ASSET SALE & PURCHASE AGREEMENT
EXHIBIT
10.5
ASSET
SALE & PURCHASE AGREEMENT
THIS
ASSET SALE & PURCHASE AGREEMENT is made and entered into as of October 16,
2006 (the “Effective
Date”)
by and
between Hi-Tek,
Inc.
(“Hi-Tek”), a California corporation (referred to as “Seller”)
and
Dot VN, Inc., a Delaware corporation (referred to as “Buyer”).
Recitals:
A. WHEREAS,
Seller owns a certain asset, including a trademark registered in the United
States, bearing in words and symbols the name “Dot VN”, which shall be referred
to as the “Trademark”;
B.
Buyer
desires to purchase from Seller and Seller desires to sell to Buyer, the
Trademark, in consideration of the Purchase Price and on the terms and
conditions set forth in this Agreement (this term and all other capitalized
terms used herein having the respective meanings set forth in this
Agreement).
Agreements:
In
consideration of the foregoing, the mutual covenants of the parties set forth
in
this Agreement, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties, intending to be legally
bound, agree as follows:
| 1. |
Purchase
and Sale.
|
1.1 Purchase
and Sale.
Seller
agrees to sell, and Buyer agrees to purchase the Trademark on the terms and
conditions set forth in this Agreement. At closing, subject to the terms of
purchase as described in Section 2 hereof and the satisfaction of the other
terms of this Agreement, Seller shall cause the Trademark to be transferred
to
Buyer free and clear of any and all liens, encumbrances, security interests
or
obligations.
1.2 Trademark.
The
assets to be sold by the Seller to Buyer pursuant to this Agreement is a
trademark filed with the United States Patent and Trademark Office on January
29, 2004 bearing in words the name “Dot VN” and its logo, a true and correct
depiction of which is attached here as Exhibit
A,
and all
Intellectual Property rights associated therewith.
| 2. |
Purchase
Price and Payment.
|
2.1 Purchase
Price.
In
exchange for the sale, transfer and conveyance to Buyer of the Trademark, Buyer
shall provide
the following consideration to Seller,
the sum
of Three Hundred Sixty Thousand Dollars and No Cents ($360,000.00) payable
in
the form of a Convertible Promissory Note due and payable in full two (2) years
after Closing, in the form of Exhibit
B
to this
Agreement (the “Promissory
Note”).
2.2 Piggyback
Registration.
Whenever Buyer proposes to register any of its securities under the Securities
Act (other than pursuant to any of the registration rights listed above, or
a
registration on Form S-4 or S-8 or any successor or similar
forms)
and the registration form to be used may be used for the registration of
Registrable Securities, whether or
not for
sale for its own account, Buyer will include in such registration all
Registrable Securities all securities transferred to Seller included in
contemplated transaction.
1
| 3. |
Pre-Closing
Matters.
|
3.1 Between
the Effective Date and the Closing Date, Seller shall not
sell,
lease, or otherwise transfer or dispose of the Trademark, or permit
or
allow the Trademark to become subject to any additional Lien.
| 4. |
Closing.
|
4.1 Buyer’s
Conditions.
Buyer’s
obligation to close this transaction shall be subject to and contingent upon
Seller
having obtained, at Seller’s expense, any Governmental Authorizations necessary
to transfer the
Trademark to Buyer upon
consummation of this transaction.
4.2 Closing. The
Closing shall take place at the offices of Dot VN, Inc. 0000 Xxxxxx Xxx, Xxxxx
000, Xxx Xxxxx, XX 00000, or at such other location as the parties may mutually
agree, on the Effective Date.
| 5. |
Representations
and Warranties.
|
5.1 Seller’s
Representations and Warranties.
Seller
represents and warrants to Buyer as follows:
5.1.1 Organization
and Good Standing.
Hi-Tek,
Inc. is a company, duly formed, validly existing and in good standing under
the
laws of California.
5.1.2 Title
to Trademark.
On the
Closing Date, Seller will transfer and convey to Buyer good and marketable
title
to the Trademark, free and clear of all liens, encumbrances, security interests,
judgments, claims or other matters affecting title.
5.1.3 Authority;
No Conflict.
This
Agreement constitutes the legal, valid, and binding obligation of Seller,
enforceable against Seller in accordance with its terms. Seller has full power,
authority, and capacity to execute and deliver this Agreement and the Seller’s
closing documents and to perform its obligations hereunder and thereunder.
5.2 Buyer’s
Representations and Warranties.
Buyer
represents and warrants to Seller as follows:
5.2.1 Organization
and Good Standing.
