Document:

exv10w1

 

Exhibit 10.1

CHANGE IN CONTROL AGREEMENT

     THIS AGREEMENT dated as of April 16, 2007 is made by and between EntreMed, Inc. (the
“Company”) and _____________ (the “Executive”).

     WHEREAS the Company considers it essential to its best interests and to the best interests of
its stockholders to foster the continuous employment of its key management personnel; and

     WHEREAS the Company recognizes that the possibility of a Change in Control (as defined in
Section 8.5 hereof) exists, as in the case of any publicly-held corporation, and that such
possibility, and the uncertainty and questions that it may raise among management, may result in
the departure or distraction of management personnel to the detriment of the Company and its
stockholders; and

     WHEREAS the Company has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Company’s management, including
the Executive, to their assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
the Company and the Executive hereby agree as follows:

     1. Defined Terms. Definitions of certain capitalized terms used in this Agreement are
provided in Section 8 and elsewhere in this Agreement.

     2. Term of Agreement. This Agreement shall become effective on the date hereof and
shall remain in effect indefinitely thereafter; provided, however, that (a) except as provided in
clause (b) of this sentence, either the Company or the Executive may terminate this Agreement by
giving the other party at least one (1) year advance written notice of such termination, and (b) if
a Change in Control shall have occurred during the term of this Agreement, this Agreement may not
be terminated until all obligations of either party hereto have been performed in full and the
Coverage Period has expired without the occurrence of a Triggering Event. Notwithstanding the
foregoing, this Agreement shall terminate upon the Executive’s Disability or death, except as to
obligations of the Company hereunder arising from a Change in Control and/or a termination of the
Executive’s employment that, in either case, occurred prior to the Executive’s Disability or death.

     3. Agreement of the Company. In order to induce the Executive to remain in the employ
of the Company, the Company agrees, under the terms and conditions set forth herein, that, upon the
occurrence of both a Change in Control and a Triggering Event during the term of this Agreement,
the Company shall provide to the Executive the payments and benefits described in this Section 3
(the “Severance Benefits”).

     3.1 Severance Payment. In lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination, the Company shall pay to the Executive a lump sum
severance payment, in cash, without discount, equal to the sum of (a) the product of (x)

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___ months and (y) the Executive’s Monthly Base Salary and (b) the Executive’s Average Bonus.

     3.2 Pro Rata Current Year Bonus. The Company shall pay to the Executive a pro rata
portion of the Executive’s current year bonus equal to the product of (a) the Current Year Bonus
and (b) a fraction, the numerator of which is the number of days in the fiscal year prior to the
occurrence of both a Change in Control and a Triggering Event, and the denominator of which is the
total number of days in such fiscal year. For purposes of this Agreement, “Current Year Bonus”
means the. greater of (x) the current percentage of annual base salary to which the Executive would
have been entitled for the fiscal year that includes the Date of Termination under any bonus plan
or program then in effect or (y) ___ percent of the Executive’s current base salary.

     3.3 Reimbursement for COBRA Premiums. If the Executive elects to receive continued
coverage under the Company’s group health plans(s) after the Date of Termination pursuant Part 6 of
Title I of the Employee Retirement Income Security Act of 1974, as amended, and Section 4980B of
the Code (COBRA), the Company shall pay or promptly reimburse Executive for the cost of required
premiums payable by the Executive for such Coverage during the period of such coverage, but not for
a period extending beyond ___ months after the Date of Termination.

     3.4 Accrued Compensation and Other Benefits. To the extent not theretofore paid or
provided, the Company shall timely pay or provide to the Executive his or her Accrued Compensation
and any other benefits to which the Executive is entitled.

