Exhibit 10.13
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into by Eagle Broadband,
Inc. ("Company") and Xxxx Xxxxxxx ("Employee"), to be effective as of November
8, 2004 (the "Effective Date").
WITNESSETH:
WHEREAS, Employee will become employed by Company on the Effective Date;
and
WHEREAS, the Company desires to employ Employee from and after the
Effective Date pursuant to the terms and conditions and for the consideration
set forth in this Agreement, and Employee desires to be employed by Company
pursuant to such terms and conditions and for such consideration.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants,
and obligations contained herein, the Company and Employee agree as follows:
ARTICLE 1: EMPLOYMENT AND DUTIES:
1.1 The Company agrees to employ Employee, and Employee agrees to be
employed by the Company, beginning as of the Effective Date and continuing until
the date of termination of Employee's employment ("Termination Date") or the
expiration of this Agreement by its terms at the end of the Term and any
renewals thereof ("Expiration Date"), subject to the terms and conditions of
this Agreement. The "Employment Period," as used herein, shall mean the period
commencing on the Effective Date, and ending on the earlier of the Termination
Date or the Expiration Date. The "Term," as used herein, shall mean the four-
(4) year period commencing on the Effective Date, and expiring at midnight of
the day before the forth (4th) anniversary of the Effective Date.
(a) At least thirty (30) days prior to the expiration of the Term (and each
mutually agreed to extension thereof), the Chief Executive Officer ("CEO") of
the Company shall notify the Employee, in writing pursuant to Section 5.1, of
the CEO's desire to continue Employee's employment beyond the end of the Term
(or any mutually agreed to extension thereof). If the CEO desires to retain the
Employee and the Employee agrees to at that time to be so retained, then the
parties shall amend this agreement to extend the Employment Period for an
additional two- (2) year period ("Extension Period"), and the Term (or any
mutually agreed to extension thereof) shall be extended for an additional two
(2) years, or a new employment agreement (on substantially the same terms as
this Agreement) shall be negotiated, prepared, and put into effect prior to the
end of the Term (or any mutually agreed to extension thereof); however if the
parties cannot agree to the terms of a new agreement by the expiration of the
Term (or any mutually agreed to extension thereof), then Employee's employment
shall terminate at the end of the Term (or any mutually agreed to extension
thereof), and shall be subject to Section 3.1(b).
(b) For the avoidance of doubt it is the parties' understanding that if
this Agreement is extended for an Extension Period or any subsequent Extension
Period, at the end of any such Extension Period, the provisions of Section 1.1
(a) shall apply, and any reference in this Agreement to the Term shall include
any mutually agreed extension thereof, whether or not expressly noted.
1.2 Beginning as of the Effective Date and throughout the Term (and
mutually agreed to extension thereof), Employee shall be employed as Chief
Financial Officer of the Company. Employee shall report to the CEO. Employee
agrees to serve in such position, and to perform diligently and to the best of
Employee's abilities the duties and services pertaining to such positions as
reasonably determined and assigned by the CEO, as well as such additional or
different duties and services appropriate to such positions which the Employee
from time to time may be directed to perform by the CEO. The CEO initially will
require Employee to review and revise the Company's financial procedures, with
particular attention to the requirements of Section 404 of the Sarbanes Oxley
Act. Employee is knowledgeable in SEC matters and understands that part of his
duties entails the provision of certain certifications to the SEC and AMEX.
Employee agrees that he shall provide such certifications to the extent he is
able to so certify based on the statements contained in such certifications.
1.3 Employee shall at all times comply with and be subject to such policies
and procedures as the Company may establish from time to time, including,
without limitation, the Company's Employee Handbook and Code of Business Ethics.
