MIDAS MEDICI GROUP HOLDINGS, INC. SUBSCRIPTION AGREEMENT
SUBSCRIPTION
AGREEMENT (“Subscription Agreement”) made as of this 18th day of
July, 2009, between Midas Medici Group Holdings, Inc., a Delaware corporation
with offices located at 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 (the “Company”), and
Xxxxxxx Xxxxxxxx, an individual having an address at XX Xxx 0000, Xxxxxx Xxxxxx,
XX 00000 (the “Subscriber”).
WHEREAS,
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”), and Rule 506 promulgated thereunder, the Company desires to
sell and the Subscriber desires to purchase 80,000 shares of the Company’s
common stock, par value $.001 per share (the “Shares”) in a private placement
(the “Offering”) on the terms and conditions set forth herein;
NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as
follows:
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I.
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SUBSCRIPTION
FOR SECURITIES; REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
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1.1 Subscription for
Shares. Subject to the terms and conditions hereinafter set
forth, the Subscriber hereby subscribes for and agrees to purchase the Shares
from the Company at a purchase price of $2.10 per share and the Company agrees
to sell such Shares to the Subscriber for said purchase
price.
1.2 Reliance on
Exemptions. The Subscriber acknowledges that the Offering has
not been reviewed by the United States Securities and Exchange Commission (the
“SEC”) or any state agency because it is intended to be a nonpublic offering
exempt from the registration requirements of the Securities Act and state
securities laws. The Subscriber understands that the Company is
relying in part upon the truth and accuracy of, and the Subscriber’s compliance
with the representations, warranties, agreements, acknowledgments and
understandings of the Subscriber set forth herein in order to determine the
availability of such exemptions and the eligibility of the Subscriber to acquire
the Shares.
1.3 Investment
Purpose. The Subscriber represents that the Shares are being
purchased for his own account, for investment purposes only and not for
distribution or resale to others in contravention of the registration
requirements of the Securities Act. The Subscriber agrees that it
will not sell or otherwise transfer the Shares unless they are registered under
the Securities Act or unless an exemption from such registration is
available.
1.4 Accredited
Investor. The Subscriber represents and warrants that it is an
“accredited investor” as such term is defined in Rule 501 of Regulation D
promulgated under the Securities Act, and that it is able to bear the economic
risk of any investment in the Shares.
1.5 Risk of
Investment. The Subscriber recognizes that the purchase of the
Shares involves a high degree of risk in that: (a) an investment in
the Company is highly speculative and only investors who can afford the loss of
their entire investment should consider investing in the Company and the Shares;
(b) transferability of the Shares is limited; and (c) the Company may require
substantial additional funds to operate its business and subsequent equity
financings will dilute the ownership and voting interests of
Subscriber.
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1.6 Prior Investment
Experience. The Subscriber hereby acknowledges and represents
that (a) the Subscriber has knowledge and experience in business and financial
matters, prior investment experience, or the Subscriber has employed the
services of a “purchaser representative” (as defined in Rule 501 of Regulation
D), attorney and/or accountant to read all of the documents furnished or made
available by the Company to the Subscriber to evaluate the merits and risks of
such an investment on the Subscriber’s behalf; (b) the Subscriber recognizes the
highly speculative nature of this investment; and (c) the Subscriber is able to
bear the economic risk that the Subscriber hereby assumes.
1.7 Information. The
Subscriber acknowledges careful review of this Subscription Agreement as well as
any other written material furnished to the Subscriber from the Company
(collectively, the “Offering Documents”), all of which the undersigned
acknowledges have been provided to the undersigned. The undersigned
has been given the opportunity to ask questions of, and receive answers from,
the Company concerning the terms and conditions of this Offering and the
Offering Documents and to obtain such additional information, to the extent the
Company possesses such information or can acquire it without unreasonable effort
or expense, necessary to verify the accuracy of same as the undersigned
reasonably desires in order to evaluate the investment. The
undersigned understands the Offering Documents, and the undersigned has had the
opportunity to discuss any questions regarding any of the Offering Documents
with its counsel or other advisor. Notwithstanding the foregoing, the
only information upon which the undersigned has relied is that set forth in the
Offering Documents. The undersigned has received no representations or
warranties from the Company, its employees, agents or attorneys in making this
investment decision other than as set forth in the Offering
Documents. The undersigned does not desire to receive any further
information.
1.8 No
Representations. The Subscriber hereby represents that, except
as expressly set forth in the Offering Documents, no representations or
warranties have been made to the Subscriber by the Company or any agent,
employee or affiliate of the Company, and in entering into this transaction the
Subscriber is not relying on any information other than that contained in the
Offering Documents and the results of independent investigation by the
Subscriber.
