AGREEMENT
AGREEMENT (the "Agreement") dated as of November 30, 1997 (the
"Effective Date"), between Crusader Holding Corporation (the "Company"),
Crusader Savings Bank, FSB and its subsidiaries (the "Bank"), and Crusader
Mortgage Corporation ("Mortgage") (collectively "Crusader"), on the one hand,
and Xxxxxxx X. Xxxxxx (the "Executive") and Satellite Mortgage Corporation
("Satellite"), on the other hand.
WHEREAS, the Executive has been employed as President of Mortgage since
1996 and is the owner of 50 shares of common stock of Mortgage (the "Shares");
WHEREAS, Crusader and the Executive mutually desire to have the
employment of the Executive by Mortgage terminated as of the Effective Date and
to provide for an orderly transfer of Executive's responsibilities;
WHEREAS, Executive desires to sell to the Bank and the Bank desires to
purchase from Executive the Shares; and
WHEREAS, the parties wish to settle their mutual rights and obligations
arising from, or related to, the termination of the Executive's employment with
Crusader and to effectuate the purchase and sale of the Shares.
NOW THEREFORE, in consideration of the mutual promises and agreements
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Crusader and the Executive agree
as follows:
Section 1. Payment. The Executive agrees that he will resign from
Crusader as of the Effective Date. Subject to the last sentence of this Section
1, Mortgage agrees to pay Satellite the sum of Two Hundred Fifty Thousand
Dollars ($250,000) on May 31, 1998. Such payment shall be in lieu, and in
complete discharge, of all obligations owed by Crusader to the Executive and
Satellite including but not limited to all payments of base salary, bonus,
profit sharing and all other compensation and benefits, as an employee of
Mortgage, except as set forth herein.
Section 2. Purchase and Sale of Stock. Following the execution of this
Agreement, Executive agrees to deliver to the Bank a certificate representing
the Shares with all required stock powers in return for which the Bank will
deliver to Executive a certificate representing 150,000 shares (assuming the two
for one stock split effected as a 100% stock dividend) of fully paid
non-assessable shares of Common Stock of the Company (the "Company Shares").
Executive hereby agrees that the Company Shares shall be placed in escrow with
an escrow agent selected by Crusader. Subject to the conditions set forth in
Subsections (a) and (b) of this Section 2, the Company Shares shall be released
to Executive as follows: (i) one-half promptly after net income has been
determined for Mortgage for the twelve months ended December 31, 1998 ("Net
Income") but no later than February 15, 1999; (ii) one-third of the Company
Shares remaining in escrow on the second anniversary of the Effective Date; and
(iii) the balance of the Company Shares on the third anniversary of the
Effective Date.
(a) In the event that there is a claim for indemnification
pursuant to the terms of the indemnification agreement attached hereto as
Exhibit B, which has not been satisfied by Executive, Crusader is authorized to
retain in escrow that number of Company Shares having the value of such
unsatisfied claim until such time as such claim is resolved by a tribunal or by
agreement of the parties; and
(b) In the event that Net Income, as determined in accordance
with Generally Accepted Accounting Principles and the Company's current
accounting practices (except that any Crusader management fee, net of the
related tax effect, will be added back), of Mortgage is less than $1 million,
the number of Company Shares to which Executive shall be entitled, subject to
the escrow provisions, shall be equal to that number determined by multiplying
150,000 by a fraction the numerator of which is the actual net income of
Mortgage for calendar year 1998 and the denominator of which is $1 million. Any
shares in excess of that number shall be promptly returned to the Company. In
the event that Executive disagrees with the calculation of Net Income, Executive
shall provide to the Company a written notice setting forth an amount which he
believes is Net Income. Upon receipt of such notice, the Company shall direct
its independent auditors to perform an audit for the purpose of determining Net
Income. The determination of the Company's independent auditors shall be final
and binding upon the parties. In the event that the auditors determine that Net
Income is equal to or greater than the amount set forth in the notice provided
by Executive, the cost of such audit shall be borne by Crusader. Otherwise, the
cost of such audit shall be borne by Executive.
Section 3. Consulting. In addition to the payments set forth in Section
1 hereof, Crusader shall also pay to Satellite $225,000 payable in thirty-six
equal monthly installments of $6,250. From December 1, 1997 until November 30,
2000, Executive shall, upon request and if permitted by regulatory agencies and
applicable statutes, rules and regulation, provide consulting services to
Crusader, its directors, officers and employees.
Section 4. Resignation from Offices. The Executive agrees that as of
the Effective Date he shall be deemed to have resigned from all offices and
positions with Crusader, except as provided in Section 3 above.
