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<SEC-DOCUMENT>0001178913-06-000069.txt : 20060823
<SEC-HEADER>0001178913-06-000069.hdr.sgml : 20060823
<ACCEPTANCE-DATETIME>20060112091208
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001178913-06-000069
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060112

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BOS BETTER ONLINE SOLUTIONS LTD
		CENTRAL INDEX KEY:			0001005516
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER COMMUNICATIONS EQUIPMENT [3576]
		IRS NUMBER:				0000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		100 BOS RD
		CITY:			TERADION ISRAEL
		STATE:			L3
		ZIP:			00000

	MAIL ADDRESS:	
		STREET 1:		TERADION INDUSTRIAL PARK
		CITY:			BEIT RABIN
		STATE:			L3
		ZIP:			20179
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
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     <!-- Control Number: 62129                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    BOS better online solutions Ltd                                  -->
     <!-- Project Name:   CORRESP                                                          -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>CORRESP</TITLE>
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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>January 12, 2006 </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>VIA EDGAR</U> </FONT> </P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Securities and Exchange
Commission<BR>100F Street, N.E. </FONT><BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>Washington, D.C. 20549 </FONT></P>


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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Attn:  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Rebekah
Toton, Esq.   <BR>   Mail Stop 4561</FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>         Re: </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Registration
Statement on Form F-3        <BR>           Filed December 1, 2005    <BR>               File No.
333-130048</FONT></TD>
</TR>
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<BR>

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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Form
20-F for the Fiscal Year ended December 31, 2004      <BR>             <U>File No. 01-14184</U> </FONT></TD>
</TR>
</TABLE>
<BR>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ladies and Gentlemen: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On behalf of B.O.S. Online Solutions,
Ltd., an Israel corporation (&#147;BOS&#148; or the &#147;Company&#148;), we have set
forth below the Company&#146;s proposed response in the Staff&#146;s comment letter dated
December 29, 2005 with respect to Amendment No. 1 to the Registration Statement on Form
F-3. The Staff&#146;s comments have been reproduced (in bold) below and are immediately
followed by the Company&#146;s responses thereto. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>FORM F-3</U> </FONT> </P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Selling Shareholders
&#150; page 15</U> </FONT> </P>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               <B>Please expand the filing to describe the material transactions and
               relationships between </B> <B>B.O.S. and each of the selling shareholders during
               the past three years. See Item 9.D of </B> <B>the Form 20-F, as referenced by
               Item 4 of the Form F-3. Revise to disclose all material </B> <B>transactions
               between you and Laurus Master Fund during the past three years and to </B>
               <B>describe the material terms of your December 14, 2003 transaction with
               Hillswood Holdings </B> <B>Ltd. and Vamos Inc. The number of shares underlying
               the warrant issued to Laurus Master </B> <B>Fund in your September 2005
               transaction also should be disclosed, as should the &#147;certain </B>
               <B>circumstances&#148; under which the various warrant exercise prices are
               subject to adjustment. </B> <B>Please ensure that all documents memorializing
               the issuance transactions by which the </B> <B>selling shareholders received
               their shares are included or incorporated by reference into </B> <B>this
               registration statement. For example, the registration rights agreements entered
               into </B> <B>as part of the June 2005 and September 2005 transaction should be
               filed as exhibits.</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company has complied with the Staff&#146;s comment.  </FONT></TD>
</TR>
</TABLE>
<BR>


<p align=center>
<font size=2></font></p>
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<page>


