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Exhibit 10.6
Execution Version
INVESTOR RIGHTS AGREEMENT
GOAMERICA, INC.
Dated as of August 1, 2007
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TABLE OF CONTENTS
Page
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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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