Section 5. No further Obligations of Crusader. Except as provided in
Sections 1 through 3 and 9 hereof, Crusader shall have no further obligations
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whatsoever to the Executive, including any obligations under the Subscription
and Shareholders Agreement dated June 24, 1996 among Executive, Xxxxxxx X.
Xxxxxxxxx, RACA, LLC, the Bank and Mortgage.
Section 6. Conditions of Benefits. Crusader shall provide to the
Executive and Satellite the rights, payments and benefits set forth in Sections
1 through 3 hereof as consideration for and contingent upon (i) the execution by
Executive and Satellite, non-revocation and honoring of a release of claims and
covenant not to xxx in favor of Crusader in the forms attached hereto as
Exhibits A and A-1, (ii) the continued compliance by Executive and Satellite
with the provisions of Sections 7, 8, 9, 10 and 11A hereof, (iii) the entering
into an indemnification agreement in the form attached hereto as Exhibit B by
Executive and Satellite, and (iv) the Executive executing a Shareholders
Agreement, a copy of which is attached hereto as Exhibit C. In the event that
Executive or Satellite breach any of the foregoing provisions, in addition to
any other remedies available, Crusader may set off any damages incurred by
Crusader resulting from such breach against the Company Shares held in escrow
and may terminate its obligations under Sections 2 and 3 above.
Section 7. Nondisclosure. The Executive and Satellite hereby agree that
neither shall, at any time following the Effective Date, disclose or use for any
purpose confidential information or proprietary data of Crusader (or any of its
subsidiaries), except as required by applicable law or legal process; provided,
however, that confidential information shall not include any information known
generally to the public or ascertainable from public or published sources (other
than as a result of unauthorized disclosure by Executive or Satellite) or any
information of a type not otherwise considered confidential by persons engaged
in the same business or a business similar to that conducted by Crusader.
Executive and Satellite acknowledge and agree that Crusader will suffer
irreparable injury in the event of any material breach of this Section 7, that
damages resulting from such injury will be incapable of being precisely
measured, and that Crusader will not have an adequate remedy at law to redress
the harm which such violation shall cause. Therefore, Executive and Satellite
agree that Crusader shall have the rights and remedies of specific performance
and injunctive relief, in addition to any other rights or remedies that may be
available at law or in equity or under this Agreement, in respect of any
failure, or threatened failure, on the part of the Executive and Satellite to
comply with the provisions of this Section 7, including, but not limited to,
temporary restraining orders and temporary injunctions to restrain any violation
or threatened violation of this Section 7 by Executive and Satellite.
Section 8. Return of Crusader Property. The Executive acknowledges that
all records, files, documents and equipment, all information relating to
employees and suppliers, and any other materials that in any way relate to the
business of Crusader which the Executive has accumulated during his employment
by Crusader, other than information and documents publicly known or
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disseminated, are the property of Crusader, including all duplicates and copies
of any of the foregoing, and that all such property shall be returned to the
sole possession of Crusader promptly following the execution of this Agreement.
Section 9. Business Goodwill. At all times following date hereof, the
Executive shall and Executive shall instruct Satellite, its officers, directors,
agents and employees to make no comments or take any other actions, direct or
indirect, that will reflect adversely on Crusader or its officers, directors,
employees or agents in such capacity or adversely affect their business
reputation or goodwill. At all times following the date hereof, the Board of
Directors, each director and each officer of Crusader shall make no comments or
take any other actions, direct or indirect, that will reflect adversely on the
Executive or Satellite or adversely affect their business reputation or
goodwill, except for information which is publicly available. The Executive
hereby agrees that for a period of three years following the Termination Date,
he shall reasonably cooperate with Crusader in providing information that
Crusader reasonably requests and in taking such other action as Crusader may
reasonably request. The Executive acknowledges that it will be difficult to
determine the appropriate level of damages to be paid by the Executive and
Satellite in the event of a breach of the first sentence of this Section 9.
Section 10. Non-Compete and Anti-Raiding. For a period of three years
following Effective Date, Executive and Satellite agree not (a) to engage in any
business or become an officer, director, employee or consultant to an entity
whose business competes with the business of Mortgage, the Company or the Bank
or any subsidiary or affiliate of either of them, (b) to counsel or attempt to
induce any person who is currently in the employ of Crusader to leave the employ
of Crusader or employ or attempt to employ any such person or persons who at any
time during the preceding six months was in the employ of Crusader or (c) to
counsel or attempt to induce such person who is currently a mortgage banker or
broker of Crusader or who at any time during the preceding six months was a
broker or banker of Crusader to terminate its relationship with Crusader or to
direct loans to another lender that could have been referred to Crusader.
