EXHIBIT 4.4
THIS WARRANT AND THE COMMON STOCK ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE FEDERAL SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE;
ACCORDINGLY, NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE HEREUNDER ARE
FREELY TRANSFERABLE AND NEITHER MAY BE SOLD, TRANSFERRED, OR ASSIGNED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OR UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE, TRANSFER, OR
ASSIGNMENT.
QUADRANT INTERNATIONAL, INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
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PB NO. 4
ISSUED TO: PROGRESS CAPITAL, INC.
000 XXXXXXXX XXXXXXXX
0000 XXXXXXXXXX XXXX
XXXXXXXXXX, XXXXXXXX 00000
NUMBER OF SHARES TO BE
ISSUED UPON EXERCISE IN FULL: 200,000
PURCHASE PRICE PER SHARE: $ 0.593
GROSS PURCHASE PRICE: $118,600
FOR VALUE RECEIVED, QUADRANT INTERNATIONAL, INC., a Pennsylvania
corporation (the "Company"), promises to issue to Progress Capital, Inc., a
Pennsylvania corporation, or any successor entity ("Progress"), two hundred
thousand (200,000) fully paid and non-assessable shares of the Company's voting
common stock for the price of $0.593 per share (the "Purchase Price"). The
holder of this Warrant Certificate shall have the right to exercise the rights
provided for herein (such rights, with respect to each such share, is called
herein a "Warrant" and with respect to more than one share, is called herein
"Warrants"), in whole or in part at any time or times until January 6, 2005.
The number of shares of common stock purchasable upon exercise of the Warrants
and the Purchase Price shall be subject to adjustment from time to time as set
forth herein.
1. Definitions. For purposes of this Warrant Certificate:
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(a) "Common Stock" shall mean, in addition to the classes of common
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stock now in existence, any and all other stock of any class which has the right
to participate in the distribution of earnings and assets of the Company without
limit as to amount or percentage.
"Common Stock" shall not include any shares at any time directly or indirectly
owned by the Company.
(b) "Warrant" shall mean the right given under this Warrant
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Certificate to purchase one share of the Company's voting common stock.
(c) "Warrant Shares" shall mean the shares of the Company's voting
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common stock purchased upon exercise of Warrants or which the holder hereof has
the right to purchase upon exercise of Warrants.
2. Exercise of Warrants.
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(a) Warrants may be exercised in whole or in part by the surrender of
this Warrant Certificate, properly endorsed, accompanied by written notice to
the Company by execution of the form of subscription attached hereto, at the
principal executive office of the Company and upon payment to the Company by
certified check or bank draft of the Purchase Price for the shares purchasable
thereunder. The persons entitled to the shares so purchased shall be treated
for all purposes as the holders of such shares as of the close of business on
the date of exercise. Certificates for the Warrant Shares so purchased together
with a new Warrant Certificate or Certificates of like tenor representing in the
aggregate the right to purchase the number of shares of the Company's common
stock with respect to which Warrants have not been exercised (each such warrant
Certificate or Certificates to be for such portion of the total shares as the
holder thereof shall designate), shall be issued and delivered to the persons so
entitled within a reasonable time, not exceeding 15 days, after such exercise.
(b) Until such time as a Warrant is exercised in whole or in part,
the holder thereof shall have no rights as a shareholder of the Company except
for such rights as are expressly set forth herein.
3. Exchange. This Warrant Certificate is exchangeable, upon the
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surrender thereof by the holder thereof at any office of the Company, for a new
Warrant Certificate of like tenor representing in the aggregate the right to
purchase the number of shares of the Company's voting common stock purchasable
under the Warrant Certificate being exchanged, each such new Warrant Certificate
to represent the right to subscribe for and purchase such portion of the
aggregate number of shares of the Company's voting common stock represented by
the Warrant Certificate being exchanged as shall be designated by such holder at
the time of such surrender.
4. Transfer.
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(a) This Warrant Certificate and the Warrants are transferable, in
whole or in part, at the principal executive offices of the Company by the
Holder hereof in person or by duly authorized attorney, upon presentation of
this Warrant Certificate properly endorsed for transfer; provided, however that
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this Warrant Certificate and the Warrants are only so transferable to a legal
successor of Progress or a corporate affiliate of Progress or Progress Bank.
