EXHIBIT 10.5
UNCOMMITTED LOAN AGREEMENT
THIS AGREEMENT is made as of June 1, 2003, between THE BANK OF
TOKYO-MITSUBISHI, LTD., Seattle Branch ("Lender") and Synetics Solutions Inc. ,
("Borrower").
Section 1. The Credit.
1.1 Discretionary Advances. Lender has made no
commitment, and is under no obligation, to lend money or otherwise extend credit
to Borrower. This Agreement governs the terms of any loan (a "Loan") which
Lender may in its discretion elect to make to Borrower. When Borrower wishes to
obtain a Loan, its authorized representative, after conferring with Lender,
shall submit a written Loan Request in the form of Exhibit A. If Lender makes
the Loan requested, the terms of the request shall be binding on Borrower.
1.2. Terms and Conditions. Credit limits and special
provisions applicable to all Loans are set forth in Exhibit B when applicable.
Each Loan is subject to the terms and conditions contained in this Agreement,
including Exhibit B when applicable, and in the applicable Loan Request. No Loan
shall be made for a term longer than one year.
1.3. Manner of Payments. All payments on the Loans shall
be made to Lender at its Seattle Branch (including to its account notified to
Borrower in writing) and in the same currency in which funds were advanced. All
computations of interest shall be made on the basis of a year of 360 days for
the actual number of days elapsed. All payments shall be made free and clear of,
and without deduction or withholding for, any tax. Lender is authorized to
collect any amount not paid by Borrower by set-off against any account
maintained by Borrower at any banking office of Lender wherever located.
1.4. Interest Payments. Interest on Loans shall be payable
at maturity, except that interest will be payable on demand after default.
1.5. Default Interest. After default a Loan shall bear
interest at a rate 2% per annum above The Bank of Tokyo-Mitsubishi, Ltd. prime
rate as in effect from time to time.
1.6. Prepayment. A Loan may be prepaid in whole or part
only with Lender's prior consent. Interest accrued on any prepaid amount of
principal shall be paid on the date of prepayment, together with break-funding
costs as determined by Lender and notified to Borrower.
1.7. Evidence of Debt. The Loans shall be evidenced by
Lender's books of account.
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1.8. Increased Costs. If Lender in its discretion shall
determine that, by reason of a change after the date of this Agreement in any
law, regulation, or order of any governmental authority or in the application
thereof, (a) there is a change in the basis of taxation of payments to Lender of
the principal of, or interest on, any Loan (except for taxes imposed on the
overall net income of Lender and franchise or other taxes imposed generally on
Lender by the jurisdiction (or any political subdivision therein) in which
Lender has its principal office; or (b) any reserve, special deposit, capital
maintenance, or similar requirement (including without limitation any reserve
requirement under regulations of the Board of Governors of the Federal Reserve
System) against assets of, deposits with, or for the account of, or credit
extended by Lender or any capital adequacy requirement applicable to Lender is
imposed, increased, modified, or deemed applicable; and the result of any of the
foregoing is to increase the cost to Lender of maintaining the Loans or to
reduce the amount of any sum received or receivable by Lender hereunder in
respect thereof (and such increase or reduction shall not have been compensated
by a corresponding increase in the interest rate applicable to the respective
Loans), by an amount deemed by Lender to be material (such increases in cost and
reductions in amounts receivable being herein called "Increased Costs"), then
Borrower shall pay to Lender, upon demand, such additional amount or amounts as
will compensate Lender for those Increased Costs (all of such as determined by
Lender and notified to Borrower).
Section 2. Conditions of Lending. Lender shall make no Loan until
fulfillment of the following conditions and any special conditions set forth in
Exhibit B if applicable.
