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EXHIBIT 10.43
[UNION BANK OF CALIFORNIA LOGO]
AMENDED AND RESTATED
LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT ("Agreement") is made and
entered into as of May 4, 1998 by and between SAFESKIN CORPORATION, a Florida
corporation, ("Borrower") and UNION BANK OF CALIFORNIA, N.A., ("Bank"). This
Agreement amends and restates in its entirety that certain loan agreement dated
May 15, 1996 between Bank and Borrower.
SECTION 1. THE LOAN
1.1. The Revolving Loan. Bank will loan to Borrower an amount not to
exceed Forty Million Dollars ($40,000,000.00) outstanding in the aggregate at
any one time (the "Revolving Loan"). Borrower may borrow, repay and reborrow all
or part of the Revolving Loan in accordance with the terms of the Revolving
Note. All borrowings of the Revolving Loan must be made before July 31, 2000 at
which time all unpaid principal and interest of the Revolving Loan shall be due
and payable. The Revolving Loan shall be evidenced by a promissory note (the
"Revolving Note") on the standard form used by Bank for commercial loans. Bank
shall enter each amount borrowed and repaid in Bank's records and such entries
shall be deemed to be the amount of the Revolving Loan outstanding. Omission of
Bank to make any such entries shall not discharge Borrower of its obligation to
repay in full with interest all amounts borrowed.
1.1.1 The Letter of Credit Sublimit. As a sublimit to the Revolving
Loan, Bank shall issue, for the account of Borrower, one or more irrevocable
commercial letters of credit (individually, a "Commercial L/C" and collectively,
the "Commercial L/Cs") and/or one or more irrevocable standby letters of credit
(individually a "Standby L/C" and collectively the "Standby L/Cs"). The
aggregate amount available to be drawn under all outstanding Commercial L/Cs and
Standby L/Cs and the aggregate amount of unpaid reimbursement obligations under
all drawn Commercial L/Cs and Standby L/Cs shall not exceed Two Million Five
Hundred Thousand Dollars ($2,500,000) and shall reduce, dollar for dollar, the
maximum amount available under the Revolving Loan. Each Commercial L/C and
Standby L/C shall call only for drafts drawn at sight. No Commercial L/C shall
have an expiry date more than 180 days from its date of issuance and no Standby
L/C shall have an expiry date more than 12 months from its date of issuance
provided, however, that in no event shall any Commercial L/C or Standby L/C have
an expiry date later than the maturity date of the Revolving Loan. Each
Commercial L/C and Standby L/C shall be drawn on such terms and conditions as
are acceptable to Bank and shall be governed by the terms of (and Borrower
agrees to execute) Bank's standard form of credit application and reimbursement
agreement or standby letter of credit application and reimbursement agreement,
as the case may be.
1.2 Terminology.
As used herein the word "Loan" shall mean, collectively, all the credit
facilities described above.
As used herein the word "Note" shall mean, collectively, all the
promissory notes described above.
As used herein, the words "Loan Documents" shall mean all documents
executed in connection with this Agreement.
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1.3 Purpose of Loan. The proceeds of the Revolving Loan shall be used
for general working capital purposes, general operating needs, common and/or
preferred stock repurchases and acquisitions.
1.4 Interest. The unpaid principal balance of the Revolving Loan shall
bear interest at the rate or rates provided in the Note and selected by
Borrower. The Revolving Loan may be prepaid in full or in part only in
accordance with the terms of the Revolving Note and any such prepayment shall be
subject to the prepayment fee provided for therein.
1.5 Unused Commitment Fee. On the last calendar day of the third month
following the execution of this Agreement and on the last calendar day of each
three-month period thereafter until July 31, 2000, or the earlier termination of
the Loan, Borrower shall pay to Bank a fee of fifteen one-hundredths percent
(0.15%) per year on the average unused portion of the Loan for the preceding
quarter computed on the basis of actual days elapsed of a year of 360 days.
1.6 Balances. Borrower shall maintain its major depository accounts with
Bank until the Note and all sums payable pursuant to this Agreement have been
paid in full.
