[GRAPHIC OMITTED] Standby Letter of Credit Application and Agreement
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Date: November 30, 2006
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TO: AND
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International Trade Services Complete this section only if
Department application is being submitted
Comerica Bank through another bank.
BY COURIER:
One Detroit Center ------------------------------------
500 Xxxxxxxx Avenue NAME OF APPLICANT'S BANK
Detroit, Michigan 48226-3341
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STREET ADDRESS
BY MAIL:
P.O. Box 75000 ------------------------------------
Detroit, Michigan 48275-3341 CITY, STATE, ZIP
(Bank's Designated Office)
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The undersigned hereby requests Comerica Bank to issue an irrevocable standby
letter of credit and notify directly or through an advising bank by: a)
[ ] Forwarding directly to beneficiary via [ ] mail [ ] courier; b)
[ ] S.W.I.F.T./telex; c) [ ] Hold for pickup by (insert name):_________________;
or d) [ ] Send to third party (insert name and address):________________________
_____________________ by [ ] mail [ ] courier; as follows (if the preceding
information is not completed we will send the Credit directly to the beneficiary
or an advising bank we select):
Advising Bank if applicable): Bank of America, Scranton, PA
Branch or S.W.I.F.T. No.: bofaus3n
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(COMPLETE STREET ADDRESS - NO P.O. BOX)
In favor of (Beneficiary) Bank of America N.A.
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(NAME)
000 Xxxx Xxxxxx, Xxxxxx Xx 00000-3714
ATTN: Mail Code TX1-492-66-01
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(COMPLETE STREET ADDRESS - NO P.O. BOX)
For account of (Applicant) Scottish Re Limited
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(NAME)
00 Xxxxxxx Xxxxxx, Xxxxxx, XX0X 0XX, XX
ATTN:
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(COMPLETE STREET ADDRESS - NO P.O. BOX)
Amount $1,403,204.00 One Million Four Hundred and three
Thousand Two Hundred and Four Dollars and no cents
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(AMOUNT IN WORDS AND FIGURES)
Expiration Date one year from issuance
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(PROVIDE SPECIFIC DATE)
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Auto Extension Provisions (select one option and complete, or the default
selection is not automatically extendable):
X NOT AUTOMATICALLY EXTENDABLE; OR
[ ] AUTO EXTENDABLE ____ Number of Days Notice Prior to Expiration
(i.e., 30, 45, 60, 90) ____ How often (i.e., yearly, semi-yearly)
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Drawing and Presentation Options (you must select only one option):
[ ] Partial Drawing
Permitted/Multiple
X Partial Drawings/ [ ] Partial Drawings/ Presentation Prohibited
Multiple Presentations Multiple Presentations (only one presentation
Permitted (multiple Prohibited (only one may be made but it may be
presentations for less presentation and for for less than the full
than full amount) full amount) amount available)
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Available by draft(s) at sight drawn on Comerica Bank as follows (you must
select only one):
X Issue the Standby Letter of Credit substantially in the form attached hereto
as Exhibit A. (Mark "Exhibit A" and Applicant must sign).
[ ] A written statement purportedly signed by the beneficiary with the following
wording: "______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
__________________________________________________________________________."
[ ] NO DOCUMENTS REQUIRED. (If selected, the only documentary requirement for
payment is presentation of a draft or presentation by S.W.I.F.T., as
applicable).
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[ ] OTHER CONDITIONS, INSTRUCTIONS AND REQUESTS:________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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TERMS AND CONDITIONS
In these provisions:
(1) "Applicant" means the undersigned party or parties identified and signing
as such.
(2) "Application" and "Agreement" each means this Standby Letter of Credit
Application and Agreement for an irrevocable standby letter of credit to be
issued by Bank, as such Application may be amended or modified from time to
time in accordance with the provisions hereof.
(3) "Bank" means Comerica Bank.
(4) "Credit" means the irrevocable standby letter of credit (or confirmation)
issued by Bank at its option pursuant to this Application, as such letter
of credit may be modified or amended from time to time.
(5) "Governing Rules" means the rules governing letter of credit practice as
specified in the Credit, which shall be either the International Standby
Practices 1998, International Chamber of Commerce ("ICC") Publication No.
590, and any revisions thereof approved by the ICC and adhered to by Bank
or the Uniform Customs and Practice for Documentary Credits (1993
Revision), ICC Publication No. 500, and any revisions thereof approved by
the ICC and adhered to by Bank.
