Exhibit 10.3

 

VOTING AGREEMENT

 

This VOTING AGREEMENT (this “Agreement”), dated as of September 6, 2013 (the
“Effective Date”), is entered into by and between Double Black Diamond, L.P., a
Delaware limited partnership (“DBD LP”), Double Black Diamond Offshore Ltd., a
Cayman Islands exempted company (“Double Offshore”), Black Diamond Offshore
Ltd., a Cayman Islands exempted company (“Offshore,” and along with DBD LP and
Double Offshore, collectively, the “Investor”) and SWK Holdings Corporation, a
Delaware corporation (the “Company”, and together with Investor, the “Parties”
and, each individually, a “Party”).

 

RECITALS:

 

WHEREAS, simultaneously herewith, Investor and the Company are entering into a
Loan Agreement (as may be amended from time to time, the “Loan Agreement”)
whereby, on the terms and subject to the conditions set forth therein, Investor
will provide the Company with capital to fund additional financings in the life
sciences industries consistent with the past business practices of the Company;

 

WHEREAS, as a material inducement to the Company entering into the Loan
Agreement, Investor has agreed to enter into this Agreement to vote certain
Excess Shares (as defined herein) in accordance with the terms herein; and

 

WHEREAS, as a material inducement to Investor entering into the Loan Agreement,
the Company has agreed to enter into this Agreement to grant certain rights to
Investor in connection with future equity issuances by the Company in accordance
with the terms herein.

 

NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements contained herein, and intending to be legally bound hereby, the
Parties hereto agree as follows:

 

Section 1.     REPRESENTATIONS AND WARRANTIES.

 

1.1.     Representations and Warranties. Each Party represents and warrants to
the other Party as follows:

 

(a)     Such Party has the requisite power, authority and legal capacity to
enter into and deliver this Agreement and to carry out its obligations
hereunder. This Agreement has been duly executed and delivered by such Party
and, assuming its due authorization, execution and delivery by the other Party,
is a legal, valid and binding obligation of such Party, enforceable against such
Party in accordance with its terms.

 

(b)     The execution and delivery of this Agreement by such Party do not, and
the performance of this Agreement by such Party will not, (i) conflict with or
violate any laws or (ii) conflict with or violate any contract or other
instrument to which such Party is a party or by which such Party is bound,
including, without limitation, any voting agreement, stockholders agreement or
voting trust, except to the extent waived on or prior to the date hereof.

 

 
 

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(c)     The execution and delivery of this Agreement by such Party do not, and
the performance of this Agreement by such Party will not, require such Party to
obtain any consent, approval, authorization or permit of, or to make any filing
with or notification to, any person.

 

(d)     As of the Effective Date and immediately prior to the issuance of
warrants to Investor pursuant to that certain Warrant Agreement, dated as of the
Effective Date, by the Company in favor of Investor (the “Warrant Agreement”),
Investor and its Affiliates either directly or indirectly beneficially own
12,149,100 shares of Common Stock (the “Investor Shares”). Except for the
Investor Shares, as of the Effective Date and immediately prior to the issuance
of warrants to Investor pursuant to the Warrant Agreement, Investor and its
Affiliates do not beneficially own any (i) shares of capital stock or voting
securities of the Company, (ii) securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities of the Company or
(iii) options or other rights to acquire (whether currently, upon lapse of time,
following the satisfaction of any conditions, upon the occurrence of any event
or any combination of the foregoing) from the Company any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of the Company. For purposes of this Agreement, “Affiliate”
means, as to any person or entity, each other person or entity that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such person or entity, provided
that, for purposes of this Agreement, the Company and its subsidiaries shall not
be deemed Affiliates of the Investor and vice versa. A person or entity shall be
deemed to be “controlled by” any other person or entity if such other person or
entity possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of a person or entity, whether through
the ownership of voting securities, by contract, or otherwise.