1.7 Disbursement. Upon execution hereof, Bank shall disburse the
proceeds of the Loan as provided in Bank's standard form Authorization executed
by Borrower.
1.8 Controlling Document. In the event of any inconsistency between the
terms of this Agreement and any Note or any of the other Loan Documents, the
terms of such Note or other Loan Documents will prevail over the terms of this
Agreement.
SECTION 2. CONDITIONS PRECEDENT
Bank shall not be obligated to disburse all or any portion of the
proceeds of the Loan unless at or prior to the time for the making of such
disbursement, the following conditions have been fulfilled to Bank's
satisfaction:
2.1 Compliance. Borrower shall have performed and complied with all
terms and conditions required by this Agreement to be performed or complied with
by it prior to or at the date of the making of such disbursement and shall have
executed and delivered to Bank the Note and other documents deemed necessary by
Bank.
2.2 Borrowing Resolution. Borrower shall have provided Bank with
certified copies of resolutions duly adopted by the Board of Directors of
Borrower, authorizing this Agreement and the Loan Documents. Such resolutions
shall also designate the persons who are authorized to act on Borrower's behalf
in connection with this Agreement and to do the things required of Borrower
pursuant to this Agreement.
2.3 Continuing Compliance. At the time any disbursement is to be made,
there shall not exist any event, condition or act which constitutes an event of
default under Section 6 hereof or any event, condition or act which with notice,
lapse of time or both would constitute such event of default; nor shall there be
any such event, condition, or act immediately after the disbursement were it to
be made.
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SECTION 3. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that:
3.1 Business Activity. The principal business of Borrower is as a
manufacturer and seller of disposable latex and synthetic gloves.
3.2 Affiliates and Subsidiaries. Borrower's affiliates and subsidiaries
(those entities in which Borrower has either a controlling interest or at least
a 25% ownership interest) and their addresses, and the names of Borrower's
principal shareholders, are as provided on a schedule delivered to Bank on or
before the date of this Agreement.
3.3 Authority to Borrow. The execution, delivery and performance of this
Agreement, the Note and all other agreements and instruments required by Bank in
connection with the Loan are not in contravention of any of the terms of any
indenture, agreement or undertaking to which Borrower is a party or by which it
or any of its property is bound or affected.
3.4 Financial Statements. The financial statements of Borrower,
including both a balance sheet at December 31, 1997, together with supporting
schedules, and an income statement for the twelve (12) months ended December 31,
1997, have heretofore been furnished to Bank, and are true and complete and
fairly represent the financial condition of Borrower during the period covered
thereby. Since December 31, 1997 there has been no material adverse change in
the financial condition or operations of Borrower.
3.5 Title. Except for assets which may have been disposed of in the
ordinary course of business, Borrower has good and marketable title to all of
the property reflected in its financial statements delivered to Bank and to all
property acquired by Borrower since the date of said financial statements, free
and clear of all liens, encumbrances, security interests and adverse claims
except those specifically referred to in said financial statements.
3.6 Litigation. There is no litigation or proceeding pending or
threatened against Borrower or any of its property which is reasonably likely to
affect the financial condition, property or business of Borrower in a materially
adverse manner or result in liability in excess of Borrower's insurance
coverage.
3.7 Default. Borrower is not now in default in the payment of any of its
material obligations, and there exists no event, condition or act which
constitutes an event of default under Section 6 hereof and no condition, event
or act which with notice or lapse of time, or both, would constitute an event of
default.
3.8 Organization. Borrower is duly organized and existing under the laws
of the state of its organization, and has the power and authority to carry on
the business in which it is engaged and/or proposes to engage.
3.9 Power. Borrower has the power and authority to enter into this
Agreement and to execute and deliver the Note and all of the other Loan
Documents.
3.10 Authorization. This Agreement and all things required by this
Agreement have been duly authorized by all requisite action of Borrower.
3.11 Qualification. Borrower is duly qualified and in good standing in
any jurisdiction where such qualification is required, except for any
jurisdiction where the failure to so qualify would not have a material adverse
effect on the operations or financial condition of Borrower.