2.1. Corporate Authority. Lender shall have received in
form and substance satisfactory to it (i) a copy of a resolution adopted by the
board of directors of the Borrower (and certified by the appropriate corporate
officer) authorizing the execution, delivery and performance of the Loan
Documents and the borrowings hereunder, and (ii) evidence of the authority and
specimen signatures of the persons who have signed this Agreement who will sign
the other Loan Documents on behalf of Borrower, and who will request and
negotiate Loans on behalf of Borrower.
2.2. Security. If the Loan is to be secured, Lender shall
have received evidence satisfactory to it that it has a perfected security
interest of such priority, and in collateral of such types and quality and in
such amounts, as Lender in its discretion deems adequate.
2.3. Other Documents. Lender shall have received all other
documents requested by Lender in connection with the Loan.
Section 3. Representations and Warranties. On the date of this
Agreement and the date of each Loan, Borrower represents and warrants to Lender
as follows. As of each such date, Borrower also makes the special
representations and warranties, if any, set forth in Exhibit B.
3.1. Corporate Existence and Power. Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Borrower's jurisdiction, and
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has full corporate power, authority and legal right to execute, deliver and
perform the Loan Documents.
3.2. Corporate Authorization. The execution, delivery and
performance by Borrower of the Loan Documents and any borrowings hereunder have
been duly authorized by all necessary corporate action of Borrower.
3.3. Government Approvals, Etc. No government approval or
filing or registration with any governmental authority is required for the
making and performance by Borrower of the Loan Documents.
3.4. Binding Obligations, Etc. This Agreement has been
duly executed and delivered by Borrower and constitutes, and each of the other
Loan Documents when duly executed and delivered will constitute, the legal,
valid and binding obligation of Borrower enforceable against Borrower in
accordance with their respective terms.
3.5. Litigation. There are no actions, proceedings,
investigations, or claims against or affecting Borrower now pending before any
court, arbitrator or governmental authority (nor to the knowledge of Borrower
has any thereof been threatened nor does any basis exist therefor) which if
determined adversely to Borrower would be likely to have a material adverse
effect on the financial condition or operations of Borrower, to impair Lender's
Lien on Collateral or Borrower's rights therein, or to result in a judgment or
order against Borrower (in excess of insurance coverage) for more than the
Threshold Amount, except as reflected in the financial statements referred to in
Section 3.6 or otherwise previously disclosed to Lender in writing.
3.6. Financial Condition. The balance sheet of Borrower as
at the close of the fiscal year of Borrower last ended, and the related
statements of income and retained earnings of Borrower for the fiscal year then
ended, copies of which have been furnished to Lender, fairly present the
financial condition of Borrower as at such date and the results of operations of
Borrower for the period then ended, all in accordance with generally accepted
accounting principles consistently applied.
3.7. Title and Liens. Borrower has good and marketable
title to the properties and assets reflected in its balance sheet referred to in
Section 3.6 (except such as have been since sold or otherwise disposed of in the
ordinary course of business). No assets or revenues of Borrower are subject to
any Lien except as required or permitted by this Agreement or disclosed in the
balance sheet referred to in Section 3.6 or otherwise previously disclosed to
Lender in writing. All properties of Borrower and Borrower's use thereof comply
with applicable zoning and use restrictions and with applicable laws and
regulations relating to the environment.
3.8. Taxes. Borrower has filed all tax returns and reports
required of it, has paid all taxes which are due and payable, and has provided
adequate reserves for payment of any tax whose payment is being contested. There
are no questions or disputes between Borrower and
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any governmental authority with respect to any taxes except as disclosed in the
balance sheet referred to in Section 3.6 or otherwise previously disclosed to
Lender in writing.
3.9. Other Agreements. Borrower is not in material breach
of or default under any agreement to which it is a party or which is binding on
it or any of its assets.
Section 4. Affirmative Covenants. While any Loan is outstanding, until
payment in full of each Loan and performance of all other obligations of
Borrower under the Loan Documents, Borrower agrees, unless Lender shall
otherwise consent in writing, to perform all of the following covenants and also
the special affirmative covenants, if any, set forth in Exhibit B.
