Exhibit 4.19
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Registration Rights Agreement")
is made as of February 9, 1998, by and between PHOTRAN CORPORATION, a Minnesota
corporation (the "Company"), and ST. XXXXX CAPITAL PARTNERS, L.P., a Delaware
limited partnership ("Purchaser").
WHEREAS, on the date hereof, Purchaser acquired from the Company a 10%
Convertible Promissory Note (the "Note") in the original principal amount of
$3,500,000 convertible into shares (the "Note Shares") of the Company's Common
Stock, no par value ("Common Stock");
WHEREAS, on the date hereof, Purchaser received a Warrant (the "Warrant")
to purchase 1,225,000 shares (the "Warrant Shares"; and together with the Note
Shares, the "Shares") of Common Stock, subject to adjustment as provided in the
Warrant;
WHEREAS, the Company wishes to grant Purchaser (and any Holder, as
hereinafter defined) certain registration rights in respect of the Shares, as
set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
"COMMISSION" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"HOLDER" shall mean Purchaser and any transferee of any Warrants or the
Note or holder of any Warrant Shares issued upon exercise of any Warrants or
Note Shares issued upon conversion of the Note.
"REGISTRABLE SECURITIES" shall mean (i) any Shares held now or at any time
hereafter by Purchaser, or any person or entity to whom Purchaser has
transferred such Shares in a private transaction and (ii) any securities which
may be issued or distributed in respect of the Shares by way of a stock
dividend, stock split, spin-off, or other recapitalization, distribution, or
reclassification or in connection with a merger, share exchange, consolidation
or other reorganization. Any Registrable Securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale by the holder of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement; or (ii) they shall have been distributed to
the public pursuant to Rule 144 (or any successor provision) under the
Securities Act.
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The terms "REGISTER", "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering by the
Commission of the effectiveness of such registration statement.
"REGISTRATION EXPENSES" shall mean all expenses, other than Selling
Expenses (as defined below), incurred by the Company in complying with this
Registration Rights Agreement, including, without limitation, all registration,
qualification and filing fees, exchange listing fees, printing expenses, escrow
fees, fees and disbursements of counsel for the Company, blue sky fees and
expenses, the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
a Holder except all fees and disbursements of counsel for Holder.
"UNDERWRITTEN PUBLIC OFFERING" shall mean a public offering in which the
Common Stock is offered and sold on a firm commitment basis through one or more
underwriters, all pursuant to (i) an effective registration statement under the
Securities Act and (ii) an underwriting agreement between the Company and such
underwriters.
ARTICLE II
REGISTRATION RIGHTS
2.1 DEMAND REGISTRATION.
2.1.1 At any time and from time to time, a Holder or Holders of
Registrable Securities holding in the aggregate at least 50% of the then
existing Registrable Securities may make a one-time written request upon the
Company, to file, within 60 days after such written request is made, with the
Securities and Exchange Commission a shelf registration statement covering the
resale of the Shares on an appropriate form promulgated by the Commission (the
"Registration Statement"). The Company shall use its reasonable best efforts to
cause such Registration Statement to become effective as soon as practicable and
to cause the Shares to be qualified in such state jurisdictions as the Holder
may request.
2.1.2 Except as set forth herein, the Company shall take all
reasonable steps necessary to keep the Registration Statement current and
effective until the earlier of (i) one (1) year or (ii) until all of the
Registrable Securities are transferable pursuant to Rule 144 under the
Securities Act without the volume limitations set forth in such rule.
2.1.3 The Company shall be entitled to require that the parties
refrain from effecting any public sales or distributions of the Registrable
Securities pursuant to a Registration Statement that has been declared effective
by the Commission or otherwise, if the board of directors of the Company
reasonably determines that such public sales or distributions would interfere in
any material respect with any transaction involving the Company that the board
of directors reasonably determines to be material to the
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Company or determines that the Holder of Registrable Securities is an
"insider" with respect to material non-public information. The board of
directors shall, as promptly as practicable, give the Holders of the
Registrable Securities written notice of any such development. In the
event of a request by the board of directors of the Company that the
Holders of Registrable Securities refrain from effecting any public
sales or distributions of the Registrable Securities, the Company shall
be required to lift such restrictions regarding effecting public sales
or distributions of the Registrable Securities as soon as reasonably
practicable after the board of directors shall reasonably determine
public sales or distributions by the Holders of the Registrable
Securities shall not interfere with such transaction, PROVIDED, that in
no event shall any requirement that the Holders of Registrable
Securities refrain from effecting public sales or distributions in the
Registrable Securities extend for more than 90 days.