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3.12 Compliance With Laws. Borrower is not in violation with respect to
any applicable laws, rules, ordinances or regulations which materially affect
the operations or financial condition of Borrower.
3.13 ERISA. Any defined benefit pension plans as defined in the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), of Borrower meet,
as of the date hereof, the minimum funding standards of Section 302 of ERISA,
and no Reportable Event or Prohibited Transaction as defined in ERISA has
occurred with respect to any such plan.
3.14 Regulation U. No action has been taken or is currently planned by
Borrower, or any agent acting on its behalf, which would cause this Agreement or
the Note to violate Regulation U or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities and
Exchange Act of 1934, in each case as in effect now or as the same may hereafter
be in effect. Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock as one of its important
activities and none of the proceeds of the Loan will be used directly or
indirectly for such purpose.
3.15 Continuing Representations. These representations shall be
considered to have been made again at and as of the date of each disbursement of
the Loan and shall be true and correct as of such date or dates.
SECTION 4. AFFIRMATIVE COVENANTS
Until the Note and all sums payable pursuant to this Agreement or any
other of the Loan Documents have been paid in full, unless Bank waives
compliance in writing, Borrower agrees that:
4.1 Use of Proceeds. Borrower will use the proceeds of the Loan only as
provided in subsection 1.3 above.
4.2 Payment of Obligations. Borrower will pay and discharge promptly all
taxes, assessments and other governmental charges and claims levied or imposed
upon it or its property, or any part thereof, provided, however, that Borrower
shall have the right in good faith to contest any such taxes, assessments,
charges or claims and, pending the outcome of such contest, to delay or refuse
payment thereof provided that adequately funded reserves are established by it
to pay and discharge any such taxes, assessments, charges and claims.
4.3 Maintenance of Existence. Borrower will maintain and preserve its
existence and assets and all rights, franchises, licenses and other authority
necessary for the conduct of its business and will maintain and preserve its
property, equipment and facilities in good order, condition and repair. Bank
may, at reasonable times on twenty-four (24) hours prior written notice, visit
and inspect any of the properties of Borrower.
4.4 Records. Borrower will keep and maintain full and accurate accounts
and records of its operations according to generally accepted accounting
principles and will permit Bank, at reasonable times on twenty-four (24) hours
prior written notice, to have access thereto, to make examination and
photocopies thereof, and to make audits during regular business hours.
Reasonable costs for such audits shall be paid by Borrower.
4.5 Information Furnished. Borrower will furnish to Bank:
(a) Within sixty (60) days after the close of each fiscal quarter,
except for the final quarter of each fiscal year, its unaudited balance sheet as
of the close of such fiscal quarter,
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its unaudited income and expense statement with supportive schedules and
statement of retained earnings for that fiscal quarter, prepared in accordance
with generally accepted accounting principles;
(b) Within one hundred (100) days after the close of each fiscal year, a
copy of its consolidating financial statements and its consolidated statement of
financial condition including at least its balance sheet as of the close of such
fiscal year, its income and expense statement and retained earnings statement
for such fiscal year, examined and prepared on an audited basis by independent
certified public accountants selected by Borrower and reasonably satisfactory to
Bank, in accordance with generally accepted accounting principles applied on a
basis consistent with that of the previous year, except for any inconsistencies
explained in such audit of the notes thereto.
(c) As soon as available, copies of such financial statements and
reports as Borrower may file with any state or federal agency;
(d) Such other financial statements and information as Bank may
reasonably request from time to time;
(e) In connection with each financial statement provided hereunder, a
statement executed by chief financial officer of Borrower, certifying that no
default has occurred and no event exists which with notice or the lapse of time,
or both, would result in a default hereunder; and a certification of compliance
with all covenants under the Agreement, executed by Borrower's chief financial
officer or other duly authorized officer of Borrower, in form reasonably
acceptable to Bank;
(f) Prompt written notice to Bank of all events of default under any of
the terms or provisions of this Agreement or of any other agreement, contract,
document or instrument entered, or to be entered into with Bank; and of any
litigation which, if decided adversely to Borrower, would have a material
adverse effect on Borrower's financial condition; and of any other matter which
has resulted in, or is likely to result in, a material adverse change in its
financial condition or operations; and
(g) Written notice to Bank of any changes in Borrower's officers and
other senior management, and prior notice to Bank of any changes in Borrower's
name, the location of Borrower's assets, or Borrower's principal place of
business or chief executive office.
