THIS LEASE AGREEMENT made and entered into as of the 1st day of
February, 1996, by and between NORTH XXXXXX PARTNERSHIP, a Virginia General
Partnership, party of the first part and Lessor herein, and PLUMA, INC., a North
Carolina corporation, party of the second part and Lessee herein;
W I T N E S S E T H:
WHEREAS, Lessor has acquired a certain parcel of land located off State
Route 108 in Martinsville Magisterial District of Xxxxx County, Virginia, known
as Tract 5A (see Exhibit 1), and has constructed thereon certain facilities
containing a total of 000,000 xxxxxx xxxx xx xxxxx xxxx; and
WHEREAS, Lessor desires to lease to Lessee said Land and Building, and
Lessee desires to lease the same from Lessor; and
WHEREAS, Lessor and Lessee desire to set forth the terms and conditions
of such lease herein;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions. In addition to other terms defined elsewhere
in this Agreement, the following terms shall have the following meanings in this
Agreement unless the context requires otherwise:
"Lease" shall mean this Agreement including any amendments hereto;
"Authorized Representative of Lessee" shall mean such person or persons
as may be designated by Lessee;
"Authorized Representative of Lessor" shall mean such person or persons
as may be designated by Lessor;
"Building" shall mean the building described hereinabove located on the
Land shown on Exhibit l; and
"Commencement Date" shall mean February 1, 1996.
"Land" shall mean the real estate described as Tract 5A on Exhibit 1
attached hereto.
Section 1.2. Rules of Construction. The following rules shall apply to
the construction of this Lease Agreement unless the context otherwise requires:
(a) Singular words shall connote the plural number as well as the
singular and vice versa.
(b) All references herein to particular articles or sections are
references to articles or sections of this Lease Agreement.
(c) The headings herein are solely for convenience of reference and
shall not constitute a part of this Lease Agreement nor shall they affect its
meaning, construction or effect.
ARTICLE II. REPRESENTATIONS
Section 2.1. Representations of Lessor. The Lessor makes the following
representations as the basis for its undertakings hereunder: Lessor is duly
organized as a Virginia general partnership under the laws of the Commonwealth
of Virginia and has the power and authority to enter into the transactions
contemplated by this Lease Agreement and to carry out its obligations hereunder
and by proper action has duly authorized the execution and delivery of, and the
performance under, this Lease Agreement.
Section 2.2. Representations of Lessee. The Lessee makes the following
representations as the basis for its undertaking hereunder: Lessee is a
corporation duly organized and existing and has the power to enter into this
Agreement and the transactions contemplated hereby and to perform its
obligations hereunder and by proper action has duly authorized the execution and
delivery of and the performance under this Lease Agreement.
ARTICLE III. PREMISES
Section 3.1. Premises. Lessor hereby leases to Lessee and Lessee hereby
leases from Lessor the Land described on Exhibit 1 attached hereto and the
Building located thereon.
ARTICLE IV. COMMENCEMENT OF TERM
Section 4.1. Term. To have and hold the same unto Lessee for the
initial term of five (5) years, commencing on the Commencement Date, on the
covenants, conditions, and agreements hereinbefore and hereinafter stated.
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ARTICLE V. RENT
Section 5.1. Rent Payments. During the term of this Lease Agreement,
Lessee covenants and agrees to pay the Lessor a monthly rent, the amount of
which said monthly rent shall be sixteen cents ($0.16) per square foot per month
through April 30, 1996, and shall increase to seventeen cents ($0.17) per square
foot per month commencing on May 1, 1996, and continuing thereafter for the
initial term of this Lease Agreement. Rent shall be payable in equal monthly
installments in advance on the first day of each month during the term of this
Lease Agreement at the offices of Lessor or such place as Lessor may designate
without any offset or deduction. In addition to said rent, a late charge of two
percent (2%) of the amount of any monthly rental payment shall be due and
payable if such monthly rental payment is not received by Lessor on or before
the tenth (10th) day of the month in which it was due.
