EXHIBIT 2.5
TECHNOLOGY TRANSFER AND LICENSE AGREEMENT
BY AND BETWEEN
BEI ELECTRONICS, INC.
AND
BEI TECHNOLOGIES, INC.
BEI
TECHNOLOGY TRANSFER AND LICENSE AGREEMENT
THIS AGREEMENT is made and entered into as of this 26th day of September,
1997 by and between BEI ELECTRONICS, INC., with its principal executive offices
at 00 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx, 00000, (hereinafter referred to as
"Electronics") and BEI TECHNOLOGIES, INC., with its principal executive offices
at Xxx Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 (hereinafter
referred to as "Technologies") (hereinafter collectively the "Parties" and each
individually a "Party").
RECITALS
WHEREAS, Electronics and Technologies are contemplating entering into
a Distribution Agreement concerning the spin-off of Technologies from
Electronics (the "Distribution Agreement");
WHEREAS, prior to entering into the Distribution Agreement,
Electronics possesses certain Intellectual Property and Technology used
exclusively or primarily in the Technologies business;
WHEREAS, Technologies desires to own or have the right to use such
certain Intellectual Property and Technology used in its business;
WHEREAS, to allow each of Electronics and Technologies (and their
respective stockholders) to obtain the full value of its respective rights under
the Distribution Agreement, Technologies and Electronics desire to enter into
and execute this Agreement concerning the assignment and licensing of certain
Intellectual Property and Technology;
NOW, THEREFORE, in consideration of the above, and the mutual promises
set forth below, Electronics and Technologies agree as follows:
1. DEFINITIONS.
Whenever used in this Agreement, the following terms shall have the
following meanings, on the understanding that words in the singular include the
plural and vice-versa. Headings and subheadings are used for convenience only
and are not intended as limitations in the Agreement or for use in interpreting
the Agreement.
"Agreement" shall mean this agreement as amended and/or supplemented from
time to time, including all the Exhibits attached hereto.
"Confidential Information" shall mean any and all information disclosed to
the receiving Party by the disclosing Party pursuant to this Agreement, in any
form such as, but not limited
1.
to, visual, oral, written, graphic, electronic or model form, including but not
limited to know-how and trade secrets, whether patented or not and whether in
the laboratory, pilot plant or commercial plant stage (including drawings,
operating conditions, specifications and safety instructions) owned or
controlled by a Party.
"Effective Date" shall mean the Effective Time specified in the
Distribution Agreement.
"Electronics Businesses" shall mean the businesses of BEI Medical Systems
Company, Inc. (hereinafter "Medical Systems"), as they were carried out on or
before the Effective Date.
"Electronics Intellectual Property" shall mean the Intellectual Property,
not including trademarks or tradedress, owned or licensed in by Medical Systems
on or before the Effective Date.
"Electronics Products" shall mean those products that were made by Medical
Systems on or before the Effective Date and products acquired, developed or
established by or for Electronics or any of its Subsidiaries after the Effective
Date.
"Electronics Technology" shall mean all the Technology, that was used by or
derived from efforts by or on behalf of Medical Systems on or before the
Effective Date.
"Intellectual Property" shall mean all classes or types of patents, utility
models, design patents, copyrights, mask works and applications for the
aforementioned, in all countries of the world, owned by a Party and in existence
on or before the Effective Date.
"Medical Device" shall mean a product that is primarily intended for use in
the field of woman's health care and has virtually no other independent
application.
"Person" shall mean any natural person, corporation, limited liability
company, business trust, joint venture, association, company, partnership or
government, or any agency or political sub-division thereof.
"Products" shall mean the Electronics Products and the Technologies
Products.
"Subsidiary" shall mean any corporation, partnership or other entity of
which another entity (i) owns, directly or indirectly, ownership interests
sufficient to elect a majority of the Board of Directors (or persons performing
similar functions) (irrespective of whether at the time any other class or
classes of ownership interests of such corporation, partnership or other entity
shall or might have such voting power upon the occurrence of any contingency) or
(ii) is a general partner or an entity performing similar functions (e.g., a
trustee).