4.1. Use of Proceeds. Borrower will use the proceeds of
each Loan exclusively for the purposes specified in Exhibit B when applicable.
4.2. Payments. Borrower will pay the principal of and
interest on the Loans in accordance with the terms of this Agreement and the
relevant Loan Request and will pay when due all other amounts payable by
Borrower under the Loan Documents.
4.3. Preservation of Corporate Existence, Etc. Borrower
will preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation and will qualify and remain
qualified as a foreign corporation in each jurisdiction where such qualification
is necessary or advisable in view of the business and operations of Borrower or
the ownership of its properties.
4.4. Visitation Rights. At any reasonable time, and from
time to time, Borrower will permit Lender to examine and make copies of and
abstracts from the records and books of account of and to visit the properties
of Borrower and to discuss the affairs, finances and accounts of Borrower with
any of its officers or directors.
4.5. Keeping of Books and Records. Borrower will keep
adequate records and books of account in which complete entries will be made, in
accordance with generally accepted accounting principles consistently applied,
reflecting all financial transactions of Borrower.
4.6. Maintenance of Property, Etc. Borrower will maintain
and preserve all of its properties in good working order and condition, ordinary
wear and tear excepted, and will from time to time make all needed repairs,
renewals or replacements so that the efficiency of such properties shall be
fully maintained and preserved.
4.7. Compliance with Laws, Etc. Borrower will comply in
all material respects with all laws, regulations, rules, and orders of
governmental authorities applicable to Borrower or to its operations or
property, except any thereof whose validity is being contested in good faith by
appropriate proceedings upon stay of execution of the enforcement thereof.
4.8. Other Obligations. Borrower will pay and discharge
before the same shall
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become delinquent all indebtedness, taxes and other obligations for which
Borrower is liable or to which its income or property is subject and all claims
for labor and materials or supplies which, if unpaid, might become by law a lien
upon assets of Borrower.
4.9. Insurance. Borrower will keep in force upon all of
its properties and operations policies of insurance carried with responsible
companies in such amounts and covering all such risks as shall be customary in
the industry and satisfactory to Lender. Borrower will on request furnish to
Lender certificates of insurance or duplicate policies evidencing such coverage.
4.10. Financial Information. Borrower will deliver to
Lender (a) as soon as available and in any event within 120 days after the end
of each fiscal year of Borrower, the balance sheet of Borrower as of the end of
such fiscal year and the related statements of income and retained earnings and
statement of changes in financial position of Borrower for such year,
accompanied by the audit report thereon by independent certified public
accountants; (b) if specified in Exhibit B, then as soon as available and in any
event within 90 days after the end of each fiscal quarter of Borrower, the
unaudited balance sheet and statement of income and retained earnings of
Borrower as of the end of such fiscal quarter (including the fiscal year to the
end of such fiscal quarter), accompanied by a certificate of the chief financial
officer of Borrower that such unaudited balance sheet and statement of income
and retained earnings have been prepared in accordance with generally accepted
accounting principles consistently applied and present fairly the financial
position and the results of operations of Borrower as of the end of and for such
fiscal quarter; and (c) all other statements, reports and other information as
Lender may reasonably request concerning the financial condition and business
affairs of Borrower.
4.11. Notification. Promptly after learning thereof,
Borrower will notify Lender of (a) any action, proceeding, investigation or
claim against or affecting Borrower instituted before any court, arbitrator or
governmental authority or, to Borrower's knowledge threatened to be instituted,
which if determined adversely to Borrower would be likely to result in a
judgment or order against Borrower (in excess of insurance coverage) for more
than the Threshold Amount; (b) any substantial dispute between Borrower and any
governmental authority; (c) any labor controversy which has resulted in or, to
Borrower's knowledge, threatens to result in a strike which would materially
affect the business operations of Borrower; and (d) the occurrence of any
Default.
