Exhibit 9(a)(7)
HYBRIDON, INC.
AMENDMENT
TO THE EXCHANGE AGREEMENT AND LETTER OF TRANSMITTAL
TO TENDER AND TO ENTER INTO CERTAIN AGREEMENTS
IN RESPECT OF 9% CONVERTIBLE SUBORDINATED NOTES DUE 2004
OF HYBRIDON PURSUANT TO ITS OFFER TO EXCHANGE
DATED FEBRUARY 6, 1998, AS AMENDED
BY AN AMENDMENT THERETO DATED MARCH 30, 1998
THE OFFER, AS AMENDED, WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
APRIL 10, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE"). THE OFFER MAY BE
WITHDRAWN AT ANY TIME PRIOR TO 12:00 MIDNIGHT, NEW YORK TIME, ON THE EXPIRATION
DATE.
Hybridon, Inc., a Delaware corporation ("Hybridon"), is hereby
amending the terms of the offer to exchange (the "Offer") with respect to its 9%
Convertible Subordinated Notes due 2004 (the "Notes") set forth in its Offer to
Exchange, dated February 6, 1998 (the "Original Offer to Exchange"). Unless
otherwise provided in this Amendment (this "Amendment") to the Exchange
Agreement and the Letter of Transmittal which was sent together with the
Original Offer to Exchange (the "Original Letter of Transmittal") to the holders
of the Notes or unless the context requires otherwise, the terms of and the
conditions to the Offer contained in the Original Letter of Transmittal and the
Original Offer to Exchange remain unchanged. All capitalized terms used herein
but not defined herein shall have the respective meanings ascribed thereto in
the Original Offer to Exchange, as amended by the accompanying Amendment thereto
dated March 30, 1998 (the "Amendment"; the Original Offer to Exchange, as
amended by the Amendment, being referred to herein as the" Offer to Exchange").
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In the event that the Alternative Consideration is to be issued in
connection with the Offer, any tender of Notes which involves denominations of
less than $1,000 in Exchange Value thereof will be exchanged on a pro rata
basis, except to the extent that such proration would result in the issuance of
a fractional share of Alternative Series A Preferred Stock. In the event that
such fractional share would result, Hybridon shall, at its sole discretion,
either (a) round such fractional share to the nearest whole number of shares
(with 0.5 being rounded up), or (b) pay in cash an amount equal to such fraction
multiplied by $100 (which is the per share stated value of Alternative Series A
Preferred Stock). Hybridon will not issue any fractional shares of Alternative
Series A Preferred Stock in the Offer. In the event that a tendering Noteholder
would otherwise be entitled to receive a fractional Alternative Exchange
Warrant, Hybridon shall round up such fractional Alternative Exchange Warrant to
the nearest whole number of Alternative Exchange Warrants.
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IN ADDITION TO THE ORIGINAL LETTER OF TRANSMITTAL AND OTHER
REQUIRED DOCUMENTS, ALL REGISTERED HOLDERS AND BENEFICIAL OWNERS OF NOTES BEING
TENDERED MUST EXECUTE AND SEND THIS AMENDMENT TO THE DEPOSITARY ON OR PRIOR TO
THE EXPIRATION DATE, REGARDLESS OF WHETHER THEY HAVE HERETOFORE TENDERED THEIR
NOTES PURSUANT TO THE OFFER. ANY TENDER OF NOTES NOT ACCOMPANIED BY THIS
AMENDMENT AND THE ORIGINAL LETTER OF TRANSMITTAL WILL BE DEEMED INVALID. THIS
AMENDMENT MUST BE DELIVERED TO THE DEPOSITARY AT THE ADDRESS OR THE FACSIMILE
NUMBER SHOWN ON THE BACK COVER OF THE ORIGINAL LETTER OF TRANSMITTAL AND IN
ACCORDANCE WITH THE PROCEDURES SET FORTH IN THE ORIGINAL OFFER TO EXCHANGE, AS
AMENDED, AND IN THE ORIGINAL LETTER OF TRANSMITTAL.
