REGISTRATION RIGHTS AGREEMENT
January 3, 1996
Xxxxx Xxxxxxxx
00 Xxxx Xxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Xxxxxx XxxXxxx
00 Xxxx Xxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Dear Purchasers:
This will confirm that, in consideration of the Asset Purchase
Agreement between Xxxxxxx Waste Management, Inc., a subsidiary of Xxxxxxx Waste
Systems, Inc., a Delaware corporation (the "Corporation"), and Northeast Waste
Services, Ltd., dated January 3, 1996 (the "Asset Purchase Agreement"), pursuant
to which Xxxxxxx Waste Management, Inc. will acquire certain assets of Northeast
Waste Services, Ltd. and enter into certain arrangements with the Purchasers for
consideration including stock purchase warrants to purchase shares of Class A
Common Stock, $.01 par value, of the Corporation (the "Warrants") and in order
to induce you to consummate the transaction contemplated by the Asset Purchase
Agreement, the Corporation hereby covenants and agrees with you, and with each
subsequent holder of Restricted Securities (as such term is defined herein), as
follows:
1. Certain Definitions.. As used in this Agreement, the following
terms shall have the following respective meanings:
"Charter" shall mean the Corporation's Amended and Restated Certificate
of Incorporation.
"Commission" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation, as constituted as of the date of this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Purchasers" shall mean Xxxxxx XxxXxxx and Xxxxx Xxxxxxxx.
"Registration Expenses" shall mean the expenses so described in
Section 6.
"Restricted Securities" shall mean the Warrants and the Restricted
Stock, for so long as the instruments or certificates evidencing such securities
shall be required to bear the legend set forth in Section 2 hereof.
"Restricted Stock" shall mean the Warrant Shares, the certificates for
which are required to bear the legend set forth in Section 2 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 6.
"Warrant Shares" shall mean the shares of Class A Common Stock issued
or issuable upon exercise of the Warrants by the Purchasers.
2. Restrictive Legend. Each certificate representing Warrant Shares
and, except as otherwise provided in Section 3 hereof, each certificate issued
upon exchange or transfer of any such Warrant Shares shall be stamped or
otherwise imprinted with a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR
UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE."
3. Notice of Proposed Transfer. Prior to any proposed transfer of any
Restricted Securities (other than under the circumstances described in Section 4
hereof), the holder thereof shall give written notice to the Corporation of its
intention to effect such transfer. Each such notice shall describe the manner of
the proposed transfer and shall be accompanied by an opinion of counsel
satisfactory to the Corporation to the effect that the proposed transfer may be
effected without registration under the Securities Act, whereupon, subject to
any other restrictions or transfer then applicable to the holder thereof, such
holder shall be entitled to transfer such securities in accordance with the
terms of its notice. All Restricted Securities transferred as above provided
shall bear the legend set forth in Section 2, except that such securities shall
not bear such legend if (a) such transfer is a public sale in
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accordance with the provisions of Rule 144 (or any other rule permitting public
sale without registration under the Securities Act) or (b) the opinion of
counsel referred to above is to the further effect that the transferee and any
subsequent transferee (other than an affiliate of the Corporation) would be
entitled to transfer such securities in a public sale without registration under
the Securities Act.
4. Incidental Registration. If the corporation at any time proposes to
register any of its securities for its own account under the Securities Act for
sale to the public (except with respect to registration statements on Form X-0,
X-0, X-00 or S- 15 or another form for a similar limited purpose, or any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation), each such time it
will give written notice to Purchasers of its intention so to do. Upon the
written request of any Purchaser given within ten (10) days after the date of
any such notice, to register any of its Restricted Stock (which request shall
state the intended method of disposition thereof), the Corporation will use its
best efforts to cause the Restricted Stock as to which registration shall have
been so requested to be included in the securities to be covered by the
registration statement proposed to be filed by the Corporation, all to the
extent requisite to permit the sale or other disposition by the holder (in
accordance with its written request) of such Restricted Stock so registered. The
Corporation may withdraw any such registration statement before it becomes
effective or postpone the offering of securities contemplated by such
registration fee without any obligation to any holder of any Restricted Stock.