4.12. Additional Payments; Additional Acts. From time to
time, Borrower will (a) pay or reimburse Lender on request for all expenses,
including legal fees, actually incurred by Lender in connection with the
preparation of the Loan Documents and the making of the Loans or the enforcement
by judicial proceedings or otherwise of any of the rights of Lender under the
Loan Documents; and (b) execute and deliver all such instruments (such as
Uniform Commercial Code continuation statements) and to perform all such other
acts as Lender may reasonably request to carry out the transactions contemplated
by the Loan Documents.
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Section 5. Negative Covenants. While any Loan is outstanding, until
payment in full of the Loans and performance of all other obligations of
Borrower under the Loan Documents, Borrower agrees that, unless Lender shall
otherwise consent in writing, Borrower will observe and perform all of the
following and also the special negative covenants, if any, set forth in Exhibit
B.
5.1. Liquidation, Merger, Sale of Assets. Borrower shall
not liquidate, dissolve or enter into any merger, consolidation, joint venture,
partnership or other combination nor sell, lease, or dispose of all or any
substantial portion of its business or assets or of any collateral for the Loans
(excepting sales of goods in the ordinary course of business).
5.2. Guaranties, Etc. Borrower shall not assume, guaranty,
endorse or otherwise become directly or contingently liable for any obligation
or indebtedness of any other person, except by endorsement of negotiable
instruments for deposit or collection or by similar transactions in the ordinary
course of business.
5.3. Liens. Borrower shall not create or assume any
security interest or other lien except (a) liens in favor of Lender, (b)
existing liens reflected in the balance sheet referred to in Section 3.6 or
otherwise previously disclosed to Lender in writing, (c) involuntary liens, and
(d) liens to secure Indebtedness permitted by Section 5.3(d) for the deferred
price of property, but only if they are limited to such property.
Section 6. Events of Default.
6.1. Events of Default Defined. The occurrence of any of
the following events shall constitute an "Event of Default."
6.1.1. Payment Default. Borrower shall fail to pay
when due any amount of principal of or interest on the Loans or any other amount
payable by it under the Loan Documents; or
6.1.2. Breach of Warranty. Any representation or
warranty made or deemed made by Borrower under or in connection with the Loan
Documents shall prove to have been incorrect in any material respect when made
and as a result Lender reasonably believes that Borrower's financial condition
or its ability to pay its debts as they come due will thereby be materially
impaired; or
6.1.3. Breach of Certain Covenants. Borrower shall
fail to have complied with any provision of Section 4.11 or Section 5; or
6.1.4. Breach of Other Covenant. Borrower shall
fail to perform or observe any other covenant, obligation or term of any Loan
Document and such failure shall remain unremedied for 30 days after written
notice thereof shall have been given to Borrower by Lender; or
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6.1.5. Cross-default. Borrower or Parent shall fail
(a) to pay any indebtedness when due or (b) to perform any term or covenant on
its part to be performed under any agreement or instrument relating to
indebtedness if the effect of such failure to perform is to accelerate or to
permit the acceleration of the maturity of such indebtedness, or (c) any such
indebtedness of Borrower or Parent shall be declared to be due and payable prior
to the stated maturity thereof; or
6.1.6. Voluntary Bankruptcy, Etc. Borrower or
Parent shall: (a) file a petition seeking relief for itself under Bankruptcy Law
or fail timely to controvert a petition filed against it seeking relief under
Bankruptcy Law; or
6.1.7. Involuntary Bankruptcy, Etc. An order for
relief shall be entered against Borrower or Parent under Bankruptcy Law, which
order is not stayed; or appointing a receiver, liquidator, or custodian of
Borrower or Parent or of any substantial part of its property; or upon the
expiration of 120 days after the filing of any involuntary petition against it
seeking any of the relief specified in Section 6.1.6 or this Section 6.1.7
without the petition being dismissed prior to that time; or
6.1.8. Insolvency, Etc. Borrower or Parent shall
(a) make a general assignment for the benefit of its creditors or (b) consent to
the appointment of or taking possession by a receiver, liquidator, or custodian
of all or a substantial part of the property of Borrower or Parent, or (c) admit
its insolvency or inability to pay its debts generally as they become due, or
(d) fail generally to pay its debts as they become due; or
6.1.9. Judgment. A final judgment or order for the
payment of money in excess of the Threshold Amount or which impairs Lender's
Lien on collateral or Borrower's rights therein, shall be rendered against
Borrower and such judgment or order shall continue unsatisfied and in effect for
a period of 10 consecutive days; or
6.1.10. Involuntary Liens. Any involuntary Lien in
excess of the Threshold Amount shall attach to any asset or property of Borrower
which is not discharged within 60 days after such attachment or within 30 days
after notice from Lender, whichever first occurs; or
6.1.11. Special Events of Default. There shall occur
any event specified in Exhibit B as a "Special Event of Default."