2.2 PIGGYBACK REGISTRATION.
2.2.1 Subject to the terms hereof, if at any time or from time to
time the Company or any shareholder of the Company shall determine to register
any of its securities (except for registration statements relating to employee
benefit plans or exchange offers), either for its own account or the account of
a security holder, the Company will promptly give to the Holders of Registrable
Securities written notice thereof no less the 10 days prior to the filing of any
registration statement, and include in such registration (and any related
qualification under blue sky laws or other compliance), and in the underwriting
involved therein, if any, such Registrable Securities as such Holders may
request in a writing delivered to the Company within 20 days after the Holders'
receipt of Company's written notice.
2.2.2 The Holders of Registrable Securities may participate in any
number of registrations until all Holders of Registrable Securities have had an
opportunity to register all of the Registrable Securities or until all of the
Registrable Securities are transferable pursuant to Rule 144 under the
Securities Act without the volume limitations set forth in such rule.
2.2.3 If any registration statement is an Underwritten Public
Offering, the right of Holders of Registrable Securities to registration
pursuant to this Section shall be conditioned upon each such Holder
participating in such reasonable underwriting arrangements as the Company shall
make regarding the offering, and the inclusion of Registrable Securities in the
underwriting shall be limited to the extent provided herein. Holders of
Registrable Securities and all other shareholders proposing to distribute their
securities through such underwriting shall (together with the Company and the
other Holders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section, if the managing underwriter concludes in its
reasonable judgment that the number of shares to be registered for selling
shareholders (including the Holders of Registrable Securities) would materially
adversely affect such offering, the number of Registrable Securities to be
registered, together with the number of shares of Common Stock or other
securities held by other shareholders proposed to be registered in such
offering, shall be reduced on a pro rata basis based on the number of shares
proposed to be sold by the Holders of Registrable Securities as compared to the
number of shares proposed to be sold by all shareholders. If any Holder of
Registrable Securities disapproves of the terms of any such underwriting, it may
elect to withdraw therefrom by written notice to the Company and the managing
underwriter, delivered not less than 10 days before the effective date. The
Registrable Securities excluded by the managing underwriter or withdrawn from
such underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution
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prior to 120 days after the effective date of the registration statement
relating thereto, or such other shorter period of time as the
underwriters may require.
2.2.4 The Company shall have the right to terminate or withdraw
any registration initiated by it under this Section prior to the effectiveness
of such registration whether or not the Holders of Registrable Securities have
elected to include securities in such registration.
2.3 EXPENSES OF REGISTRATION. All Registration Expenses shall be borne by
the Company. Unless otherwise stated herein, all Selling Expenses relating to
securities registered on behalf of the Holders of Registrable Securities shall
be borne by the Holders of Registrable Securities.
2.4 BEST REGISTRATION RIGHTS. If, on or after the date of this
Registration Rights Agreement, the Company grants to any person with respect to
any security issued by the Company or any of its Subsidiaries registration
rights that provide for terms that are in any manner more favorable to the
Holder of such registration rights than the terms granted to a Holder pursuant
hereto (or if the Company amends or waives any provision of any Agreement
providing registration rights of others or takes any other action whatsoever to
provide for terms that are more favorable to other Holders than the terms
provided to a Holder pursuant hereto) then this Registration Rights Agreement
shall immediately be deemed amended to provide the Holders of Registrable
Securities with any (or all) of such more favorable terms as the Holders of
Registrable Securities shall elect to include herein.
2.5 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep the Holders of Registrable
Securities advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. At its expense,
the Company will:
2.5.1 Prepare and file with the Commission a registration
statement with respect to such securities and use its commercially reasonable
efforts to cause such registration statement to become and remain effective
until the distribution described in such registration statement has been
completed;
2.5.2 Furnish to each underwriter such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as such underwriter
may reasonably request in order to facilitate the public sale of the shares by
such underwriter, and promptly furnish to each underwriter and the Holders of
Registrable Securities notice of any stop-order or similar notice issued by the
Commission or any state agency charged with the regulation of securities, and
notice of any NASDAQ or securities exchange listing.