"Technologies Businesses" shall mean the businesses of Electronics other
than the Electronics Businesses, as they were carried out on or before the
Effective Date.
2.
"Technologies Intellectual Property" shall mean the Intellectual Property,
not including trademarks or tradedress, owned or licensed in by Electronics, its
Subsidiaries and their constituent companies and predecessor companies prior to
the Effective Date, other than Electronics Intellectual Property.
"Technologies Products" shall mean all products of Electronics other than
Electronics Products that were made by Subsidiaries of Electronics or their
constituent companies and their predecessor companies on or before the Effective
Date and all products acquired, developed or established by or for Technologies
or any of its Subsidiaries after the Effective Date.
"Technologies Technology" shall mean all the Technology, other than
Electronics Technology, that was used by or derived from efforts by or on behalf
of Electronics or its constituent companies and their predecessors on or before
the Effective Date.
"Technology" shall mean the body of knowledge owned by a Party or a
Subsidiary of a Party and in existence as of the Effective Date, including: (i)
information such as technical, engineering, maintenance, environmental and
safety information with respect to the design, equipment selection,
construction, installation, staffing and operation of facilities and equipment
for the design and manufacture of Products; (ii) formulae, process drawings and
descriptions, know-how, and technological and processing information, for the
design and manufacture of Products; and (iii) specifications and properties of
the Products.
"Term" shall mean the period of time during which this Agreement is in full
force and effect pursuant to Section 5.
2. ASSIGNMENT OF INTELLECTUAL PROPERTY.
2.1 ASSIGNMENT. At or prior to the Effective Time, Electronics
irrevocably agrees to assign and transfer to Technologies all of its right,
title and interest, together with all rights of priority, in and to the
Technologies Intellectual Property, the Technologies Technology and the
Technologies Products that are or will be owned by Electronics or any of its
Subsidiaries at the time of the assignment and transfer. Electronics will
retain all right, title and interest in and to the Electronics Intellectual
Property, the Electronics Technology and the Electronics Products.
2.2 DISCLAIMER. EXCEPT AS EXPRESSLY STATED IN SECTION 3.10, ELECTRONICS
MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE
INTELLECTUAL PROPERTY OR TECHNOLOGY ASSIGNED HEREBY, INCLUDING WITHOUT
LIMITATION AS TO THEIR VALIDITY, ENFORCEABILITY OR FITNESS FOR ANY PARTICULAR
USE OR PURPOSE. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY USE OF CONFIDENTIAL
INFORMATION OR INTELLECTUAL PROPERTY RIGHTS OBTAINED BY IT FROM THE OTHER PARTY
HEREUNDER.
3.
3. LICENSES.
3.1 LIMITED LICENSE. Technologies and its Subsidiaries hereby grant
to Electronics an irrevocable, royalty free, worldwide, nonexclusive license,
with the right to sublicense, to use the Technologies Intellectual Property and
the Technologies Technology, that have been used by or on behalf of Electronics
in the Electronics Businesses on or before the Effective Date, solely for
designing, making, having made, using, offering for sale, selling and importing
Electronics Products that qualify as Medical Devices hereunder.
3.2 SUBLICENSE TERMS. Any sublicense granted pursuant to this Section 3
shall be consistent with and subject to the terms and conditions of this
Agreement.
