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EXHIBIT 10.51
COPE STOCK PURCHASE AGREEMENT
This COPE STOCK PURCHASE AGREEMENT dated effective January 1,
2001 (the "Agreement") is made and entered into by, between and among Dataquad,
Inc., a Nevada corporation ("Dataquad"), The LibraryCard, Inc., a Nevada
corporation ("LibraryCard"), Corey M. Patick ("Patick") in his individual
capacity and Robert S. Cope in his individual capacity ("Cope"). Dataquad and
LibraryCard are collectively sometimes referred to herein as the "Corporations".
R E C I T A L S
WHEREAS, Dataquad and LibraryCard each previously sold and
issued to Patick shares of its Common Stock to be used by Patick for the express
purpose of reselling such shares of stock to employees, agents and
representatives of such Corporation and for no other purpose (the "Trust
Shares");
WHEREAS, Patick agreed to purchase, acquire, hold and use such
Trust Shares for such stated purposes and no other;
WHEREAS, Patick further agreed to purchase, acquire, hold and
use such Trust Shares of stock for such purposes as a "Trustee" of such Shares
to be held by Patick in "Trust" for the benefit of the intended beneficiaries of
such Shares, namely employees, agents and representatives of the Corporations to
whom Patick subsequently determined in his sole discretion and election to sell
and issue such Trust Shares in a way and manner which Patick believed in his
sole election and discretion would provide motivation and incentive to such
recipients to advance the respective business endeavors and interests of the
Corporations as Patick reasonably understood such matters;
WHEREAS, during the period of time that Patick owned the Trust
Shares he is deemed for all purposes to be the registered and beneficial owner
of the Trust Shares and he is entitled to exercise all incidents of such
ownership including without limitation the voting of such shares;
WHEREAS, Patick understood and agreed that if he retained any of
the Trust Shares sold and issued to him under this Agreement on December 31,
2002 (the "Possible Further Transfer Date"), he would then resell and transfer
such remaining
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Shares to the respective Corporations which issued the shares to Patick under
the agreement with Patick unless either or both of such Corporations notified
Patick that it does not desire to purchase any such remaining Trust Shares;
WHEREAS, the Trust Shares have previously been sold and issued
to Patick who continues to own all of such Trust Shares;
WHEREAS, it is now proposed that as of the effective date of
this Agreement as first indicated above, Patick would sell, transfer, assign and
convey all of his right, title and interest in and to the Trust Shares to Cope
who would thereupon and thereafter be, act and serve as the registered and
beneficial owner of and the "Trustee" in respect of such Trust Shares in lieu of
and as substitute for Patick as more fully provided for in and pursuant to and
in accordance with this Agreement;
WHEREAS, Cope has agreed to and hereby does acquire and accept
such Trust Shares and own, act and serve as the Trustee in respect of such Trust
Shares pursuant to and in accordance with this Agreement; accept; and
WHEREAS, the undersigned parties desire to memorialize their
understandings and agreements in respect of the Trust Shares and matters related
thereto in this Agreement;
A G R E E M E N T
NOW, THEREFORE, the undersigned parties in consideration of the
premises and the covenants contained herein hereby agree, subject to the within
terms and conditions, as follows:
1. Trust Shares.
1.1 Patick agrees and hereby does sell, transfer, assign
and convey to Cope Seven Hundred Thousand (700,000) shares of the Common Stock,
$0.001 par value, of Dataquad (the "Dataquad Trust Shares"), for consideration
in the amount of One Hundred Eighty Thousand Two Hundred Fifty Dollars
($180,250); and
1.2 Patick agrees and hereby does sell, transfer,
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assign and convey to Cope Seven Hundred Thousand (700,000) shares of the Common
Stock, $0.001 par value, of LibraryCard (the "LibraryCard Trust Shares"), for
consideration in the amount of One Hundred Thousand Two Hundred Fifty Dollars
($100,250).
The Dataquad Trust Shares and the LibraryCard Trust Shares are herein
collectively referred to for convenience sake as the "Trust Shares".
