REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of ________________, 1997 by and between THE MENDIK COMPANY,
INC., a Maryland corporation (the "Company"), and the holders of Units listed
on SCHEDULE A hereto (individually, a "Holder"), attached hereto.
WHEREAS, on the date hereof, the Holders are receiving on the date
hereof Class A units of limited partnership interest ("Units") in the Mendik
Company, L.P. (the "Partnership");
WHEREAS, in connection therewith, the Company has agreed to grant
to Holders the Registration Rights (as defined in Section 1 hereof);
NOW, THEREFORE, the parties hereto, in consideration of the
foregoing, the mutual covenants and agreements hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, hereby agree as follows:
SECTION 1. REGISTRATION RIGHTS
If Holder receives shares of common stock ("Common Stock") of the
Company upon redemption of Units (the "Redemption Shares") pursuant to the
terms of the agreement of limited partnership of the Partnership, as amended
(the "Partnership Agreement"), Holder shall be entitled to offer for sale
pursuant to a shelf registration statement the Redemption Shares, subject to
the terms and conditions set forth herein (the "Registration Rights").
1.1 DEMAND REGISTRATION RIGHTS.
1.1(a) REGISTRATION PROCEDURE. Subject to Sections 1.1(c) and 1.2
hereof, if Holder desires to exercise its Registration Rights with respect to
the Redemption Shares, Holder shall deliver to the Company a written notice
(a "Registration Notice") informing the Company of such exercise and
specifying the number of shares to be offered by Holder (such shares to be
offered being referred to herein as the "Registrable Securities"). Such
notice may be given at any time on or after the date a notice of redemption
is delivered by Holder to the Partnership pursuant to the Partnership
Agreement, but must be given at least ten (10) business days prior to the
consummation of the sale of Registrable Securities. Upon receipt of the
Registration Notice, the Company, if it has not already caused the
Registrable Securities to be included as part of an existing shelf
registration statement and related prospectus (the "Shelf Registration
Statement") that the Company then has on file with the Securities and
Exchange Commission (in which event the Company shall be deemed to have
satisfied its registration obligation under this Section 1.1), will cause to
be filed with the Securities and Exchange Commission (the "SEC") as soon as
reasonably practicable after receiving the Registration Notice a new
registration statement and related prospectus (a "New Registration
Statement") that complies as to form in all material respects with applicable
SEC rules providing for the
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sale by Holder of the Registrable Securities, and agrees (subject to Section
1.2 hereof) to use its best efforts to cause such New Registration Statement
to be declared effective by the SEC as soon as practicable. (As used herein,
"Registration Statement" and "Prospectus" refer to the Shelf Registration
Statement and related prospectus (including any preliminary prospectus) or
the New Registration Statement and related prospectus (including any
preliminary prospectus), whichever is utilized by the Company to satisfy
Holder's Registration Rights pursuant to this Section 1, including in each
case any documents incorporated therein by reference. Holder agrees to
provide in a timely manner information regarding the proposed distribution by
Holder of the Registrable Securities and such other information reasonably
requested by the Company in connection with the preparation of and for
inclusion in the Registration Statement. The Company agrees (subject to
Section 1.2 hereof) to use its best efforts to keep the Registration
Statement effective (including the preparation and filing of any amendments
and supplements necessary for that purpose) until the earlier of (i) the date
on which Holder consummates the sale of all of the Registrable Securities
registered under the Registration Statement, or (ii) the date on which all of
the Registrable Securities are eligible for sale pursuant to Rule 144(k) (or
any successor provision) or in a single transaction pursuant to Rule 144(e)
(or any successor provision) under the Securities Act of 1933, as amended
(the "Act"). The Company agrees to provide to Holder a reasonable number of
copies of the final Prospectus and any amendments or supplements
thereto.
1.1(b) OFFERS AND SALES. All offers and sales by Holder under the
Registration Statement referred to in this Section 1.1 shall be completed
within the period during which the Registration Statement is required to
remain effective pursuant to Section 1.1(a), and upon expiration of period
Holder will not offer or sell any Registrable Securities under the
Registration Statement. If directed by the Company, Holder will return all
undistributed copies of the Prospectus in its possession upon the expiration
of such period.
1.1 (c) LIMITATIONS ON REGISTRATION RIGHTS. Each exercise of a
Registration Right shall be with respect to a minimum of the lesser of (i)
Fifty Thousand (50,000) shares of Common Stock or (ii) the total number of
Redemption Shares held by Holder at such time plus the number of Redemption
Shares that may be issued upon redemption of Units by Holder. The right of
Holder to deliver a Registration Notice commences upon the date a Holder is
permitted to redeem Units pursuant to the Partnership Agreement. The right of
Holder to deliver a Registration Notice shall expire on the date on which all
of the Redemption Shares held by Holder or issuable upon redemption of Units
held by Holder are eligible for sale pursuant to Rule 144(k) (or any
successor provision) or in a single transaction pursuant to Rule 144(e) (or
any successor provision) under the Securities Act of 1933, as amended (the
"Securities Act"). The Registration Rights granted pursuant to this Section
1.1 may not be exercised in connection with any underwritten public offering
by the Company or by Holder without the prior written consent of the Company.
