Document:

Exhibit_10_3z-IAESideLetter35

Exhibit 10.3(z)

628 Hebron Avenue, Suite 400
Glastonbury, CT 06033 USA

March 15, 2012

Mr. Mark Powers
Chief Financial Officer
JetBlue Airways Corporation
27-01 Queens Plaza North
Long Island City, NY 11101

		
	Subject:
	Side Letter No. 35 to the V2500 General Terms of Sale Agreement between JetBlue Airways Corporation and IAE International Aero Engines AG dated May 4, 1999.

Ladies and Gentlemen:

We refer to the General Terms of Sale Agreement dated May 4, 1999 between IAE International Aero Engines AG (“IAE”) and JetBlue Airways Corporation (“JetBlue”), as amended from time to time, such contract being hereinafter referred to as the "Agreement".  

Unless expressly stated to the contrary, and to the extent possible, capitalized terms used in this Side Letter Agreement No. 35 (“Side Letter No. 35”) shall have the same meaning given to them in the Agreement. In the event of a conflict between the terms and provisions of this Side Letter No. 35 and those of the Agreement, this Side Letter No. 35 shall govern.

WHEREAS, The Parties wish to schedule or reschedule, as applicable, the delivery of two (2) Spare Engines to [***] 2012 and a further two (2) Spare Engines to [***] 2012.

NOW, THEREFORE, the Parties hereby agree as follows:
		
	1.
	Revision to Exhibit B-2 to the Agreement

		
	1.1.
	The Parties hereby agree that Exhibit B-2 to the Agreement, Purchased Items, Price, Escalation Formula and Delivery, is hereby deleted in its entirety and replaced by the revised delivery schedule attached as Appendix 1 hereto which captures the amendments as set forth in Clause 3 below.

		
	2.
	Revision to Exhibit A to Side Letter 33 to the Agreement

		
	2.1.
	The Parties hereby agree that Exhibit A to the Side Letter No. 33 to the Agreement, 2011 Incremental Spare Engine Delivery Schedules, is hereby deleted in its entirety and replaced by the revised delivery schedule attached as Appendix 2 hereto which captures the amendments as set forth in Clause 3 below.

[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for Confidential Treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

		
	3.
	Spare Engine Rescheduling

		
	3.1.
	The delivery of Spare Engine No. 27 (as listed in Appendix 1 hereto) is deferred from [***] 2012 and rescheduled for delivery in [***]  2012.  

		
	3.2.
	The delivery of 2011 Incremental Spare Engine No. 5 (as listed in Appendix 2 hereto) is scheduled for delivery in [***]  2012.

		
	3.3.
	The delivery of Spare Engine No. 28 (as listed in Appendix 1 hereto) is accelerated from [***]  2012 and rescheduled for delivery in [***]  2012.

		
	3.4.
	The delivery of 2011 Incremental Spare Engine No. 6 (as listed in Appendix 2 hereto) is scheduled for delivery in [***]  2012.

		
	3.5.
	The Purchase Price for the Spare Engines as detailed in Clauses 3.1 and 3.2 above (each a “[***]  2012 Spare Engine” and collectively the “[***]  2012 Spare Engines”) shall [***] in the case of Spare Engine No. 27 [***] in the case of 2011 Incremental Spare Engine No. 5.   

		
	3.6.
	In the event that JetBlue takes delivery of either [***] 2012 Spare Engine after [***]  2012, and if the delay is not caused or requested by IAE, then the Purchase Price balance for each such [***] 2012 Spare Engine shall [***]  in accordance with applicable escalation formula contained in Exhibit B-2 to the Agreement.

		
	3.7.
	The Purchase Price for the Spare Engines as detailed in Clauses 3.3 and 3.4 above (each an “[***]  2012 Spare Engine” and collectively the “[***]  2012 Spare Engines”) [***] .  

		
	3.8.
	In the event that JetBlue takes delivery of either [***]  2012 Spare Engine after [***]  2012, and if the delay is not caused or requested by IAE, then the Purchase Price balance for each such [***]  2012 Spare Engine shall [***]  in accordance with applicable escalation formula contained in Exhibit B-2 to the Agreement.

		
	3.9.
	The [***]  2012 Spare Engines, with engine serial numbers V16227 and V16235, will be delivered to JetBlue from IAE’s designated facility [***] (the “IAE Spare Engine Tooling”).  IAE agrees to [***].  JetBlue agrees to [***].

