Exhibit 10.11
SECOND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is dated this 3rd day of April, 1998, by and among ILD
TELESERVICES, INC., a Delaware corporation (the "Company"), INTELLICALL,
INC., a Delaware corporation ("Intellicall"), TRIAD-ILD PARTNERS, L.P., a
Georgia limited partnership ("Triad I"), TRIAD-ILD PARTNERS II, L.P., a
Georgia limited partnership ("Triad II"), TRIAD-ILD PARTNERS III, L.P., a
Georgia limited partnership ("Triad III")(Triad I, Triad II and Triad III
shall collectively be referred to as "Triad-ILD"), XXXXXX TELECOMMUNICATIONS,
LLC, a Georgia limited liability company ("Xxxxxx"), XXXXXXXX X. XXXXXXXXX, a
Georgia resident ("XxXxxxxxx"); XXXXXXXX HOLDING COMPANY ("Xxxxxxxx"), XXXXX
ENTERPRISES, INC. ("Xxxxx"), XXXXXX X. XXXXXX, a Tennessee resident
("Xxxxxx"), and XXXXXXX X. XXXXXX, a Georgia resident; as stockholders of the
Company (collectively, the "Stockholders");
W I T N E S S E T H:
WHEREAS, the Company and certain of the Stockholders are parties to that
certain Amended and Restated Registration Rights Agreement dated December 15,
1997 (the "Current Rights Agreement"), pursuant to which such Stockholders
were afforded certain rights to participate in the registration of their
shares of common stock of the Company;
WHEREAS, in connection with the transfer of certain stock of the Company
from Intellicall to certain of the Stockholders, the parties desire to
restate this agreement to add such other stockholders; and
WHEREAS, the parties desire to execute this Second Amended and Restated
Registration Rights Agreement to provide for registration, under the
Securities Act of 1933, as amended (together with any successor federal
statute, the "Securities Act"), of the shares of the Company's common stock
owned by the Stockholders, including shares of the Company's common stock
issued upon conversion of Series A preferred stock ("Series A Shares"),
Series B convertible preferred stock or other convertible securities or
convertible instruments, together with any other shares of common stock of
the Company hereafter acquired by any Stockholder (the "Shares").
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. REGISTRATION RIGHTS.
(a) INCIDENTAL RIGHTS. If at any time or from time to time the
Company proposes to file with the United States Securities and Exchange
Commission (the "Commission"), a registration statement for the
registration under the Securities Act of any shares of common stock of the
Company for sale to the public by the Company or on behalf of stockholders
of the Company, including any Stockholder, for cash (excluding any shares
of common stock issuable by the Company upon the exercise of employee stock
options or in connection with the merger or consolidation of the Company
with one or more other corporations if the Company is the surviving
corporation), the Company shall give all Stockholders who then hold any
Shares at least ten (10) days, but not more than ninety (90) days, prior
written notice of the filing of the proposed registration statement. The
notice shall include a list of the states and foreign jurisdictions, if
any, in which the Company intends to qualify such shares and the stock
exchange or service on which the Company proposes to list the common stock.
