REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT dated as of August 13, 1999 (as
amended, supplemented or modified from time to time, the "Registration Rights
Agreement") between OPTICARE HEALTH SYSTEMS, INC., a Delaware corporation f/k/a
Saratoga Resources, Inc. (the "Company"), and BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC. having offices at 0 Xxxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000
("BACCFI").
W I T N E S S E T H:
WHEREAS, in connection with a certain Amended and Restated Loan and
Security Agreement, dated August 13, 1999 (the "Loan Agreement") among the
Company, the lenders named therein, Bank Austria AG as the LC Issuer, and BACCFI
as the Agent, the Company has agreed to execute and deliver a Warrant Agreement
as of the date hereof (as the same may be amended, supplemented or otherwise
modified from time to time, the "Warrant Agreement") in favor of BACCFI,
pursuant to which the Company will issue to BACCFI or an Affiliate certain stock
purchase warrants (the "Warrants") exercisable for up to 100,000 shares of
Common Stock or Series A Preferred Stock, par value $0.001 per share (the
"Series A Preferred Stock") (subject to adjustment pursuant to the Warrant
Agreement); and
WHEREAS, the Company and BACCFI are entering into a Exchange and
Subscription Agreement as of the date hereof (as the same may be amended,
supplemented or otherwise modified from time to time, the "Subscription
Agreement") pursuant to which BACCFI will purchase from the Company 418,803
shares of the Company's Series A Convertible Preferred Stock; and
WHEREAS, in order to induce BACCFI to enter into the Loan Agreement and
the Subscription Agreement, the Company has agreed to provide BACCFI with
certain exchange rights and rights in respect of the registration of the
Company's equity securities to be issued to BACCFI pursuant to the Warrant
Agreement and the Subscription Agreement; and
NOW, THEREFORE, in consideration of the premises, the terms and
conditions herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Definitions.
"AFFILIATE" of any Person (which shall include an individual,
a partnership, a limited liability company, a corporation, a trust, a
joint venture, an incorporated organization or a government or any
department or agency thereof) means any other Person directly or
indirectly controlling, controlled by or under direct or indirect
common control with such Person. For purposes of this definition, a
Person shall be deemed to control another Person if such first Person
possesses directly or indirectly the power to (i) vote 10% or more of
the securities having ordinary voting power for the selection of
directors of such Person or (ii)
direct, or cause the direction of, the management and policies of the
second Person, whether through the ownership of voting securities, by
contract or otherwise. In addition, as to BACCFI, "Affiliate" shall
include any partnership a majority of the partners of which are
officers, directors, employees or Affiliates of Purchaser, and as to
the Company, Affiliate" shall not include BACCFI or any Affiliate of
BACCFI which is a holder of any Securities of the Company.
"COMMON STOCK" shall mean the Common Stock, $0.001 par value per share,
of the Company.
"COMMISSION" shall mean the Securities and Exchange Commission and any
successor federal agency having similar powers.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"HOLDERS" shall mean BACCFI, and all other Persons holding Registrable
Securities so long as BACCFI or such other Person holds Registrable
Securities, except that none of the Company or any Affiliate of the
Company will at any time be a Holder. Unless otherwise provided in this
Agreement, in each instance that a Holder is required to request or
consent to or otherwise approve an action, such Holder will be deemed
to have requested or consented to or otherwise approved such action if
the Holders of a majority-in-interest of the Registrable Securities so
request, consent or otherwise approve.
"NON-ATTRIBUTABLE STOCK" shall have the meaning given such term in the
Warrant Agreement.
"NON-PUBLIC WARRANT SHARES" shall mean Warrant Shares that have not
been sold to the public.
"PERSON" this term shall be interpreted broadly to include any
individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, company,
institution, entity, party, or government (whether national, federal,
state, county, city, municipal, or otherwise, including, without
limitation, any instrumentality, division, agency, body, or department
of any of the foregoing).
"REGISTER," "REGISTERED," AND "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance
with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRABLE SECURITIES" shall mean (a) the Warrants, (b) the
Non-Public Warrant Shares, (c) shares of Series A Preferred Stock held
by BACCFI, and (d) shares of Common Stock issued or issuable upon
conversion of the Series A Preferred Stock.