1.3 The Trust Shares sold by Patick to Cope under
Sections 1.1 and 1.2 hereof shall be registered in the name of and be owned of
record and beneficially by Cope.
1.4 Cope is not obligated to sell and issue any or all
of the Trust Shares to any recipients; however, if Cope does elect to sell and
transfer any of such Trust Shares from time to time prior to the Possible
Retransfer Date, Cope shall only sell and transfer such Trust Shares to
recipients thereof and provided for and contemplated hereby under the so-called
"Trust" arrangement and only pursuant to and in accordance with applicable
Federal and state securities laws including as provided for in Section 5 of this
Agreement.
2. Payment By Cope.
2.1 Cope shall pay for the Trust Shares being purchased
and acquired from Patick by entering into new promissory notes payable to the
respective Corporations for the Dataquad Trust Shares and the LibraryCard Trust
Shares in the principal amount of the obligation previously owed by Patick to
such Corporations for such Trust Shares as of the effective Date of this
Agreement in the form attached hereto and incorporated herein as Exhibit A
(collectively the "Notes"); and Patick shall no longer be obligated to the
Corporations or either of them on, under or otherwise in respect of the Notes
made by Patick at the time he purchased and acquired such Trust Shares (which
obligation is now "assumed" by Cope pursuant to and in accordance with the Notes
and the obligation of Cope represented thereby to the Corporations) and,
following receipt of certificates for the Trust Shares by Cope, Patick shall
have no duties, responsibilities and/or obligation of any kind to Cope (and/or
to the Corporations) in respect of such Shares or the subject matter of this
Agreement.
3. Purchase By The Corporations.
3.1 If the Corporations, or either of them, determine at
the Possible Retransfer Date (December 31, 2002) that
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they want to purchase and acquire the remaining Trust Shares issued by each of
such respective Corporations which Cope still then owns, then such Corporation
shall purchase from and pay Cope for such remaining shares of Dataquad Trust
Shares and LibraryCard Trust Shares effective as of the Possible Retransfer Date
in the same manner as Cope purchased and paid Patick for such Shares as provided
for in Section 2; and, upon receipt of such consideration by Cope, Cope
including his successors shall sell, transfer and deliver any and all such
remaining Trust Shares effective as of such Date.
3.2 If any of the remaining Trust Shares are not
purchased by the respective issuer Corporations of such Trust Shares as provided
for herein, then Cope shall thereafter remain the registered and beneficial
owner of such Trust Shares without any further obligation to such issuer
Corporations in respect thereof except for payment in full of the Notes (Exhibit
A) used by Cope to pay for such Trust Shares under this Agreement; and, if not
already paid for in cash or by check, Cope shall complete payment under such
notes for any and all such remaining Trust Shares which Cope shall continue
owning on and after the Possible Retransfer Date in accordance with the
provisions of this Agreement.
3.3 Notwithstanding any contrary provision contained
herein, Cope shall have the right, but not the obligation, in his sole election
and judgment at any time during the nine (9) month period following the
effective date of this Agreement (ending September 30, 2001) to tender any or
all of the Trust Shares then owned by him to the respective issuer Corporations
thereof for purchase and payment by such Corporations for the price, in the
manner and with the consequences provided for in Section 3.1 hereof (the "Cope
Tender Date"); and, if Cope makes such election, then the respective
Corporations shall purchase, acquire and pay for any and all of such remaining
Trust Shares which are the subject of Cope's tender in accordance with the
provisions of Section 3.1 hereof.