(b) Progress acknowledges by acceptance of this Warrant Certificate
that the Warrant Shares may be sold only if the Warrant Shares are registered
under federal and state securities laws or if an exemption from registration is
available. The Warrant Shares presently
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are not so registered, and the Company is under no obligation at any time to
register them under federal or state securities laws, except as expressly
provided in this Warrant Certificate. Each certificate representing Warrant
Shares shall bear a legend substantially the same as the legend set forth on the
first page of this Warrant Certificate.
5. Certain Covenants of the Company. The Company covenants and agrees
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that all Warrant Shares will, upon issuance, be duly and validly issued, fully
paid and nonassessable, and free from all taxes, liens, and charges with respect
to the issuance thereof provided that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any certificate in a name other than Progress; and, if any other
outstanding shares of Common Stock are then listed on a national or regional
securities exchange, will be so listed. The Common Stock is not presently
listed on any securities exchange and the Company is under no obligation to list
it. The Company further covenants and agrees that during the period within
which the rights represented by this Warrant Certificate may be exercised, the
Company shall, at all times, have authorized and reserved for the purpose of
issuance upon exercise of the purchase rights evidenced by this Warrant
Certificate, a sufficient number of shares of the Company's common stock to
provide for the then exercise of the rights represented by this Warrant
Certificate.
6. Adjustment of Purchase Price and Number of Shares. The number of
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Warrant Shares purchasable hereunder and the Purchase Price shall be subject to
adjustment from time to time upon the happening of certain events as follows:
(a) Reclassification, Consolidation or Merger. In case of any
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reclassification (other than a change in par value or from par value to no par
value) or change of outstanding securities issuable upon exercise of this
Warrant Certificate, or in case of any consolidation or merger of the Company
with or into another corporation (other than a merger with another corporation
in which the Company is a continuing corporation and which does not result in
any such reclassification or change), the Company, or such successor or
purchasing corporation, as the case may be, shall, without payment of any
additional consideration therefor, execute and deliver to each holder of
Warrants, a new Warrant Certificate, providing that the holder of such new
Warrant Certificate shall have the right to exercise such new Warrant
Certificate (upon terms no less favorable to the holder than those then
applicable to this Warrant Certificate) and procure upon such exercise in lieu
of each share of the Company's voting common stock theretofore issuable upon
exercise of the Warrants the kind and amount of shares of stock, other
securities, money or property (the "Consideration") receivable upon such
reclassification, change, consolidation, or merger, by the holder of one share
of the Company's voting common stock issuable upon exercise of the Warrants as
though this Warrant Certificate had been exercised immediately prior to such
reclassification, change, consolidation or merger. Such new Warrant shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 6. The provisions of
this Section 6(a) shall similarly apply to successive reclassifications,
changes, consolidations or mergers. The Company shall use its best efforts to
give Progress no less than 30 days prior written notice of any reclassification,
change of outstanding securities, merger or consolidation described in this
Section 6(a).
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(b) Subdivision or Combination of Shares. If the Company, at any time
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while any Warrants remain outstanding and unexpired, shall subdivide or combine
any of its Common Stock, the Purchase Price shall be proportionately reduced and
the number of Warrant Shares Purchasable hereunder proportionately increased, in
the case of a subdivision of shares, or vice versa in the case of a combination
of shares, in either case as of the effective date of such subdivision or
combination.
(c) Certain Dividends and Distributions. If at any time while any
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Warrants are outstanding and unexpired the Company shall:
(i) Pay a dividend payable in its Common Stock, or in rights to
acquire (by exercise, conversion or otherwise) its Common Stock, (in each case
other than where shares are being issued in lieu of cash), then the number of
Warrants shall be adjusted as of the date of such dividend, by multiplying the
number of Warrants represented by this Warrant Certificate immediately prior to
such date by a fraction (I) the numerator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend and (II) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend; or
(ii) Authorize a distribution of its assets to the holders of its
Common Stock as a dividend in liquidation or by way of return of capital or
other than as a dividend payable out of earnings or surplus legally available
for dividends under applicable law, the Company shall give notice thereof to the
holder of this Warrant Certificate at least 30 days prior to the record date for
determining entitlement to such distribution; and the holder of this Warrant
Certificate shall, upon exercise of the Warrants, be entitled to participate in
such distribution, without payment of any additional consideration therefor,
according to the number of shares of Common Stock held by such holder after the
exercise of the Warrants pro rata with all other holders of the Company's Common
Stock.