4.6 Quick Ratio. Borrower shall maintain at all times a ratio of cash,
accounts receivable and marketable securities to current liabilities of not less
than 1.0:1.0, as such terms are defined by generally accepted accounting
principles.
4.7 Tangible Net Worth. Borrower will at all times maintain Tangible Net
Worth of not less than the sum of (a) Fifty Million Dollars ($50,000,000) and
the aggregate amount of all infusions of equity, except for the grant or
exercise of stock options, made on or after January 1, 1998. "Tangible Net
Worth" shall mean net worth increased by indebtedness of Borrower subordinated
to Bank and decreased by patents, licenses, trademarks, trade names, goodwill
and other similar intangible assets, organizational expenses, and monies due
from affiliates (including officers, shareholders and directors).
4.8 Debt to Tangible Net Worth. Borrower will at all times maintain a
ratio of total liabilities to tangible net worth of not greater than 0.50:1.0.
4.9 Profitability. Borrower will maintain a net profit, after provision
for income taxes, of any positive amount as reported at the end of each fiscal
quarter, and Borrower will maintain
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its annual net profit, after provision for income taxes, at not less than Ten
Percent (10%) of consolidated gross annual revenues.
4.10 Insurance. Borrower will keep all of its insurable property, real,
personal or mixed, insured by good and responsible companies against fire and
such other risks as are customarily insured against by companies conducting
similar business with respect to like properties. Borrower will maintain
adequate worker's compensation insurance and adequate insurance against
liability for damages to persons and property in such amounts as are customarily
maintained by companies engaged in similar businesses in the same general areas
in which Borrower operates.
4.11 Additional Requirements. Borrower will promptly, upon demand by
Bank, take such further action and execute all such additional documents and
instruments in connection with this Agreement as Bank in its reasonable
discretion deems necessary, and promptly supply Bank with such other information
concerning its affairs as Bank may request from time to time.
4.12 Litigation and Attorneys' Fees. Borrower will pay promptly to Bank
upon demand, reasonable attorneys' fees (including but not limited to the
reasonable estimate of the allocated costs and expenses of in-house legal
counsel and legal staff) and all costs and other expenses paid or incurred by
Bank in collecting, modifying or compromising the Loan or in enforcing or
exercising its rights or remedies created by, connected with or provided for in
this Agreement or any of the Loan Documents, whether or not an arbitration,
judicial action or other proceeding is commenced. If such proceeding is
commenced, only the prevailing party shall be entitled to attorneys' fees and
court costs.
4.13 Bank Expenses. Borrower will pay or reimburse Bank for all costs,
expenses and fees incurred by Bank in preparing and documenting this Agreement
and the Loan, and all amendments and modifications thereof, including but not
limited to all filing and recording fees, costs of appraisals, insurance and
attorneys' fees, including the reasonable estimate of the allocated costs and
expenses of in-house legal counsel and legal staff.
4.14 Reports Under Pension Plans. Intentionally Deleted.
SECTION 5. NEGATIVE COVENANTS
Until the Note and all other sums payable pursuant to this Agreement or
any other of the Loan Documents have been paid in full, unless Bank waives
compliance in writing, Borrower agrees that:
5.1 Encumbrances and Liens. Borrower will not create, assume or suffer
to exist any mortgage, pledge, security interest, encumbrance, or lien (other
than for taxes not delinquent and for taxes and other items being contested in
good faith) on property of any kind, whether real, personal or mixed, now owned
or hereafter acquired, or upon the income or profits thereof, except to Bank and
except for minor encumbrances and easements on real property which do not affect
its market value, and except for existing liens on Borrower's personal property
and future purchase money security interests encumbering only the personal
property purchased. All of such permitted personal property liens shall not
exceed, in the aggregate, One Million Five Hundred Thousand Dollars ($1,500,000)
at any time.
