ADVISORS SERIES TRUST INVESTMENT ADVISORY AGREEMENT Chase Investment Counsel Corp.
Chase
Investment Counsel Corp.
THIS
INVESTMENT ADVISORY AGREEMENT is made as of the 5th day of September, 1997,
by
and between ADVISORS SERIES TRUST, a Delaware business trust (hereinafter called
the “Trust”), on behalf of the following series of the Trust, Chase Growth Fund
(the “Fund”) and Chase Investment Counsel Corp., a Virginia corporation
(hereinafter called the “Advisor”).
WITNESSETH:
WHEREAS,
the Trust is an open-end management investment company, registered as such
under
the Investment Company Act of 1940 (the “Investment Company Act”);
and
WHEREAS,
the Fund is a series of the Trust having separate assets and liabilities;
and
WHEREAS,
the Advisor is registered as an investment adviser under the Investment Advisers
Act of 1940 (the “Advisers Act”) (or is exempt from registration) and is engaged
in the business of supplying investment advice as an independent contractor;
and
WHEREAS,
the Trust desires to retain the Advisor to render advice and services to the
Fund pursuant to the terms and provisions of this Agreement, and the Advisor
desires to furnish said advice and services;
NOW,
THEREFORE, in consideration of the covenants and the mutual promises hereinafter
set forth, the parties to this Agreement, intending to be legally bound hereby,
mutually agree as follows: -
1. Appointment
of Advisor.
The
Trust hereby employs the Advisor and the Advisor hereby accepts such employment,
to render investment advice and related services with respect to the assets
of
the Fund for the period and on the terms set forth in this Agreement, subject
to
the supervision and direction of the Trust’s Board of Trustees.
2. Duties
of Advisor.
(a) General
Duties.
The
Advisor shall act as investment adviser to the Fund and shall supervise
investments of the Fund on behalf of the Fund in accordance with the investment
objectives, policies and restrictions of the Fund as set forth in the Fund’s and
Trust’s governing documents, including, without limitation, the Trust’s
Agreement and Declaration of Trust and By-Laws; the Fund’s prospectus, statement
of additional information and undertakings; and such other limitations, policies
and procedures as the Trustees may impose from time to time in writing to the
Advisor. In providing such services, the Advisor shall at all times adhere
to
the provisions and restrictions contained in the federal securities laws,
applicable state securities laws, the Internal Revenue Code, the Uniform
Commercial Code and other applicable law.
Without
limiting the generality of the foregoing, the Advisor shall: (i) furnish the
Funds with advice and recommendations with respect to the investment of the
Fund’s assets and the purchase and sale of portfolio securities for the Fund,
including the taking of such steps as may be necessary to implement such advice
and recommendations (i.e.,
placing
the orders); (ii) manage and oversee the investments of the Funds, subject
to
the ultimate supervision and direction of the Trust’s Board of Trustees; (iii)
vote proxies for the Fund, file ownership reports under Section 13 of the
Securities Exchange Act of 1934 for the Fund, and take other actions on behalf
of the Fund; (iv) maintain the books and records required to be maintained
by
the Fund except to the extent arrangements have been made for such books and
records to be maintained by the administrator or another agent of the Fund;
(v)
furnish reports, statements and other data on securities, economic conditions
and other matters related to the investment of the Fund’s assets which the
Fund’s administrator or distributor or the officers of the Trust may reasonably
request; and (vi) render to the Trust’s Board of Trustees such periodic and
special reports with respect to each Fund’s investment activities as the Board
may reasonably request, including at least one in-person appearance annually
before the Board of Trustees.
(b) Brokerage.
The
Advisor shall be responsible for decisions to buy and sell securities for the
Fund, for broker-dealer selection, and for negotiation of brokerage commission
rates, provided that the Advisor shall not direct order to an affiliated person
of the Advisor without general prior authorization to use such affiliated broker
or dealer for the Trust’s Board of Trustees. The Advisor’s primary consideration
in effecting a securities transaction will be execution at the most favorable
price. In selecting a broker-dealer to execute each particular transaction,
the
Advisor may take the following into consideration: the best net price available;
the reliability, integrity and financial condition of the broker-dealer; the
size of and difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the Fund
on a
continuing basis. The price to the Fund in any transaction may be less favorable
than that available from another broker-dealer if the difference is reasonably
justified by other aspects of the portfolio execution services
offered.