The Original Letter of Transmittal is hereby amended as follows:
(i) In the event that the Alternative Consideration shall be issued
in exchange for the Notes as a result of the consummation of the
Alternative Equity Offering, all references to Series A Preferred
Stock and Exchange Warrants contained in Articles I, II and IV of
the Exchange Agreement portion of the Letter of Transmittal (the
"Exchange Agreement"), and in the instructions forming part of
the Letter of Transmittal, shall be deemed to mean the
Alternative Series A Preferred Stock and the Alternative Exchange
Warrants, respectively.
(ii) Section 2 of Article II of the Exchange Agreement is hereby
amended by inserting the following sentence after the last
sentence thereof:
Notwithstanding anything to the contrary contained in this
Section 2 of Article II, in the event that the Alternative
Consideration is issued in exchange for the Notes as a
result of the consummation of the Alternative Equity
Offering, Hybridon shall use its best efforts to file with
the Commission a Registration Statement pursuant to Rule 415
under the Securities Act no later than the earlier of (i) 60
days following the date on which the Alternative Equity
Offering is consummated and (ii) the date on which any
registration statement under the Securities Act is filed in
respect of the resale of any security sold in the
Alternative Equity Offering.
(iii) Article III of the Exchange Agreement is hereby amended by
replacing in its entirety the existing sentence thereunder with
the following sentence:
For so long as at least 50% of the Series A Preferred Stock
or Alternative Series A Preferred Stock, as the case may be,
initially issued in the Offer remains outstanding, the
holders of such Series A Preferred Stock or such Alternative
Series A Preferred Stock, as the case may be, issued in the
Offer shall be entitled to designate one member for
nomination to the Board of Directors of Hybridon (the
"Designated Director"), provided that such nominee is
reasonably acceptable to Hybridon. The initial Designated
Director shall be Mr. Art Xxxxx (unless the holders of a
majority of the Series A Preferred Stock or the Alternative
Series A Preferred Stock, as the case may be, issued in the
Offer shall instruct otherwise in the space provided in the
Amendment to the Letter of Transmittal, in which case the
person receiving the most votes shall be the initial
Designated Director), to hold office until his successor is
duly elected and qualified or until his earlier resignation
or removal.
(iv) Sections 1 and 2 of Article V of the Exchange Agreement are
hereby amended by replacing the references therein to the
"Restructuring Trigger" with the following:
Restructuring Trigger (in the event that the Original
Consideration is issued in the Offer) or following the
consummation of Alternative Equity Offering (in the event
that the Alternative Consideration is issued in the Offer)
and the reference therein to Series A Preferred Stock shall be
deemed to mean the Alternative Series A Preferred Stock if the
Alternative Consideration is issued in exchange for the Notes as
a result of the consummation of the Alternative Equity Offering.
(v) The reference to Series A Preferred Stock in Section 2 of Article
V of the Exchange Agreement shall be deemed to mean the
Alternative Series A Preferred Stock if the Alternative
Consideration is issued in exchange for the Notes as a result of
the consummation of the Alternative Equity Offering.
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(vi) Section 3 of Article V of the Exchange Agreement is hereby
amended by inserting the following sentence after the last
sentence thereof:
Notwithstanding anything to the contrary contained in this
Section 3 of Article V, in the event that the Alternative
Equity Offering is consummated, no Reset Warrants shall be
issued by Hybridon to the undersigned.
(vii) In the event that the Alternative Consideration shall be issued
in exchange for the Notes as a result of the consummation of the
Alternative Equity Offering, all references to Series A Preferred
Stock contained in Article V, "Certain Additional Covenants and
Representations of Hybridon," of the Exchange Agreement shall be
deemed to mean the Alternative Series A Preferred Stock.
(viii) In the event that the Alternative Consideration shall be issued
in exchange for the Notes as a result of the consummation of the
Alternative Equity Offering, all references to Series A Preferred
Stock contained in Article VI of the Exchange Agreement shall be
deemed to mean the Alternative Series A Preferred Stock issued in
the Offer as part of the Alternative Consideration and any
Alternative Series A Preferred Stock declared and issued as a
dividend on such Alternative Series A Preferred Stock issued in
the Offer.
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This Amendment will become effective and binding on the undersigned and
Hybridon at such time that Hybridon accepts for exchange any of the Exchange
Value of the Notes tendered by the undersigned.