2.5.3 Cause the Shares to be listed on NASDAQ and each securities
exchange on which the Common Stock is approved for listing.
2.6 INDEMNIFICATION.
2.6.1 To the extent permitted by law, the Company will
indemnify each Holder of Registrable Securities, each of its officers and
directors and partners, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act,
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against all expenses, claims, losses, damages or liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of
any litigation, commenced or threatened, to the extent such expenses, claims,
losses, damages or liabilities arise out of or are based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other similar
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any violation by
the Company of the Securities Act or any rule or regulation promulgated under
the Securities Act applicable to the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse
each Holder of Registrable Securities, each of its officers and directors and
partners, and each person controlling each Holder of Registrable Securities,
each such underwriter and each person who controls any such underwriter, for
any legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability
or action; provided, however, that the indemnity contained herein shall not
apply to amounts paid in settlement of any claim, loss, damage, liability or
expense if settlement is effected without the consent of the Company (which
consent shall not unreasonably be withheld); provided, further, that the
Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Company by a Holder of Registrable Securities, such controlling person or
such underwriter specifically for use therein. Notwithstanding the
foregoing, insofar as the foregoing indemnity relates to any such untrue
statement (or alleged untrue statement) or omission (or alleged omission)
made in the preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the Commission at the time the registration statement
becomes effective or in the final prospectus filed with the Commission
pursuant to the applicable rules of the Commission or in any supplement or
addendum thereto, the indemnity agreement herein shall not inure to the
benefit of any underwriter if a copy of the final prospectus filed pursuant
to such rules, together with all supplements and addenda thereto, was not
furnished to the person or entity asserting the loss, liability, claim or
damage at or prior to the time such furnishing is required by the Securities
Act.
2.6.2 To the extent permitted by law, each Holder of Registrable
Securities will, if securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is being
effected pursuant to terms hereof, indemnify the Company, each of its directors
and officers, each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other person selling the Company's securities covered by such registration
statement, each of such person's officers and directors and each person
controlling such persons within the meaning of Section 15 of the Securities Act,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by a
Holder of Registrable Securities of any rule or regulation promulgated under the
Securities Act applicable to Holders of Registrable Securities and relating to
action or inaction required of Holders of Registrable Securities in connection
with any such registration, qualification or compliance, and will reimburse the
Company, such other persons, such directors, officers, persons, underwriters or
control persons for any legal or other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
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liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity
with written information furnished to the Company by such Holder of
Registrable Securities specifically for use therein; provided, however,
that the indemnity contained herein shall not apply to amounts paid in
settlement of any claim, loss, damage, liability or expense if
settlement is effected without the consent of such Holder of Registrable
Securities (which consent shall not be unreasonably withheld).
Notwithstanding the foregoing, the liability of such Holder of
Registrable Securities under this subsection 2.6.2 shall be limited in
an amount equal to the net proceeds from the sale of the Shares sold by
such Holder of Registrable Securities, unless such liability arises out
of or is based on willful conduct by such Holder of Registrable
Securities. In addition, insofar as the foregoing indemnity relates to
any such untrue statement (or alleged untrue statement) or omission (or
alleged omission) made in the preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the
time the registration statement becomes effective or in the final
prospectus filed pursuant to applicable rules of the Commission or in
any supplement or addendum thereto, the indemnity agreement herein shall
not inure to the benefit of the Company or any underwriter if a copy of
the final prospectus filed pursuant to such rules, together with all
supplements and addenda thereto, was not furnished to the person or
entity asserting the loss, liability, claim or damage at or prior to the
time such furnishing is required by the Securities Act.
2.6.3 Notwithstanding the foregoing paragraphs 2.6.1 and 2.6.2 of
this Section, each party entitled to indemnification under this Section (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or as to which the
Indemnifying Party is asserting separate or different defenses, which defenses
are inconsistent with the defenses of the Indemnified Party. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. No Indemnified Party
shall consent to entry of any judgment or enter into any settlement without the
consent of each Indemnifying Party.