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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               <B>We note that the registration statement includes shares that may be issued in
               payment of </B> <B>interest that has not yet accrued on the convertible note. As
               these interest payments on </B> <B>the convertible note may be made in cash or
               in common stock at the discretion of Laurus </B> <B>Master Fund, it does not
               appear that the offering of these shares has been completed such </B> <B>that
               they may be registered for resale at this time. In this regard, it is unclear
               what </B> <B>portion of the 625,000 shares being registered that represents
               shares issuable upon </B> <B>conversion of the principal amount and upon
               conversion of interest thereon. Moreover, it </B> <B>is unclear how Section
               2.1(b) of the Secured Convertible Term Note is a mandatory interest </B>
               <B>conversion feature given that it allows the holder to convert &#147;all or a
               portion&#148; of the </B> <B>monthly principal payment and accrued interest if
               certain conditions are met.</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
We
have revised footnote (6) to the Calculation of Registration Fee Table on the cover page
of the registration statement to indicate the number of ordinary shares that are being
registered pursuant to the mandatory interest conversion feature of Section 2.1(b) of the
Term Note. Under Section 2.1(a) of the Term Note, Laurus Master Fund, the Noteholder, can
elect between receiving cash or ordinary shares, if the average closing price for the
Company&#146;s ordinary shares is less than 110% of the Fixed Conversion Price (as defined
in the Note). Under Section 2.1(b), however, if the average closing price for the
Company&#146;s ordinary shares for five trading days is greater than 110% of the Fixed
Conversion Price, the monthly principal and interest amounts due <U>must</U> be converted
into ordinary shares (subject to a market volume limitation). </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
With
respect to mandatory conversions under Section 2.1(b), we believe that the investment
decision to receive ordinary shares in payment of interest has already been made, and
accordingly that, based on the Company&#146;s good faith estimate of the amount thereof,
the shares issuable respecting such interest may be registered under the instant
registration statement. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
language &#147;<I>or a portion</I>&#148; in Section 2.1(b) was inserted in order to
accommodate a situation where the Holder has already elected pursuant to Section 2.1(a) to
convert part of the Monthly Amount into ordinary shares prior to the occurrence of the
mandatory conversion event. In such case, the remaining portion of the Monthly Amount due
will be converted into ordinary shares. Laurus does not have any discretion under Section
2.1(b) to elect to convert less than all of the then unconverted portion of the Monthly
Amount into ordinary shares. As indicated in footnote (6) to the Calculation of
Registration Fee Table on the cover page of the registration statement, only shares
subject to the mandatory interest rate conversion feature of Section 2.1(b) are being
registered for sale by Laurus. </FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2></font></p>
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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               <B>Please revise to name the natural person or persons who exercise the sole or
               shares voting </B> <B>and/or dispositive powers with respect to the shares to be
               offered for resale by Catalyst </B> <B>Fund L.P. Please also revise to indicate
               clearly that the natural persons listed in the </B> <B>footnotes (3), (4), (5)
               and (6) as &#147;controlling&#148; or &#147;beneficially owning&#148; shares
               have </B> <B>voting and/or dispositive power with respect to the shares to be
               offered for resale.</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company has complied with the Staff&#146;s comment.  </FONT></TD>
</TR>
</TABLE>
<BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               <B>In addition, please tell us whether any of the selling shareholders that are
               legal entities </B> <B>are affiliates of registered broker-dealers. If any
               selling shareholders are affiliates of </B> <B>registered broker-dealers, expand
               the prospectus to indicate whether they acquired the </B> <B>securities to be
               resold in the ordinary course of business. Also indicate whether at the </B>
               <B>time of the acquisition, the broker-dealer affiliates had any agreements,
               understandings </B> <B>or arrangements with any other persons, either directly
               or indirectly, to dispose of the </B> <B>securities.</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company has been advised that none of the selling shareholders is a US registered broker
dealer or an affiliate of a US registered broker dealer. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<U><B>Plan
of Distribution, page 21</B></U> </FONT></TD>
</TR>
</TABLE>
<BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>5.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               <B>Tell us what steps you have implemented to ensure that each of the selling
               stockholders will </B> <B>conduct the distribution in accordance with Regulation
               M. See paragraph (b)(7) of Rule 461.</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company has advised the selling shareholders of their obligation to comply with the
requirements of Regulation M as is also reflected in the disclosure under Plan of
Distribution. </FONT></TD>
</TR>
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<BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>6.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               <B>In your plan of distribution, you indicate that selling shareholders may
               create short </B> <B>positions in the common shares in connection with the
               offering. In your response letter, </B> <B>please advise us that B.O.S. and the
               selling shareholders are aware of CF Tel. Interp. </B> <B>A.65.</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company is aware of CF Tel.  Int.  A. 65 and has  provided a copy of this advice to the
              selling shareholders. </FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
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<page>