1.4 Employee shall, during the Employment Period, devote Employee's full
business time, energy, and best efforts to the business and affairs of the
Company. Employee may not engage, directly or indirectly, in any other business,
investment, or activity that interferes with Employee's performance of
Employee's duties hereunder, is contrary to the interest of the Company or any
of its affiliated subsidiaries and divisions (collectively, "Eagle Broadband,
Inc."), or requires any significant portion of Employee's business time. The
foregoing notwithstanding, the parties recognize and agree that Employee may
engage in passive personal investments and other business activities that do not
conflict with the business and affairs of the Company or interfere with
Employee's performance of his duties hereunder. Employee shall be eligible to
serve on the Board of directors or committees thereof of entities other than
Eagle Broadband, Inc. during Employee's employment by the Company, subject to
the CEO's advance consideration and approval thereof. Employee shall be
permitted to retain any compensation received for approved service on any
unaffiliated corporation's Board of directors or committees thereof.
1.5 Employee acknowledges and agrees that Employee owes a fiduciary duty of
loyalty, fidelity, and allegiance to act at all times in the best interests of
the Company and to do no act which would, directly or indirectly, injure any
such entity's business, interests, or reputation. It is agreed that any direct
or indirect interest in, connection with, or benefit from any outside
activities, particularly commercial activities, which interest might in any way
adversely affect the Company or involves a possible conflict of interest. In
keeping with Employee's fiduciary duties to the Company, Employee agrees that
during the Employment Period Employee shall not knowingly become involved in a
conflict of interest with the Company, or upon discovery thereof, allow such a
conflict to continue. Moreover, during the Employment Period Employee shall not
engage in any activity which might involve a possible conflict of interest
without first obtaining approval in accordance with this Agreement and the
Company's policies and procedures.
ARTICLE 2: COMPENSATION AND BENEFITS:
2.1 During the Employment Period, the Employee shall receive a base salary
("Base Salary") of Two Hundred Thousand Dollars ($200,000) per annum, less all
required deductions, including but not limited federal withholding, social
security and other taxes, and payable biweekly on the Company's regular payroll
schedule. During the Employment Period, the Base Salary may be reviewed
periodically by the Chief Executive Officer (the "CEO"). Any increase in the
Base Salary shall not serve to limit or reduce any other obligation to the
Employee under this Agreement. During the Term (and each mutual extension
thereof), the Base Salary shall not be reduced.
2.2 In addition to the payment of Base Salary, the Company hereby grants to
the Employee, as an incentive to maximize the potential of the Company, two
equity incentives:
First, the Company shall issue non-qualified stock options (the "Stock
Options") to purchase 500,000 shares of common stock from the Company. The
Stock Options shall be exercisable at $0.61 per share and shall vest
monthly in equal increments over a twenty-four (24) month period starting
with the date of this Agreement, unless there is a change of control in
which case all such Stock Options shall vest. The Stock Option Agreement
pertaining to the Stock Options shall contain a cashless conversion feature
as well as standard anti-dilution provisions. The Stock Option Agreement
shall also provide that the Stock Options are non-transferable and expire
at the close of business on October 31, 2009.
Second, the Executive shall receive grants of common stock of the Company
based on the attainment of four specific objectives while Employee is
employed by the Company.
50,000 shares upon the development of effective internal control
procedures over financial reporting and subsequent compliance under
the Sarbanes Oxley Act.
50,000 shares upon obtaining a qualified opinion letter from the
outside auditors on management's assessment of the effectiveness of
the internal controls.
50,000 shares upon the design and implementation of an effective
financial reporting system to the Management and Board of Directors on
a timely basis that complies with Section 404 of the Sarbanes Oxley
Act.
50,000 shares when effective cost cutting measures are implemented
causing a positive effect on gross margins by _____%.
The Stock Options and the stock issuable thereunder and the stock granted
hereunder shall be registered under a Form S-8 immediately upon issuance of the
Stock Options and upon issuance of the stock granted hereunder.