Upon the written request of one or more of the Stockholders received by the
Company within twenty-one (21) days of the date the Company notified the
Stockholders of its intention to file such registration statement, the
Company shall, subject to the conditions and in accordance with the
procedures set forth in paragraphs (c) and (d) of this Section 1, and at
its own expense as provided in Section 3 of this Agreement, use its best
efforts to include in the coverage of such registration statement and to
qualify for sale under the blue sky or securities laws of the various
states, the number of Shares (herein called the "Specified Shares") held by
and requested to be registered by such Stockholders; provided, that if the
managing underwriter for the Company indicates in writing that the effect
of including all or part of the Specified Shares in the coverage of such
registration statement will materially and adversely affect the sale of the
shares of common stock proposed to be sold by the Company (which statement
of the managing underwriter shall also state the maximum number of shares
of common stock (herein called the "Maximum Shares", if any, which can be
sold by stockholders of the Company without materially adversely affecting
the sale of the shares of common stock proposed to be sold by the Company),
then each such Stockholder shall have the right, subject to the incidental
registration rights existing as of the date hereof issued by the Company to
Sirrom Capital Corporation and Xxxxx River Ventures, L.P. (as warrant
holders or holders of convertible notes)(which the Company represents and
warrants to the Stockholders are identical in all material respects and
PARI PASSU to the rights herein), to include in such registration statement
its respective pro rata portion of the Maximum Shares, determined by
dividing the number of Shares held by such Stockholder by the total number
of Shares held by all stockholders requesting their Shares to be
registered. In the event that: (i) any Stockholder (an "Overalloted
Stockholder") requesting registration has requested registration of more
shares than that Stockholder's pro rata portion of the Maximum Shares and
(ii) any other Stockholder (an "Underalloted Stockholder") requesting such
registration has requested registration of fewer shares than such
Stockholder's pro rata portion of the Maximum Shares, then each Overalloted
Stockholder shall have the right, subject to the rights of Sirrom Capital
Corporation and Xxxxx River Ventures, L.P., to include in such
registration statement its pro rata portion of the Maximum Shares with
respect to which the Underalloted Stockholders shall not have
requested registration, determined by dividing the number of shares of
common stock held by such Overalloted Stockholder by the total number of
shares of common stock owned by all stockholders requesting registration.
Notwithstanding the foregoing, each of the Stockholders hereby agrees and
acknowledges that it shall not exercise any of its rights hereunder in
connection with the initial public offering of shares of common stock by
the Company effected pursuant to the approved terms for an initial public
offering adopted by at least 80% of the board of directors of the Company.
Subject to the foregoing and without in any way limiting the types of
registrations to which this paragraph (a) applies, if the Company at any
time or from time to time effects any "shelf registrations" under Rule 415
promulgated under the Securities Act ("Rule 415"), or any other similar
rule or regulation, then for each shelf registration effected by the
Company, the Company shall take all necessary action, including, without
limitation, the filing of post-effective amendments, to permit the
Stockholders to include their shares in such registrations in accordance
with this paragraph (a), provided that the Company shall not be required to
include any shares in such registration by post-effective amendment to the
extent that the amount of such shares, when added to the number of shares
of common stock theretofore or contemporaneously to be sold by the Company
under such Registration Statement, would exceed the total number of shares
of common stock registered thereunder.
Other than as provided in this Agreement, in no event shall the
Company be required to amend any registration statement filed pursuant to
this Section 1(a) after it has become effective or to amend or supplement
any prospectus to permit the continued disposition of Shares registered
under any registration except in connection with a registration statement
complying with Rule 415. The Stockholders agree not to sell under a
registration statement complying with Rule 415 during any period in which
the Company is engaged in a stock repurchase program.
The Company shall have the right to select any underwriters, including
the managing underwriter, of any public offering of shares of common stock
subject to the provisions of this paragraph (a). Nothing in this paragraph
(a) shall create any liability on the part of the Company to any
Stockholder if the Company for any reason should decide not to file such a
registration statement.
(b) MANDATORY RIGHTS. On not more than one occasion during the
period commencing at least one hundred and eighty (180) days after the
Company has undertaken an initial public offering of its capital stock and
such stock becomes listed on a National Stock Exchange (the "Commencement
Date") and ending on that date when all Shares held by the Stockholders are
eligible for resale pursuant to Rule 144 (the "Ending Date") (the period
between the Commencement Date and Ending Date, the "Stockholder Demand
Period"), any Stockholder, or a group of Stockholders, who hold
individually or in the aggregate not less than 50,000 Shares, shall have
the right (but only one right), upon written request, to cause the Company
to prepare and file, promptly after receipt of such request and in any case
within 90 days thereof, and thereafter use its best efforts to cause
to become effective, a registration statement under and complying in all
material respects with the Securities Act covering such number of Shares
constituting common stock of the Company as shall be specified in the
request of such Stockholder(s) for the sole purpose of distributing such
stock to the equity holders of such Stockholder(s), which request shall not
be less than 25,000 Shares, as may be adjusted by a stock recapitalization
(the "Stockholder Registration Statement"). For purposes hereof, National
Stock Exchange shall mean the New York Stock Exchange, the American Stock
Exchange or the NASDAQ National Market System. Notwithstanding the
foregoing:
(i) The Company may delay the filing of a Stockholder
Registration Statement for a reasonable period if, in the reasonable
judgment of the Company, the Company would be required to include in
such registration statement material information which at that time
has not been disclosed publicly and cannot be disclosed publicly
without a risk of a material disruption of a major corporate
development or transactions then pending or in progress or without a
risk of other material consequence to the Company or an affiliate of
the Company; provided, however, that the duration of the delay shall
not exceed one hundred twenty (120) days from the date the Company
receives written registration request from the requesting
Stockholder(s); and further provided, that in the event of any such
deferral, any requesting Stockholder(s) shall have the right to
withdraw the request for registration by delivering written notice of
such withdrawal to the Company and such withdrawn request shall not be
considered such Stockholder's permitted request for registration under
this Section 1(b);
(ii) If the effective date of the Stockholder Registration
Period would otherwise be forty-five (45) days after, but prior to
ninety (90) days after, the end of the Company's most recently
completed fiscal year, and if the Securities Act requires the Company
to include audited financial statements (as of the end such fiscal
years), then the Company may delay the filing of the Stockholder
Registration Statement for such period as is reasonably necessary to
include therein its audited financial statements for such fiscal year.