4. Sales/Transfer By Cope.
4.1 When Cope sells and transfers any of the Trust
Shares to recipients thereof as contemplated by and under this Agreement, Cope
shall immediately report such sale/transfer transaction to the respective issuer
Corporations, including the consideration paid to and received by Cope for or
otherwise in connection with such sold/transferred Trust Shares; and Cope shall
simultaneously cause to be registered for transfer all such
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sold/transferred Trust Shares on the stock transfer books and records of the
respective Corporation(s) as maintained by such Corporation(s) or its (their)
independent stock register and/or transfer agent(s) to the recipients thereof as
provided for and contemplated by this Agreement. All proceeds from the
sale/transfer of Trust Shares by Cope, prior to the Cope Tender Date or, if less
than all the Trust Stock is tendered, the Possible Retransfer Date, must be used
by Cope to pay down the balance due and owing by Cope under the Notes
(sale/transfer of Dataquad Trust Shares requiring payment on the Note to
Dataquad and sale/transfer of LibraryCard Trust Shares requiring payment on the
Note to LibraryCard). Following the sale/transfer of Trust Shares by Cope
pursuant to and in accordance with this Agreement, Cope shall have no further
interest in, to or otherwise in respect of any of such sold/transferred Trust
Shares; and, accordingly, Cope shall have no further obligation to the issuer
Corporation of such Trust Shares in respect thereof under this Agreement or
otherwise.
5. Certain Securities Matters.
5.1 The Trust Shares sold, transferred, assigned and
conveyed by Patick to Cope pursuant to this Agreement shall not be registered
and/or qualified under Federal or state securities laws and shall be sold,
assigned, transferred and conveyed by Patick to Cope, and purchased and acquired
by Cope, pursuant to applicable exemptions from such registration or
qualification including under the "private placement" exemption from such
registration and/or qualification; and, as such, the Trust Shares are understood
and shall be treated for all purposes as "restricted securities" as that term is
generally understood under applicable securities laws. The certificates
representing the Trust Shares shall contain a customary legend restricting the
sale and transfer thereof except under applicable securities laws (see Exhibit B
hereto); and the Corporations shall place or cause to be placed and implemented
customary "stop transfer" instructions in respect of such Trust Shares and the
certificates therefor as registered and in the name of Cope.
5.2 Cope shall provide the respective Corporations with
such further written assurances as such Corporations or their counsel shall
request in connection with the sale, assignment, transfer and conveyance of the
Trust Shares by Patick to Cope, and by Cope to recipients thereof, in respect of
such securities exemption and related matters; and Cope otherwise hereby agrees
and promises to cooperate with and assist the Corporations in respect of the
matters which are the subject of
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this Agreement.
5.3 Cope shall exercise reasonable judgment in
determining if and when to sell and transfer any of the Trust Shares to any
recipients thereof so as not to violate any securities laws pertaining to the
registration and/or qualification of any such Trust Shares applicable to the
sale and transfer of such Shares by Cope to any recipient thereof.
6. Spousal Consent.
5.1 Cope shall obtain the consent of his spouse in
respect of the subject matter of this Agreement and Cope's individual and
separate ownership of the Trust Shares in the form attached hereto and
incorporated herein as Exhibit C; and Cope hereby further agrees to take such
steps as are reasonably necessary to ensure that his successors in interest
(including without limitation his executors and administrators) are bound by the
terms and conditions of this Agreement in respect of the Trust Shares.
7. Indemnities.
7.1 Cope and the respective Corporations each hereby
agree and promise to indemnify and hold harmless the other(s) for any and all
costs and expenses (including reasonable attorneys and other professionals' fees
and costs paid or incurred), claims, debts, causes of action, judgments and
liabilities actual and contingent which may result from, arise or otherwise be
asserted or imposed on or against any of the undersigned parties as a result of
any of the undersigned party(ies) failure or refusal to perform this Agreement
or any agreement, covenant, promise and/or provision hereof.
7.2 The Corporations and each of them, and Cope, hereby
agree and promise, jointly and severally, to indemnify and hold harmless Patick
for any and all costs and expenses including reasonable attorneys and other
professionals' fees and costs paid or incurred, claims, debts, causes of action,
judgments and liabilities actual and contingent which may result from, arise or
otherwise be asserted or imposed on or against Patick as a result of or in any
way relating to his prior ownership of the Trust Shares and/or the instant sale,
assignment and transfer of the Trust Shares to Cope pursuant to and in
accordance with this Agreement.