Section 5.2. Additional Rent. The parties agree that Lessee may be
required from time to time to pay additional rent during the initial term or any
extended or renewal term, which additional rent shall be due if Lessor's costs
of taxes or insurance relating to the Land and Building increase. If such
increases occur from time to time, Lessee shall pay an amount, as additional
rent, equal to such increases, payable in equal monthly installments. If Lessor
verifies in writing to Lessee that real estate taxes and/or insurance on the
Land and Building have increased, Lessee agrees to an increase in rent equal to
the cost of such increase.
ARTICLE VI. USE
Section 6.1. Use of the Premises. Lessee shall use and occupy the
premises for its legal activities, which shall include the operation of a
warehouse and light manufacturing facility and general offices related thereto
and for no other purpose, without the express consent of Lessor, which consent
may not be unreasonably withheld. Lessee shall not suffer or permit the premises
or any part thereof to be used in any manner, or anything to be done therein, or
suffer or permit anything to be brought into or kept in the premises which would
in any way (i) violate any law or requirement of public authorities; (ii) cause
structural injury to the Building or any part thereof; (iii) interfere with the
normal operations of the heating, air-conditioning, ventilating, plumbing or
other mechanical or electrical systems of the Building or the elevators
installed therein; (iv) constitute a public or private nuisance; (v) alter the
appearance of the exterior of the Building or conduct any major alterations on
the interior of the Building without the written consent of Lessor.
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ARTICLE VII. REPAIRS; ALTERATIONS; FIXTURES
Section 7.1. Lessor Maintenance. Lessor shall, at Lessor's own expense,
maintain only the roof, exterior walls, foundation and other structural portions
of the premises, and fire protection system, except damages occasioned by acts
or omissions of Lessee or its employees or invitees.
Section 7.2. Lessee Maintenance. Lessee shall maintain the demised
premises in the condition it is in on the day possession is accepted by Lessee
and suffer no damage or injury to it save ordinary wear and tear. Lessee shall
be responsible for all repair and maintenance of any kind, nature or
description, excepting only maintenance of the roof, exterior walls, foundation
and other structural portions (except damages occasioned by acts or omissions of
Lessee or its employees or invitees) and the fire protection system. Lessee
shall be responsible to maintain the interior of its premises including all
electrical fixtures, plumbing fixtures, trade fixtures, and any and all other
equipment of every kind, nature or description. Lessee at its own expense shall
cause such regular, periodic inspections as may be reasonably required by Lessor
to be performed on the fire control system serving the premises in accordance
with Factory Mutual requirements and submit copies of same to Lessor.
ARTICLE VII. TAXES
Section 8.1. Payment of Taxes. Lessor shall be responsible to pay and
shall pay when they are due all real estate taxes attributable to Lessor's
ownership of the Land and Building, subject, however, to the provisions of
Section 5.2 above.
ARTICLE IX. UTILITIES
Section 9.1. Payment of Utility Expenses. Lessee shall bear the cost of
all utilities.
ARTICLE X. INSURANCE
Section 10.1. Insurance. Lessee at Lessee's own expense and cost shall
maintain insurance protecting and indemnifying Lessee, Lessor and their assigns
against any and all claims for injury and/or damage to persons or property or
for the loss of life or of property occurring in or about the premises occupied
by Lessee. Such insurance shall not be less than One Million Dollars
($1,000,000) in respect of bodily injury, death to any one person and not less
than Three Million Dollars ($3,000,000) in respect of any one occurrence or
accident and not less than One Hundred Thousand Dollars ($100,000) for property
damage. Lessee shall, at its own expense, provide such insurance as it may deem
necessary to protect itself for damage by fire or other casualty occurring
within the space leased by Lessee. On or
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before the Commencement Date, Lessee shall furnish Lessor with a certificate
evidencing the aforesaid coverage.