In no event shall such Stockholder Registration Statement be filed
later than the ninety-first (91st) day after the end of such recently
completed calendar years; and provided further, under no event shall
the Company be obligated to effect any registration under this Section
1(b) if such registration would require the Company to: (x) furnish
any financial statements other than as of the end of a fiscal quarter,
(y) furnish any audited financial statements of the Company other than
as of the end of the fiscal year unless the Stockholder agrees to bear
the expense of preparing such financial statements, or (z) furnish any
audited financial statements of any other entity not otherwise
available unless the Stockholder agrees to bear the expense of
preparing such financial statements; and
(iii) The Company shall have no obligation to prepare and file a
Stockholder Registration Statement if at the time of the Company's
receipt of the Stockholder's registration request the Company is
contractually committed not to
register securities for a specified period but in such event the
Stockholder's request shall be withdrawn and not be considered such
Stockholder's permitted request for registration under this Section
1(b).
(iv) In the event of the filing of any registration statement
under the Securities Act pursuant to this Section 1(b) which covers at
least 25,000 Shares (as may be adjusted upwards by a stock
recapitalization), the Company shall have the right to require the
Stockholder to make such distribution pursuant to procedures mutually
acceptable to the Company and the Stockholder.
(c) DISTRIBUTION ARRANGEMENTS. The Stockholders agree that, in
disposing of the Shares owned by them, they will comply with Rules 10b-2,
l0b-6 and 10b-7 and any other applicable rules promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended.
(d) COVENANTS AND PROCEDURES. The Stockholders understand that they
have certain registration rights pursuant to this Section 1 with respect to
the Shares, but other than as specifically set forth in this Section 1, the
Company has not covenanted and is not obligated to furnish a registration
statement under the Securities Act covering the Shares, to file a
notification with respect to the Shares or to take any other action that
would make available an exemption from registration. If the Company
becomes obligated under the provisions of paragraph (a) or (b) of this
Section 1 to effect registration of shares of common stock on behalf of a
Stockholder, the Company, at its own expense as provided in Section 3,
shall prepare and file with the Commission a registration statement
covering such shares of common stock and use its best efforts to cause such
registration statement to become effective; and the Company will file such
post-effective amendments to such registration statement (and use its best
efforts to cause them to become effective) and such supplements as are
necessary so that current prospectuses are at all times available for a
period of at least 90 days after the effective date of such registration
statement or for such longer period, not to exceed 180 days, as may be
required under the plan or plans of distribution set forth in such
registration statement. Each Stockholder shall promptly provide the
Company with such information with respect to such Stockholder's shares of
common stock to be so registered and, if applicable, the proposed terms of
the offering or distribution thereof as is required for such registration.