8. Events of Default/Notice and Cure.
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8.1 Before declaring any default of this Agreement, the
undersigned parties shall first provide the party(ies) alleged to have committed
a material breach of this Agreement with written notice including details of any
such alleged material breach and opportunity to cure any such breach within the
thirty (30) day period following the date of any such notice of alleged default;
and, thereafter, the party receiving any such notice of alleged breach having
failed to timely cure any such alleged breach, the party(ies) providing any such
notice and request for cure shall be entitled to declare an event of default
under this agreement and seek relief against any such defaulting party(ies)
consistent with Section 9 hereof.
9. Arbitration.
9.1 In the event of any disagreement and/or dispute
under or otherwise in respect of this Agreement, the undersigned parties hereby
agree to resolve any such disagreement and/or dispute, and all related matters,
by binding arbitration. All arbitration proceedings shall be conducted in
accordance with the then prevailing and applicable rules of the American
Arbitration Association ("AAA") at a city in Los Angeles County, California
selected pursuant to such rules. The arbitration shall be conducted by a single
arbitrator selected jointly by the parties or, in the event that the parties are
enable to mutually agree upon the person to act as such arbitrator within thirty
(30) days following the first providing of a notice to arbitrate by any of the
parties, then the arbitrator shall be selected by the AAA. For purposes of such
arbitration, the parties shall be entitled to avail themselves of all discovery
permitted under California Code of Civil Procedure Section 2017 et seq. The
arbitrator shall be empowered to provide any relief and make any award that
could be provided or made by a court of competent jurisdiction. Judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction or application may be made to such court for a judicial acceptance
of the award and an order of enforcement, as the case may be.
10. Attorneys/Professionals' Fees/Costs.
10.1 In addition to whatever other relief any of the
party(ies) may be entitled to under or otherwise in respect of this Agreement,
in the event of any disagreement and/or dispute under or otherwise in respect of
this Agreement, the part(ies) prevailing in any such disagreement and/or dispute
shall recover the costs of the arbitration proceeding and the acceptance and
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enforcement of any such arbitration award in any judicial proceeding initiated
for such purpose by the prevailing party(ies), and such prevailing party(ies)
reasonable attorneys and other professionals' fees and costs paid or incurred in
asserting, maintaining and prosecuting any such disagreement/dispute and
arbitration proceeding and decision in respect thereof.
11. Choice of Law.
11.1 This Agreement has been made, executed and
delivered within the State of California, and the rights and obligations of the
parties hereto shall be construed, interpreted and enforced in accordance with
and governed by the law of said State.
12. Time Is Of The Essence.
12.1 For purpose of this Agreement, including the
performance of the parties' responsibilities, duties and obligations hereunder,
time shall be deemed to be of the essence.
13. Assignment and Other Matters.
13.1 The parties to this Agreement shall not have the
right, absent the prior written approval and consent of all of the other parties
to this Agreement, to assign or otherwise transfer this Agreement including any
of their rights, duties, responsibilities and/or obligations hereunder to any
person or entity.
14. Severability.
14.1 If any provision of this Agreement is hereafter
finally determined to be unenforceable for any reason, then such provision shall
be deemed and treated for all purposes as severed from this Agreement; and the
balance of this Agreement shall remain in full force and effect as between the
parties notwithstanding any such unenforceable and severed provision.
15. Notices.
15.1 Notices to be given under or in respect of this
Agreement shall be provided in writing and shall be deemed
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effective upon receipt if personally delivered or on the third (3rd) day
following mailing in the United States Mail by certified mail - return receipt
requested, addressed as follows:
If To Dataquad, Inc.
Dataquad, Inc.
3201 Temple Avenue
Pomona, CA 91768-3200
With a copy to -
Robert H. Bretz, Esq.
520 Washington Blvd, PMB #428
Marina del Rey, CA 90292
If To The LibraryCard, Inc.
The LibraryCard, Inc.
3201 Temple Avenue
Pomona, CA 91768-3200
With a copy to -
Robert H. Bretz, Esq.