2.3 During the Employment Period, the Employee shall be entitled to
participate in incentive, savings, and retirement plans, and other standard
benefit plans afforded to executive level employees of the Company, including,
without limitation, all medical, dental, disability, group life, accidental
death, D&O indemnity, and travel accident insurance plans and programs of the
Company, to the extent Employee is otherwise eligible under the terms and
conditions of the applicable plan or policy, and as such plans or policies may
be from time to time be amended, modified or terminated by the Company without
prior notice. Dependents of Employee may participate in such plans to the extent
allowed for other dependents of executive level Employees of the Company as
allowed by the applicable plan. This Agreement shall not be construed to limit
in any respect the Company's right to establish, amend, modify, or terminate any
benefit plan or policy. Furthermore, the Company shall not by reason of this
Article 2 be obligated to institute, maintain, or refrain from changing,
amending, or discontinuing, any incentive compensation, employee benefit, or
stock or stock option program or plan, so long as such actions are similarly
applicable to covered employees generally.
2.4 During the Employment Period, the Company shall pay or reimburse
Employee for all actual, reasonable, and customary expenses incurred by Employee
in the course of his employment, including business-related travel expenses,
subject to the terms of and Employee's compliance with the Company's Expense
Policy, as amended from time to time, and any other applicable Company policies
related to business expenses.
2.5 During the Employment Period, the Employee shall be entitled to four
weeks of vacation and sick days, fully paid, per calendar year.
2.6 The Company may withhold from any compensation, benefits, or amounts
payable under this Agreement all federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.
2.7 The Company shall reimburse the Employee, upon submission of reasonably
detailed receipts or other reasonable evidence of payment by Employee, all
reasonable and necessary expenses incurred by Employee in connection with his
relocation from his current residence to Houston, Texas; provided, however, in
the event that (a) Employee's employment terminates as a result of the
circumstances described in Section 3.1(a)(iii) or (iv) within six (6) months
from the date hereof, Employee shall be required to refund to the Company fifty
percent (50%) of the amount paid to him in connection with such relocation. The
Company shall have the right to offset any amounts payable to Employee under
this Section 2.6 against any amounts owed to it by the Employee.
ARTICLE 3: TERMINATION OF EMPLOYMENT
AND EFFECTS OF SUCH TERMINATION:
3.1 (a) Employee's employment shall be terminated during the Employment
Period by reason of the following circumstances:
(i) Death of Employee.
(ii) Permanent Disability. "Permanent Disability" shall mean Employee's
physical or mental incapacity to perform his usual duties, with such
condition likely to remain continuously and permanently as determined
by the CEO or Board of Directors. The decisions as to whether and as
of what date Employee has become permanently disabled are delegated to
the CEO or Board of Directors for determination, and any dispute of
Employee with any such decision shall be limited to whether the CEO or
Board of Directors reached such decision in good faith.
(iii) Voluntary Termination. "Voluntary Termination" shall mean a
termination of employment at the election of Employee. Employee will
provide the Company with thirty (30) days advance notice of his intent
to terminate his employment voluntarily. Employee shall continue to
remain an employee of the Company through the thirty- (30) day notice
period and will perform such duties, if any, assigned to him by the
Company during the notice period. Notwithstanding the foregoing, the
Company may, at its option, waive the Employee's obligation to remain
an employee during all or any portion of the thirty- (30) day notice
period, in which case Employee's employment shall cease immediately.
(iv) Termination by Company for Cause. "Termination for Cause" shall mean a
termination of employment immediately upon notice to the Employee from
the Company that an event constituting "Cause" has occurred. For
purposes of this Agreement, the term "Cause" shall be defined as: (a)
a material act of dishonesty or fraud; (b) a knowing and material
violation of any written policy of the Company; (c) a knowing and
material violation of an applicable law, rule, or regulation that
exposes the Company to damages or liability; (d) a material breach of
fiduciary duty; (e) conviction of a felony or (f) a failure to follow
the reasonable directions of the CEO or the Board of Directors;
provided that Employee shall be provided five (5) business days to
cure any default under this subparagraph (f). In the event that
Employee is terminated for Cause, Employee shall be provided with
notice of such termination in accordance with Section 5.1 below.
(b) In the event Employee's employment terminates as a result of any of the
circumstances described in Section 3.1(a)(i) through (iv) above, all future
compensation to which Employee would otherwise be entitled and all future
benefits for which Employee is eligible shall cease and terminate as of the
Termination Date, except as specifically provided in this Section 3.1 or the
terms of any of the Company's health or welfare plans, and Employee shall
receive payment, if any, for accrued and unused vacation days according to the
Company's current policy applicable to payment for unused vacation.
