EXHIBIT 2
STOCK PURCHASE AGREEMENT
AGREEMENT effective as of the 8th day of January, 2004 between Twin
Lakes, Inc., a Nevada corporation (the "COMPANY"), Turquoise Partners, LLC, a
New York limited liability company ("BUYER"), Xxxxxx X. Xxxxxx ("JRT"), an
individual residing at 00 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxx 00000, Estancia LLC,
a Nevada limited liability corporation ("ELC"), Snow Xxxxxx Xxxxxx, P.C., a
professional corporation organized under the laws of New York ("SBK"), and SBK
Investment Partners, a partnership organized under the laws of New York ("SIP"),
(JRT, ELC, SBK, and SIP, collectively, the "SELLERS")
W I T N E S S E T H
WHEREAS, Buyer desires to acquired all of the Company's outstanding
equity securities, except for an aggregate of 60,000 shares of the Company's
common stock, such 60,000 shares of the Company's common stock hereunder (the
"RETAINED SHARES") and the Company desires that Buyer acquire all of the
Company's equity other than the Retained Shares; and
WHEREAS, Sellers are the holders of all of the Company's equity
securities, such securities consisting of an aggregate of 3,000,000 shares of
common stock, $0.001 par value, and Class A Warrants ("WARRANTS") to acquire in
the aggregate 1,000,000 shares of the Company's common stock; and
WHEREAS, Sellers desire to sell all of outstanding securities of the
Company, except for the Retained Shares; and
WHEREAS, the Buyer desires to acquire from the Sellers the Offered
Securities on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the partners hereby agree as follows:
1. PURCHASE AND SALE OF SHARES.
Upon the terms and conditions set forth in this Agreement at the
Closing on the Closing Date (as defined in paragraph 2 hereof), Buyer shall
purchase an aggregate of 2,940,000 shares of the Company's common stock, par
value $.001 per share (the "SHARES") and 1,000,000 Class A warrants to acquire
Shares (the "WARRANTS") for an aggregate purchase price of $32,000, as follows:
(i) It shall purchase from ELC, and ELC shall sell to Buyer,
2,205,000 Shares and 986,667 Warrants for a purchase price
of $24,000;
(ii) It shall purchase from SBK and SBK shall sell to Buyer
39,200 Shares and 13,333 Warrants for a purchase price of
$426.67; and
(iii) It shall purchase from SIP, and SIP shall sell to Buyer,
695,800 Shares for an aggregate purchase price of
$7,573.33.
2. CLOSING.
The Closing of the purchase and sales of the Shares shall take
place at the offices of Snow Xxxxxx Xxxxxx P.C., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, on January 8, 2004 (the "CLOSING DATE"), or at such earlier time,
date or place as the parties hereto shall mutually agree. At the Closing, ELC,
SBK and SIP shall each deliver to Buyer certificates representing each of the
Shares and a single certificate for each of the Warrants to be sold by each of
them as specified in paragraph 1 above against delivery to each of them of a
check payable to their order in the amount of the purchase price specified in
immediately available New York City funds. Each of the certificates representing
the Shares and Warrants delivered shall each be duly endorsed to the order of
Buyer with the signatures guaranteed.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY JRT AND ELC.
Each of JRT, ELC and the Company, jointly and severally, represent
and warrant to Buyer that:
3.1 INCORPORATION, STANDING, ETC. The Company is a corporation
duly incorporated, validly existing and in good standing
under the laws of the State of Nevada and has all requisite
corporate power and authority to own and operate its
properties, to carry on its business as now conducted and
to enter into this Agreement
3.2 CAPITALIZATION. The authorized capital stock of the Company
consists of 8,000,000 shares of Preferred Stock, par value
$.001 per share, none of which shares is outstanding, and
40,000,000 shares of Common Stock, $.001 per share, of
which 3,000,000 shares of Common Stock are outstanding and
1,000,000 shares of Common Stock are reserved for issuance
upon exercise of the Warrants and no shares of Preferred
Stock are issued or reserved for issuance. The Company does
not hold any shares of Common Stock in its treasury. All
such presently outstanding shares have been duly and
validly authorized, and are validly issued and outstanding
and fully paid and non-assessable, free and clear of all
claims, liens, encumbrances, subscriptions, options,
warrants, calls, contracts, demands, commitments,
convertible securities or other agreements or arrangements
of any character or nature whatsoever under which the
Company or any Seller is or may become obligated to issue,
assign, transfer or purchase any shares of the capital
stock of the Company or allocate the proceeds from the sale
of the Shares to the Buyer to any person other than the
respective registered owner in direct proportion to their
record Share
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holdings. No shares of the capital stock of the Company are
or should be reserved for issuance.