Section 10.2 Waiver of Subrogation. Lessor and Lessee agree (to the
extent that such agreement does not invalidate coverage under any policy of
insurance) that, in the event the demised premises, or any part thereof, are
damaged or destroyed by fire or other casualty that is covered by insurance of
the Lessor or Lessee, or the sublessees, assignees or transferees of Lessee, the
rights of any party against the other or against the employees, agents or
licensees of any part, with respect to such damage or destruction and with
respect to any loss resulting therefrom, including the interruption of the
business of any of the parties, are hereby waived to the extent of the coverage
of said insurance. Lessor and Lessee further agree that all policies of fire,
extended coverage, business interruption and other insurance covering the
demised premises or the contents therein shall, if possible, provide that the
insurance shall not be impaired if the insureds have waived their right of
recovery from any person or persons prior to the date and time of loss or
damage. Any additional premiums for such clause or endorsement shall be paid by
the primary insured.
ARTICLE XI. DAMAGE BY FIRE OR OTHER CASUALTY
Section 11.1. Damages. In the event of total or partial destruction of
or damage to the leased premises by fire or any other cause during the term
hereof, Lessor shall be obligated to and shall with due diligence rebuild or
restore the leased premises to a condition comparable to that existing prior to
the occurrence of said destruction or damage.
If any such destruction or damage to the leased premises is such as to
prevent the operation of Lessee's business on the leased premises, or to make it
impractical so to do, then the rent, taxes and any other charges to be paid by
Lessee hereunder shall xxxxx from the occurrence of any destruction or damage up
to and including the time that the leased premises has been rebuilt or restored.
The amount of such abatement is to be determined by taking a fraction, the
numerator of which shall be the square foot area of the building which is a part
of the leased premises which is usable in the operation of Lessee's business on
the leased premises following any destruction or damage thereto and the
denominator of which shall be the total square foot area, inside dimensions, of
such building. The amount of which results from the multiplication of such
fraction by all rent and taxes and all other charges that would have been due
from Lessee to Lessor hereunder but not for the destruction or damage, shall be
the amount payable to Lessee for the period commencing with any destruction or
damage and terminating with the completion by Lessor, of the aforesaid
rebuilding or restoration.
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In the event of the destruction of more than fifty percent (50%) of the
leased premises, either Lessor or Lessee shall have the option to terminate this
lease upon notice to the other within thirty (30) day of such destruction.
ARTICLE XII. ASSIGNMENT; SUBLETTING
Section 12.1. Assignment. Lessee shall not assign or sublet the
premises without the prior written consent of Lessor. A change in identity of
Lessee, by virtue of acquisition, merger, consolidation, or other corporate
reorganization shall not be deemed to be an assignment or sublease. Lessor shall
have the right to withhold its consent to assign or sublet the premises for any
reason. Lessee acknowledges that Lessor has obtained financing which may require
assignment of this Lease. Lessee expressly consents to such assignment. Lessee
may not sublet or assign without the prior written consent of Lessor, which
consent may not be unreasonably withheld. The foregoing notwithstanding, the
parties agree that Tultex is pre-approved as an acceptable assignee or sublessee
of this Lease.
Section 12.2. Subordination. Lessee's rights under this Lease Agreement
are subordinate to the terms and conditions of Lessor's deed of trust as
executed with Lessor's lending institution and is further subject to the
security interest of that lending institution. Upon Lessor's request, Lessee
shall agree to subordinate this lease to any mortgage or trust deeds which may
hereafter be placed on the demised premises and to any and all advances to be
made thereunder, and to the interest thereon, and all renewals, replacements and
extensions thereof, and shall execute any and all further instruments necessary
to that purpose, provided such mortgagee or trustee named in such mortgage or
trust deeds shall agree to recognize the lease and the rights under this Lease
in the event of foreclosure if Lessee is not in default hereunder.
