall constitute events of default (each an "Event of Default") hereunder:

               (a)    The occurrence of a default under either Note if the same is not cured within thirty (30) days after written notice to SigmaSYS.

               (b)    The failure of SigmaSYS to perform any covenant under this Agreement if such failure is not cured within thirty (30) days after written notice to SigmaSYS.

               (c)    SigmaSYS becomes insolvent, a receiver is appointed for any part of SigmaSYS's property, SigmaSYS makes an assignment for the benefit of creditors, or any proceeding is commenced either by SigmaSYS or against SigmaSYS under any bankruptcy or insolvency laws.

        5.     Upon the occurrence of any Event of Default, and at any time thereafter, each Secured Party shall have all of the rights and remedies of a secured party under the Delaware Uniform Commercial Code, including the right to sell the Collateral at public sale without the necessity of first obtaining a judicial decree authorizing sale. Such remedies shall be in addition to any other remedies provided by law or in any other document executed by SigmaSYS.

        6.     So long as no Event of Default shall have occurred and be continuing or would result from any of the following actions, SigmaSYS may in the ordinary course of its business dispose of any Collateral which constitutes tangible personal property and enforce and collect Collateral which constitutes Accounts or General Intangibles, and SigmaSYS may retain, use and apply for its corporate purposes the Collateral and proceeds thereof.

        7.     SigmaSYS hereby agrees that, so long as an uncured Event of Default continues, at any time, without presentment, or demand, and without affecting or impairing in any way the rights of Secured Party with respect to the Collateral, the obligations of SigmaSYS hereunder or the Notes, Secured Party may - but shall not be obligated to and shall incur no liability to SigmaSYS or any third party for failure to - take any action that SigmaSYS is obligated by this Agreement to do and to exercise such rights and powers as SigmaSYS might exercise with respect to the Collateral, and SigmaSYS hereby irrevocably appoints Secured Party as its attorney-in-fact to exercise such rights and powers. SigmaSYS agrees to reimburse Secured Party upon demand for any costs and expenses, including, without limitation, reasonable attorneys' fees, Secured Party may incur while acting as SigmaSYS's attorney-in-fact hereunder, all of which costs and expenses are included in the obligations secured hereby. SigmaSYS further agrees that Secured Party will not be responsible for any act of commission or omission, excluding willful misconduct or gross negligence, arising out of the exercise of the rights and powers of SigmaSYS by Secured Party as attorney-in-fact. SigmaSYS shall pay all costs of recording any financing statements executed in connection with this Agreement.

        8.     Each Secured Party hereby appoints the Secured Party Representative as its agent for purposes of holding and enforcing rights and remedies under this Agreement or against any Collateral, and authorizes the Secured Party Representative to take such action on its behalf and to exercise such powers and discretion as this Agreement permits, in each case with respect to each Secured Party's respective interest in the Collateral, and Secured Party Representative hereby accepts such appointment. Each Secured Party and the Secured Party Representative acknowledges and agrees that SigmaSYS may rely on any notice from, or act of, the Secured Party Representative hereunder as the act of the Secured Parties. 

        9.     Any demand or notice that either party may give to the other shall be mailed by certified mail, return receipt requested, addressed to the Secured Parties at 1723 Hacienda Place, El Cajon, CA 92020, Attn: Sandy L. Hoover (it being acknowledged that any such demand or notice delivered to that address shall constitute delivery to both Secured Parties), and addressed to SigmaSYS at c/o inTEST Corporation, 7 Esterbrook Lane, Cherry Hill NJ 08003, attn: Hugh T. Regan, Jr. Either party may change its address for notices by a notice duly given to the other. The parties shall execute and deliver all further instruments and documents and shall take any other action as may be reasonably required to more effectively carry out the terms and provisions of this Agreement. This Agreement constitutes the entire agreement between the parties concerning this subject matter and may be amended, waived, or discharged only by an agreement in writing signed by all of the parties. If any provision of this Agreement is determined by a court to be invalid, illegal or unenforceable, this Agreement shall be construed as if that provision had been amended to the extent necessary to cause this Agreement to be enforceable and to preserve the transactions contemplated by this Agreement to the greatest extent possible. This Agreement shall be binding upon and inure to the benefit of the parties and their respective personal representatives and successors. The laws of the State of Delaware shall govern the validity and construction of this Agreement, without regard to the principles of conflict of laws, and the parties submit to the jurisdiction of the courts of the State of Delaware and the venue of the U.S. District Court for the District of Delaware. Each party has participated to a significant degree in the drafting and preparation of this Agreement, and no provision shall be construed against a party on the basis of that party's being the "drafter."

        10.    This Agreement may be executed by facsimile and in one or more counterparts, each of which shall be deemed an original but all of which counterparts collectively shall constitute one instrument. The transmission of a signed counterpart of this Agreement by facsimile or by portable document file ("PDF") shall have the same force and effect as delivery of an original signed counterpart of this Agreement, and shall constitute valid and effective delivery for all purposes. 

 

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(the signature page follows)

 

 

 

 

 

        IN WITNESS WHEREOF, the parties have executed this Security Agreement as of the day and year first above written.
SigmaSYS Corp.

By:/s/ Hugh T. Regan, Jr. (SEAL)

Name:Hugh T. Regan, Jr.

Title: Treasurer

SECURED PARTIES:

The Exemption Trust, a sub-trust of the Robert T. Stewart Separate Property Trust dated March 17, 2003

By:/s/ Sandy L. Hoover

Name:Sandy L. Hoover

Title: Trustee

The Sandy L. Hoover Trust, a sub-trust of the Robert T. Stewart Separate Property Trust dated March 17, 2003

By:/s/ Sandy L. Hoover

Name:Sandy L. Hoover

Title: Trustee

SECURED PARTY REPRESENTATIVE:

/s/ Sandy L. Hoover

Sandy L. Hoover

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