AMENDMENT TO LEASE AND CONSENT AGREEMENT
THIS AMENDMENT TO LEASE AND CONSENT AGREEMENT ("Consent Agreement") is
entered into this 30th of December, 1997 by and between KMART CORPORATION, a
Michigan corporation, whose address is 0000 Xxxx Xxx Xxxxxx Xxxx, Xxxx, Xxxxxxxx
00000 ("Kmart") and XXXXX X. XXXXX and XXXXX X. XXXXX, his wife, and XXX X.
XXXXX and XXXXXXXX X. XXXXX, his wife, whose address is 0000 Xxxxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxxx, Xxxxx Xxxxxxxx 00000 ("Landlord"), and COMMUNITY BANKSHARES,
INC., a South Carolina Bank Holding Company, whose address is X.X. Xxx 0000,
Xxxxxxxx, Xxxxx Xxxxxxxx 00000-0000 ("Tenant").
WITNESSETH:
WHEREAS, by Lease dated July 1,1968 and amended January 27,1992 (the
"Kmart Lease"), Kmart leased from Landlord the buildings and site improvements
located on a certain parcel of land located in the City of Xxxxxxxx, County of
Xxxxxxxx, State of South Carolina, more particularly described on Exhibit A and
attached hereto and made a part of hereof (the "Kmart Demised Premises"); and
WHEREAS, Landlord desires to lease to Tenant a certain parcel of land
containing approximately 75,462 square feet located within the Kmart Demised
Premises, said parcel described on Exhibit A-1 and shown on Exhibit B, both
exhibits being attached hereto and made a part hereof ("Tenant's Demised
Premises"); and
WHEREAS, Tenant plans to construct a 7,500 sq. foot building and
associated improvements, including 43 parking spaces, on Tenant's Demised
Premises (collectively, the "Improvements").
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. Kmart's Acknowledement of Ground Lease. Kmart hereby consents to the
lease between Landlord and Tenant attached hereto and made a part hereof, a copy
of which lease is attached hereto as Exhibit C (the "Tenant Lease"). Landlord
and Tenant agree to perform their respective obligations under the Tenant Lease.
Kmart shall not be responsible for or obligated to perform any of the
obligations of Landlord or Tenant under the Tenant Lease, or be liable for any
default thereunder by Landlord or Tenant. Landlord hereby discharges and
releases Kmart from all obligations under the Kmart Lease with respect to
Tenant's Demised Premises, and the "common areas" as defined in Paragraph 9 of
the Kmart Lease are herebv amended to exclude the Tenant's Demised Premises
therefrom; provided, however, should the Tenant Lease terminate or be rejected
in bankruptcy for any reason and the Kmart Lease continue, the Landlord shall be
obligated to obtain Kmart's consent for any subsequent use of the Tenant's
Demised Premises on terms consistent with the provisions and conditions of this
Agreement.
2. Payment to Broker/Kmart. For so long as both the Tenant Lease and
the Kmart Lease shall be in effect the Landlord shall receive and disburse the
monthly rental payments as a fiduciary on behalf of Landlord and Kmart, in
accordance with the terms hereof. Landlord shall pay directly to CB Commercial
Real Estate Group, Inc. ("CB Commercial") at such place as CB Commercial shall
designate in writing from time to time, an amount equal to one hundred percent
(100%) of the monthly rent payable under the Tenant Lease on each date for
payment of rent under the Tenant Lease until such time as CB Commercial has
received Twenty-Two Thousand Three Hundred Twenty and No/100 Dollars ($22,320)
in rent from Tenant (representing all commissions payable by Landlord and Kmart
with respect to the Tenant Lease). After CB Commercial is fully paid, Landlord
shall pay directly to Kmart, as consideration and compensation for this consent,
at such place as Kmart shall designate in writing from time to time, an amount
equal to fifty percent (50%) of the monthly rent payable under the Tenant Lease
on each date for payment of rent under the Tenant Lease. Such compensation shall
be paid to Kmart when due, without notice or demand. If any amount, as
hereinabove provided, shall not be paid by Landlord, Landlord shall pay to
Kmart, upon demand, interest at the rate of twelve percent (12%) per annum or
the highest rate permitted by law, whichever is lower on such amount from the
due date thereof until paid. Landlord shall not be entitled to any abatement,
reduction, set-off, counterclaim, defense or deduction with respect to any
payment due to Kmart hereunder.
