Contract
EXHIBIT
5
ROLLOVER
AGREEMENT dated as of November 4, 2005 among Cap Rock Holding Corporation,
a Delaware corporation (“Parent”),
LGB
Cap Rock LLC, a Delaware limited liability company (the “LGB
Shareholder”),
and
Xxxxx X. Xxxxxx, Xxxx X. North, Jr., Xxx Xxxxxx and Xxxxx X. Page (each, a
“Shareholder”
and,
together with the LGB Shareholder, the “Purchasers”).
WHEREAS
Parent and Cap Rock Energy Corporation, a Texas corporation (the “Company”),
propose to enter into an Agreement and Plan of Share Exchange dated as of the
date hereof (as the same may be amended or supplemented, the “Exchange
Agreement”;
capitalized terms used but not defined herein shall have the meanings set forth
in the Exchange Agreement);
WHEREAS
Parent and each Shareholder have entered into the Principal Shareholder
Agreement, dated as of the date hereof;
WHEREAS
each Shareholder intends to subscribe for the number of shares of Parent common
stock, par value $0.01 (the “Parent
Common Stock”)
set
forth opposite his or her name on Schedule A hereto (the “Purchased
Shares”)
and
the LGB Shareholder intends to subscribe for the Remaining Shares (as
defined below); and
WHEREAS,
as a condition to its willingness to enter into the Exchange Agreement, Parent
has requested that each Shareholder and the LGB Shareholder enter into this
Agreement.
NOW,
THEREFORE, the parties hereto agree as follows:
ARTICLE
I
Subscription
for and Acquisition
of
Common Stock
Section
1.01. Issuance
of Parent Common Stock to Shareholders.
On the
terms and subject to the conditions set forth in this Agreement, each
Shareholder hereby subscribes for and agrees to acquire, and Parent hereby
agrees to issue and transfer to such Shareholder, immediately prior to the
Effective Time, the Purchased Shares, in consideration for an equal number
of
shares of Company Common Stock to be transferred to Parent by such Shareholder
(the “Subject
Shares”).
Section
1.02. Issuance
of Parent Common Stock to LGB Shareholder.
The term
“Remaining
Shares”
shall
represent shares of Parent Common Stock, the number of which shall be determined
by (a) calculating the number of shares of Company Common Stock outstanding
immediately prior to the Effective Time (disregarding the effects of any
transactions contemplated herein), and (b) subtracting from such number the
total number of Purchased Shares to be issued and transferred to all
Shareholders pursuant to Section 1.01. On the terms and subject to the
conditions set forth in this
Agreement,
the LGB Shareholder hereby subscribes for and agrees to acquire, and Parent
hereby agrees to issue and transfer to the LGB Shareholder, the Remaining
Shares, immediately prior to the Effective Time, in consideration for a cash
purchase price of $21.75 per Remaining Share.
Section
1.03. The
Closing.
The
closing (the “Closing”)
of the
acquisition and transfer under Sections 1.01 and 1.02 of the Parent Common
Stock shall occur on the Closing Date at the offices of Cravath, Swaine &
Xxxxx LLP, located at 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000.
ARTICLE
II
Representations
and Warranties of Parent
Parent
represents and warrants to each Purchaser on the date hereof and on and as
of
the Closing Date as follows:
Section
2.01. Authorization;
Validity.
Parent
has full corporate power and authority to execute and deliver this Agreement
and
to perform its obligations hereunder, and this Agreement has been duly
authorized, executed and delivered by Parent and is a valid and binding
agreement of Parent, enforceable against Parent in accordance with its
terms.
Section
2.02. Capitalization.
The
Parent Common Stock to be issued to each Purchaser pursuant to this Agreement,
when issued and delivered in accordance with the terms hereof, will be duly
authorized and validly issued and, upon receipt by Parent of the consideration
to be received hereunder, will be fully paid and nonassessable.
Section
2.03. No
Conflicts; No Violations.
None of
the execution, delivery or performance of this Agreement by Parent will conflict
with Parent’s Articles of Incorporation or By-laws or result in any material
breach of any terms or provisions of, or constitute a material default under,
any material contract, agreement or instrument to which Parent is a party or
by
which Parent or its property is bound.