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"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
"SERIES A PREFERRED STOCK" shall mean the Series A Convertible
Preferred Stock $0.001 par value, of the Company having the rights,
restrictions, privileges and preferences set forth in the Company's
Certificate of Designation of terms of Series A Convertible Preferred
Stock.
"SUBSCRIPTION AGREEMENT" shall mean the Exchange and Subscription
Agreement, dated as of August 13, 1999, between the Company and BACCFI
(as such agreement may be amended, restated, supplemented or otherwise
modified from time to time).
"WARRANT AGREEMENT" shall mean the Warrant Agreement, dated as of
August 13, 1999, between the Company and BACCFI (as such agreement may
be amended, restated, supplemented or otherwise modified from time to
time).
"WARRANT SHARES" shall have the meaning given such term in the Warrant
Agreement.
"WARRANTS" shall have the meaning given such term in the Warrant
Agreement.
Section 2. Exchange Rights. If the Company takes any action to cause
the Common Stock currently or previously held by or currently issuable without
restriction to BACCFI and its Affiliates (other than shares of Non-Attributable
Stock) to exceed 4.99% of the aggregate number of issued and outstanding shares
of Common Stock, then the Company shall use its best efforts, as soon as
practicable and in any event within 3 business days after receipt of written
notice from BACCFI exercising its exchange rights hereunder, to exchange such
portion of Common Stock for Series A Preferred Stock as will reduce the shares
of Common Stock currently or previously held by or currently issuable without
registration to the BACCFI and its Affiliates (not including "Non-Attributable
Stock") to 4.99% of the aggregate number of issued and outstanding shares of
Common Stock.
Section 3. Registration Rights.
(a) If, at any time after the date hereof, the Company proposes to
register any of its securities under the Securities Act (except pursuant to a
registration statement filed on Form S-8 or Form S-4 or such other form as shall
be prescribed under the Act for the same purposes), it will at each such time
give written notice (which notice shall state the intended method of disposition
thereof by the prospective sellers) to all holders of outstanding Registrable
Securities of its intention to do so and the proposed minimum offering price per
shares of such securities and upon the written request of any holder thereof
given within 10 days after the Company's giving of such notice, the Company,
will use its reasonable best efforts to effect the registration of the
Registrable Securities which it shall have been so requested to register by
including the same in such registration statement all to the extent required to
permit the sale or other disposition thereof in accordance with the intended
method of sale or other disposition given in each such request. If the
registration of which the Company gives notice pursuant to this subsection 3(c)
is for an
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underwritten public offering, only Registrable Securities which are to be
included in the underwriting may be included in such registration, and the
Company shall have the right to designate the managing underwriter(s) in any
such underwritten public offering; provided that (i) the Company shall use its
reasonable best efforts to cause the managing underwriter(s) to include the
Registrable Securities requested to be included in the registration in the
underwriting; (ii) if the managing underwriter(s) advises the holders of the
Registrable Securities in writing that the total amount of securities which they
and the Company intend to include in such offering is sufficiently large to
materially and adversely affect the success of such offering, the amount of
securities to be offered for the accounts of all holders of Registrable
Securities shall be reduced pro rata (based upon the amount of securities each
such Person sought to include in the offering) to the extent necessary to reduce
the total amount of securities to be included in the offering to the amount
recommended by such managing underwriter(s) (which amount may be zero, if so
recommended by such managing underwriter(s). Any registration statement filed
pursuant to this subsection 3(c) may be withdrawn at any time at the discretion
of the Company.
(b) If a registration under subsection 3(c) shall be in connection with
an underwritten public offering, each holder of Registrable Securities shall be
deemed to have agreed by acquisition of such Registrable Securities not to
effect any sale or distribution, including any sale pursuant to Rule 144 or Rule
144A, of any Registrable Securities, and to use such holder's reasonable best
efforts not to effect any such sale or distribution of any other equity security
of the Company or of any security convertible into or exchangeable or
exercisable for any equity security of the Company (other than as part of such
underwritten public offering) within seven days before or 90 days after the
effective date of such registration statement, provided that the Company hereby
also so agrees and agrees to use its reasonable efforts to cause each other
selling shareholder in such offering, so to agree.
