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INVESTOR RIGHTS AGREEMENT GOAMERICA, INC

Investors Rights Agreement

INVESTOR RIGHTS AGREEMENT GOAMERICA, INC | Document Parties: CCG Operations, LLC | CLEARLAKE CAPITAL PARTNERS, LLC | GoAmerica, Inc | Lowenstein Sandler PC You are currently viewing:
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CCG Operations, LLC | CLEARLAKE CAPITAL PARTNERS, LLC | GoAmerica, Inc | Lowenstein Sandler PC

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Title: INVESTOR RIGHTS AGREEMENT GOAMERICA, INC
Governing Law: New York     Date: 8/7/2007
Industry: Communications Services     Law Firm: Milbank Tweed;Lowenstein Sandler     Sector: Services

INVESTOR RIGHTS AGREEMENT GOAMERICA, INC, Parties: ccg operations  llc , clearlake capital partners  llc , goamerica  inc , lowenstein sandler pc
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Exhibit 10.6

Execution Version

INVESTOR RIGHTS AGREEMENT

GOAMERICA, INC.

Dated as of August 1, 2007

<PAGE>

TABLE OF CONTENTS

Page

----

1. DEMAND REGISTRATIONS......................................................1

1.1. Requests for Registration.......................................1

1.2. Demand Notice...................................................2

1.3. Demand Registration Expenses....................................2

1.4. Short-Form Registrations........................................2

1.5. Priority on Demand Registrations................................3

1.6. Restrictions on Demand Registrations............................3

1.7. Selection of Underwriters.......................................3

1.8. Other Registration Rights.......................................3

2. PIGGYBACK REGISTRATIONS...................................................4

2.1. Right to Piggyback..............................................4

2.2. Piggyback Expenses..............................................4

2.3. Priority on Primary Registrations...............................4

2.4. Priority on Secondary Registrations.............................4

3. REGISTRATION GENERALLY....................................................5

3.1. Registration Procedures.........................................5

3.2. Registration Expenses...........................................9

3.3. Participation in Underwritten Offerings........................10

3.4. Holdback Agreements............................................10

3.4.1. Securityholder Holdback..............................10

3.4.2. Company Holdback.....................................11

3.5. Current Public Information.....................................11

4. REGISTRATION INDEMNIFICATION.............................................12

4.1. Indemnification by the Company.................................12

4.2. Indemnification by Holders of Registrable Securities...........12

4.3. Procedure......................................................13

4.4. Entry of Judgment; Settlement..................................13

4.5. Contribution...................................................13

4.6. Other Rights...................................................14

5. TRANSFER RESTRICTiONS....................................................14

5.1. General Transfer Restrictions..................................14

5.2. Restrictions on Transfer.......................................15

5.2.1. Private Transfers....................................15

5.2.2. Public Transfers.....................................15

6. PREEMPTIVE RIGHTS........................................................15

6.1. Offering.......................................................15

6.2. Expiration of Subscription Period..............................16

6.3. New Securities.................................................16

 

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7. DEFINITIONS..............................................................17

8. MISCELLANEOUS............................................................20

8.1. No Inconsistent Agreements.....................................20

8.2. Remedies.......................................................20

8.3. Amendment and Waiver...........................................20

8.4. Successors and Assigns; Transferees............................20

8.5. Severability...................................................21

8.6. Counterparts...................................................21

8.7. Descriptive Headings...........................................21

8.8. Notices........................................................21

8.9. Delivery by Facsimile..........................................22

8.10. Governing Law..................................................22

8.11. Jurisdiction. Submission to Jurisdiction; Waivers.............22

8.12. Waiver of Jury Trial...........................................22

8.13. Termination....................................................22

 

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INVESTOR RIGHTS AGREEMENT

This Investor Rights Agreement (this "Agreement") is made as of August 1,

2007 (the "Effective Date") by and among:

(i) GoAmerica, Inc., a Delaware corporation (together with its

successors and permitted assigns, the "Company");

(ii) Each of the shareholders of the Company listed on Schedule A to this

Agreement (each a "Sponsor" and, collectively the "Sponsors"); and

(iii) such other Persons, if any, that from time to time become parties

hereto pursuant to Section 8.4 hereof (collectively, together with

the Sponsors, the "Shareholders").

