EXHIBIT 10.4
PAGE 1 of 8
CONTINUING GUARANTY
THIS CONTINUING GUARANTY ("Guaranty"), dated as of May 15, 1998, is
executed and delivered by Xxxxxx X. Xxx, ("Guarantor") in favor of PREFERRED
BUSINESS CREDIT, INC., a California Corporation ("PBC") and in light of the
following:
FACT ONE: Borrower and PBC are, contemporaneously herewith, entering
into the Loan Documents; and
FACT TWO: In order to induce PBC to extend financial accommodation to
XXX PHARMACEUTICALS, a California corporation, ("Borrower") pursuant to the
Loan Documents, and in consideration thereof, and in consideration of any
loans or other financial accommodations heretofore or hereafter extended by
PBC to Borrower, whether pursuant to the Loan Documents or otherwise,
Guarantor has agreed to guarantee the Guaranteed Obligations.
NOW, THEREFORE, in consideration of the foregoing, Guarantor hereby
agrees, in favor of PBC, as follows:
1. DEFINITIONS AND CONSTRUCTION.
(a) DEFINITION. The following terms, as used in this Guaranty,
shall have the following meanings:
"BANKRUPTCY CODE" means The Bankruptcy Reform Act of 1978 (11
U.S.C. Sections 101-1330), as amended or supplemented from time to time, and
any successor statute, and any and all rules issued or promulgated in
connection therewith.
"GUARANTEED OBLIGATIONS" means any and all obligations,
indebtedness, or liabilities of any kind or character owed by Borrower to PBC
including all such obligations, indebtedness, or liabilities, whether for
principal, interest (including any interest which, but for the application of
the provisions of the Bankruptcy Code, would have accrued on such amounts),
premium, reimbursement obligations, fees, costs, expenses (including,
attorneys' fees), or indemnity obligations, whether heretofore, now, or
hereafter made, incurred, or created, whether voluntarily or involuntarily
made, incurred, or created, whether secured or unsecured (and if secured,
regardless of the nature of extent of the security), whether absolute or
contingent, liquidated or unliquidated, determined or indeterminate, whether
Borrower is liable individually or jointly with others, and whether recovery
is or hereafter becomes barred by any statute of limitations or otherwise
becomes unenforceable for any reason whatsoever, including any act or failure
to act by PBC.
"LOAN DOCUMENTS" shall mean that certain Loan and Security
Agreement dated May 21, 1996 between PBC and Borrower, any promissory notes
issued by Borrower in connection therewith, and those documents, instruments,
and agreements which either now or in the future exist among Borrower,
Guarantor, or any affiliate of Borrower, on the one hand, and PBC, on the
other hand.
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(b) CONSTRUCTION. Unless the context of this Guaranty clearly
requires otherwise, references to the plural include the singular, references
to the singular include the plural, and the term "including" is not limiting.
The words "hereof," "herein," "hereby," "hereunder," and other similar terms
refer to this Guaranty as a whole and not to any particular provision of this
Guaranty. Any reference herein to any of the Loan Documents includes any and
all alterations, amendments, extensions, modifications, renewals, or
supplements thereto or thereof, as applicable. Neither this Guaranty nor any
uncertainty or ambiguity herein shall be construed or resolved against PBC or
Guarantor, whether under any rule of construction or otherwise. On the
Contrary, this Guaranty has been reviewed by Guarantor, PBC, and their
respective counsel, and shall be construed and interpreted according to the
ordinary meaning of the words used so as to fairly accomplished the purposes
and intentions of PBC and Guarantor.
2. GUARANTEED OBLIGATIONS. Guarantor hereby irrevocably and
unconditionally guarantees to PBC, as and for its own debt, until final and
indefeasible payment thereof has been made, (a) payment of the Guaranteed
Obligations, in each case when and as the same shall become due and payable,
whether at maturity, pursuant to a mandatory prepayment requirement, by
acceleration, or otherwise; it being the intent of Guarantor that the
guaranty set fourth herein shall be a guaranty of payment and not a guaranty
of collection; and (b) the punctual and faithful performance, keeping,
observance, and fulfillment by Borrower of all of the agreements, conditions,
covenants, and obligations of Borrower contained in the Loan Documents.