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3. Remedies. In the event of Landlord's default in payment of the sums
due Kmart hereunder, Kmart shall have (i) the right to deduct any past due sums
owing to Kmart by Landlord from the rent payable by Kmart to Landlord under the
Kmart Lease, and (ii) all other remedies available to Kmart in law or in equity
as a result of Landlord's default hereunder.
4. Access. Tenant shall establish and maintain on Tenant's Demised
Premises (independent of parking available on any other portion of the property
depicted on Exhibit B) parking of at least the minimum requirement as
established by applicable governmental authority for a building of the size and
use to be constructed by Tenant on Tenant's Demised Premises, and as approved in
writing by Kmart. Both Tenant and Kmart covenant and agree that each party shall
prohibit their respective employees from parking on the other party's property.
5. Construction of Improvements. No buildings or improvements shall be
constructed on Tenant's Demised Premises except in accordance with: (i) the site
plan, elevation and exterior detail plans therefor approved by Kmart in writing
prior to the commencement of construction and (ii) the terms and conditions of
all matters of record as set forth in the Title Report, as defined in Paragraph
11. No construction activity on Tenant's Demised Premises shall interfere with
the operation or use of Kmart's Demised Premises. No signs or exterior lighting
may be erected or placed on Tenant's Demised Premises except as have been
previously approved by Kmart in writing, which approval shall not be
unreasonably withheld, and as are in conformance with all the requirements of
all laws, ordinances, codes, orders, rules and regulations of all governmental
authorities having jurisdiction over Tenant's Demised Premises ("Government
Regulations"). Tenant shall submit to Kmart, for Kmart's approval complete plans
and specifications for the Improvements, including, without limitation,
dimensions for the Tenant's proposed building, the placement, size and
configuration of signs and satisfactory evidence that Tenant's Demised Premises
can accommodate a 7,500 square foot building with adequate parking and
information concerning Tenant's procedure for mobilization, phasing and storage
of materials and equipment, sufficient for Landlord to ascertain any
interference with customary operations of the site which may occur as a result
of Tenant's construction activities ("Tenant's Plans and Specifications"). If
Kmart disapproves Tenant's Plans and Specifications, Kmart shall provide Tenant
with a detailed statement as to the changes required for approval. Tenant shall
have fifteen days after Tenant's receipt of Kmart's disapproval to either: (i)
submit revised plans and specifications to Kmart that comply with Kmart's
detailed statement of required changes, or (ii) terminate this Consent Agreement
and the Tenant Lease by written notice thereof to Kmart. If Tenant's Plans and
Specifications are accompanied by written notice stating the deadline for
response and the consequence for failure to timely respond, Kmart's failure to
give notice to Tenant of its approval or disapproval within forty-five (45) days
of its receipt of Tenant's Plans and Specifications, when required to do so,
shall be deemed Kmart's approval. Notwithstanding anything herein to the
contrary, no building or other structure to be constructed by Tenant or to be
caused to be constructed by Tenant on any portion of Tenant's Demised Premises
shall exceed one (1) story or twenty four (24) feet in height, whichever is
smaller, and shall contain no more than 7,500 square feet. Notwithstanding the
foregoing, Tenant shall have the right to construct one (1) clear tower
extending to a height of thirty-seven (37) feet on Tenant's Demised Premises and
the pitch of the roof may extend to a height of twenty-nine (29) feet.
6. Structural Changes or Alterations. Tenant shall not make any
structural changes or alterations to the exterior of the building or to the
Improvements, without Kmart's prior written approval of the engineering,
architectural and exterior detail plans therefor, which approval shall not be
unreasonably withheld, conditioned or delayed.