(d) Adjustment of Purchase Price. Upon each adjustment of the number
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of shares of the Company's voting common stock purchasable hereunder, the
Purchase Price then in effect shall likewise be adjusted to that amount
determined by multiplying the Purchase Price then in effect by a fraction the
number of which is the number of shares of the Company's voting common stock
purchasable hereunder immediately prior to the adjustment and the denominator of
which is the number of shares of the Company's voting common stock purchasable
hereunder immediately after such adjustment.
(e) Other Action Affecting Common Stock. If any event occurs as to
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which the other provisions of this Section 6 are not strictly applicable, or if
strictly applicable would not fairly protect the holder of Warrants against
dilution in accordance with the intent and principles of such Section 6, then
the Board of Directors shall make an adjustment in the application of such
provisions, in accordance with such intent and principles, so as to protect such
anti-dilution rights as aforesaid.
7. Notice of Adjustments. In the event the Company shall take any action
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which pursuant to Section 6 results in an adjustment of the Purchase Price
and/or the number of Warrant Shares purchasable upon exercise of Warrants, the
Company will give to each holder of
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Warrants written notice of such action promptly following its effective date.
Such notice shall contain the Company's certificate signed by its President
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated
(including a description of the basis on which the Company's Board of Directors
made any determination hereunder), and the Purchase Price and number of Warrant
Shares purchasable after giving effect to such adjustment. Failure to give any
notice required by this Warrant Certificate shall not effect the validity of any
action taken that triggers an adjustment under Section 6.
8. Participation Rights. Other than in connection with a public
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offering, if an unaffiliated third party makes an offer to the holders of more
than 50% of the outstanding shares of Common Stock of the Company (the "Offer")
to acquire, whether by purchase (including a merger or consolidation), tender or
exchange, in excess of 50% of the outstanding shares of Common Stock of the
Company on a fully diluted basis, which offer such holders desire to accept, the
Company agrees to promptly forward a copy of the Offer to Progress. In such
event, the Company agrees not to effect any consolidation or merger to which it
would be a party and to use its best efforts to cause any such other transaction
with the shareholders not to be consummated, unless Progress shall have had a
period of at least ten days from the date it received a copy of the offer to
exercise this Warrant and participate in the transaction to the same extent, on
a pro rata basis, with the other shareholders of the Company. Progress
acknowledges that the rights granted hereunder have also been granted to other
security holders of the Company and understands that such rights may be junior
or pari passu with the rights of such other parties.
9. No Registration under Securities Act. Neither this Warrant
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Certificate nor the Warrant Shares have been registered under the Securities Act
of 1933, as amended (the "Act") or under the securities laws of any state. In
issuing this Warrant Certificate, the Company has relied upon the exemption from
registration provided by Section 4(2) of the Act for transactions by an issuer
not involving any public offering. The holder of this Warrant Certificate
acknowledges by acceptance of this Warrant Certificate that the sale of
Warrants, or of any of the Warrant Shares, under certain circumstances may be
deemed to constitute a distribution within the meaning of, and require
registration under, the Act.
10. Subsequent Registration by Company of the Securities.
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(a) As used herein, the term "Registrable Security" means each of the
shares of Common Stock issuable upon exercise of this Warrant and any shares of
Common Stock issued upon any stock split or stock dividend in respect of such
shares; provided, however, that Registerable Security shall not include any such
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shares (i) disposed of pursuant to one or more registration statements under the
Act, (ii) which are saleable pursuant to Rule 144 under the Act or (iii) which
have otherwise been sold or transferred without registration under the Act.
