BALCHEM MINERALS CORPORATION TO BANK OF AMERICA, N.A., AS HOLDER
EXHIBIT
10.6
BALCHEM
MINERALS CORPORATION
TO
BANK
OF
AMERICA, N.A.,
AS
HOLDER
DATED
FEBRUARY 6, 2006
THIS
GUARANTY dated February 6, 2005 (the “Guaranty”) from BALCHEM
MINERALS CORPORATION,
a
Delaware corporation having its principal office at c/o Balchem Corporation,
P.
O. Box
600, 52 Sunrise Park Road, New Hampton, New York 10958
(the
“Guarantor”) to BANK OF AMERICA, N.A. (successor by merger to Fleet National
Bank), a national banking association organized and existing under the laws
of
the United States and having an office at Xxxxx Xxxxxxx Xxxxx, Xxxxxx, Xxx
Xxxx
00000 (the “Holder”);
W
I T N E S S E T H:
WHEREAS,
the Holder has extended a certain revolving line of credit loan to Balchem
Corporation
(the
“Company”) (the “Line of Credit Loan”) the repayment of which is evidenced by an
amended and restated promissory note (revolving line of credit) dated the date
hereof in the principal amount of $3,000,000.00 (as modified or supplemented
or
extended from time to time, the “Line of Credit Loan Note”); and
WHEREAS,
the Holder has extended a certain term loan to the Company (the “Term Loan” and
collectively with the Line of Credit Loan, the “Loans”) the repayment of which
is evidenced by a promissory note dated the date hereof in the principal amount
of $10,000,000.00 (as modified or supplemented or extended from time to time,
the “Term Loan Note” and collectively with the Line of Credit Loan Note, the
“Notes”); and
WHEREAS,
the Loans are being made pursuant to the provisions, terms and conditions of
an
amended and restated loan agreement dated the date hereof (as modified or
supplemented from time to time, the “Loan Agreement”) by and between the Company
and the Holder; and
WHEREAS,
the proceeds of the Loans will be made available to the Company upon the terms
and conditions set forth in the Loan Agreement; and
WHEREAS,
in connection with the making of the Loans, the Company has offered to have
the
Guarantor guaranty repayment of the Notes as set forth herein; and
WHEREAS,
the Guarantor specifically approves the terms of the Notes and the other
Financing Documents; and
WHEREAS,
the Guarantor is willing to enter into this Guaranty in order to induce the
Holder to make the Loans and thereby achieve interest cost and other savings
to
the Company;
NOW,
THEREFORE, for good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties agree as follows:
ARTICLE
I
REPRESENTATIONS
AND WARRANTIES
OF
THE
GUARANTOR
The
Guarantor does hereby represent and warrant to the Holder that:
SECTION
1.1. AUTHORITY OF THE GUARANTOR. The
Guarantor represents and warrants that it is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware,
possesses full corporate power and corporate capacity to consummate the
transactions contemplated hereby and is authorized to conduct business in all
jurisdictions wherein the nature of its activities requires such except where
the failure to do so would not have a material adverse effect upon the
Guarantor.
SECTION
1.2. NO VIOLATION OF RESTRICTIONS. The
Guaranty and all other documents to be executed by the Guarantor in connection
therewith, when executed and delivered by the respective parties thereto, will
constitute valid and binding obligations of the Guarantor. The execution and
delivery by the Guarantor of the Financing Documents to which it is a party
and
the performance thereof by the Guarantor (1) have been authorized by all
necessary corporate action and (2) do not and will not conflict with, or result
in any breach of, or constitute a default under the Guarantor’s articles of
incorporation or by-laws or any indenture, mortgage, deed of trust, bank loan
or
credit agreement or any other agreement or instrument to which the Guarantor
is
a party or by which the Guarantor or any of its Property may be bound for which
a valid consent has not been secured except where the failure to do so would
not
have a material adverse effect upon the Guarantor, or result in the creation
of
any Lien (other than that created by the Financing Documents) upon or with
respect to any Property of the Guarantor.
SECTION
1.3. GOVERNMENTAL CONSENT. No
approval or other action by any Governmental Authority is required in connection
with the execution or performance by the Guarantor of the Guaranty.