		
	3.10.
	[***] shall be responsible for the transportation of the IAE Spare Engine Tooling from JetBlue’s facilities in Orlando, FL to IAE’s designated facilities in Middletown, CT.

		
	4.
	Miscellaneous

		
	3.1
	This Side Letter No. 35 is not, and shall not be construed as, a waiver of either Party’s rights or remedies.

		
	3.2
	This Side Letter No. 35 contains matters of a confidential and proprietary nature and is delivered on the express condition that its terms shall not be disclosed to any third party or reproduced in whole or in part for anyone other than the parties hereto without the other party's prior written consent, unless otherwise stated herein.

		
	3.3
	This Side Letter No. 35 constitutes a valid, legal, binding obligation.  This Side Letter No. 

[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for Confidential Treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

35 shall be construed and interpreted in accordance with the laws of the State of Connecticut, United States of America with the exception of its conflict of law provisions.  
		
	3.4
	This Side Letter No. 35 may be executed in one or more counterparts, each of which when so executed and delivered shall be an original but shall constitute one and the same instrument.

Except as expressly amended by this Side Letter No. 35, all provisions of the Agreement (as amended from time to time by various side letters and amendments) remain in full force and effect.

	
		
	Very truly yours,
	Agreed to and accepted on behalf of

	IAE International Aero Engines AG
	JetBlue Airways Corporation

	_/s/ Debarshi Mandal_____________ 
By  
	_/s/ Mark D. Powers_____________________
By  

	_Debarshi Mandal________________
Name
	 _Mark D. Powers_______________________         
Name  

	_Commercial Manager____________
Title
	__CFO________________________________
Title

[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for Confidential Treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

APPENDIX 1 

Exhibit B-2
 
Purchased Items, Price, Escalation Formula and Delivery

As of March 2012
____________________________________________________________________________________
Glossary Notes:

		
	•
	Delivered Firm Spare Engines are indicated by Italics typeface

		
	•
	Applicable escalation formulae, indicated for the calculation of Spare Engine pricing and credits, are in accordance with Side Letter No. 13 and Side Letter No. 17 to the Agreement, as amended by Side Letter No. 25 to the Agreement.

____________________________________________________________________________________

	
							
	No. 1
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
	[***] -99

	No. 2
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
	[***] -00

	No. 3
	V2527-A5
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	Formula I
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	No. 4
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	No. 5
	V2527-A5
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	Formula I
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	No. 6
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	Formula I
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	No. 7
	V2527-A5
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	Jan-03
	1
	Formula I
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	No. 8
	V2527-A5
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	Formula I
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	No. 9
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
	[***] -05

	No. 10
	V2527-A5
	$[***]
	Jan-03
	1
	Formula II
	[***] -06

	No. 11
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
	[***] -06

	No. 12
	V2527-A5
	$[***]
	Jan-03
	1
	Formula II
	[***] -07

	No. 13
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
	[***] -07

	No. 14
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
	[***] -07

	No. 15
	V2527-A5
	$[***]
	Jan-03
	1
	Formula II
	[***] -07

	No. 16
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
	[***] -07

	No. 17
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
	[***] -08

	No. 18
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
	[***] -08

	No. 19
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
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	No. 20
	V2527-A5
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	Jan-03
	1
	Formula I
	[***] -10

	No. 21
	V2527-A5
	$[***]
	Jan-03
	1
	Formula II
	[***] -10

	No. 22
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
	[***] -10

	No. 23
	V2527-A5
	$[***]
	Jan-03
	1
	Formula I
	[***] -11

	No. 24
	V2533-A5
	$[***]
	Jan-03
	1
	Formula II
	[***] -11

	No. 25
	V2533-A5
	$[***]
	Jan-03
	1
	Formula II
	[***] -11

	No. 26
	V2533-A5
	$[***]
	Jan-03
	1
	Formula II
	[***] -11

	No. 27
	V2533-A5
	$[***]
	Jan-03
	1
	Formula II
	[***] -12

	No. 28
	V2533-A5
	$[***]
	Jan-03
	1
	Formula II
	[***] -12

[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for Confidential Treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

 ESCALATION FORMULA I

		
	1.
	Any unit base price or other sum expressed to be subject to escalation from a base month to a month of delivery or other date of determination in accordance with the IAE Escalation Formula will be subject to escalation in accordance with the following formula:

P = Pb ( [***]  L + [***]   M + [***]   E )
 Lo      Mo        Eo
Where:

P = the invoiced purchase price or escalated sum rounded to the nearest U.S. Dollar

Pb = unit base price or other sum.

