EXHIBIT-99
OFFICE LEASE
THIS OFFICE LEASE ("Lease"), is entered into on November 1, 2005, between Xxxx
Properties II, LLC, a Michigan limited liability company with offices located at
0000 - 00xx Xxxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx, 00000 ("Landlord") and BestNet
Communications Corporation, a Nevada corporation, with offices located at 0000
Xxxxxxx Xxxx XX, Xxxxx X, Xxxxx Xxxxxx, Xxxxxxxx, 00000 ("Tenant").
WITNESSETH
1. Description of the Premises. Landlord leases to Tenant and Tenant hires
from Landlord Suite C (the "Leased Premises") in the building (the "Building")
located at 0000 Xxxxxxxxxx Xxxxxx XX, Xxxxx Xxxxxx, Xxxxxxxx, 00000, together
with the non-exclusive right to use the Common Areas hereinafter defined.
2. Common Areas. Landlord shall also make available areas and facilities of
common benefit to the tenants and occupants of the Building which shall include,
without limitation, such parking areas, driveways, roadways, sidewalks and
ramps, service areas, hallways and lighting facilities as are a part of the
Building and surrounding areas (the "Common Areas"). Subject to Section 5
hereof, Landlord shall manage, equip, light, insure, repair and maintain the
Common Areas. All Common Areas shall be subject to the exclusive control and
management of Landlord and Landlord shall have the right, from time to time, to
establish, modify, and enforce rules and regulations with respect thereto.
3. Term; Acceptance; Renewal & Holdover.
3.1 Initial Term: This Lease shall be for an Initial Term of Twenty-four
(24) months commencing at noon on November 1, 2005 ("the Commencement Date") and
terminating at noon on November 1, 2007 (the "Expiration Date").
3.2 Acceptance: By conducting business from the Leased Premises, Tenant
shall be deemed to have accepted the Leased Premises in their then present
condition and to have acknowledged that Landlord has fulfilled its obligation to
make all improvements to the Leased Premises in accordance with any agreement,
whether oral or written, between the parties.
3.3 Commencement and Termination Dates: Landlord and the Tenant shall,
upon the request of either of them, execute an Agreement in recordable form
expressing the Commencement and Termination Dates of the Term of this Lease.
3.4 Renewal Term: Provided Tenant is not in default of any covenant
contained in this Lease, Tenant shall have one (1) right of renewal, which may
be exercised by Tenant, in Tenant's sole discretion, for a further term of two
(2) years (a "Renewal Term"), provided, however, that Tenant gives Landlord
written notice that Tenant intends to exercise its right of renewal not later
than 60 days prior to the end of the then-current lease or renewal term (the
"Renewal Notice"). Each renewal shall be on the terms contained in this Lease,
except that there shall be no further rights to renew and except as to Base Rent
which shall be adjusted as set forth in Section 4.2.
3.5 Holdover: In the event Tenant remains in possession of the Leased
Premises after the expiration or termination of the Lease, without the execution
of a lease renewal or new Lease, Tenant shall be deemed to be occupying the
Leased Premises as a tenant from month-to-month subject to all conditions,
provisions, and obligations of this Lease, insofar as the same can be applicable
to a month-to-month tenancy, cancelable by either party upon thirty (30) days
written notice to the other, except that the rent shall increase by ten percent
(10%) over the rent for the last month of the Lease, and Landlord may increase
the rent on 30 days' written notice to Tenant.
4. Base Rental.
4.1 Tenant shall pay to Landlord annual rent during the Initial Term of
this Lease in the amount of Thirty-Five Thousand One Hundred and Sixty Dollars
and 00/100 Dollars ($35,160) ("Base Rent"), which shall be paid in equal
consecutive monthly installments of One Thousand Four Hundred and Sixty-Five
Dollars and 00/100 Dollars ($1,465.00) and a prorated portion for any partial
calendar month. Installments of rent shall be paid on the first day of each
calendar month in advance.