PLEASE SIGN AND COMPLETE BELOW
TO BE COMPLETED WHERE APPROPRIATE BY ALL HOLDERS TENDERING NOTES
(WHETHER OR NOT NOTES ARE BEING PHYSICALLY
TENDERED)
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ONLY REGISTERED NOTEHOLDER(S) SHOULD PROVIDE THIS INFORMATION AND SIGN
HERE. (BENEFICIAL OWNERS SHOULD COMPLETE THE INFORMATION REQUESTED ON,
AND SIGN, THE LAST PAGE HEREOF):
I have read this Amendment to the Exchange Agreement and Letter of
Transmittal and agree to be bound by the foregoing.
I hereby certify that, to the best of my knowledge, the Notes being
tendered are beneficially owned by: ____________________________________________
(if beneficially owned by more than one person, I have indicated in parenthesis
the principal amount owned by each such person.)
x___________________________________________________
Signature(s) of Registered Noteholder(s) or Authorized Signatory
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Type or Print Name
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Type or Print Address(es)
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Capacity (Full Title)
Dated:_______________, 1998
Area Code and telephone No(s).:____________________________
Tax Identification or Social Security No(s).:_________________________
Must be signed by the registered Noteholder(s) exactly as the name(s)
appear(s) on the certificate and by person(s) authorized to become registered
Noteholder(s) as evidenced by endorsements and documents. See Instruction 4 to
the Original Letter of Transmittal. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, agent, or
other person acting in a fiduciary or representative capacity, please see
Instruction 4 to the Original Letter of Transmittal.
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BENEFICIAL OWNER(S) OF THE NOTES BEING TENDERED (INCLUDING ANY REGISTERED
NOTEHOLDER(S) WHO ARE ALSO BENEFICIAL OWNER(S)) MUST CAREFULLY READ THE
FOLLOWING AND COMPLETE AND SIGN BELOW:
I have read this Amendment to the Exchange Agreement and Letter of
Transmittal carefully and agree to be bound by each covenant contained in the
Original Letter of Transmittal, as amended by this Amendment.
I (hereinafter referred to as "Holder") hereby acknowledge and
represent and warrant to Hybridon as follows:
A. Investment Representations
a. Investment Intent. The Holder recognizes that the tender of Notes in
exchange for Series A Preferred Stock and Exchange Warrants (in the event that
the Original Consideration shall be issued in the Offer) or the Alternative
Series A Preferred Stock and the Alternative Exchange Warrants (in the event
that the Alternative Consideration shall be issued in the Offer) and the
Hybridon Common Stock underlying the foregoing securities (the foregoing
securities are hereinafter collectively referred to as the "Exchange
Securities") involves a high degree of risk including, but not limited to, the
following: (i) Hybridon remains a development stage business with limited
operating history and requires substantial additional funds; (ii) an investment
in Hybridon is highly speculative, and only investors who can afford the loss of
their entire investment should consider tendering their Notes in exchange for
the Exchange Securities; (iii) the Holder may not be able to liquidate his
Exchange Securities received in the Offer; (iv) transferability of the Exchange
Securities received in the Offer is extremely limited; (v) in the event of a
disposition of the Exchange Securities received in the Offer such Holder could
sustain the loss of his entire investment and (vi) Hybridon has not paid any
dividends since inception and does not anticipate the payment of dividends on
the Hybridon Common Stock or the Series A Preferred Stock or the Alternative
Series A Preferred Stock (except as required in the applicable Certificate of
Designation) in the foreseeable future.
b. Lack of Liquidity. The Holder confirms that he or it is able (i) to
bear the economic risk of this investment, (ii) to hold the Exchange Securities
received in the Offer for an indefinite period of time, and (iii) presently to
afford a complete loss of the investment; and represents that he or it has
sufficient liquid assets so that the illiquidity associated with this investment
will not cause any undue financial difficulties or affect such Holder's ability
to provide for his or its current needs and possible financial contingencies,
and that his or its commitment to all speculative investments is reasonable in
relation to his or its net worth and annual income. Furthermore, each Holder
acknowledges that the Series A Preferred Stock and the Alternative Series A
Preferred Stock each contains certain applicable restrictions on exercise,
voting, conversion and certain other rights, as more particularly set forth in
the applicable Certificate of Designation.