3.3 LIMITATIONS. Notwithstanding any other provision of this Agreement,
no Party or its Subsidiaries shall be obligated to: (i) grant any license, or
make any disclosure, to the other Party with respect to Intellectual Property,
owned or controlled by such Party or its Subsidiaries, if to do so would violate
an agreement with an unrelated third party in effect on the Effective Date, or
(ii) grant any license, or make any disclosure, to the other Party with respect
to Intellectual Property owned or controlled by such Party or its Subsidiaries
if to do so would be in violation of law. If the violation can be avoided by a
more limited license, then the Parties, for themselves and on behalf of their
respective Subsidiaries, agree to grant same to the extent commercially
reasonable. Notwithstanding any other provision of this Agreement, following
the Effective Date, neither Party nor any of their respective Subsidiaries shall
be obligated to make any further disclosure to the other Party with respect to
any Technology or Intellectual Property licensed hereunder.
3.4 WARRANTY. Each Party warrants that (a) except as expressly set forth
in this Agreement, neither such Party nor any of its Subsidiaries has granted
nor will grant any licenses that conflict with the rights and licenses set forth
in this Agreement, and (b) such Party and its respective Subsidiaries have the
right to grant the rights and licenses granted by such Party or its respective
Subsidiaries in or pursuant to this Agreement. NO OTHER WARRANTY OF ANY KIND,
WHETHER EXPRESS OR IMPLIED, IS GIVEN BY ONE PARTY TO THE OTHER PARTY AND IN
PARTICULAR THE PARTIES DISCLAIM ANY WARRANTY THAT THEIR RESPECTIVE INTELLECTUAL
PROPERTY AND RIGHTS WITH RESPECT THERETO ARE VALID OR ENFORCEABLE OR USEFUL FOR
ANY PURPOSE.
3.5 EXPRESS LICENSES ONLY. Except for licenses expressly granted pursuant
to this Section 3, no other licenses are intended to be or are granted hereby,
and nothing in this Agreement shall be construed as, or result in, conveying by
implication, waiver or estoppel any right or license to either Party, any
Subsidiary or to any third party.
4.
4. CONFIDENTIALITY.
4.1 CONFIDENTIALITY OBLIGATION. Each of the Parties agrees to keep
confidential and neither disclose to others nor use except as permitted herein
any Confidential Information received from the other Party or its Subsidiaries
pursuant to this Agreement.
4.2 LIMITS ON DISCLOSURE. The receiving Party shall treat such
Confidential Information in the same manner and with the same degree of care as
it uses with respect to its own Confidential Information of like nature and
shall disclose Confidential Information of the other Party only to its employees
or consultants who have a need to know it, provided that such employees and
consultants are bound to respect all confidentiality obligations provided for in
this Agreement.
4.3 EXCEPTIONS. The obligations set forth in Sections 4.1 and 4.2 shall
not apply with respect to any Confidential Information that:
4.3.1 PUBLIC KNOWLEDGE. Is generally available to the public or
subsequently becomes generally available to the public through no breach by the
receiving Party of confidentiality obligations under this Agreement or prior
agreements between the Parties concerning the Confidential Information; or
4.3.2 RECEIVED FROM THIRD PARTY. Is received without a
confidentiality obligation from a third party who is legally free to disclose
such Confidential Information and who did not receive such Confidential
Information in confidence from the disclosing Party; or
4.3.3 APPROVED FOR DISCLOSURE. Is approved in writing for release by
the disclosing Party or its Subsidiaries; or
4.3.4 SUCCESSOR IN INTEREST. Is disclosed to any permitted assignee
of this Agreement, provided that such assignee agrees in writing to be bound by
the provisions of this Agreement; or
4.3.5 INDEPENDENTLY DEVELOPED. Is independently developed by the
receiving Party without reference to the Confidential Information received from
the disclosing Party or its Subsidiaries.
4.4 PERMITTED DISCLOSURES. The provisions of Sections 4.1 and 4.2
notwithstanding, in exercising the rights granted under this Agreement, any
Party may disclose Confidential Information to others for purpose of
sublicensing, provided that any sublicenses pursuant to which any Confidential
Information is disclosed shall have first entered into a written confidentiality
and non-use obligation at least as stringent as that imposed on the Parties
pursuant to this Agreement.