(6) "Instrument" means any draft, receipt, cable or written demand for payment
relating to the Credit.
In consideration of the issuance of the Credit by Bank, Applicant hereby agrees
with Bank as follows:
1. Applicant will reimburse Bank at its designated office, in cash, the amount
required to pay each Instrument, such reimbursement to be made on demand in
the case of each sight draft or demand, with interest from the date of
payment of the Instrument to the date of reimbursement. Any Credit payable
in U.S. dollars shall be reimbursed in U.S. dollars. Upon the occurrence of
any event of default described in paragraph 11 below, Applicant will pay
Bank a sum equal to Bank's outstanding liability under the Credit.
2. Applicant will pay Bank such commission as has been agreed to, the
reasonable fees and expenses of Bank in connection with the Credit
according to Bank's standard practice as in effect from time to time, and
interest on the amount paid by Bank and not reimbursed as provided in
paragraph 1 hereof, including all charges and expenses paid or incurred by
Bank in connection therewith, at the rate of three (3%) percent above
Bank's prime rate; and effect shall be given to any change in the interest
rate resulting from a change in the prime rate on the date of such change
in the prime rate. The "prime rate" shall mean the rate of interest
established by Bank from time to time as its prime rate, which may not
necessarily be the lowest interest rate charged by Bank to its borrowers.
There shall be no refund or decrease, and Applicant shall not be entitled
to any return, of any commission paid or owed to Bank in the event that the
Credit is reduced, terminated, cancelled or otherwise modified. Bank is
authorized to charge Applicant's deposit accounts and other accounts with
Bank for all required payments and reimbursements.
3. If any law or regulation or the interpretation or implementation thereof by
any court or administrative or governmental authority charged with the
administration thereof shall either: (a) impose, modify or deem applicable
any reserve, special deposit, limitation or similar requirement against
letters of credit issued by, or assets held by, or deposits in or for the
account of, Bank, or (b) impose on Bank any insurance premium or other
condition regarding this Application or the Credit, and the result of any
event referred to in clause (a) or (b) above shall be to increase the cost
of issuing or maintaining the Credit over that which Bank assumed in
determining its fees, then, upon demand by Bank, Applicant shall
immediately pay to Bank, as specified by Bank from time to time, additional
amounts which shall be sufficient to compensate Bank for such increased
cost, together with interest on each such amount from the date demanded
until payment in full thereof at the rate and on the terms set forth in
paragraph 2 above. A certificate as to such increased cost incurred by Bank
as a result of any event mentioned in clause (a) or (b) above, submitted by
Bank to Applicant shall be conclusive, absent manifest error, as to the
amount thereof.
4. Applicant agrees to indemnify and hold Bank harmless from and against any
and all claims, damages, losses, liabilities, costs or expenses whatsoever
which Bank may incur (or which may be claimed against Bank by any person)
by reason of, or in connection with, the execution and delivery or transfer
of, or payment or failure to pay under, the Credit, or by reason of, or in
connection with, any other matters arising under this Application, or any
of the transactions contemplated hereby; provided, however, Applicant shall
not be required to indemnify Bank for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent,
caused by Bank's willful misconduct or gross negligence.
5. Applicant assumes all risks of the acts or omissions of any beneficiary or
transferee of the Credit with respect to its use of the Credit. Neither
Bank nor any of its officers, directors, employees or agents shall be
liable or responsible for: (a) the use which may be made of the Credit or
for any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of
any endorsements thereof, even if such documents should in fact prove to be
in any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by Bank made against presentation of documents which substantially
comply with the terms of the Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under the Credit. In
furtherance and not in limitation of the foregoing, Bank may accept
documents that appear on their face to be in order, without responsibility
for further investigation, regardless of any notice or information to the
contrary. Bank shall not be responsible for any act, error, neglect,
default, omission, insolvency or failure in business of any of Bank's
correspondents. The occurrence of any one or more of the contingencies
referred to in the preceding clauses of this paragraph shall not affect,
impair or prevent the vesting of any of Bank's rights or powers hereunder
or Applicant's obligation to make reimbursement. Applicant will promptly
examine (i) the copy of the Credit (and any amendments thereto) sent to it
by Bank and (ii) all documents and Instruments delivered to it from time to
time by Bank, and, in the event of any claim of noncompliance with
Applicant's instructions or other irregularity, will immediately notify
Bank thereof in writing, Applicant being conclusively deemed to have waived
any such claim against Bank and its correspondents unless such notice is
given within seven (7) business days of Bank sending the Credit and the
applicable documents and Instruments to Applicant.