In the event that any registration pursuant to this Section 4 shall be, in whole
or in part, an underwritten public offering of Common Stock, any request by a
holder pursuant to this Section 4 to register Restricted Stock shall specify
that either: (i) such Restricted Stock is to be included in the underwriting on
the same terms and conditions as the shares of Common Stock otherwise being sold
through underwriters under such registration; or (ii) such Restricted Stock is
to be sold in the open market without any underwriting, on terms and conditions
comparable to those normally applicable to offerings of common stock in
reasonably similar circumstances. The number of shares of Restricted Stock to be
included in such an underwriting may be reduced (pro rata among the requesting
holders based on their total ownership of shares of common stock, giving effect
to the conversion into Common Stock of all securities convertible therein to))
if and to the extent that the managing underwriter shall be of the opinion that
such inclusion would adversely affect the marketing of the securities to be sold
by the Corporation therein. Notwithstanding anything to the contrary contained
in this Section 4, in the event that there is an underwritten offering of
securities of the Corporation pursuant to a registration covering Restricted
Stock and a selling holder of Restricted Stock does not elect to sell his
Restricted Stock to the underwriters of the Corporation's securities in
connection with such offering, such holder shall refrain from selling such
Restricted Stock so registered pursuant to this Section 4 during the period of
distribution of the Corporation's securities by such underwriters and a period
in which the underwriting syndicate participates in the aftermarket; provided,
however,
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that such holder shall, in any event, be entitled to sell its Restricted Stock
in connection with such registration commencing on the 90th day after the
effective date on such registration statement. The Corporation may withdraw any
registration statement referred to in this Section 4 without thereby incurring
any liability to the holders of Restricted Stock.
5. Registration Procedures. If and whenever the Corporation effects the
registration of any shares of Restricted Stock under the Securities Act, the
Corporation will:
(a) prepare and file with the Commission a registration statement with
respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the period of
the distribution contemplated thereby (determined as hereinafter
provided);
(b) as expeditiously as possible, prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement effective, in the case of a firm
underwritten public offering, until each underwriter has completed the
distribution of all securities purchased by it and, in the case of any
other offering, until the earlier of the sale of all Restricted Stock
covered thereby or 120 days after the effective date thereof;
(c) as expeditiously as possible, furnish to each seller and to each
underwriter such number of copies of the prospectus as such persons
reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Stock covered by such registration
statement;
(d) as expeditiously as possible, use its best efforts to register or
qualify the Restricted Stock covered by such registration statement
under the securities or blue sky laws of such jurisdictions as the
sellers of Restricted Stock or, in the case of an underwritten public
offering, the managing underwriter reasonably shall request, provided,
however, that the Corporation shall not be required in connection with
this paragraph (d) to qualify as a foreign corporation or execute a
general consent to service of process in any jurisdiction;
(e) immediately notify each seller of Restricted Stock and each underwriter
under such registration statement, at any time when
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a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which the Corporation
has knowledge as a result of which the prospectus contained in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(f) use its best efforts (if the offering is underwritten) to furnish, at
the request of any seller of Restricted Stock, on the closing date of
such offering: (i) an opinion, dated such date, of counsel representing
the Corporation for the purposes of such registration, addressed to the
underwriters and to such seller, covering substantially the same
matters with respect to the registration statement and the prospectus
as are customarily covered in opinions of issuer's counsel delivered to
underwriters in underwritten public offerings of securities.
For purposes of paragraphs (a) and (b) above, the period of
distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby or 120 days
after the effective date thereof.
In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Corporation in writing such information
with respect to themselves and the proposed distribution by them as reasonably
shall be necessary in order to assure compliance with federal and applicable
state securities laws.
6. Expenses. All expenses incurred by the Corporation in complying with
Section 4, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Corporation, fees of the National Association of Securities
Dealers, Inc., transfer taxes, fees of transfer agents and registrars, costs of
insurance and fees and expenses of one counsel for the sellers of Restricted
Stock, but excluding any Selling Expenses, are herein called "Registration
Expenses." All underwriting discounts and selling commissions applicable to the
sale of Restricted Stock are called "Selling Expenses."