1.2 SUSPENSION OF OFFERING. Upon any notice by the Company, either
before or after a Holder has delivered a Registration Notice, that a
negotiation or consummation of a transaction by the Company or its
subsidiaries is pending or an event has occurred, which negotiation,
consummation or event would require additional
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disclosure by the Company in the Registration Statement of material
information which the Company has a BONA FIDE business purpose for keeping
confidential and the nondisclosure of which in the Registration Statement
might cause the Registration Statement to fail to comply with applicable
disclosure requirements (a "Materiality Notice"), Holder agrees that it will
immediately discontinue offers and sales of the Registrable Securities under
the Registration Statement until Holder receives copies of a supplemented or
amended Prospectus that corrects the misstatement(s) or omission(s) referred
to above and receives notice that any post-effective amendment has become
effective; PROVIDED, that the Company may delay, suspend or withdraw the
Registration Statement for such reason for no more than sixty (60) days after
delivery of the Materiality Notice at any one time. If so directed by the
Company, Holder will deliver to the Company all copies of the Prospectus
covering the Registrable Securities current at the time of receipt of such
notice.
1.3 EXPENSES. The Company shall pay all expenses incident to the
performance by it of its registration obligations under this Section 1,
including (i) all stock exchange, SEC and state securities registration,
listing and filing fees, (ii) all expenses incurred in connection with the
preparation, printing and distributing of the Registration Statement and
Prospectus, and (iii) fees and disbursements of counsel for the Company and
of the independent public accountants of the Company. Holder shall be
responsible for the payment of any brokerage and sales commissions, fees and
disbursements of Holder's counsel, and any transfer taxes relating to the
sale or disposition of the Registrable Securities by Holder.
1.4 QUALIFICATION. The Company agrees to use its best efforts to
register or qualify the Registrable Securities by the time the applicable
Registration Statement is declared effective by the SEC under all applicable
state securities or "blue sky" laws of such jurisdictions as Holder shall
reasonably request in writing, to keep each such registration or
qualification effective during the period such Registration Statement is
required to be kept effective or during the period offers or sales are being
made by Holder after delivery of a Registration Notice to the Company,
whichever is shorter, and to do any and all other acts and things which may
be reasonably necessary or advisable to enable Holder to consummate the
disposition in each such jurisdiction of the Registrable Securities owned by
Holder; PROVIDED, HOWEVER, that the Company shall not be required to (x)
qualify generally to do business in any jurisdiction or to register as a
broker or dealer in such jurisdiction where it would not otherwise be
required to qualify but for this Section 1.1, (y) subject itself to taxation
in any such jurisdiction, or (z) submit to the general service of process in
any such jurisdiction.
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SECTION 2. INDEMNIFICATION; PARTNERSHIP
2.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Holder and each person, if any, who controls
any Holder within the meaning of Section 15 of the Securities Act or Section
20 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as follows:
(a) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment thereto) pursuant to which
the Registrable Securities were registered under the Securities Act,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus
(or any amendment or supplement thereto), including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(b) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(c) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel), reasonably
incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, in each case whether or not a party, or
any claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (a) or (b) above;
PROVIDED, HOWEVER, that the indemnity provided pursuant to this Section 2.1
does not apply to any Holder with respect to any loss, liability, claim,
damage or expense to the extent arising out of (i) any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto), or
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(ii) such Holder's failure to deliver an amended or supplemental Prospectus
if such loss, liability, claim, damage or expense would not have arisen had
such delivery occurred.
2.2 INDEMNIFICATION BY HOLDER. Holder (and each permitted assignee
of Holder, on a several basis) agrees to indemnify and hold harmless the
Company, and each of its directors and officers (including each director and
officer of the Company who signed a Registration Statement), and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, as follows:
(a) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment thereto) pursuant to which
the Registrable Securities were registered under the Securities Act,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus
(or any amendment or supplement thereto), including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(b) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of Holder; and
(c) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel), reasonably
incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, in each case whether or not a party, or
any claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (a) or (b) above;
PROVIDED, HOWEVER, that the indemnity provided pursuant to this Section 2.1
shall only apply with respect to any loss, liability, claim, damage or
expense to the extent arising out of (i) any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by Holder expressly for use
in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto), or (ii) Holder's failure to deliver
an amended or supplemental Prospectus if such loss, liability, claim, damage
or expense would not have arisen had such delivery occurred. Notwithstanding
the provisions of this
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Section 2.2, Holder and any permitted assignee shall not be required to
indemnify the Company, its officers, directors or control persons with
respect to any amount in excess of the amount of the total proceeds to Holder
or such permitted assignee, as the case may be, from sales of the Registrable
Securities of Holder under the Registration Statement, and no Holder shall be
liable under this Section 2.2 for any statements or omissions of any other
Holder.