(c) (i) As a condition to the inclusion of a holder's Registrable
Securities in any registration statement, each such holder of
Registrable Securities requesting registration thereof will furnish to
the Company such information with respect to such holder as is required
to be disclosed in the registration statement (and the prospectus
included therein) by the applicable rules, regulations and guidelines
of the Commission and enter into a customary agreement requested by the
Company regarding compliance with Rule 10b-18 promulgated under the
Exchange Act and agreeing that such holder will, upon receipt of a
notice from the Company pursuant to subsection 3(d)(iv) below, refrain
from selling Warrants or Warrant Shares pursuant to the Registration
Statement until the Company has filed and furnished to the holder an
amended or supplemented prospectus as contemplated in subsection
3(d)(iv), but not longer than ninety (90) days after such notice.
Failure of a holder to furnish such information or agreement shall not
affect the obligation of the Company under this Section 3 to the
remaining holders who furnish such information.
(ii) Each Holder of Registrable Securities requesting
registration thereof agrees that such Holder will register shares of
Common Stock to the greatest extent permitted by applicable law and to
the extent that legal restrictions would not make the registration of
Common Stock disadvantageous to such Holder.
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(d) If and whenever the Company is required under this Section 3 to use
its reasonable best efforts to effect the registration of Registrable Securities
under the Securities Act, the Company shall:
(i) as expeditiously as possible prepare and file with the
Commission a registration statement on the appropriate form with
respect to such Registrable Securities and use its reasonable best
efforts to cause such registration statement to become effective as
soon as practicable after such filing;
(ii) as expeditiously as possible, prepare and file with the
Commission such amendments and supplements (including post-effective
amendments and supplements) to the registration statement covering such
Registrable Securities and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and
usable for resale for a period necessary to complete the distribution
of such securities, but in no event in excess of 12 months plus any
period during which the holders of Registrable Securities are obligated
to refrain from selling because the Company is required to amend or
supplement the prospectus as contemplated under subsection 3(d)(iv),
and to comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by such
registration statement during such period in accordance with the
intended method of disposition of the sellers set forth therein;
(iii) as expeditiously as possible, furnish to each seller of
such Registrable Securities registered, or to be registered under the
Securities Act, and to each underwriter, if any, of such Registrable
Securities such number of copies of a prospectus and preliminary
prospectus in conformity with the requirements of the Securities Act,
and such other documents as such seller or underwriter may reasonably
request in order to facilitate the public sale or other disposition of
such Registrable Securities;
(iv) as expeditiously as possible, notify each seller of such
Registrable Securities if, at any time when a prospectus relating to
such Registrable Securities, is required to be delivered under the
Securities Act, any event shall have occurred as a result of which the
prospectus then in use with respect to such Registrable Securities
would include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or for any other reason it shall be
necessary to amend or supplement such prospectus in order to comply
with the Securities Act and prepare and furnish to all sellers as
promptly as possible, and in any event within ninety (90) days of such
notice, a reasonable number of copies of a supplement to or an
amendment of such prospectus which will correct such statement or
omission or effect such compliance;
(v) as expeditiously as possible, use its reasonable best
efforts to register or qualify, or obtain exemptions from such
registration or qualification of, such Registrable Securities under
such other securities or blue sky laws of such jurisdictions as such
seller shall reasonably request and do any and all other acts and
things which may be reasonably necessary to enable such seller to
consummate the public sale or other disposition in each
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such jurisdiction of the Registrable Securities owned by such
seller and included in such registration statement, provided that the
Company shall not be required to consent to the general service of
process or to qualify to do business in any jurisdiction where it is
not then qualified;
(vi) use its reasonable best efforts to keep the holders of
such Registrable Securities informed of the Company's best estimate of
the earliest date on which such registration statement or any
post-effective amendment or supplement thereto will become effective
and will promptly notify such holders and the managing underwriters, if
any, participating in the distribution pursuant to such registration
statement of the following: (A) when such registration statement or any
post-effective amendment or supplement thereto becomes effective or is
approved; (B) of the issuance by any competent authority of any stop
order suspending the effectiveness or qualification of such
registration statement or the prospectus then in use or the initiation
or threat of any proceeding for that purpose; and (C) of the suspension
of the qualification of any Registrable Securities included in such
registration statement for sale in any jurisdiction;
(vii) make available to its security holders, as soon as
practicable, an earnings statement covering a period of at least twelve
months which satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(viii) cooperate with the sellers of such Registrable
Securities and the underwriters, if any, of such Registrable
Securities; give each seller of such Registrable Securities, and the
