Document:

an23323652-ex10_1.htm

        Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL RELEASE

This is a Separation Agreement and General Release (“Agreement”) between AngioDynamics, Inc. (“Employer”) and Johannes (Jan) Keltjens (“Employee”) in complete settlement of all issues concerning Employee’s employment and termination of employment with Employer.  As used in this Agreement, “Employer” shall mean AngioDynamics, Inc. and its parent(s), subsidiaries, predecessors, divisions, affiliates, successors, assigns, and all of its and their current and former directors, officers, employees, and agents (in their individual and representative capacities); “Employee” shall include Johannes (Jan) Keltjens and his heirs, executors, administrators, and assigns.

 

TERMS

For mutual consideration, including Employee’s right to receive certain payments and benefits under this Agreement, and the Employer’s right to be free from legal action initiated by, or on behalf of Employee, the parties agree to the following:

1. Termination of Employment.  Employee’s last day of active employment with the Employer was June 8, 2011 (hereinafter “Separation Date”).  The employment relationship is permanently and irrevocably severed, and the Employer has no obligation to re-employ Employee.  Employee has resigned from all positions he held with Employer, including his membership on Employer’s Board of Directors.

 

2. Payment and Benefits.  Employer has provided or will provide the following, provided that Employee fully complies with all obligations under this Agreement, including the requirement to transition all responsibilities as determined and required by Employer.  The payments provided for in this Agreement do not include Employee’s base salary accrued through the Separation Date.  After the Employer receives the executed original of this Agreement, Employee will be eligible to receive the following from the Employer:

a. Severance.  Severance payment in the amount of $930,811.  This payment shall be made within thirty (30) days of the Separation Date, unless on that date Employee is a “Specified Employee” pursuant to Section 409A of the Internal Revenue Code, in which case such payment shall be made no earlier than January 1, 2012 but no later than January 15, 2012, subject to applicable withholdings and deductions.

b. Stock Options and Restricted Stock.  Stock options and restricted stock shall be governed by the terms of the 2004 Stock and Incentive Award Plan and any granting documents.  Employee shall not vest in any restricted stock or stock options on or after the Separation Date.  Employee shall have three (3) months from the Separation Date to exercise any vested options pursuant to the terms of the Plan, unless such options shall earlier terminate under the terms of the Plan or granting documents.  Any restricted stock with respect to which the forfeiture period is in effect on the Separation Date shall be forfeited and surrendered by Employee to Employer on the Separation Date.  For a 

 

  

  

  

 

period of six (6) months after the Separation Date, Employee shall not perform any purchases or sales (as such terms are defined under the Securities Laws of the United States) involving Employer stock during any customary Employer blackout period.  Employer shall notify Employee of any and all blackout periods that occur during this 6-month period.  Employee shall be responsible for any reporting requirements related to any stock transactions after the Separation Date, and, provided Employer is notified of all transactions by Employee, Employer shall report said transactions as required by law.

c. Payment for all accrued but unused vacation pay; and

d. Health Benefits.  Employer offers continuation of group health, dental, vision and prescription drug coverage maintained by Employer (“Health Plan”) in which Employee is enrolled on the Separation Date, pursuant to the continuation coverage and requirements of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), measured from the Separation Date.  Notification of conditions to continue these benefits will be provided to Employee as required by COBRA regulations.  Coverage is subject to the terms of the Health Plan.  Employer reserves and retains the right to select the health care provider of such Health Plan and makes no promises, express or implied, with regard to specific coverage provided or premiums charged.

 

If Employee elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period prescribed pursuant to COBRA, the Company will provide payments on behalf of the Employee for the COBRA premiums (at the coverage levels in effect immediately prior to Employee’s termination) until the earlier of (i) a period of twenty-four (24) months from the Separation Date, (ii) the date on which Employee accepts an offer of employment that provides similar insurance coverage, or (iii) the date Employee is no longer eligible to receive continuation coverage pursuant to COBRA or applicable New York State law (“NY Mini-COBRA”).

3. No other benefits.  Except as provided above, all other employee benefits will cease on the Separation Date.

4. Consultation and Transition.

a. Employee shall consult with the Employer on an as-needed basis and shall reasonably cooperate with the Employer for up to six (6) months following the Separation Date, in transitioning all pending matters, including but not limited to, responding to all questions concerning pending business matters and projects, plans, locating files, documents, records, data of any type, and explain any processes, negotiations, or other business matters.

b. Employee also agrees to provide reasonable assistance to the Employer and cooperate with the Employer in relation to its prosecution or defense of any litigation or other controversies, if Employee has, either directly or indirectly, any documents or 

 

  

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information that could lead to the discovery of admissible evidence in such litigation or controversies.

5. Other Payments and Benefits.  Employee understands that the payments described in paragraph “2” shall be in lieu of, and not in addition to, any payments to which Employee might otherwise be entitled under the letter employment agreement entered into by Employee and Employer on January 19, 2009 (“Employment Agreement”), any severance or separation pay policy sponsored by the Employer, or any other plan, policy, or benefit provided or sponsored by the Employer.  Employee acknowledges that the payments provided for herein include the entire amount of consideration to which Employee is entitled.  Employee agrees not to seek any further compensation in connection with the matters encompassed in this Agreement or arising from Employee’s employment with the Employer.