4.5 SUBPOENA OR DEMAND. The provisions of Sections 4.1 and 4.2
notwithstanding, a Party may disclose Confidential Information if compelled to
do so pursuant to a subpoena or
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similar demand for production of documents in connection with any suit or
arbitration proceeding, any administrative procedure or before a governmental or
administrative agency or instrumentality thereof or any legislative hearing or
other similar proceeding, provided that (a) the receiving Party shall promptly
notify the disclosing Party or its appropriate Subsidiary of the subpoena or
demand, (b) the receiving Party shall assert in good faith prior to making such
disclosure any available evidentiary privilege, and (c) the receiving Party
shall use its best efforts to maintain the confidential nature of the
Confidential Information by protective order or other means.
4.6 PROTECTION OF RIGHTS. The provisions of Sections 4.1 and 4.2
notwithstanding, any Party hereto may disclose Confidential Information to
others as may be necessary in a bona fide attempt to protect or enforce its
rights and privileges under this Agreement.
5. DURATION AND TERMINATION.
5.1 TERM OF AGREEMENT. This Agreement shall become effective on the
Effective Date, and shall continue in full force for ten years from the
Effective Date, at which time it shall terminate unless renewed by written
agreement of the Parties. After expiration of the Agreement pursuant to this
Section 5.1, the rights and obligations set forth in Sections 2, 3, 4, and 9
shall survive.
5.2 TERMINATION FOR MATERIAL BREACH. If either Party or a Subsidiary of
either Party commits a material breach with respect to any of such entity's
obligations hereunder, the other Party may give written notice to the allegedly
breaching Party or Subsidiary, specifying the alleged material breach and an
intention to terminate this Agreement and all extant licenses. The Party or
Subsidiary, charged with the alleged material breach shall have sixty (60) days
from the date of receipt of such written notice to cure the alleged material
breach. If the alleged material breach is not cured within said sixty (60)-day
period, the other Party may terminate this Agreement and any license still in
force that was granted to the breaching Party by sending a written notice of
termination to the Party who breached or whose Subsidiary breached and in this
event, neither Party waives any legal rights to recover damages resulting from
the termination of this Agreement.
5.3 INSOLVENCY. In the event that either Party shall: (i) become
insolvent or go into liquidation or receivership or be admitted to the benefits
of any procedure for the settlement or postponement of debts or be the subject
of bankruptcy proceedings filed against it, which proceedings are not terminated
within ninety (90) days of filing; or (ii) become party to dissolution
proceedings; then this Agreement and any and all obligations assumed hereby
(except as otherwise expressly provided for herein) may be terminated by the
other Party, if permitted by law, by giving written notice of such termination
on a date specified therein. [Expand]
6. RIGHTS UPON TERMINATION OTHER THAN UNDER SECTION 6.1.
6.1 TERMINATION OF LICENSES. Notwithstanding the foregoing, the licenses
granted under Section 3 to the Party committing a material breach as
contemplated by Section 5.2 may
6.
be canceled immediately by the Party terminating this Agreement and such
breaching Party shall promptly forward to the other Party all copies of
Confidential Information, blue prints, drawings and data which it may have in
written or graphic or machine readable form and which have been proposed or
reproduced by it from the Confidential Information received from the other
Party. The termination of this Agreement pursuant to Section 5.2 shall not
affect the rights and licenses previously granted to the non-breaching Party,
which shall continue in full force and effect.
6.2 OBLIGATIONS SURVIVING TERMINATION. Upon termination pursuant to
Sections 5.2 or 5.3, the obligations of each Party to the other shall cease
except, subject to Section 6.1, the obligations set forth in Sections 3, 4 and 9
shall continue in full force and effect until completely discharged.