Buyer
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware.
5.2.2 Authority;
No Conflict.
This
Agreement constitutes the legal, valid, and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms. No
proceeding is pending or, to Buyer’s knowledge, has been threatened against
Buyer that challenges, or could reasonably be expected to have the effect of
preventing, making illegal, or otherwise materially interfering with this
transaction.
| 6. |
Definitions
and Interpretation.
|
6.1 Defined
Terms.
As used
in this Agreement, the following terms have the respective meanings set forth
below:
“Agreement”
means
this Asset Sale and Purchase Agreement.
“Buyer”
has
the
meaning set forth in the preamble to this Agreement.
“Buyer’s
Knowledge”
means
that any of the officers or directors of Buyer is actually aware of a particular
fact or other matter.
“Consent”
means
any approval, consent, ratification, waiver, or other authorization, including
any Governmental Authorization.
2
“Governmental
Authority”
means
any national, federal, state, provincial, county, municipal, or local
government, foreign or domestic, or the government of any political subdivision
of the any of the foregoing, or any entity, authority, agency, ministry, or
other similar body exercising executive, legislative, judicial, regulatory,
or
administrative authority or functions of or pertaining to the government,
including any quasi-governmental entity established to perform any such
functions.
“Governmental
Authorization”
means
any Consent, license, permit, waiver, or other authorization issued, granted,
given, or otherwise made available by or under the authority of any Governmental
Authority or pursuant to any Legal Requirement.
"Intellectual
Property Rights"
shall
mean any or all of the following and all statutory and/or common law rights
throughout the world in, arising out of, or associated with the Trademark.
“Legal
Requirement”
means
any federal, state, local, municipal, foreign, international, multinational,
or
other administrative Order, constitution, law, ordinance, principle of common
law, regulation, rule, statute, or treaty.
“Lien”
means
a
monetary encumbrance against a purchased asset.
“Order”
means
any award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any court, administrative agency, or
other
Governmental Authority or by any arbitrator or mediator.
“Organizational
Documents”
means
(i) the articles or certificate of incorporation and the bylaws of a
corporation, (ii) the partnership agreement and any statement of
partnership of a general partnership, (iii) the limited partnership
agreement and certificate of limited partnership of a limited partnership,
(iv) any charter, operating agreement, or similar document adopted or filed
in connection with the creation, formation, or organization of a Person, and
(v) any amendment to any of the foregoing.
“Representative”
means,
with respect to a particular Person, any director, officer, employee, agent,
consultant, advisor, or other representative of or to such Person, including
such Person’s attorneys, accountants, and financial advisors.
“Tax”
means
any tax (including any income tax, capital gains tax, value-added tax, sales
tax, excise tax, property tax, gift tax, or estate tax), levy, assessment,
tariff, duty (including any customs duty), deficiency, or other fee, and any
related charge or amount (including any fine, penalty, interest, or addition
to
tax), imposed, assessed, or collected by or under the authority of any
Governmental Authority or payable pursuant to any tax-sharing agreement or
other
Contract relating to the sharing or payment of any such tax, levy, assessment,
tariff, duty, deficiency, or fee.
6.2 Construction
and Interpretation.
6.2.1 The
headings or titles of the sections of this Agreement are intended for ease
of
reference only and shall have no effect whatsoever on the construction or
interpretation of any provision of this Agreement. References herein to sections
are to sections of this Agreement unless otherwise specified.
6.2.2 Meanings
of defined terms used in this Agreement are equally applicable to singular
and
plural forms of the defined terms. The masculine gender shall also include
the
feminine and neutral genders and vice versa.
6.2.3 As
used
herein, (i) the term “party” refers to a party to this Agreement, unless
otherwise specified, (ii) the terms “hereof,” “herein,” “hereunder,” and
similar terms refer to this Agreement as a whole and not to any particular
provision of this Agreement, (iii) the term “this transaction” refers to
the transaction contemplated by this Agreement, (iv) the term “including”
is not limiting and means “including without limitation,” (v) the term
“documents” includes all instruments, documents, agreements, certificates,
indentures, notices, and other writings, however evidenced, and (vi) the
term “property” includes any kind of property or asset, real, personal, or
mixed, tangible or intangible.
3
6.2.4 In
the
event any period of time specified in this Agreement ends on a day other than
a
Business Day, such period shall be extended to the next following Business
Day.
In the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including,” the words “to” and “until”
each mean “to but excluding,” and the word “through” means “to and
including.”