6. Employee Release.  Except as described in paragraph “9” below, Employee knowingly RELEASES AND DISCHARGES Employer from all claims, actions, causes of action, suits, charges, damages and demands whatsoever, in law or equity, which Employee ever had, has or hereafter may have against Employer, directly or indirectly, whether known or unknown, from the beginning of his/her employment to the date of this Agreement.  Employee acknowledges that this RELEASE includes all claims arising out of his employment and the termination of that employment, whether before courts, administrative agencies, or other forums wherever situated, including but not limited to all claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, Sections 1981 through 1988 of Title 42 of the United States Code, the Americans with Disabilities Act, as amended, the Fair Labor Standards Act, the National Labor Relations Act, as amended, the Equal Pay Act, the Family and Medical Leave Act, as amended, the Employee Retirement Income Security Act (ERISA), the Occupational Safety and Health Act, as amended, the New York Human Rights Law, the New York Labor Law, the nondiscrimination and/or retaliation provisions of the New York Workers’ Compensation Law, and any other federal, state or local employment laws and regulations, and all common law claims of the State of New York, including, but not limited to, claims of express or implied contract, wrongful discharge, defamation, slander, intentional and negligent infliction of emotional distress, and all claims for attorneys’ fees, costs and expenses, and any other claims arising out of or related to Employee’s employment with Employer, and the termination of that employment, but specifically excepting from this RELEASE Employer’s obligations to Employee under this Agreement.  The payments set forth in paragraph “2” are contingent on Employee executing and providing to Employer the General Release attached as Appendix “A.”  If Employee fails to sign the General Release, Employer shall have no obligation to make any separation payments under this Agreement, but all other terms of this Agreement shall remain in effect.

7. Covenant Not to Sue.  Except as described in paragraph “9” below, Employee represents and warrants that Employee has not filed and will not file any claim, charge or lawsuit (civil, administrative or criminal) against the Employer, either individually in any type of proceeding or as a member of a class, based upon acts, occurrences or events occurring prior to the signing of this Agreement.  If Employee breaches this provision and files an action falling within its scope, Employee agrees to indemnify Employer for all costs, including court costs and 

 

  

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reasonable attorneys’ fees, incurred by Employer in the defense of such action or in establishing or maintaining the application or validity of this Agreement or the provisions thereof.

8. No Cooperation.  Employee agrees that he will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against Employer and/or any officer, director, employee, agent, representative, shareholder or attorney of the Employer, unless under a subpoena or other court order to do so.

9. EEOC Proceedings.  Employee understands that nothing in this Agreement prevents Employee from filing an action to enforce this Agreement or from filing a charge with the Equal Employment Opportunity Commission (“EEOC”) or participating in any investigation or proceeding conducted by the EEOC.  However, Employee understands and agrees that Employee is waiving any entitlement or right to recover any monetary or other personal relief as a result of any such EEOC proceeding.

10. No Admission of Liability.  By entering into this Agreement, neither the Employer nor Employee admits any wrongdoing or liability.  Employee acknowledges that the Employer has not violated any law, statute, ordinance, contract, duty or obligation whatsoever, committed any tort, or engaged in any wrongful conduct with respect to Employee.

11. Confidentiality/Noncompetition/Nonsolicitation.

a. Employee acknowledges and agrees that:

i.           in the course of his employment with the Employer, he obtained knowledge of confidential and proprietary information of a special and unique nature and value and became familiar with the Employer’s trade secrets relating to the conduct and details of the Employer’s business.  Therefore, it is possible that he could cause irreparable harm to the Employer, which may not be adequately compensated by monetary damages, if he violates the restrictive covenants in this Agreement.  As of the date of this Agreement, the February 19, 2009 Confidentiality Agreement and Covenant Against Conflicting Employment Agreement (“Conflicting Employment Agreement”) previously executed by Employee, expire.

ii.           in the course of performing his duties and responsibilities for Employer, Employee has been a representative of Employer to its customers, clients and suppliers and as such had significant responsibility for maintaining and enhancing Employer’s goodwill with such customers, clients and suppliers and would not have, except by virtue of the employment with Employer, developed a close and direct relationship with Employer’s customers, clients and suppliers; and

iii.           Employer is entitled to protect, and through this Agreement seeks to protect its proprietary rights which include the right to protect confidential and proprietary information, as defined in this Agreement, and trade secrets, the right to preserve Employer’s goodwill and the right to the benefit of any relationships that 

 

  

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have developed between Employee and Employer’s customers, clients and suppliers by virtue of Employee’s employment with Employer.

b.  Confidentiality of Confidential Employer Information.

 

i. Employee represents and warrants that, unless compelled or expressly permitted by operation of law, Employee shall not, directly or indirectly, disclose, reveal, publish, or in any other manner communicate to any third party, whether written or oral, any information obtained during Employee’s period of employment that is or may be considered proprietary or confidential to Employer.  Confidential and proprietary information includes, but is not limited to, non-public corporate information, including plans, strategies, tactics, policies, procedures and practices, customers, suppliers, products, services, research, development, manufacturing, purchasing, finance, engineering, designs, concepts; non-public marketing information; non-public strategic information; and any and all other non-public information, in whatever form, related to Employer’s business including, but not limited to, financial information, operations information, personnel information, and affiliate, supplier, customer and business partner information.  Confidential information does not include information that is publicly available (a) prior to the date of this Agreement, or (b) by reason of acts not attributable to a breach of this Agreement.

ii. In the course of his employment, Employee has received information that is considered material inside information within the meaning and intent of federal securities laws, rules and regulations.  Employee shall not disclose this information directly or indirectly, or use as a basis for advice to any other party concerning any decision to buy, sell or otherwise trade in the Employer’s securities.