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6. Applicant will pay on demand all reasonable costs and expenses (including
without limitation, reasonable attorneys' fees and legal expenses) incurred
by Bank in connection with the enforcement of this Application and such
other documents which may be delivered in connection with this Application
or any action or proceeding relating to a court order, injunction or other
process or decree restraining or seeking to restrain Bank from paying any
amount under the Credit.
7. Except insofar as instructions may be given by Applicant in writing or by a
Request (as defined in paragraph 9 below) expressly to the contrary with
regard to, and prior to, Bank's issuance of the Credit, Bank may, but shall
not be required to, honor, as complying with the terms of the Credit and
the Application, any Instruments or other documents otherwise in order
signed or issued by any administrator, executor, trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, liquidator,
receiver or other legal representative of the party authorized under the
Credit to draw or issue such Instruments or other documents.
8. This Agreement and all rights, obligations and liabilities arising
hereunder, and the Credit (unless the Credit provides for a different
governing law) shall be subject to and construed in accordance with the
laws of the State of Michigan, including the Michigan Uniform Commercial
Code, as from time to time amended and enforced (the "Commercial Code"),
without regard to its conflict of law principles. This Agreement and the
Credit shall be subject to the Governing Rules (a copy of which is
available upon request) and, in the event any provision of the Governing
Rules is or is construed to vary from or be in conflict with any provision
of the Commercial Code, the Governing Rules shall prevail. Notwithstanding
the terms of this paragraph 8, if the Credit provides for a governing law
other than the laws of the State of Michigan, the selected governing law
provided for in the Credit shall govern the Credit, along with the
Governing Rules.
9. Applicant authorizes Bank to honor Applicant's request to waive a
discrepancy in a document or Instrument, or to issue or amend the Credit
for Applicant's account and risk upon a request communicated to Bank by
telephone, telegram, telex, computer, facsimile transmission, S.W.I.F.T. or
other electronic means (a "Request") subject to the following: (a) a
Request shall be made only by those persons authorized by Applicant in
accordance with Bank's established requirements, and Bank shall not be
obligated to identify such persons so authorized beyond the use of the
authorized name or code identification, if any is established, (b) all
Requests will be confirmed by Bank in writing by sending to Applicant a
copy of the documents authorized or requested by Applicant and Applicant
agrees promptly to examine such documents and to report any discrepancies
promptly upon receipt of such confirmation, (c) if frequent Requests are to
be made, Bank may, but shall not be obligated to, assign a unique code
number or word and require that such code be used by Applicant (and if such
a code number or word is established, all further Requests shall refer to
such code), (d) Bank shall not be liable for any loss that Applicant may
incur as a result of Bank's compliance with a Request in accordance with
this Application even if unauthorized, provided that Bank acted in good
faith, and Applicant agrees to indemnify Bank and hold Bank harmless for
any such losses, (e) Bank will not be liable for any delays in honoring any
Request, nor for any delays caused by others to whom Bank may transmit such
Request either at Applicant's direction or otherwise and Bank will not be
required to honor Requests on the day on which Requests are received unless
Bank has agreed to do so and Applicant has caused such Request to be
received before the time Bank has specified to honor such Request, (f) Bank
shall not be obligated to honor any Requests provided that Bank has
notified Applicant by telephonic or other prompt means, (g) all Requests
shall be subject to the terms of this Application and any other written or
electronic agreement entered into between Bank and Applicant in connection
with any transaction relating to such Request. Bank may record any Request
made by telephone and any other telephonic communications between Applicant
and Bank regarding the Credit. Notwithstanding anything to the contrary
contained in this Agreement, Bank shall not be obligated to, and shall have
no liability for failing to, honor or comply with a Request.
10. has delivered cash collateral in an amount not less than $4,900,000 (or its
Pounds Sterling equivalent) to be held in a Xxxxxxx'x Bank account in
Bank's name subject to the Deposit Deed dated the date hereof between
Applicant and Bank (the "Deposit Deed"). In the event of a default by
Applicant hereunder, Bank shall have all remedies available to Bank under
the Commercial Code, in addition to other remedies in law or equity.
