EXHIBIT 10.9
SETTLEMENT AGREEMENT AND RELEASE
This SETTLEMENT AGREEMENT AND RELEASE dated as of December 3, 2004
(this "Settlement Agreement"), by and among NEWPORT INTERNATIONAL GROUP, INC., a
Delaware corporation ("Newport"), XXXXXXXX XXXX INC. ("Xxxxxxxx Xxxx"), FIRST
CAPITAL HOLDINGS INTERNATIONAL, INC. ("First Capital"), CONTINENTAL BLUE
LIMITED, ("Continental Blue"), and E-HOLDINGS, INC. ("E-Holdings").
WHEREAS, a dispute exists among Xxxxxxxx Xxxx and First Capital, on the
one hand, and Newport, on the other hand, concerning the respective obligations,
if any, to each other with respect to a private placement of common stock and
warrants by Newport in the aggregate amount of approximately $6,589,932 for
which Continental Blue and/or E-Holdings acted as Newport's placement agent (the
"Private Placement"); and
WHEREAS, Xxxxxxxx Xxxx, First Capital, Continental Blue, E-Holdings and
Newport have negotiated a full and complete settlement of such dispute in the
manner set forth in this Settlement Agreement; and
WHEREAS, without admitting any wrongdoing or liability, or
acknowledging the validity of any claim, asserted or unasserted, each of
Xxxxxxxx Xxxx, First Capital, Continental Blue, E-Holdings and Newport have
reached an amicable settlement and have agreed to resolve all claims and other
disputes among them arising out of, and relating to, the Private Placement and
the transactions contemplated thereby, in the manner set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and the other good and valuable consideration as set forth in this
Settlement Agreement, the legal adequacy of which is hereby acknowledged, the
parties agree as follows:
1. No Admission of Fault. Each of Xxxxxxxx Xxxx, First Capital,
Continental Blue, E-Holdings and Newport acknowledges and agrees that it is
entering into this Settlement Agreement in order to settle and resolve all
disputed matters among them arising out of or in any way relating to the Private
Placement and the transactions contemplated thereby and none of them is
admitting any wrongdoing or liability on its part in any way relating to such
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matters, and no inference regarding any such wrongdoing or liability is intended
by virtue of the parties entering into this Settlement Agreement.
2. Consideration to Xxxxxxxx Xxxx, First Capital, Continental Blue and
E-Holdings. In consideration of the release granted by Xxxxxxxx Xxxx, First
Capital, Continental Blue and E-Holdings pursuant to Section 5 hereof, Newport
shall do the following:
(a) Xxxxxxxx Xxxx and First Capital Shares. Concurrently with
the execution and delivery of this Settlement Agreement, Newport shall issue
750,000 shares of common stock of Newport to Xxxxxxxx Xxxx (the "Xxxxxxxx Xxxx
Shares") and 750,000 shares of common stock of Newport to First Capital (the
"First Capital Shares"). The Xxxxxxxx Xxxx Shares and the First Capital Shares
shall be subject to all of the obligations and receive all of the rights and
benefits under the Registration Rights Agreement dated as of August 27, 2004, as
amended on November 2, 2004. The Xxxxxxxx Xxxx Shares and First Capital Shares
are not subject to any put option pursuant to the Common Stock Purchase
Agreement dated as of August 27, 2004, as amended on November 2, 2004 (the
"Common Stock Purchase Agreement"). Xxxxxxxx Xxxx and First Capital hereby
instruct Newport to issue a stock certificate in the name of Preston & Price
S.A. for 1,500,000 shares of common stock of Newport representing the Xxxxxxxx
Xxxx Shares and the First Capital Shares. The certificate for 1,500,000 shares
of common stock of Newport registered in the name of Preston & Price S.A. shall
be sent to UBS London, 0 Xxxxxx Xxxxxx, Xxxxxx X0X0XX, Xxxxxx Xxxxxxx,
Attention: Xxxxx Xxxxxx.