3. CONTINUING GUARANTY. This Guaranty includes Guaranteed Obligations
arising under successive transactions continuing, compromising, extending,
increasing, modifying, releasing, or renewing the Guaranteed Obligations,
changing the interest rate, payment terms, or other terms and conditions
thereof, or creating new or additional Guaranteed Obligations after prior
Guaranteed Obligations have been satisfied in whole or in part. To the
maximum extent permitted by law, Guarantor hereby waives any right to revoke
this Guaranty as to future indebtedness. If such a revocation is effective
notwithstanding the foregoing waiver, Guarantor acknowledges and agrees that
(a) no such revocation shall be effective until written notice thereof has
been received by PBC, (b) no such revocation shall apply to any Guaranteed
Obligations in existence on such date (including, any subsequent
continuation, extension, or renewal thereof, or change in the interest rate,
payment terms, or other terms and conditions thereof), (c) no such revocation
shall apply to any Guaranteed Obligations made or created after such date to
the extent made or created pursuant to a legally binding commitment of PBC in
existence on the date of such revocation, (d) no payment by Guarantor,
Borrower, or from any other source, prior to the date of such revocation
shall reduce the maximum obligation of Guarantor hereunder, and (e) any
payment by Borrower or from any source other than Guarantor, subsequent to
the date of such revocation, shall first be applied to that portion of the
Guaranteed Obligations as to which the revocation is effective and which are
not, therefore, guaranteed hereunder, and to the extent so applied shall not
reduce the maximum obligation of Guarantor hereunder.
4. PERFORMANCE UNDER THIS GUARANTY. In the event that Borrower fails
to make any payment of any Guaranteed Obligations on or before the due date
thereof, or if Borrower shall fail to perform, keep, observe, or fulfill any
other obligation referred to in clause (b) of Section 2 hereof in the manner
provided in the Loan Documents, Guarantor immediately shall cause such
payment to be made or each of such obligations to be performed, kept,
observed, or fulfilled.
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5. PRIMARY OBLIGATIONS. This Guaranty is a primary and original
obligation of Guarantor, is not merely the creation of a surety relationship,
and is an absolute, unconditional, and continuing guaranty of payment and
performance which shall remain in full force and effect without respect to
future changes in conditions, including any change of law or any invalidity
or irregularity with respect to the issuance of the Notes. Guarantor agrees
that it is directly, jointly and severally with any other guarantor of the
Guaranteed Obligation, liable to PBC, that the obligations of Guarantor
hereunder are independent of the obligations of Borrower or any other
guarantor, and that a separate action may be brought against Guarantor
whether such action is brought against Borrower or any other guarantor or
whether Borrower or any such other guarantor is joined in such action.
Guarantor agrees that its liability hereunder shall be immediate and shall
not be contingent upon the exercise or enforcement by PBC of whatever
remedies it may have against Borrower or any other guarantor, or the
enforcement of any lien or realization upon any security PBC may at any time
possess. Guarantor agrees that any release which may be given by PBC to
Borrower or any guarantor shall not release Guarantor. Guarantor consents and
agrees that PBC shall be under no obligation to marshal any assets of
Borrower or any other guarantor in favor of Guarantor, or against or in
payment of any or all of the Guaranteed Obligations.
6. WAIVERS.
(a) Guarantor hereby waives: (1) notice of acceptance hereof; (2)
notice of any loans or other financial accommodations made or extended under
the Loan Documents or the creation or existence of any Guaranteed
Obligations; (3) notice of the amount of the Guaranteed Obligations, subject,
however, to Guarantor's right to make inquiry of PBC to ascertain the amount
of the Guaranteed Obligations at any reasonable time; (4) notice of any
adverse change in the financial condition of Borrower or of any other fact
that might increase Guarantor's risk hereunder; (5) notice of presentment for
payment, demand, protest, and notice thereof as to any promissory notes or
other instruments among the Loan Documents; (6) notice of any event of
default under the Loan Documents; and (7) all other notices (except if such
notice is specifically required to be given to Guarantor hereunder or under
any Loan Document to which Guarantor is a party) and demands to which
Guarantor might otherwise be entitled.
(b) To the maximum extent permitted by law, Guarantor hereby waives
the right by statute or otherwise to require PBC to institute suit against
Borrower or to exhaust any rights and remedies which PBC has or may have
against Borrower. In this regard, Guarantor agrees that it is Bound to the
payment of all Guaranteed Obligations, whether now existing or hereafter
accruing, as fully as if such Guaranteed Obligations were directly owing to
PBC by Guarantor. Guarantor further waives any defense arising by reason of
any disability or other defense (other than the defense that the Guaranteed
Obligations shall have been fully and finally performed and indefeasibly
paid) of Borrower or by reason of the cessation from any cause whatsoever of
the liability of Borrower in respect thereof.