7. Construction Activity. Tenant covenants and agrees that the
Improvements shall be constructed without cost or expense to Landlord, Kmart or
Landlord's mortgagee and, in accordance with all Government Regulations. Such
construction shall be performed in a manner that will not interfere with the
business and use of Kmart's Demised Premises by Kmart and any other owners or
occupants thereof. Throughout the duration of this Consent Agreement, Tenant
agrees that the Improvements, including, but notlimited to all plumbing,
electrical, heating, air conditioning and ventilation equipment and systems, and
all other equipment, will be installed, operated and maintained in accordance
with all laws, regulations and requirements of any and all Government
Regulations, at Tenant's sole cost and expense.
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8. Real Estate Taxes. (a) Tenant shall pay or cause to be paid, as and
when same shall become due, all real property taxes, assessments, use and
occupancy taxes, development fees, impact fees, fees in lieu of taxes, water and
sewer charges, rates and rents, charges for public utilities, excises, license
and permit fees and other charges, real and personal, general and special,
ordinary and extraordinary, foreseen and unforeseeable, of any kind and nature
whatsoever, which shall or may during the term of the Tenant Lease be assessed,
levied, charged, confirmed, or imposed upon or become payable out of or become a
lien on Tenant's Demised Premises, the Improvements or Tenant's property or any
part thereof (the "Impositions").
(b) Landlord shall notify Tenant, in writing, as to the amount of
Impositions Tenant shall be required to pay in accordance with the foregoing
provisions of this Paragraph 8, and Tenant will pay such Impositions directly to
Landlord providing notice within twenty (20) days of Tenant's receipt of the
notification. Such written notification from Landlord shall be accompanied by a
copy of the tax xxxx and such information as may be required to show how
Tenant's portion of such Imposition was calculated.
9. Insurance. (a) Tenant shall, at its sole cost and expense, obtain
and maintain, commencing with the Effective Date (as defined in the Tenant
Lease) and continuing throughout the term of the Tenant Lease, insurance
policies providing the following coverages:
(i) All-risk or fire and extended coverage insurance against fire,
vandalism, malicious mischief, sprinkler leakage and such additional perils as
now are or hereafter may be included in a standard extended coverage endorsement
from time to time in general use in the State within which Tenant's Demised
Premises are located (the "State"), insuring Tenant's Demised Premises, and all
fixtures and equipment pertaining thereto, in an amount equal to not less than
the full replacement value thereof (exclusive of the cost of excavations,
foundations and footings) and, in any event, in at least such an amount as will
prevent the Tenant from becoming a co-insurer under the terms of such insurance
policy;
(ii) A comprehensive policy of general liability insurance, protecting
against any liability occasioned on or about any part of Tenant's Demised
Premises or appurtenances thereto, or arising from any of the acts set forth in
Paragraph 10 hereof against which the Tenant is required to indemnify Kmart and
Landlord, with such policy to be in the minimum amount of Three Million Dollars
($3,000,000.00) single limit coverage;
(iii) Workmen's compensation insurance having such limits, and under
such terms and conditions, as are required by applicable law;
(iv) During the period of any construction, reconstruction or
alteration of any Improvements upon the Demised Premises, builder's risk
insurance in an amount equal to the completed value of such Improvements; and
(v) Contractual liability insurance insuring the Tenant's obligations
set forth in the Tenant Lease with a minimum limit of not less than Three
Million Dollars ($3,000,000.00) or such higher limit as the Landlord may
reasonably require from time to time.
(b) All insurance policies required to be procured and maintained
hereunder by Tenant shall: (i) be issued by financially responsible insurance
companies authorized to do business in the State; (ii) be written as primary
policy coverage and not contributing with or in excess of any coverage which the
Landlord or Kmart may carry; (iii) insure and name the Landlord, Kmart and any
mortgagee of the shopping center as additional insureds as their respective
interests may appear; and (iv) contain an express waiver of any right of
subrogation by the insurance company against the Landlord, Kmart and their
agents and employees. Neither the issuance of any insurance policy required
hereunder, nor the minimum limits specified herein with respect to any insurance
coverage, shall be deemed to limit or restrict in any way the liability of
Tenant (and/or its contractors or subcontractors) arising under or out of the
Tenant Lease. Any insurance required to be carried hereunder may be carried
under a blanket policy covering Tenant's Demised Premises and other locations of
the Tenant, provided that the policy does not include a so-called "pro rata
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distribution" clause, and provided that the amount of insurance required to be
provided hereunder shall not be diminished thereby. Each and every insurance
policy required to be carried hereunder by or on behalf of the Tenant shall
provide (and any certificate evidencing the existence of each such insurance
policy shall certify) that, unless the Landlord and Kmart shall first have been
given ten (10) days' prior written notice thereof: (i) such insurance policy
shall not be canceled and shall continue in full force and effect, (ii) the
insurance carrier shall not, for any reason whatsoever, fail to renew such
insurance policy, and (iii) no material changes may be made in such insurance
policy (which shall also require the Landlord's and Kmart's approval).