2.6.4 If the indemnification provided for in this Section is
unavailable to an Indemnified Party in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and the shareholder or shareholders offering
securities in the offering (the "Selling Security Holders") on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and the
Selling
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Security Holders on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Selling
Security Holders and the parties' relevant intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Selling Security Holders agree that it
would not be just and equitable if contribution pursuant to this Section
were based solely upon the number of entities from whom contribution was
requested or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
Section. The amount paid or payable by an Indemnified Party as a result
of the losses, claims, damages and liabilities referred to above in this
Section shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim, subject to the
provisions hereof. Notwithstanding the provisions of this Section, no
Selling Security Holder shall be required to contribute any amount or
make any other payments under this Agreement which in the aggregate
exceed the proceeds received by such Selling Security Holder. No person
guilty of fraudulent misrepresentation (within the meaning of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
2.7 CERTAIN INFORMATION.
2.7.1 The Holders of Registrable Securities agree, with respect to
any Registrable Securities included in any registration, to furnish to the
Company such information regarding such Holder, the Registrable Securities and
the distribution proposed by the such Holder as the Company may reasonably
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to herein.
2.7.2 The failure of the Holder of Registrable Securities to
furnish the information requested pursuant to Section 2.7.1 shall not affect the
obligation of the Company to the other Selling Security Holders who furnish such
information unless, in the reasonable opinion of counsel to the Company or the
underwriters, such failure impairs or may impair the legality of the
Registration Statement or the underlying offering.
2.8 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of Restricted Securities (used herein as defined in Rule 144 under the
Securities Act) to the public without registration, the Company agrees to use
its best lawful efforts to:
2.8.1 Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
during which the Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
2.8.2 File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at all times during which the Company is subject to such reporting
requirements); and
2.8.3 So long as any Holder of Registrable Securities owns any
Restricted Securities (as defined in Rule 144 promulgated under the Securities
Act), to furnish to such Holder forthwith upon request a written statement by
the Company as to its compliance with the reporting requirements of said
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Rule 144 and with regard to the Securities Act and the Exchange Act (at
all times during which the Company is subject to such reporting
requirements), a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents of the Company and
other information in the possession of or reasonably obtainable by the
Company as such Holder of Registrable Securities may reasonably request
in availing itself of any rule or regulation of the Commission allowing
such Holder to sell any such securities without registration.
2.9 TRANSFERABILITY. The rights conferred by this Agreement shall be
freely transferable to any permitted transferee of Registrable Securities.
2.10 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of Minnesota.
2.11 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject hereof. This Agreement, or any provision hereof, may be amended,
waived, discharged or terminated upon the written consent of the Company and the
Purchaser.
2.12 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger
including Federal Express or similar courier service, addressed (a) if to the
Purchaser: St. Xxxxx Capital Partners, L.P., c/o St. Xxxxx Capital Corp., 0000
Xxxx Xxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, or at such other address
as the Purchaser shall have furnished to the Company in writing, or (b) if to
the Company: to Photran Corporation, 00000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx
5044, or at such other address as the Company shall have furnished to the
Purchaser. Each such notice or other communication shall for all purposes of
this Agreement be treated as effective upon receipt.
2.13 DELAYS OR OMISSIONS. Except as expressly provided herein, no delay or
omission to exercise any right, power or remedy accruing to any party to this
Agreement shall impair any such right, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party to this Agreement, shall be cumulative and not alternative.
2.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
2.15 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
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2.16 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in
construing or interpreting this Agreement.
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THE COMPANY'S SIGNATURE PAGE
IN WITNESS WHEREOF, the Company has executed this agreement
effective upon the date first set forth above.
PHOTRAN CORPORATION
By: /s/ Xxxx X. Xxxx
--------------------------
Name: Xxxx X. Xxxx
Title: CEO
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THE PURCHASER'S SIGNATURE PAGE
IN WITNESS WHEREOF, the Purchaser has signed this Agreement as of the date
first written above.
ST. XXXXX CAPITAL PARTNERS, L.P.
By: St. Xxxxx Capital Corp., its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: CEO
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