(c) To the maximum extent permitted by law, Guarantor hereby
waives: (1) any rights to assert against PBC any defense (legal or
equitable), set-off, counterclaim, or claim which Guarantor may now or at any
time hereafter have against Borrower or any other party liable to PBC; (2)
any defense, set-off, counterclaim, or claim, of any kind or nature, arising
directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Guaranteed Obligations or any
security therefor; (3) any defense arising by reason of any claim of defense
based upon an election or remedies by PBC including the provisions of
Sections 580d and 726 of the California Code of Civil Procedure, or any
similar law of California or any other jurisdiction; (4) the guarantor
expressly waives
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EXHIBIT 10.4
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any and all defenses in its favor based upon an election of remedies by the
PBC which destroys, diminishes or affects the guarantor's subrogation rights
against the borrower and/or the guarantor's rights to proceed against the
borrower for reimbursement, contribution, indemnity or otherwise, including
without limitation any election(s) by PBC to conduct a nonjudicial fore
closure sale under any deed(s) of trust, and further including without
limitation any and all defenses, rights or stoppels which might otherwise
arise under or in connection with California Civil Code of Civil Procedure
("CCP") Section 580d or 580a as a result of any such election(s) or
otherwise. The guarantor acknowledges and agrees that it is knowingly waiving
in advance as a result of the foregoing sentence a complete or partial
defense to its guaranty it may later have had arising from CCP Section 580d
or 580a based upon PBC's subsequent election to conduct a private nonjudicial
foreclosure sale, even though such election would destroy, diminish or affect
the guarantor's rights of subrogation against the borrower and the
guarantor's rights to pursue the borrower for reimbursement, contribution,
indemnity or otherwise. (5) the benefit of any statute of limitations
affecting Guarantor's liability hereunder or the enforcement thereof, and any
act which shall defer or delay the operation of any statute of limitations
applicable to the Guaranteed Obligations shall similarly operate to defer or
delay the operation of such statute of limitations applicable to guarantor's
liability hereunder.
(d) To the maximum extent permitted by law, Guarantor hereby waives
any right of subrogation Guarantor has or may have as against Borrower with
respect to the Guaranteed Obligations. In addition, Guarantor hereby waives
any right to proceed against Borrower, now or hereafter, for contribution,
indemnity, reimbursement, and any other suretyship rights and claims, whether
direct or indirect, liquidated or contingent, whether arising under express
or implied contract or by operation of law, which Guarantor may now have or
hereafter have as against the Borrower with respect to the Guaranteed
Obligations. Guarantor also hereby waives any rights to recourse to or with
respect to any asset of Borrower Guarantor agrees that in light of the
immediately forgoing waivers, the execution of this Guaranty shall not be
deemed to make Guarantor a "creditor" of Borrower, and that for purposes of
Sections 547 and 550 of the Bankruptcy Code Guarantor shall not be deemed a
"creditor" of Borrower.
(e) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION SET FORTH IN THIS GUARANTY, GUARANTOR HEREBY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ANY AND ALL BENEFITS OR DEFENSES ARISING DIRECTLY OR
INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE SECTION 2799, 2808,
2809, 2810, 2815, 2819, 2820, 2821, 2822, 2838, 2839, 2845, 2848, 2849, AND
2850, CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 580a, 580b, 580c, 580d, AND
726, AND CHAPTER 2 OF TITLE 14 OF THE CALIFORNIA CIVIL CODE.
7. RELEASES. Guarantor consents and agrees that, without notice to or
by Guarantor and without affecting or impairing the obligations of Guarantor
hereunder, PBC may, by action or inaction:
(a) compromise, settle, or extend the duration or the time for the
payment of, or discharge the performance of, or may refuse to or otherwise
not enforce the Loan Documents;
(b) release all or any one or more parties to any one or more of the
Loan Documents or grant other indulgences to Borrower in respect thereof;
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EXHIBIT 10.4
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(c) amend or modify in any manner and at any time (or from time to
time) any of the Loan Documents; or
(d) release or substitute any other guarantor, if any, of the
Guaranteed Obligations, or enforce, exchange, release, or waive any security
for the Guaranteed Obligations (including, the collateral referred to in
Section 18 hereof) or any other guaranty of the Guaranteed Obligations, or
any portion thereof.