 

Section 2.     AGREEMENT TO VOTE

 

2.1.     Agreement to Vote.

 

(a)     During the Voting Period, Investor will (and, if applicable, will cause
any of its Affiliates who have the right to vote or direct the voting of any
Excess Shares to) (1) appear at any meeting of stockholders and shall appear or
otherwise cause any Excess Shares to be counted as present thereat for purposes
of calculating a quorum and (2) vote (or cause to be voted), in person or by
proxy, on any matter properly brought before the stockholders of the Company for
vote, any Excess Shares (as determined as of the time of the applicable
stockholder vote) in the same proportion of “for” and “against” votes as the
stockholders of the Company vote their shares on such matter (after excluding
the votes of Investor and any of its Affiliates). For the avoidance of doubt,
the voting obligations contained in this Section 2.1 shall not apply to any
shares of Common Stock directly or indirectly owned by Investor or its
Affiliates other than the Excess Shares and Investor and its Affiliates shall be
permitted to vote such other shares in such manner as they determine in their
sole discretion.

 

(b)     For the purposes of this Agreement, “Excess Shares” shall mean, as of
any time (the “Determination Date”), any shares of Common Stock that (i) are
directly or indirectly acquired by Investor or its Affiliates pursuant to either
the Warrant Agreement or its rights as Backstop Agent in Section 4 hereof and
(ii) when combined with all other shares of Common Stock owned directly or
indirectly by Investor and its Affiliates as of the applicable Determination
Date, entitle Investor, together with its Affiliates, to ownership of, and the
unrestricted right to vote, the greater of (1) 33% of the outstanding Common
Stock as of the applicable Determination Date and (2) 14,201,515 shares of
Common Stock.

 

 
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(c)     For the purposes of this Agreement, the “Voting Period” shall mean the
period beginning on the date that Investor or one of its Affiliates first
acquires ownership of an Excess Share and ending on the two year anniversary of
such date.

 

2.2.     Notice of Vote; Irrevocable Proxy. In order to allow Investor to vote
the Excess Shares in the manner provided for in Section 2.1, prior to Investor
being required to vote the Excess Shares in accordance with Section 2.1, the
Company shall provide Investor with written notice stating the manner in which
the stockholders of the Company have elected to vote (after excluding the votes
of Investor and any of its Affiliates) on any matter properly brought before the
stockholders of the Company for vote. Subject to the last sentence of this
Section 2.2, by execution and delivery of this Agreement, the Investor does
hereby appoint the Company, with full power of substitution and resubstitution,
as the Investor’s true and lawful attorney and irrevocable proxy, to the fullest
extent of the Investor’s rights with respect to the Excess Shares, to vote each
of the Excess Shares solely with respect to the matters set forth in Section 2.1
hereof. The Investor intends this proxy to be irrevocable and coupled with an
interest hereunder until the expiration of the Voting Period, at which time this
irrevocable proxy shall automatically terminate. Notwithstanding anything to the
contrary provided herein, this proxy shall be effective only if the Investor (A)
fails to appear or otherwise fails to cause any Excess Shares to be counted as
present for purposes of calculating a quorum at a meeting of the Company’s
stockholders, or (B) fails to vote any Excess Shares in accordance with Section
2.1. The Investor hereby revokes any proxies previously granted by the Investor
with respect to the Excess Shares, and represents to the Company that none of
such previously-granted proxies are irrevocable.

 

Section 3.     RIGHT OF FIRST OFFER ON SUBSEQUENT ISSUANCES

 

3.1.     General.

 

(a)     During the period beginning on the Effective Date and ending on the
three year anniversary of the Effective Date, Investor (or its designees) shall
have the right, in its sole discretion, to purchase its Pro Rata Share (as of
immediately prior to the issuance of any New Securities) of all or any part of
any New Securities that the Company may from time to time issue or sell after
the Effective Date.