6.2. Consequences of Default. If any Event of Default
shall occur and be continuing, then in any such case and at any time thereafter
so long as any such Event of Default shall be continuing, Lender may at its
option declare the principal of and the interest on the Loans and all other sums
payable by Borrower under the Loan Documents to be immediately due and payable,
whereupon the same shall become immediately due and payable without protest,
presentment, notice or demand, all of which Borrower expressly waives.
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Section 7. Miscellaneous.
7.1. No Waiver; Remedies Cumulative. No failure by Lender
to exercise, and no delay in exercising, any right, power or remedy under any
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy under any Loan Documents preclude any
other or further exercise thereof or the exercise of any other right, power, or
remedy. The exercise of any right, power, or remedy shall in no event constitute
a cure or waiver of any Event of Default nor prejudice the right of Lender in
the exercise of any right hereunder or thereunder, unless in the exercise of
such right, all obligations of Borrower under the Loan Documents are paid in
full. The rights and remedies provided herein and therein are cumulative and not
exclusive of any right or remedy provided by law.
7.2. Governing Law. The Loan Documents shall be governed
by and construed in accordance with the laws of the State of Oregon (excluding
its conflict of laws rules).
7.3. Consent to Jurisdiction; Waiver of Immunities.
Borrower hereby irrevocably submits to the jurisdiction of any state or federal
court sitting in Portland, Oregon, in any action or proceeding brought to
enforce or otherwise arising out of or relating to any Loan Document and
irrevocably waives to the fullest extent permitted by law any objection which it
may now or hereafter have to the laying of venue in any such action or
proceeding in any such forum, and hereby further irrevocably waives any claim
that any such forum is an inconvenient forum.
7.4. Notices. All notices and other communications
provided for in this Agreement shall be in writing or (unless otherwise
specified) by facsimile transmission and shall be mailed (with air mail postage
prepaid) or sent by air courier (with air freight prepaid) or delivered to each
party by hand or facsimile transmission at the address set forth under its name
on the signature page hereof, or at such other address as shall be designated by
such party in a written notice to each other party. Except as otherwise
specified, all such notices and communications if duly given or made shall be
effective upon receipt.
7.5. Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective Successors and assigns,
except that Borrower may not assign or otherwise transfer all or any part of its
rights or obligations hereunder without the prior written consent of Lender, and
any such assignment or transfer purported to be made without such consent shall
be ineffective.
7.6. Reliance. Lender shall be entitled to rely, without
liability, on any telephonic, written, or facsimile communication it believes in
good faith to be genuine.
7.7. Termination. This Agreement may be terminated by
either party by notice to the other and will in any event terminate five years
after the date hereof, but no termination shall affect the obligations of
Borrower under this Agreement with respect to Loans outstanding
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at the time of termination.