8. NO ELECTION. PBC shall have the right to seek recourse against
Guarantor to the fullest extent provided for herein, and no election by PBC
to proceed in one form of action or proceeding, or against any party, or on
any obligation, shall constitute a waiver of PBC's right to proceed in any
other form of action or proceeding or against other parties unless PBC has
expressly waived such right in writing. Specifically, but without limiting
the generality of the forgoing, no action or proceeding by PBC under any
document or instrument evidencing the Guaranteed Obligations shall serve to
diminish the liability of Guarantor under this Guaranty except to the extent
that PBC finally and unconditionally shall have realized indefeasible payment
by such action or proceeding.
(9) INDEFEASIBLE PAYMENT. The Guaranteed Obligations shall not be
considered indefeasibly paid for purposes of this Guaranty unless and until
all payments to PBC are no longer subject to any right on the part of any
person, including Borrower, Borrower as a debtor in possession, or any
trustee (whether appointed under the Bankruptcy Code or otherwise) of
Borrower's assets to invalidate or set aside such payments or to seek to
recoup the amount of such payments or any portion thereof, or to declare same
to be fraudulent or preferential. Upon such full and final performance and
indefeasible payment of the Guaranteed Obligations whether by Guarantor or
Borrower, PBC shall have no obligation whatsoever to transfer or assign its
interest in the Loan Documents to Guarantor. In the event that, for any
reason, any portion of such payments to PBC is set aside or restored, whether
voluntarily or involuntarily, after the making thereof, then the obligation
intended to be satisfied thereby shall be revived and continued in full force
and effect as if said payment or payments had not been made, and Guarantor
shall be liable for the full amount PBC is required to repay plus any and all
costs and expenses (including attorneys' fees) paid by PBC in connection
therewith.
10. FINANCIAL CONDITION OF BORROWER. Guarantor represents and warrants
to PBC that Guarantor is currently informed of the financial condition of
Borrower and of all other circumstances which a diligent inquiry would reveal
and which bear upon the risk of nonpayment of the Guaranteed Obligations.
Guarantor further represents and warrants to PBC that Guarantor has read and
understands the terms and conditions of the Loan Documents. Guarantor hereby
covenants that Guarantor will continue to keep informed of Borrower's
financial condition, the financial condition of other guarantors, if any,
and of all other circumstances which bear upon the risk of nonpayment or
nonperformance of the Guaranteed Obligations.
11. SUBORDINATION. Guarantor hereby agrees that any and all present
and future indebtedness of Borrower owing to Guarantor is postponed in favor
of and subordinated to payment, in full, in cash, of the Guaranteed
Obligations. In this regard, no payment of any kind whatsoever shall be made
with respect to such indebtedness until the Guaranteed Obligations have been
indefeasibly paid in full.
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12. PAYMENTS; APPLICATION. All payments to be made hereunder by
Guarantor shall be made in lawful money of the United States of America at
the time of payment, shall be made in immediately available funds, and shall
be made without deduction (whether for taxes or otherwise) or offset. All
payments made by Guarantor hereunder shall be applied as follows: first, to
all costs and expenses (including attorneys' fees) incurred by PBC in
enforcing this Guaranty or in collecting the Guaranteed Obligations; second,
to all accrued and unpaid interest, premium, if any, and fees owing to PBC
constituting Guaranteed Obligations; and third, to the balance of the
Guaranteed Obligations.
13. ATTORNEYS' FEES AND COSTS. Guarantor agrees to pay, on demand, all
reasonable attorneys' fees and all other costs and expenses which may be
incurred by PBC in the enforcement of this Guaranty or in any way arising out
of, or consequential to the protection, assertion, or enforcement of the
Guaranteed Obligations (or any security therefor), whether or not suit is
brought.
14. INDEMNIFICATION. Guarantor agrees to indemnify PBC and hold PBC
harmless against all obligations, demands, or liabilities asserted by any
party and against all losses in any way suffered, incurred, or paid by PBC as
a result of or in any way arising out of, following, or consequential to
PBC's transactions with Borrower.