1.9 Tax
Consequences. The Subscriber acknowledges that the Offering
may involve tax consequences and that the contents of the Offering Documents do
not contain tax advice or information. The Subscriber acknowledges
that it must retain its own professional advisors to evaluate the tax and other
consequences of an investment in the Shares.
1.10 Transfer or
Resale. The Subscriber understands and hereby acknowledges
that the Company is under no obligation to register the Shares under the
Securities Act except as contained herein. The Subscriber consents
that the Company may, if it desires, permit the transfer of the Shares out of
the Subscriber’s name only when the Subscriber’s request for transfer is
accompanied by an opinion of counsel reasonably satisfactory to the Company that
neither the sale nor the proposed transfer results in a violation of the
Securities Act or any applicable state “blue sky” laws. The
subscriber further agrees that he will not publicly sell or transfer the Shares
for a period of twelve months from the effective date of the Company’s proposed
public offering, without the prior written consent of the
underwriter. Subscriber further agrees to enter into a lock-up
agreement with the underwriter evidencing such agreement and acknowledges that
an appropriate legend will be placed upon the certificate for the
Shares.
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1.11 Legends. The Subscriber
understands that the certificates representing the Shares, until such time as
they have been registered under the Securities Act, shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of such certificates or other instruments):
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
LAWS, OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Shares upon which it is
stamped, if (a) such Shares are being sold pursuant to a registration statement
under the Securities Act, (b) such holder delivers to the Company an opinion of
counsel, in a reasonably acceptable form, to the Company that a disposition of
the Shares is being made pursuant to an exemption from such registration, or (c)
such holder provides the Company with reasonable assurance that a disposition of
the Shares may be made pursuant to the Rule 144 under the Securities
Act without any restriction as to the number of securities acquired as of a
particular date that can then be immediately sold.
1.12 No General
Solicitation. The Subscriber represents that the Subscriber
was not induced to invest by any form of general solicitation or general
advertising including, but not limited to, the following: (a) any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over the news or radio; and (b) any seminar or
meeting whose attendees were invited by any general solicitation or
advertising.
1.13 Validity;
Enforcement. Subscriber represents and warrants that this
Subscription Agreement has been duly and validly executed and delivered and
constitutes the legal, binding and enforceable obligation of the
undersigned.
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1.14 Patriot Act. The
Subscriber certifies that, to the best of its knowledge, the Subscriber has not
been designated, and is not owned or controlled, by a “suspected terrorist” as
defined in Executive Order 13224. The Subscriber hereby acknowledge
that the Company seeks to comply with all applicable laws concerning money
laundering and related activities. In furtherance of those efforts,
the Subscriber hereby represents, warrants and agrees that: (i) none
of the cash used for the subscription has been or shall be derived from, or
related to, any activity that is deemed criminal under United States law; and
(ii) neither this investment nor this Agreement will cause the Company or the
Subscriber to be in violation of the United States Bank Secrecy Act, the United
States International Money Laundering Control Act of 1986 or the United States
International Money Laundering Abatement and Anti-Terrorist Financing Act of
2001.
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II.
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REPRESENTATIONS
BY THE
COMPANY
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The
Company represents and warrants to the Subscriber, except as set forth in the
disclosure schedules attached hereto:
2.1 Organization. The
Company is duly organized and validly existing in good standing under the laws
of the jurisdiction of its organization. The Company has full power
and authority to own, operate and occupy its properties and to conduct its
business as presently conducted, and is registered or qualified to do business
and in good standing in each jurisdiction in which the nature of the business
conducted by it or the location of the properties owned or leased by it requires
such qualification and where the failure to be so qualified would have a
material adverse effect upon the Company’s financial condition (a “Material
Adverse Effect”), and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
2.2 Due Authorization and Valid
Issuance. The Company has all requisite power and authority to
execute, deliver and perform its obligations under the Offering Documents, and
when executed and delivered by the Company will constitute legal, valid and
binding agreements of the Company enforceable against the Company in accordance
with their terms, except as rights to indemnity and contribution may be limited
by state or federal securities laws or the public policy underlying such laws,
and except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally, and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
2.3 Noncontravention. The
execution and delivery of the Offering Documents, the issuance and sale of the
Shares under the Offering Documents, the fulfillment of the terms of the
Offering Documents, and the consummation of the transactions contemplated
thereby will not (i) conflict with or constitute a violation of, or default
(with the passage of time or otherwise) under (1) any material bond, debenture,
note or other evidence of indebtedness, lease, contract, indenture, mortgage,
deed of trust, loan agreement, joint venture or other agreement or instrument to
which the Company is a party or by which it or any of its properties are bound,
(2) the charter, bylaws or other organizational documents of the Company or any
subsidiary or (3) any law, administrative regulation, ordinance or order of any
court or governmental agency, arbitration panel or authority applicable to the
Company or its properties, except for any such conflicts, violations or defaults
that are not reasonably likely to have a Material Adverse Effect, or (ii) result
in the creation or imposition of any lien, encumbrance, claim, security interest
or restriction whatsoever upon any of the material properties or assets of the
Company or an acceleration of indebtedness pursuant to any obligation, agreement
or condition contained in any material bond, debenture, note or any other
evidence of indebtedness, indenture, mortgage, deed of trust or any other
agreement or instrument to which the Company is a party or by which it is bound
or to which any of the material property or assets of the Company is
subject. No consent, approval, authorization or other order of, or
registration, qualification or filing with, any regulatory body, administrative
agency, or other governmental body in the United States or any other person is
required for the execution and delivery of the Offering Documents and the valid
issuance and sale of the Shares to be sold pursuant to the Offering Documents,
other than such as have been made or obtained, and except for any post-closing
securities filings or notifications required to be made under federal or state
securities laws.