7. FORCE MAJEURE.
7.1 ACTS CONSTITUTING FORCE MAJEURE. Neither Party shall be liable to the
other arising out of a delay in its performance of this Agreement arising from
causes beyond its reasonable control. Without limiting the generality of the
foregoing, such events include any act of God; accident; explosion; fire;
earthquake; flood; strikes; labor disputes; riots; sabotage; embargo; equipment
failure; federal, state, or local legal restriction or limitation. Neither
Party shall be required to resolve labor disputes, but shall use commercially
reasonable efforts to seek alternative sources to the extent practicable.
7.2 NOTICE REQUIREMENT. When circumstances occur that delay the
performance of either Party under this Agreement, whether or not such
circumstances are excused pursuant to Section 7.1 above, such Party shall, when
it first becomes aware of such circumstances, promptly notify the other Party,
by facsimile or by telephone confirmed in writing within two (2) business days
in the case of oral notice. Within ten (10) business days of the date when
either Party first becomes aware of the event which it contends is responsible
for the delay, it shall supply to the other Party in writing the reason(s) for
and anticipated duration of such delay, the measures taken and to be taken to
prevent or minimize the delay, and the timetable for the implementation of such
measures.
8. GUARANTEES, LIABILITIES AND INDEMNITIES.
8.1 LAWFUL POSSESSION. Each Party represents that to the best of its
knowledge and belief, it will be in the lawful possession of any Confidential
Information when disclosed by it pursuant to this Agreement and that the
disclosure of said Confidential Information shall not in any way violate any
agreement to hold such Confidential Information in confidence.
9. EXPORT CONTROL.
Each Party, for itself and on behalf of its Subsidiaries, agrees not to
export or reexport, or cause to be exported or reexported, any Confidential
Information furnished hereunder by the other Party or any of such other Party's
Subsidiaries or any Products designed or manufactured using any such
Confidential Information to any country to which, under the laws of the country
7.
of origin of the Confidential Information, it is or may be prohibited from
exporting such Confidential Information or the direct product thereof.
10. ASSIGNMENT.
10.1 LIMITATIONS ON ASSIGNMENT. This Agreement shall not be assigned by
either Party to a third party without the prior written consent of the other
Party, which consent shall not be unreasonably withheld, except to: a Subsidiary
of a Party, or a successor to the business of such Party to which this Agreement
relates, or a successor to all or substantially all of the assets of such Party,
provided that the successor agrees in writing to accept the rights and to be
bound by the obligations of the assigning Party, any other assignment being
void.
10.2 VIOLATION. Any assignment in violation of this Section 10 shall be
void and any attempt to assign or actual assignment in derogation of this
prohibition shall be a material breach of this Agreement.
11. MISCELLANEOUS.
11.1 COMPLETE AGREEMENT. This Agreement and the Distribution Agreement
shall constitute the entire agreement between the parties with respect to the
subject matter hereof and shall supersede all previous negotiations, commitments
and writings with respect to such subject matter.
11.2 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
11.3 NOTICES. All notices and other communications hereunder shall be in
writing and hand delivered or mailed by registered or certified mail (return
receipt requested) or sent by any means of electronic message transmission with
delivery confirmed (by voice or otherwise) to the parties at the following
addresses (or at such other addresses for a Party as shall be specified by like
notice) and will be deemed given on the date on which such notice is received:
To BEI ELECTRONICS, INC.:
00 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: President
with a copy to:
Xxx Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Chairman
8.
To BEI TECHNOLOGIES, INC.:
Xxx Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: President
11.4 WAIVERS. The failure of either Party to require strict performance by
the other Party of any provision in this Agreement will not waive or diminish
that Party's right to demand strict performance thereafter of that or any other
provision hereof.
11.5 AMENDMENTS. Subject to the terms of Sections 5 and 6 hereof, this
Agreement may not be modified or amended except by an agreement in writing
signed by the Parties.
11.6 SUBSIDIARIES. Each of the parties hereto shall cause to be performed,
and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such Party at
the time such performance is anticipated to occur in order to carry out the
intent of this Agreement.