 

iv.           If Employee is required by law or valid court order to disclose information that is precluded by this Agreement, Employee shall utilize his best efforts to provide advance written notice to Employer to allow Employer an opportunity to contest the impending disclosure.

c. Noncompetition/Nonsolicitation of Customers.

i.           Employee recognizes and acknowledges that it is possible that he could cause irreparable harm to Employer which may not be adequately compensated by monetary damages if he enters into the employment of a Conflicting Organization, as defined in this Agreement, or if the Employee goes into business on his own behalf that is in direct competition with the Employer.  A Conflicting Organization means any person or organization, which is now or hereafter engaged directly or indirectly in research on or development, production, marketing, or selling of a Conflicting Product.  Conflicting Product means 

 

 

  

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any product, process, machine, or service of any person or organization other than AngioDynamics whether now existing or hereafter developed which resembles or competes with a product, process, machine, system, or service sold, marketed or under development by Employer during Employee’s term of employment with Employer, or whose use or marketability could be enhanced by application to it of confidential and proprietary information to which Employee has had access during his employment.

 

ii.           For one (1) year from the Separation Date, Employee shall not directly or indirectly:

 

(a)           render services to a Conflicting Organization.  Given the global nature of Employer’s business, the noncompetition provision contained in this paragraph shall apply to any Conflicting Organization, regardless of location, and to any position held by Employee for any Conflicting Organization, whether as an employee, consultant, independent contractor, owner or in any other capacity whatsoever; provided;  however, Employee may accept employment with a Conflicting Organization whose business is diversified and which is, as to that part of its business in which he accepts employment, not a Conflicting Organization, provided written assurances satisfactory to Employer that Employee will not render services, directly or indirectly, in connection with any Conflicting Product are delivered to Employer.  Employee agrees that the foregoing restriction does not unduly restrict his vocational opportunities  as it does not prohibit Employee from working for an organization other than those that fall within the scope of this paragraph; or

 

(b)           appropriate, direct or assist another to appropriate or direct any business or customer away from Employer or attempt to do any of the foregoing.

 

d. Nonsolicitation/Noninterference. For one (1) year from the Separation Date, Employee agrees that he will not:

 

i.           directly or indirectly solicit or recruit for employment, hire, employ or attempt to employ any individual who was employed by Employer as of the Separation Date or at any time within the one year period prior to the Separation Date, or entice or suggest to such individual to terminate his employment with Employer; and

 

ii.           directly or indirectly interfere with or assist, or in any way be involved with any third party’s attempt to interfere with, the business operations of Employer.

 

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e. Reasonableness.  Employee acknowledges and agrees that the restrictive covenants in this Agreement are reasonable and properly required for the adequate protection of the Employer’s business.  Employee further agrees that he will not raise any issue of reasonableness as a defense in any proceeding to its enforcement.  If any geographical or time limitation is deemed to be unreasonable by a court of competent jurisdiction, Employee agrees and submits to the reduction of the geographical or time limitation to a limit as the court shall deem to be reasonable.

 

f. Enforcement.  In the event of an actual or threatened breach of this paragraph “11” of this Agreement, Employee acknowledges that the Employer will be irreparably damaged and that the Employer is entitled to an injunction restraining him from violating the restrictive covenants.  Nothing in this Agreement shall be construed as prohibiting the Employer from pursuing any other available remedies for such breach or threatened breach of this Agreement.  In the event of a breach of this covenant or a breach of any other covenant stated in this Agreement, Employer shall be relieved of its obligation to make any remaining payments under this Agreement and shall be entitled to commence a civil action to recover all payments previously made or its actual damages, whichever is greater, unless otherwise prohibited by law.  If one or more provisions of this Agreement are determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforcement of the remaining provisions shall not in any way be affected or impaired.

12. Non-Disparagement.  Employee agrees to not engage, at any time, in any action or conduct that either directly or indirectly disparages the Employer or any of the Employer’s employees, officers, or representatives, or that results in the disparagement, mistreatment, or injury of the Employer or any of the Employer’s employees, officers, or representatives.  Employer agrees to not engage, at any time, in any action or conduct that either directly or indirectly disparages the Employee or that results in the disparagement of the Employee.

13. Employment Reference.  In response to requests for job references, the Employer’s Human Resources Department shall limit its response to confirmation of Employee’s dates of employment with the Employer, positions held, and pay rates.  If further information is requested, the Employer shall state that its policy is not to provide any further information.

14. Older Worker Benefit Protection Act.  Employee acknowledges and agrees that in accordance with the terms of the Age Discrimination in Employment Act (“ADEA”), as amended by the Older Workers Benefit Protection Act:

a. Employee has read and understands this Agreement and knowingly and voluntarily entered into this Agreement without fraud, duress, or any undue influence.

b. Employee acknowledges that by this Agreement the Employer advised Employee in writing to consult with an attorney before signing this Agreement.

 

  

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c. Employee understands the language of this Agreement and its meaning, particularly with respect to Employee’s waiver and release of any claims against the Employer.

d. Employee has been afforded twenty-one (21) days to consider the terms of this Agreement, but may voluntarily elect to sign the Agreement in a shorter period of time.

e. Employee can accept the terms of this Separation Agreement by providing an executed agreement to Mary Cregut, Vice President of Human Resources, AngioDynamics, Inc., 14 Plaza Drive, Latham, NY 12110 or by facsimile at (518) 798-1435, by 5 p.m. on June 13, 2011.

f. Employee has seven (7) days following the execution of this Agreement to revoke the Agreement, and the Agreement will not become effective or enforceable until the seven (7) day period has expired.  Employee may revoke the Agreement by ensuring written notice of revocation is received by the Employer by 5 p.m. on the seventh (7th) calendar day following the execution of this Agreement.

g. As stated in the Employment Agreement, the Employee is not entitled to the payments set forth in paragraph “2” unless Employee executes and provides such release of any claims he may have against the Employer, and, therefore, Employee is receiving consideration under this Separation Agreement to which he is not otherwise entitled.

h. Employee is not waiving any rights or claims that may arise after the date this Agreement is executed.