5.2 Borrowings. Borrower will not sell, discount or otherwise transfer
any account receivable or any note, draft or other evidence of indebtedness,
except to Bank or except to a financial institution at face value for deposit or
collection purposes only and without any fee other than fees normally charged by
the financial institution for deposit or collection services. Borrower will not
borrow any money, become contingently liable to borrow money, nor enter any
agreement to directly or indirectly obtain borrowed money, except pursuant to
agreements made with Bank.
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5.3 Sale of Assets, Liquidation or Merger. Borrower will neither
liquidate nor dissolve nor enter into any consolidation, merger, partnership or
other combination, nor convey, sell or lease all or the greater part of its
assets or business, nor acquire all or the greater part of the assets or
business of another; provided, however, Borrower may merge or consolidate with
another corporation, and may acquire all or the greater part of the assets or
business of another, if (a) Borrower is in compliance with the covenants of this
Agreement immediately following the consummation of such transaction, (b) the
aggregate compensation paid or to be paid by Borrower in connection with such
transaction does not exceed fifteen percent (15%) of Borrower's Tangible Net
Worth as of the last day of the calendar month immediately preceding the
calendar month in which such transaction is consummated, (c) the assets acquired
in connection with such transaction are not, following the consummation of such
transaction, subject to any lien or encumbrance in favor of any person or entity
other than Bank unless otherwise permitted by the terms of this Agreement, and
(d) if such transaction is a merger or consolidation, Borrower is the surviving
corporation.
5.4 Loans, Advances and Guaranties. Borrower will not, except in the
ordinary course of business as currently conducted, make any loans or advances,
become a guarantor or surety, pledge its credit or properties in any manner or
extend credit; except, however, Borrower may offer, up to a maximum of Fifteen
Million Dollars ($15,000,000), its unsecured guarantee to its subsidiaries
located in Malaysia and Thailand.
5.5 Investments. Borrower will not purchase the debt or equity of
another person or entity except for savings accounts and certificates of deposit
from banks with deposits in excess of Five Hundred Million Dollars
($500,000,000), direct U.S. Government obligations and commercial paper issued
by corporations with the top ratings of Xxxxx'x or Standard & Poor's, provided
all such permitted investments shall mature within one year of purchase.
5.6 Payment of Dividends. Borrower will not declare or pay any
dividends, other than a dividend payable in its own common stock, or authorize
or make any other distribution with respect to any of its stock now or hereafter
outstanding, unless, subsequent to the payment of such dividend or distribution,
Borrower will be in compliance with the covenants contained in this Agreement.
5.7 Affiliate Transactions. Borrower will not transfer any property to
an affiliate or subsidiary, except for value received in the normal course of
business as business would be conducted with an unrelated or unaffiliated
entity. In no event shall management fees or fees for services be paid by
Borrower to any such affiliate without Bank's prior written approval.
5.8 Lease Obligations. Borrower will not incur new lease obligations as
lessee which would result in aggregate lease payments for any fiscal year
exceeding One Million Five Hundred Thousand Dollars ($1,500,000). Each said
lease shall be of equipment or real property needed by Borrower in the ordinary
course of its business.
SECTION 6. EVENTS OF DEFAULT
The occurrence of any of the following events ("Events of Default")
shall terminate any obligation on the part of Bank to make or continue the Loan
and automatically, unless otherwise provided under the Note, shall make all sums
of interest and principal and any other amounts owing under the Loan immediately
due and payable, without notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor, or any other notices or demands:
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6.1 Borrower shall fail to pay when due any principal payment, or shall
fail to pay within ten (10) days of the date when due any interest or other
payment, required under the terms of the Note, this Agreement or any of the
other Loan Documents; or
6.2 Any default shall occur under the Note; or
6.3 Any of the following events or conditions shall occur or exist:
(a) Xxxxxxx Xxxxx, Xxxxxx Xxxxx and/or Xxxx Xxxxxxxxx or their
respective affiliates shall cease to own or control, in the aggregate, at least
twenty percent (20%) of the issued and outstanding stock of Borrower; or
(b) Any person, entity or affiliated group other than Xxxxxxx Xxxxx,
Xxxxxx Xxxxx and/or Xxxx Xxxxxxxxx or their respective affiliates shall own or
control twenty percent (20%) or more of the issued and outstanding stock of
Borrower; or
(c) Borrower and/or one or more subsidiaries of Borrower shall cease
to own or control at least eighty percent (80%) of the issued and outstanding
stock of any subsidiary of Borrower.