ARTICLE
III
Representations
and Warranties of the Purchasers
Each
Purchaser hereby, severally and not jointly, represents and warrants to Parent
on the date hereof and on and as of the Closing Date, with respect to itself,
as
follows:
Section
3.01 Authority;
No Other Action.
The
Purchaser has all requisite power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery by the Purchaser of this Agreement and consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Purchaser. The Purchaser has duly
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executed and delivered this Agreement, and this Agreement constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms. The execution and delivery by the Purchaser of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any person under, or result in the creation of any Lien upon any of the properties or assets of the Purchaser under, any provision of any Contract to which the Purchaser is a party or by which any properties or assets of the Purchaser are bound or, subject to the filings and other matters referred to in the next sentence, any provision of any Judgment or Law applicable to the Purchaser or the properties or assets of the Purchaser. No Consent of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to the Purchaser in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, other than the Schedule 13E-3 and such reports under Sections 13(d) and 16 of the Exchange Act as may be required in connection with this Agreement and the transactions contemplated hereby.
Section
3.02. Investment
Intention; No Resales.
The
Purchaser is acquiring the Purchased Shares or Remaining Shares, as the case
may
be, for investment, solely for its own account and not with a view to, or for
resale in connection with, the distribution thereof; provided,
however,
that
the Purchaser shall have the right at all times to sell or otherwise dispose
of
all or any part of the Parent Common Stock so acquired by the Purchaser pursuant
to the terms of the Shareholders Agreement (as defined below).
Section
3.03. Stock
Unregistered.
The
Purchaser has been advised by Parent that (a) the offer and sale of the
Parent Common Stock has not been registered under the Securities Act or the
securities laws of any other jurisdiction; (b) the offering and sale of the
Parent Common Stock is intended to be exempt from registration under the
Securities Act pursuant to Section 4(2) of the Securities Act; and
(c) there is no established market for the Parent Common Stock, and it is
not anticipated that there will be any public market for the Parent Common
Stock
in the foreseeable future.
Section
3.04. Parent
Information.
The
Purchaser confirms that neither Parent nor any of its employees, officers,
directors, affiliates or agents has made any representations or warranties
to
the Purchaser regarding (A) the value of the Parent Common Stock, (B) the
business, assets, liabilities, results of operations, financial condition or
prospects of Parent or its subsidiaries (including the Company and its
subsidiaries), (C) the plans or intentions of Parent, its employees, officers,
directors, affiliates or agents with respect to the Company and its subsidiaries
or their business, operation or management, or (D) any other consideration
to be
paid to Purchaser by Parent or any of its subsidiaries in connection with the
transactions contemplated herein or otherwise, except to the extent set forth
in
this Agreement.
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ARTICLE
IV
Representations
and Warranties of the Shareholders
Each
Shareholder hereby, severally and not jointly, represents and warrants to Parent
on the date hereof and on and as of the Closing Date, with respect to himself
or
herself, as follows:
Section
4.01. The
Subject Shares.
The
Shareholder is the record and beneficial owner of, or is the trustee of a trust
that is the record holder of, and whose beneficiaries are the beneficial owners
of, and has good and marketable title to, the Subject Shares, free and clear
of
any Liens. The Shareholder has the sole right to vote such Subject Shares,
and
none of such Subject Shares is subject to any voting trust or other agreement,
arrangement or restriction with respect to the voting of such Subject Shares,
except as contemplated by the Principal Shareholder Agreement.
Section
4.02. Further
Authorization.
If the
Shareholder is married and the Subject Shares of the Shareholder constitute
community property or such Shareholder otherwise needs spousal or other approval
for this Agreement and the transactions contemplated herein to be legal, valid
and binding, this Agreement has been duly authorized, executed and delivered
by,
and constitutes a valid and binding agreement of, the Shareholder’s spouse,
enforceable against such spouse in accordance with its terms. No trust of which
the Shareholder is a trustee requires the consent of any beneficiary to the
execution and delivery of this Agreement or to the consummation of the
transactions contemplated hereby.
ARTICLE
V
Conditions
Precedent
Section
5.01. Conditions
to Each Party’s Obligation.
The
respective obligation of each party to effect the transactions contemplated
hereunder is subject to the satisfaction or waiver of all conditions precedent
to the Exchange set forth in Article VII of the Exchange Agreement.