     4. Limitations on Payments and Benefits. Notwithstanding any other provision of this
Agreement, in the event that any payment or benefit received or to be received by the Executive in
connection with a Change in Control or the termination of the Executive’s employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (collectively,
the “Total Benefits”) would be subject to the excise tax imposed under Section 4999 of the Code
(the “Excise Tax”), then the Total Benefits shall be reduced to the extent necessary so that no
portion of the Total Benefits is subject to the Excise Tax; provided, however that the reduction
provided for the by the foregoing provisions of this Section 4 shall apply and be made only if (a)
the net amount of such Total Benefits, as so reduced (and after deduction of the net amount of
federal, state and local income taxes and FICA and Medicare taxes on such reduced Total Benefits),
is greater than (b) the excess of (i) the net amount of such Total Benefits, without reduction (but
after deduction of the net amount of federal, state and local income taxes and FICA and Medicare
taxes on such Total Benefits), over (ii) the amount of Excise Tax to which the Executive would be
subject in respect of such Total Benefits. All determinations required to be made under this
Section 4 shall be made by tax counsel selected by the Company and reasonably acceptable to the
Executive (“Tax Counsel”), which determinations shall be conclusive and binding on the Executive
and the Company absent manifest error. All fees and expenses of Tax Counsel shall be borne solely
by the Company. Prior to any reduction in the Executive’s Total Benefits pursuant to this Section
4, (a) Tax Counsel shall provide the Executive and the Company with a report setting forth its calculations and containing related
supporting information, and (b) the Executive shall be entitled to specify which component(s) of
the Total Benefits shall be reduced in order to comply with the terms of this Section 4.

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     5. Timing of Payments. The payments provided for in Sections 3.1 and 3.2 shall be
made on the Date of Termination; provided, however, that if the amounts of such payments cannot be
finally determined on or before such day, the Company shall pay to the Executive on such day an
estimate, as determined in good faith by the Company, of the minimum amount of such payments and
shall pay the remainder of such payments (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code from the Date of Termination to the payment of such remainder) as soon as
the amount thereof can be determined but in no event later than the thirtieth (30th) day after the
Date of Termination. In the event that the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) business day after demand by the Company (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code from the Date of Termination to
the repayment of such excess).

     6. Termination Procedures.

     6.1 Notice of Termination. After a Change in Control, any termination of the
Executive’s employment (other than by reason of death) must be preceded by a written Notice of
Termination from the terminating party to the other party hereto in accordance with Section 7.6
hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall
(a) specify the date of termination (the “Date of
Termination”) which shall not be more than sixty (60) days from the date such Notice of Termination is given, (b) indicate the notifying party’s opinion
regarding the specific provisions of this Agreement that will apply upon such termination and (c)
set forth in reasonable detail the facts and circumstances claimed to provide a basis for the
application of the provisions indicated. Termination of the Executive’s employment shall occur on
the specified Date of Termination even if there is a dispute between the parties relating to the
provisions of this Agreement applicable to such termination.

     6.2 Dispute Concerning Applicable Termination Provisions. If within thirty (30) days
of receiving the Notice of Termination the party receiving such notice notifies the other party
that a dispute exists concerning the provisions of this Agreement that apply to such termination,
the dispute shall be resolved either by mutual written agreement of the parties or by expedited
commercial arbitration under the rules of the American Arbitration Association. The parties shall
pursue the resolution of such dispute with reasonable diligence. Within five (5) days of such a
resolution, any party owing any payments pursuant to the provisions of this Agreement shall make
all such payments together with interest accrued thereon at the rate provided in Section
1274(b)(2)(B) of the Code.

     7. Miscellaneous.

     7.1 Section 409A. Notwithstanding anything in this Agreement to the contrary, to the
extent required to comply with Section 409A of the Code, any payment of deferred compensation
(within the meaning of Section 409A of the Code) hereunder on account of the Executive’s separation
from service (within the meaning of Section 409A of the Code) shall not be paid before the date that is six months after the date of the separation from service (or,
if earlier, the Executive’s death). Any payment(s), benefits and streams of payments and benefits
to the Executive which would have commenced during such six-month period shall commence on the
first day following the end of such period and the term over which any stream of

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payments or benefits shall be made shall run from the delayed commencement date for its full term such that the
delayed commencement shall not shorten the term over which any payments or benefits hereunder are
provided. The Executive and the Company will cooperate in good faith in making such amendments to
this Agreement, if any, as may be necessary or appropriate in order for the payments and benefits
to which the Executive is entitled hereunder to comply with Section 409A of the Code.

     7.2 No Mitigation. The Company agrees that, if the Executive’s employment by the
Company is terminated in a manner that results in the payment of Severance Benefits hereunder, the
Executive shall not be required to seek other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant to this Agreement. Further, the amount of
any payment or benefit provided for under this Agreement shall not be reduced by any compensation
earned by the Executive as the result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the Company, or otherwise.