ARTICLE XIII. NO LIABILITY ON LESSOR'S PART
Section 13.1. Lessor Liability. Except as specified herein, Lessor and
its agents shall not be liable for any damage to property of Lessee or of others
entrusted to employees of the Building, nor for the loss of or damage to any
property of Lessee by theft or otherwise. Lessor and its agents shall not be
liable for any injury or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water, rain, snow or leaks
from any part of the Building or from the pipes, alliances, or plumbing works or
from the street, or subsurface or from any other place or by dampness or any
other cause of whatsoever nature unless caused or due to the willful act or
negligence of Lessors, its agents, servants or employees; nor shall Lessor and
its agents be liable for any such damage caused by other tenants or persons in
the Building or caused by operations in construction of any private, public or
quasi-public work; nor shall Lessor be liable for damages or injury to the
person or property of Lessee or others unless caused by the willful act or
negligence of
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Lessor. Notwithstanding any provision herein to the contrary, Lessor shall be
liable for such damages as directly result to Lessee from failure of the Lessor
to maintain or repair, with reasonable promptness, those items which Lessor is
required to maintain and repair. Upon receiving notice from Lessee that
maintenance or repairs are required, Lessor shall have a commercially reasonable
time to repair the same and it shall not be liable for any damages sustained by
Lessee during a commercially reasonable repair period. If Lessor shall fail to
perform such maintenance or repair within a commercially reasonable time, then
Lessor shall be responsible for such damages sustained by Lessee upon Lessor's
failure to maintain and repair the premises in a commercially reasonable time;
however, in no event shall Lessor be held responsible for indirect or
consequential damages, such as loss of profit, goodwill, etc.
ARTICLE XIV. CONDEMNATION
Section 14.1. Condemnation of Premises. In the event that all or a
material part of the Building shall be condemned or taken in any manner for any
public or quasi-public use, this Lease Agreement shall cease and terminate as of
the date of the vesting of title. A condemnation of part of the parking area
shall not work a termination of the Lease Agreement unless the part so taken
renders the Lessee's operation practically impossible, in which event this Lease
Agreement shall cease and terminate. In the event of any condemnation or taking
hereinabove mentioned which causes a termination of the Lease Agreement, Lessor
shall be required to account to Lessee for the condemnation award to the extent
that such condemnation award includes compensation to Lessor for improvements
installed at Lessee's sole expense.
ARTICLE XV. DEFAULTS; REMEDIES
Section 15.1. Default and Remedies.
(a) If Lessee defaults (1) in fulfilling any of the covenants of this
Lease Agreement requiring the payment of rent or additional rent, or (2) in
complying with any of the other terms, conditions or provisions of this Lease
Agreement, or (3) if Lessee ceases to conduct its business in the demised
premises or leaves the same vacant, then, in the case of nonpayment of rent
which continues for ten (10) days after Lessor serves a written notice upon
Lessee specifying such default, or if Lessee defaults in any one or more of the
events referred to in (2) or (3) above, then upon Lessor's serving a fifteen
(15) day written notice upon Lessee specifying the nature of said default and
upon the expiration of said fifteen (15) days, if Lessee shall have failed to
comply with or remedy such default, or if said default or omission complained of
shall be of such a nature that the same cannot be completely cured or remedied
within said fifteen (15) day period, and if Lessee shall not have diligently
commenced curing such default with such fifteen (15) day period, and shall not
thereafter with reasonable diligence and in good faith proceed to remedy or cure
such default, then
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Lessor may serve a written fifteen (15) day notice of cancellation of this Lease
Agreement upon Lessee and upon the expiration of said fifteen (15) days, this
Lease Agreement and the term hereunder shall end and expire as fully and
completely as if the date of expiration of such fifteen (15) day period were the
day herein definitely fixed for the end and expiration of this Lease Agreement
and the term thereof and Lessee shall then quit and surrender the demised
premises to Lessor but Lessee shall remain liable as hereinafter provided.
(b) If the fifteen (15) day notice of cancellation provided for in (a)
hereof shall have been given and the term shall expire as aforesaid; or if
Lessee shall make default after ten (10) days notice and the payment of the rent
set forth herein or any item of additional rent herein mentioned, then and in
any of such events, Lessor may without further notice re-enter the demised
premises either by force or otherwise and dispossess Lessee by summary
proceedings or otherwise, and the legal representatives of Lessee or other
occupant of the demised premises and remove their effects and hold the premises
as if this Lease Agreement had not been made, but Lessee shall remain liable
hereunder as hereinafter provided and Lessee hereby waives the service of notice
of intention to re-enter or institute legal proceedings to that end.