(b) Additional 500,000 Shares for Collateral Account.
Concurrently with the execution and delivery of this Settlement Agreement,
Newport shall deposit with its brokerage account at Christows London an
additional 500,000 free trading shares of Xxxxxxx Park Investments as additional
collateral for Newport to honor any put options pursuant to the Common Stock
Purchase Agreement.
(c) E-Holdings Commission. Newport covenants and agrees that
E-Holdings and/or its assignee shall receive a commission equal to 10% on any
future financings between Newport and Xxxxxxxx Xxxx, Continental Advisory
Services, First Capital and/or any other entity with a similar ownership or
management structure as such entities.
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3. Consideration to Newport. In consideration of the release granted by
Newport pursuant to Section 4 hereof, Xxxxxxxx Xxxx, First Capital, Continental
Blue and E-Holdings shall do the following:
(a) Warrants Issued to Continental Blue. Concurrently with the
execution and delivery of this Settlement Agreement, Continental Blue shall
rescind the warrants to purchase an aggregate of 339,000 shares of common stock
of Newport issued in connection with the Private Placement as an acknowledgment
that E-Holdings, and not Continental Blue, acted as the placement agent in
connection with the Private Placement and the financing with Xxxxxxx Park
Investments (the "Xxxxxxx Financing"). Continental Blue and E-Holdings
acknowledge that they have been paid in full for the Private Placement and the
Xxxxxxx Financing pursuant to the exercise of put options previously granted to
E-Holdings in connection with the Xxxxxxx Financing. Continental Blue shall
immediately return the original warrants to Newport.
(b) Voting Rights; First Refusal Rights. Concurrently with the
execution and delivery of this Settlement Agreement, Xxxxxxxx Xxxx and First
Capital shall grant to Mr. Cery Perle, the Chief Executive Officer of Newport,
all voting rights with respect to the Xxxxxxxx Xxxx Shares and the First Capital
Shares. Continental Blue shall forego and release any first refusal rights or
restrictions on subsequent financings of Newport that Continental Blue presently
holds pursuant to Section 3.13 of the Common Stock Purchase Agreement. 4.
Release by Newport. Except for a breach of this Settlement Agreement, Newport
hereby releases and forever discharges Xxxxxxxx Xxxx, First Capital, Continental
Blue and E-Holdings by executing the Release in the form attached hereto as
Exhibit A (the "Newport Release").
5. Release by Xxxxxxxx Xxxx, First Capital, Continental Blue and
E-Holdings. Except for a breach of this Settlement Agreement, each of Xxxxxxxx
Xxxx, First Capital, Continental Blue and E-Holdings hereby releases and forever
discharges Newport by executing the release in the form attached hereto as
Exhibit B (the "Xxxxxxxx Xxxx, First Capital, Continental Blue and E-Holdings
Release").
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6. Payments of Legal Fees. Immediately following the execution of this
Settlement Agreement, Newport and Continental Blue shall each pay to Jenkens &
Xxxxxxxxx Xxxxxx Xxxxxx LLP an amount equal to $6,000, for an aggregate amount
of $12,000, in respect legal fees incurred on behalf of the parties in
connection with the Private Placement and this Settlement Agreement.
7. Representations and Warranties by Newport. Newport hereby represents
and warrants to each of Xxxxxxxx Xxxx, First Capital, Continental Blue and
E-Holdings as follows:
(a) Newport has the corporate power and authority to execute,
deliver and perform this Settlement Agreement, the Newport Release and to issue
the Xxxxxxxx Xxxx Shares and the First Capital Shares.
(b) The execution, delivery and performance of this Settlement
Agreement, the Newport Release and the issuance of the Xxxxxxxx Xxxx Shares and
the First Capital Shares have been duly authorized by Newport in accordance with
all requisite corporate power and authority.