Subject
to such policies as the Board of Trustees of the Trust may determine, the
Advisor shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides (directly or indirectly)
brokerage or research services to the Advisor an amount of commission for
effecting a portfolio transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Advisor determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by
such
broker or dealer, viewed in terms of either that particular transaction or
the
Advisor’s overall responsibilities with respect to the Trust. The Advisor is
further authorized to allocate the orders placed by it on behalf of the Fund
to
such brokers or dealers who also provide research or statistical material,
or
other services, to the Trust, the Advisor, or any affiliate of either. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine, and the Advisor shall report on such allocations regularly to the
Trust, indicating the broker-dealers to whom such allocations have been made
and
the basis therefor. The Advisor is also authorized to consider sales of shares
as a factor in the selection of brokers or dealers to execute portfolio
transactions, subject to the requirements of best execution, i.e.,
that
such
brokers or dealers are able to execute the order promptly and at the best
obtainable securities price.
-2-
On
occasions when the Advisor deems the purchase or sale of a security to be in
the
best interest of one or more of the Fund as well as of other clients, the
Advisor, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be so purchased or sold in order to obtain the
most
favorable price or lower brokerage commissions and the most efficient execution.
In such event, allocation of the securities so purchased or sold, as well as
the
expenses incurred in the transaction, will be made by the Advisor in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Funds and to such other clients.
3. Representations
of
the Advisor.
(a) The
Advisor
shall use its best judgment and efforts in rendering the advice and services
to
the Funds as contemplated by this Agreement.
(b) The
Advisor
shall maintain all licenses and registrations necessary to perform its duties
hereunder in good order.
(c) The
Advisor
shall conduct its operations at all times in conformance with the Advisers
Act,
the Investment Company Act , and any other applicable state and/or
self-regulatory organization regulations.
(d) The
Advisor
shall maintain errors and omissions insurance in an amount at least equal to
that disclosed to the Board of Trustees in connection with their approval of
this Agreement.
4. Independent
Contractor.
The
Advisor shall, for all purposes herein, be deemed to be an independent
contractor, and shall, unless otherwise expressly provided and authorized to
do
so, have no authority to act for or represent the Trust or the Fund in any
way,
or in any way be deemed an agent for the Trust or for the Fund. It is expressly
understood and agreed that the services to be rendered by the Advisor to the
Funds under the provisions of this Agreement are not to be deemed exclusive,
and
the Advisor shall be free to render similar or different services to others
so
long as its ability to render the services provided for in this Agreement shall
not be impaired thereby.
5. Advisor’s
Personnel.
The
Advisor shall, at its own expense, maintain such staff and employ or retain
such
personnel and consult with such other persons as it shall from time to time
determine to be necessary to the performance of its obligations under this
Agreement. Without limiting the generality of the foregoing, the staff and
personnel of the Advisor shall be deemed to include persons employed or retained
by the Advisor to furnish statistical information, research, and other factual
information, advice regarding economic factors and trends, information with
respect to technical and scientific developments, and such other information,
advice and assistance as the Advisor or the Trust’s Board of Trustees may desire
and reasonably request.
-3-
6. Expenses.
(a) With
respect
to the operation of the Fund, the Advisor shall be responsible for (i) providing
the personnel, office space and equipment reasonably necessary for the operation
of the Fund, (ii) the expenses of printing and distributing extra copies of
the
Fund’s prospectus, statement of additional information, and sales and
advertising materials (but not the legal, auditing or accounting fees attendant
thereto) to prospective investors (but not to existing shareholders), and (iii)
the costs of any special Board of Trustees meetings or shareholder meetings
convened for the primary benefit of the Advisor. If the Advisor has agreed
to
limit the operating expenses of the Fund, the Advisor shall also be responsible
on a monthly basis for any operating expenses that exceed the agreed upon
expense limit.