520 Washington Blvd, PMB #428
Marina del Rey, CA 90292
If To Cope
Robert S. Cope
c/o Auto-Graphics, Inc.
3201 Temple Avenue
Pomona, CA 91768-3200
With a copy to -
Paul Gautreau, Esq.
957 S. Village Oaks
Covina CA 91724
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If To Patick
Corey M. Patick
269 South Beverly Drive #438
Beverly Hills, CA 90210
With a copy to -
Bill D. Ringer, Esq.
1401 N. Hunter Street
San Joaquin, CA 95202
Any party may, from time to time, update or otherwise change its address for
purposes of notice under this Agreement by providing such notice in accordance
with the provisions of this paragraph.
16. Headings.
16.1 The headings of the paragraphs (and any
subparagraphs) of this Agreement are included for the convenience of reference
only and are not intended to affect the meaning or interpretation of this
Agreement.
17. Complete Agreement/Amendment.
17.1 This Agreement constitutes the entire understanding
and agreement between the parties with respect to the subject matter hereof and
is intended to supersede all prior and contemporaneous written or oral
agreements and discussions regarding the matters which are the subject of this
Agreement. This Agreement may be amended or otherwise changed only by an
agreement in writing so stating and signed by the party(ies) against which any
such amendment or other change is sought to be enforced. Each of the parties
represents and warrants to, and agrees with, the other that in entering into and
performing this Agreement, they have not received and are not otherwise relying
upon any statement, fact, circumstance, representation, understanding,
agreement, covenant, promise, guaranty, warranty, assurance and/or any other
matter which is/are not expressly set forth in this Agreement; and that they
will not at any time assert otherwise (whether by way of any claims in contract,
tort, or otherwise), in any action, proceeding or otherwise against or in
respect of any of such parties to this Agreement. In entering into this
Agreement, each of the parties hereby further represents and warrants to, and
agrees with, the other that such party had the opportunity to consult with
independent counsel of its
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(including his/her) own choosing regarding this Agreement and the subject matter
thereof. The parties acknowledge and agree that this Agreement was negotiated,
drafted and otherwise prepared jointly by all of the parties and that no party
shall suffer any detriment or prejudice as a result of any determination that
any of the language of this Agreement is ambiguous or otherwise unclear in any
manner. The "Recitals" set forth at the outset of this Agreement are hereby
incorporated by this reference into and made part of the "Agreement" portion of
this Agreement.
IN WITNESS WHEREOF, the undersigned parties thereunto duly
authorized have executed and delivered this Agreement in Pomona, California
effective as of the date of this Agreement.
DATAQUAD, INC.
By
Robert S. Cope, President
THE LIBRARYCARD, INC.
By
--------------------------------------------
Michael K. Skiles, Acting
President
Corey M. Patick, an individual
Robert S. Cope, an individual
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FORM OF PROMISSORY NOTE
$
January 1, 2001
Pomona, California
FOR VALUE RECEIVED, the undersigned Robert S. Cope ("Cope")
hereby promises to pay to LibraryCard, Inc., a Nevada corporation, or its
designee ("________"), at its corporate offices in California, the principal
amount of ___________________________________ ($________) plus interest from the
date of this Promissory Note until paid in full on the unpaid balance of this
Note at the rate of five percent (5%) per annum. This Promissory Note is made
and given pursuant to and in accordance with that certain Cope Stock Purchase
Agreement dated as of the date of this Note (the "Agreement") which shall,
except as expressly provided for herein, govern this Note for all purposes.
Unless otherwise expressly provided for in this Note, the defined terms in this
Note shall have the same meaning as the terms defined in the Agreement.