4.2 In the event that Tenant exercises its right to a Renewal Term, the
Base Rent payable during the Renewal Term (and the Base Building Expense
figure), as specified in Section 4.1 for Base Rent and Section 5.1 for Base
Building Expense, shall be adjusted as of the first day of each Renewal Term
(the "First Adjustment Date") by the percentage increase in the Consumer's Price
Index for all Urban Consumers specified for All Items, All Cities
(1982-1984=100) and issued by the Bureau of Labor Statistics of the United
States Department of Labor, or any replacement thereof (the "Index"). The
increased annual Base Rent shall be equal to the annual Base Rent payable for
the year preceding the Adjustment Date multiplied by a fraction, the numerator
of which is the Index for the second calendar month immediately preceding the
Adjustment Date and the denominator is the Index for the second calendar month
one year preceding. In no event shall the Base Rent be decreased.
Notwithstanding the foregoing, the increase in Base Rent for any one Renewal
Term shall not be greater than five percent (5%).
4.3 All rent shall be paid to Landlord at the address set forth herein or
at such other address as Landlord may designate in writing, without any prior
demand therefore and without any deduction or offset whatsoever.
4.4 In the event that Tenant shall fail to pay any amount under this
Lease when the same shall be due, such amount shall be subject to a one-time
late charge of five cents (.05(cent)) for each One Dollar ($1.00) not paid when
due and thereafter shall be subject to a service charge until such amount is
paid at the lesser of the rate of two percent (2%) per month or the highest rate
permitted by law.
5. Building Expenses.
5.1 Tenant also shall pay to Landlord as additional rent its
proportionate share of Building Expenses for each calendar year (and a
proportionate amount for any partial calendar year) during the term of this
Lease (initial and renewal), whenever such Building Expenses exceed Four
Thousand, Nine Hundred Eighty Seven and 50/100 Dollars ($4,987.50) for the
Leased Premises. Tenant's pro rata share of all Building Expenses is Ten and
28/100ths percent (10.28%).
5.2 "Building Expenses" shall mean all costs and expenses incurred by
Landlord, directly or indirectly, in the maintenance, ownership, operation,
repair, and replacement of land and the Building including the Common Areas, and
including, without limitation: property taxes and assessments, real, personal,
general and special; insurance; water, sewer, electricity, gas and other sources
of power for heating, lighting, ventilating or air conditioning (except when
separately billed to a specific tenant of the Building); management fees, wages,
salaries, fringe benefits, and applicable taxes on the employer for services
related to the Building performed by Landlord's employees; supplies consumed in
connection with cleaning and general maintenance; cost incurred in connection
with snow removal and exterior grounds care; and depreciation for repairs.
Building Expenses shall not include janitorial expenses for the Leased Premises
or other leased premises within the Building.
5.3 Tenant, in addition to the payment of Tenant's pro rata share of
Building Expenses, shall be directly responsible for paying for any telephone
and janitorial services servicing the Leased Premises. Tenant hereby releases
Landlord from any liability whatsoever for any interruption of electrical
service or gas to the Leased Premises, specifically including, but not limited
to, any interruption of electrical current to word processing or computer
equipment or the memories thereof.
5.4 At the end of each calendar year, Landlord shall furnish Tenant with
a written statement itemizing Building Expenses and any other additional rent
for that calendar year. Tenant shall pay the amount stated therein within ten
(10) days of receipt of the written statement.
5.5 The additional rent provided to be paid pursuant to this Section 5
may be escalated by Landlord for each renewal term.
6. Use. Tenant shall use and occupy the Leased Premises for general office
purposes, and for no other purpose without the prior written consent of the
Landlord. Tenant shall not intentionally and knowingly use the Leased Premises
for any purpose or in any manner in violation of any law, ordinance, rule or
regulation adopted or imposed by any federal, state, county, or municipal body
or other governmental agency. The Tenant shall not deface or injure the Leased
Premises or the Building, or permit any activity in the Leased Premises which
will result in an increase of any premium for insurance on the Leased Premises
or the Building unless Tenant shall pay such increased premiums.
Tenant may move its property into the Leased Premises on or after October
10, 2005. Tenant shall be liable for any costs or damages that may result
therefrom. All property of Tenant kept on the premises shall be so kept at the
sole risk of Tenant and Tenant shall hold Landlord harmless from any claims
arising out of damage to same.
7. Taxes. Subject to Tenant's obligations set forth in Section 5 hereof,
Landlord shall pay all taxes and special assessments levied against the land and
improvements on and in which the Leased Premises are situated. Tenant shall pay
all personal property taxes assessed against any personal property owned by
Tenant located on or in the Leased Premises.