SECTION 7. MISCELLANEOUS PROVISIONS
7.1 Additional Remedies. The rights, powers and remedies given to Bank
hereunder shall be cumulative and not alternative and shall be in addition to
all rights, powers and remedies given to Bank by law against Borrower or any
other person, including but not limited to Bank's rights of setoff or banker's
lien.
7.2 Nonwaiver. Any forbearance or failure or delay by Bank in exercising
any right, power or remedy hereunder shall not be deemed a waiver thereof and
any single or partial exercise of any right, power or remedy shall not preclude
the further exercise thereof. No waiver shall be effective unless it is in
writing and signed by an officer of Bank.
7.3 Inurement. The benefits of this Agreement shall inure to the
successors and assigns of Bank and the permitted successors and assignees of
Borrower, and any assignment by Borrower without Bank's consent shall be null
and void.
7.4 Applicable Law. This Agreement and all other agreements and
instruments required by Bank in connection therewith shall be governed by and
construed according to the laws of the State of California.
7.5 Severability. Should any one or more provisions of this Agreement be
determined to be illegal or unenforceable, all other provisions nevertheless
shall be effective. In the event of any conflict between the provisions of this
Agreement and the provisions of any note or reimbursement agreement evidencing
any indebtedness hereunder, the provisions of such note or reimbursement
agreement shall prevail.
7.6 Integration Clause. Except for documents and instruments
specifically referenced herein, this Agreement constitutes the entire agreement
between Bank and Borrower regarding the Loan and all prior communications verbal
or written between Borrower and Bank shall be of no further effect or
evidentiary value.
7.7 Construction. The section and subsection headings herein are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
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7.8 Amendments. This Agreement may be amended only in writing signed by
all parties hereto.
7.9 Counterparts. Borrower and Bank may execute one or more counterparts
to this Agreement, each of which shall be deemed an original, but when together
shall be one and the same instrument.
SECTION 8. SERVICE OF NOTICES
8.1 Any notices or other communications provided for or allowed
hereunder shall be effective only when given by one of the following methods and
addressed to the respective party at its address given with the signatures at
the end of this Agreement and shall be considered to have been validly given:
(a) upon delivery, if delivered personally; (b) upon receipt, if mailed, first
class postage prepaid, with the United States Postal Service; (c) on the next
business day, if sent by overnight courier service of recognized standing; and
(d) upon telephoned confirmation of receipt, if telecopied.
8.2 The addresses to which notices or demands are to be given may be
changed from time to time by notice delivered as provided above.
THIS AGREEMENT is executed on behalf of the parties by duly authorized
officers as of the date first above written.
UNION BANK OF CALIFORNIA, N.A. SAFESKIN CORPORATION
By: /s/ XXXXX XXXXXXX By: /s/ XXXXX X. XXXXXX
-------------------------- ---------------------------------
Title Vice President Title Executive Vice-President and
-------------------------- Chief Financial Officer
---------------------------------
By: By:
-------------------------- ---------------------------------
Title: Title
-------------------------- ---------------------------------
Address: 000 "X" Xxxxxx, 0xx Xxxxx Address: 00000 Xxxx Xxxxx Xxxxx, Xxxxxxxx "X"
Xxx Xxxxx, Xxxxxxxxxx 00000-0000 Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Vice President Attention: Xxxxx Xxxxxx, Chief Financial Officer
Telecopier: (000)000-0000 Telecopier: (000)000-0000
Telephone: (000)000-0000 Telephone: (000)000-0000
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