“Projects” has the meaning set forth in the preliminary statements of this Agreement.
“Project Companies” has the meaning set forth in the preliminary statements of this Agreement.
“Prudent Operator Standard” means that a Person will (a) perform its duties in good faith and as a reasonably prudent operator, (b) perform its duties in compliance with the requirements of the Material Contracts, (c) exercise such care, skill and diligence as a reasonably prudent business company of established reputation engaged in the geothermal energy business would exercise in the conduct of its business and for the advancement or protection of its own interests, (d) perform the duties in accordance with applicable geothermal energy industry standards, taking into account, prior to the Flip Date, the requirements to maintain qualification for Tax Credits, (e) use sufficient and properly trained and skilled personnel, and (f) use parts and supplies that meet the specifications set forth in the Material Contracts, in all cases with respect to (a) through (f) herein, taking into account all of the costs, expenses and benefits of operation of each Project.
“Purchase Agreement” has the meaning set forth in the preliminary statements of this Agreement.
“Purchaser Indemnified Costs” has the meaning set forth in the Purchase Agreement.
“Quarter” means, with respect to the Fiscal Year of the Company, each of the three month periods from January 1 through March 31, from April 1 through June 30, from July 1 through September 30 and from October 1 through December 31 of any calendar year.
“Representatives” means, with respect to any Person, the managing member(s), the officers, directors, employees, representatives or agents (including investment bankers, financial advisors, attorneys, accountants, brokers and other advisors) of such Person, to the extent that such officer, director, employee, representative or agent of such Person is acting in his or her capacity as an officer, director, employee, representative or agent of such Person.
“Revenue Procedures” means statements of procedure from the IRS designated as such and issued to the general public, affecting the rights or duties of taxpayers or other members of the public under the Code.
“Specified Price” has the meaning set forth in Section 9.5(a) of this Agreement.
“Specified Terms” has the meaning set forth in Section 9.5(a) of this Agreement.
“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, joint venture or other entity of which such Person (either alone or through or together with any other Person pursuant to any agreement, arrangement, contract or other commitment) owns, directly or indirectly, 50% or more of the stock or other equity
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interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity.
“Super-Majority Vote” has the meaning set forth in Section 3.2(f).
“Target Internal Rate of Return” means the rate of return set forth in the Base Case Model.
“Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means:
(i) any taxes, customs, duties, charges, fees, levies, penalties or other assessments imposed by any federal, state, local or foreign taxing authority, including, but not limited to, income, gross receipts, windfall profit, severance, property, production, sales, use, license, excise, franchise, net worth, employment, occupation, payroll, withholding, social security, alternative or add-on minimum, ad valorem, transfer, stamp, or environmental tax, or any other tax, custom, duty, fee, levy or other like assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax, or additional amount attributable thereto; and
(ii) any liability for the payment of amounts with respect to payment of a type described in clause (i), including as a result of being a member of an affiliated, consolidated, combined or unitary group, as a result of succeeding to such liability as a result of merger, conversion or asset transfer or as a result of any obligation under any tax sharing arrangement or tax indemnity agreement.
“Tax Credits” means the renewable electricity production tax credits within the meaning of Section 45 of the Code or any successor to such section.
“Tax Matters Partner” has the meaning set forth in Section 7.7(a) hereof.
“Tax Return” means any return, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including any IRS Form K-1 issued to Members by the Company, information return, claim for refund, amended return or declaration of estimated Tax.
“Tax Year” means the 12-month year ending November 30 unless the Company is required by Section 706 of the Code to use a different Tax Year.
“Termination Date” has the meaning set forth in Section 2.4 hereof.
“Transaction Documents” means (i) prior to the Galena 3 Closing this Agreement, the Purchase Agreement, the Management Services Agreement, the O&M Agreements (other than the O&M Agreement between the Operator and ORNI 14), and each of the other documents required to be delivered on the Initial Closing Date, individually and collectively and (ii) after the Galena 3 Closing, all the agreements listed in subsection (i) plus the O&M Agreement between the Operator and ORNI 14, and each of the other documents required to be delivered on the Galena 3 Closing Date, individually and collectively.
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“Transfer” has the meaning set forth in Section 9.1 hereof.