SECTION
1.4. PENDING LITIGATION. As
of the
date hereof, there are no actions, suits or proceedings at law or in equity,
or
before or by any Governmental Authority, pending or, to the knowledge of the
Guarantor, threatened against or affecting the Guarantor which are reasonably
likely to materially adversely affect the financial condition of the Guarantor
and of the Company taken as a whole or involving the validity or enforceability
of the Financing Documents to which it is a party or the priority of the Liens
thereof, and to the Guarantor’s knowledge it is not in default with respect to
any material order, writ, judgment, decree or demand of any court or any
Governmental Authority.
SECTION
1.5. NO DEFAULTS. No event has occurred and no condition exists which, upon
the
execution of this Guaranty, would constitute an Event of Default under Article
III hereof.
SECTION
1.6. TAXES. All
material Federal, state, county, municipal and city income and other tax returns
and other reports and documents required to have been filed by the Guarantor
have been filed and the Guarantor has paid all fees and taxes indicated as
due
pursuant to such returns, reports and documents or pursuant to any assessments
received by the Guarantor, and the Guarantor knows of no basis for any
additional material assessment in respect of any such taxes which has not been
or will not be reserved for in accordance with GAAP.
2
ARTICLE
II
COVENANTS
AND AGREEMENTS
SECTION
2.1. GUARANTY OF PAYMENT. (A) The Guarantor hereby irrevocably and
unconditionally guarantees to the Holder full and prompt payment of moneys
sufficient to pay, or to provide for the payment of, the outstanding principal
balance of the Notes together with premium, if any, thereon and accrued and
unpaid interest thereon (the “Guaranteed Amount”). The Guarantor hereby
irrevocably and unconditionally agrees that, upon the occurrence of an Event
of
Default and the acceleration of the principal balance of either or both of
the
Notes then outstanding by the Holder, the Guarantor will, upon written demand
by
the Holder, promptly pay such Guaranteed Amount.
(B) All
payments by the Guarantor shall be paid in lawful money of the United States
of
America in immediately available funds.
(C) Each
and
every default in payment of the principal of or interest on the Notes shall
give
rise to a separate cause of action hereunder, and separate suits may be brought
hereunder by the Holder as each cause of action arises.
(D) The
Guarantor shall pay to the Holder all reasonable costs and expenses (including
reasonable legal fees) incurred by the Holder in the protection of any of its
rights or in the pursuance of any of its remedies in respect of this
Guaranty.
SECTION
2.2. OBLIGATIONS UNCONDITIONAL. The obligations of the Guarantor under this
Guaranty shall be absolute and unconditional and shall remain in full force
and
effect and, to the extent permitted by law, such obligations shall not be
affected, modified or impaired by any state of facts or the happening from
time
to time of any event including, without limitation, any of the following,
whether or not with notice to or the consent of the Guarantor:
(A) the
invalidity, irregularity, illegality or unenforceability of, or any defect
in,
(1) the Notes, (2) the other Financing Documents, or (3) any collateral security
for any thereof;
(B) any
present or future law or order of any government (de jure
or
de facto)
or of
any agency thereof purporting to reduce, amend or otherwise affect the Notes
or
any other obligation of the Company or any other obligor or to vary any terms
of
payment;
(C) any
claim
of immunity on behalf of the Company or any other obligor or with respect to
any
Property of the Company or any other obligor;
(D) the
waiver, compromise, settlement, release or termination of any or all of the
obligations, covenants or agreements of (1) the Company under the Notes or
any
of the other Financing Documents, (2) a co-guarantor of the Notes;
(E) the
failure
to give notice to the Guarantor of the occurrence of an Event of Default under
the Financing Documents;
(F) the
transfer,
assignment or mortgaging, or the purported or attempted transfer, assignment
or
mortgaging, of all or any part of the interest of the Company in the Collateral,
or any failure of or defect in the title with respect to the Company’s interest
in the Collateral;
3
(G) the
release, sale, exchange, surrender or other change in any security for payment
of the Notes;
(H) the
extension of the time for payment of any principal of or interest or premium
on
the Notes owing or payable on such Notes or under this Guaranty or of the time
for performance of any other obligations, covenants or agreements under or
arising out of the other Financing Documents;
(I) the
modification or amendment (whether material or otherwise) of any obligation,
covenant or agreement set forth in the Notes or any other Financing
Document;
(J) the
taking of, or the omission to take, any of the actions referred to in the
Financing Documents;
(K) any
failure, omission or delay on the part of the Holder or any other Person to
enforce, assert or exercise any right, power or remedy conferred on the Holder
or such other Person in this Guaranty or the other Financing
Documents;
(L) the
voluntary or involuntary liquidation, dissolution, sale or other disposition
of
all or substantially all the assets, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with creditors or readjustment of,
or
other similar proceedings affecting the Company or any of the assets of any
of
them, or any contest of the validity of the Financing Documents, in any such
proceedings;
(M) any
event or
action that would, in the absence of this Section 2.2, result in the release
or
discharge of the Guarantor from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty;
(N) the
default or failure of the Guarantor fully to perform any of its obligations
set
forth in this Guaranty; or
(O) any
other
circumstances which might otherwise constitute a legal or equitable discharge
or
defense of a surety or a guarantor.