(c) Notwithstanding anything contained in Section 3.1(b), in the event that
Employee's employment terminates as a result of death or permanent disability
resulting from any accident or incident beyond Employee's control that occurs
while Employee is traveling on Company business or is in the course and scope of
employment (excluding any accident or incident occurring when Employee is
traveling within Houston and to or from his normal place of business or his
residence), the preceding paragraph shall not apply, and instead Employee (or
his Estate, as the case may be) shall be entitled to receive payment subject to
and calculated in accordance with the provisions of Sections 3.2(a) and
3.2(a)(i) through (iii) below.
3.2 The Company reserves the right to terminate Employee's employment for
any reason other than the circumstances described in Sections 3.1(a)(i) through
3.1(a)(iv) above.
(a) If the Termination Date occurs during the Term (or any mutual extension
thereof), Company shall pay Employee, within thirty (30) days after the
Termination Date, and after Employee's execution of a full release of all claims
against the Company (excluding only claims for benefits and payments to be
payable after Termination Date under any of the Company's health or welfare
plans, a "Termination Payment" (subject to required taxes and withholdings)
consisting of the following:
(i) pro rata Base Salary through the Termination Date;
(ii) payment, if any, for accrued and unused vacation days according to
the Company's current policy applicable to payment for unused
vacation; and
(iii) the Employee's Base Salary for a one- (1) year period and group
medical and dental coverage for a one- (1) year period.
(b) Termination of the employment relationship as a result of expiration of
the Term of this Agreement shall not require any notice of termination, and
Employee shall only be entitled to the payments stipulated in (i) and (ii)
above, but not any other payments.
3.3 Any Termination Payment paid to Employee pursuant to Section 3.2 shall
be in consideration of Employee's continuing obligations under Article 4.
Nothing contained in this Article 3 shall be construed to be a waiver by
Employee of any benefits accrued for or due Employee under any employee benefit
plan (as such term is defined in the Employee Retirement Income Security Act of
1974, as amended), maintained by the Company.
3.4 Termination of the employment relationship does not terminate those
obligations imposed by this Agreement which are continuing obligations,
including Employee's obligations under Article 4.
ARTICLE 4: OWNERSHIP AND PROTECTION OF INTELLECTUAL PROPERTY
AND CONFIDENTIAL INFORMATION; NON COMPETITION AGREEMENT:
4.1 All information, ideas, concepts, improvements, discoveries, and
inventions, whether patentable or not, which are conceived, made, developed or
acquired by Employee, individually or in conjunction with others, during
Employee's employment by the Company (whether during business hours or otherwise
and whether on the Company's premises or otherwise) which relate to the
business, products or services of the Company (including, without limitation,
all such information relating to corporate opportunities, confidential financial
information, research and development activities, sales data, pricing and
trading terms, evaluations, opinions, interpretations, acquisition prospects,
the identity of customers or potential customers and their requirements, the
identity of key contacts within the customers' organizations or within the
organizations of acquisition prospects, marketing and merchandising techniques,
prospective names, and marks), and all writings or material of any type
embodying any of such items, shall be the sole and exclusive property of the
Company.