“Treasury Regulations” means the regulations promulgated under the Code, as such regulations are in effect on the date hereof or as otherwise contemplated by Section 5.2 hereof.
“UCC” means the Uniform Commercial Code of any applicable jurisdiction.
“Unrelated Persons” means a Person that is not “related”, within the meaning of Section 45(e)(4) of Code, to any Person to whom any of the Project Companies sells electricity during the period the Company is entitled to Tax Credits on such electricity.
“Working Capital Loan” has the meaning given to such term in Section 11.16(a) hereof.
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Schedule 1
Project Companies and Projects
Prior to the Galena 3 Closing:
Name of Project Company | Project | Location of Project | Generating Capacity (MW) | PPA Offtaker | PPA End Date |
ORNI 3 LLC | Desert Peak 2 | Churchill County, Nevada | 12 | Nevada Power Company | 2027 |
Steamboat Hills, LLC | Galena 2 | Washoe County, Nevada | 10 | Nevada Power Company | 2027 |
Steamboat Hills, LLC | Steamboat Hills | Washoe County, Nevada | 10 | Sierra Pacific Power Company | 2018 |
After the Galena 3 Closing:
Name of Project Company | Project | Location of Project | Generating Capacity (MW) | PPA Offtaker | PPA End Date |
ORNI 3 LLC | Desert Peak 2 | Churchill County, Nevada | 12 | Nevada Power Company | 2027 |
Steamboat Hills, LLC | Galena 2 | Washoe County, Nevada | 10 | Nevada Power Company | 2027 |
Steamboat Hills, LLC | Steamboat Hills | Washoe County, Nevada | 10 | Sierra Pacific Power Company | 2018 |
ORNI 14 LLC (“ORNI 14”) | Galena 3 | Washoe County, Nevada | 17 | Sierra Pacific Power Company | 2028* |
* | The Galena 3 power purchase agreement will expire twenty years from January 1 following the commercial operations date. The expiration date presented above is based on current expectations regarding the commercial operations date of the Galena 3 Project. |
Schedule 4.2(d)
Initial Capital Account
Member Name and Address | Ormat Nevada, Inc. | Morgan Stanley Geothermal LLC | Lehman-OPC LLC |
| Ormat Nevada, Inc. 6225 Neil Road Reno, Nevada 89511 Attn: Asset Management Telephone: (775) 356-9029 Facsimile: (775) 356-9039 | Morgan Stanley Geothermal LLC 1585 Broadway, Floor 04 New York, NY 10036 Attn: Jason Cavaliere, Executive Director Telephone: (212) 761-1385 Facsimile: (212) 507-4012 | Lehman-OPC LLC c/o Lehman Brothers 745 7th Ave, 5th Floor New York, NY 10019 Attn: Carl Weatherley-White Telephone: (212) 526-4041 Facsimile: (212) 834-4754 |
Capital Account Balance | $25,200,000* | $50,260,000** | $21,540,000** |
Capital Interest | 25.98% | 51.81% | 22.21% |
* | The excess of the fair market value of the Projects (based on pre-closing appraisal) and the Class A Member’s up-front contribution to O&M and spare parts reserve accounts over the Class B Member’s Capital Account. |
** | The total cash paid at closing. |
Schedule 9
Transfer Representations and Warranties
(a) [The Class B Member] is a [______________] duly organized, validly existing and in good standing under the laws of [______________] and has all requisite [__________] power and authority to transfer the Class B Membership Interests as contemplated by the Agreement.
(b) [The Class B Member] owns directly [___]% of the Company’s outstanding Class B Membership Interests to the extent that is what it was sold under the [Purchase Agreement] [other transfer documentation].
(c) [The Class B Member] has absolute record and beneficial ownership and title to all of the Membership Interests held by [the Class B Member] to the extent that is what it was sold under the [Purchase Agreement] [other transfer documentation], free and clear of any Encumbrances except Permitted Encumbrances.
(d) The assignment agreement effecting the Transfer of the Class B Membership Interests from [the Class B Member] to [the Class A Member] has been duly and validly executed and delivered by [the Class B Member] and constitutes [the Class B Member’s] legal, valid and binding obligation, enforceable against it in accordance with its terms (subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium and similar laws from time to time in effect relating to the rights and remedies of creditors as well as to general principles of equity whether considered at law or in equity).