15. Tax Obligations.  Employee acknowledges that the Employer has not given any advice as to the characterization of payments received under this Agreement for any personal tax responsibility such payments may generate.  Should any taxing authority challenge Employee’s treatment or characterization of the payments, Employee acknowledges that the Employer has no obligation whatsoever to indemnify, defend, aid, pay or reimburse Employee for any underpayment, overpayment, penalty or interest charge the taxing authority may assess against or claim is due from Employee.

16. Confidentiality of Agreement.  Employee and Employer shall keep the existence and contents of this Agreement confidential and shall not disclose it or its terms to any third party, except for the purposes of enforcement, as a defense to any administrative or legal proceeding or as otherwise required by law.  The terms of this paragraph shall not apply to such disclosures to Employee’s attorney, financial advisors or spouse, or factual disclosures as may be required pursuant to court order or subpoena or as part of any EEOC proceedings.  In the event that Employer determines that disclosure of this Agreement or a portion thereof is required by U.S. Securities Laws, the terms of this paragraph shall not apply to the portion of this Agreement that is publicly disclosed by the Employer.  Employee further acknowledges that if a court of competent jurisdiction determines that Employee has breached this confidentiality provision, Employee shall, without 

 

 

  

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prejudice to any other remedies the Employer may have, be liable to pay liquidated damages to the Employer in the amount of five  hundred thousand dollars ($500,000.00).  Employee and the Employer acknowledge that in the event of a breach of this provision, the exact amount of damages suffered by the Employer would be difficult to ascertain with certainty, and that the amount provided herein is reasonably proportionate to the amount of damages that would be suffered.

17. Return of Company Property/Confidential Information.  At an agreed upon time, Employee shall return any and all Employer property, including, without limitation, any documents, records, communications, or similar visual or conceptual presentations of any type, and all duplicates and copies thereof, regardless of the form in which they exist or are stored, that contain any Confidential and Proprietary Information, including but not limited to, financial information, business and strategic plans, and other similar confidential materials or information, and any other equipment or other property that belongs to the Employer.

Employee shall return the company provided laptop computer by June 15, 2011.   Employer agrees that Employee will retain possession of his company issued iPhone. Employee agrees that he will provide the iPhone to the Employer by noon on June 14, 2011 and at that time Employer will remove all confidential and proprietary information on the iPhone, return the iPhone to the Employee, and that Employee will assume all costs associated with the operation of the iPhone beginning on June 15, 2011.

Employee shall be entitled to take title to or otherwise release to his name the Company-Leased Vehicle at a price to be determined by the Employer.  A quote will be provided to employee by June 17, 2011.  The exact price at time of purchase may vary based on expiration of quoted materials.  Updated quotes can be supplied to Employee upon request.  If the sale transaction is not completed by August 1, 2011, Employee shall be obligated to return the vehicle by August 1, 2011.    Please contact Kim Hoyt, Travel and Fleet Administrator to arrange details of purchase or return.

18. Costs.  The Parties shall each bear their own costs, expert fees, attorneys’ fees and other fees incurred in connection with this Agreement.

19. Authority.  Employee represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the terms and conditions of this Agreement.

20. Voluntary Execution.  Employee represents that he has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement.

21. Choice of Law/Venue.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to New York’s rules regarding choice of law.  Any proceeding between the parties relating to this Agreement shall be held in a court of competent jurisdiction in the State of New York.  All parties agree to be subject to the personal jurisdiction of the courts of New York.

 

 

  

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22. Severability.  The language of all parts of this Agreement shall be construed as a whole, according to its fair meaning and not strictly for or against either party.  If any provision or part of this Agreement is deemed to be invalid or unenforceable for any reason, such provision or part shall be treated as if it were deleted from the Agreement and the remainder of the Agreement shall remain in full force and effect.

23. Notice.  Any notice required to be given to either party under this Agreement shall be deemed effectively given when personally delivered or sent by certified or registered mail, postage prepaid, as follows:

To the Employer:                                  Vice President of Human Resources

AngioDynamics, Inc.

14 Plaza Drive

Latham, New York 12110

To Employee:                                        Johannes Keltjens

31 Vista Drive

Saratoga Springs, New York 12866

or to such other address as either party may designate by like notice. Any notice, consent or other communication required or permitted to be given hereunder shall be deemed to have been given on the date of mailing or personal delivery.

24. Complete Defense.  Employee understands and agrees that this Agreement may be pled by Employer as a complete defense to any claim or entitlement which may be asserted by Employee, or on his behalf, in any suit, claim or proceeding against Employer concerning any matter arising up to and including the date of execution of this Agreement.

25. Miscellaneous.  Employee represents and warrants that Employee has not taken action contrary to the terms of this Agreement from the date of this Agreement to the date the Employee executes this Agreement.  Any such action contrary to the terms of this Agreement will void the terms of this Agreement and Employee will not be entitled to the benefits described herein.

This signed Agreement together with the General Release sets forth the entire Agreement between the Employer and Employee.  This Agreement may not be modified except by a writing signed by both parties.