11. Upon the death of any Applicant; or if any of the obligations and/or
liabilities of Applicant to Bank shall not be paid or performed when due;
or if there is a breach in any warranty or representation herein; or if
Applicant shall become insolvent (however such insolvency may be evidenced)
or commit any act of bankruptcy or insolvency, or make a general assignment
for the benefit of creditors; or if Applicant shall suspend the transaction
of its usual business or be expelled or suspended from, or reprimanded by,
any securities exchange; or if an application is made by any judgement
creditor of Applicant for an order directing Bank to pay money or deliver
other property (and Applicant is unable to have such order set aside within
45 days of notice thereof); or if a petition in bankruptcy shall be filed
by or against Applicant or a petition or any proceeding shall be filed or
instituted by or against Applicant for any relief under any bankruptcy or
insolvency laws or any law relating to the relief of debtors, readjustment
of indebtedness, reorganization, composition or extension; or if any
governmental authority, or any court at the instance of any governmental
authority, shall take possession of any substantial part of the property of
Applicant, or shall assume control over the affairs or operations of
Applicant, or if a receiver shall be appointed for, or a writ of order of
attachment or garnishment shall be issued or made against, any of the
property or assets of Applicant (and Applicant is unable to have such order
or attachment set aside within 45 days of the entry thereof); at any time;
thereupon, unless Bank shall otherwise elect, any and all obligations and
liabilities of Applicant to Bank hereunder, whether now existing or
hereafter incurred, shall become immediately due and payable forthwith
without presentation, demand or notice, all of which Applicant hereby
waives, and Bank is hereby authorized to exercise all rights and remedies
available to it under the Deposit Deed.
12. Applicant submits, in any legal proceeding related to the Application or
the Credit, to the nonexclusive jurisdiction over the person of Applicant
of any court of competent jurisdiction sitting in the State of Michigan and
agrees to a suit being brought in any such court; waives any objection that
it may now have or hereafter have to the venue of such proceeding in any
such court or that such proceeding was brought in an inconvenient court;
agrees that service of process and any such legal proceeding may be made,
and shall be conclusively deemed sufficient and adequate, by mailing of
copies thereof (by registered or certified mail, if practicable) postage
prepaid, or by teletransmission to Applicant at its address set forth
therein or such other address of which Bank shall be notified in writing,
in which event, service shall be deemed complete upon the filing with the
court of a copy of the process mailed or sent and an affidavit attesting
the mailing or sending. Applicant agrees that nothing herein shall affect
Bank's right to effect service of process in any other manner permitted by
law.
13. Bank shall not be deemed to have waived any of its rights hereunder, unless
Bank or its authorized agents shall have signed such waiver in writing. No
such waiver, unless expressly as stated therein, shall be effective as to
any transaction which occurs subsequent to the date of such waiver, nor as
to any continuance of a breach after such waiver.
14. If Applicant has submitted this Application to its bank ("Applicant's
Bank") and requested that Applicant's Bank (as Applicant's agent) establish
the Credit through Bank as the affiliate or correspondent of Applicant's
Bank, then the following provisions shall apply: (a) the term "Bank" shall
mean Applicant's Bank and Bank, both collectively and individually so that
either Applicant's Bank or Bank may exercise all the rights, privileges and
powers conferred upon Bank under this Application; (b) any collateral given
as security for Applicant's obligations under this
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Application shall stand as security and collateral for the Credit and for
any of Applicant's Bank's obligations entered into on behalf of Applicant
for issuance of the Credit.
15. If the Credit was directed through Applicant's Bank, then Applicant's Bank,
by its execution of this Application: (a) requests and appoints Bank as its
agent to establish in Bank's name or through a correspondent the Credit;
(b) authorizes Bank and/or its correspondent(s) to pay drafts drawn against
the Credit as specified in this Application and to exercise all rights,
powers and privileges conferred by this Application without reference to
Applicant's Bank; (c) agrees to make payments to Bank in amount, time and
manner as required of Applicant under this Application whether or not
Applicant's Bank has received payment from Applicant; (d) assigns to Bank
as security all its rights, including rights of payment and to security,
under this Application and agrees to deliver to Bank, upon demand, such
additional security as Bank may request, and also agrees to give Bank a
lien on all its property, including deposit balances now or hereafter in
Bank's possession for the amount of any liability of Applicant's Bank to
Bank hereunder; and (e) agrees that if it fails to make any payment or
provide any security as requested, all its obligations and liabilities to
Bank shall immediately, without notice, become due and payable at Bank's
sole option.