RECITALS

WHEREAS, the Company and the Sponsors are parties to the Stock Purchase

Agreement of even date herewith (the "Initial Stock Purchase Agreement") in

which the Company has agreed to sell to the Sponsors 290,135 shares of Series A

Preferred Stock of the Company, par value $.01 per share.

WHEREAS, the Company and the Sponsors are parties to the Stock Purchase

Agreement of even date herewith (the "Acquisition Stock Purchase Agreement" and,

collectively with the Initial Stock Purchase Agreement, the "Clearlake Stock

Purchase Agreements") in which the Company has agreed to sell to the Sponsors,

subject to the happening of the conditions specified therein, up to 6,479,691

additional shares of Series A Preferred Stock of the Company.

WHEREAS, the parties hereto desire for the Company to provide the

registration rights set out in this Agreement. Unless otherwise noted in this

Agreement, capitalized terms used herein shall have the meanings set forth in

Section 7.

AGREEMENT

NOW, THEREFORE, the parties to this Agreement hereby agree as follows:

1. DEMAND REGISTRATIONS.

1.1. Requests for Registration. At any time a Sponsor may initiate the

registration of Common Stock to be sold in a Public Offering (a "Demand

Registration"). Subject to the other provisions of this Section 1, a Sponsor may

initiate (on behalf of itself and any of its Affiliate) three (3) registrations

of all or part of their Registrable Securities on Form S-1 or any similar or

successor long-form registration ("Long-Form Registrations"), and, if the

Company is eligible to utilize a registration statement on Form S-3 for resales

by selling stockholders, an unlimited (but no more than two such registrations

in any twelve month period) number of registrations of all or part of their

Registrable Securities on Form S-3 or any similar or successor short-form

registration ("Short-Form Registrations"); provided in each case that the

aggregate gross offering price of the Registrable Securities requested to be

registered in any Long Form Registration

 

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pursuant to this Section must equal the greater of (a) $5,000,000 or (b) all of

the Common Stock and Conversion Shares then held by such Sponsor and its

Affiliates); and provided, further, that the Company shall have no liability to

any Shareholder with respect to any conditions that the Securities and Exchange

Commission may impose with respect to any such registration, including any

conditions that the Securities and Exchange Commission may impose upon the

utilization of Rule 415 in connection with any such registration.

1.2. Demand Notice. All requests for Demand Registrations shall be made by

giving written notice to the Company (a "Demand Notice"). Each Demand Notice

shall specify the approximate number of Registrable Securities requested to be

registered. Within ten (10) days after receipt of any such Demand Notice, the

Company will give written notice of such requested registration to all other

holders of Registrable Securities and, subject to Section 1.5, will use its

commercially reasonable efforts to include in such registration (and in all

related registrations and qualifications under blue sky laws or in compliance

with other registration requirements and in any related underwriting) all

Registrable Securities with respect to which the Company has received written

requests for inclusion therein within 15 days after the delivery of the

Company's notice.

1.3. Demand Registration Expenses. The Company will pay all Registration

Expenses in connection with any registration initiated as a Demand Registration,

whether or not it has become effective.

1.4. Short-Form Registrations. Subject to the qualifications set forth

herein and subject to any limitations that the Securities and Exchange

Commission may impose, (i) Demand Registrations will be Short-Form Registrations

whenever the Company is permitted to use any applicable short-form (unless the

managing underwriter(s) of such offering requests the Company to use a Long-Form

Registration in order to sell all of the Registrable Securities requested to be

sold) and (ii) the Sponsors may, in connection with any Demand Registration

requested by such holders that is a Short-Form Registration, require the Company

to use its commercially reasonable efforts to file such Short-Form Registration

with the Securities and Exchange Commission in accordance with and pursuant to

Rule 415 under the Securities Act (or any successor rule then in effect)

including, if the Company is then eligible, as an automatic shelf registration

statement (any such Short-Form Registration, a "Shelf Registration").