8. Maintenance and Repair. Subject to Tenant's obligations set forth in
Section 5, Landlord shall maintain and repair the Common Areas and the Building
in good condition and repair, including the heating and air conditioning
equipment, and the electrical and plumbing systems. Tenant shall maintain the
Leased Premises in a neat and clean condition. Tenant also shall be responsible
for all repairs or replacements to the Leased Premises, the Building, and the
Common Areas occasioned by the negligence or willful act of Tenant, its agents,
employees, invitees, or licensees, or resulting from Tenant's failure to report
the need for repair or maintenance in a reasonably timely manner.
9. Assignment and Subletting. Tenant shall not sell, assign, mortgage,
pledge, or in any manner transfer this Lease nor sublet the Leased Premises or
any portion thereof without the prior written consent of the Landlord.
Notwithstanding any subletting for which consent is given by Landlord, Tenant
shall remain fully liable on this Lease. Landlord's right to assign this Lease
is and shall remain unqualified. Upon any sale of the Leased Premises in which
the purchaser assumes all obligations under this Lease, Landlord shall thereupon
be entirely free of all obligations of the Landlord hereunder and shall not be
subject to any liability resulting from any act or omission or event occurring
after such conveyance. Tenant agrees to recognize and attorn to any such
transferee and Tenant further agrees, at Landlord's request, to execute and
deliver a recordable instrument setting forth the provisions of this paragraph.
10. Utilities. Subject to Tenant's obligations set forth in Section 5,
Landlord shall provide electricity, heat, air conditioning, and ventilation to
the Leased Premises. Landlord shall not be liable in damages should the
furnishing of any utilities be interrupted.
11. Insurance; Risk of Loss.
11.1 Subject to Tenant's obligations set forth in Section 5, Landlord
shall insure the Building, including the Leased Premises (but not Tenant's
leasehold improvements or personal property located therein) and the Common
Areas, against loss or damage under a policy of fire or extended coverage
insurance in such amounts as Landlord shall deem appropriate. No insurance
proceeds payable under any such insurance policy shall be paid to Tenant in any
event.
11.2 Tenant shall indemnify and save Landlord harmless from any
liability or claim for damages which may be asserted against Landlord by reason
of any accident or casualty occurring on or within the Leased Premises or which
occurs in the Building or the Common Areas which is caused by Tenant, its
employees, invitees, or licensees. Tenant shall, at its own cost and expense,
either: (i) obtain and keep in force a policy or policies of public liability
insurance naming Landlord as an additional insured with an insurance company
approved by Landlord on a single occurrence basis, with liability coverage of
not less than One Million Dollars ($1,000,000) or such greater amount as may be
designated by Landlord; or (ii) maintain self-insurance against such risks as
Tenant is required to insure against hereunder, on such basis and with such
policy amounts as are comparable to the insurance described above. Tenant shall
furnish Landlord with certificates or other evidence acceptable to Landlord
indicating that such policies of insurance, or self-insurance as the case may
be, are in full force and effect and providing that Landlord shall be notified
in writing at least thirty (30) days prior to cancellation of, any material
change in, or renewal of the policy.
11.3 Any insurance or self-insurance maintained by either party
pursuant to this Section 11 shall contain a clause or endorsement under which
the insurer or self-insurer waives all rights of subrogation against the other
party, its agents, or its employees with respect to losses payable under such
policy.
11.4 Landlord shall not be liable for any damage, injury, or loss to
persons or property of Tenant or of others located in the Leased Premises, nor
for the loss of or damage to any improvements made by Tenant to the Leased
Premises. Landlord shall not be liable for any injury or damage to persons or
property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain, snow, or leaks from any part of the Leased Premises,
from the pipes, appliances, or plumbing work, from the roof, street, or
sub-surface, or from any other place or by dampness or by any other cause of
whatsoever nature. Landlord shall not be liable for any damage caused by other
tenants, persons, or occupants of adjacent property or the public, or caused by
operations in construction of any private, public, or quasi-public work. All
property of Tenant kept on the premises shall be so kept at the sole risk of
Tenant and Tenant shall hold Landlord harmless from any claims arising out of
loss or damage to same.