3.3 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. The execution and
delivery of this Agreement, compliance by the Company with
all provisions hereof, and the consummation of the
transactions contemplated hereby will not conflict with or
constitute a breach of any of the terms or provisions of,
or a default under, the Certificate of Incorporation or
By-Laws of the Company, or any agreement, indenture or
other instrument to which the Company is a party or by
which the Company is bound, or violate or conflict with any
laws, administrative regulations or rulings or court
decrees applicable to the Company or to any of its
property.
3.4 GOVERNMENTAL CONSENT, ETC. No consent, approval, or
authorization of, or declaration or filing with, any
governmental authority on the part of the Company is
required for the valid execution and delivery of the
Agreement or the valid offer, issue, sale and delivery of
the shares sold by the Company pursuant hereto except for
such as have already been obtained or made.
3.5 AUTHORIZATION, ETC. The Company has full legal right, power
and authority to enter into this Agreement and the
execution and delivery of this Agreement by the Company has
been duly authorized. This Agreement when executed and
delivered, shall constitute a valid and legally binding
obligation of the Company enforceable in accordance with
its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally.
3.6 SHARES AND WARRANTS. Upon Closing, the Shares and Warrants
delivered by the Sellers to Buyer pursuant to this
Agreement shall have been duly authorized, validly issued,
fully paid and non-assessable.
3.7 SEC REPORTS. The Company has duly filed all reports
required to be filed by it with the Securities and Exchange
Commission under the Securities Exchange Act of 1934. All
such reports are complete and correct in all material
respects and conform in all material respects with the
requirements of such Act and the rules and regulations
thereunder. None of such reports contains any untrue
statement of a material fact or fails to state any material
fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading.
3.8 ADVERSE CHANGE. Since the filing of the Company's most
recent quarterly report on Form 10-QSB with the Securities
and Exchange Commission there has been no material adverse
change in the Company's financial position as reported in
the financial statements included therein.
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3.9 LITIGATION. The Company is not involved in any pending
litigation and the Company is not aware of any impending
litigation in which it would be involved.
3.10 DISCLOSURES. The financial information and other reports
and documents supplied to Buyer by the Company do not
contain any untrue statement of a material fact or fail to
state any material fact necessary to make the statements.
3.11 NO SUBSIDIARIES. The Company does not own any shares or any
other interest, beneficially or of record, in any other
corporation or in any partnership, unincorporated
association, trust or other entity. The Company currently
does not and never has operated any business.
3.12 FINANCIAL STATEMENTS. The Company and the Sellers have
delivered to the Buyer true and correct copies of the
unaudited balance sheets and notes thereto and related
unaudited statements of income, changes in stockholders'
equity and changes in financial position of the Company as
of the three and nine months ended September 30, 2003. The
balance sheets included in the unaudited financials present
fairly the financial position of the Company as of the
respective balance sheet dates thereof and the statements
of income, changes in stockholders' equity and changes in
financial position of the Company included in the unaudited
financials present fairly the results of operations and
changes in financial position of the Company for the
respective periods covered thereby. The unaudited
financials (a) to the best knowledge of the Sellers, were
prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the
periods indicated and with prior periods, (b) are true,
complete and correct, and (c) were prepared from the books
and records of the Company, which books and records are
complete and correct and accurately reflect the
transactions of the Company.
3.13 NO ADDITIONAL LIABILITIES. At November 30, 2003, the
Company had no liability, absolute or contingent(1), which
is not shown on or reserved against on the September 30,
2003 balance sheet included in the unaudited financials
(the "September 30, 2003 Balance Sheet"). Since September
30, 2003, there has been no change in the condition,
financial or otherwise, of the Company or on the
accompanying statement of operations. Since September 30,
2003, the Company has incurred no indebtedness or
contingent liability other than in the ordinary course of
business as set forth on Schedule 3.13 attached hereto. The
Company shall have a cash balance of at least $1,422 in its
bank account at Closing. The Company has no employees.
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(1) The term "contingent liability" shall have the same meaning in this
Agreement as is prescribed in Financial Accounting Standards Board
Release No. 5.