underwriters, if any, of such Registrable Securities and their
respective counsel and accountants, such access to its books and
records and such opportunities to discuss the business of the Company
with its officers and independent public accountants as shall be
necessary to enable them to conduct a reasonable investigation within
the meaning of the Securities Act and, in the event that Registrable
Securities are to be sold in an underwritten offering, enter into an
underwriting agreement containing customary representations and
warranties, covenants, conditions and indemnification provisions,
including without limitation the furnishing to the underwriters of a
customary opinion of independent counsel to the Company;
(ix) provide a CUSIP number for all Registrable Securities not
later than the effective date of the registration statement;
(x) as to all registrations under subsection 3(a), pay all
costs and expenses incident to the performance and compliance by the
Company of this Section 3, including without limitation (A) all
registration and filing fees; (B) all printing expenses; (C) all fees
and disbursements of counsel and independent public accountants for the
Company; (D) all blue sky fees and expenses (including fees and
expenses of counsel in connection with blue sky surveys); (E) all
transfer taxes; (F) the entire expense of any special audits required
by the rules and regulations of the Commission; (G) the cost of
distributing prospectuses in preliminary and final form as well as any
supplements thereto; and
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(e)(i) The Company will indemnify and hold harmless each
seller of Registrable Securities, each director, officer, employee and
agent of each seller, and each other person, if any, who controls such
seller within the meaning of the Securities Act or the Exchange Act
from and against any and all losses, claims, damages, liabilities and
legal and other expenses (including costs of investigation) caused by
any untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such Registrable
Securities were registered under the Securities Act, any prospectus or
preliminary prospectus contained therein or any amendment or supplement
thereto, or caused by any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses are caused by any such untrue
statement or omission or alleged untrue statement or omission based
upon information relating to such seller and furnished to the Company
in writing by such seller expressly for use therein, and provided that
the Company will not be liable to any Person who participates as an
underwriter in the offering or sale of Registrable Securities or any
other Person, if any, who controls such underwriter within the meaning
of the Securities Act under the indemnity agreement in this subsection
3(e) with respect to any preliminary prospectus or the final prospectus
or the final prospectus as amended or supplemented, as the case may be,
to the extent that any such loss, claim, damage or liability of such
underwriter or controlling Person results from the sale by such
underwriter of Registrable Securities to a Person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a
copy of the final prospectus or of the final prospectus as then amended
or supplemented, whichever is most recent, if the Company has
previously furnished copies thereof to such underwriter, or from a sale
to a Person in a state where the offering has not been registered or
qualified, if the Company has notified the seller and any underwriter
involved in such sale of the states where the offering has been
registered or qualified.
(ii) It shall be a condition to the obligation of the Company
to effect a registration of Registrable Securities under the Securities
Act pursuant hereto that (X) each seller, severally and not jointly,
indemnify and hold harmless the Company and each person, if any, who
controls the Company within the meaning of the Securities Act or the
Exchange Act to the same extent as the indemnity from the Company in
the foregoing paragraph, but only with reference to any breach by such
seller of any agreement between such seller, and the Company with
respect to the offering and with reference to information relating to
such seller furnished to the Company in writing by such seller
expressly for use in the registration statement, any prospectus or
preliminary prospectus contained therein or any amendment or supplement
thereto and (Y) each seller, in the event that Registrable Securities
are to be sold in an underwritten offering, enters into an underwriting
agreement containing customary representations and warranties,
covenants, conditions and indemnification provisions.
(iii) In case any claim shall be made or any proceeding
(including any governmental investigation) shall be instituted
involving any indemnified party in respect of which indemnity may be
sought pursuant to this subsection 3(e), such indemnified party shall
promptly notify the indemnifying party in writing of the same, provided
that failure to notify the indemnifying party shall not relieve it from
any liability it may have to an
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indemnified party otherwise than under this subsection 3(e). The
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent
the indemnified party in such proceeding and shall pay the fees and
disbursements of such counsel. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
disbursements of such counsel shall be at the expense of such
indemnified party unless (A) the indemnifying party shall have failed
to retain counsel for the indemnified party as aforesaid, (B) the
indemnifying party and such indemnified party shall have mutually
agreed to the retention of such counsel or (C) representation of such
indemnified party by the counsel retained by the indemnifying party
would, in the reasonable opinion of the indemnified party, be
inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel
in such proceeding, provided that the Company shall not be liable for
the fees and disbursements of more than one additional counsel for all
indemnified parties. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such
settlement or judgment.