(c) No consents or approvals of, notices to or filings with,
any person or entity are required to be obtained by Newport in connection with
its execution, delivery and performance of this Settlement Agreement, the
Newport Release and the issuance of the Xxxxxxxx Xxxx Shares and the First
Capital Shares.
(d) Newport has received, or has had the opportunity to
receive, independent legal advice from attorneys of its choice with respect to
the terms and provisions of this Settlement Agreement and the Newport Release,
the advisability of entering into this Settlement Agreement and of the
consequences of entering into this Settlement Agreement and the Newport Release.
(e) Newport has made such investigation of the facts
pertaining to this Settlement Agreement and to the transactions contemplated
hereby, as it considers appropriate.
(f) This Settlement Agreement and the Newport Release
constitute a legal, valid and binding obligation of Newport, enforceable against
Newport in accordance with its terms, except as enforcement may be limited by
(i) applicable bankruptcy, insolvency,
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reorganization, moratorium or other similar laws of general applicability
affecting the enforcement of creditors' rights and (ii) the application of
general principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
(g) The execution, delivery and performance of this Settlement
Agreement and the Newport Release by Newport, the issuance of the Xxxxxxxx Xxxx
Shares and the First Capital Shares, shall not (i) violate or contravene the
certificate of incorporation or by-laws of Newport; (ii) violate or constitute a
breach of, or default under, any material agreement or other instrument binding
upon Newport or to which it is a party; (iii) violate or contravene any
judgment, decree or order of any court or regulatory body binding upon Newport;
or (iv) violate any law or regulation applicable to Newport.
(h) Newport has reserved the Xxxxxxxx Xxxx Shares and the
First Capital Shares for issuance and such shares upon issuance will be legally
and validly issued, fully paid and non-assessable.
8. Representations and Warranties by Xxxxxxxx Xxxx, First Capital,
Continental Blue and E-Holdings. Each of Xxxxxxxx Xxxx, First Capital,
Continental Blue and E-Holdings hereby represents and warrants to Newport as
follows:
(a) Each of Xxxxxxxx Xxxx, First Capital, Continental Blue and
E-Holdings has the corporate power and authority to execute, deliver and perform
this Settlement Agreement and the Xxxxxxxx Xxxx, First Capital, Continental Blue
and E-Holdings Release.
(b) The execution, delivery and performance of this Settlement
Agreement and the Xxxxxxxx Xxxx, First Capital, Continental Blue and E-Holdings
Release have been duly authorized by each of Xxxxxxxx Xxxx, First Capital,
Continental Blue and E-Holdings in accordance with all requisite corporate power
and authority.
(c) No consents or approvals of, notices to or filings with,
any person or entity are required by Xxxxxxxx Xxxx, First Capital, Continental
Blue or E-Holdings in connection with the execution, delivery and performance of
this Settlement Agreement or the Xxxxxxxx Xxxx, First Capital, Continental Blue
and E-Holdings Release.
(d) Each of Xxxxxxxx Xxxx, First Capital, Continental Blue or
E-Holdings has received independent legal advice from attorneys of his choice
with respect to the
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terms and provisions of this Settlement Agreement and the Xxxxxxxx Xxxx, First
Capital, Continental Blue and E-Holdings Release, the advisability of entering
into this Settlement Agreement and of the consequences of entering into this
Settlement Agreement and the Xxxxxxxx Xxxx, First Capital, Continental Blue and
E-Holdings Release.
(e) Each of Xxxxxxxx Xxxx, First Capital, Continental Blue and
E-Holdings has made such investigation of the facts pertaining to this
Settlement Agreement and to the transactions contemplated by this Settlement
Agreement, as it considers appropriate.
(f) This Settlement Agreement and the Xxxxxxxx Xxxx, First
Capital, Continental Blue and E-Holdings Release constitute a legal, valid and
binding obligation of each of Xxxxxxxx Xxxx, First Capital, Continental Blue and
E-Holdings, enforceable against each in accordance with its terms, except as
enforcement may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general applicability
affecting the enforcement of creditors' rights and (ii) the application of
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).