     7.3 Successors. In addition to any obligations imposed by law upon any successor to
the Company, the Company shall be obligated to require any successor (whether direct or indirect,
by purchase, merger, consolidation, operation of law, or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to perform it if no
such succession had taken place; in the event of such a succession, references to the “Company”
herein shall thereafter be deemed to include such successor. Failure of the Company to obtain such
assumption and agreement at or prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle the Executive to terminate the Executive’s employment and
thereafter to receive Severance Benefits, except that, for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed the Date of Termination.

     7.4 Incompetency. Any benefit payable to or for the benefit of the Executive, if
legally incompetent, or incapable of giving a receipt therefor, shall be deemed paid when paid to
the Executive’s guardian or to the party providing or reasonably appearing to provide for the care
of such person, and such payment shall fully discharge the Company.

     7.5 Death. This Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive shall die while any amount would still be
payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the
death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to the executors,
personal representatives or administrators of the Executive’s estate.

     7.6 Notices. For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other address as either

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party may have furnished to the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon actual receipt:

To the Company:

EntreMed, Inc.

9640 Medical Center Drive,

Rockville, Maryland 20850

Attention: Director of Human Resources

To the Executive:

__________________

c/o EntreMed, Inc.

9640 Medical Center Drive,

Rockville, Maryland 20850

     7.7 Modification, Waiver. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officer as may be specifically designated by the Board or its delegee. No
waiver by either party hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.

     7.8 Entire Agreement. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either party which are not
expressly set forth in this Agreement.

     7.9 Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Maryland without regard to principles of
conflicts of laws thereof.

     7.10 Statutory Changes. All references to sections of the Exchange Act or the Code
shall be deemed also to refer to any successor provisions to such sections.

     7.11 Withholding. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any additional withholding to
which the Executive has agreed.

     7.12 Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

     7.13 No Right to Continued Employment. Nothing in this Agreement shall be deemed to
give any Executive the right to be retained in the employ of the Company, or to interfere with the
right of the Company to discharge the Executive at any time and for any lawful reason, subject in
all cases to the terms of this Agreement.

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     7.14 No Assignment of Benefits. Except as otherwise provided herein or by law, no
right or interest of any Executive under the Agreement shall be assignable or transferable, in
whole or in part, either directly or by operation of law or otherwise, including without limitation
by execution, levy, garnishment, attachment, pledge or in any manner; no attempted assignment or
transfer thereof shall be effective; and no right or interest of any Executive under this Agreement
shall be liable for, or subject to, any obligation or liability of such Executive.

     7.15 No Duplication of Benefits. Notwithstanding any other provision of this
Agreement to the contrary, if the Company is obligated by law or by contract (other than under this
Agreement), to pay severance pay, a termination indemnity, notice pay, or the like, or if the
Company is obligated by law or by contract to provide advance notice of separation (“Notice
Period”), then any Severance Benefits hereunder shall be reduced by the amount of any such
severance pay, termination indemnity, notice pay or the like, as applicable, and by the amount of
any pay received with respect to any Notice Period. To the extent that the Executive is entitled
to a severance payment, pro rata current year bonus, and/or reimbursement for COBRA premiums under
Section 3 of this Agreement, the Executive shall not receive payment of such amounts pursuant to
Section 8(d) of the Executive’s Employment Agreement, as it may be amended from time to time or any
other employment or severance agreement entered into between the Executive and the Company.

     7.16 Nondisclosure. During the Executive’s employment with the Company and
thereafter, the Executive shall not disclose or use in any way any confidential business or
technical information or trade secret acquired in the course of such employment, other than (i)
information that is generally known in the Company’s industry or acquired from public sources, (ii)
as required in the course of such employment, (iii) as required by any court, supervisory
authority, administrative agency or applicable law, or (iv) with the prior written consent of the
Company.

     7.17 Headings. The headings and captions herein are provided for reference and
convenience only, shall not be considered part of this Agreement, and shall not be employed in the
construction of this Agreement.

     8. Definitions.

     8.1 “Accrued Compensation” means all amounts of compensation for services rendered by
the Executive to the Company or any affiliate that have been earned or accrued through the Date of
Termination but that have not been paid as of the Date of Termination, including (i) base salary,
(ii) reimbursement (in accordance with the Company’s expense reimbursement policy) for reasonable
and necessary business expenses incurred by the Executive on behalf of the Company during the
period ending on the Date of Termination, and (iii) vacation pay.