Lo = the “North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I” as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the Labor for the month preceding the base month by four months.

L = the “North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I” as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the month preceding the month of delivery or other date of determination by four months.

Mo = the “Producer Price Index, Code 10, for Metals and Metal Products” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the base month by four months.

M = the “Producer Price Index, Code 10, for Metals and Metal Products” for the month preceding the base month by four months.

Eo = the “Producer Price Index, Code 5, for Fuel and Related Products and Power” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the base month by four months.

E = the “Producer Price Index, Code 5, for Fuel and Related Products and Power” for the month preceding the base month by four months.

The values of the factors   [***]   L + [***]   M + [***]   E 
 Lo      Mo       Eo

Respectively, shall be determined to the nearest fourth decimal place.  If the fifth decimal is five or more, the fourth decimal place shall be raised to the next higher number.

If the U.S. Department of Labor ceases to publish the above statistics or modifies the basis of their calculation, then IAE may substitute any officially recognized and substantially equivalent statistics.

The Basic Contract Prices contained in this Exhibit B are subject to escalation from a Base Month of January 2003 to the month of delivery using using Lo, Mo and Eo values for September 2002.

If the application of the formula contained in this Exhibit B results in a Purchase Price which is lower than the Basic Contract Price, the Basic Contract Price will be deemed to be the Purchase Price for such Supplies.

[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for Confidential Treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

ESCALATION FORMULA II
		
	1.
	Any unit base price or other sum expressed to be subject to escalation from a base month to a month of delivery or other date of determination in accordance with the IAE Escalation Formula will be subject to escalation in accordance with the following formula:

		
	Pi
	=    (Pb+F) x CPI where:

		
	Pi
	=    the invoiced purchase price or escalated sum rounded to the nearest U.S. Dollar.

Pb    =    unit base price or other sum.

F    =    [***] (N)(Pb)

N    =    the calendar year of scheduled delivery or other date of determination minus 2003

CPI    =    [***]  (L) + [***]  (M)

L    =    Labor Ratio defined below

M    =    Material Ratio defined below

IAE’s Composite Price Index (“CPI”) is the sum of [***] percent of the Labor ratio and [***] percent of the Material Ratio, with the sum rounded to the nearest ten thousandth.
The quarterly value published for the Employment Cost Index will be deemed to apply to each month of the quarter.
The Labor Ratio is the “North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I” as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the month of scheduled delivery for each engine/equipment; divided by the value of “North American Industry Classification System (NAICS) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I” for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the Base Month. To be clear the quarterly value of CIU2023211000000I will apply to each month of a given quarter.

The Material Ratio is the “Producer Price Index, Industrial Commodities, WPU03thru15”, as published monthly by the Bureau of Labor Statistics, U.S. Department of Labor, for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the month of scheduled delivery for each engine/equipment; divided by the value for Industrial Commodities for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the Base Month.

For a given month, the escalation shall be computed by using the applicable Index value, which the Bureau has published as the time of delivery or other date of determination.
		
	2.
	If the U.S. Department of Labor changes the base year for determination of the Index values as defined above, such re-based values will be incorporated in the escalation calculation.

		
	3.
	If the U.S. Department of Labor revises the methodology used for the determination of the values to be 

[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for Confidential Treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

used to determine the CPI or, for any reason, has not released values needed to determine the CPI, IAE, in its sole discretion, shall select a substitute for such values from data published by the Bureau of Labor Statistics or otherwise make revisions to the escalation formula such that the escalation will as closely as possible approximate the result that would have been attained by continuing the use of the original escalation formula and values as they may have fluctuated during the applicable time period.

		
	4.
	The invoiced purchase price, which in no event shall be less than the unit base price, shall be the final price.  If the calculated sum of L + M is less than 1.0000, then the value of the sum is adjusted to 1.0000.