All principal and interest due and owing on this Note shall be
paid no later than December 31, 2002, except that Cope shall have the option in
his sole election and discretion to satisfy the principal payment obligation
represented by this Note then due and owing by tendering any or all shares of
________ acquired, purchased and received by Cope under the Agreement registered
to and owned by Cope as of September 30, 2001 for purchase and acquisition by
________ pursuant to and in accordance with Section 3.3 of the Agreement (the
"Cope Tender Date" under the Agreement). All "________ Trust Shares" (as defined
in the Agreement) registered to and owned by Cope following the Cope Tender Date
(not timely tendered by Cope for purchase and sale by ________) shall continue
to be owned by Cope, and Cope's obligation under this Note in respect of such
Shares, shall be timely paid by Cope in accordance with the provisions of this
Note by no later than December 31, 2002 (the "Possible Retransfer Date" under
the Agreement and the maturity date of this Note) unless ________ notifies Cope
at or prior to that date that ________ is exercising its rights to purchase and
acquire all or any portion of such ________ Trust Shares under Section 3.1 of
the Agreement. Any shares purchased and acquired from Cope by ________ pursuant
to and in accordance with the provisions of Section 3.1 of the Agreement shall
be at the rate that Cope purchased and acquired such Shares under the Agreement
($0.2575 per share), and Cope shall pay the balance then due and owing on this
Note following any such repurchase transaction by ________ no later than
December 31, 2002. Any tender by Cope of ________ Trust Shares, on or before
September 30, 2001 as provided for herein and the Agreement, shall likewise be
at the rate of $0.2575 per share.
In accordance with the Agreement, any sale and transfer by Cope
to any recipient of ________ Trust Shares registered to and owned by Cope as
provided for in the Agreement shall require an automatic and immediate payment
by Cope to ________ under this Note in the amount of any and all consideration
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when and as received by Cope from the recipient of such Shares as proceeds of
the sale of such Shares or otherwise.
Notices required or elected to be given under or in respect of
this Note shall be given pursuant to and in accordance with the provisions of
Section 15 of the Agreement. To the extent not otherwise expressly provided for
in this Note, the provision of the Agreement, to the extent applicable, shall be
incorporated into, adopted and made a part of this Note for all purposes.
Cope hereby waives any and all statutory and other legal
requirements under California law applicable to this Note relating to, requiring
and/or otherwise in respect of presentment, demand or other similar notice and
other procedural requirements applicable to the collection of and under this
Note by ________.
This Note is made and shall be governed and interpreted for all
purposes by and under the laws of the State of California. For purposes of this
Note, time shall be deemed to be of the essence.
IN WITNESS WHEREOF, the undersigned Robert S. Cope (herein
"Cope"), thereunto duly authorized and acting in his individual capacity, and
intending to be legally bound and obligated thereby, has executed this Note as
of the date first above stated.
Robert S. Cope
EXHIBIT A
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`33 ACT LEGEND
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND
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 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 ACT
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SPOUSAL CONSENT
The undersigned Elizabeth R. Cope ("Spouse"), the wife of Robert
S. Cope, having had the opportunity to consult with her own independent attorney
or other professional advisor in respect of such matters and the within Spousal
Consent, acknowledges the attached Cope Stock Purchase Agreement and the
provisions thereof (the "Agreement"), and hereby acknowledges, agrees and
consents to the provisions of the Agreement stating and otherwise providing that
the Trust Shares to be sold, assigned, transferred and conveyed by Corey M.
Patick to Robert S. Cope pursuant to and in accordance with the Agreement are
and shall be for al purposes the separate property of Robert S. Cope as provided
for therein; and such undersigned Spouse further hereby irrevocably waives and
disclaims any interest of any kind or nature in and to the Trust Shares (the
"Spousal Consent").
The undersigned Spouse also acknowledges and agrees that, in
entering into and performing the Agreement, the Corporations, Corey M. Patick,
and Robert S. Cope in his individual capacity as a signatory to the Agreement,
are relying on the within Spousal Consent; and that, in the event that such
Spouse or her successors in interest asserts any right, title and/or interest in
and/or to the Trust Shares for any reason whatsoever, the prevailing party in
any such proceeding or action shall be entitled to recover such
person(s)/entity(ies) reasonable attorneys and other professionals' fees and
costs paid or incurred in respect of any such proceeding/action.
Elizabeth R. Cope
EXHIBIT C
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