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2.4 No Violation. The
Company is not (a) in violation of its charter, bylaws or other organizational
document; (b) in violation of any law, administrative regulation, ordinance or
order of any court or governmental agency, arbitration panel or authority
applicable to the Company, which violation, individually or in the aggregate,
would be reasonably likely to have a Material Adverse Effect; or (c) in default
(and there exists no condition that, with the passage of time or otherwise,
would constitute a default) in any material respect in the performance of
material agreement or instrument to which the Company is a party or by which the
Company is bound or by which the properties of the Company are bound, that would
be reasonably likely to have a Material Adverse Effect. The business
of the Company is not being conducted in violation of any law, ordinance, rule,
regulation, order, judgment or decree of any governmental entity, court or
arbitration tribunal, except for possible violations the sanctions for which
either singly or in the aggregate would not have a Material Adverse
Effect.
2.5 Capitalization. The
Shares to be sold pursuant to the Offering Documents have been duly authorized,
and when issued and paid for in accordance with the terms of the Agreements will
be duly and validly issued, fully paid and nonassessable. The outstanding shares
of capital stock of the Company have been duly and validly issued and are fully
paid and nonassessable, have been issued in compliance with all federal and
state securities laws, and were not issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. No
preemptive right, co-sale right, right of first refusal, registration right, or
other similar right exists with respect to the Shares or the issuance and sale
thereof (other than any such rights for which the Company has obtained waivers
in respect thereof). There are no stockholders agreements, voting agreements or
other similar agreements with respect to the common stock of the Company to
which the Company is a party or, to the knowledge of the Company, between or
among any of the Company’s stockholders. The Company does not have
any so-called stockholder rights plan or “poison pill” and there are no
“shark-repellant” charter or bylaw provisions or so-called “state antitakeover”
statutes applicable, in any case, to all or any portion of the transactions
contemplated by the Offering Documents, including, without limitation, issuance
of the Shares. After completion of the Company’s proposed purchase of
Utilipoint International, Inc. (“Utilipoint”), and the completion of the sale of
the Shares, the Company will have no more than 2,700,000 shares of common stock
issued and outstanding, post any stock splits.
2.6 Legal
Proceedings. There is no action, suit, proceeding, or to the
knowledge of the Company, inquiry or investigation before or by any court,
public board, governmental agency or authority, or self-regulatory organization
or body pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its directors or officers in their capacities as
such, wherein an unfavorable decision, ruling or finding would have a Material
Adverse Effect or would adversely affect the Offering or that would adversely
affect the validity or enforceability of, or the authority or ability of the
Company to consummate the Offering.
2.7 Governmental Permits,
etc. The Company has all necessary franchises, licenses,
certificates and other authorizations from any foreign, federal, state or local
government or governmental agency, department, or body that are currently
necessary for the operation of the business of the Company as currently
conducted, except where the failure to currently possess could not reasonably be
expected to have a Material Adverse Effect.
2.9 Intellectual
Property. (i) The Company owns or possesses sufficient
rights to use all material patents, patent rights, trademarks, copyrights,
licenses, inventions, trade secrets, trade names and know-how (collectively,
“Intellectual Property”) as owned or possessed by it, or that are necessary for
the conduct of its business as now conducted or as proposed to be conducted,
except where the failure to currently own or possess would not have a Material
Adverse Effect, (ii) the Company has not received any notice of, or has any
knowledge of, any asserted infringement by the Company of, any rights of a third
party with respect to any Intellectual Property that, individually or in the
aggregate, would have a Material Adverse Effect, and (iii) the Company has
not received any notice of, or has no knowledge of, infringement by a third
party with respect to any Intellectual Property rights of the Company that,
individually or in the aggregate, would have a Material Adverse
Effect.