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<TD WIDTH=95%>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>Form
20-F for the fiscal year ended December 31, 2004</B></U> </FONT> </TD>
</TR>
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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>Item
15, Controls and Procedures, page 73</B></U> </FONT> </TD>
</TR>
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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               <B>We note your disclosure that you performed an evaluation of the effectiveness
               of your </B> <B>disclosure controls and procedures that are designed to ensure
               that the material financial </B> <B>and non-financial information required to be
               disclosed on Form 20-F and filed with the </B> <B>Securities and Exchange
               Commission is recorded, processed, summarized and reported timely. </B>
               <B>However, Item 15(a) of Form 20-F requires you to disclose the conclusions of
               your </B> <B>principal executive and principal financial officers regarding the
               effectiveness of your </B> <B>disclosure controls and procedures as defined in
               Rule 13a-15(e) of the Exchange Act. Rule </B> <B>13a-15(e) defines disclosure
               controls and procedures as controls and other procedures of </B> <B>an issuer
               that are designed to ensure that information required to be disclosed by the
               </B> <B>issuer in the reports that it files or submits under the Exchange Act is
               recorded, </B> <B>processed, summarized and reported, within the time periods
               specified in the Commission&#146;s </B> <B>rules and forms and to ensure that
               information required to be disclosed by an issuer in </B> <B>the reports that it
               files or submits under the Act is accumulated and communicated to the </B>
               <B>issuer&#146;s management, including its principal executive and principal
               financial officers, </B> <B>or persons performing similar functions, as
               appropriate to allow timely decisions </B> <B>regarding required disclosure.
               Tell us whether your disclosure controls and procedures are </B> <B>designed as
               defined in Rule 13a-15(e) and if your CEO and CFO reached their conclusions as
               </B> <B>to the effectiveness of your disclosure controls and procedures based
               upon the definition </B> <B>set forth in Rule 13a-15(e). Please confirm that you
               will take this comment into </B> <B>consideration in preparing your future Item
               15(a) disclosure.</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company confirms that its disclosure controls and procedures are designed as defined in
Rule 13a-15(e) and that its CEO and CFO reached their conclusions as to the effectiveness
of the Company&#146;s disclosure controls and procedures based upon the definition in Rule
13a-15(e). The Company will take the SEC&#146;s comment into consideration in preparing
its future Item 15(a) disclosure. </FONT></TD>
</TR>
</TABLE>
<BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               <B>You state that &#147;there can be no assurance that the Company&#146;s
               disclosure controls and </B> <B>procedures will detect or uncover all failures
               of persons within the Company to disclose </B> <B>material information otherwise
               required to be set forth in the Company&#146;s reports.&#148; Please </B>
               <B>tell us whether you <I>designed</I> your disclosure controls and procedures
               to provide reasonable </B> <B>assurance of achieving their objectives and
               whether your CEO and CFO concluded that your </B> <B>disclosure controls and
               procedures are effective at that reasonable assurance level. </B> <B>Please
               refer to Section II.F.4 of Management&#146;s Reports on Internal Control Over
               Financial </B> <B>Reporting and Certification of Disclosure in Exchange Act
               Periodic Reports, SEC Release </B> <B>No. 33-8283. Please confirm that you will
               take this comment into consideration in </B> <B>preparing your future disclosure
               or, in the alternative, remove the reference to the level </B> <B>of assurance
               of your disclosure controls and procedures.</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
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The
Company&#146;s disclosure controls and procedures are designed to provide reasonable
assurance of achieving their objectives and the Company&#146;s CEO and CFO concluded that
the Company&#146;s disclosure controls and procedures are effective at that reasonable
assurance level. The Company will take the SEC&#146;s&nbsp;comment into consideration in
preparing its future disclosure. </FONT></TD>
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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>9.</B> </FONT></TD>
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               <B>You disclose that &#147;[s]ubsequent to the date of evaluation thereof, there
               have been no </B> <B>significant changes in the Company&#146;s internal controls
               or in other factors that could have </B> <B>materially affected or are
               reasonably likely to materially affect these controls.&#148; </B> <B>However,
               Item 15(d) of Form 20-F requires you to disclose any change in your internal
               </B> <B>control over financial reporting that occurred during the period covered
               by the annual </B> <B>report that has materially affected, or is reasonably
               likely to materially affect, your </B> <B>internal control over financial
               reporting. Please tell us whether there was any change in </B> <B>your internal
               control over financial reporting that occurred during the fiscal year ended </B>
               <B>December 31, 2004 that has materially affected, or is reasonably likely to
               materially </B> <B>affect, your internal control over financial reporting.
               Please confirm that you take this </B> <B>comment into consideration in
               preparing your future Item 15(d) disclosure.</B> </FONT></TD>
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There
was no change in the Company&#146;s internal control over financial reporting that
occurred during the fiscal year ended December 31, 2004 that has materially affected, or
is reasonably likely to materially affect, the Company&#146;s internal control over
financial reporting. The Company will take the SEC&#146;s&nbsp;comment into consideration
in preparing its future Item 15(d) disclosure. </FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
you have any questions concerning the responses, please do not hesitate to call me at
212-841-0700. </FONT></P>

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<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cordially,<BR><BR>Brian Brodrick</FONT></TD>
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