SECTION
2.3. WAIVERS BY THE GUARANTOR. The Guarantor hereby waives with respect to
the
Notes, the other Financing Documents, the Guaranty and the indebtedness
evidenced thereby the following: diligence; presentment; demand for payment;
any
right to require a proceeding first against the Company or any other such
Person; protest; notice of dishonor or nonpayment of any such liabilities and
any other notice and all demands whatsoever. The Guarantor hereby waives notice
from the Holder and the Company (A) of the execution and delivery of the Notes,
and (B) of acceptance of, or notice and proof of reliance on, the benefits
of
this Guaranty.
SECTION
2.4. DISCHARGE OF THE GUARANTOR’S OBLIGATIONS AND TERMINATION OF THIS GUARANTY.
This Guaranty shall terminate and the obligations of the Guarantor created
hereunder shall be discharged when all amounts due under the Financing Documents
have been paid in full except as set forth below. On the date of such discharge,
the Guarantor shall be released from any and all conditions, terms, covenants
or
restrictions created or placed upon them by this Guaranty and the Guarantor
shall not have any further obligation or liability hereunder.
SECTION
2.5. OTHER SECURITY. The Holder may pursue its rights and remedies under this
Guaranty notwithstanding (A) any other guaranty of or security for the Notes
or
the obligations or liabilities of the Company under the other Financing
Documents, and (B) any action taken or omitted to be taken by,
any
4
other
Holder or any other Person to enforce any of the rights or remedies under such
other guaranty or with respect to any other security.
SECTION
2.6. NO SET-OFF BY THE GUARANTOR. No set-off, counterclaim, reduction or
diminution of an obligation, or any defense of any kind or nature (other than
payment in full of the Guaranteed Amount) which the Guarantor has or may have
with respect to a claim under this Guaranty, shall be available hereunder to
the
Guarantor against the Holder.
SECTION
2.7. NATURE OF GUARANTY. (A) The Guaranty is a guaranty of payment and not
of
collection, and the Guarantor hereby waives any right to require that any action
be brought against any other Person or to require that resort be had to any
security or to any balance of any fund or credit held by the Holder in favor
of
the Company or any other Person prior to the Holder proceeding under the
Guaranty. If at any time any payment of the principal of, premium, if any,
on or
interest on the Notes or any other amount payable by the Company and guaranteed
by the Guarantor pursuant to Section 2.1 hereof is rescinded or is otherwise
required to be restored or returned upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, the Guarantor’s obligations
hereunder with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.
(B) All
of the
rights and remedies of this Guaranty shall inure to the benefit of the
Holder.
SECTION
2.8. SUBORDINATION OF DEBT. During the term of the Guaranty, the Guarantor
agrees with the Holder that upon the occurrence and continuance of an Event
of
Default if the Holder so requests, any and all indebtedness of the Company
owed
to the Guarantor shall be collected, enforced and received by the Guarantor
as
trustee for the Holder and paid over to the Holder on account of the
indebtedness of the Company to the Holder, but without reducing or affecting
in
any manner the liability of the Guarantor under the other provisions of this
Guaranty except to the extent the principal amount of such outstanding
indebtedness shall have been reduced by such payment.