[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for Confidential Treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

APPENDIX 2 

Exhibit A

2011 Incremental Spare Engine Delivery Schedule
As of March 2012
____________________________________________________________________________________
Glossary Notes:

		
	•
	Delivered 2011 Incremental Spare Engines are indicated by Italics typeface

____________________________________________________________________________________

	
							
	No. 1
	V2527-A5
	$[***]
	Jan-11
	1
	Formula II
	[***] -11

	No. 2
	V2527-A5
	$[***]
	Jan-11
	1
	Formula II
	[***] -11

	No. 3
	V2527-A5
	$[***]
	Jan-11
	1
	Formula II
	[***] -11

	No. 4
	V2527-A5
	$[***]
	Jan-11
	1
	Formula II
	[***] -11

	No. 5
	V2527-A5
	$[***]
	Jan-11
	1
	Formula II
	[***] -12

	No. 6
	V2527-A5
	$[***]
	Jan-11
	1
	Formula II
	[***] -12

[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for Confidential Treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.f8k1206_x101-cmgo.htm

MUTUAL GENERAL RELEASE

THIS MUTUAL GENERAL RELEASE, is made as of the 20th day of April, 2012 by and among: A TO Z HOLDINGS, LLC, a Florida Limited Liability Company (“A TO Z”), PRIME EQUITY FUND IV LLC, a Delaware Limited Liability Company (“PRIME”), INFINITE ALPHA, INC., an Illinois Corporation (“INFINITE”), JRC LIMITED INC., a Florida Corporation (“JRC”), CLARE LLC, an Illinois Limited Liability Company (“CLARE”), DAVID FIDLER, a resident of Chicago, Illinois (“FIDLER”), ERIK TUCKER, a resident of Chicago, Illinois (“TUCKER”), GLEN LAKEN, a resident of Chicago, Illinois (“LAKEN”), JOHN KATSOCK, a resident of Juniper, Florida (“KATSOCK”), CMG HOLDNGS GROUP, INC., a Nevada Corporation (‘CMG’), AUDIOEYE, an Arizona Corporation (“AUDIOEYE”) ALAN MORELL, a resident of Santa Barbara, California (“MORELL”), and JAMES ENNIS, a resident of Croaten, New York (“ENNIS”) (individually a “PARTY” and collectively the “PARTIES”);

WHEREAS, A TO Z, PRIME, INFINITE, JRC, CLARE, FIDLER, TUCKER, LAKEN, and KATSOCK claim that they have a financial claim against CMG, AUDIOEYE, MORRELL and ENNIS; and

WHEREAS, CMG, AUDIOEYE, MORRELL and ENNIS claim that they have a financial claim against A TO Z, PRIME, INFINITE, JRC, CLARE, FIDLER, TUCKER, LAKEN, and KATSOCK; and

WHEREAS, A TO Z, PRIME, INFINITE, JRC, CLARE, FIDLER, and TUCKER, filed a lawsuit against CMG, AUDIOEYE, MORRELL and ENNIS in the District Court for Clark County, Nevada, Case No.: A-11-639-611-B Dept. No: XI (the “ACTION”); and

WHEREAS, the PARTIES without admitting or denying any liability on any of the other PARTIES have concluded after advice from their own legal counsel that it is best for all the PARTIES herein to settle all their disputes, hereby agree that CMG shall pay A TO Z, PRIME, INFINITE, JRC, CLARE, FIDLER, TUCKER, LAKEN, and KATSOCK together, Ten Thousand ($10,000) Dollars payable to the Trust Account of FOX ROTHSCHILD LLP, 3800 Howard Hughes Pkwy., Suite 500, Las Vegas Nevada 89169 attorneys for A TO Z, PRIME, INFINITE, JRC, CLARE, FIDLER, TUCKER, LAKEN, and KATSOCK as complete and total settlement of any and all claims between the PARTIES.

WHEREAS, the PARTIES desire to resolve their outstanding relationships subject to the terms conditions and releases contained herein;

NOW THEREFORE, the PARTIES hereto, for good and valuable consideration, and intending to be legally bound, the PARTIES do hereby agree as follows:

1. Settlement.  CMG shall pay A TO Z, PRIME, INFINITE, JRC, CLARE, FIDLER, TUCKER, LAKEN, and KATSOCK together, Ten Thousand ($10,000) Dollars payable to the Trust Account of SEC ATTORNEY LLC, 12 Corporate Drive, Shelton CT 06484, escrow agent for A TO Z, PRIME, INFINITE, JRC, CLARE, FIDLER, TUCKER, LAKEN, and KATSOCK.