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3.14 TAX RETURNS. The Company has filed with the appropriate
governmental agencies, and furnished copies to Buyer of,
all federal tax returns and reports, all state and local
tax returns and reports with respect to income and sales
taxes and all other tax returns and reports the filing of
which is necessary for the conduct of the business of the
Company in those jurisdictions where such business is
conducted (the "Tax Returns"). All Tax Returns properly
reflect the taxes of the Company for the periods covered
thereby. All federal, state and local taxes, assessments,
interest, penalties or deficiencies, fees and other
governmental charges or impositions called for by the Tax
Returns, or claimed to be due by an taxing authority upon
the Company or upon or measured by its properties or assets
or income (the "Taxes"), have been properly accrued or
paid. The Company has not received any notice of deficiency
or assessment or proposed deficiency or assessment by the
Internal Revenue Service or any other taxing authority in
connection with any Tax Returns. All federal income tax
returns included in the Tax Returns have been examined and
reported on by the relevant taxing authorities or closed by
applicable statutes and satisfied for all fiscal years
prior to and including the fiscal year ended December 31,
2002. The Company has not waived any law or regulation
fixing, or consented to the extension of, any period of
time for assessment of any Tax.
The accrued liability for current and deferred income taxes
shown on the September 30, 2003 Balance Sheet is adequate
to cover the tax liabilities of the Company as of that date
and nothing has occurred subsequent to that date to make
said amount inadequate. The Company is not a consenting
corporation within the meaning of Section 341(f) of the
Internal Revenue Code of 1954, as amended.
4. REPRESENTATIONS AND WARRANTIES OF SELLERS. The Sellers each, jointly and
severally, represent and warrant to Buyer that:
4.1 AUTHORIZATION, ETC. It has the full legal right, power and
authority to enter into this Agreement and the execution
and delivery of the Agreement by it has been duly
authorized. This Agreement, when executed and delivered,
shall constitute its valid and legally binding obligations
respectively, enforceable in accordance with its terms,
except as the same may be limited by bankruptcy,
insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally.
4.2 OWNERSHIP OF SHARES AND WARRANTS. It owns the Shares and
Warrants it is selling to Buyer under this Agreement, free
and clear of All claims, liens, encumbrances,
subscriptions, options,
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warrants, calls, contracts, demands, commitments,
convertible securities or other agreements or arrangements
of any character or nature whatsoever under which the
Company or any Seller is or may become obligated to issue,
assign, transfer or purchase any shares of the capital
stock of the Company or allocate the proceeds from the sale
of the Shares to the Buyer to any person other than the
respective registered owner in direct proportion to their
record Share holdings. No shares of the capital stock of
the Company are or should be reserved for issuance.
4.3 SATISFACTION OF LIABILITIES AND OBLIGATIONS. The Sellers
shall have reduced all outstanding indebtedness and ongoing
obligations of the Company as of the Closing Date to an
aggregate amount not to exceed $10,000 and the loan payable
to Shareholders reflected on the books and records of the
Company in the principal amount of $30,100 shall be
satisfied in full prior to the Closing.
5. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to
the Sellers that:
5.1 AUTHORIZATION, ETC. Buyer has full legal right, power and
authority to enter into this Agreement and the execution
and delivery of this Agreement by it has been duly
authorized. This Agreement, when executed and delivered,
shall constitute a valid and legally binding obligation of
Buyer enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of
creditors' rights generally.
5.2 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. The execution and
delivery of this Agreement, compliance by Buyer with all
provisions hereof, and the consummation of the transactions
contemplated hereby will not conflict with or constitute a
breach of any of the terms or provisions of, or a default
under, its Certificate of Incorporation or By-Laws, or any
agreement, indenture or other instrument to which it is a
party or by which it is bound, or violate or conflict with
any laws, administrative regulations or rulings or court
decrees applicable to it or to any of its property.
5.3 GOVERNMENTAL CONSENT, ETC. No consent, approval or
authorization of, or declaration or filing with, any
governmental authority on the part of Buyer is required for
the valid execution and delivery of this Agreement or the
valid purchase and receipt of the Shares and warrants
pursuant hereto except for such as have already been
obtained or made.
5.4 PIGGYBACK REGISTRATION RIGHTS. Unless the Retained Shares
become eligible for resale under Rule 144 of the Securities
Act of 1933, as amended, for which they are not currently
eligible, the Company shall register the Retained Shares on
the first registration statement for which such shares can
be registered. In the event
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that the Retained Shares cannot then be registered, because
of an underwriter's cutback or for any other reason, the
Company shall register the Retained Shares on the first
available registration statement.
6. BUYER'S CONDITIONS TO CLOSING. Buyer's obligation to purchase the Shares
and Warrants to be sold to it is subject to the fulfillment to its
reasonable satisfaction prior to or at the Closing of the following
conditions:
6.1 SIMULTANEOUS TRANSACTIONS. All four sales set forth in
paragraph 1 shall be simultaneously consummated.
