EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of May 15, 2000, by GenStar Therapeutics Corporation, a Delaware
corporation (the "Company"), for the benefit of the individuals and entities
listed on Exhibit A hereto (each a "Holder").
RECITALS
A. The Company and Allegro Cell Systems, Inc., a Delaware corporation
("Allegro"), entered into an Acquisition Agreement and Plan of Merger dated May
15, 2000 (the "Merger Agreement"), providing for the acquisition of Allegro by
the Company via the merger of Allegro with and into the Company.
B. Pursuant to Section 5.4 of the Merger Agreement, the Company has
agreed to extend registration rights to the Holders, subject to certain
limitations upon the transfer of shares so registered, as more fully set forth
herein.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and in the
Merger Agreement, the parties hereby agree as follows:
Section 1. General.
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1.1 Definitions. As used in this Agreement, the following terms shall
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have the following respective meanings:
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" means each of the individuals and entities listed on
Exhibit A hereto.
"Registrable Securities" means (i) Common Stock of the Company
issued to the Holders pursuant to the Merger Agreement, and (ii) any Common
Stock of the Company issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, such
above-described securities. Notwithstanding the foregoing, Registrable
Securities shall not include any securities sold by a Holder to the public
either pursuant to a registration statement or Rule 144 or sold in a private
transaction in which the transferor's rights under Section 2 of this Agreement
are not assigned.
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with Section 2.2 and 2.3 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and disbursements not
to exceed Ten Thousand Dollars ($10,000.00) of a single special counsel for the
Holders, blue sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company).
"SEC" means the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.
Section 2. Registration; Restrictions on Transfer.
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2.1 Restrictions on Transfer of Registrable Securities. As a condition
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precedent to the inclusion of any Holder's Registrable Securities in a
registration statement under Section 2.2 or 2.3 hereof, such Holder shall be
required to execute a "lockup" agreement, in form and substance acceptable to
the Company, providing that for the Lockup Period (as defined below) applicable
to such registration statement, such Holder shall not, directly or indirectly,
by operation of law or otherwise, sell, donate, transfer, assign, exchange,
encumber, pledge, alienate or otherwise dispose of all or any part of such
Holder's Registrable Securities so registered. Any Holder not executing such a
"lockup" agreement shall not be entitled to registration rights hereunder. The
"Lockup Period" shall mean (i) one hundred eighty (180) days after the effective
date of a registration statement filed on or before ninety (90) days from the
date of this Agreement, and (ii) ninety (90) days after the effective date of a
registration statement filed on or after ninety-one (91) days from the date of
this Agreement.
2.2 Best Efforts to File Registration Statement. The Company shall use
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its best efforts to prepare and file, within one hundred eighty (180) days after
the effective time of the Merger, a registration statement under the Securities
Act covering the registration of all of the Registrable Securities, and shall
thereafter use its best efforts to cause such registration statement to be
declared effective as expeditiously as possible.
2.3 Piggyback Registration Rights. The Company shall notify all Holders
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of Registrable Securities in writing at least fifteen (15) days prior to the
filing of any registration statement under the Securities Act for purposes of a
public offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans or with respect to corporate reorganizations or other transactions under
Rule 145 of the Securities Act) and will afford each such Holder an opportunity
to include in such registration statement all or part of such Registrable
Securities held by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by it
shall, within ten (10) days after the above-described notice from the Company,
so notify the Company in writing. Such notice shall state the intended method of
disposition of the Registrable Securities by such Holder. If a Holder decides
not to include all of its Registrable Securities in any registration statement
thereafter filed by the Company, such Holder shall nevertheless continue to have
the right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with respect
to offerings of its securities, all upon the terms and conditions set forth
herein.