Notwithstanding anything in this Agreement to the contrary, if the Securities

and Exchange Commission refuses to declare a registration statement filed

pursuant to this Agreement effective as a valid secondary offering under Rule

415 due to the number of Registrable Securities included in such registration

statement relative to the number of shares of Common Stock outstanding or the

number of outstanding shares of Common Stock held by non-affiliates or for any

other reason, then, without any liability under this Agreement or any further

obligation to register such excess Registrable Securities, the Company shall be

permitted to reduce the number of Registrable Securities included in such

registration statement to an amount that does not exceed an amount that the

Securities and Exchange Commission allows for the offering thereunder to qualify

as a valid secondary offering under Rule 415. The Company shall not be liable

for damages under this Agreement as to any Registrable Securities which are not

permitted by the Securities and Exchange Commission to be included in a

registration statement due to Securities and Exchange Commission guidance

relating to Rule 415.

 

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1.5. Priority on Demand Registrations. The Company shall not include in

any Demand Registration any securities which are not Registrable Securities

without the prior receipt of Majority Sponsor Approval. If a Demand Registration

is an underwritten offering and the managing underwriter(s) advises the Company

that in its opinion the number of Registrable Securities and, if permitted

hereunder, other securities, requested to be included in such offering exceeds

the number of Registrable Securities and other securities, if any, which can be

sold therein without adversely affecting the marketability of the offering, then

the Company shall include in such registration, (a) prior to the inclusion of

any securities that are not Registrable Securities, the number of Registrable

Securities requested to be included in such offering that, in the opinion of

such managing underwriter, can be sold without adversely affecting the

marketability of the offering, pro rata (based on the number of shares requested

to be registered) among the respective holders thereof, provided that if the

number of securities that are Registrable Securities that are included in such

offering are less than 75% of the number of securities that are Registrable

Securities requested to be included in such offering, such offering shall not

count for purposes of calculating the number of Long-Form Registrations

initiated by a Majority Sponsor, and (b) only then securities that are not

Registrable Securities, if the managing underwriter(s) has advised that such

securities may be included.

1.6. Restrictions on Demand Registrations. The Company will not be

obligated to effect any Demand Registration within 90 days after the closing of

a Public Offering (other than on Form S-4 or Form S-8 or any successor or

similar form, but including the closing of an underwritten distribution pursuant

to a Shelf Registration), except that if such Public Offering is an underwritten

offering and the managing underwriter of such Public Offering determines that a

longer period, not to exceed 180 days, is reasonably necessary in its opinion,

then such restricted period shall continue for the period designated by the

managing underwriter, provided that such period shall not extend beyond 180 days

after the closing of such Public Offering. The Company may postpone for up to 45

days (from the date of the request) the filing or the effectiveness of a

registration statement for a Demand Registration if and so long as the Company

determines that such Demand Registration would reasonably be expected to have an

adverse effect on any proposal or plan by the Company or any of the Subsidiaries

to engage in any acquisition or disposition of assets (other than in the

ordinary course of business) or any merger, consolidation, tender offer,

registration or issuance of securities, financing or other material transaction.

The Company may not postpone a Demand Registration more than two (2) times in

any twelve-month period.

1.7. Selection of Underwriters. The Sponsor(s) selling a majority of the

Registrable Securities to be sold by all Sponsors in a Demand Registration will

have the right to select the underwriter or underwriters to administer the

offering, provided that such selection will be subject to the approval of the

board of directors of the Company (the "Board"), which approval will not be

unreasonably withheld.

1.8. Other Registration Rights. The Company represents and warrants that

it is not a party to, or otherwise subject to, any other agreement granting

registration rights to any other Person with respect to any equity securities of

the Company, other than this Agreement. Except as provided in this Agreement,

the Company shall not grant to any Person the right to request the Company to

register any equity securities of the Company, or any securities convertible or

exchangeable into or exercisable for such securities, without Majority Sponsor

Approval

 

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approving the grant of registration rights for such securities; provided that

without such approval, subject to Section 6, (a) the Company may grant rights to

other Persons to participate in Demand Registrations and Piggyback Registrations

so long as such rights are subordinate to the rights of the holders of

Registrable Securities with respect to such Demand Registrations and Piggyback

Registrations; and (b) the Company may grant rights to other Persons to request

registrations so long as the holders of Registrable Securities are entitled to

participate in any such registrations with such Persons pro rata on the basis of

the number of Common Stock owned by each such holder.