Section 15.2. Rent Deficiency. In case of any such default, re-entry,
expiration and/or dispossess by summary proceedings or otherwise, (a) the rent
and additional rent shall become due thereupon and be paid up to the time of
such re-entry, or dispossess together with such expenses as Lessor may incur for
legal expenses, attorney's fees, brokerage, and/or putting the demised premises
in good order or for preparing the same for re-rental; (b) Lessor may re-let the
premises or any part or parts thereof, either in the name of lessor or otherwise
for a term or terms, which may at Lessor's option be less than or exceed the
period which would otherwise have constituted the balance of the term of this
Lease Agreement and may grant concessions or free rent; and/or (c) Lessee or the
legal representatives of Lessee shall also pay Lessor's liquidated damages for
the failure of Lessee to observe and perform said Lessee's covenants herein
contained, any deficiency between the rents and additional rents hereby reserved
and/or covenanted to be paid and the net amount, if any, of the rents collected
or to be collected on account of the lease or leases of the demised premises for
each month of the period which would otherwise have constituted the balance of
the term of this Lease Agreement. The failure or refusal of Lessor to re-let the
premises or any part or parts thereof shall not release or affect Lessee's
liability for damages although Lessor shall be under a duty to exercise
diligence and good faith in an effort to re-let the same and mitigate damages.
In computing such damages, there shall be added to said deficiency such expenses
as Lessor may incur in connection with re-letting such as legal expenses,
attorney's fees, brokerage, and for keeping the demised premises in good order
or for preparing the same for re-letting. Any such damages shall be paid in
monthly installments by Lessee on the rent date specified in this Lease
Agreement and any suit brought to collect the amount of the deficiency for any
month shall not prejudice in any way the rights of Lessor to collect the
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deficiency for any subsequent month or months by a similar proceeding. Lessor
may at Lessor's option make such alterations, repairs or replacements in the
demised premises as Lessor in Lessor's sole judgment considers advisable and
necessary for the purpose of re-letting the demised premises; and the making of
such alterations, repairs or replacements shall not operate or be construed to
release Lessee from liability hereunder as aforesaid. Lessor shall in no event
be liable in any way whatsoever for failure to re-let the demised premises
provided Lessor makes a good faith effort to re-let the same, or in the event
that the demised premises are re-let for failure to collect the rent thereunder
provided reasonable diligence is used in an attempt to collect such rent. Any
such action against Lessee may be an action for the full amounts of all rents
and damages suffered or to be suffered by Lessor. In the event of a breach by
Lessee of any of the covenants or provisions hereof, Lessor shall have the right
of injunction and the right to invoke any remedy allowed at law or in equity as
if re-entry, summary proceedings and other remedies were not herein provided
for. Mention in this Lease Agreement of any particular remedy shall not preclude
Lessor from any other remedy, in law or in equity, the foregoing remedies and
rights of Lessor are cumulative. Lessee hereby expressly waives any and all
rights of redemption granted by or under any present or future laws in the event
of Lessee being evicted or dispossessed for any cause, or in the event of Lessor
obtaining possession of the demised premises, by reason of the violation by
Lessee of any of the covenants and conditions of this Lease Agreement or
otherwise.
Section 15.3. Default by Lessor. Should Lessor default in Lessor's duty
to pay taxes, insurance and debt service payments to a lending institution or in
its obligation to maintain the roof, Lessee shall have and enjoy, in addition to
any other rights under this Lease or under common law or by statute, the right
to divert rent payments hereunder from Lessor to pay directly taxes, insurance
required to be maintained by Lessor, bank payments a lending institution or to
necessary roof repairs. Provided, however, that Lessee's right to divert rent
payments for roof repairs shall be conditioned upon Lessee's reasonable notice
to Lessor of the necessity for repairs and upon Lessor's failure to make such
repairs in a commercially reasonably time.
ARTICLE XVI. COVENANT OF QUIET ENJOYMENT
Section 16.1. Quiet Enjoyment. Lessor warrants and represents that it
has full authority to execute this Lease Agreement for the term aforesaid and
covenants that upon Lessee's paying the rent and performing the covenants to be
observed and performed on Lessee's part, Lessee may peaceably and quietly have,
hold and enjoy the demised premises, subject, nevertheless, to the terms and
conditions of this Lease Agreement.