(g) The execution, delivery and performance of this Settlement
Agreement and the Xxxxxxxx Xxxx, First Capital, Continental Blue and E-Holdings
Release by Xxxxxxxx Xxxx, First Capital, Continental Blue and E-Holdings shall
not (i) violate or contravene the certificate or articles of incorporation or
by-laws of Xxxxxxxx Xxxx, First Capital, Continental Blue and E-Holdings; (ii)
violate or constitute a breach of, or default under, any material agreement or
other instrument binding upon Xxxxxxxx Xxxx, First Capital, Continental Blue or
E-Holdings or to which it is a party; or (iii) violate or contravene any
judgment, decree or order of any court or regulatory body binding upon Xxxxxxxx
Xxxx, First Capital, Continental Blue or E-Holdings.
9. Ownership of Claims. Each of Newport, on the one hand, and Xxxxxxxx
Xxxx, First Capital, Continental Blue or E-Holdings, on the other hand,
represent and warrant to the other, that it is the lawful and sole owner of the
claims being released hereby and it has not sold, transferred, assigned,
pledged, hypothecated or otherwise encumbered any such claim.
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10. Governing Law. THIS SETTLEMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES
THAT WOULD RESULT IN THE APPLICATION OF THE SUBSTANTIVE LAW OF ANOTHER
JURISDICTION. THIS SETTLEMENT AGREEMENT SHALL BE CONSTRUED WITHOUT REGARD TO ANY
PRESUMPTION OR OTHER RULE REQUIRING CONSTRUCTION AGAINST THE PARTY CAUSING THE
SETTLEMENT AGREEMENT TO BE DRAFTED.
11. Confidentiality. Commencing from the date hereof each of the
parties shall keep the terms and provisions of this Settlement Agreement
confidential and shall not disclose such terms and provisions to any person or
entity, except (i) as may be required by applicable law or regulation; (ii)
pursuant to applicable subpoena; (iii) in connection with the enforcement of
this Settlement Agreement; and (iv) to their respective attorneys and
accountants, who are advised of the confidential nature of this Settlement
Agreement prior to disclosure and who agree to be bound by the confidentiality
obligations set forth in this Section 11.
12. Notices. Any notice or other communication under or relating to
this Settlement Agreement shall be in writing and shall be considered given when
received by the intended recipient, if (i) delivered in person; (ii) sent by a
recognized overnight courier service; (iii) when mailed by registered mail or
certified first class mail return receipt requested (with postage prepaid); or
(iv) on the day received by telecopy transmission if received before 6:00 p.m.
(local time), or if received after that time it shall be considered received on
the next business day, at the respective address or telecopy number of the
parties or such other address or telecopy number as a party may specify by a
notice in accordance with this Section 12 to the other parties hereto:
If to Newport:
Newport International Group, Inc.
00000 Xx Xxxxx Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: President and CEO
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
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If to Xxxxxxxx Xxxx:
Xxxxxxxx Xxxx Inc.
European Administration:
4 Xxxxxx Xxxxxx
X.X. Xxx 00000
0000 Xxxxxxxx
Xxxxxx
+ 357 2533 9274
Kontaktperson: Xxxxxxxx Magistrate
If to First Capital:
First Capital Holdings International, Inc.
00 XxXxxxxx Xxxxxx
Wickhams Cay 1
Roadtown
Tortola, British Virgin Islands
Attention: Xxxxx Xxxxxxxxxx
If to Continental Blue:
Continental Blue Limited
Xxxxxxxxxx Xxxxx
00 Xxxxxxxxxx Xxxxxx
Nassau, The Bahamas
Attention: Xxxxx Xxxxxx
If to E-Holdings:
E-Holdings, Inc.