12. Acceptance of Leased Premises. Tenant accepts the Leased Premises
in their "as is" "where is" condition and agrees that Landlord shall have no
obligations to make any modifications or alterations thereto, except as agreed
in writing between Landlord and Tenant.
13. Damage or Destruction.
13.1 If, during the term of this Lease, the Leased Premises shall
be partially or totally destroyed by fire or other casualty covered by insurance
so as to become partially or totally untenantable, the same shall be repaired as
soon as reasonably possible at the expense of Landlord unless this Lease is
terminated as hereinafter provided. In the event of such damage or destruction,
and this Lease is not terminated, there shall be an abatement or reduction in
the rental payments due under this Lease until the Leased Premises is again
tenantable.
13.2 If, during the term of this Lease, the Leased Premises or the
Building shall be partially or totally destroyed by fire or other casualty and
cannot be restored within ninety (90) days after such damage or destruction,
then either Landlord or Tenant, by written notice to the other, may terminate
this Lease.
14. Condemnation. If the whole or any part of the Leased Premises shall be
taken by any public authority under the power of eminent domain, including any
conveyances or grants made in anticipation of or in lieu of such taking, then
the term of this Lease shall cease on that part of the Leased Premises from the
day the possession of that part of the Leased Premises shall be acquired by such
public authority, and the rent shall be paid to that date. If the portion of the
Leased Premises is so taken is such as to substantially impair the usefulness of
the Premises for the purpose for which the Leased Premises were leased, Tenant
shall have the right either to terminate this Lease or to continue in possession
of the remainder of the Leased Premises under the terms and conditions hereof
except that the rental shall be reduced in proportion to the amount of the
Premises taken, and in the latter event, Landlord shall promptly restore such
remainder to a reasonably tenantable condition. All damages awarded for such
taking shall belong to and be the property of Landlord, whether such damages
shall be awarded as compensation for diminution of value of the leasehold or to
the fee of the Premises, provided, however, that Landlord shall not be entitled
to any award made to Tenant for the costs of removal of fixtures or business
interruption.
15. Alterations. Tenant may, at its own expense, construct a small room on
the Leased Premises to contain its telephone equipment. Tenant shall submit a
detailed plan for such work to Landlord, including the identity of the
contractor, for Landlord's approval before commencing construction. No other
improvements, alterations, additions, or physical changes shall be made upon the
Leased Premises by Tenant without the prior written consent of Landlord. Tenant
shall not change the locks on any doors of the Building or to the Leased
Premises. Tenant shall not attach or hang any curtains, blinds, shades, screens,
awnings, or other projections to the exterior of any window of the Leased
Premises or on the outside wall of the Building. All alterations and
improvements, exclusive of movable equipment and trade fixtures, installed by
Tenant or Landlord shall be the property of Landlord and shall remain upon, and
be surrendered with, the Leased Premises at the termination of the Lease,
provided, however, that Landlord may require that Tenant remove such alterations
and improvements and repair any damages to the Leased Premises caused by such
removal.
16. Signs. Landlord shall provide appropriate signs in the Common Areas
identifying Tenant's location in the Building. Landlord reserves the right to
require uniform interior signs for all tenants, and no sign or other advertising
or lettering shall be placed in the corridors or on the exterior walls of the
Building or on any window or door of the Building without Landlord's prior
consent.
17. Remedies and Defaults.
17.1 If Tenant shall default in the payment of any sums to Landlord
when due, shall fail to perform any other obligation or covenant hereof, or
shall otherwise breach this Lease; or if Tenant shall be adjudicated bankrupt or
make any assignment for the benefit of creditors, then Landlord may: 1.)
accelerate the full balance of the rent payable for the remainder of the term
which shall be then immediately payable by Tenant; 2.) terminate this Lease by
giving a notice of termination effective immediately upon delivery to Tenant,
evict Tenant, and recover all damages suffered as a result of Tenant's breach,
including costs and expenses of repossession, alterations and additions,
expenses of reletting, and expenses of enforcement or attempted enforcement of
this Lease, including brokerage fees and reasonable attorney fees; or 3.)
without terminating this Lease, evict Tenant or any other occupant of the Leased
Premises. Tenant waives any right to possession of the Premises after eviction.