Section
5.02 Conditions
to Parent’s Obligation.
The
obligation of Parent to effect the transactions contemplated herein is subject
to the execution and delivery by each party hereto of an agreement substantially
in the form of the shareholders agreement (the “Shareholders
Agreement”)
attached as Exhibit A to the letter from Parent to each of the Purchasers dated
as of the date hereof.
ARTICLE
VI
Miscellaneous
Section
6.01. Binding
Effect.
All
obligations imposed upon each Purchaser, and all rights granted to Parent
hereunder, shall be binding upon each Purchaser’s heirs, legal representatives
and successors. This Agreement and the rights
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and
obligations hereunder shall not be assignable or transferable by Parent or
any
Purchaser. Any attempted assignment or transfer in violation of this
Section 6.01 shall be void.
Section
6.02. Recapitalizations,
Exchanges, etc., Affecting Parent Common Stock or Company Common
Stock.
The
provisions of this Agreement shall apply to the full extent set forth herein
with respect to the Purchased Shares, Remaining Shares and Subject Shares and
to
any and all shares of capital stock of Parent and the Company or any successors
or assigns of Parent and the Company (whether by merger, share exchange,
consolidation, sale of assets or otherwise) which may be issued in respect
of,
in exchange for, or in substitution of the Purchased Shares, Remaining Shares
or
Subject Shares, as the case may be, by reason of any stock dividend, stock
split, stock issuance, reverse stock split, combination, recapitalization,
reclassification, merger, consolidation or otherwise. Upon the occurrence of
any
of such events, amounts hereunder shall be appropriately adjusted if
necessary.
Section
6.03. Amendment.
This
Agreement may be amended only by a written instrument signed by Parent and
each
Purchaser.
Section
6.04. Notices.
All
notices and other communications provided for herein shall be dated and in
writing and shall be deemed to have been duly given when sent by registered
or
certified mail, return receipt requested, postage prepaid and when received,
if
delivered personally or otherwise, to the party to whom it is
directed:
If
to
Parent, to it at the following address:
Cap
Rock Holding Corporation
c/o
Xxxxxxxx Xxxxxxx & Co. LLC
000
Xxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Attention:
J. Xxxxxxx Xxxxxxxx
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with
copies to:
Cravath,
Swaine & Xxxxx LLP
Worldwide
Plaza
000
Xxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxxx Xxxx, Esq.
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Xxxxx,
Xxxxxx & Xxxxxxx, P.C.
000
Xxxx 0xx
Xxxxxx
00xx
Xxxxx
Xxxxxx,
Xxxxx 00000
Attention:
Xxxxxx Xxxxxx, Esq.
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If
to the
LGB Shareholder, to it at the following address:
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LGB
Cap Rock LLC
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c/o
Xxxxxxxx Xxxxxxx & Co. LLC
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000
Xxxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention:
J. Xxxxxxx Xxxxxxxx
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with
a copy to:
Cravath,
Swaine & Xxxxx LLP
Worldwide
Plaza
000
Xxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxxx Xxxx, Esq.
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If
to a
Shareholder, to it at the following address:
Cap
Rock Energy Corporation
000
Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
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or
at
such other address as the parties hereto shall have specified by notice in
writing to the other parties (provided
that
such notice of change of address shall be deemed to have been duly given only
when actually received).
Section
6.05. APPLICABLE
LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INTERPRETATION, VALIDITY
AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT, REGARDLESS OF THE LAW THAT
MIGHT
BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF LAW.
Section
6.06. Integration.
This
Agreement, the Exchange Agreement, the Principal Shareholder Agreement and
the
Shareholders Agreement, and the documents referred to herein and therein or
delivered pursuant hereto or thereto which form a part hereof or thereof contain
the entire understanding of the parties with respect to the subject matter
hereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein, in the Exchange Agreement, the
Principal Shareholder Agreement and the Shareholders Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to the subject matter hereof, other than such agreements and
understandings set forth in the Exchange Agreement, the Principal Shareholder
Agreement and the Shareholders Agreement, provided that in the event of any
inconsistency between the Exchange Agreement and this Agreement (or any document
delivered pursuant hereto), the terms and conditions of the Exchange Agreement
shall control. FOR
THE AVOIDANCE OF DOUBT, SUCH TERMS AND CONDITIONS SHALL INCLUDE THE APPLICABLE
LAW, EXCLUSIVE JURISDICTION, SERVICE OF PROCESS, LAYING OF
VENUE
6
AND
WAIVER OF JURY TRIAL PROVISIONS PROVIDED FOR IN THE EXCHANGE
AGREEMENT.