Cumberland House
27 Cumberland Street
Nassau, The Bahamas
Attention: Xxxxxx Xxxxx
13. Miscellaneous. (a) No party may assign any of its rights or
delegate any of its duties under this Settlement Agreement without the prior
written consent of the other party hereto. This Settlement Agreement shall be
binding upon the successors and permitted assigns of the parties and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
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(b) The provisions of this Settlement Agreement shall not be
construed as a waiver of any party's right to bring suit to enforce the terms
and provisions of this Settlement Agreement.
(c) This Settlement Agreement (together with the Newport
Release, the Xxxxxxxx Xxxx, First Capital, Continental Blue and E-Holdings
Release) contains a complete statement of all the arrangements, understandings
and agreements among the parties with respect to the subject matter hereof,
supersede all other arrangements, understandings and agreements, whether written
or oral, among them relating to such subject matter, all of which are merged
herein. This Settlement Agreement cannot be altered, modified, waived or
amended, except by an instrument in writing executed by each of the parties
hereto.
(d) Section headings contained in this Settlement Agreement
are included herein solely for convenience of reference only and are not
intended to affect the interpretation or construction of any of the terms or
provisions of this Settlement Agreement.
(e) This Settlement Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which, when
taken together shall constitute one and the same instrument. The facsimile
signature of a party hereto shall constitute a valid and effective signature.
[The remainder of this page left intentionally blank.]
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IN WITNESS WHEREOF each of the parties has duly executed this
Settlement Agreement as of the date first above written.
NEWPORT INTERNATIONAL GROUP, INC.
By: __/S/_________________________________
Name:
Title:
XXXXXXXX XXXX INC.
By: __/S/_________________________________
Name:
Title:
FIRST CAPITAL HOLDINGS INTERNATIONAL, INC.
By: __/S/_________________________________
Name:
Title:
CONTINENTAL BLUE LIMITED
By: __/S/_________________________________
Name:
Title:
E-HOLDINGS, INC.
By: __/S/_________________________________
Name:
Title:
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Exhibit A
RELEASE
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Newport International Group, Inc., a Delaware
corporation (the "Releasor"), hereby absolutely and irrevocably releases,
waives, relinquishes, renounces and discharges forever, Xxxxxxxx Xxxx Inc.,
First Capital Holdings International, Inc., Continental Blue Limited and
E-Holdings, Inc., and each of their respective subsidiaries, affiliates,
successors and assigns, if any, as well as their respective present and former
directors, officers, employees, agents, attorneys or other attorneys and other
representatives acting on their behalf and successors and assigns of each of
them (the "Releasees"), from any and all claims, suits, damages, debts, liens,
liabilities, obligations, promises, judgments, demands, losses, causes of
actions, rights, costs and expenses (including, without limitation, attorneys'
fees and expenses) of every kind, nature and description, in law or in equity,
whether the same be known or unknown, or known in the future, billed or
unbilled, suspected or unsuspected, absolute or contingent, disclosed or
undisclosed, direct or indirect or nominally or beneficially possessed or
claimed by the Releasor, from the beginning of time through the date hereof,
which Releasor could assert against any Releasee relating to or arising out of
the private placement dated and signed on August 27, 2004, as amended on
November 2, 2004, and the transactions contemplated thereby, including, without
limitation, all of the transaction documents entered into in connection with the
private placement (collectively, the "Released Claims").
If the Releasor brings any claim, suit, action or manner of action
against any Releasee in administrative proceedings, in arbitration, at law, in
equity or mixed, in any way connected with, relating to or arising out of the
Released Claims, then the Releasor agrees to jointly and severally indemnify and
hold harmless the Releasees in the amount of any final monetary judgment or
settlement and any related costs (including, without limitation, its reasonable
attorneys' fees and expenses) entered against, paid or incurred by the
Releasees.
Releasor hereby warrants and represents to Releasees that there has
been no assignment, conveyance, encumbrance, hypothecation, pledge or other
transfer of any interest or any matter covered by this Release.