Further, if the shares of common stock to be covered by the registration
statement are not to be sold to or through underwriters acting for the
Company, the Company shall (i) deliver to the Stockholders as promptly as
practicable as many copies of preliminary prospectuses as the Stockholders
may reasonably request, and such Stockholders shall keep a written record
of the distribution of such preliminary prospectuses and shall refrain from
delivery of such preliminary prospectuses in any manner or under any
circumstances which would violate the Securities Act or the securities laws
of any other jurisdiction, including the various states of the United
States, (ii) deliver to the respective Stockholders, as soon as practicable
after the effective date of the registration statement, and from time to
time thereafter during such 90-day period, or such longer period as is
herein provided, as many copies of the prospectuses required to be
delivered in connection with the registration of
shares of common stock to be sold or distributed under the registration
statement as the Selling Stockholders may reasonably request, and (iii) in
case of the happening, after the effective date of such registration
statement and during such 90-day period, or such longer period as is
herein provided, of any event or occurrence which would be set forth in an
amendment of or supplement to such prospectus to make any statements
therein not misleading, give the Stockholders written notice thereof and
prepare and furnish to the Stockholders, in such quantities as they may
reasonably request, copies of such amended prospectus or of such supplement
to be attached to the prospectus in order that the prospectus, as so
amended or supplemented, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) In connection with the offering of any Shares pursuant to this
Agreement, the Company shall take such action as may be necessary to: (i)
qualify or register the Shares to be sold under the securities or "blue
sky" laws of such jurisdictions as may be reasonable requested by the
Stockholders; provided, however, that the Company shall not be obligated to
qualify as a foreign corporation to do business under the laws of any such
jurisdiction in which it is not then qualified, (ii) list the Shares to be
subject to the registration statement on a National Stock Exchange, and
(iii) provide a CUSIP number for the Shares not later than the effective
date of the registration statement.
2. INDEMNIFICATION. In the event of any registration under the
Securities Act pursuant to this Agreement of shares of common stock held by
any Selling Stockholder, the Company will hold harmless such Selling
Stockholder and each underwriter of such securities and each other person, if
any, who controls, such Selling Stockholder or such underwriter, against any
losses, claims, damages or liabilities, joint or several, to which such
Selling Stockholder or such underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in any registration
statement under which such securities were registered under the Securities
Act, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, 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 such Selling Stockholders and each such underwriter and
each such controlling person for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage or liability unless such arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, preliminary prospectus or final
prospectus or such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by such Selling Stockholder or such underwriter specifically for use
in the preparation thereafter.
It shall be a condition precedent to the obligation of the Company to
include in any registration statement any shares of common stock then held by
a Selling Stockholder that the Company shall have received an undertaking
satisfactory to it and its counsel from each Selling Stockholder, to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in the preceding paragraph of this Section 2) the Company, each
director of the Company, each officer of the Company who shall sign such
registration statement and any person who controls the Company within the
meaning of the Securities Act, (i) with respect to any statement or omission
from such registration statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, if such
statement or omission was made in reliance upon and in conformity with
information furnished to the Company through an instrument duly executed by
such Selling Stockholder specifically for use in the preparation of such
registration statement, preliminary prospectus or final prospectus or such
amendment or supplement thereto, and (ii) with respect to compliance by such
Selling Stockholder with applicable laws in effecting the sale or other
disposition of the shares of common stock covered by such registration
statement.
Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 2, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give written
notice to the latter of the commencement of such action. In case any such
action is brought against an indemnified party, the indemnifying party will
be entitled to participate in and to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses incurred by the latter in
connection with the defense thereof.
3. EXPENSES. All expenses incurred by the Company in connection with
any registration statement covering Shares offered by any Selling
Stockholder, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company and the
expense of qualifying such Shares under state blue sky laws, shall be borne
by the Company; provided, however, that (i) all underwriting expenses to be
incurred by the Selling Stockholders, including underwriter's discounts and
commissions, (ii) all fees and disbursements of counsel for any of the
Selling Stockholders, and (iii) all expenses which are to be paid by the
Selling Stockholders under Section 1(b)(ii) or Section 1(d)(ii) hereof, shall
be borne by such Selling Stockholders with each Selling Stockholder bearing
that portion of such expenses that the Shares held by such Selling
Stockholder and being registered bears to the total number of shares being
registered by the Stockholders as a group. It shall be a condition precedent
to the obligations of the Company to take any action to include Shares of any
Selling Stockholder in any registration statement that the Company shall have
received an undertaking satisfactory to the Company from such Selling
Stockholder to pay all expenses required to be paid by such Selling
Stockholder pursuant to this Section 3.