6.2.5 This
Agreement is the product of arm’s length negotiations among, and has been
reviewed by counsel to, the parties and is the product of all the parties.
Accordingly, this Agreement shall not be construed for or against any party
by
reason of the authorship or alleged authorship of any provision
hereof.
| 7. |
Miscellaneous
Provisions.
|
7.1 Expenses.
Except
as otherwise provided, each party shall bear its own expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and this transaction, including all fees and expenses of its own Representatives
or any other similar payment in connection with this transaction.
7.2 Binding
Effect.
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the parties and, subject to the restrictions on assignment set forth herein,
their respective successors and assigns.
7.3 Assignment.
Neither
party shall assign any of its rights or obligations under this Agreement without
the prior written consent of the other party. No assignment of this Agreement
shall release the assigning party from its obligations under this
Agreement.
7.4 Notices.
All
notices under this Agreement shall be in writing. Notices may be
(i) delivered personally, (ii) transmitted by facsimile, (iii) or
delivered by a recognized international overnight delivery. Notices to any
party
shall be directed to its address set forth below, or to such
other or additional address as any party may specify by notice to the other
party. Any notice delivered in accordance with this Section 11.5 shall be
deemed given when actually received or, if earlier, (a) in the case of any
notice transmitted by facsimile, on the date on which the transmitting party
receives confirmation of receipt by facsimile transmission, telephone, or
otherwise, if sent during the recipient’s normal business hours or, if not, on
the next Business Day, (b) in the case of any notice delivered by a
recognized international overnight delivery service, on the next Business Day
after delivery to the service or, if different, on the day designated for
delivery.
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If
to Hi-Tek:
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Hi-Tek,
Inc.
|
|
|
If
to Buyer:
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Dot
VN, Inc.
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|
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Attn:
Xxx Xxxxxxx, President
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||
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0000
Xxxxxx Xxx, Xxxxx 000
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||
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Xxx
Xxxxx, XX XXX 00000
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||
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Tel:
(000) 000-0000
Fax:
(000) 000-0000
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7.5 Waiver.
Any
party’s failure to exercise any right or remedy under this Agreement, delay in
exercising any such right or remedy, or partial exercise of any such right
or
remedy shall not constitute a waiver of that or any other right or remedy
hereunder. A waiver of any Breach of any provision of this Agreement shall
not
constitute a waiver of any succeeding Breach
of
such provision or a waiver of such provision itself. No waiver of any provision
of this Agreement shall be binding on a party unless it is set forth in writing
and signed by such party.
4
7.6 Amendment.
This
Agreement may not be modified or amended except by the written agreement of
the
parties.
7.7 Severability.
If any
provision of this Agreement is held invalid, illegal, or unenforceable, then
(i) such provision shall be enforceable to the fullest extent permitted by
applicable law, and (ii) the validity and enforceability of the other
provisions of this Agreement shall not be affected and all such provisions
shall
remain in full force and effect.
7.8 Integration.
This
Agreement, including the Exhibits and Schedules hereto, contains the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements with respect
thereto. The parties acknowledge and agree that there are no agreements or
representations relating to the subject matter of this Agreement, either written
or oral, express or implied, that are not set forth in this Agreement, in the
Exhibits and Schedules to this Agreement.
7.9 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
Delaware (without regard to the principles thereof relating to conflicts of
laws).
7.10 Arbitration.
All
disputes or claims arising out of or relating to this Agreement, or the breach
hereof, including disputes as to the validity and/or enforceability of this
Agreement or any portion thereof, and any claims for indemnification under
the
provisions of this Agreement, shall be resolved by binding arbitration conducted
in San Diego, California. Any arbitration pursuant to this Section 11.11
shall be conducted, upon the request of any party, before a single arbitrator
selected by the parties or, failing agreement on the choice of an arbitrator
within 30 days of service of written demand for arbitration, by an arbitrator
designated by the Presiding Judge of the Superior Court for San Diego County,
California. The arbitrator shall be a retired judge or practicing attorney
licensed to practice in one or more of the 50 states, with substantial
experience in commercial and/or commercial litigation matters. Such arbitration
shall be conducted in accordance with the laws of the State of Delaware and
pursuant to the commercial arbitration rules of the American Arbitration
Association (although not under the auspices of the American Arbitration
Association) and such of the federal rules of civil procedure as the arbitrator
may determine. The arbitration shall be conducted within 45 days of the
selection of the arbitrator and the arbitrator shall render his or her decision
within 20 days after conclusion of the arbitration. The prevailing party in
the
arbitration shall be entitled as a part of the arbitration award to the costs
and expenses (including reasonable attorneys’ fees and the fees of the
arbitrator) of investigating, preparing, and pursuing or defending the
arbitration claim as such costs and expenses are awarded by the arbitrator.