Despite eviction, Tenant shall remain fully obligated for the payment of rent
through the remainder of the lease term. Landlord shall have no obligation to
re-let the premises and landlord's failure or refusal to re-let the premises
will not affect Tenant's obligation to pay rent.
17.2 The remedies provided to Landlord under this Lease are cumulative
and not exclusive. If Landlord commences an action to enforce this Lease, Tenant
agrees to pay Landlord's reasonable costs and attorney fees, whether or not such
action is prosecuted to judgment. Landlord and Tenant knowingly and voluntarily
waive trial by jury in any action to enforce this Lease, or which is in any way
related to this Lease, the Premises, or the relationship between Landlord and
Tenant.
18. Access to Leased Premises. Upon prior written notice, Landlord shall
have the right to enter upon the Leased Premises at all reasonable hours.
Landlord shall have the right to use all or any part of the Leased Premises to
install, maintain, use, repair and/or replace, pipes, ducts, lights, conduits,
plants, wires, floor coverings, and all other mechanical equipment serving the
Building; the same to be in locations within the Leased Premises as will not
materially interfere with Tenant's use thereof.
19. Rules and Regulations. Landlord reserves the right to adopt from time
to time such rules and regulations for the operation of the Building and the
Common Areas as are customary for buildings of this character which are not
inconsistent with the provisions of this Lease. Tenant and its agents,
employees, invitees, and licensees shall comply with all such rules and
regulations.
20. Waiver. Landlord's failure to insist upon the strict performance of any
of the terms, covenants, or conditions of this Lease shall not be deemed a
waiver of any subsequent breach or default in the terms, covenants, or
conditions herein contained. This Lease may be changed, modified, or discharged
only in writing, signed by both parties.
21. Notices. All notices required hereunder shall be in writing, and shall
be deemed to have been given if either delivered personally or mailed by
certified or registered mail to Landlord at its address set forth herein, to
Tenant at the Leased Premises, or to such other address as either party may
furnish in writing during the term of this Lease.
22. Quiet Enjoyment. Landlord covenants and agrees with Tenant, its
successors and assigns, that upon Tenant's paying the rent and observing and
performing all of the terms, covenants and conditions of this Lease, Tenant may
peaceably and quietly hold, have, occupy, possess, and enjoy the Leased Premises
for the full term hereof.
23. Subordination/Estoppel Certificates.
23.1 Tenant agrees that Landlord may choose to make this Lease
subordinate or paramount to any mortgages, trust deeds, and ground or underlying
leases now or hereafter affecting the Leased Premises and to any and all
advances to be made thereunder or to be secured thereby, and to the interest and
charges thereon, and all renewals, replacements and extensions thereof, provided
the mortgagee, lessor, or trustee named in any such mortgages, trust deeds, or
leases agrees to recognize the lease of Tenant in the event of foreclosure if
Tenant is not in default. Tenant will execute promptly any instrument or
certificate that Landlord may request to confirm such subordination, and hereby
irrevocably appoints Landlord as Tenant's attorney-in-fact to execute such
instrument or certificate on its behalf.
23.2 Tenant shall, within ten (10) days after request by Landlord,
execute and deliver to Landlord an estoppel certificate proposed by Landlord
identifying the Commencement Date and Expiration date of this Lease and state
that this Lease is unmodified and in full force and effect, or is in full force
and effect as modified, stating the modifications, and stating that Tenant does
not claim that Landlord is in default in any way, or listing any such claimed
defaults. The certificate also will confirm the amount of monthly installments
of base rent payable hereunder and additional rent as of the date of the
certificate, the date to which the rent has been paid in advance, and the amount
of any security deposit or prepaid rent. If Tenant fails to deliver the executed
certificate to Landlord within the ten (10) day period, the execution of the
proposed certificate will be deemed conclusively confirmed.
24. Security Deposit. Tenant has, upon execution of this Lease, deposited
with Landlord, and will keep on deposit at all times during the term hereof, the
sum of One Thousand Four Hundred Sixty Five and 00/100 Dollars ($1,465.00) which
shall be applied first towards any delinquent rent due under the Lease.