     8.2 “Average Bonus” means the average of the two most recent annual bonuses paid to
the Executive by the Company.

     8.3 “Board” means the Board of Directors of the Company.

     8.4 “Cause” shall mean the Executive’s:

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          (a) refusal to perform any material duties reasonably required of the Executive by the Board
(other than by reason of Disability), after reasonable demand for substantial performance is
delivered by or on behalf of the Board specifically identifying the manner in which the Board
believes the Executive has not performed his or her duties;

          (b) conviction involving personal dishonesty or moral turpitude;

          (c) perpetration of a dishonest act against or breach of fiduciary duty toward the Company;

          (d) willful act or omission that is injurious in any material respect to the financial
condition or business reputation of the Company; or

          (e) habitual drunkenness or drug addiction.

     8.5 A “Change in Control” shall mean:

          (a) any Person or Persons acting together, excluding the employee benefit plans of the
Company, acquire or become the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act or any successor provisions thereto), directly or indirectly of securities of the
Company representing fifty one percent (51%) or more of the combined voting power of the Company’s
then outstanding securities;

          (b) the Company consummates a merger, consolidation, share exchange, division or other
reorganization or transaction of the Company ( a “Fundamental Transaction”) with any other
corporation, other than a Fundamental Transaction which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) at least sixty
percent (60%) of the combined voting power immediately after such Fundamental Transaction of (A)
the Company’s outstanding securities, (B) the surviving entity’s outstanding securities or (C) in
the case of a division, the outstanding securities of each entity resulting from the division;

          (c) the shareholders of the Company approve a plan of complete liquidation or winding-up of
the Company or the Company consummates the sale or disposition (in one transaction or a series of
transactions) of all or substantially all of the Company’s assets; or

          (d) during any period of twenty-four consecutive months, individuals who at the beginning of
such period constituted the Board (including for this purpose any new director whose election or
nomination for election by the Company’s shareholders was approved by a vote of at least two thirds of the directors then still in office who were directors at the
beginning of such period) cease for any reason to constitute at least a majority of the Board.

     8.6 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     8.7 “Coverage Period” means the period commencing on the date on which a Change in
Control occurs and ending on the second anniversary date thereof.

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     8.8 “Date of Termination” has the meaning assigned to such term in Section 6.1 hereof.

     8.9 “Disability” means the Executive’s total and permanent disability under the
Company’s long-term disability plan or policy applicable to the Executive such that the Executive
becomes eligible to receive long-term disability benefits thereunder.

     8.10 “Employment Agreement” means that certain Employment Agreement entered into by
and between the Company and the Executive, dated June 15, 2004.

     8.11 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time.

     8.12 “Excise Tax” has the meaning assigned to such term in Section 4 hereof.

     8.13 “Good Reason” means the occurrence during the Coverage Period of any of the
following events:

          (a) the assignment to the Executive of any duties inconsistent in any material respect with
the Executive’s position, authority, duties or responsibilities immediately prior to the Change in
Control or any other action by the Company which results in a diminution in any material respect in
such position, duties or responsibilities, excluding for this purpose an isolated and inadvertent
action not taken in bad faith that is remedied by the Company promptly after receipt of written
notice thereof given by the Executive;

          (b) a reduction by the Company in the Executive’s annual base salary as in effect on the date
hereof, unless such change was applicable to all senior executives of the Company;

          (c) the Company’s requiring the Executive to be based at any office or location that is more
than fifty (50) miles from the Executive’s office or location as of immediately prior to the Change
in Control;

          (d) the failure by the Company to continue to provide the Executive with benefits
substantially similar to those enjoyed by the Executive under any of the Company’s pension, life
insurance, medical, health and accident, disability or other welfare plans in which the Executive
was participating as of immediately prior to the Change in Control, unless such change was
applicable to all senior executives of the Company;

          (e) the failure by the Company to pay to the Executive any deferred compensation when due
under any deferred compensation plan or agreement applicable to the Executive; or

          (f) the failure by the Company to honor in any material respect the terms and provisions of
this Agreement.

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     8.14 “Monthly Base Salary” means the greater of one twelfth of (a) the Executive’s
highest annual base salary in effect during the one (1) year period preceding a Change in Control
or (b) the Executive’s highest annual base salary in effect during the one (1) year period
preceding the Executive’s Date of Termination.