7.8. Entire Agreement; Amendment. The Loan Documents
comprise the entire agreement of the parties and may not be amended or modified
except by written agreement of Borrower and Lender. No provision of any Loan
Document may be waived except in writing and then only in the specific instance
and for the specific purpose for which given.
Section 8. Definitions.
Certain Defined Terms. As used in this Agreement, including Exhibit B
when applicable, the following terms have the following meanings, which apply to
both the singular and plural forms of the terms defined:
"Bankruptcy Law" means any now existing or future
applicable bankruptcy, insolvency, or other similar law of any jurisdiction
providing for the reorganization, winding up, liquidation, or discharge of
debtors or an arrangement, composition, extension, or adjustment with creditors,
including Title 11 of the United States Code as now constituted or hereafter
amended.
"Default" means an Event of Default or other event
which, with notice or lapse of time or both, would constitute an Event of
Default.
"Event of Default" has the meaning defined in Section
6.1.
"Loan" means a loan by Lender to Borrower pursuant to
Section 1.
"Loan Document" means and includes this Agreement,
all Loan Requests, and all security documents and other documents executed and
delivered by Borrower to Lender pursuant to Section 2.2 or Section 2.3.
"Loan Request" means a loan request in the form of
Exhibit A sent by Lender to Borrower pursuant to Section 1.3.
"Parent" has the meaning specified in Exhibit B when
applicable.
"Threshold Amount" has the meaning specified in
Exhibit B when applicable.
Accounting Terms. Except as otherwise provided
herein, accounting terms not specifically defined shall be construed in
accordance with generally accepted accounting principles.
"UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS
MADE BY US AFTER OCTOBER 3, 1989, CONCERNING
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LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL,
FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE
BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION
AND BE SIGNED BY US TO BE ENFORCEABLE," OREGON REVISED
STATUTES 41.580 (3) (a)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or agents thereunto duly authorized as of
the date first above written.
LENDER: BORROWER:
The Bank of Tokyo-Mitsubishi, Ltd., Synetics Solutions Inc.
Seattle Branch
SIGNATURE ----
VERIFIED MR
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By: /s/ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its: General Manager Its: Chairman and CEO
Address: ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ SW Address: ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ Parkway, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
97204
Attn: Corporate Banking Dept. Attn: Hiroshi Yoshio
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EXHIBIT B
SPECIAL PROVISIONS
These special provisions supplement the Uncommitted Loan Agreement
dated June 1, 2003 between The Bank of Tokyo-Mitsubishi, Seattle Branch
("Lender") and Synetics Solutions Inc. (Borrower"). Capitalized terms used and
not defined in this Exhibit B have the respective meanings defined in the Loan
Agreement.
Credit limits: No Loan may exceed US$7,000,000.00 or its equivalent and the
total principal amount of Loans and any other credits outstanding at any time
shall not exceed US$7,000,000.00 or its equivalent (the "Credit Limit").
Parent: Yaskawa Electric Corporation
Facility Fee: On account of Lender's willingness to be prepared to consider
requests to borrow from Borrower, but without prejudice to the uncommitted
nature of the facility under which Lender may make or decline to make Loans in
its sole discretion, Borrower shall pay to Lender a facility fee on the daily
amount of the above-mentioned Credit Limit which is unutilized, computed on a
monthly basis in arrears on the last Business Day of each calendar month in
accordance with the following schedule (expressed as a percentage per annum) and
payable within 2 Business Days of the Lender's invoice therefor:
No fee (0%) when the aggregate Loan balance is $5,000,000 or more.
0.10% when the aggregate Loan balance is $3,000,000 or more and less than
$5,000,000.
0.25% when the aggregate Loan balance is less than $3,000,000.
The computation of the facility fee shall be made on the basis of a 360-day year
and actual days elapsed.
Agreed: Synetics Solutions Inc., as Borrower
SIGNATURE ----
VERIFIED MR
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By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name/Title: ▇▇▇▇ ▇▇▇▇▇▇▇▇/Chairman and CEO