2. PIGGYBACK REGISTRATIONS.

2.1. Right to Piggyback. Whenever the Company proposes to register any of

its equity securities under the Securities Act (other than (a) pursuant to a

Demand Registration, (b) in connection with registration on Form S-4 or Form S-8

or any successor or similar form or (c) in connection with the registration of

shares on Form S-3 with respect to a dividend reinvestment plan) and the

registration form to be used may be used for the registration of Registrable

Securities (a "Piggyback Registration"), the Company will give prompt written

notice to all holders of Registrable Securities of its intention to effect such

a registration and, subject to Sections 2.3 and 2.4 below, will include in such

registration all Registrable Securities with respect to which the Company has

received written requests for inclusion therein within 15 days after the

delivery of the Company's notice. Each such Company notice shall specify the

approximate number of Company equity securities to be registered and the

anticipated per share price range for such offering.

2.2. Piggyback Expenses. The Company will pay all Registration Expenses in

connection with all Piggyback Registrations, whether or not any such

registration becomes effective.

2.3. Priority on Primary Registrations. If a Piggyback Registration is an

underwritten primary registration on behalf of the Company and the managing

underwriter(s) advises the Company that in its opinion the number of securities

requested to be included in such registration exceeds the number which can be

sold in such offering without adversely affecting the marketability of such

offering, the Company will include in such registration: (a) first, the

securities the Company proposes to sell, (b) second, the Registrable Securities

requested to be included in such registration, pro rata (based on the number of

shares requested to be registered) among the holders of such Registrable

Securities, and (c) third, the other securities requested to be included in the

such registration in the manner determined by the Company and such shareholders.

2.4. Priority on Secondary Registrations. If a Piggyback Registration is

an underwritten secondary registration on behalf of holders of Company

securities (other than the holders of Registrable Securities), and the managing

underwriter(s) advises the Company that in its opinion the number of securities

requested to be included in such registration exceeds the number which can be

sold in such offering without adversely affecting the marketability of the

offering, the Company will include in such registration: (a) first, the

securities requested to be included therein by the holders requesting

registration, (b) second, securities requested by the Company to be included in

such registration, and (c) third, Registrable Securities and other securities

 

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requested to be included in such registration, pro rata among the holders of

such Registrable Securities and the holders of such other securities permitted

to have their securities included in such registration on the basis of the

number of shares owned by each such holder.

3. REGISTRATION GENERALLY.

3.1. Registration Procedures. Whenever the holders of Registrable

Securities have requested that any Registrable Securities be registered pursuant

to this Agreement, the Company will use its best efforts to effect the

registration and the sale of such Registrable Securities in accordance with the

intended method of disposition thereof and pursuant thereto the Company will as

expeditiously as reasonably practicable:

(a) prepare and (within 60 days after the end of the period

within which requests for inclusion in such registration may be

given to the Company) file with the Securities and Exchange

Commission a registration statement with respect to such Registrable

Securities and thereafter use commercially reasonable efforts to

cause such registration statement to become effective (provided that

before filing a registration statement or prospectus or any

amendments or supplements thereto, the Company will furnish to

counsel selected by the Sponsors owning the Registrable Securities

to be included in any Demand Registration copies of all such

documents proposed to be filed, which documents will be subject to

review by such counsel);