(b) The
Fund is
responsible for and has assumed the obligation for payment of all of its
expenses, other than as stated in Subparagraph 6(a) above, including but not
limited to: fees and expenses incurred in connection with the issuance,
registration and transfer of its shares; brokerage and commission expenses;
all
expenses of transfer, receipt, safekeeping, servicing and accounting for the
cash, securities and other property of the Trust for the benefit of the Fund
including all fees and expenses of its custodian, shareholder services agent
and
accounting services agent; interest charges on any borrowings; costs and
expenses of pricing and calculating its daily net asset value and of maintaining
its books of account required under the Investment Company Act; taxes, if any;
a
pro rata portion of expenditures in connection with meetings of the Fund’s
shareholders and the Trust’s Board of Trustees that are properly payable by the
Fund; salaries and expenses of officers and fees and expenses of members of
the
Trust’s Board of Trustees or members of any advisory board or committee who are
not members of, affiliated with or interested persons of the Advisor; insurance
premiums on property or personnel of each Fund which inure to its benefit,
including liability and fidelity bond insurance; the cost of preparing and
printing reports, proxy statements, prospectuses and statements of additional
information of the Fund or other communications for distribution to existing
shareholders; legal, auditing and accounting fees; trade association dues;
fees
and expenses (including legal fees) of registering and maintaining registration
of its shares for sale under federal and applicable state and foreign securities
laws; all expenses of maintaining and servicing shareholder accounts, including
all charges for transfer, shareholder recordkeeping, dividend disbursing,
redemption, and other agents for the benefit of the Funds, if any; and all
other
charges and costs of its operation plus any extraordinary and non-recurring
expenses, except as herein otherwise prescribed.
(c) The
Advisor
may voluntarily absorb certain Fund expenses or waive the Advisor’s own advisory
fee.
(d) To
the extent
the Advisor incurs any costs by assuming expenses which are an obligation of
a
Fund as set forth herein, the Fund shall promptly reimburse the Advisor for
such
costs and expenses, except to the extent the Advisor has otherwise agreed to
bear such expenses. To the extent the services for which a Fund is obligated
to
pay are performed by the Advisor, the Advisor shall be entitled to recover
from
such Fund to the extent of the Advisor’s actual costs for providing such
services. In determining the Advisor’s actual costs, the Advisor may take into
account an allocated portion of the salaries and overhead of personnel
performing such services.
-4-
7. Investment
Advisory and Management Fee.
(a) The
Fund
shall pay to the Advisor, and the Advisor agrees to accept, as full compensation
for all investment management and advisory services furnished or provided to
such Fund pursuant to this Agreement, an annual management fee at the rate
set
forth in Schedule A to this Agreement.
(b) The
management fee shall be accrued daily by each Fund and paid to the Advisor
on
the first business day of the succeeding month.
(c) The
initial
fee under this Agreement shall be payable on the first business day of the
first
month following the effective date of this Agreement and shall be prorated
as
set forth below. If this Agreement is terminated prior to the end of any month,
the fee to the Advisor shall be prorated for the portion of any month in which
this Agreement is in effect which is not a complete month according to the
proportion which the number of calendar days in the month during which the
Agreement is in effect bears to the number of calendar days in the month, and
shall be payable within ten (10) days after the date of
termination.
(d) The
fee
payable to the Advisor under this Agreement will be reduced to the extent of
any
receivable owed by the Advisor to the Fund and as required under any expense
limitation applicable to a Fund.
(e) The
Advisor
voluntarily may reduce any portion of the compensation or reimbursement of
expenses due to it pursuant to this Agreement and may agree to make payments
to
limit the expenses which are the responsibility of a Fund under this Agreement.
Any such reduction or payment shall be applicable only to such specific
reduction or payment and shall not constitute an agreement to reduce any future
compensation or reimbursement due to the Advisor hereunder or to continue future
payments. Any such reduction will be agreed to prior to accrual of the related
expense or fee and will be estimated daily and reconciled and paid on a monthly
basis.
(f) Any
fee
withheld or voluntarily reduced and any Fund expense absorbed by the Advisor
voluntarily or pursuant to an agreed upon expense cap shall be reimbursed by
the
Fund to the Advisor, if so requested by the Advisor, in the first, second or
third (or any combination thereof) fiscal year next succeeding the fiscal year
of the withholding, reduction or absorption if the aggregate amount actually
paid by the Fund toward the operating expenses for such fiscal year (taking
into
account the reimbursement) do not exceed the applicable limitation on Fund
expenses. Such reimbursement may be paid prior to the Fund’s payment of current
expenses if so requested by the Advisor even if such practice may require the
Advisor to waive, reduce or absorb current Fund expenses.
-5-
(g) The
Advisor
may agree not to require payment of any portion of the compensation or
reimbursement of expenses otherwise due to it pursuant to this Agreement. Any
such agreement shall be applicable only with respect to the specific items
covered thereby and shall not constitute an agreement not to require payment
of
any future compensation or reimbursement due to the Advisor
hereunder.
8. No
Shorting; No Borrowing.