If, for any reason, any court of competent jurisdiction shall hold by
final non-appealable order that any Released Claim purported to be released
hereby is not so released, then this Release shall nonetheless be and remain
effective with respect to each and every other Released Claim released hereby.
This Release shall be governed by and construed in accordance with the
laws of the State of New York, without regard to conflicts of laws principles
that would result in the application of the substantive law of another
jurisdiction. This Release may not be amended or modified except by an
instrument in writing signed by the Releasor.
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IN WITNESS WHEREOF, each of the undersigned has caused this Release to
be duly executed effective as of the 3rd day of December, 2004.
NEWPORT INTERNATIONAL GROUP, INC.
By: __/S/_________________________________
Name:
Title:
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EXHIBIT B
RELEASE
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Xxxxxxxx Xxxx Inc., First Capital Holdings
International, Inc., Continental Blue Limited and E-Holdings, Inc., and their
successors and assigns, if any, and their respective officers, directors,
employees, subsidiaries, affiliates and attorneys (collectively, the
"Releasors"), hereby absolutely and irrevocably forever release, waive,
relinquish, renounce and discharge forever, Newport International Group, Inc., a
Delaware corporation, and its successors and assigns, if any, and its respective
present and former directors, officers, employees, agents, attorneys or other
attorneys and other representatives acting on their behalf and successors and
assigns of each of them (the "Releasees"), from any and all claims, suits,
damages, debts, liens, liabilities, obligations, promises, judgments, demands,
losses, causes of action, rights, costs and expenses (including, without
limitation, attorneys fees and expenses) of every kind, nature and description,
in law or in equity, whether the same be known or unknown, or known in the
future, billed or unbilled, suspected or unsuspected, absolute or contingent,
disclosed or undisclosed, direct or indirect or nominally or beneficially
possessed or claimed by the Releasors, which the Releasors could assert against
the Releasee relating to or arising out of the private placement dated and
signed on August 27, 2004, as amended on November 2, 2004, and the transactions
contemplated thereby, including, without limitation, all of the transaction
documents entered into in connection with the private placement (collectively,
the "Released Claims"); provided, however, any claim by the Releasors relating
to the failure of the Releasees to honor a put option pursuant to Article VI of
the common stock purchase agreement dated as of August 27, 2004, as amended on
November 2, 2004, shall not constitute a Released Claim under this Release.
If a Releasor brings any claim, suit, action or manner of action
against the Releasee in administrative proceedings, in arbitration, at law, in
equity or mixed, in any way connected with, relating to or arising out of the
Released Claims, then such Releasor agrees to jointly and severally indemnify
and hold harmless the Releasees in the amount of any final monetary judgment or
settlement and any related costs (including, without limitation, its reasonable
attorneys' fees and expenses) entered against, paid or incurred by any of the
Releasees.
Each Releasor hereby warrants and represents to Releasees that there
has been no assignment, conveyance, encumbrance, hypothecation, pledge or other
transfer of any interest or any matter covered by this Release.
If, for any reason, any court of competent jurisdiction shall hold by
final non-appealable order that any Released Claim purported to be released
hereby is not so released, then this Release shall nonetheless be and remain
effective with respect to each and every other Released Claim released hereby.
This Release shall be governed by and construed in accordance with the
laws of the State of New York, without regard to conflicts of laws principles
that would result in the application of the substantive law of another
jurisdiction. This Release may not be amended or modified except by an
instrument in writing signed by the Releasor.
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IN WITNESS WHEREOF, each of the undersigned has caused this Release to
be duly executed effective as of the 3rd day of December, 2004.
XXXXXXXX XXXX INC.
By: ___/S/________________________________
Name:
Title:
FIRST CAPITAL HOLDINGS INTERNATIONAL, INC.
By: ___/S/________________________________
Name:
Title:
CONTINENTAL BLUE LIMITED
By: ____/S/_______________________________
Name:
Title:
E-HOLDINGS, INC.
By: __/S/_________________________________
Name:
Title:
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