(b) prepare and file with the Securities and Exchange

Commission such amendments and supplements to such registration

statement and the prospectus used in connection therewith as may be

necessary (i) to keep such registration statement effective for a

period (A) of not less than 180 days (subject to extension pursuant

to Section 3.3(b)) or, if such registration statement relates to an

underwritten offering, such longer period as in the opinion of

counsel for the underwriters a prospectus is required by law to be

delivered in connection with sales of Registrable Securities by an

underwriter or dealer, or (B) in the case of a Shelf Registration,

ending on the earliest of (I) the date on which all Registrable

Securities have been sold pursuant to the Shelf Registration or have

otherwise ceased to be Registrable Securities, (II) the second

anniversary of the effective date of such Shelf Registration, (III)

such other date determined by the Majority Sponsors and (IV) when

all such Registrable Securities are freely saleable under Rule

144(k) under the Securities Act, and (ii) to comply with the

provisions of the Securities Act with respect to the disposition of

all securities covered by such registration statement until such

time as all of such securities have been disposed of in accordance

with the intended methods of disposition by the seller or sellers

thereof set forth in such registration statement;

(c) cause (i) any issuer free writing prospectus to comply

with the information and legending requirements under paragraph (c)

of Rule 433 and to be accompanied or preceded by a statutory

prospectus to the extent required under Rule 433, and (ii) any free

writing prospectus or issuer information contained in a free writing

prospectus required to be filed by the Company with

 

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the Securities and Exchange Commission under paragraph (d) under

Rule 433 to be so filed in accordance with such requirements;

(d) furnish to each seller of Registrable Securities such

number of copies of such registration statement, each amendment and

supplement thereto, in each case, to the extent not available on

EDGAR, the prospectus included in such registration statement

(including each preliminary prospectus), each free writing

prospectus used in connection with such registration, and such other

documents as such seller may reasonably request in order to

facilitate the disposition of the Registrable Securities owned by

such seller, but in all cases only if such documents are not

available on EDGAR;

(e) use its best efforts to register or qualify such

Registrable Securities under such other securities or blue sky laws

of such States as any seller reasonably requests and do any and all

other acts and things which may be reasonably necessary or advisable

to enable such seller to consummate the disposition in such

jurisdictions of the Registrable Securities owned by such seller

(provided that the Company will not be required to (i) qualify

generally to do business in any jurisdiction where it would not

otherwise be required to qualify but for this subsection, (ii)

subject itself to taxation in respect of doing business in any such

jurisdiction or (iii) consent to general service of process in any

such jurisdiction);

(f) promptly notify each seller of such Registrable

Securities, at any time when a prospectus relating thereto is

required to be delivered under the Securities Act, upon discovery

that, or upon the discovery of the happening of any event as a

result of which, the prospectus included in such registration

statement contains an untrue statement of a material fact or omits

any fact necessary to make the statements therein not misleading in

the light of the circumstances under which they were made, and, at

the request of any such seller, the Company will prepare and furnish

to such seller a reasonable number of copies of a supplement or

amendment to such prospectus so that, as thereafter delivered to the

prospective purchasers of such Registrable Securities, such

prospectus will not contain an untrue statement of a material fact

or omit to state any fact necessary to make the statements therein

not misleading in the light of the circumstances under which they

were made;

(g) use best efforts to cause all such Registrable Securities

to be listed on each securities exchange or market system on which

similar securities issued by the Company are then listed and, if not

so listed, to be listed on the NASD automated quotation system and,

if listed on the NASD automated quotation system, use commercially

reasonable efforts to secure designation of all such Registrable

Securities covered by such registration statement as a "NMS

Security" within the meaning of Rule 600(b)(46) of Regulation NMS of

the Securities and Exchange Commission or, failing that, to secure

NASDAQ authorization for such Registrable Securities;

 

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(h) provide a transfer agent and registrar for all such Registrable

Securities not later than the effective date of such registration

statement;

(i) enter into such customary agreements (including underwriting

agreements in customary form) and take all such other actions as the

Sponsors owning a majority of the Registrable Securities to be included in

the registration or the underwriters, if any, reasonably request in order

to expedite or facilitate the disposition of such Registrable Securities

(which might include effecting a share split or a combination of shares);