15. NOTICES. All notices or demands by Guarantor or PBC to the other
relating to this Guaranty shall be in writing and either personally served or
sent by registered or certified mail, postage prepaid, return receipt
requested, or by prepaid telex, telefacsimile, or telegram, and shall be
deemed to be given for purposes of this Guaranty on the day that such writing
is received by the party to whom it is sent. Unless otherwise specified in a
notice sent or delivered in accordance with the provisions of this section,
such writing shall be sent, if to Guarantor, then to the attention of Xxxxxx
X. Xxx at Guarantor's address set forth on the signature page hereof, and if
to PBC, then as follows:
PREFERRED BUSINESS CREDIT, INC.
000 X. Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn.: President
16. CUMULATIVE REMEDIES. No remedy under this Guaranty or under any
Loan Document is intended to be exclusive of any other remedy, but each and
every remedy shall be cumulative and in addition to any and every other
remedy given hereunder or under any Loan Document, and those provided by law
or in equity. No delay or omission by PBC to exercise any right under this
Guaranty shall impair any such right nor be construed to be a waiver thereof.
No failure on the part of PBC to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
17. BOOKS AND RECORDS. Guarantor agrees that PBC's books and records
showing the account between PBC and Borrower shall be admissible in any
action or proceeding and shall be binding upon Guarantor for the purpose of
establishing the items therein set forth and shall constitute prima facie
proof thereof.
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EXHIBIT 10.4
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18. COLLATERAL. The obligations of Guarantor hereunder are secured, as
provided in that certain n/a.
19. SEVERABILITY OF PROVISION. Any provision of this Guaranty which is
prohibited or unenforceable under applicable law, shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
20. ENTIRE AGREEMENT; AMENDMENTS. This Guaranty constitutes the entire
agreement between Guarantor and PBC pertaining to the subject matter
contained herein. This Guaranty may not be altered, amended, or modified,
nor may any provision hereof be waived or noncompliance therewith consented
to, except by means of a writing executed by both Guarantor and PBC. Any
such alteration, amendment, modification, waiver, or consent shall be
effective only to the extent specified therein and for the specific purpose
for which given. No course of dealing and no delay or waiver of any right or
default under this Guaranty shall be deemed a waiver of any other, similar or
dissimilar right or default or otherwise prejudice the rights and remedies
hereunder.
21. SUCCESSORS AND ASSIGNS. The death of Guarantor shall not terminate
this Guaranty. This Guaranty shall be binding upon Guarantor's heirs,
executors, administrators, representatives, successors, and assigns and shall
inure to the benefit of the successors and assigns of PBC; Provided, however,
Guarantor shall not assign this Guaranty or delegate any of its duties hereunder
without PBC's prior written consent. Any assignment without the consent of PBC
shall be absolutely void. In the event of any assignment or other transfer of
rights by PBC, the rights and benefits herein conferred upon PBC shall
automatically extend to and be vested in such assignee or other transferee.
22. SEPARATE PROPERTY. Any married individual who signs this Guaranty in
his or her individual capacity hereby expressly agrees that recourse may be had
against his or her separate property for all Guaranteed Obligations hereunder.
23. CHOICE OF LAW AND VENUE. THE VALIDITY OF THIS GUARANTY, ITS
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF GUARANTOR
AND PBC, SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
GUARANTOR HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS GUARANTY SHALL BE TRIED AND DETERMINED ONLY IN THE STATE AND
FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, OR,
AT THE SOLE OPTION OF PBC, IN ANY OTHER COURT IN WHICH PBC SHALL INITIATE
LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER
MATTER IN CONTROVERSY. TO THE MAXIMUM EXTENT PERMITTED BY LAW, GUARANTOR
HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT
IN ACCORDANCE WITH THIS SECTION.
24. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
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ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH
RESPECT TO THIS GUARANTY, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE DEALINGS OF GUARANTOR AND PBC WITH RESPECT TO THIS GUARANTY,
OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE
MAXIMUM EXTENT PERMITTED BY LAW, GUARANTOR HEREBY AGREES THAT ANY SUCH ACTION,
CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL
WITHOUT A JURY AND THAT PBC MAY FILE AN ORIGINAL COUNTERPART OF THIS SECTION
WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF GUARANTOR
TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as
of the date set forth in the first paragraph hereof.
/s/ Xxxxxx X. Xxx
---------------------------------------
Xxxxxx X. Xxx
Guarantor's Address: 0000 Xxx Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
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