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ARTICLE XVII. NOTICES
Section 17.1. Notice to Lessor. Any notice required or permitted to be
given to Lessor shall be deemed to have been properly given upon mailing the
same by certified or registered mail to Lessor, c/o Xxxxxxx X. Xxxxxx
Corporation, P.0. Xxx 0000, Xxxxxxxxxxxx, XX 00000-0000. Lessor reserves the
right to designate another representative for the purpose of receiving notices
required or permitted to be made hereunder provided the designation is made in
writing and delivered to Lessee.
Section 17.2. Notice to Lessee. Any notice required or permitted to be
given to Lessee shall be deemed to have been properly given upon mailing the
same by certified or registered mail to Pluma, Inc., Xxxx Xxxxxx Xxx 000, Xxxx,
Xxxxx Xxxxxxxx 00000, ATTN: R. Xxxx Xxxxxxx, Xx. Lessee reserves the right to
designate another representative for the purpose of receiving notices required
or permitted to be made hereunder provided the designation is made in writing
and delivered to Lessor.
ARTICLE XVIII. EXTENSION OPTION GRANTED LESSEE
Section 18.1. Extensions. Provided that Lessee shall be in compliance
with all other terms hereof and further provided that Lessee shall have given
Lessor at least twelve (12) months written notice of its intention to do so,
Lessee shall have the option to extend this lease for four (4) additional five
(5) year periods, upon the said terms and conditions hereof, except that rent
increases during such extensions shall be agreed upon by good faith negotiation
between the parties. If the parties are unable, in good faith, to agree on the
amount of rent increases to be paid during such renewal terms at least six (6)
months prior to the expiration of the term then in effect, then such renewal
options shall lapse and become void and of no effect whatsoever.
Section 18.2. Alterations; Improvements. Lessee shall have the right to
make alterations to the premises, conditioned upon Lessee obtaining Lessor's
approval, which said approval shall not be unreasonably withheld. Lessee's
request for Lessor's approval shall be in writing describing the proposed
alterations in detail and Lessor's response to Lessee shall be in writing. All
improvements shall become the property of Lessor upon termination of occupancy.
ARTICLE XIX. MISCELLANEOUS
Section 19.1. Entire Agreement. This Agreement constitutes the entire
understanding between the parties and shall be conclusively deemed to supersede
all prior written or verbal communications between the parties. This Agreement
may not be modified or terminated unless in writing, signed by the party to be
bound thereby.
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Section 19.2. Governing Law. This Agreement is to be governed and
construed in accordance with the laws of the Commonwealth of Virginia.
Section 19.3. Attorneys' Fees. In the event of a breach of this
Agreement, the breaching party shall be responsible for all cost and expenses of
the other party, including reasonable attorneys' fees.
WITNESS the following signatures and seals the day and year first above
written:
LESSOR:
NORTH XXXXXX PARTNERSHIP, a
Virginia General Partnership,
BY: /s/ Xxxxx X. Xxxxxx
BY: /s/ Xxxxx X. Xxxxxx
BY: /s/ Xxxxxxx x. Xxxxxx, Xx.
LESSEE:
PLUMA, INC.
BY: /s/ R. Xxxx Xxxxxxx, Xx.
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COMMONWEALTH OF VIRGINIA
CITY OF MARTINSVILLE, TO-WIT:
The foregoing was acknowledged before me, this 16th day of January ,
1996, by Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx, Xx., partners
of North Xxxxxx Partnership, a Virginia general partnership.
My commission expires: 11-30-98
/s/ Xxxxx X. Xxxxx
NOTARY PUBLIC
STATE OF Virginia , COUNTY OF Xxxxx , TO-WIT:
The foregoing was acknowledged before me, this 30 day of January ,
1996, by R. Xxxx Xxxxxxx, Xx. , the President of Pluma, Inc.
My commission expires: 1-31-98
/s/ M. Xxxxxx Wine
NOTARY PUBLIC
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