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereupon and each of which shall constitute one and the same instrument.  This Agreement shall be deemed fully executed when one or more counterparts hereof, individually or taken together, shall bear the signatures of each of the parties.  A party may deliver its signature via pdf, scan or facsimile.

 

  

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Dated:  June 13, 2011      

	
/s/ Johannes Keltjens      

	  	
Johannes Keltjens

	
Subscribed and sworn to before me

	  
	
this _____ day of ______, 2011

	  
	  	  
	  	  
	
___________________________________

	  
	
Notary Public

	  
	
My Commission Expires __________

	  
	
(Affix Seal)

	  
	  	  
	  	
Employer

	  	  
	
Dated:  June 13, 2011      

	
By: /s/ Scott J. Solano      

	  	
Name:  Scott J. Solano

	  	
Title:  Interim Chief Executive Officer

 

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Appendix “A”                                                      General Release

Johannes Keltjens (“Employee”), for and in consideration of the sum of ONE DOLLAR AND NO CENTS ($1.00), and other good and valuable consideration, receipt of which is hereby acknowledged,  for himself and his heirs, administrators, representatives, successors, and assigns unconditionally releases and forever discharges AngioDynamics, Inc., its parent, subsidiary and affiliated corporations, divisions, successors, predecessors and assigns, and all of their current and former officers, directors, trustees, employees, and agents, in their individual and representative capacities (hereinafter collectively referred to as the “Employer”), from any and all actions or causes of action, suits, damages, claims, debts, promises, agreements, proceedings, complaints, and demands that he ever had, now has, or may ever have against the Employer, directly or indirectly, whether asserted or unasserted, whether known or unknown, arising out of, or related in any way to, all matters of whatever nature.  This release includes, but is not limited to, claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, Sections 1981 through 1988 of Title 42 of the United States Code, the Americans with Disabilities Act, as amended, the Fair Labor Standards Act, the National Labor Relations Act, as amended, the Equal Pay Act, the Family and Medical Leave Act, as amended, the Employee Retirement Income Security Act (ERISA), the Occupational Safety and Health Act, as amended, the New York Human Rights Law, the New York Labor Law, the nondiscrimination and/or retaliation provisions of the New York Workers’ Compensation Law, and any other federal, state or local employment laws and regulations, and all common law claims of the State of New York, including, but not limited to, claims of express or implied contract, wrongful discharge, defamation, slander, intentional and negligent infliction of emotional distress, and all claims for attorneys’ fees, costs and expenses, and any other claims arising out of or related to Employee’s employment with Employer, and the termination of that employment; provided, however, that this shall not affect Employee's entitlement to any vested accrued benefit to which he is entitled under any employee benefit plan subject to ERISA or his right to enforce the terms of a certain Separation Agreement executed by Employee and Employer, dated _____________, 2011.

Employee understands that nothing in this Release prevents him from filing a charge (including a challenge to the Separation Agreement) with the Equal Employment Opportunity Commission (the “EEOC”) or participating in any investigation or proceeding conducted by the EEOC or brought by the EEOC on his behalf.  However, he understands and agrees that he is waiving any right to recover any monetary or other personal relief because of any such EEOC proceedings or any subsequent legal action brought by the EEOC on his behalf.

IN WITNESS WHEREOF, Johannes Keltjens has signed this General Release on this ____ day of ___________, 2011.

 

	
STATE OF ____________________

	
)

	
_____________________________

	
COUNTY OF __________________

	
)  ss.:

	
Johannes Keltjens

 

On this ____, day of _______ 2011, before me personally appeared Johannes Keltjens to me known and known to me to be the same person described in and who executed the foregoing general release, and he duly acknowledged to me that he executed the same.

 

 

______________________________

Notary Public

12exhibit10_1.htm

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of June 13, 2011, by and among The Quercus Trust (“Quercus” or the “Purchaser”), and Entech Solar, Inc., a Delaware corporation (the “Company”).

 

WHEREAS, the Purchaser desires to purchase from the Company, and the Company desires to sell to Purchaser, shares of the Company’s common stock, par value $0.001 (“Common Stock”), on the terms set forth herein; and  

WHEREAS, the Company is offering the Common Stock pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and/or Rule 506 of Regulation D promulgated under the Securities Act.

 

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

 

1.            Sale of Shares.

 

1.1. Purchase and Sale of Shares.  The Company hereby agrees to issue to Quercus one million two hundred fifty thousand (1,250,000) shares of Common Stock at a price of eight cents ($0.08) per share (the “Share Price”), which amount represents a premium of $0.03 per share over the closing price of the Common Stock on the date Quercus wired funds to the Company, for an aggregate purchase price of $100,000, which shares shall be purchased by Quercus upon the full execution of this Agreement.

 

1.2. The Closing.  The sale and purchase of the Common Stock shall take place at the offices of the Company, or at such other location as the Company and Quercus mutually agree, on the date first set forth above (the “Closing”).  At the Closing, the Company shall deliver to Quercus a certificate representing the Common Stock (the “ Certificate”) in the form set forth on Exhibit A hereto, against delivery to the Company of a check or wire transfer in the amount of the Share price.  The obligation of Quercus to consummate the purchase at the Closing is subject to issuance of the Certificate by the Company and the truth and accuracy of the representations and warranties of the Company in Section 2 below.

 

	
2.  

	
Representations and Warranties of Company.  The Company hereby represents and warrants to Quercus that:

 

2.1. Organization, Good Standing and Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  The Company has full corporate power and authority to own and hold its properties and to conduct its business.  The Company is duly licensed or qualified to do business, and in good standing, in each jurisdiction in which the nature of its business requires licensing, qualification or good standing, except for any failure to be so licensed or qualified or in good standing that would not have a material adverse effect on (i) the Company, (ii) its consolidated results of operations, assets, or financial condition, and (iii) its ability to perform its obligations under this Agreement (a “Material Adverse Effect”).