5
ARTICLE
III
EVENTS
OF
DEFAULT
SECTION
3.1. DEFAULT REMEDIES. If an Event of Default exists, the Holder may proceed
to
enforce the provisions hereof and to exercise any other rights, powers and
remedies available to the Holder. The Holder, in its sole discretion, shall
have
the right to proceed first and directly against the Guarantor under this
Guaranty without proceeding against or exhausting any other remedies which
it
may have and without resorting to any other security held by the
Holder.
SECTION
3.2. REMEDIES; WAIVER AND NOTICE. (A) No remedy herein conferred upon or
reserved to the Holder is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be
in
addition to every other remedy given under this Guaranty or now or hereafter
existing at law or in equity or by statute.
(B) No
delay
or omission to exercise any right or power accruing upon the occurrence of
any
Event of Default hereunder shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right or power may be exercised
from time to time and as often as may be deemed expedient.
(C) In
order to
entitle the Holder to exercise any remedy reserved to it in this Guaranty,
it
shall not be necessary to give any notice, other than such notice as may be
expressly required in this Guaranty.
(D) In
the
event any provision contained in this Guaranty should be breached by any party
and thereafter duly waived by the other party so empowered to act, such waiver
shall be limited to the particular breach so waived and shall not be deemed
to
waive any other breach hereunder.
(E) No
waiver,
amendment, release or modification of this Guaranty shall be established by
conduct, custom or course of dealing.
SECTION
3.3. RIGHT OF SET-OFF. The
guarantor hereby grants to the Holder, a continuing lien, security interest
and
right of setoff as security for all liabilities and obligations to the Holder,
whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of the Holder or any entity under the control of Bank
of
America Corporation and its successors and assigns, or in transit to any of
them. At any time, without demand or notice (any such notice being expressly
waived by the Guarantor), the Holder may set off the same or any part thereof
and apply the same to any liability or obligation of the Guarantor even though
unmatured and regardless of the adequacy of any other collateral securing the
Notes. ANY AND ALL RIGHTS TO REQUIRE THE HOLDER TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE NOTES, PRIOR
TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF THE GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.
SECTION
3.4. EXPENSES INCURRED IN CONNECTION WITH ENFORCEMENT. The
Guarantor shall pay on demand all reasonable expenses of the Holder in
connection with the preparation, administration, default, collection, waiver
or
amendment of loan terms, or in connection with the Holder’s exercise,
preservation or enforcement of any of its rights, remedies or options hereunder,
including, without limitation, reasonable fees of outside legal counsel or
the
allocated costs of in-house legal counsel, accounting, consulting, brokerage
or
other similar professional fees or expenses, and any reasonable fees or expenses
associated with travel or other costs relating to any appraisals or examinations
conducted in connection with the Loans or any collateral therefor, and the
amount of all such expenses shall, until paid,
6
bear
interest at the rate applicable to principal hereunder (including any default
rate) and be an obligation secured by any collateral.
7
ARTICLE
IV
INTERPRETATION
OF GUARANTY
SECTION
4.1. ACCOUNTING PRINCIPLES. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or
consolidated or other accounting computation is required to be made for the
purposes of this Guaranty, this shall be done in accordance with generally
accepted accounting principles at the time in effect, to the extent applicable,
except where such principles are inconsistent with the requirements of this
Guaranty.
SECTION
4.2. DIRECTLY OR INDIRECTLY. Where any provision in this Guaranty refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.
SECTION
4.3. GOVERNING LAW. This Guaranty and the rights and obligations of the parties
hereunder shall be construed and interpreted in accordance with the laws of
the
State of New York (the “Governing State”) (excluding the laws applicable to
conflicts or choice of law).
THE
GUARANTOR AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS GUARANTY MAY BE
BROUGHT IN THE COURTS OF THE GOVERNING STATE OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE
OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE GUARANTOR BY MAIL AT THE ADDRESS
SET FORTH HEREIN. THE GUARANTOR HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW
OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT
IS BROUGHT IN AN INCONVENIENT FORUM.
SECTION
4.4. DEFINITIONS. All defined terms used herein and not otherwise defined herein
being used herein with the same meanings as set forth in the Loan Agreement.
As
used herein, all words of masculine gender shall mean and include correlative
words of feminine and neuter genders.