(j) make available for inspection by any seller of Registrable

Securities, any underwriter participating in any disposition pursuant to

such registration statement and any attorney, accountant or other agent

retained by any such seller or underwriter, all financial and other

records, pertinent corporate documents and properties of the Company, and

cause the Company's officers, directors, employees and independent

accountants to supply all information reasonably requested by any such

seller, underwriter, attorney, accountant or agent in connection with such

registration statement, and to cooperate and participate as reasonably

requested by any such seller in road show presentations, in the

preparation of the registration statement, each amendment and supplement

thereto, the prospectus included therein, and other activities as such

seller may reasonably request in order to facilitate the disposition of

the Registrable Securities owned by such seller;

(k) otherwise use commercially reasonable efforts to comply with all

applicable rules and regulations of the Securities and Exchange

Commission, and make available to its security holders, as soon as

reasonably practicable, but not later than 18 months after the effective

date of the registration statement, an earnings statement covering the

period of at least twelve months beginning with the first day of the

Company's first full calendar quarter after the effective date of the

registration statement, which earnings statement shall satisfy the

provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

(l) in the event of the issuance of any stop order suspending the

effectiveness of a registration statement, or of any order suspending or

preventing the use of any related prospectus or suspending the

qualification of any Securities included in such registration statement

for sale in any jurisdiction, the Company will use commercially reasonable

efforts promptly to obtain the withdrawal of such order;

(m) obtain one or more comfort letters, dated the effective date of

such registration statement (and, if such registration includes an

underwritten public offering, dated the date of the closing under the

underwriting agreement), signed by the Company's independent registered

public accounting firm in the then-current customary form and covering

such matters of the type customarily

 

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covered from time to time by comfort letters as the holders of a

majority of the Registrable Securities being sold reasonably

request;

(n) provide a legal opinion of the Company's outside counsel,

dated the effective date of such registration statement (and, if

such registration includes an underwritten public offering, dated

the date of the closing under the underwriting agreement), with

respect to the registration statement, each amendment and supplement

thereto, the prospectus included therein (including the preliminary

prospectus) and such other documents relating thereto in the

then-current customary form and covering such matters of the type

customarily covered from time to time by legal opinions of such

nature (in a form reasonably acceptable to the holders of a majority

of the Registrable Securities included in the registration);

(o) cooperate with the sellers of Registrable Securities

covered by the registration statement and the managing underwriter

or agent, if any, to facilitate the timely preparation and delivery

of certificates (not bearing any restrictive legends) representing

securities to be sold under the registration statement, and enable

such securities to be in such denominations and registered in such

names as the managing underwriter or agent, if any, or such holders

may request;

(p) notify counsel for the sellers of Registrable Securities

included in such registration statement and the managing underwriter

or agent, immediately, and confirm the notice in writing (i) when

the registration statement, or any post-effective amendment to the

registration statement, shall have become effective, or any

supplement to the prospectus or any amendment prospectus shall have

been filed, (ii) of the receipt of any comments from the Securities

and Exchange Commission, (iii) of any request of the Securities and

Exchange Commission to amend the registration statement or amend or

supplement the prospectus or for additional information, and (iv) of

the issuance by the Securities and Exchange Commission of any stop

order suspending the effectiveness of the registration statement or

of any order preventing or suspending the use of any preliminary

prospectus, or of the suspension of the qualification of the

registration statement for offering or sale in any jurisdiction, or

of the institution or threatening of any proceedings for any of such

purposes;

(q) use its reasonable effort to prevent the issuance of any

stop order suspending the effectiveness of the registration

statement or of any order preventing or suspending the use of any

preliminary prospectus and, if any such order is issued, to obtain

the withdrawal of any such order at the earliest possible moment;

(r) if requested by the managing underwriter or agent or any

holder of Registrable Securities covered by the registration

statement, promptly incorporate in a prospectus supplement or

post-effective amendment such information as the managing

underwriter or agent or such holder reasonably

 

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requests to be included therein, including, without limitation, with

respect to the number of Registrable Securities being sold by such

holder to such underwriter or agent, the purchase price being paid

therefor by such underwriter or agent and with respect to any other

terms of the underwritten offering of the Registrable Securities to

be sold in such offering; and make all required filings of such

prospectus supplement or post-effective amendment as soon as

practicable after being notified of the matters incorporated in such

prospectus supplement or post-effective amendment;

(s) cooperate with each seller of


 
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