 

(b)     For purposed of this Agreement, “New Securities” shall mean any shares
of Common Stock or preferred stock of the Company, whether or not now
authorized, and rights, options or warrants to purchase such Common Stock or
preferred stock, and securities of any type whatsoever that are, or may become,
convertible or exchangeable into such Common Stock or preferred stock; provided,
that the term “New Securities” does not include:

 

(i)     shares of Common Stock issued pursuant to the Warrant Agreement;

 

 
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(ii)     shares of Common Stock (as such number of shares is equitably adjusted
for subsequent stock splits, stock combinations, stock dividends and
recapitalizations) issued directly or upon the exercise of options to directors,
officers, employees, or consultants of the Company in connection with their
service as directors of the Company, their employment by the Company or their
retention as consultants by the Company, in each case authorized by the Board
and, if applicable, the stockholders of the Company, including, without
limitation, pursuant to any of the Company’s stock compensation plans as
described in the Company’s filings under the Securities Exchange Act of 1934, as
amended; and

 

(iii)     shares of the Company’s Common Stock issued in connection with any
stock split or stock dividend.

 

(c)     For purposes of this Agreement, Investor’s “Pro Rata Share” shall mean,
as of any time, the ratio of (i) the number of fully-diluted shares of Common
Stock directly or indirectly owned by Investor and its Affiliates as of such
time to (ii) the number of fully-diluted shares of Common Stock actually
outstanding as of such (excluding and shares of Common Stock owned or held by or
for the account of the Company or any of its controlled subsidiaries as of such
time); provided that for purposes of this definition, “fully-diluted shares of
Common Stock” shall only include shares of Common Stock underlying rights,
options or warrants to purchase such Common Stock, and securities of any type
whatsoever that are, or may become, convertible into Common Stock, to that
extent that (x) all applicable vesting requirements have been satisfied and (y)
the per share value of the Common Stock as of such time (which shall be deemed
to be the closing price of a share of Common Stock on any stock exchange or
automated quotation system on which the Common Stock is then listed or quoted)
exceeds the exercise or conversion price per share of Common Stock for such
rights, options or warrants to purchase such Common Stock, or securities of any
type whatsoever that are, or may become, convertible into Common Stock, in each
case, as of such time.

 

3.2.     Procedures.

 

(a)     If the Company proposes to undertake an issuance of New Securities, it
shall give written notice to Investor of its intention to issue New Securities
(the “ROFO Notice”), describing the type of New Securities and the price and the
terms upon which the Company proposes to issue such New Securities. Investor (or
its designee) shall have 15 days from receipt of any such ROFO Notice to agree
to purchase up to Investor’s Pro Rata Share of such New Securities for the price
and upon the terms specified in the ROFO Notice by giving written notice to the
Company and stating in such notice the quantity of New Securities to be
purchased (not to exceed Investor’s Pro Rata Share).

 

(b)     If Investor (or its designee) fails to provide such written notice
within such 15 day period or provides written notice that it elects not to
purchase all or any portion of the New Securities, then the Company shall have
90 days from the expiration of the periods set forth above to sell all or any
New Securities that were not agreed to be purchased by Investor, at a price not
less than, and upon terms not materially more favorable to the purchasers of
such New Securities than, specified in the ROFO Notice. If the Company has not
issued and sold such New Securities within such period, then after such period
the Company shall not issue or sell any New Securities without again first
complying with this Section 3.

 

 
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(c)     If Investor (or its designee) provides written notice within such 15 day
period that it elects to purchase any or all of the New Securities, then the
Company and Investor (or its designee) shall promptly thereafter proceed to
consummate the sale or issuance of New Securities by the Company to Investor (or
its designee) on the terms set forth in the ROFO Notice. The Company and its
board of directors shall also take all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s charter, bylaws or similar charter
documents or the laws of its state of incorporation that is or could become
applicable to the Company as a result of the Company and Investor (or its
designee) consummating any such sale or issuance of New Securities by the
Company to Investor (or its designee). Any such sale or issuance to Investor (or
its designee) shall be subject to compliance with applicable federal and state
securities laws.