10. Indemnification. Tenant and Landlord, jointly and severally, agree
to defend, indemnify and hold harmless Kmart, its successors and assigns, from
and against (i) any and all claims, actions, damages, liability, cost and
expense, including reasonable attorney's fees, in connection with loss of life,
personal injury and/or damage arising from or out of any occurrence in, upon or
at Tenant's Demised Premises, or in connection with the construction of any
improvements, use, occupation, possession or management of Tenant's Demised
Premises, (ii) any and all Impositions owing on Tenant's Demised Premises, and
(iii) all expenses, liens or claims incurred or asserted by reason of or with
respect to any construction activity and any environmental investigations on or
for the benefit of Tenant's Demised Premises.
11. Evidence of Title. Prior to the execution of this Consent
Agreement, Tenant, at its sole cost and expense, shall furnish to Kmart a
preliminary title report or other evidence of title satisfactory to Tenant and
Kmart (the "Title Report"). Such report or evidence of title shall show the
legal description of Tenant's Demised Premises and any easements, encumbrances
or other matters affecting Tenant's Demised Premises. Within thirty (30) days
following the full execution of this Consent Agreement, Tenant, at its sole cost
and expense, shall also furnish to Kmart a survey of Tenant's Demised Premises
by a duly licensed surveyor which shall show the location, area boundaries, and
dimensions and total area of the Tenant's Demised Premises, its relative
location with respect to streets or highways, the location of utilities,
building setbacks, easements or reservations (including, the recording
information of each item), and that there are not encroachments of any
improvements adjoining Tenant's Demised Premises.
12. Amendment. Assignment or Subletting. No amendment, modification,
assignment or sublease under the Tenant Lease, or leasing or re-leasing of the
Tenant's Demised Premises, shall be effective against Kmart in the event it
adversely affects, infringes upon or reduces the rights of Kmart. If the Tenant
Lease terminates, any new lease shall be subject to the terms and conditions of
this Agreement, including but not limited to payment to Kmart of fifty percent
(50%) of the renal revenue. Tenant agrees not to assign or in any manner
transfer the Tenant Lease or any estate or interest therein, or sublet any
portion of Tenant's Demised Premises without the prior written consent of Kmart,
which shall not be unreasonably withheld. Kmart's consent shall be contingent
upon receipt of proof acceptable to Kmart that the proposed subtenant or
assignee (a) has a net worth which is at least equal to that of Tenant at the
time of (i) execution or (ii) assignment or subleasing, whichever is greater,
and (b) has at least five years business experience operating in the same use as
proposed for its use of the Tenant's Demised Premises. The making of any
assignment, transfer, subletting, leasing or re-leasing, in whole or in part,
with Kmart's consent shall not operate to relieve Tenant of its obligations
hereunder, and shall not constitute a waiver of Kmart's rights to approve any
further leasing or re-leasing of the Tenant's Demised Premises by Landlord.
Notwithstanding the foregoing, Tenant shall have the right to assign the lease
to an affiliate or a subsidiary corporation of Tenant provided such assignment
does not operate to relieve the Tenant of its obligations hereunder.
13. Eminent Domain. (a) If the Tenant Lease is terminated as a result
of all or substantially all of Tenant's Demised Premises being taken by any
public authority under the power of eminent domain, then the term of this
Consent Agreement shall cease as of the day such possession shall be taken by
such public authority and all amounts due hereunder shall be paid up to the day
of such possession. All amounts paid hereunder in advance and pertaining to a
period beyond the date of such possession shall be proportionately refunded by
Kmart.