4.2 Employee acknowledges that the businesses of the Company are highly
competitive and that their strategies, methods, books, records, and documents,
their technical information concerning their products, equipment, services, and
processes, procurement procedures and pricing techniques, the names of and other
information (such as credit and financial data) concerning their customers and
business affiliates (including but not limited to the products and/or services
marketed, advertised, and/or sold to customers and prospective customers, and
the prices charged or quoted to them for such products and/or services, and the
business activities, needs, and requirements for products and/or services of
such customers or prospective customers) all comprise confidential business
information and trade secrets which are valuable, special, and unique assets
which the Company use in their business to obtain a competitive advantage over
their competitors. Employee further acknowledges that protection of such
confidential business information and trade secrets against unauthorized
disclosure and use is of critical importance to the Company in maintaining their
competitive position. Employee hereby agrees that Employee will not, at any time
during or after the Employment Period, make any unauthorized disclosure of any
confidential business information or trade secrets of the Company, or make any
use thereof, except in the carrying out of his employment responsibilities
hereunder. Confidential business information shall not include information that
is now in, or hereafter becomes part of, the public domain, whether by
publication, patenting or otherwise than as a result of the Employee's breach of
this Agreement; information that the Employee can show, through documentary
evidence, already was in its possession prior to its receipt from the Company
hereunder; information which, subsequent to its receipt hereunder, is disclosed,
without obligation or confidence, to the Employee hereunder by a third party not
known to be under an obligation of confidence to Company hereunder; or
information that the Company authorizes for public release. The above
notwithstanding a disclosure shall not be unauthorized if (i) it is required by
law or applicable regulation or by a court of competent jurisdiction or (ii) it
is in connection with any judicial arbitration, dispute resolution or other
legal proceeding in which Employee's legal rights and obligations as an Employee
or under this Agreement are at issue; provided, however, that Employee shall, to
the extent practicable and lawful in any such events, give prior notice to the
Company of his intent to disclose any such confidential business information
pursuant to (ii) above so as to allow the Company or the applicable an
opportunity (which Employee will cooperate with and will not oppose) to obtain
such protective orders or similar relief with respect thereto as may be deemed
appropriate.
4.3 All written materials, records, and other documents made by, or coming
into the possession of, Employee during the Employment Period which contain or
disclose confidential business information or trade secrets of the Company shall
be and remain the property of the Company, as the case may be. Upon termination
of Employee's employment with the Company, for any reason, Employee promptly
shall deliver the same and all copies thereof to the Company.
4.4 To enable Employee to perform the duties contemplated by this
Agreement, the Company promises that it will disclose confidential information,
including confidential business information and trade secrets of the nature
described or referenced in Sections 4.1 - 4.3 above, during the Employment
Period and before termination of the employment relationship established by this
Agreement. In return for and ancillary to the promise made by the Company to
make such disclosure, (and ancillary to the other covenants of the Company under
this Agreement)" Employee hereby makes a reciprocal promise designed to enforce
the Company's interest in protecting its confidential information and its
goodwill. Accordingly, Employee promises to comply with the obligations set
forth in Sections 4.1 through 4.3 above, and furthermore, Employee agrees that,
during Employee's employment with the Company and for one (1) year following the
termination of Employee's employment with the Company pursuant to Section 3.2
above will not, so long as Company is not in breach of this Agreement or its
obligations to Employee, directly or through any other person, firm, or
corporation:
(a) in any state of the United States of America in which the Company
presently does business or does business during Employee's employees perform
services as an employee, officer, director or independent contractor for any
Competing Enterprise (as defined below);
(b) be an owner, shareholder (except for the ownership by Employee of less
than Five Percent (5%) of the equity securities of any publicly-traded company),
agent, or partner of, or serve in an executive position with, any Competing
Enterprise;
(c) call on or otherwise communicate with any customer or prior customer of
the Company or any business referral sources or vendors to the Company including
any respective successors and assigns, for the purpose of soliciting business
for a Competing Enterprise; or
(d) do anything to interfere with the normal operation of the businesses of
the Company including, without limitation, make any effort personally or through
others to recruit, hire, or solicit any employee or independent contractor of
the Company to leave the Company, or to interfere in any way with the Company's
relationships with its customers or suppliers.
For purposes of this Section, the term "Competing Enterprise" shall mean: any
person or any business organization of whatever form, excluding the Company,
engaged directly or indirectly in any business or enterprise whose business
activities specifically compete with the lines of business described in the
Company's most recent Form l0K filed with the Securities & Exchange Commission.
ARTICLE 5: MISCELLANEOUS:
5.1 For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly
given when received by or tendered to Employee or the Company, as applicable, by
pre paid courier or by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Company, to
Eagle Broadband, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxx 00000
If to Employee, to his last known personal residence.
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
Notwithstanding the foregoing, any Notice of Termination pursuant to Article 3
may be delivered to the Employee in accordance with the above sentences in this
Section 5.1.