 

Section 4.     EXCLUSIVE RIGHT TO PROVIDE BACK STOP.

 

4.1.     General.

 

(a)     During the period beginning on the Effective Date and ending on the
three year anniversary of the Effective Date, Investor (or its designee) shall
have the right, in its sole discretion, to serve as the exclusive Backstop Agent
for any of the unsubscribed portion of New Securities in any Rights Offering;
provided, however, that Investor shall only have the right to so serve as
Backstop Agent to the extent such backstop would not result in the impairment of
any net operating losses of the Company.

 

(b)     For purposes of this Agreement, “Backstop Agent” means any person or
entity that is engaged to purchase the unsubscribed portion of any rights
offered in any Rights Offering.

 

(c)     For purposes of this Agreement, “Rights Offering” means any issuance of
rights offered to the Company’s stockholders that entitles them to purchase New
Securities in proportion to their existing holdings, or any other similar
issuance to the Company’s stockholders (excluding any rights or securities
issued pursuant to the Company’s Second Amended and Restated Rights Agreement by
and between the Company and Computershare Trust Company, N.A., as Rights Agent,
as amended from time to time, or any “poison pill” or similar stockholder rights
plan now or hereafter in effect).

 

4.2.      Procedures.

 

(a)     If the Company proposes to undertake a Rights Offering with one or more
Backstop Agents, it shall give written notice to Investor of its intention to
undertake the Rights Offering (the “Rights Offering Notice”), describing the
price and the terms upon which the Company proposes to offer New Securities in
the Rights Offering and the terms on which the Company proposes to engage a
Backstop Agent(s) for the Rights Offering. Investor (or its designee) shall have
15 days from receipt of any such Rights Offering Notice to agree to serve as the
or a Backstop Agent for the Rights Offering upon the terms specified in the
Rights Offering Notice by giving written notice to the Company and stating in
such notice the portion of the Rights Offering for which Investor will serve as
Backstop Agent.

 

 
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(b)     If Investor (or its designee) fails to provide such written notice
within such 15 day period or provides written notice that it elects not to serve
as Backstop Agent for all or any portion of the Rights Offering, then the
Company shall have 90 days from the expiration of the periods set forth above to
engage other Backstop Agents as to any portion of the Rights Offering to which
Investor has agreed to serve as Backstop Agent and to consummate the Rights
Offering, in each case, upon terms not materially more favorable to the other
Backstop Agents and the stockholders of the Company than specified in the Rights
Offering Notice. If the Company has not consummated the Rights Offering within
such period, then after such period the Company shall not commence any Rights
Offering without again first complying with this Section 4.

 

(c)     If Investor (or its designee) provides written notice within such 15 day
period that it elects to serve as Backstop Agent for all or any portion of the
Rights Offering, then the Company and Investor (or its designee) shall promptly
thereafter execute and deliver a customary engagement letter providing for the
terms on which Investor (or its designee) will serve as Backstop Agent. The
Company and its board of directors shall also take all necessary action, if any,
in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s charter, bylaws or
similar charter documents or the laws of its state of incorporation that is or
could become applicable to the Company as a result of the Company and Investor
(or its designee) consummating any such Rights Offering (including the issuance
of any New Securities by the Company to Investor (or its designee) in connection
with any such Rights Offering). Any such engagement shall be subject to
compliance with applicable federal and state securities laws.

 

Section 5.     GENERAL PROVISIONS.

 

5.1.     Termination. This Agreement shall remain in effect until the earliest
to occur of (a) immediately prior to the closing of (i) the sale of the Company
(through a merger, consolidation, sale of all or substantially all of its assets
or stock or similar transaction); (ii) the acquisition by a single purchaser of
all of the issued and outstanding shares of Common Stock; (b) at any time
indicated in the written agreement of the Company and Investor; (c) the
effective time of any liquidation, winding up or dissolution of the Company; and
(d) the seven year anniversary of the Effective Date.