     8.15 “Notice of Termination” shall have the meaning assigned to such term in Section
6.1 hereof.

     8.16 “Notice Period” has the meaning assigned to such term in Section 7.15 hereof.

     8.17 “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act and
shall also include any syndicate or group deemed to be a “person” under Section 13(d)(3) of the
Exchange Act.

     8.18 “Severance Benefits” has the meaning assigned to such term in Section 3 hereof.

     8.19 “Tax Counsel” has the meaning assigned to such term in Section 4 hereof.

     8.20 “Total Benefits” has the meaning assigned to such term in Section 4 hereof.

     8.21 “Triggering Event” means (a) the termination of the Executive’s employment by the
Company at any time during the Coverage Period, other than a termination for Cause or a termination
due to the Executive’s Disability or death or (b) a termination of the Executive’s employment by
the Executive at any time during the Coverage Period for Good Reason upon thirty (30) days prior
written notice to the Company setting forth such Good Reason.

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officer,
thereunto duly authorized, and the Executive has executed this Agreement, all as of the day and
year first above written.

	 	 	 	 	 
	 	ENTREMED, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	EXECUTIVE:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	 	 
	 

10exv10w2

 

Exhibit 10.2

[ENTREMED LETTERHEAD]

March 29, 2007

James S. Burns

President and Chief Executive Officer

EntreMed, Inc.

9640 Medical Center Drive

Rockville, MD 20850

     Re: Amendment to Employment Agreement Effective as of June 15, 2004

Dear Jim:

     This letter is to confirm the proposed amendment to the terms of your employment agreement,
effective as of June 15, 2004 (the “Agreement”). The Compensation Committee approved this
amendment on March 9, 2007. Capitalized terms used in this letter without definition have the
meanings set forth in the Agreement.

     Section 9 of your Agreement provides that you may resign during the Term for “Good Reason.”

     We propose to amend and restate the first sentence of Section 9 as follows:

     “If Executive has Good Reason during the Term, Executive may resign at any time during the
Term by providing at least thirty (30) days prior written notice to the Company that specifies the
reason for, and the effective date of, his termination.”

     If you resign for Good Reason, the resignation is treated as a termination without Cause, and
you are entitled to the compensation and other benefits specified in the Agreement. Good Reason is
currently defined in Section 10(e) of the Agreement to mean the occurrence of specified events
after a “Change in Control.”

     We propose to amend and restate Section 10(e) of the Agreement as follows:

(e) “Good Reason” shall mean the occurrence of any of the following events: (A)
the assignment to Executive of any duties inconsistent in any material respect with
Executive’s position, authority, duties or responsibilities or any other action by the
Company which results in a diminution in any material respect in such position, duties
or responsibilities, excluding for this purpose an isolated and inadvertent action not
taken in bad faith that is remedied by the Company promptly after receipt of written
notice thereof given by Executive; (B) a reduction by the Company in Executive’s annual
Base Salary as in effect on the date hereof, or subsequently in effect hereunder,
except as agreed to by Executive, unless such change was applicable to all senior
executives of the

 

 

Company; (C) the Company’s requiring Executive to be based at any office or location that is
more than fifty (50) miles from Executive’s office or location as of the date hereof; (D)
the failure by the Company to continue to provide Executive with benefits substantially
similar to those enjoyed by him under any of the Company’s pension, life insurance, medical,
health and accident, disability or other welfare plans in which he was participating, unless
such change was applicable to all senior executives of the Company; (E) the failure by the
Company to pay to Executive any deferred compensation when due under any deferred
compensation plan or agreement applicable to him; or (F) the failure by the Company to honor
in any material respect the terms and provisions of this Agreement.

     If the amendment to Section 10(e) is acceptable to you, please countersign this letter in the
space indicated below. This amendment to the Agreement will be effective on the date of your
signature. All other terms and conditions of the Agreement will remain in full force and effect.

	 	 	 	 	 
	 	Sincerely,

 	 
	 	/s/ Michael Tarnow
 	 
	 	Michael Tarnow 	 
	 	Chairman 	 

	 	 	 	 	 
	Accepted and Agreed as of April 16, 2007

 	 	 
	/s/ James S. Burns
 	 	 
	James S. Burns

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