(b) If the Company shall seek to register under the Act or qualify
any of its Common Stock (except in connection with or an acquisition, merger or
exchange of stock, to be registered on Forms X-0, X-0 or any successor forms
under the Act) and if the form of registration statement proposed to be used
otherwise may be used for the registration of the Registerable Securities, then,
on each such occasion, the Company shall furnish the holders of
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Registerable Securities (including the holders of Warrants exercisable for
Registrable Securities) with at least 30 days prior written notice thereof. At
the written request of any such holders, given within 20 days after the receipt
of such notice, and subject to the provisions of the Registration Rights
Agreement dated April 30, 1998 between the Company and several holders of its
securities (the "Registration Rights Agreement"), the Company will use its best
efforts to cause all of the Registerable Securities for which registration shall
have been so requested to be included in such registration statement. In the
event that the proposed registration by the Company is, in whole or in part, an
underwritten public offering, and the managing underwriter determines and
advises in writing that the securities requested to be included in such
registration exceeds the number which can be sold in such offering, the Company
will include in such registration, in the following order of priority: (i)
first, the securities the Company proposes to register (which triggers this
Section 10), whether for its own account or for the account of any of its
securityholders who have Registrable Securities under and as defined in the
Registration Rights Agreement; (ii) second, the Registrable Securities and the
securities of any other securityholders of the Company (including, but not
limited to, NEPA Venture Fund II, L.P. to the extent it exercises its piggyback
registration rights) with rights equal to those of the holders of Registrable
Securities, pro rata (based on the number of fully diluted shares of the Company
then owned by such holders), and (iii) third, other securities requested to be
included in such registration statement.
(c) All expenses in connection with the preparation and filing of any
registration statement under this Section 10, any registration or qualification
under securities or blue Sky laws of states in which the offering will be made
under such registration statement, and any filing fee of the National
Association of Securities Dealers, Inc. relating to such offering, shall be
borne in full by the Company, except for (i) any underwriter's or broker's
commissions applicable to the shares to be sold by the holders of Registerable
Securities, (ii) fees required to be paid by a selling shareholder rather than
the Company in order to comply with Blue Sky or state securities laws, (iii) all
fees or expenses expressly applicable to securities being sold by the holders of
Registrable Securities and (iv) fees or expenses of such holder's counsel.
(d) The Company shall indemnify and hold harmless selling holders of
Registrable Securities and, to the extent required in any agreement with any
underwriter or broker-dealer for whom the Registerable Securities may be sold,
any such underwriter or broker-dealer and each person, if any, who controls any
such underwriter or broker-dealer (within the meaning of the Act) against all
losses, claims, damages, liabilities, expenses or actions in respect thereof
caused by any untrue statement of a material fact contained in any registration
statement under which such Registerable Securities were registered under the
Act, any preliminary or final prospectus contained therein, or any amendment or
supplement thereto (unless cured by an amendment or supplement to the prospectus
delivered to the selling holders prior to the sales of the Registerable
Securities that are subject to a claimed right of indemnification) or caused by
any omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading (unless cured by an
amendment or supplement to the prospectus delivered to the selling holders prior
to the sales of the registerable securities that are subject to a claimed right
or indemnification); except insofar as such losses, claims, damages, liabilities
or expenses are caused by any untrue statement or omission contained in
information furnished in writing to the Company by the selling holders of
Registrable Securities expressly for use therein. In connection with any such
registration statement, the selling holders of Registrable
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Securities will furnish the Company in writing such information as the Company
may reasonably request for use in any such registration statement or prospectus
and they will, as a condition precedent to the Company's obligation hereunder,
agree to indemnify the Company, its directors and officers, and, to the extent
required in any agreement with any underwriter or broker-dealer, each such
underwriter or broker-dealer and each person, if any, who controls the Company
or any underwriter or broker-dealer (within the meaning of the Act) against any
loses, claims, damages, liabilities, statement of a material fact contained in
any such registration statement or prospectus or caused by any omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein no misleading, insofar as such losses, claims, damages,
liabilities, expenses or actions are caused by any untrue statement or omission
based upon information furnished in writing to the Company by the selling
holders expressly for use therein.
(e) If a public offering is not completed within nine months after
the effective date of any registration statement filed by the Company pursuant
to Section 10(b), the Company reserves the right, in its option, to withdraw
from registration any securities offered by the Company which have not been sold
during such period.