(e) Neither the execution, delivery and performance by [the Class B Member] of the assignment agreement effecting the Transfer of the Class B Membership Interests from [the Class B Member] to [the Class A Member] nor the consummation of the transactions contemplated thereby will (i) conflict with or result in any breach of any provision of the Organizational Documents of [the Class B Member], (ii) violate or conflict with (or give rise to any right of termination, cancellation or acceleration under) any of the terms, conditions or provisions of any material contract or other instrument or obligation that [the Class B Member] is a party to or by which [the Class B Member] is bound; or (iii) violate any material Legal Requirement or any material license, franchise, permit or other authorization applicable to or affecting [the Class B Member] or any of its respective assets.
(f) No declaration, filing or registration with, or notice to, or authorization, consent or approval of any Governmental Body or any other Person that has not been made or obtained on or before the date hereof is necessary for the execution, delivery and performance by [the Class B Member] of the assignment agreement effecting the Transfer of the Class B Membership Interests from [the Class B Member] to [the Class A Member] or the consummation by any such Person of the transactions contemplated thereby.
Exhibit A
Form of Certificate for Class A Membership Interest
THE INTERESTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS. ACCORDINGLY, SUCH INTERESTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH STATE SECURITIES LAWS, AND THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO IT THAT NO VIOLATION OF SUCH ACT AND SUCH STATE SECURITIES LAWS WILL RESULT FROM ANY PROPOSED SALE, TRANSFER OR OTHER DISPOSITION OF SUCH INTERESTS.
THIS CERTIFICATE EVIDENCES AN INTEREST IN OPC LLC AND SHALL BE A SECURITY FOR THE PURPOSES OF ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN THE STATE OF NEW YORK.
No. [___] | Class A Membership Interests |
OPC LLC
a Delaware Limited Liability Company
Certificate of Interest
This certifies that [__________________] is the owner of [__________________] Class A Membership Interests in OPC LLC (the “Company”), which limited liability company interests are subject to the terms of the Amended and Restated Limited Liability Company Agreement of OPC LLC, dated as of [___________], 2007, as the same may be further amended from time to time in accordance with the terms thereof (the “Limited Liability Company Agreement”).
This Certificate of Interest may be transferred by the lawful holders hereof only in accordance with the provisions of the Limited Liability Company Agreement.
IN WITNESS WHEREOF, the said Company has caused this Certificate of Interest to be signed by its duly authorized representative this [___] day of [_______________], 2007.
[Reverse]
INSTRUMENT OF TRANSFER OF
MEMBERSHIP INTEREST IN
OPC LLC
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer unto
| | | |
| | | |
(print or type name of assignee) | | | |
the limited liability company interest evidenced by and within the Certificate of Interest herewith, and does hereby irrevocably constitute and appoint __________________ as attorney to transfer said interest on the books of OPC LLC, with full power of substitution in the premises.
Dated as of:
| | [__________________] |
| | By:
| |
| | | Name: Title: |
Exhibit B
Form of Certificate for Class B Membership Interest
THE INTERESTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS. ACCORDINGLY, SUCH INTERESTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH STATE SECURITIES LAWS, AND THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO IT THAT NO VIOLATION OF SUCH ACT AND SUCH STATE SECURITIES LAWS WILL RESULT FROM ANY PROPOSED SALE, TRANSFER OR OTHER DISPOSITION OF SUCH INTERESTS.
THIS CERTIFICATE EVIDENCES AN INTEREST IN OPC LLC AND SHALL BE A SECURITY FOR THE PURPOSES OF ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN THE STATE OF NEW YORK.
No. [___] | Class B Membership Interests |
OPC LLC
a Delaware Limited Liability Company
Certificate of Interest
This certifies that [__________________] is the owner of [__________________] Class B Membership Interests in OPC LLC (the “Company”), which limited liability company interests are subject to the terms of the Amended and Restated Limited Liability Company Agreement of OPC LLC, dated as of [____________], 2007, as the same may be further amended from time to time in accordance with the terms thereof (the “Limited Liability Company Agreement”).
This Certificate of Interest may be transferred by the lawful holders hereof only in accordance with the provisions of the Limited Liability Company Agreement.
IN WITNESS WHEREOF, the said Company has caused this Certificate of Interest to be signed by its duly authorized representative this [___] day of [_______________], 2007.