16. The obligations hereof shall bind the successors and assigns of Applicant,
and all rights, benefits and privileges conferred on Bank shall be extended
to, conferred upon, and may be enforced by Bank's successors and assigns.
If Applicant is a partnership, the obligations hereof shall continue in
force and apply, notwithstanding any change in the membership of such
partnership, whether arising from the death or retirement of one or more
partners or the accession of one or more new partners. If this Application
is signed by two or more Applicants, it shall be the joint and several
agreement of each Applicant.
17. Except as otherwise provided herein, any notice from Bank to Applicant, if
mailed, shall be deemed given when mailed, postage paid, addressed to
Applicant at its address set forth herein or such other address of which
Bank shall be notified in writing at Bank's designated office. Whenever
possible each provision of this Application shall be interpreted in such
manner as to be effective and valid under applicable law, but if any
provision of this Application shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Application.
18. Bank shall have the sole and absolute right to renew or not renew a Credit.
If the Credit provides for automatic renewal, Bank must receive actual
notice in writing at least sixty (60) days prior to the last day specified
in the Credit by which Bank must give notice of its intent not to renew the
Credit; if Applicant fails to provide Bank with actual written notice of
Applicant's intent not to renew the Credit at least sixty (60) days prior
to the last day specified in the Credit by which Bank must give notice of
its intent not to renew the Credit, then Applicant shall be deemed to have
irrevocably authorized the renewal of the Credit, and Applicant shall
continue to be liable under the terms of this Agreement. Notwithstanding
Applicant's request to renew a Credit or failure to timely give Bank actual
notice of Applicant's desire to not renew a Credit, any decision whether to
renew a Credit shall be in Bank's sole and absolute discretion. Applicant
acknowledges that in the event the beneficiary of the Credit, or any
employee, successor, assignee, representative, trustee or agent of the
beneficiary is notified that Bank has elected not to renew the Credit, the
terms of the Credit may allow it to be drawn upon, and Applicant shall be
bound by the reimbursement and other obligations under this Agreement, and
Applicant shall irrevocably waive all claims, causes of action, and
defenses that Applicant may have against Bank for electing not to renew the
Credit.
19. This Agreement, the Deposit Deed and the Letter Agreement by and among
Scottish Annuity & Life Insurance Company (Cayman) Ltd., Scottish Re
Limited and Bank constitute the entire agreement and understanding of the
parties regarding its subject matter, supersedes all prior agreements
regarding its subject matter, and, except as provided in paragraph 9, can
only be modified in writing by the each party's authorized representatives.
This Agreement may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties, and there are
no unwritten oral agreements between the parties.
20. APPLICANT AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. AFTER CONSULTING (OR HAVING
HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS CHOICE, APPLICANT AND
BANK (BY ITS ACCEPTANCE OF THIS AGREEMENT) KNOWINGLY AND VOLUNTARILY, AND
FOR THEIR MUTUAL BENEFIT, WAIVE ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF
LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY
RELATED TO, THIS AGREEMENT.
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In consideration of Bank issuing the Credit and for other consideration, the
receipt and adequacy of which is hereby acknowledged, Applicant agrees to be
bound by this Agreement, including but not limited to the payment obligations
therein set forth, and including being jointly and severally liable for all
indebtedness and obligations of Co-Applicant, if any, arising under or pursuant
to this Agreement.
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APPLICANT APPLICANT'S BANK (This section must
be completed by applicant's bank if
application is being submitted
throughanother bank)
SCOTTISH RE LIMITED -----------------------------------
NAME
/s/ Xxxxxx Xxxxxxx CFO
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AUTHORIZED SIGNATURE, TITLE AUTHORIZED SIGNATURE, TITLE
/s/ Xxxxx Xxxxxx CEO
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AUTHORIZED SIGNATURE, TITLE AUTHORIZED SIGNATURE, TITLE
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CONTACT NAME
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TELEPHONE NUMBER
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Co-Applicant agrees to be bound by the
terms and conditions of this Agreement
(as Applicant) and Applicant and Co-
Applicant agree that each shall be
jointly and severally liable for all
indebtedness and obligations arising
under or pursuant to this Agreement.
CO-APPLICANT
By:
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Authorized Signature
Its:
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Title
Address:
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Telephone: ( )
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Facsimile: ( )
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