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In the event of a taking of the whole or substantially all of Tenant's
Demised Premises, Kmart shall be entitled to receive the award for the taking of
its interest in Tenant's Demised Premises including, without limitation, Kmart's
lost interest in rental income but such award for Kmart's interest shall not
preclude Tenant from any reward for the value of its leasehold interest.
(b) In the event of a taking that does not result in a termination of
the Tenant Lease, Tenant, at its sole cost and expense, shall proceed with
reasonable diligence to repair, alter and restore the improvements constructed
on Tenant's Demised Premises to their former condition to the extent that the
same may be feasible, subject to such changes or alterations as Tenant may elect
to make in conformity with Paragraph 6 hereof. Upon completion of the repair or
restoration of Tenant's Demised Premises and the improvements constructed on
Tenant's Demised Premises, Tenant shall deliver to Landlord and Kmart a copy of
the certificate of occupancy for Tenant's Demised Premises and the improvements
constructed on Tenant's Demised Premises. If a certificate of occupancy is not
provided by the local governmental entity, Tenant will deliver to Landlord and
Kmart such other evidence from the local governmental entity in a form
reasonably satisfactory to Landlord and Kmart which shall permit Tenant to
occupy Tenant's Demised Premises.
14. Use, Operation and Maintenance of Premises. (a) Tenant shall use
and occupy Tenant's Demised Premises during the continuance of the Tenant Lease
solely for the purpose of the operation of a Community Bank branch facility and
for no other purpose or purposes without the prior written consent of Kmart,
which consent may be withheld for any or no reason, in Kmart's sole and
unfettered discretion. Tenant agrees to operate Tenant's business from the
entire building located on Tenant's Demised Premises during the entire term of
the Tenant Lease unless prevented from doing so because of fire, accidents,
strikes or acts of God, and to conduct its business in a high class and
reputable manner. Tenant shall promptly comply with all laws and ordinances and
lawful orders and regulations affecting Tenant's Demised Premises and the
cleanliness, safety, occupancy and use of same. Tenant shall keep Tenant's
Demised Premises orderly, neat, safe and clean and free from rubbish and dirt at
all times, shall store all merchandise, supplies and equipment within the
building or other structures located on Tenant's Demised Premises from time to
time, and shall store all trash and garbage outside said building or other
structures in a dumpster within an enclosure adjacent to said building or
structures. Tenant shall not burn any trash or garbage at any time on Tenant's
Demised Premises.
(b) Tenant's rights and interests in Tenant's Demised Premises will be
subject to (i) all taxes, assessments, easements, agreements and other matters
affecting Tenant's Demised Premises whether of record or not, and (ii).alI
applicable zoning rules, restrictions, regulations, resolutions, and ordinances
and building restrictions and governmental regulations now or hereinafter in
effect.
(c) In the event of destruction or damage from fire or any casualty to
the Improvements, Tenant shall promptly, but in no event later than one hundred
and eighty (180) days from the date of such destruction or damage, either: (a)
rebuild and repair the same to at least substantially the same size and
condition as such was in immediately preceding such fire or casualty; or (b) at
its own expense, raze and remove the Improvements, pave, stripe, light and
maintain Tenant's Demised Premises for use as part of the common areas of the
Shopping Center, in which event the owners, occupants, customers and employees
of the Shopping Center shall have and are hereby granted by Tenant a
non-exclusive easement for ingress, egress and parking over and upon Tenant's
Demised Premises.
(d) Tenant's Demised Premises shall not be used for (i) entertainment
or recreational purposes, which for purposes hereof include without limitation a
bowling alley, skating rink, health studio or gym, billiard room, game arcade or
amusement center, theater, bar or tavern, (except where incidental to the
operation of a restaurant or delicatessen), dance hall or disco (except where
incidental to the operation of a restaurant or delicatessen), or massage parlor,
(ii) a "training or educational facility", which for purposes hereof shall
include without limitation a beauty school, xxxxxx college, reading room, place
of instruction or any other operation catering primarily to students or trainees
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rather than to customers, (iii) a pharmacy, (iv) a discount shoe store, (v) a
business specializing in the sale of automobile accessories or automobile
service and repair, (vi) a restaurant whose primary menu item is pizza, (vii)
any sale of meat, dairy products, baked goods or other food for off-premises
consumption, (viii) any non-retail operation; or (ix) any use inconsistent with
the operation of a family-type retail shopping center.