6.2 REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties of the Company, the Sellers contained in
this Agreement shall be true and correct in all material
respects when made and at the time of the Closing.
6.3 PERFORMANCE: NO DEFAULT. The Company and the Sellers shall
have performed and complied with all agreements and
conditions contained in this Agreement required to be
performed or complied with by them prior to or at the
Closing.
6.4 [Intentionally left blank].
6.5 OPINION OF COUNSEL FOR THE COMPANY AND FOR THE SELLERS.
Buyer shall have received opinions, dated the Closing Date
of Snow Xxxxxx Xxxxxx PC, counsel to the Company and the
Sellers in form and substance satisfactory to Buyer to the
effect that: (i) the Company is a corporation duly
incorporated, validly existing and in good standing under
the laws of the State of Nevada and has the corporate power
to enter into and perform the terms and provisions of this
Agreement; (ii) the execution, delivery and performance of
this Agreement have been duly authorized by the Company and
the Sellers; (iii) all corporate acts and other proceedings
required to be taken to authorize the delivery of the
Shares and Warrants of the Company by the Sellers to this
Agreement have been duly and properly taken; (iv) the
Shares and Warrants to be sold to Buyer pursuant to this
Agreement, upon delivery to the Company of certificates
therefore in accordance with the terms of this Agreement
will be validly issued, fully paid and non-assessable; (v)
the Sellers have the power to sell and transfer the Shares
and Warrants to be sold by it under this Agreement; (vi) no
provision of the Certificate of Incorporation, By-Laws or
Partnership Agreement of the Company or the Sellers, or of
any mortgage, indenture, agreement, contract or other
instrument known to such counsel to which the Company and
the Sellers are a party, will be violated or breached by
the performance by the Company and the Sellers of this
Agreement and the transactions contemplated hereby; and
(vii) no consent or approval by any governmental authority
is required in connection with the consummation by the
Company and the Sellers of the
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transactions contemplated hereby, except for such as have
already been obtained. In rendering such opinions, such
counsel may rely to the extent specified therein upon
certificates as to matters of fact of officers of the
Company and the Sellers, provided that such counsel shall
state that they believe that both Buyer and they are
justified in relying upon such certificates.
6.6 PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions
contemplated hereby and all documents and instruments
incident to such transactions shall be satisfactory in all
respects to Buyer, and Buyer shall have received all such
counterpart originals or certified or other copies of such
documents as they may reasonably request. In addition,
Exhibit 6.6(a) hereto is a full and correct copy of the
Company's current Certificate of Incorporation and as
Exhibit 6.6(b) a list of all accounts payable outstanding
as of November 30, 2003.
6.7 SATISFACTION OF LIABILITIES AND OBLIGATIONS. The Company
and the Sellers shall provide evidence satisfactory to
Buyer, in its sole discretion, that the aggregate amount of
obligations and liabilities of the Company outstanding at
the Closing shall not exceed $10,000, the Company shall
have at least $1,400 in cash, and the Company shall deliver
to the Buyer evidence to the satisfaction of Buyer, in its
sole discretion, that all such liabilities and obligations
outstanding in excess of such amounts has been satisfied in
full and shall provide Buyer a list of all outstanding
Liabilities and Obligations as of the Closing Date. 6.8
RESIGNATION OF CURRENT OFFICERS AND DIRECTORS. All Officers
and Directors of the Company shall have delivered to the
Buyer their respective resignations from all such positions
effective as of the Closing.
7. CONDITIONS OF THE SELLERS TO CLOSING. The obligations of the Sellers to
sell the Shares and Warrants to Buyer are subject to the fulfillment to
the reasonable satisfaction at or prior to the Closing of each of the
following conditions
7.1 SIMULTANEOUS TRANSACTIONS. All four sales set forth in
paragraph 1 shall be simultaneously consummated.
7.2 PURCHASE PRICE. Buyer shall tender to the Seller the
purchase price as set forth in paragraphs 1 and 2 above.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTS. All representations,
warranties, and agreements of the parties hereto shall survive the
closing.
9. INDEMNIFICATION AND RESOLUTION OF DISPUTES.
9.1 INDEMNIFICATION OF BUYER. Each of Sellers, jointly and
severally, hereby indemnifies Buyer and shall hold it
harmless at all times after the date of this Agreement in
respect of each and all of the following:
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9.1.1 MISREPRESENTATIONS. Any and all damage or deficiency
resulting from any misrepresentation, breach of
warranty or covenant, or nonfulfillment of any
obligation on the part of any of the Sellers
contained in this Agreement or from any
misrepresentation in or omission from any
certificate, schedule or other instrument furnished
to Buyer in connection herewith.