  

 

  

  

  

 

2.2. Authorization.  The Company has full corporate power and authority to execute, deliver and enter into this Agreement and to consummate the transactions contemplated hereby.  All action on the part of the Company necessary for the authorization, execution, delivery and performance of this Agreement by the Company, the authorization, sale, issuance and delivery of the Common Stock and the performance of the Company’s obligations hereunder has been taken.  The Common Stock has been duly authorized and, when issued and paid for in accordance with this Agreement, will be validly issued, fully paid and non-assessable and will be free and clear of all liens imposed by or through the Company other than restrictions imposed by this Agreement and applicable securities laws.  This Agreement has been duly executed and delivered by the Company, and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and by general equitable principles, or (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

2.3. Compliance With Other Instruments.

 

(a) The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby will not (i) result in the violation of any provision of the Certificate of Incorporation or By-laws of the Company, (ii) result in any violation of any law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company is bound, (iii) except with respect to securities already held by the Purchaser, trigger the increase in the rights of any holder of the Company’s outstanding debt or equity securities, including securities converted with such securities, (iv) conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement, trust indenture or other agreement to which the Company is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company, in the cases of clauses (ii) and (iii) above, only to the extent such conflict, breach, violation, default or lien reasonably could, individually or in the aggregate, have or result in a Material Adverse Effect.

 

(b) No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority remains to be obtained or is otherwise required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, including, without limitation the issue and sale of the Common Stock, except filings as may be required to be made by the Company with (i) the United States Securities and Exchange Commission (“SEC”) and (ii) state “blue sky” or other securities regulatory authorities.

 

  

  

  

 

2.4. Material Adverse Changes.  Except as disclosed in the Company’s periodic and other filings with the SEC, since March 31, 2011, there has not occurred any event or events which, singly or in the aggregate, have had or are reasonably expected to have, a Material Adverse Effect upon the business, operations or financial condition of the Company.

 

2.5. Issuance of Securities.  Except with respect to (i) any shares of restricted stock or stock options issued to employees or directors under any of the Company’s equity incentive plans, since March 31, 2011, the Company has not issued any capital stock, or any securities convertible into, or exchangeable for, capital stock, or entered into any written or oral commitment with respect thereto, other than transactions with the Purchaser or in connection with the Company’s stock option plan.

 

2.6. Litigation.  There are no pending or overtly threatened actions, claims, orders, decrees, investigations, suits or proceedings by or before any governmental authority, arbitrator, court or administrative agency which would have a Material Adverse Effect, or which question the validity of this Agreement or any action taken or to be taken by the Company in connection herewith, or which might result in any impairment of the right or ability of the Company to enter into or perform his obligations under this Agreement.

 

2.7. Reports; Financial Statements.  The Company’s Annual Report on Form 10-K for the years ended December 31, 2009 and December 31, 2010, Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 and all Current Reports on Form 8-K filed to date (the “Reports”) have been filed with the SEC and the Reports complied in all material respects with the rules of the SEC applicable to such Reports on the date filed with the SEC, and the Reports did not contain, on the date of filing with the SEC, any untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances in which they were made, not materially misleading.  Other than as filed with the SEC, the Reports have not been amended, nor as of the date hereof has the Company filed any report on Form 8-K since April 13, 2011. All of the consolidated financial statements included in the Reports (the “Company Financial Statements”):  (a) have been prepared from and on the basis of, and are in accordance with, the books and records of the Company and with generally accepted accounting principles applied on a basis consistent with prior accounting periods; (b) fairly and accurately present in all material respects the consolidated financial condition of the Company as of the date of each such Company Financial Statement and the results of its operations for the periods therein specified; and (c) in the case of the annual financial statements, are accompanied by the audit opinion of the Company’s independent public accountants.  Except as set forth in the Company Financial Statements, as of the date hereof, the Company has no liabilities other than (x) liabilities which are reflected or reserved against in the Company Financial Statements and which remain outstanding and undischarged as of the date hereof, (y) liabilities arising in the ordinary course of business of the Company since March 31, 2011, or (z) liabilities incurred as a result of this Agreement or which were not required by generally accepted accounting principles to be reflected or reserved on the Company Financial Statements.  

 

2.8. Permits.  The Company has all franchises, permits, licenses and similar authorizations necessary for the conduct of its business, and is not in default of any such authorizations, where the absence or default of such authorization could have a Material Adverse Effect.

 

  

  

  

 

2.9. Income Tax Returns.  The Company and each entity owned or controlled, directly or indirectly by the Company or in which it has a fifty percent (50%) or greater interest (each, a “Subsidiary”) has filed all federal and state income tax returns which are required to be filed, and have paid, or made provision for the payment of, all taxes which have become due pursuant to said returns or pursuant to any assessment received by the Company or any Subsidiary, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided.  The Company has no knowledge of any pending assessments or adjustments of the income tax payable of the Company or its Subsidiaries with respect to any year.

 

2.10. Environmental Matters.  None of the operations of the Company or any Subsidiary is the subject of any federal or state investigation evaluating whether any remedial action involving a material expenditure is needed to respond to a release of any toxic or hazardous waste or substance into the environment.  To the Company’s knowledge, neither the Company nor any Subsidiary has received notice of any actual or threatened claim, investigation, proceeding, order or decree in connection with any release of any toxic or hazardous waste or substance into the environment.