15. Environmental Matters. Tenant represents and warrants that it will
not use, store, generate or permit, in, on, about or under Tenant's Demised
Premises in any form any material defined as a hazardous, radioactive or toxic
substance or a pollutant or contaminant by any law, ordinance, rule or
regulation of any governmental authority ("Hazardous Substance") in violation of
any law, ordinance, rule or regulation of any governmental authority regarding
the use, control, regulation or prohibition of any Hazardous Substance
("Environmental Law"). Tenant shall immediately provide Kmart with copies of any
order, notice, permit, application or any other communication from or to any
entity or person, including governmental agencies, regarding the environmental
condition of Tenant's Demised Premises.
Tenant shall defend, indemnify and hold Kmart harmless from and against
all claims, loss, damage, liabilities, judgments, penalties, fines, costs or
expenses, whatsoever, including attorneys' fees and costs, from Hazardous
Materials existing, or caused by Tenant, its employees, agents, representatives,
contractors, or invitees to be on, in, at, under, or about Tenant's Demised
Premises. The terms of this Paragraph 15 will survive the expiration or earlier
termination of this Consent Agreement.
Tenant may perform a standard ASTM Phase I Environmental Site
Assessment on the Demised Premises. However, Tenant may not perform any Phase II
environmental investigation without Kmart's and Landlord's prior written
consent.
16. Conflict. In the event of any inconsistency or conflict between the
terms and provisions of this Consent Agreement and the Tenant Lease, the terms
and provisions of this Consent Agreement shall govern and be binding.
17. Notices. Any notices, consents, approvals or demands given under
this Consent Agreement or pursuant to any law or governmental regulation, by or
to Kmart, Landlord or Tenant shall be in writing. Unless otherwise required by
law or governmental regulation, any such notice, consent, approval or demand
shall be deemed given if sent by a recognized overnight courier service, United
States certified mail, return receipt requested, postage prepaid or by facsimile
provided that a copy of such notice, consent, approval or demand is sent by
certified mail as hereinabove provided:
(i) to Kmart to the attention of the Vice President, Real Estate
Department, at the address of Kmart as hereinabove set forth or such other
address as Kmart may designate by notice to the other parties hereto
(ii) to Landlord at the address of Landlord as hereinabove set forth or
such other address as Landlord may designate by notice to the other parties
hereto; or
(iii) to Tenant at the address of Tenant hereinabove set forth or such
other address as Tenant may designate by notice to the other parties hereto.
Any notice, consent, approval or demand sent as hereinabove provided
shall be deemed to have been received on the day following the date of sending
if sent by overnight courier service, on the third day following the mailing
thereof if sent by United States certified mail, and on the date of sending if
sent by facsimile and the receipt thereof is confirmed.
18. Complete Agreement. This Consent Agreement and the Exhibits
attached hereto and made a part hereof, set forth the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof.
This Consent Agreement may not be modified orally or in any manner other than an
agreement in writing signed by the parties hereto or their respective successors
and assigns.
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19. Successors and Assigns. This Consent Agreement shall bind and inure
to the benefit of the parties hereto and to their respective successors and
assigns and the agreements and the covenants herein contained are intended to
run with and bind all lands affected thereby.
20. Governing Law. This Consent Agreement shall be construed and
enforced in accordance with the laws of the State where Tenant's Demised
Premises is located.
21. No Relationship. The foregoing provisions of this Consent Agreement
are not intended to create, nor shall they be in any way interpreted to create a
joint venture, partnership or any other similar relationship among the parties
hereto.
22. Recording. No party shall record this Agreement. Kmart, Landlord
and Tenant shall, however, simultaneously herewith, enter into a short form
memorandum of this Agreement, in suitable form for recording under the laws of
the State where Tenant's Demised Premises are located, the same to be recorded
at the expense of Tenant.
23. Counterparts. This Consent Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one in the same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
[SIGNATURES OMITTED]
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