The Corporation will pay all Registration Expenses in connection with
each registration statement under Section 4. All Selling Expenses in connection
with each registration statement under Section 4 shall be borne by the
participating
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Purchasers in proportion to the number of shares sold by each, or by such
participating Purchasers other than the Corporation (except to the extent the
Corporation shall be a seller) as they may agree.
7. Indemnification and Contribution. In the event of a registration of
any of the Restricted Stock under the Securities Act pursuant to Section 4, the
Corporation will indemnify and hold harmless each seller of such Restricted
Stock thereunder and each underwriter of such Restricted Stock thereunder and
each other person, if any, who controls such seller or underwriter within the
meaning of the Securities Act, against any and all losses, claims, damages or
liabilities, joint or several, to which such seller, underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
Restricted Stock was registered under the Securities Act pursuant to Section 4,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each such seller, each such underwriter and each such controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Corporation will not be liable in any such
case if and to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information furnished by
any such seller, any such underwriter or any such controlling person in writing
specifically for use in such registration statement or prospectus.
In the event of a registration of any of the Restricted Stock under the
Securities Act pursuant to Section 4, each seller of such Restricted Stock
thereunder, severally and not jointly, will indemnify and hold harmless the
Corporation and each person, if any, who controls the Corporation within the
meaning of the Securities Act, each officer of the Corporation who signs the
registration statement, each director of the Corporation, each underwriter and
each person who controls any underwriter within the meaning of the Securities
Act, against all losses, claims, damages or liabilities, joint or several, to
which the Corporation or such officer, director, underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such
Restricted Stock was registered under the Securities Act pursuant to Section 4,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein
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not misleading, and will reimburse the Corporation and each such officer,
director, underwriter and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action, provided, however, that such
seller will be liable hereunder in any such case if and only to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information pertaining to such
seller, as such, furnished in writing to the Corporation by or on behalf of such
seller specifically for use in such registration statement or prospectus, and
provided, further, however, that the liability of each seller hereunder shall
not in any event exceed the proceeds received by such seller from the sale of
Restricted Stock covered by such registration statement.
Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 7. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 7 for any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof; provided, however, that, if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party or if the indemnifying party shall not in fact have employed counsel to
assume the defense of such action, the indemnified party shall have the right to
select a separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and foes of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the
right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless: (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid; or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood that the
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indemnifying party shall not, in connection with any action or related actions
in the same jurisdiction, be liable for the fees and disbursements of more than
one separate firm qualified in such jurisdiction to act as counsel for the
indemnified party. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
If the indemnification provided for in the first two paragraphs of this
Section 7 is unavailable to or insufficient to hold harmless as indemnified
party under such paragraphs in respect of any losses, claims, damages or
liabilities or actions in respect thereof referred to therein, then each
indemnifying party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Corporation, on the one hand,
and the sellers of such Restricted Stock, on the other, in connection with the
statement or omissions which resulted in such losses, claims, damages,
liabilities or actions, as well as any other relevant equitable considerations
including the failure to give any notice under the third paragraph of this
Section 7. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Corporation, on the one hand, or by the sellers of such
Restricted Stock, on the other, and to the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Corporation and the sellers of Restricted Stock agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if all of the sellers of Restricted
Stock were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
action in respect thereof, referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this and the immediately preceding paragraph,
the sellers of such Restricted Stock shall not be required to contribute any
amount in excess of the proceeds received by it. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
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The indemnification of underwriters provided for in this Section 7
shall be on such other terms and conditions as are at the time customary and
reasonably required by such underwriters. In that event the indemnification of
the sellers of Restricted Stock in such underwriting shall at the sellers'
request be modified to conform to such terms and conditions.
8. Changes in Common Stock. If, and as often as, there is any change in
the Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Common Stock as so changed.