8
ARTICLE
V
MISCELLANEOUS
SECTION
5.1. OBLIGATIONS ARISE ON DELIVERY OF THE NOTES. The obligations of the
Guarantor hereunder shall arise absolutely and unconditionally when the Notes
shall have been executed and delivered by the Company to the
Holder.
SECTION
5.2. SURVIVAL. All warranties, representations, and covenants made by the
Guarantor herein shall be deemed to have been relied upon by the Holder and
shall survive the delivery to the Holder of this Guaranty regardless of any
investigation made by the Holder.
SECTION
5.3. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the successors
and permitted assigns of the Guarantor. The provisions of this Guaranty are
intended to be for the benefit of the Holder, its successors and
assigns.
SECTION
5.4. NOTICES. (A) All notices, certificates and other communications under
this
Guaranty shall be in writing and shall be sufficiently given and shall be deemed
given when: (1) delivered to the applicable address stated in subsection (B)
hereof by registered or certified mail, return receipt requested or by such
other means as shall provide the sender with documentary evidence of such
delivery, or (2) delivery is refused by the Guarantor or the Holder, as the
case
may be, as evidenced by the affidavit of the Person who attempted to effect
such
delivery;
(B) The
addresses
to which communications under this Guaranty shall be delivered are as
follows:
TO
THE
GUARANTOR:
Balchem
Minerals Corporation
x/x
Xxxxxxx Xxxxxxxxxxx
X.X.
Xxx
000
00
Xxxxxxx Xxxx Xxxx
Xxx
Xxxxxxx, Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxx, President
TO
THE
HOLDER:
Bank
of
America, N.A.
Xxxxx
X.
Xxxxxxx Xxxxx
Xxxxxx,
Xxx Xxxx 00000
Attention:
Corporate Banking Division
WITH
A
COPY TO:
Xxxxxx
Xxxxxxxx LLC
00
Xxxxxxxx Xxxxx
Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxxxxxxxx, Esq.
9
(C) The
Guarantor and the Holder may by notice given hereunder designate any further
or
different addresses to which subsequent notices, certificates and other
communications shall be sent.
SECTION
5.5. ENTIRE UNDERSTANDING; COUNTERPARTS. This Guaranty constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof and may
be
executed simultaneously in several counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
SECTION
5.6. AMENDMENTS. No amendment, change, modification, alteration or termination
of this Guaranty shall be made except upon the written consent of the Guarantor
and the Holder.
SECTION
5.7. PARTIAL INVALIDITY. The invalidity or unenforceability of any one or more
phrases, sentences, clauses or sections in this Guaranty shall not affect the
validity or enforceability of the remaining portions of this Guaranty or any
part thereof.
SECTION
5.8. SECTION HEADINGS NOT CONTROLLING. The headings of the several sections
of
this Guaranty have been prepared for convenience of reference only and shall
not
control, affect the meaning or be taken as an interpretation of any provision
of
this Guaranty.
SECTION
5.9. JURY TRIAL WAIVER. THE
GUARANTOR AND THE HOLDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY OR ANY COURSE
OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE HOLDER RELATING TO THE
ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE NOTES, AND AGREE THAT NEITHER
PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH
A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, THE
GUARANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE GUARANTOR CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE HOLDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE HOLDER WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR THE HOLDER TO ACCEPT THE GUARANTY AND MAKE THE
LOANS.
10
IN
WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the day and
year
first above written.
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BALCHEM
MINERALS CORPORATION
|
||
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By:
|
/s/
Xxxx X. Xxxxx
|
|
|
Xxxx
X. Xxxxx, President
|
||
Accepted:
BANK
OF
AMERICA, N.A., as Holder
|
By:
|
/s/
Xxxxx X. Xxxxxxxx
|
|
|
Xxxxx
X. Xxxxxxxx, Vice President
|
On
the
6th day of February, in the year 2006 before me personally came XXXX
X. XXXXX,
to me
known, who, being by me duly sworn, did depose and say that he/she/they
reside(s) in New York; that he/she/they is(are) the President of BALCHEM
MINERALS CORPORATION, the corporation described in and which executed the above
instrument; and that he/she/they signed his/her/their name(s) thereto by
authority of the board of directors of said corporation.
|
/s/
Xxxxxxx X. Xxxxxxx
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|
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Notary
Public, State of New York
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