11.7 THIRD PARTY BENEFICIARIES. This Agreement is solely for the benefit
of the Parties hereto and their respective Subsidiaries and should not be deemed
to confer upon third parties any remedy, claim, liability, reimbursement, claim
of action or other right in excess of those existing without reference to this
Agreement.
11.8 ATTORNEY FEES. Except as contemplated by the third to the last
sentence of Section 12.2 hereof, a Party in breach of this Agreement shall, on
demand, indemnify and hold harmless the other Party hereto for and against all
out-of-pocket expenses, including, without limitation, legal fees, that are
finally awarded to and incurred by such other Party by reason of the enforcement
and protection of its rights under this Agreement. The payment of such expenses
is in addition to any other relief to which such other Party may be entitled
hereunder or otherwise.
11.9 TITLE AND HEADINGS. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
11.10 SPECIFIC PERFORMANCE. Each of the Parties hereto acknowledges that
there is no adequate remedy at law for failure by such Party to comply with the
provisions of this Agreement and that such failure would cause immediate harm
that would not be adequately compensable in damages, and therefore agree that
its agreements contained herein may be specifically enforced without the
requirement of posting a bond or other security, in addition to all other
remedies available to the other Party under this Agreement.
11.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA AS SUCH LAWS ARE APPLIED TO
AGREEMENTS BETWEEN CALIFORNIA RESIDENTS ENTERED INTO AND PERFORMED ENTIRELY IN
CALIFORNIA.
9.
11.12 SEVERABILITY. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby. The Parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
12. DISPUTE RESOLUTION.
12.1 ALTERNATIVE DISPUTE RESOLUTION. In the event of a controversy,
dispute or claim (other than controversies, disputes or claims related to
infringement, validity or enforceability of Intellectual Property) arising out
of, in connection with, or in relation to the interpretation, performance,
nonperformance, validity or breach of this Agreement or otherwise arising out
of, or in any way related to this Agreement, including, without limitation, any
claim based on contract, tort, statute or constitution (collectively, "Agreement
Disputes"), such matters shall be resolved in accordance with the provisions of
Article 4 of the Distribution Agreement between the Parties dated as of the
Effective Date.
12.2 CONSENT TO JURISDICTION. This Section 12.2 shall not limit the
provisions of Sections 12.1 hereof. Each Party irrevocably submits to the
exclusive personal jurisdiction and venue of (a) the Superior Court for the City
and County of San Francisco, California and (b) the United States District Court
for the Northern District of California for the purposes of any suit, action or
other proceeding arising out of this Agreement or any transaction contemplated
hereby. Each Party agrees to commence any action, suit or proceeding relating
hereto either to the United States District Court for the Northern District of
California located in San Francisco, California or if such suit, action or other
proceeding may not be brought in such court for jurisdictional reasons, in the
Superior Court for the City and County of San Francisco, California. Each Party
further agrees that service of any process, summons, notice or document by U.S.
registered mail to such Party's address set forth above shall be effective
service of process for any action, suit or proceeding in California with respect
to any matters to which it has submitted to jurisdiction in this Section 12.2.
Each Party irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) the Superior Court for the city and
County of San Francisco, California, or (ii) the United States District Court
for the Northern District of California located in San Francisco, California,
and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
12.3 CONTINUING OBLIGATIONS. It is expressly agreed that the failure of
the Parties to resolve a dispute on any issue to be resolved hereunder shall not
relieve either Party from any obligation set forth in this Agreement. In
addition, notwithstanding the pendency of any such dispute, neither Party will
be excused of its obligations hereunder to cooperate with the other to
effectuate the purposes of this Agreement.
10.
IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be
executed in duplicate as of the date first written above.
BEI ELECTRONICS, INC. BEI TECHNOLOGIES, INC.
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxxx
------------------------ ------------------------
Name: Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx
---------------------- ----------------------
Title: President Title: President
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