 

2.11. Offering.  Subject to the truth and accuracy of Purchaser’s representations set forth in Section 3 of this Agreement, the offer, sale and issuance of the securities contemplated by this Agreement are exempt from the registration requirements of the Securities Act, and the qualification or registration requirements of the Act or other applicable blue sky laws.  Neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemptions.

 

2.12. Patents and Trademarks.  The Company possesses all patents, patent rights, trademarks, trademark rights, service marks, service mark rights, trade names, trade name rights and copyrights necessary for its business without, to its knowledge (but without having conducted any special investigation or patent search), any conflict with or infringement of the valid rights of others and the lack of which could materially and adversely affect the operations or condition, financial or otherwise, of the Company, and the Company has not received any notice of infringement upon or conflict with the asserted rights of others.

 

2.13. Insurance.  The Company has in full force and effect fire and casualty insurance policies with such coverages in amounts (subject to reasonable deductibles) customary for companies similarly situated.

 

2.14. Related Party Transactions.  Except as disclosed in the Reports, no existing contractual obligation of the Company or its Subsidiaries is with or for the direct benefit of (i) any party owning, or formerly owning, beneficially or of record, directly or indirectly, in excess of five percent (5%) of the outstanding capital stock of the Company, (ii) any director, officer or similar representative of the Company, other than employment agreements, (iii) any natural person related by blood, adoption or marriage to any party described in (i) or (ii), or (iv) any entity in which any of the foregoing parties has, directly or indirectly, at least a five percent (5%) beneficial interest (a “Related Party”).  Without limiting the generality of the foregoing, no Related Party, directly or indirectly, owns or controls any material assets or material properties which are used in the Company’s business and to the knowledge of the Company, no Related Party, directly or indirectly, engages in or has any significant interest in or connection with any business which is, or has been within the last two years, a competitor, customer or supplier of the Company or has done business with the Company or which currently sells or provides products or services which are similar or related to the products or services sold or provided in connection with the Business.

 

  

  

  

 

2.15. No Anti-Dilution Rights.  Except with respect to any such provisions for the benefit of the Purchaser, the transactions contemplated hereby will not trigger any anti-dilution provisions contained in any existing shareholder agreements.

 

2.16. Full Disclosure.  No representation, warranty, schedule or certificate of the Company made or delivered pursuant to this Agreement contains or will contain any untrue statement of fact, or omits or will omit to state a material fact the absence of which makes such representation, warranty or other statement misleading.

 

	
3.  

	
Representations and Warranties of Quercus.  Quercus hereby represents and warrants to, and agrees with, the Company that:

 

3.1. Restricted Securities.  Quercus understands that (i) the Common Stock is characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering, (ii) under such laws and applicable regulations such securities may be resold without registration under federal and state securities laws only in certain limited circumstances, and (iii) the Company may require a legal opinion of Quercus’ counsel with respect to unregistered transfers.

 

3.2. Accredited Investor.  Quercus represents that it is an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act.

 

3.3. Legends.  Quercus understands that the certificates evidencing the Common Stock will bear substantially the following legends:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH SECURITIES ACT.

 

3.4. Investment Purposes.  The securities will be acquired for investment for Quercus’ own account, not as a nominee or agent, and not with a view to the public resale or distribution thereof within the meaning of the federal or state securities laws, and Quercus has no present intention of selling, granting any participation in, or otherwise distributing the same. Quercus further represents that he or it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the securities.

 

  

  

  

 

3.5. Litigation.  There are no claims before any governmental entity or arbitrator pending or, to such Purchaser’s knowledge, currently threatened against or with respect to such Purchaser relating to or affecting the Common Stock which question the validity of this Agreement or any action taken or to be taken by such Purchaser in connection herewith, or which might result in any impairment of the right or ability of such Purchaser to enter into or perform its obligations under this Agreement.

 

3.6. Awareness of Company Performance.  Purchaser acknowledges that (i) it has received and reviewed the Company’s financial statements (a) as of and for the years ended December 31, 2009 and December 31, 2010 and (b) as of and for the three month period ended March 31, 2011, (ii) it has received or has had full access to all the information Purchaser considers necessary or appropriate to make an informed decision with respect to the purchase of the Common Stock pursuant to this Agreement, and (iii) it has had an opportunity to ask questions and receive answers from the Company regarding the Company’s financial performance and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Purchaser or to which Purchaser had access.

 

4.            Survival of Representations and Warranties.  All representations, warranties and agreements made by the Company and Quercus in this Agreement or in any certificate or other instrument delivered pursuant hereto shall survive the Closing and any investigation and discovery by the Company or by Quercus, as the case may be, made at any time with respect thereto; provided, however, that, neither Quercus nor the Company shall have any liability to the other for any misrepresentation, inaccuracy or omission in any representation or warranty, or any breach of any representation or warranty, unless the party asserting a claim with respect to any thereof gives to the other written notice of such claim on or before the date which is two (2) years following the Closing Date.