The
duty to arbitrate shall survive a termination or cancellation of this Agreement
and shall be specifically enforceable under applicable federal law and the
prevailing arbitration law of the State of Delaware. The decision of the
arbitrator shall be final and binding upon the parties and enforceable in any
court of competent jurisdiction.
7.11 Execution.
This
Agreement may be executed in any number of counterparts, all of which together
shall constitute one and the same agreement. Each party may rely upon the
signature of each other party on this Agreement that is transmitted by facsimile
as constituting a duly authorized, irrevocable, actual, current delivery of
this
Agreement with the original ink signature of the transmitting
party.
7.12 Incorporation
of Recitals, Exhibits, and Schedules.
The
Recitals to this Agreement and all Exhibits and Schedules to this Agreement
are
incorporated herein by this reference.
7.13 Mutual
Cooperation.
Each of
the parties hereto shall cooperate with the other parties in every reasonable
way in carrying out the transactions contemplated herein, and in delivering
all
documents and instruments deemed reasonably necessary or useful by counsel
for
each party hereto.
7.14 Further
Assurances.
Each
party agrees to execute and deliver such additional documents and instruments
as
may reasonably be required to effect this transaction fully, so long as the
terms thereof are consistent with the terms of this Agreement.
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[Signature
Page Follows]
6
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
set forth above.
Seller:
HI-TEK,
INC.
By:
Its:
President
Buyer:
DOT
VN, INC.
By:
Xxx
Xxxxxxx
Its:
President
7
Exhibit
List
Exhibit
A - Dot VN Trademark
Exhibit
B - Convertible Promissory Note
8
Exhibit
A - Dot VN Trademark
9
Exhibit
B - Convertible Promissory Note
DOT
VN, INC.
100%
CONVERTIBLE NOTE
|
$360,000.00
|
October
16, 0000
|
|
XXX
XXXXX, XXXXXXXXXX
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DOT
VN,
INC., a Delaware corporation (“Maker” or the “Company”), hereby promises to pay
to the order of Hi-Tek,
Inc., a California corporation (“Payee”), or
its
assigns (“Holder”), the sum of the
sum
of Three Hundred Sixty Thousand Dollars and No Cents ($360,000.00), without
interest, on October 16, 2008 (the “Due Date”). In the event not paid by the Due
Date, this note shall thereafter accrue interest at the rate of ten percent
(10%) per annum.
All
payments due and owning under this 100% Convertible Note (“Note”) shall be
subject to the terms and conditions set forth herein.
| 1. |
Agreement.
|
The
Note
is issued pursuant to that certain Asset Sale & Purchase Agreement (the
“Agreement”), dated October 16, 2006, by and between Maker and Holder, which is
hereby incorporated by reference. Capitalized terms used but not defined in
this
Note have the meanings assigned to them in the Agreement.
| 2. |
Register.
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The
Company shall keep at its principal office a register in which the Company
shall
provide for the registration of the Holder of the Note or for the registration
of a transfer of the Note to a different Holder.
| 3. |
Loss
Theft, Destruction or Mutilation of the
Note.
|
Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of the Note and, in the case of any such loss, theft
or destruction, upon receipt of an indemnity bond in such reasonable amount
as
the Company may determine (or if such Note is held by the original Holder,
of an
unsecured indemnity agreement reasonably satisfactory to the Company) or, in
the
case of any such mutilation, upon surrender and cancellation of such Note,
the
Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Note, a new Note of like tenor and unpaid principal amount and dated
as of the date to which interest has been paid on the Note so lost, stolen,
destroyed or mutilated.
| 4. |
Registered
Holder.
|
The
Company may deem and treat the person in whose name any Note is registered
as
the absolute owner and Holder of such Note for the purpose of receiving payment
of the principal of and interest on such Note and for the purpose of any
notices, waivers or consents thereunder, whether or not such Note shall be
overdue, and the Company shall not be affected by notice to the contrary.
Payments with respect to any Note shall be made only to the registered Holder
thereof.
| 5. |
Surrender
of the Note.
|
The
Company may, as a condition of payment of all or any of the principal of, and
interest on, the Note, or its conversion, require Holder to present the Note
for
notation of such payment and, if the Note be paid in full or converted at the
election of Holder as herein provided, require the surrender
hereof.