[Reverse]
INSTRUMENT OF TRANSFER OF
MEMBERSHIP INTEREST IN
OPC LLC
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer unto
| | | |
| | | |
(print or type name of assignee) | | | |
the limited liability company interest evidenced by and within the Certificate of Interest herewith, and does hereby irrevocably constitute and appoint __________________ as attorney to transfer said interest on the books of OPC LLC, with full power of substitution in the premises.
Dated as of:
| | [__________________] |
| | By:
| |
| | | Name: Title: |
Exhibit C
Form of Operations Report
A. Year-to-Date Consolidated Operational Information:
Period to Run Evaluation For | Start | | End | Current Prod Month |
| | | | |
|
Project Specifics |
Description | Desert Peak 2 | Steamboat Hills | Galena 2 | Galena 3 |
MW’s | | | | |
IE Predicted 12 Month & Available Data Period |
Average Gen MW’s (12 Month) | | | | |
Average Gen MW’s (Available Data Period) | | | | |
Total Gen MWh’s (Available Data Period) | | | | |
Actuals For Available Data Period |
Avg Gen MW’s | | | | |
Total Gen Mwh’s | | | | |
Deviations for Available Data Period Actual vs. IE |
Reporting Period Avg Gen MW’s | | | | |
Reporting Period Total Gen Mwh’s | | | | |
| | | | | | |
Actual PTC Volume by Asset By Month |
Month | Desert Peak 2 | Steamboat Hills | Galena 2 | Galena 3 |
Jan | | | | |
Feb | | | | |
Mar | | | | |
Apr | | | | |
May | | | | |
Jun | | | | |
Jul | | | | |
Aug | | | | |
Sep | | | | |
Oct | | | | |
Nov | | | | |
Dec | | | | |
Actual Generation vs IE Predicted |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
B. Monthly Consolidated Operational Information:
Period to Run Evaluation For | Start | | End | Current Prod Month |
| | | | |
|
Project Specifics |
Description | Desert Peak 2 | Steamboat Hills | Galena 2 | Galena 3 |
MW’s | | | | |
IE Predicted 12 Month & Available Data Period |
Average Gen MW’s (12 Month) | | | | |
Predicted Capacity Factor (Available Data Period) | | | | |
Average Gen MW’s (Available Data Period) | | | | |
Total Gen MWh’s (Available Data Period) | | | | |
Actuals For Available Data Period |
Avg Gen MW’s | | | | |
Total Gen Mwh’s | | | | |
Deviations for Available Data Period Actual vs. IE |
Reporting Period Avg Gen MW’s | | | | |
Reporting Period Total Gen Mwh’s | | | | |
| | | | | | |
Actual PTC Volume by Asset By Month |
Month | Desert Peak 2 | Steamboat Hills | Galena 2 | Galena 3 |
Jan | | | | |
Feb | | | | |
Mar | | | | |
Apr | | | | |
May | | | | |
Jun | | | | |
Jul | | | | |
Aug | | | | |
Sep | | | | |
Oct | | | | |
Nov | | | | |
Dec | | | | |
| | | | |
Actual Generation vs IE Predicted | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | | | | | |
Exhibit D
Form of Working Capital Loan Note
PROMISSORY NOTE
[Working Capital Loan]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
FOR VALUE RECEIVED, OPC LLC, a Delaware limited liability company (the “Borrower”), hereby promises to pay to the order of [____________], [______________________](the “Lender”), the principal sum of [_______] dollars $[________], on date 364 days after the date of this Note (the “Maturity Date”), unless sooner paid as provided herein.
The Borrower also promises to pay interest on the unpaid principal amount hereof from time to time outstanding, from the date hereof until paid in full, at a rate of per annum equal to LIBOR (as defined below) plus 2.0 percent, calculated on the basis of a 360-day year, such interest to be payable monthly on the last business day of each month (each, a “Payment Date”), commencing [insert date]. In addition, all accrued and unpaid interest hereon will be due and payable upon the day that all principal is due and payable (whether on the Maturity Date, by acceleration or otherwise). For purposes of this Note, “LIBOR” means the rate per annum quoted on the British Bankers’ Association Website “Historic Libor Rates” page, for 1 month Libor as of 10 London Business Days before the date hereof as the rate per annum for deposits in U.S. dollars, or if no rate appears on British Bankers’ Association Website, the one-month London Interbank Offered Rate as published in the Wall Street Journal two London Business Days prior to the date hereof.