Section 11. Representations and Warranties.
A. Executive and Satellite hereby represent and warrants to
the Company, the Bank and Mortgage as follows:
1. Each is authorized to enter into this Agreement.
2. The execution of this Agreement by each will not
violate any statute, rule or regulation applicable to him.
3. Executive owns the Shares free and clear of all
pledges, liens, mortgages and encumbrances.
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4. All loans originated by Mortgage during
Executive's employment were lawfully originated and were in compliance
with all applicable rules, regulations and statutes and the policies of
Mortgage.
5. Executive has made no commitments to any employee
of Mortgage, other than as disclosed in writing to Crusader as an
exhibit to this Agreement.
6. Executive has made no commitments to any mortgage
broker, mortgage banker or finder with respect to the business of the
Company, the Bank or Mortgage, other than as disclosed in writing to
Crusader as an exhibit to this Agreement.
7. Executive has made no misrepresentation of a
material fact or omitted to state a material fact necessary to make any
statement in light of the circumstances under which they were made, not
misleading with respect to the business of the Company, the Bank or
Mortgage.
8. While employed by Mortgage, Executive complied
with all rules, regulations and statutes and the policies of the
Company, the Bank and Mortgage, other than as disclosed to Crusader.
B. The Company, the Bank and Mortgage hereby represent and
warrant to the Executive as follows:
1. Each of the Company, the Bank and Mortgage are
authorized to enter into this Agreement.
2. The execution of this Agreement by the Company,
the Bank and Mortgage will not violate any statute, rule or regulation
applicable to any of them.
3. The Company Shares when issued will be fully paid
and non-assessable.
4. Mortgage has adequate resources to fund its
obligations under Section 1 hereof.
Section 12. Miscellaneous.
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A. Complete Agreement. This Agreement constitutes the entire
agreement between the parties and cancels and supersedes all other agreements
and understandings, whether written or oral, between the parties which may have
related to the subject matter contained in this Agreement.
B. Modification; Agreement; Waiver. No modification, amendment
or waiver of any provisions of this Agreement shall be effective unless approved
in writing by both parties. The failure at any time to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of either party thereafter to enforce
each and every provision hereof in accordance with its terms.
C. Governing Law; Jurisdiction. This Agreement and performance
under it, and all proceedings that may ensue from its breach, shall be construed
in accordance with and under the laws of the Commonwealth of Pennsylvania, and
the parties submit to the jurisdiction of the courts of the Commonwealth of
Pennsylvania located in Philadelphia for purposes of any actions or proceedings
that may be required to enforce this Agreement.
D. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be held to 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
Agreement.
E. Assignment. The rights and obligations of the parties under
this Agreement shall be binding upon and inure to the benefit of their
respective successors, assigns, executors, administrators and heirs, provided,
however, that neither Crusader nor the Executive may assign any duties under
this Agreement without the prior written consent of the other.
F. Notices. All notices and other communications under this
Agreement shall be in writing and shall be given in person or by telegraph,
telefax or first class mail, certified or registered with return receipt
requested, and shall be deemed to have been duly given when delivered personally
or three days after mailing or one day after transmission of a telegram or
telefax, as the case may be, to the respective persons named below:
If to Crusader: Crusader Holding Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Secretary
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If to the Executive Xxxxxxx X. Xxxxxx
or 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx: Xxxxxxxx, XX 00000
G. Advice of Counsel. The Executive acknowledges that he has
consulted with his own legal counsel with respect to the subject matter and the
terms of this Agreement and that this Agreement is the product of negotiations
between Crusader and its counsel on the one hand and the Executive and Satellite
and their counsel on the other.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
CRUSADER: CRUSADER HOLDING CORPORATION
By /s/ Xxxxx X. Xxxx
-----------------------------------
Its President
----------------------------------
CRUSADER SAVINGS BANK, FSB
By /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Its President
----------------------------------
CRUSADER MORTGAGE CORPORATION
By /s/ Xxxxx X. Xxxx
-----------------------------------
Its President
----------------------------------
EXECUTIVE: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
SATELLITE MORTGAGE CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Its President
----------------------------------
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JOINDER
The undersigned for himself and for Satellite Mortgage Corporation
("Satellite"), in connection with the execution and performance of an agreement
dated as of November 30, 1997 between Crusader Holding Corporation, Crusader
Savings Banks FSB and Crusader Mortgage Corporation, on the one hand, and the
undersigned and Satellite, on the other hand, hereby agrees to be bound by the
terms of the Subscription and Shareholders' Agreement dated March 1, 1996 by and
among the Company and the then shareholders of the Company, as amended, on
January 31, 1997 and December 8, 1997.