 

5.           Indemnification.

 

5.1.         Indemnification by the Company.  In addition to all other sums due hereunder or provided for in this Agreement, the Company agrees to indemnify and hold harmless the Purchaser and its respective “Affiliates” (as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act) and their respective officers, directors, agents, representatives, employees, subsidiaries, partners and controlling persons (each, an “indemnified party”) from and against any and all losses, claims, damages, expenses (including reasonable fees, disbursements and other charges of counsel) or other liabilities (“Liabilities”) resulting from any breach of any covenant, agreement, representation or warranty of the Company in this Agreement; provided, however, that the Company shall not be liable under this Section 5.1: (a) for any amount paid in settlement of claims without the Company’s consent (which consent shall not be unreasonably withheld) or (b) to the extent that it is finally judicially determined that such Liabilities resulted primarily from the willful misconduct or bad faith of such indemnified party; provided, further, that if and to the extent that such indemnification is held, by final judicial determination to be unenforceable, in whole or in part, for any reason, the Company shall make the maximum contribution to the payment and satisfaction of such indemnified Liability.  In connection with the obligation of the Company to indemnify for expenses as set forth above, the Company further agrees to reimburse each indemnified party for all such expenses (including reasonable fees, disbursements and other charges of counsel) as they are incurred by such indemnified party; provided, however, that if an indemnified party is reimbursed hereunder for any expenses, such reimbursement of expenses shall be refunded to the extent it is finally judicially determined that the Liabilities in question resulted primarily from the willful misconduct or bad faith of such indemnified party.

 

  

  

  

 

5.2. Notification; Procedure.  Each indemnified party under Section 5.1 will, promptly after the receipt of notice of the commencement of any action or other proceeding against such indemnified party in respect of which indemnity may be sought from the Company under Section 5.1, notify the Company in writing of the commencement thereof.  The omission of any indemnified party so to notify the Company of any such action shall not relieve the Company from any liability which it may have to such indemnified party (i) other than pursuant to Section 5.1 or (ii) under Section 5.1 unless, and only to the extent that, such omission results in the Company’s forfeiture of substantive rights or defenses.  In case any such action or other proceeding shall be brought against any indemnified party and it shall notify the Company of the commencement thereof, the Company shall be entitled to participate therein and, to the extent that it may wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that any indemnified party may, at its own expense, retain separate counsel to participate in such defense.  Notwithstanding the foregoing, in any action or proceeding in which both the Company and an indemnified party is, or is reasonably likely to become, a party, such indemnified party shall have the right to employ separate counsel at the Company’s expense and to control its own defense of such action or proceeding if, in the reasonable opinion of counsel to such indemnified party, (a) there are or may be legal defenses available to such indemnified party or to other indemnified parties that are different from or additional to those available to the Company or (b) any conflict or potential conflict exists between the Company and such indemnified party that would make such separate representation advisable; provided, however, that in no event shall the Company be required to pay fees and expenses under this sentence of Section 5.1 for more than one firm of attorneys in any jurisdiction in any one legal action or group of related legal actions.  The Company agrees that the Company will not, without the prior written consent of the Purchaser, settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated hereby (if any indemnified party is a party thereto or has been actually threatened to be made a party thereto) unless such settlement, compromise or consent includes an unconditional release of the Purchaser and each other indemnified party from all liability arising or that may arise out of such claim, action or proceeding.  No such settlement shall impose any restriction on the future conduct of any indemnified party without such party’s consent, which may be withheld in such party’s discretion.  The rights accorded to indemnified parties hereunder shall be in addition to any rights that any indemnified party may have at common law, by separate agreement or otherwise.

 

6.            Miscellaneous.

 

6.1. Entire Agreement.  This Agreement contains the entire agreement among the parties with respect to the exchange contemplated hereby.

 

  

  

  

 

6.2. Governing Law.  This Agreement shall be governed by and construed under the laws of the State of Delaware.

 

6.3. Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

6.4. Severability.  The invalidity of any portion hereof shall not affect the validity, force, or effect of the remaining portions hereof. If it is ever held that any restriction hereunder is too broad to permit enforcement of such restriction to its fullest extent, the parties agree that a court of competent jurisdiction may enforce such restriction to the maximum extent permitted by law against those for whom it may be enforceable, and each party hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction.

 

6.5. Further Assurances.  The parties hereto shall, without additional consideration, execute and deliver or cause to be executed and delivered such further instruments and shall take or cause to be taken such further actions as are necessary to carry out more effectively the intent and purpose of this Agreement.

 

6.6. Successors and Assigns.  Except as otherwise provided herein, the terms and conditions of Section 5 of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any securities).  Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

6.7. Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

6.8. Notices.  All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent to the address as set forth on the signature page hereof or at such other address as such party may designate by ten (10) days advance written notice to the other parties hereto.

 

6.9. Finder’s Fee.  Each party represents that it neither is nor will be obligated for any finders’ fee or commission in connection with this transaction.  Quercus agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finders’ fee (and the costs and expenses of defending against such liability or asserted liability) for which Quercus or any of its trustees, employees or representatives is responsible.  The Company agrees to indemnify and hold harmless Quercus from any liability for any commission or compensation in the nature of a finders’ fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

 

6.10. Amendments and Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Quercus. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding, and each future holder of all such securities and the Company.

 

[SIGNATURE PAGE FOLLOWS]

 

  

  

  

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

 

	 	 	 THE QUERCUS TRUST
	 	 	 
	 	 	 
	 	By: 	/s/ David Gelbaum
	 	Name:	David Gelbaum 
	 	Title:	Trustee

 

Address:

1835 Newport Blvd.

A109 - PMB 467

Costa Mesa, California 92627

 

 

 

	 	 	 ENTECH SOLAR, INC.
	 	 	 
	 	 	 
	 	By:	/s/ Shelley Hollingsworth
	 	Name:	Shelley Hollingsworth
	 	Title:	Chief Financial Officer

 

Address:

13301 Park Vista Blvd., Suite 100

Fort Worth, Texas 76177

  

  

  

EXHIBIT A

STOCK CERTIFICATE

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