(a) Underwriting. If the registration statement under which the
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Company gives notice under this Section 2.3 is for an underwritten offering, the
Company shall so advise
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the Holders of Registrable Securities. In such event, the right of any such
Holder to be included in a registration pursuant to this Section 2.3 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of the
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company; second, to the Holders on a pro rata basis based on the total
number of Registrable Securities held by the Holders; and third, to any
stockholder of the Company (other than a Holder) on a pro rata basis. No such
reduction shall (i) reduce the securities being offered by the Company for its
own account to be included in the registration and underwriting or (ii) reduce
the amount of securities of the selling Holders included in the registration
below twenty-five percent (25%) of the total amount of securities included in
such registration. If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by written notice to
the Company and the underwriter, delivered at least ten (10) business days prior
to the effective date of the registration statement. Any Registrable Securities
excluded or withdrawn from such underwriting shall be excluded and withdrawn
from the registration. For any Holder which is a partnership or corporation, the
partners, retired partners and stockholders of such Holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing person shall be deemed to be a single "Holder",
and any pro rata reduction with respect to such "Holder" shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such "Holder," as defined in this sentence.
(b) Right to Terminate Registration. The Company shall have the
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right to terminate or withdraw any registration initiated by it under this
Section 2.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.4 hereof.
2.4 Expenses of Registration. Except as specifically provided herein,
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all Registration Expenses incurred in connection with any registration hereunder
shall be borne by the Company. All Selling Expenses incurred in connection with
any registration hereunder shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered.
2.5 Obligations of the Company. Whenever effecting a registration of any
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Registrable Securities hereunder, the Company shall, as expeditiously as
reasonably possible:
(a) With respect to a registration statement filed relating to
Registrable Securities, keep such registration statement effective for up to one
(1) year following the expiration of the applicable Lockup Period or, if
earlier, until the Holder or Holders of such Registrable Securities have
completed the distribution thereof.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as
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may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement for the period set forth in paragraph (a) above.
(c) Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Use its reasonable best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
(g) Provide a transfer agent and registrar for all Registrable
Securities registered hereunder and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such registration.
2.6 Termination of Registration Rights. All registration rights granted
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under this Section 2 shall terminate and be of no further force and effect on
the date five (5) years after the date of this Agreement. In addition, a
Holder's registration rights shall expire if all Registrable Securities held by
and issuable to such Holder (and its affiliates, partners, former partners,
members and former members) may be sold under Rule 144 during any ninety (90)
day period.
2.7 Delay of Registration; Furnishing Information.
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(a) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.2 or 2.3 that the selling
Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.
2.8 Indemnification. In the event any Registrable Securities are included
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in a registration statement under Section 2.2 or 2.3:
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(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers and directors of each Holder,
any underwriter (as defined in the Securities Act) for such Holder and each
person, if any, who controls such Holder or underwriter within the meaning of
the Securities Act or the Exchange Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any of the following statements, omissions or violations
(collectively a "Violation") by the Company: (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) 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, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement; and the Company will pay as incurred to
each such Holder, partner, officer, director, underwriter or 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 indemnity agreement contained in this Section 2.8(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company, which consent shall not be unreasonably withheld, nor shall the Company
be liable in any such case for any such loss, claim, damage, liability or action
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by such Holder, partner, officer,
director, underwriter or controlling person of such Holder.
(b) To the extent permitted by law, each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration qualifications or compliance is being effected, indemnify and hold
harmless the Company, each of its directors, its officers and each person, if
any, who controls the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such registration
statement or any of such other Holder's partners, directors or officers or any
person who controls such Holder, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, underwriter or other such Holder, or partner,
director, officer or controlling person of such other Holder may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder under an
instrument duly executed by such Holder and stated to be specifically for use in
connection with such registration; and each such Holder will pay as incurred any
legal or other expenses reasonably incurred by the Company or any such director,
officer, controlling person, underwriter or other Holder, or partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however,
that the indemnity agreement contained in this Section 2.8(b) shall not apply to
amounts paid in settlement of any such loss,
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claim, damage, liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld;
provided further, that in no event shall any indemnity under this Section 2.8
exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
2.8 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.8, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.8, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.8.
(d) If Section 2.8 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any losses, claims, damages
or liabilities referred to herein, the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall to the extent permitted by
applicable law contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
Violation(s) that resulted in such loss, claim, damage or liability, as well as
any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by a court
of law by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission; provided, that in no event
shall any contribution by a Holder hereunder exceed the net proceeds from the
offering received by such Holder.