Witness:
/s/ Xxxxx X. Xxxx /s/ Xxxxxxx X. Xxxxxx
------------------------- ----------------------------------
Xxxxx X. Xxxx Xxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxx
----------------------------------
Satellite Mortgage Corporation
By: Xxxxxxx X. Xxxxxx
EXHIBIT A
GENERAL RELEASE AGREEMENT
I, XXXXXXX X. XXXXXX, for myself, my heirs, executors, administrators
and assigns, if any, for and in consideration of the rights, payments and
benefits under the Agreement between Xxxxxxx X. Xxxxxx and Satellite
Corporation, on one hand and Crusader Holding Corporation, Crusader Savings
Bank, FSB, and Crusader Mortgage Corporation (collectively "Crusader"), on the
other hand, dated as of November 30, 1997 (the "Agreement") hereby agrees as
follows:
1. I waive, release and forever discharge Crusader, and its
subsidiaries and affiliates, and each of their directors, officers and employees
and each of their successors and assigns (hereinafter the "Released Parties"),
of and from any and all past, present or future causes of action, suits,
agreements or other claims which I have against the Released Parties upon or by
reason of any matter, cause or thing whatsoever, including, without limitation,
claims for any alleged violation of the Civil Rights Acts of 1964 and 1991, the
Equal Pay Act of 1963, the Age Discrimination in Employment Act of 1967, the
Rehabilitation Act of 1973, the Older Workers Benefit Protection Act of 1990,
the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of
1993, the Pennsylvania Human Relations Act and any other federal or state law,
regulation or ordinance, or public policy, contract or tort law having any
bearing whatsoever on the terms and conditions of employment or termination of
employment, and I promise not to file a lawsuit to assert any such claims;
provided, however, that this release shall not apply to the payments, benefits
and other obligations set forth in the Agreement.
2. I acknowledge that I have carefully read and fully understand the
provisions of this General Release Agreement, that I have had twenty-one (21)
days from the date I received a copy of this General Release Agreement in which
to consider entering into this General Release Agreement that if I sign and
return this General Release Agreement before the end of that twenty-one (21) day
period then I will have voluntarily waived my right to consider the Agreement
for the full twenty-one (21) days and that I have executed this General Release
Agreement voluntarily and with full knowledge of its significance, meaning and
binding effect. I also acknowledge that Crusader has advised me in writing to
consult with an attorney of my own choosing with regard to entering into this
General Release Agreement and that I have done so.
3. I acknowledge that I may revoke this General Release Agreement
within seven (7) days of my execution of this document by submitting a written
notice of my revocation to The Secretary of Crusader at Crusader. I also
understand that this General Release Agreement shall not become effective or
enforceable until the expiration of that seven (7) day period.
4. I acknowledge that in my decision to enter into this General Release
Agreement, I have not relied on any representations, promises or agreements of
any kind, including oral statements by representatives of Crusader.
IN WITNESS WHEREOF, and with the intention of being legally bound
hereby, I have executed this General Release Agreement on the 12th day of
December, 1997.
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
XXXXXXX X. XXXXXX
Sworn to and subscribed
before me this 12th day
of December, 1997
/s/ Xxxxxxxxxx Xxxxx Xxxxx
-----------------------------
Notary Public
[NOTARIAL SEAL]
EXHIBIT A-1
GENERAL RELEASE AGREEMENT
SATELLITE MORTGAGE CORPORATION ("Satellite"), its affiliates and
assigns, if any, for and in consideration of the rights, payments and benefits
under the Agreement between Xxxxxxx X. Xxxxxx and Satellite Corporation, on one
hand and Crusader Holding Corporation, Crusader Savings Bank, FSB, and Crusader
Mortgage Corporation (collectively "Crusader"), on the other hand, dated as of
November 30, 1997 (the "Agreement") hereby agrees as follows:
Satellite hereby waives, releases and forever discharges Crusader, and
its subsidiaries and affiliates, and each of their directors, officers and
employees and each of their successors and assigns (hereinafter the "Released
Parties"), of and from any and all past, present or future causes of action,
suits, agreements or other claims which Satellite has or may in the future have
against the Released Parties upon or by reason of any matter, cause or thing
whatsoever; provided, however, that this release shall not apply to the
payments, benefits and other obligations set forth in the Agreement.
IN WITNESS WHEREOF, and with the intention of being legally bound
hereby, Satellite has executed this General Release Agreement on the 12th day of
December, 1997.