5.2 This Agreement shall be governed by and construed and enforced, in all
respects in accordance with the law of the State of Texas, without regard to
principles of conflicts of law, unless preempted by federal law, in which case
federal law shall govern; provided, however, that the dispute resolution process
in Section 5.5 shall govern in all respects with regard to the resolution of
disputes hereunder.
5.3 No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or
provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
5.4 It is a desire and intent of the parties that the terms, provisions,
covenants, and remedies contained in this Agreement shall be enforceable to the
fullest extent permitted by law. If any such term, provision, covenant, or
remedy of this Agreement or the application thereof to any person, association,
or entity or circumstances shall, to any extent, be construed to be invalid or
unenforceable in whole or in part, then such term, provision, covenant, or
remedy shall be construed in a manner so as to permit its enforceability under
the applicable law to the fullest extent permitted by law. In any case, the
remaining provisions of this Agreement or the application thereof to any person,
association, or entity or circumstances other than those to which they have been
held invalid or unenforceable, shall remain in full force and effect.
5.5 It is the mutual intention of the parties to have any dispute
concerning this Agreement resolved out of court. Accordingly, the parties agree
that any claim or controversy of whatever nature arising from or relating in any
way to this Agreement or the employment of the Employee by the Company, and any
continuing obligations under this Agreement, including disputes arising under
the common law or federal or state statutes, laws or regulations and disputes
with respect to the arbitrability of any claim or controversy, shall be resolved
exclusively by final and binding arbitration before a single experienced
employment arbitrator selected by the parties and conducted in accordance with
the agreement of the parties or as determined by the arbitrator. If the parties
are unable to agree to an arbitrator, an arbitrator will be selected in
accordance with the Employment Dispute Resolution ("EDR") Rules of the American
Arbitration Association ("AAA"). The arbitration will be conducted in Houston,
Texas, pursuant to the EDR Rules of the AAA, and the arbitrator shall have full
authority to award or grant all remedies provided by law. The judgment upon the
award may be enforced by any court having jurisdiction thereof. The Company
shall pay for the fees of the arbitrator or the administrative and filing fees
charged by the AAA. However, either party, on its own behalf, shall be entitled
to seek a restraining order or injunction in any court of competent jurisdiction
to prevent any breach or the continuation of any breach of the provisions of
herein.
5.6 This Agreement shall be binding upon and inure to the benefit of the
Company, and any other person, association, or entity which may hereafter
acquire or succeed to all or substantially all of the business or assets of the
Company by any means whether direct or indirect, by purchase, merger,
consolidation, or otherwise. Employee's rights and obligations under this
Agreement are personal and such rights, benefits, and obligations of Employee
shall not be voluntarily or involuntarily assigned, alienated, or transferred,
whether by operation of law or otherwise, without the prior written consent of
the Company.
5.7 This Agreement replaces and extinguishes any previous agreements and
discussions pertaining to the subject matter covered herein. This Agreement
constitutes the entire agreement of the parties with regard to the terms of
Employee's employment, termination of employment and severance benefits, and
contains all of the covenants, promises, representations, warranties, and
agreements between the parties with respect to such matters. Each party to this
Agreement acknowledges that no representation, inducement, promise, or
agreement, oral or written, has been made by either party with respect to the
foregoing matters which is not embodied herein, and that no agreement,
statement, or promise relating to the employment of Employee by the Company that
is not contained in this Agreement shall be valid or binding, except as set
forth in any applicable Employee benefit plan. It is understood that, by signing
below, Employee acknowledges that this Agreement supercedes any agreements or
understandings regarding the subject matter covered herein made prior to the
Employee signing this document. Any modification of this Agreement will be
effective only if it is in writing and signed by each party whose rights
hereunder are affected thereby, provided that any such modification must be
authorized or approved by the Board of Directors or its delegate, as
appropriate.
IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement in multiple originals to be effective on the Effective Date.
Eagle Broadband, Inc.
By:
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Printed Name:
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Title:
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Date:
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Employee
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Xxxx Xxxxxxx
Date:
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