 

  

1

  

 

2. Release.  For and in consideration of the terms contained herein, and except as expressly provided to the contrary in this Agreement, A TO Z, PRIME, INFINITE, JRC, CLARE, FIDLER, TUCKER, LAKEN, and KATSOCK on the one hand, and CMG, AUDIOEYE, MORRELL and ENNIS on the other hand, do hereby release, remise, hold harmless and forever discharge each other, as well as their successors, agents, servants, workmen, subsidiaries, directors, shareholders, employees, assigns and attorneys, of and from any and all manner of actions, causes of  action, suits, debts, dues, accounts,  damages, bonds, covenants, notes, contracts, agreements, judgments, demands and claims whatsoever in law or in equity (including reasonable attorney’s fees/expenses and court costs arising directly or indirectly therefrom), whether or not heretofore known, suspected or asserted, foreseen or unforeseen, which any PARTY ever had, or has or may have in the future relating to any activity which occurred prior to the signing of this Mutual General Release, including but not limited to any and all claims which were raised or could have been raised in the ACTION.

3. General Nature of the Release.  The PARTIES hereto acknowledge that this release is a General Release, and each PARTY therefore expressly waives and assumes the risk of any and all claims for damages which exist as of this date, but which the PARTIES may not be aware of or suspect to exist, whether through ignorance, oversight, error, negligence or otherwise, and which, if known, would materially affect the decision to enter into this Mutual General Release.

4. No Contact. Subsequent to execution hereof, the PARTIES agree that neither will have either direct or indirect contact with the other or the employees, agents, creditors, debtors, shareholders, officers directors or the like of the other PARTIES, other than in furtherance of the performance of the terms hereof.

5. Governing Law.  This release shall be construed in accordance with the laws of the state of Nevada.  All disputes shall be resolved in the state or federal courts of the State of Nevada.

6. Entire Agreement.  This Settlement and Termination Agreement contains the entire agreement between the PARTIES with regard to the subject matter set forth herein and shall be binding upon the heirs, successors and assigns of the PARTIES.  This Settlement and Termination Agreement may only be modified in writing, signed by or on behalf of the PARTIES.

7. Costs and Expenses.  Each PARTY shall bear their own attorney’s fees and costs arising from the disputes between the PARTIES.

8. Assignment.  This Agreement shall not be assignable without the written mutual consent of all PARTIES to this Agreement.

9. The PARTIES consent to a dismissal of the ACTION and shall cause their counsel to execute a Stipulation and Order for Dismissal With Prejudice, each PARTY to bear its own costs and attorneys’ fees.

  

2

  

 

IN WITNESS WHEREOF, the PARTIES hereto have caused this agreement to be executed in multiple originals, on the date first mentioned above.

A TO Z HOLDINGS, LLC

 

By:           /s/ Norman Zlirkoff

Print Name:  Norman Zlirkoff

PRIME EQUITY FUND IV LLC

By:           /s/ John J. Katsock Jr

Print Name:  John J. Katsock Jr.

INFINITE ALPHA, INC.

By:           /s/ Barbara Laken

Print Name:  Barbara Laken

JRC LIMITED INC

By:           /s/Roy Milkin

Print Name:  Roy Milkin

CLARE LLC

By:           /s/Dennis Flynn

Print Name:  Dennis Flynn, Mgr.

DAVID FIDLER, INDIVIDUALLY

By:           /s/David Fidler

 

3

 

ERIK TUCKER, INDIVIDUALLY

By:           /s/ Erik Tucker

GLEN LAKEN, INDIVIDUALLY

By:           /s/ Glen Laken

JOHN KATSOCK, INDIVIDUALLY

By:           /s/ John Katsock

CMG HOLDNGS GROUP, INC.

By:           /s/James Ennis

Print Name:  James Ennis

AUDIOEYE

By:           /s/ James Ennis

Print Name:  James Ennis

ALAN MORELL, INDIVIDUALLY

By:           /s/ Alan Morell

JAMES ENNIS, INDIVIDUALLY

By:           /s/ James Ennis

  

4

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