9. "Stand-Off" Agreement. If requested by the corporation and the
managing underwriter of an offering by the Corporation of Common Stock or other
securities of the Corporation pursuant to a Registration Statement, you and any
subsequent holders of Restricted Stock shall agree not to sell publicly or
otherwise transfer or dispose of any Restricted Stock held by such holder for a
period of time beginning 20 days prior to and ending 180 days (in the case of an
initial public. offering), or 120 days (in the case of a public offering
following the initial public offering) after the effective date of the
Registration Statement; provided, that (i) all stockholders of the Corporation
holding not less than the number of shares of Common Stock held by such holder
of convertible securities, or upon the exercise of options, warrants or rights)
and all officers and directors of the Corporation enter into similar agreements;
and (ii) all stockholders of the Corporation shall be released from such
stand-off agreement, if any stockholders are released, on a pro rata basis, with
no stockholder having any right to offer and sell Restricted Stock free from
such stand-off provisions before any other stockholder.
10. Representations and Warranties of the Corporation. The Corporation
represents and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by the
Corporation have been duly authorized by all requisite corporate action
and will not violate any provision of law, any order of any court or
other agency of government, the Charter or By-laws of the Corporation
or any provision of any indenture, agreement or other instrument to
which it or any or its properties or assets is bound, conflict with,
result in a breach of or constitute (with due notice or lapse of time
or both) a default under any such indenture, agreement or other
instrument or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or
assets of the Corporation.
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(b) This Agreement has been duly executed and delivered by the Corporation
and constitutes the legal, valid and binding obligation of the
Corporation, enforceable in accordance with its terms.
11. Rule 144 Reporting. The Corporation agrees with each of you as
follows:
(a) The Corporation shall make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities
Act, at all times from and after 90 days following the effective date
of the first registration of the Corporation under the Securities Act
of an offering of its securities to the general public.
(b) The Corporation shall file with the Commission in a timely manner all
reports and other documents as the Commission may prescribe under
Section 13(a) or 15(d) of the Exchange Act at any time after the
Corporation has become subject to such reporting requirements of the
Exchange Act.
(c) The Corporation shall furnish to each holder of Restricted Stock
forthwith upon request: (i) a written statement by the Corporation as
to its compliance with the reporting requirements of Rule 144 (at any
time from and after 90 days following the effective date of the first
registration statement of the Corporation for an offering of its
securities to the general public), and of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); (ii) a copy of the most recent annual or quarterly
report of the Corporation; and (iii) such other reports and documents
so filed as a holder may reasonably request to avail itself of any rule
or regulation of the Commission allowing a holder of Restricted Stock
to sell any such securities without registration.
12. Miscellaneous.
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto whether
so expressed or not. Without limiting the generality of the foregoing,
the registration rights conferred herein on the holders of Restricted
Stock shall only inure to the benefit of holders of at least 25,000
shares of Restricted Stock, and
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shall only inure to any such holders for so long as the certificates
representing the Restricted Stock shall be required to bear the legend
specified in Section 2 hereof.
(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by first class mail, postage
prepaid, addressed as follows:
If to the Corporation:
Xxxxxxx Waste Management, Inc.
00 Xxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
If to the Purchasers:
Xxxxx Xxxxxxxx
00 Xxxx Xxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Xxxxxx XxxXxxx
00 Xxxx Xxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of Vermont.
(d) This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and may not be modified or amended
except by the written agreement of all of the parties.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(f) The parties hereto acknowledge that the Corporation is party to a
Registration Rights Agreement dated as of December 22, 1995 with the
purchasers of its Series D Preferred Stock and others (the "1995
Registration Rights Agreement"), and that the 1995 Registration Rights
Agreement prohibits the Corporation from entering into an agreement
with any other person unless, under the terms of any such agreement,
such person may include securities in a registration only on terms
substantially similar to
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the terms on which parties to the 1995 Registration Rights Agreement
may include shares in such registration. Accordingly, the parties
hereto agree that, at the written request or the Corporation, this
Agreement will be deemed amended to comply with the requirement set
forth in the preceding sentence upon determination by the Board of
Directors of the Corporation that such an amendment is necessary to
avoid a violation of the 1995 Registration Rights Agreement.
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this Agreement
shall be a binding agreement between the Corporation and you.
Very truly yours,
XXXXXXX WASTE SYSTEMS, INC.
AGREED TO AND ACCEPTED as of the date first above written.
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Xxxxx Xxxxxxxx
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Xxxxxx XxxXxxx
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