 

5.2.     Headings. The headings and captions used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement. All references in this Agreement to sections, paragraphs, exhibits
and schedules shall, unless otherwise provided, refer to sections and paragraphs
of this Agreement and exhibits and schedules attached to this Agreement, all of
which exhibits and schedules are incorporated in this Agreement by this
reference.

 

5.3.     Assignment. To the fullest extent permitted by law, this Agreement
shall not be assigned by either Party without the prior written consent of the
other Party; provided that Investor shall be entitled to assign all or any part
of this Agreement to any of its Affiliates; provided further that in connection
with any permitted transfer of Excess Shares to any Affiliate of the Investor,
such Affiliate shall, as a condition to such transfer, agree to perform the
Investor’s obligations hereunder with respect to such Excess Shares, including
with respect to the Investor’s obligations under Section 2 . The terms and
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the Company and Investor and their respective successors and permitted assigns.

 

 
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5.4.     Notices. All notices, requests, consents, demands and other
communications required or permitted under this Agreement shall be in writing,
unless otherwise specifically provided in the Agreement, and shall be deemed
sufficiently given or furnished if delivered by personal delivery, by facsimile,
by delivery service with proof of delivery, or by registered or certified United
States mail, postage prepaid, to the Company at the address of the Company
specified below and to Investor at the address specified below (unless changed
by similar notice in writing given by the particular person whose address is to
be changed). Any such notice or communication shall be deemed to have been given
(a) in the case of personal delivery or delivery service, as of the date of
first attempted delivery during normal business hours at the address provided
herein, (b) in the case of facsimile, upon receipt, or (c) in the case of
registered or certified United States mail, three days after deposit in the
mail.

 

If to the Company:

 

SWK Holdings Corporation

15770 North Dallas Parkway

Suite 1290

Dallas, Texas 75248

Attention: J. Brett Pope, Chief Executive Officer

Facsimile: (972) 687-7255

 

With a copy to (which shall not constitute notice):

 

Holland & Knight LLP

300 Crescent Court, Suite 1100

Dallas, Texas 75201

Attention: Ryan Magee

Facsimile: (214) 964-9501

 

If to Investor:

 

c/o Carlson Capital, L.P.

2100 McKinney Avenue

Suite 1800

Dallas, Texas 75201

Attention: Christopher W. Haga; and G. Thomas Cason, III, General Counsel’s
Office

Facsimile: (214) 932-9712

 

5.5.     No Third Party Beneficiaries. This Agreement is not intended to be for
the benefit of, and shall not be enforceable by, any person or entity not a
Party hereto.

 

 
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5.6.     Specific Performance. Each of the Company and Investor acknowledges
that a breach or threatened breach by such Party of any of its obligations under
this Agreement would give rise to irreparable harm to the other Party hereto for
which monetary damages would not be an adequate remedy and hereby agrees that in
the event of a breach or a threatened breach by such Party of any such
obligations, the other Party hereto shall, in addition to any and all other
rights and remedies that may be available to it in respect of such breach, be
entitled to equitable relief, including a restraining order, an injunction,
specific performance and any other relief that may be available from a court of
competent jurisdiction. The rights and remedies provided in this Agreement are
cumulative and are not exclusive of, and are in addition to and not in
substitution for, any other rights or remedies available at law, in equity or
otherwise.

 

5.7.     No Waiver. No failure or delay (whether by course of conduct or
otherwise) by a Party in exercising any right, power or remedy that such Party
may have under the Agreement shall operate as a waiver thereof or of any other
right, power or remedy, nor shall any single or partial exercise by a Party of
any such right, power or remedy preclude any other or further exercise thereof
or of any other right, power or remedy. No waiver of any provision of the
Agreement and no consent to any departure therefrom shall ever be effective
unless it is in writing, and then such waiver or consent shall be effective only
in the specific instances and for the purposes for which given and to the extent
specified in such writing. No notice to or demand on any Party shall in any case
entitle any Party to any other or further notice or demand in similar or other
circumstances. This Agreement sets forth the entire understanding between the
Parties hereto with respect to the transactions contemplated herein and
supersede all prior discussions and understandings with respect to the subject
matter hereof, and no waiver, consent, release, modification or amendment of or
supplement to this Agreement shall be valid or effective against any Party
hereto unless the same is in writing and signed by such Party.