2.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. The indemnified party
shall give reasonably prompt notice to the indemnifying party of any action
or proceeding commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify the indemnifying party (i) shall
not relieve it from any liability which it may have under the indemnity
agreement provided in Section 2.1 or 2.2 above, unless and to the extent it
did not otherwise learn of such action and the lack of notice by the
indemnified party results in the forfeiture by the indemnifying party of
substantial rights and defenses, and (ii) shall not, in any event, relieve
the indemnifying party from any obligations to the indemnified party other
than the indemnification obligation provided under Section 2.1 or 2.2 above.
If the indemnifying party so elects within a reasonable time after receipt of
such notice, the indemnifying party may assume the defense of such action or
proceeding at such indemnifying party's own expense with counsel chosen by
the indemnifying party and approved by the indemnified party, which approval
shall not be unreasonably withheld; PROVIDED, HOWEVER, that the indemnifying
party will not settle any such action or proceeding without the written
consent of the indemnified party unless, as a condition to such settlement,
the indemnifying party secures the unconditional release of the indemnified
party; and PROVIDED FURTHER, that if the indemnified party reasonably
determines that a conflict of interest exists where it is advisable for the
indemnified party to be represented by separate counsel or that, upon advice
of counsel, there may be legal defenses available to it which are different
from or in addition to those available to the indemnifying party, then the
indemnifying party shall not be entitled to assume such defense and the
indemnified party shall be entitled to separate counsel at the indemnifying
party's expense. If the indemnifying party is not entitled to assume the
defense of such action or proceeding as a result of the proviso to the
preceding sentence, the indemnifying party's counsel shall be entitled to
conduct the indemnifying party's defense and counsel for the indemnified
party shall be entitled to conduct the defense of the indemnified party, it
being understood that both such counsel will cooperate with each other to
conduct the defense of such action or proceeding as efficiently as possible.
If the indemnifying party is not so entitled to assume the defense of such
action or does not assume such defense, after having received the notice
referred to in the first sentence of this paragraph, the indemnifying party
will pay the reasonable fees and expenses of counsel for the indemnified
party. In such event, however, the indemnifying party will not be liable for
any settlement effected without the written consent of the indemnifying
party. If an indemnifying party is entitled to assume, and assumes, the
defense of such action or proceeding in accordance with this paragraph, the
indemnifying party shall not be liable for any fees and expenses of counsel
for the indemnified party incurred thereafter in connection with such action
or proceeding.
2.4 CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for
in this Section 2 is for any reason held to be unenforceable by the
indemnified party although applicable in accordance
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with its terms, the Company and Holder shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated
by such indemnity agreement incurred by the Company and Holder, (i) in such
proportion as is appropriate to reflect the relative fault of the Company on
the one hand and Holder on the other, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative fault of but also the relative benefits to the Company
on the one hand and Holder on the other, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative benefits to the indemnifying party and indemnified party shall be
determined by reference to, among other things, the total proceeds received
by the indemnifying party and indemnified party in connection with the
offering to which such losses, claims, damages, liabilities or expenses
relate. The relative fault of the indemnifying party and indemnified party
shall be determined by reference to, among other things, whether the action
in question, including any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact, has been made
by, or relates to information supplied by, the indemnifying party or the
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 2.4 were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 2.4, Holder shall
not be required to contribute any amount in excess of the amount of the total
proceeds to Holder from sales of the Registrable Securities of Holder under
the Registration Statement.
Notwithstanding the foregoing, 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 Section 2.4, each person,
if any, who controls Holder within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as Holder, and each
director of the Company, each officer of the Company who signed a
Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Company.
SECTION 3. RULE 144 COMPLIANCE
The Company covenants that it will use its best efforts to timely
file the reports required to be filed by the Company under the Securities Act
and the Securities Exchange Act of 1934, as amended, so as to enable each
Holder to sell Registrable Securities pursuant to Rule 144 under the
Securities Act. In connection with any sale, transfer or other disposition
by Holder of any Registrable Securities pursuant to Rule 144 under the
Securities Act, the Company shall cooperate with Holder to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any Securities Act legend, and enable
certificates for such Registrable Securities to be for such number of shares
and registered in such names as Holder may
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reasonably request at least ten (10) business days prior to any sale of
Registrable Securities hereunder.