The
Advisor agrees that neither it nor any of its officers or employees shall take
any short position in the shares of the Funds. This prohibition shall not
prevent the purchase of such shares by any of the officers or employees of
the
Advisor or any trust, pension, profit-sharing or other benefit plan for such
persons or affiliates thereof, at a price not less than the net asset value
thereof at the time of purchase, as allowed pursuant to rules promulgated under
the Investment Company Act. The Advisor agrees that neither it nor any of its
officers or employees shall borrow from the Fund or pledge or use the Fund’s
assets in connection with any borrowing not directly for the Fund’s benefit. For
this purpose, failure to pay any amount due and payable to the Fund for a period
of more than thirty (30) days shall constitute a borrowing.
9. Conflicts
with Trust’s Governing Documents and Applicable Laws.
Nothing
herein contained shall be deemed to require the Trust or the Fund to take any
action contrary to the Trust’s Agreement and Declaration of Trust, By-Laws, or
any applicable statute or regulation, or to relieve or deprive the Board of
Trustees of the Trust of its responsibility for and control of the conduct
of
the affairs of the Trust and Funds. In this connection, the Advisor acknowledges
that the Trustees retain ultimate plenary authority over the Fund and may take
any and all actions necessary and reasonable to protect the interests of
shareholders.
10. Reports
and Access.
The
Advisor agrees to supply such information to the Fund’s administrator and to
permit such compliance inspections by the Fund’s administrator as shall be
reasonably necessary to permit the administrator to satisfy its obligations
and
respond to the reasonable requests of the Trustees.
11. Advisor’s
Liabilities and Indemnification.
(a) The
Advisor
shall have responsibility for the accuracy and completeness (and liability
for
the lack thereof) of the statements in the Fund’s offering materials (including
the prospectus, the statement of additional information, advertising and sales
materials), except for information supplied by the administrator or the Trust
or
another third party for inclusion therein.
(b) The
Advisor
shall be liable to the Fund for any loss (including brokerage charges) incurred
by the Fund as a result of any improper investment made by the
Advisor.
(c) In
the
absence of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the obligations or duties hereunder on the part of the Advisor,
the
Advisor shall not be subject to liability to the Trust or the Fund or to any
shareholder of the Fund for any
act
or omission in the course of, or connected with, rendering services hereunder
or
for any losses that may be sustained in the purchase, holding or sale of any
security by the Funds.
-6-
(d) Each
party to
this Agreement shall indemnify and hold harmless the other party and the
shareholders, directors, officers and employees of the other party (any such
person, an “Indemnified Party”) against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating and defending any
alleged loss, liability, claim, damage or expenses and reasonable counsel fees
incurred in connection therewith) arising out of the Indemnified Party’s
performance or non-performance of any duties under this Agreement provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith or negligence in the performance
of
duties hereunder or by reason of reckless disregard of obligations and duties
under this Agreement.
(e) No
provision
of this Agreement shall be construed to protect any Trustee or officer of the
Trust, or officer of the Advisor, from liability in violation of Sections 17(h)
and (i) of the Investment Company Act.
12. Non-Exclusivity;
Trading for Advisor’s Own Account.
The
Trust’s employment of the Advisor is not an exclusive arrangement. The Trust may
from time to time employ other individuals or entities to furnish it with the
services provided for herein. Likewise, the Advisor may act as investment
adviser for any other person, and shall not in any way be limited or restricted
from buying, selling or trading any securities for its or their own accounts
or
the accounts of others for whom it or they may be acting, provided, however,
that the Advisor expressly represents that it will undertake no activities
which
will adversely affect the performance of its obligations to the Fund under
this
Agreement; and provided further that the Advisor will adhere to a code of ethics
governing employee trading and trading for proprietary accounts that conforms
to
the requirements of the Investment Company Act and the Advisers Act and has
been
approved by the Trust’s Board of Trustees.
13. Term.
(a) This
Agreement shall become effective at the time the Fund commences operations
pursuant to an effective amendment to the Trust’s Registration Statement under
the Securities Act of 1933 and shall remain in effect for a period of two (2)
years, unless sooner terminated as hereinafter provided. This Agreement shall
continue in effect thereafter for additional periods not exceeding one (1)
year
so long as such continuation is approved for the Fund at least annually by
(i)
the Board of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of each Fund and (ii) the vote of a majority
of
the Trustees of the Trust who are not parties to this Agreement nor interested
persons thereof, cast in person at a meeting called for the purpose of voting
on
such approval. The terms “majority of the outstanding voting securities” and
“interested persons” shall have the meanings as set forth in the Investment
Company Act.