 

5.8.     Governing Law; Submission to Process. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of Delaware,
without giving effect to any choice or conflict of law provision (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware. Each Party hereby
irrevocably (a) submits itself to the non-exclusive jurisdiction of the state
and federal courts sitting in Dallas County, Texas, (b) agrees and consents that
service of process may be made upon it in any legal proceeding relating to the
Agreement by any means allowed under Delaware or federal law, and (c) waives any
objection that it may now or hereafter have to the venue of any such proceeding
being in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.

 

5.9.     Severability. If any term or provision of this Agreement shall be
determined to be illegal or unenforceable all other terms and provisions of this
Agreement shall nevertheless remain effective and shall be enforced to the
fullest extent permitted by applicable law.

 

5.10.     Counterparts; Fax. This Agreement may be separately executed in any
number of counterparts and by different Parties hereto in separate counterparts,
each of which when so executed shall be deemed to constitute one and the same
Agreement. This Agreement may be validly executed and delivered in counterparts
exchanged via facsimile, electronic mail in portable document format (.pdf) or
other electronic transmission, each of which counterparts shall be deemed
originals for all purposes.

 

 
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5.11.     Waiver of Jury Trial, Punitive Damages, etc. Each Party hereby
knowingly, voluntarily, intentionally, and irrevocably (a) waives, to the
maximum extent not prohibited by law, any right it may have to a trial by jury
in respect of any litigation based hereon, or directly or indirectly at any time
arising out of, under or in connection with the Agreement or any transaction
contemplated thereby or associated therewith, before or after maturity;
(b) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any such litigation any “Special Damages” as defined
below, (c) certifies that no Party hereto nor any representative or agent or
counsel for any Party hereto has represented, expressly or otherwise, or implied
that such Party would not, in the event of litigation, seek to enforce the
foregoing waivers, and (d) acknowledges that it has been induced to enter into
this Agreement and the transactions contemplated hereby and thereby by, among
other things, the mutual waivers and certifications contained in this Section.
As used in this Section, “Special Damages” includes all special, consequential,
exemplary, or punitive damages (regardless of how named), but does not include
any payments or funds which any Party hereto has expressly promised to pay or
deliver to any other Party hereto.

 

5.12.     Entire Agreement. This Agreement, together with all exhibits and
schedules to this Agreement, constitutes the entire agreement and understanding
of the Parties with respect to the subject matter of this Agreement and
supersedes any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties with respect to the
subject matter of this Agreement.

 

[Signature page follows.]IN WITNESS WHEREOF, the Parties have caused this
Agreement to be duly executed as of the date first above written.

 

 

  SWK HOLDINGS CORPORATION                      By: /s/ J. Brett Pope     Name:
J. Brett Pope     Title:   Chief Executive Officer  

 

 

 

INVESTOR:

          Double Black Diamond, L.P.          

By:

Carlson Capital, L.P.,
its Investment Advisor

           

By:

Asgard Investment Corp. II,
its General Partner

                     By: /s/ Clint D. Carlson     Name: Clint D. Carlson    
Title:   President  

 

 

  Double Black Diamond OFFSHORE LtD.             By: Carlson Capital, L.P.,
its Investment Advisor            

By:

Asgard Investment Corp. II,
its General Partner

             By: /s/ Clint D. Carlson     Name: Clint D. Carlson     Title:  
President  

 

  

 
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  Black Diamond OFFSHORE, LTD.             By: Carlson Capital, L.P.,
its Investment Advisor            

By:

Asgard Investment Corp. II,
its General Partner

             By: /s/ Clint D. Carlson     Name: Clint D. Carlson     Title:  
President  

 

 

 

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