(f) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subsection 3(f) is
due in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, the Company or the applicable
sellers, as the case may be, shall contribute to the aggregate losses, claims,
damages and liabilities incurred (including legal or other expenses reasonably
incurred in connection with the investigating or defending of same) by the other
and for which such indemnification was sought. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the relative benefits received by each party from the offering of the
securities included in the registration statement (taking into account the
portion of the proceeds of the offering realized by each), the parties' relative
knowledge and access to information concerning the matter with respect to which
the claim was asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate in the
circumstances; provided, however, that (i) in no case shall any seller of
Registrable Securities be required to contribute any amount in excess of the
total public offering price of the Registrable Securities sold by him and (ii)
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
subsection 3(f), each person who controls any seller of Registrable Securities
or the Company shall have the same rights to contribution as such seller or the
Company. Any party entitled to contribution shall, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against the Company or the
seller of Registrable Securities under this subsection 3(h), notify the Company
or such seller, as the case may be, but the omission to so notify the Company or
such seller, as the case may be, shall not relieve it from any other obligation
it may have hereunder or otherwise.
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Section 4. Available Information. The Company shall take such
reasonable action and file such information, documents and reports as shall be
required by the Commission as a condition to the availability of Rule 144 and
Rule 144A promulgated under the Securities Act, or any successor provisions.
Section 5. Amendments and Waivers. Any provision of this Registration
Rights Agreement may be amended, supplemented, waived, discharged or terminated
by a written instrument signed by the Company and the Holders of not less than a
majority of the aggregate outstanding Registrable Securities, voting as a single
group.
Section 6. Specific Performance. The parties agree that irreparable
damage will result in the event that the obligations of the Company under this
Registration Rights Agreement are not specifically enforced, and that any
damages available at law for a breach of any such obligations would be
inadequate. Therefore, the Holders of the Registrable Securities shall have the
right to specific performance by the Company of the provisions of this
Registration Rights Agreement, and appropriate injunctive relief may be applied
for and granted in connection therewith. The Company hereby irrevocably waives,
to the extent that it may do so under applicable law, any defense based on the
adequacy of a remedy at law which may be asserted as a bar to the remedy of
specific performance in any action brought against the Company for specific
performance of this Registration Rights Agreement by the Holders of Registrable
Securities. Such remedies and all other remedies provided for in this
Registration Rights Agreement shall, however, be cumulative and not exclusive
and shall be in addition to any other remedies which may be available under this
Registration Rights Agreement.
Section 7. Notices.
(a) Any notice or demand to be given or made by the Holders of
Registrable Securities to or on the Company pursuant to this Registration Rights
Agreement shall be sufficiently given or made if sent by registered mail, return
receipt requested, postage prepaid, addressed to the Company at 00 Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, XX 00000, Attn: Chief Financial Officer.
(b) Any notice to be given by the Company to the Holders of Registrable
Securities shall be sufficiently given or made if sent by registered mail,
return receipt requested, postage prepaid, addressed to such holder as such
Holder's name and address shall appear on the Warrant Register or the Common
Stock or Series A Preferred Stock registry of the Company, as the case may be.
Section 8. Binding Effect. This Registration Rights Agreement shall be
binding upon and inure to the sole and exclusive benefit of the Company, its
successors and assigns, and the registered Holders from time to time of the
Registrable Securities.
Section 9. Continued Validity. A Holder of Registrable Securities shall
continue to be entitled with respect to such Registrable Securities to all
rights and subject to all obligations to which it would have been entitled or
subject as a Holder of Registrable Securities under Sections 2 and 3 of this
Registration Rights Agreement.
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Section 10. Counterparts. This Registration Rights Agreement may be
executed in one or more separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
Section 11. New York Law. THIS REGISTRATION RIGHTS AGREEMENT AND EACH
WARRANT CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF the parties hereto have caused this Registration
Rights Agreement to be duly executed and delivered by their proper and duly
authorized officers, as of the date and year first above written.
OPTICARE HEALTH SYSTEMS, INC.
f/k/a Saratoga Resources, Inc.
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chairman, CEO, President
Attest: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President,
CFO, Secretary
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Xxxxx Xxxx
-------------------------------------------
Name: Xxxxx Xxxx
Title: Vice President
By:______________________________
Name:___________________
Title:__________________
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