25. Changes by Landlord. Landlord hereby reserves the absolute right at any
time to make changes or revisions in the Building, parking lot, driveways,
signs, landscaping, sidewalks, and Common Areas, including additions to,
subtractions from, or rearrangements of the improvements, provided such changes
do not materially alter the use of the same.
26. Recording. The Tenant shall not record this Lease without the written
consent of the Landlord; however, upon the request of either party hereto the
other party shall join in the execution of a memorandum or "short form" of this
Lease for the purpose of recordation. The memorandum or short form of this Lease
shall describe the parties, the Leased Premises, and the term of this Lease and
shall incorporate this Lease by reference.
27. Surrender of Leased Premises on Termination. At the expiration (or
earlier termination) of this Lease, Tenant will surrender the Leased Premises
broom clean and in as good condition and repair as on the Commencement Date,
reasonable wear and tear excepted, and promptly upon surrender will deliver all
keys and building security cards for the Leased Premises to Landlord at the
place then fixed for payment of rent. All improvements which were part of the
Leased Premises as of the commencement hereof or which were added thereafter
shall be part of the Leased Premises and shall be owned by Landlord and
delivered to Landlord upon expiration or termination of this Lease. Any property
left in the Leased Premises or Common Areas shall be considered abandoned and
Landlord may dispose of it at Landlord's discretion and Tenant shall hold
Landlord harmless from any claims arising out of loss of or damage to same. All
costs and expenses incurred by Landlord in connection with repairing or
restoring the Leased Premises to the condition called for herein, together with
the costs, if any, of removing from the Leased Premises any property of Tenant
left therein, together with liquidated damages in an amount equal to the amount
of base rent plus all other charges which would have been payable by Tenant
under this Lease if the term of this Lease had been extended for the period of
time reasonably required for Landlord to repair or restore the Leased Premises
to the condition called for herein, shall be invoiced to Tenant as additional
rent and shall be paid within fifteen (15) days after receipt of invoice.
28. Waiver of Subrogation. To the extent permitted by their respective
policies of insurance, Landlord and Tenant hereby waive any and all right of
recovery against each other for any loss or damage caused by fire or any of the
risks covered by standard fire and extended coverage, vandalism and malicious
mischief insurance policies.
29. Captions and Headings. The captions and headings used herein are
intended only for convenience and are not to be used in construing this
instrument.
30. Applicable Law. This Lease shall be construed according to the laws of
the State of Michigan. Any dispute will be subject to a court of competent
jurisdiction in Kent County, Michigan. If any provision of this Lease or
portions thereof, or the application thereof to any person or circumstances,
shall, to any extent, be invalid or unenforceable, the remainder of this Lease
shall not be affected thereby and each provision of this Lease shall be valid
and enforceable to the fullest extent permitted by law.
31. Successors. This Lease and the covenants and conditions herein shall
inure to the benefit of and be binding upon Tenant and permitted assigns of
Tenant.
32. No Partnership. Any intention to create a joint venture or partnership
between the parties hereto is hereby expressly disclaimed.
33. Recovery by Tenant. Tenant agrees to look solely to Landlord's interest
in the land and improvements on and in which the Leased Premises are situated
for the satisfaction of any judgment against Landlord as a result of any breach
by Landlord of any of its obligation under this Lease. No other property of
Landlord or its members shall be subject to levy or execution as a result of any
claim by Tenant against Landlord arising out of the relationship created by this
Lease.
34. Tenant's Warranties. Tenant is duly organized and in good standing in
the state of its organization and qualified to do business in the State of
Michigan. All necessary action to approve, execute, deliver, and perform this
Lease has been taken by Tenant. This Lease is the valid and binding obligation
of Tenant, enforceable against Tenant in accordance with its terms. The person
executing this Lease has full power and authority to enter into this Lease and
to bind Tenant to all of Tenant's obligations under this Lease.
IN WITNESS WHEREOF, the Landlord and Tenant have executed this Lease on the
day and year set forth above.
DATED: LANDLORD
WITNESS Xxxx Properties, LLC, a Michigan
limited liability company
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By: /s/
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Vita Xxxxx Xxxx,
its authorized member
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DATED: TENANT
WITNESS BestNet Communications Corp.,
a Nevada corporation
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By: /s/
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Xxxxxxx Xxxxxxx, its
Chief Financial Officer
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