SATELLITE MORTGAGE CORPORATION
Sworn to and subscribed By: /s/ Xxxxxxx X. Rafsly
before me this 12th day ------------------------------
of December, 1997 Its: President
----------------------------
/s/ Xxxxxxxxxx Xxxxx Xxxxx
-------------------------------------
Notary Public
[NOTARIAL SEAL]
EXHIBIT B
INDEMNIFICATION AGREEMENT
I, XXXXXXX X. XXXXXX, for myself, my heirs, executors, administrators
and assigns, if any, and Satellite Mortgage Corporation ("Satellite") for itself
and its assigns for and in consideration of the rights, payments and benefits
under the Agreement between Xxxxxxx X. Xxxxxx and Satellite, on one hand and
Crusader Holding Corporation, Crusader Savings Bank, FSB, and Crusader Mortgage
Corporation (collectively "Crusader"), on the other hand dated as of
November 30, 1997 (the "Agreement") hereby agrees as follows:
1. We hereby agree to indemnify and hold harmless Crusader, its
subsidiaries and affiliates, and each of their directors, officers and employees
and each of their successors and assigns from and against all losses, claims,
damages or liabilities to which such indemnified parties or any of them may be
subject as a result of (a) any action or failure to act on the part of Rafsky as
an employee of Crusader or (b) any breach of a representation or warranty
contained in the Agreement. However, with respect to the representation
contained in Section 11(A)(4) of the Agreement, Executive shall be liable for
one-half of the damages incurred if he had no knowledge with respect to such
breach.
2. Each party indemnified under the provision above agrees that, upon
the service of a summons or other initial legal process upon it in any action or
suit instituted against it or upon its receipt of written notification of the
commencement of any investigation or inquiry of, or proceeding against it in
respect of which indemnity may be sought on account of any indemnity agreement
contained in such paragraph, it will promptly give written notice (herein called
the Notice) of such service or notification to the indemnifying party or
parties. The timely omission to notify the indemnifying party or parties of such
service or notification shall not relieve the indemnifying party or parties from
any liability which he or they may have to the indemnified party for
contribution or otherwise than on account of such indemnity agreement. The
indemnifying party or parties shall be entitled at its or their own expense to
participate in the defense of any action, suit or proceeding against, or
investigation or inquiry of, an indemnified party. The indemnifying party or
parties shall be entitled, if he or they so elect within a reasonable time after
receipt of the Notice by giving written notice (herein called the Notice of
Defense) to the indemnified party or parties, to assume (alone or in
conjunction with any other indemnifying party or parties) the entire defense of
such action, suit, investigation, inquiry or proceeding, in which event such
defense shall be conducted, at the expense of the indemnifying party or parties,
by counsel chosen by such indemnifying party or parties and reasonably
satisfactory to the indemnified party or parties; provided, however, that (i) if
the indemnified party or parties reasonably determines that there may be a
conflict between the positions of the indemnifying party or parties and of the
indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and (ii) in any event, the
indemnified party or parties shall be entitled to have counsel chosen by such
indemnified party or parties participate in, but not conduct, the defense. If,
within a reasonable time after receipt of the Notice, an indemnifying party
gives a Notice of Defense and the counsel chosen by the indemnifying party is
reasonably satisfactory to the indemnified party or parties, the indemnifying
party or parties will not be liable for any legal or other expenses subsequently
incurred by the indemnified party or parties in connection with the defense of
the action, suit, investigation, inquiry or proceeding, except that (A) the
indemnifying party or parties shall bear the legal and other expenses incurred
in connection with the conduct of the defense as referred to in clause (i) of
the proviso to the proceeding sentence and (B) the indemnifying party or parties
shall bear such other expenses as he or they have authorized to be incurred by
the indemnified party or parties. If, within a reasonable time after receipt of
the Notice, no Notice of Defense has been given, the indemnifying party or
parties shall be responsible for any legal or other expenses incurred by the
indemnified party or parties in connection with the defense of the action, suit,
investigation, inquiry or proceeding.
3. No indemnifying party or parties will, without the prior written
consent of the indemnified party or parties, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder unless
such settlement, compromise or consent includes an unconditional release of such
indemnified party or parties and each controlling person from all liability
arising out of such claim, action, suit or proceeding.
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IN WITNESS WHEREOF, and with the intention of being legally bound
hereby, I have executed this Indemnification Agreement on the 12th day of
December, 1997.
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
XXXXXXX X. XXXXXX
SATELLITE MORTGAGE CORPORATION
BY: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
ITS: President
------------------------------
Sworn to and subscribed
before me this 12th day
of December, 1997
/s/ Xxxxxxxxxx Xxxxx Xxxxx
------------------------------
Notary Public
[NOTARIAL SEAL]
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