Section
6.07. Descriptive
Headings.
The
headings in this Agreement are for convenience or reference only and shall
not
limit or otherwise affect the meaning of terms contained herein.
Section
6.08. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which shall constitute one and the same
instrument, and it shall not be necessary in making proof of this Agreement
to
produce or account for more than one such counterpart.
Section
6.09. Rights
Cumulative; Waiver.
The
rights and remedies of each of the parties hereto shall be cumulative and not
exclusive of any rights or remedies which it would otherwise have hereunder
or
at law or in equity or by statute, and no failure or delay by such party in
exercising any right or remedy shall impair such right or remedy or operate
as a
waiver of such right or remedy, nor shall any single or partial exercise of
any
power or right preclude its other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party’s rights or
privileges hereunder or shall be deemed a waiver of such party’s rights to
exercise the same at any subsequent time or times hereunder.
Section
6.10. EXCLUSIVE
JURISDICTION; WAIVER OF JURY TRIAL.
(A) EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF (I) THE SUPREME COURT OF THE STATE OF NEW YORK, NEW YORK
COUNTY, AND (II) UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING
OUT
OF THIS AGREEMENT, ANY AGREEMENT ENTERED INTO IN CONNECTION WITH THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO
AGREES TO COMMENCE ANY ACTION, SUIT OR PROCEEDING RELATING HERETO EITHER IN
THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR IF SUCH
SUIT, ACTION OR OTHER PROCEEDING MAY NOT BE BROUGHT IN SUCH COURT FOR
JURISDICTIONAL REASONS, IN THE SUPREME COURT OF THE STATE OF NEW YORK, NEW
YORK
COUNTY. EACH OF THE PARTIES HERETO FURTHER AGREES THAT SERVICE OF ANY PROCESS,
SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO SUCH PARTY’S RESPECTIVE
ADDRESS SET FORTH PURSUANT TO SECTION 6.04 SHALL BE EFFECTIVE SERVICE OF
PROCESS FOR ANY ACTION, SUIT OR PROCEEDING IN NEW YORK WITH RESPECT TO ANY
MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS CLAUSE. EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
7
WAIVES
ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING
OUT OF THIS AGREEMENT, THE PLAN, ANY AGREEMENT ENTERED INTO IN CONNECTION WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN
(X) THE SUPREME COURT OF NEW YORK, NEW YORK COUNTY, OR (Y) THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND HEREBY AND
THEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT
IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(B)
EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF
OR
RELATING TO THIS AGREEMENT. EACH PARTY (I) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANOTHER PARTY HAS REPRESENTED, EXPRESSLY
OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO
ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS SET FORTH ABOVE IN THIS SECTION 6.10.
Section
6.11. Severability.
If any
provision of this Agreement (or any portion thereof) or the application of
any
such provision (or any portion thereof) to any person or circumstance shall
be
held invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof (or the remaining portion thereof) or the application
of such provision to any other persons or circumstances.
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
CAP
ROCK HOLDING CORPORATION,
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by:
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/s/
Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx
Xxxxxxxx
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Title: Vice
President and Secretary
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LGB
CAP ROCK LLC,
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by:
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/s/
Xxxxxx Xxxxxxxx
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Name: Xxxxxx
Xxxxxxxx
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Title: Manager
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XXXXX
X. XXXXXX,
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by:
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/s/
Xxxxx Xxxxxx
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ULEN
A. NORTH, JR.,
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by:
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/s/
Ulen A. North, Jr.
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XXX
XXXXXX,
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by:
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/s/
Xxx Xxxxxx
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XXXXX
PAGE,
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by:
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/s/
Xxxxx Page
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9
SCHEDULE
A
Name
of Shareholder
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Number
of Purchased Shares
|
Xxxxx
X. Xxxxxx
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86,111
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Ulen
A. North, Jr.
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12,469
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Xxx
Xxxxxx
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13,220
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Xxxxx
X. Page
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7,589
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