(f) Notwithstanding the foregoing, the Company reserves the right to
delay such registration, or to withhold efforts to cause the registration
statement to become effective, if the Company determines in good faith that such
registration might (i) interfere with or affect the negotiation or completion of
any transaction that is being contemplated by the Company, or (ii) involve
initial or continuing disclosure obligations that might not be in the best
interest of the Company's shareholders. The selling holders of Registrable
Securities, upon receipt of notice from the Company that an event has occurred
which requires a post-effective amendment to any registration statement or
supplement to the prospectus included therein, shall promptly discontinue the
sale of their Registerable Securities until they receive a copy of a
supplemented or amended prospectus from the Company, which the Company shall
provide as soon as practicable after such notice.
(g) The Company shall have the right to grant any registration rights
or register any securities for the account of any person other than holders of
Registerable Securities regardless of whether such rights are senior,
subordinate or equal to those of the holders of Registerable Securities.
(h) In the case of any registration initiated under this Section 10,
the Company shall have the right to designate the managing underwriter in any
underwritten offering. The Company will supply the selling holders of
Registrable Securities with copies of such registration statements and of the
prospectus included therein in such quantities as may be reasonably necessary
for the purpose of the proposed disposition.
11. Sale of Warrant Shares Without Registration. The holder of this
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Warrant Certificate, by acceptance hereof, and the holder of any Warrant Shares,
by acceptance thereof, agrees to give written notice to Company of such holder's
intention before selling or otherwise disposing of the Warrant Shares, except to
the extent that such sale is pursuant to a then effective registration
statement. Such notice shall describe briefly the manner of any proposed sale
or other disposition to be made of Warrant Shares. Such notice shall be
accompanied by an opinion
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of counsel reasonably satisfactory to the Company stating that the proposed
exercise or sale or other disposition may be effected without registration or
qualification (under any federal or state law) of Warrant Shares. The Company,
as promptly as practicable, shall notify such holder if such opinion is
satisfactory, whereupon such holder shall be entitled to sell or otherwise
dispose of the Warrant Shares or to receive the certificates representing the
shares of Common Stock or to receive the certificates representing the Warrant
Shares and dispose of the shares so received, all in accordance with the terms
of the notice of intent delivered by such holder to the Company and in
accordance with all other applicable terms and conditions contained herein.
12. Loss, Theft, Destruction or Mutilation. Upon receipt by the Company
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of reasonable evidence satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of a Warrant Certificate and (in the case of
loss, theft, or destruction) of reasonable indemnity and (in the case of
mutilation) upon surrender and cancellation thereof, the Company will execute
and deliver, in lieu thereof, a new Warrant Certificate of like tenor.
13. Notices. All notices, requests and demands to or upon the Company
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and/or the holders of Warrants and/or Warrant Shares shall be deemed to have
been given or made when deposited in the mails, postage prepaid, registered or
certified mail, return receipt requested, or, in the case of telegraphic notice,
when delivered to the telegraph company, charges prepaid addressed as follows or
to such other address as may be hereafter designated in writing in accordance
herewith by the Company and/or the holder of Warrants and/or Warrant Shares.
The Company:
Quadrant International, Inc.
000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Mr. Xxxxx Xxx
With a copy to its
Counsel:
Cozen and X'Xxxxxx
Third Floor, Atrium Building
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Holders of Warrants
and/or Warrant Shares:
Progress Capital, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
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With a copy to its
Counsel:
Xxxxxxxx Ingersoll, P.C.
Eleven Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000 - 2985
Attention: Xxxx Xxxxxxxxx
14. Headings. The descriptive headings of the several sections of this
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Warrant Certificate are inserted for convenience only and do not constitute a
part of this Warrant Certificate.
IN WITNESS WHEREOF, the Company, intending to be legally bound hereby, has
caused this Common Stock Purchase Warrant Certificate to be duly executed under
its corporate seal as of the 30th day of July, 1998.
QUADRANT INTERNATIONAL, INC.
Attest: /s/ Xxxxx Xxx By: /s/ Xxxxxxx X. Xxxxx
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Secretary Name:
Title:
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