SECTION 4. MISCELLANEOUS
4.1 INTEGRATION; AMENDMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the matters set forth
herein and supersedes and renders of no force and effect all prior oral or
written agreements, commitments and understandings among the parties with
respect to the matters set forth herein. Except as otherwise expressly
provided in this Agreement, no amendment, modification or discharge of this
Agreement shall be valid or binding unless set forth in writing and duly
executed by the Company and Holder.
4.2 WAIVERS. No waiver by a party hereto shall be effective unless
made in a written instrument duly executed by the party against whom such
waiver is sought to be enforced, and only to the extent set forth in such
instrument. Neither the waiver by any of the parties hereto of a breach or a
default under any of the provisions of this Agreement, nor the failure of any
of the parties, on one or more occasions, to enforce any of the provisions of
this Agreement or to exercise any right or privilege hereunder shall
thereafter be construed as a waiver of any subsequent breach or default of a
similar nature, or as a waiver of any such provisions, rights or privileges
hereunder.
4.3 ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Agreement and the
rights granted hereunder may not be assigned by Holder without the written
consent of the Company; PROVIDED, HOWEVER, that Holder may assign its rights
and obligations hereunder, following at least ten (10) days prior written
notice to the Company, (i) to Holder's partners or beneficiaries in
connection a distribution of the Units to its partners or beneficiaries, (ii)
to a permitted transferee in connection with a transfer of the Units in
accordance with the terms of the Partnership Agreement, and (iii) to a third
party in connection with a transfer of Units as security for or in
satisfaction of obligations of any partner of Holder, if in the case of (i),
(ii) and (iii) above, such persons or such third party agree in writing to be
bound by all of the provisions hereof. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of all of
the parties hereto.
4.4 BURDEN AND BENEFIT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, personal and legal representatives, successors and, subject to
Section 4.3 above, assigns.
4.5 NOTICES. All notices called for under this Agreement shall be
in writing and shall be deemed given upon receipt if delivered personally or
by facsimile transmission and followed promptly by mail, or mailed by
registered or certified mail (return receipt requested), postage prepaid, to
the parties at the addresses set forth opposite their names in SCHEDULE A
hereto, or to any other address or addressee as any party entitled to receive
notice under this Agreement shall designate, from time to time, to others in
the manner provided in this Section 4.5 for the service of notices; PROVIDED,
HOWEVER, that notices of a change of address shall be effective only upon
receipt thereof. Any notice delivered to the party hereto to whom it is
addressed shall be deemed to have been given and received on the
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day it was received; PROVIDED, HOWEVER, that if such day is not a business
day then the notice shall be deemed to have been given and received on the
business day next following such day. Any notice sent by facsimile
transmission shall be deemed to have been given and received on the business
day next following the transmission.
4.6 SPECIFIC PERFORMANCE. The parties hereto acknowledge that the
obligations undertaken by them hereunder are unique and that there would be
no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to (i) compel specific performance of the obligations, covenants and
agreements of any other party under this Agreement in accordance with the
terms and conditions of this Agreement and (ii) obtain preliminary injunctive
relief to secure specific performance and to prevent a breach or contemplated
breach of this Agreement in any court of the United States or any State
thereof having jurisdiction.
4.7 GOVERNING LAW. This Agreement, the rights and obligations of
the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of the State of
Maryland, but not including the choice of law rules thereof.
4.8 HEADINGS. Section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed
to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.
4.9 PRONOUNS. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as
the identity of the person or entity may require.
4.10 EXECUTION IN COUNTERPARTS. To facilitate execution, this
Agreement may be executed in as many counterparts as may be required. It
shall not be necessary that the signature of or on behalf of each party
appears on each counterpart, but it shall be sufficient that the signature of
or on behalf of each party appears on one or more of the counterparts. All
counterparts shall collectively constitute a single agreement. It shall not
be necessary in any proof of this Agreement to produce or account for more
than a number of counterparts containing the respective signatures of or on
behalf of all of the parties.
4.11 SEVERABILITY. If fulfillment of any provision of this
Agreement, at the time such fulfillment shall be due, shall transcend the
limit of validity prescribed by law, then the obligation to be fulfilled
shall be reduced to the limit of such validity; and if any clause or
provision contained in this Agreement operates or would operate to invalidate
this Agreement, in whole or in part, then such clause or provision only shall
be held ineffective, as though not herein contained, and the remainder of
this Agreement shall remain operative and in full force and effect.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf as of the date first hereinabove
set forth.
COMPANY:
Address: The Mendik Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: __________________________
Name: ________________________
Title: _______________________
HOLDERS:
By: __________________________
Name: ________________________
Title: Attorney-in-Fact
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