9.1.2 ACTIONS, ETC. All demands, assessments, judgments,
costs and legal and other expenses, including,
without limitation, reasonable attorneys' fees,
arising from, or in connection with, any action,
suit, proceeding, settlement or claim incident to
any of the foregoing.
9.1.3 TAX LIABILITIES. Any federal, state, city, and
foreign income, profits, franchise, sales,
occupation, property, excise, or other taxes due in
connection with the business or the property of the
Company for any period prior to the Closing Date,
which have not been fully paid.
9.1.4 REIMBURSEMENT OF BUYER. Should any claim be made by
a person not a party to this Agreement with respect
to any matter to which the foregoing indemnity
relates.
9.1.5 CLAIMS AGAINST BUYER. Should any claim be made by a
person not a party to this Agreement with respect to
any matter to which the foregoing indemnity relates,
Buyer shall within a reasonable period of time give
written notice of any such claim to Sellers and
Sellers shall thereafter defend or settle any such
claim, at its sole expense, with counsel of its
selection. Any payment resulting from such defense
or settlement, together with the total expense
thereof, shall be binding on Sellers and Buyer for
the purposes of this Section. Failure to give timely
notice shall not constitute a defense, in whole or
in part, to any claim by Buyer.
10. PAYMENT AND EXPENSES. Each of the parties to the Agreement will pay its
owns expenses, incident to preparing for, entering into and performing
this Agreement and to the consummations of the transactions contemplated
thereby.
11. GOVERNING LAW. The Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. COOPERATION, ETC. Each of the parties hereto shall cooperate with the
others in every way in carrying out the transactions contemplated herein,
and delivering instruments to perfect the conveyances, assignments and
transfers contemplated herein, and in delivering all documents and
instruments deemed reasonably necessary or useful by counsel for any
party hereto. The parties shall coordinate all publicity relating to the
transactions contemplated hereby, and no party shall issue any press
release, publicity statement or other public notice relating to this
Agreement or the transactions contemplated hereby without obtaining the
prior consent of the other parties.
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13. BROKERS, ETC. Each party represents and warrants that no broker or finder
is entitled to any brokerage or finder's fee or other commission from it
based upon agreements, arrangements or undertakings made by it in
connection with the transactions contemplated hereby.
14. ASSIGNABILITY. This Agreement shall be assignable by Buyer only.
15. NOTICE. All notices and other communications provided for herein shall be
validly given if in writing and delivered personally and (i) if sent by
telecopy or other facsimile, and (ii) if sent within the United States,
by prepaid first class certified mail, (a) if to the Company addressed to
0000 Xxxxxxxx Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxx, 00000, Att: Xxxxxx X.
Xxxxxx, Chairman, telecopy: (000) 000-0000, (or to such other address as
the party shall have furnished in writing in accordance with the
provisions of this paragraph 15 with a copy to each of the parties
hereto.); (b) if to Buyer, addressed to Turquoise Partners, LLC, 000
Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Att: Xxxxxx Xxxxx,
telecopy (000) 000-0000; (c) if to JRT or ELC, addressed to c/o Xxxxxx X.
Xxxxxx, 00 Xxxxxxxx Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxx 00000, telecopy (702)
614-5171; and (d) if to SBK or SIP, addressed to Snow Xxxxxx Xxxxxx PC,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Att: Xxxxxx Xxxxxxx, telecopy
(000) 000-0000.
16. ENTIRE AGREEMENT. Prior to the Closing any provision of this Agreement
may be amended or modified in whole or in part at any time and the
observance of any term hereof may be waived only by an agreement in
writing among all of the parties hereto approved and executed in the same
manner as this Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the transactions contemplated
herein and supersedes all previous written or oral negotiations,
commitments, representations and agreements.
17. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered in the State of New York as of the day and year first above
written.
TWIN LAKES, INC. TURQUOISE PARTNERS, LLC
By:______________________________ By:_____________________________
Xxxxxx X. Xxxxxx, President Xxxxxx Xxxxx, Managing Member
_________________________________
Xxxxxx X. Xxxxxx
XXXX XXXXXX XXXXXX PC SBK INVESTMENT PARTNERS
By:______________________________ By:_____________________________
Xxxxxx Xxxxxxx, Vice President Xxxxxx Xxxxxxx, Partner
ESTANCIA LLC
By:______________________________
Xxxxxx X. Xxxxxx, Manager
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