10
| 6. |
Conversion.
|
At
any
time prior to or at the Due Date, at the option of the Holder, all principal
and
accrued interest due on this Note (the “Convertible Amount”) may be converted at
$1.00 per share (the “Conversion Price”). The Conversion Price shall be adjusted
downward in the event the Company issues common stock (or securities exercisable
for or convertible into or exchangeable for common stock) at a price below
the
Conversion Price, to a price equal to such issue price. The preceding
adjustments shall be effective immediately at the time of the issuance of any
security issued (or of any reduction in effective price of any security) on
or
before the Due Date. However, this Note shall not be adjusted in the case of
stock splits, recapitalizations and the like.
If,
on or
prior to the Due Date, Holder has not elected to convert this Note, all
outstanding principal and accrued and unpaid interest shall become due and
payable.
| 7. |
Mechanics
of Conversion.
|
Upon
the
Company’s receipt of written notice of Holder’s election to convert the Note,
the principal amount of this Note plus any accrued interest shall be deemed
converted into such number of shares of the Company’s Common Stock as determined
pursuant to Section 6, and no further payments shall thereafter accrue or be
owing under the Note. The entire balance due and owing under the Note must
be
converted to Common Stock; no partial conversions will be allowed. Holder shall
return this Note to the Company at the address set forth below, or such other
place as the Company may require in writing. Within ten (10) days after receipt
of this Note, the Company shall cause to be issued in the name of and delivered
to Holder at the address set forth above, or to such other address as to which
Holder shall have notified the Company in writing, a certificate and a warrant
evidencing the securities to which Holder is entitled. No fractional securities
will be issued upon conversion of the Note. If on conversion of the Note a
fraction of a security results, the Company shall round up the total number
of
securities to be issued to Holder to the nearest whole number.
| 8. |
Notice.
|
Any
notice required or desired to be given under this Agreement shall be in writing
and shall be deemed given when personally delivered, two business days after
deposit with a recognized overnight courier service for next available business
day delivery, or three days after being sent by certified or registered mail
postage prepaid to the addresses set forth below, or such other address as
to
which one party may have notified the other in such manner.
| 9. |
Default.
|
Upon
an
Event of Default (as defined in the Agreement) that is not cured within any
applicable cure period set forth in the Agreement, and
at
the option of Holder, or Holder’s successors or assigns, Holder
may (i) accelerate all amounts due and owing under this Note and demand payment
immediately and/or (ii) declare the right to exercise any and all remedies
available to Holder under applicable law.
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11.
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Miscellaneous.
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(a) Interest
hereunder shall be calculated based on ten percent (10%)
per
annum calculated using a 360-day year composed of 12 30-day months, payable
in
full, unless otherwise converted to common stock in the Company, at maturity
or
conversion.
(b) The
Company agrees that all Conversion Shares at the time of issuance will be fully
paid and non-assessable. Maker shall pay upon demand any and all expenses,
including reasonable attorney fees, incurred or paid by Holder of this Note
without suit or action in attempting to collect funds due under this Note or
in
connection with the issuance of the Conversion Shares. In the event an action
is
instituted to enforce or interpret any of the terms of this Note including
but
not limited to any action or participation by Maker in, or in connection with,
a
case or proceeding under the Bankruptcy Code or any successor statute, the
prevailing party shall be entitled to recover all expenses reasonably incurred
at, before and after trial and on appeal or review, whether or not taxable
as
costs, including, without limitation, attorney fees, witness fees (expert and
otherwise), deposition costs, copying charges and other expenses.
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(c) All
parties to this Note hereby waive presentment, dishonor, notice of dishonor
and
protest. All parties hereto consent to, and Holder is hereby expressly
authorized to make, without notice, any and all renewals, extensions,
modifications or waivers of the time for or the terms of payment of any sum
or
sums due hereunder, or under any documents or instruments relating to or
securing this Note, or of the performance of any covenants, conditions or
agreements hereof or thereof or the taking or release of collateral securing
this Note. Any such action taken by Holder shall not discharge the liability
of
any party to this Note.
(d) The
Company may not prepay the amount due and owing under this Note.
(e) This
Note
shall be governed by and construed in accordance with the laws of the State
of
Delaware without regard to conflict of law principles.
(f) All
payments due and owing under this Note shall be delivered to Holder at the
address set forth below unless Holder provides the Company with written notice
of a change of such instructions.
IN
WITNESS THERETO, Company has affixed its signature by a duly authorized officer
this 16th day of October, 2006.
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DOT
VN, INC.
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|||
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By:
Xxx Xxxxxxx
Its:
President
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