2.10 Utilipoint
Debt. Upon the acquisition of Utilipoint, Utilipoint will have
no more than $850,000 of debt.
2.10 Disclosure. None of
the representations and warranties of the Company appearing in the Offering
Documents, when considered together as a whole, contains, or on any closing date
will contain, any untrue statement of a material fact or omits, or on any
closing date will omit to state any material fact required to be stated herein
or therein in order for the statements herein or therein, in light of the
circumstances under which they were made, not to be misleading.
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III.
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MISCELLANEOUS
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4.1 Director
Appointment. Upon the closing of the sale of the Shares, the
Subscriber shall have the right to be appointed as a member of the Company’s
Board of Directors.
4.2 Notice. Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Subscription Agreement must be in writing and will
be deemed to have been delivered: (a) upon receipt, when delivered personally,
(b) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party), or (c) one (1) business day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications
shall be:
If to the
Company:
000 Xxxx
Xxxxxx
Xxx Xxxx,
XX 00000
Attn: Xx.
Xxxx Xxxxxxx
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
With a
copy to (which shall not constitute notice):
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
X. Xxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If to the
Subscriber, to its address and facsimile number set forth at the end of this
Subscription Agreement, or to such other address and/or facsimile number and/or
to the attention of such other person as specified by written notice given to
the Company five (5) days prior to the effectiveness of such
change. Written confirmation of receipt (a) given by the recipient of
such notice, consent, waiver or other communication, (b) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission, or (c) provided by an overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from an
overnight courier service in accordance with clause (a), (b) or (c) above,
respectively.
4.3 Entire Agreement;
Amendment. This Subscription Agreement supersedes all other
prior oral or written agreements between the Subscriber, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Subscription Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor the Subscriber makes any representation,
warranty, covenant or undertaking with respect to such matters. No
provision of this Subscription Agreement may be amended or waived other than by
an instrument in writing signed by the Company and the holders of at least a
majority of the Shares then outstanding (determined on an as exercised to common
stock basis) (or if prior to the closing, the Subscribers purchasing at least a
majority of the Shares to be purchased at the closing). No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Shares then outstanding.
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4.4 Severability. If
any provision of this Subscription Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Subscription Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Subscription Agreement in any other jurisdiction.
4.5 Governing Law; Jurisdiction; Waiver
of Jury Trial. All questions concerning the construction,
validity, enforcement and interpretation of this Subscription Agreement shall be
governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each
party hereby irrevocably submits to the non-exclusive jurisdiction of the state
and federal courts sitting in New York for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Subscription Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each party
hereby irrevocably waives any right it may have, and agrees not to request, a
jury trial for the adjudication of any dispute hereunder or in connection with
or arising out of this Subscription Agreement or any transaction contemplated
hereby.
4.6 Headings. The
headings of this Subscription Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Subscription
Agreement.
4.7 Successors and
Assigns. This Subscription Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
assigns. The Company shall not assign this Subscription Agreement or
any rights or obligations hereunder without the prior written consent of the
holders of at least a majority the Shares then outstanding, except by merger or
consolidation. The Subscriber shall not assign its rights hereunder
without the consent of the Company, which consent shall not be unreasonably
withheld.
4.8 No Third Party
Beneficiaries. This Subscription Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
4.9 Survival. The
representations and warranties of the Company and the Subscriber contained in
Articles I and II and the agreements set forth this Article IV shall survive
closing for a period of two years.
4.10 Further
Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Subscription Agreement and the consummation of
the transactions contemplated hereby.
4.11 No Strict
Construction. The language used in this Subscription Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any
party.
4.12 Legal
Representation. The Subscriber acknowledges that: (a) it has
read this Subscription Agreement and the exhibits hereto; (b) it understands
that the Company has been represented in the preparation, negotiation, and
execution of this Subscription Agreement by Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP,
counsel to the Company; and (c) it understands the terms and consequences of
this Subscription Agreement and is fully aware of its legal and binding
effect.
4.13 Counterparts. This
Subscription Agreement may be executed in two or more identical counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party; provided that a facsimile signature shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original, not a facsimile
signature.
[Signature
page follows.]
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IN
WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the
day and year first written above.
/s/
Xxxxxxx Xxxxxxxx
Xxxxxxx
Xxxxxxxx
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X.X.
Xxx 0000
Xxxxxx
Xxxxxx, XX 00000
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_____________________________________
Address
of Subscriber
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______________________________________
Taxpayer
Identification Number of Subscriber
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Subscription
Accepted:
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By:
/s/
Xxxx Xxxxxxx
Name: Xxxx
Xxxxxxx
Title: Co-Executive
Chairman and CEO
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