4. DISPOSITIONS DURING REGISTRATION. If so requested by the Company,
each Selling Stockholder will agree, upon the registration of any of such
Selling Stockholder's shares of common stock at any time during the period to
which this Agreement applies, not to sell or
otherwise dispose of any Shares (other than common stock covered by such
registration, which may be sold in accordance with the plan or plans of
distribution described in the registration statement) owned by such Selling
Stockholder for a period of 30 days following the effective date of such
registration statement, or for such longer period as may be required under
the plan or plans of distribution set forth in such registration statement.
5. RIGHTS TRANSFERABLE. All registration rights and benefits set
forth in this Agreement, including indemnification by the Company, shall be
transferable in connection with the transfer of Shares owned by any
Stockholder otherwise than pursuant to a registration statement of the
Company in connection with a public offering of common stock.
6. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
hand delivered or sent by overnight delivery by a reputable courier company
with confirmation of receipt, or by first class registered or certified mail
(return receipt requested), postage prepaid, to the Company at 00000 Xxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 and to the Stockholders at the
address set forth below, unless subsequently changed by written notice. Any
notice shall be deemed to be effective when it is received.
7. ENTIRE AGREEMENT. This Agreement expressly supersedes the
Registration Rights Agreement dated as of May 10, 1996 and represents the
entire agreement of the parties with respect to the subject matter hereof,
and shall not be amended, modified or changed except by written instrument
executed by all other parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
THE COMPANY:
ILD TELESERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxxxx
Title: President
ADDRESS:
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STOCKHOLDERS:
INTELLICALL, INC.
By: /s/ Xxxx Xxxxxxxxx
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Title: Chief Financial Officer
ADDRESS:
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TRIAD-ILD PARTNERS, L.P.
By: Triad-ILD, Inc.
Its General Partner
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, President
ADDRESS: 13000 Sawgrass Xxxxxxx Xxxxxx
Xxxxx 0
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
XXXXXX TELECOMMUNICATIONS, LLC
By: /s/ Xxxxxx Xxxxxx
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Title: VP/CFO
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ADDRESS: 00 Xxxxxxxx Xx.
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Xxxxxxxx, Xx. 00000
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TRIAD-ILD PARTNERS II, L.P.
By: Triad-ILD, Inc.
Its General Partner
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, President
ADDRESS: 13000 Sawgrass Xxxxxxx Xxxxxx
Xxxxx 0
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
XXXXXXXXX
By: /s/ Xxxxxxxx X. XxXxxxxxx
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Xxxxxxxx X. XxXxxxxxx
ADDRESS:
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TRIAD-ILD PARTNERS III, L.P.
By:Triad-ILD, Inc., Its General Partner
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, President
ADDRESS: 13000 Sawgrass Xxxxxxx Xxxxxx
Xxxxx 0
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
XXXXXXXX HOLDING COMPANY
By: /s/ C. Xxx Xxxx
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Title: Vice President
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[CORPORATE SEAL]
ADDRESS:
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XXXXX ENTERPRISES, INC.
By: /s/ Xxxxxx Xxxxxxxx
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Title: Executive Vice President
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ADDRESS:
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XXXXXX
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
ADDRESS: 000 Xxxxxxx Xxx.
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Lookout Mtn., TN 38300
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XXXXXX
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
ADDRESS: 000 Xxxxxxxxxx Xx.
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Xxxxx, Xxxxxxx 00000
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XXXXX
By: /s/ Xxx Xxxxx
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Xxxxxx X. Xxxxx
ADDRESS:
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XXXXXXXXXXXX
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxxxx
ADDRESS: 0000 Xxxxxxxx Xxx.
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Xxxxxx, XX 00000
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XXXXXXX
By: /s/ J. Xxxxx Xxxxxxx
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J. Xxxxx Xxxxxxx
ADDRESS: 0000 Xxxxxxx Xxx.
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Xxxxxx, XX 00000
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XXXXX
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
ADDRESS: 0000 Xxxxxxxx Xxxxx
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Xxxxxx, XX 00000
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