(e) The obligations of the Company and Holders under this Section 2.8
shall survive completion of any offering of Registrable Securities in a
registration statement and the termination of this agreement. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
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2.9 Assignment of Registration Rights. Subject to the restrictions on
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transfer set forth in Section 2.1 hereof, the rights of a Holder pursuant to
this Section 2 may be assigned by such Holder to a transferee or assignee of
Registrable Securities which (a) is a general partner, limited partner, retired
partner, member or retired member of a Holder, (b) is a partnership in which a
Holder is a partner, or an associate of such partnership, (c) is a Holder's
family member or trust for the benefit of an individual Holder, or (d) acquires
at least fifty thousand (50,000) shares of Registrable Securities (as adjusted
for stock splits and combinations); and provided further, (i) the transferor
shall, within twenty (20) days after such transfer, furnish to the Company
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned and
(ii) such transferee shall agree to be subject to all restrictions set forth in
this Agreement.
2.10 Amendment of Registration Rights. Any provision of this Section 2
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may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this Section 2.10 shall be binding upon each Holder and the
Company. By acceptance of any benefits under this Section 2, Holders of
Registrable Securities hereby agree to be bound by the provisions hereof.
2.11 Subordination of Registration Rights. The registration rights
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granted to Holders hereunder shall be subordinate in nature to the registration
rights granted by the Company to Xxxxxx Healthcare Corporation, a Delaware
corporation ("Xxxxxx"), pursuant to the Investor Rights Agreement dated July 8,
1998, by and among the Company, Baxter, and certain individuals named therein
(the "Investor Rights Agreement"). In accordance with the foregoing, nothing
contained herein shall operate to reduce the number of shares of Company common
stock held by Xxxxxx which pursuant to the Investor Rights Agreement may be
included in a registration statement filed by the Company under the Securities
Act.
Section 3. Miscellaneous.
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3.1 Governing Law. This Agreement shall be governed by and construed
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under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
3.2 Successors and Assigns. Except as otherwise expressly provided
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herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities from time to time;
provided, however, that prior to the receipt by the Company of adequate written
notice of the transfer of any Registrable Securities specifying the full name
and address of the transferee, the Company may deem and treat the person listed
as the holder of such shares in its records as the absolute owner and holder of
such shares for all purposes, including the payment of dividends or any
redemption price.
3.3 Entire Agreement. This Agreement and the Merger Agreement and the
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other documents delivered pursuant thereto constitute the full and entire
understanding and agreement
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between the parties with regard to the subjects hereof and no party shall be
liable or bound to any other in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein and therein.
3.4 Severability. In the event one or more of the provisions of this
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Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
3.5 Amendment and Waiver.
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(a) Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the holders
of at least a majority of then outstanding Registrable Securities.
(b) Except as otherwise expressly provided, the obligations of the
Company and the rights of the Holders under this Agreement may be waived only
with the written consent of the holders of at least a majority of then
outstanding Registrable Securities.
3.6 Delays or Omissions. It is agreed that no delay or omission to
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exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.
3.7 Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and shall be deemed to have been duly given when
delivered personally, or when mailed by United States certified or registered
mail, prepaid, to the parties or their assignees at the addresses set forth on
the signature page hereto (or at such other address as shall be given in writing
by any party).
3.8 Attorneys' Fees. In the event that any suit or action is instituted
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to enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
3.9 Titles and Subtitles. The titles of the sections and subsections of
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this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
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3.10 Facsimile. This Agreement may be executed by facsimile (with
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originals to follow by United States mail), and such facsimile shall be
conclusive evidence of the consent and ratification of the signatory hereto.
IN WITNESS WHEREOF, the undersigned has executed this Registration Rights
Agreement as of the date first written above.
GenStar Therapeutics Corporation
/s/ XXXXXX X. XXXXX
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By: Xxxxxx X. Xxxxx, M.D., President
Address:
00000 Xxxxxx Xxx, Xxxxx 000
Xxx Xxxxx, XX 00000
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EXHIBIT A
HOLDERS
Xxxx-Xxxxx Family Trust dtd 9/27/90
Xxxx Polescha
Xxxxx Xxxxxx
Xxxx Xxxx
June and Xxxxxxx Xxxxxxxx
Xxxxx Xxxxxxx
Shellwater & Co.
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