(b) The
Fund may
use the name Chase Growth Fund or any name derived from or using the name Chase
Investment Counsel Corp. only for so long as this Agreement or any extension,
renewal or amendment hereof remains in effect. Within sixty (60) days from
such
time as this Agreement shall no longer be in effect, the Fund shall cease to
use
such a name or any other name connected with the Advisor.
-7-
14. Termination;
No Assignment.
(a) This
Agreement may be terminated by the Trust on behalf of the Fund at any time
without payment of any penalty, by the Board of Trustees of the Trust or by
vote
of a majority of the outstanding voting securities of a Fund, upon sixty (60)
days’ written notice to the Advisor, and by the Advisor upon sixty (60) days’
written notice to a Fund. In the event of a termination, the Advisor shall
cooperate in the orderly transfer of the Fund’s affairs and, at the request of
the Board of Trustees, transfer any and all books and records of the Fund
maintained by the Advisor on behalf of the Fund.
(b) This
Agreement shall terminate automatically in the event of any transfer or
assignment thereof, as defined in the Investment Company Act.
15. Severability.
If any
provision of this Agreement shall be held or made invalid by a court decision,
statute or rule, or shall be otherwise rendered invalid, the remainder of this
Agreement shall not be affected thereby.
16. Captions.
The
captions in this Agreement are included for convenience of reference only and
in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
17. Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Arizona without giving effect to the conflict of laws principles
thereof; provided that nothing herein shall be construed to preempt, or to
be
inconsistent with, any federal law, regulation or rule, including the investment
Company Act and the Advisors Act and any rules and regulations promulgated
thereunder.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized officers, all on the day and year first above
written.
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CHASE
INVESTMENT COUNSEL CORP.
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on
behalf of the
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Chase
Growth Fund
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By:
/s/▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇▇
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By:
/s/▇▇▇▇▇▇▇
▇. ▇▇▇▇▇,
▇▇.
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Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Title:
Vice President
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Title:
President
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-8-
Schedule
A
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Series
or Fund of Advisors Series Trust
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Annual
Fee rate
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Chase
Growth Fund
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1.00%
of average net assets
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-9-
AMENDMENT
NO. 1 TO THE
This
Amendment No. 1 (this “Amendment”) is made as of June 7, 1999 by and between
ADVISORS SERIES TRUST, a Delaware business trust (the “Trust”), on behalf of the
following series of the Trust, Chase Growth Fund (the “Fund”) and Chase
Investment Counsel Corp., a Virginia corporation (the “Advisor”).
RECITALS
WHEREAS,
the Trust and the Advisor desire to amend the Investment Advisory Agreement
made
between them on September 5,
1997
(the
“Agreement”) to conform with current guidance from the Securities and Exchange
Commission Staff regarding the recapture of investment advisory fees waived
and
expenses reimbursed by the advisor to a fund.
WHEREAS,
disinterested Trustees of the Trust and the full Board of Trustees have
separately approved this Amendment in person at a regular quarterly meeting
of
the Board of Trustees on June 7, 1999.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing premises, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Amendment
of Section 7(f)
Section
7(f) of the Agreement is hereby amended and replaced in its entirety
with:
“(f)
Any
such reductions made by the Advisor in its fees or payment of expenses which
are
the Fund’s obligation are subject to reimbursement by the Fund to the Advisor,
if so requested by the Advisor, in subsequent fiscal years if the aggregate
amount actually paid by the Fund toward the operating expenses for such fiscal
year (taking into account the reimbursement) does not exceed the applicable
limitation on Fund expenses. The Advisor is permitted to be reimbursed only
for
fee reductions and expense payments made in the previous three fiscal years,
but
is permitted to look back five years and four years, respectively, during the
Initial six years and seventh year of the Fund’s operations. Any such
reimbursement is also contingent upon Board of Trustees review and approval
at
time the reimbursement is made. Such reimbursement may not be paid prior to
the
Fund’s payment of current ordinary operating expenses.”
1
2. No
Other Modifications
Except
as
set forth in this Amendment, the Agreement remains unmodified and in fill force
and effect.
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their duly authorized officers, all on the day and year first above
written.
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CHASE
INVESTMENT COUNSEL CORP.
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on
behalf of the
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Chase
Growth Fund
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By:
/s/▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
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By:
/s/▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇.
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Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Title:
Vice President
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Title:
President
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2