Payment of both principal and interest on this Note shall be made by wire transfer to the Lender at such bank instructions provided to the Borrower in lawful money of the United States of America in immediately available funds.
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The Borrower shall have the right to prepay this Note in whole or in part at any time, together with interest on the amount prepaid to the date of prepayment, without penalty or premium.
Upon the occurrence of any of the following events, this Note shall become immediately due and payable in full, together with interest accrued thereon:
(i) the Borrower shall fail to make any payment hereunder when due and payable;
(ii) the Borrower shall become insolvent, or generally fail to pay, or admit in writing its inability to pay, its debts as they become due, or shall voluntarily commence any proceeding or file any petition under any bankruptcy, insolvency or similar federal, state or foreign law or seeking dissolution, liquidation or reorganization or the appointment of a receiver, trustee, custodian or liquidator for it or a substantial portion of its property, assets or business or to effect a plan or other arrangement with its creditors, or shall file any answer admitting the jurisdiction of the court and the material allegations of an involuntary petition filed against it in any bankruptcy, insolvency or similar proceeding, or shall be adjudicated bankrupt, or shall make a general assignment for the benefit of creditors, or shall consent to, or acquiesce in the appointment of, a receiver, trustee, custodian or liquidator for a substantial portion of its property, assets or business, or shall by any act or failure to act indicate its consent to or approval of any of the foregoing, or if any corporate action is taken by the Borrower for the purpose of effecting any of the foregoing; or
(iii) involuntary proceedings or an involuntary petition shall be commenced or filed against the Borrower under any bankruptcy, insolvency or similar federal, state or foreign law or seeking the dissolution, liquidation or reorganization of it or the appointment of a receiver, trustee, custodian or liquidator for it or of a substantial part of its property, assets or business, and such proceedings or petition shall not be dismissed within sixty (60) days; or any writ, judgment, tax lien, warrant of attachment, execution or similar process shall be issued or levied against a substantial part of its property, assets or business, and such writ, judgment, lien, warrant of attachment, execution or similar process shall not be released, vacated or fully bonded, within sixty (60) days after commencement, filing or levy, as the case may be, or any order for relief shall be entered in any such proceeding; or any winding-up, dissolution, liquidation or reorganization of the Borrower.
The Borrower waives any and all right to assert any defense (except for the Borrower’s performance under the Note), set-off, counterclaim or crossclaim of any nature whatsoever with respect to this Note or the obligations of the Borrower hereunder in any action or proceeding brought by the Lender to collect this Note, or any portion hereof. The Borrower waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.
The Borrower promises to pay all costs and expenses of the Lender (including, without limitation, reasonable attorneys’ fees and disbursements) incurred in connection with (i) the enforcement of, or collection of any amounts due under, this Note or (ii) any waiver, extension, amendment or modification of this Note.
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This Note shall be binding upon, and shall inure to the benefit of, the Borrower and the Lender and their respective successors and assigns; provided, however, that the Borrower shall not assign its rights or obligations hereunder without the prior written consent of the Lender. This Note may be freely assigned by the Lender without the consent of the Borrower.
This Note may only be modified, amended, or terminated (other than by payment in full) by an agreement in writing signed by the Borrower and the Lender. No waiver of any term, covenant or provision of this Note shall be effective unless given in writing by the Lender.
ALL LEGAL ACTIONS OR PROCEEDINGS BROUGHT AGAINST THE BORROWER WITH RESPECT TO THIS NOTE MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS NOTE THE BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, THE JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS OR ANY SIMILAR BASIS. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS, NOTICE OR OTHER PROCESS RELATING TO ANY LEGAL ACTION OR PROCEEDING BY DELIVERY THEREOF TO IT BY HAND OR BY MAIL TO THE ADDRESS OF THE BORROWER SET FORTH BELOW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF A HOLDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
IN WITNESS WHEREOF, the Borrower has executed this Note as of the day and year first above written.
| | OPC LLC |
| | By
| |
| | | Name: Title: Address: c/of [______________] [__________________] [__________________] |
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