c. Knowledge and Experience. Such Holder has prior investment
experience, including investment in securities that are non-listed, unregistered
and are not traded on the Nasdaq National or SmallCap Market, nor on the
National Association of Securities Dealers, Inc.'s (the "NASD") automated
quotation system, or such Holder has employed at its own expense the services of
an investment advisor, attorney and/or accountant to request documents from
Hybridon pursuant to Section [e.] hereof and to read all of the documents
furnished or made available by Hybridon to such Holder and to evaluate the
investment, tax and legal merits and the consequences and risks of such a
transaction on such Holder's behalf, that such Holder or such professional
advisor has such knowledge and experience in financial and business matters that
such Holder or such professional advisor is capable of evaluating the merits and
risks of the prospective investment and that such professional advisor, if any,
satisfies the conditions set out in Rule 501(h) under the Securities Act.
x. Xxxxxx Capacity. Either by reason of such Holder's business or
financial experience, or the business or financial experience of such Holder's
professional advisors (who are unaffiliated with, and
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who are not compensated by, Hybridon or any affiliate or selling or placement
agent of Hybridon, directly or indirectly), such Holder has the capacity to
protect such Holder's own interests in connection with the transaction
contemplated hereby.
e. Offer to Exchange. Such Holder hereby acknowledges receipt and
careful review of the Offer to Exchange of Hybridon, as supplemented and
amended, and the annexes and exhibits thereto, all of which constitute an
integral part thereof, including, without limitation, the information contained
in all material concerning Hybridon provided to the registered holders of the
Notes in connection with the Offer and hereby represents that such Holder has
been furnished by Hybridon with all information regarding Hybridon which such
Holder or its representative has requested or desired to know, has been afforded
the opportunity to ask questions of, and to receive answers from, duly
authorized officers or other representatives of Hybridon concerning the terms
and conditions of the Offer and the Exchange Securities and the affairs of
Hybridon and has received any additional information which such Holder or its
representative has requested.
f. Reliance on Information. Such Holder has relied solely upon the
information provided by Hybridon in the Offer to Exchange in making the decision
to tender the Notes. To the extent necessary, each Holder has retained, at the
sole expense of such Holder, and relied upon, appropriate professional advice
regarding the investment, tax and legal merits and consequences of the Offer and
its tender of Notes in exchange for the Exchange Securities.
g. Registration. Such Holder hereby acknowledges that the Offer has not
been reviewed by the Securities and Exchange Commission or any state regulatory
authority, since the Offer is intended to be exempt from the registration
requirements of the Securities Act. No Holder shall sell or otherwise transfer
the Exchange Securities unless such securities are registered under the
Securities Act or unless an exemption from such registration is available.
h. Purchase for own Account. Such Holder understands that none of the
Exchange Securities have been registered under the Securities Act by reason of a
claimed exemption under the provisions of the Securities Act which depends, in
part, upon such Holder's investment intention. In this connection, such Holder
hereby represents that such Holder is tendering Notes in exchange for Exchange
Securities for such Holder's own account, for investment and not with a view
toward the resale or distribution to others, or for resale in connection with,
any distribution or public offering (within the meaning of the Securities Act),
nor with any present intention of distributing or selling the same and such
Holder has no present or contemplated agreement, undertaking, arrangement,
obligation or commitment providing for the disposition thereof. Such Holder, if
an entity, was not formed for the purpose of acquiring the Notes or the Exchange
Securities.
i. Holding Period. Such Holder understands that there is no public
market for the preferred stock or warrants included in the Exchange Securities
and that no market is expected to develop for any such Exchange Securities. Such
Holder understands that even if a public market develops for such Exchange
Securities, reliance upon Rule 144 under the Securities Act for resales
requires, among other conditions, a one-year holding period prior to the resale
(in limited amounts) of securities acquired in a non-public offering without
having to satisfy the registration requirements under the Securities Act. Such
Holder shall hold Hybridon and its directors, officers, employees, controlling
persons and agents and their respective heirs, representatives, successors and
assigns harmless from, and shall indemnify them against, all liabilities, costs
and expenses incurred by them as a result of (i) any misrepresentation made by
such Holder contained in this Amendment, (ii) any sale or distribution by such
Holder in violation of the Securities Act or any applicable non-United States,
state securities or "blue sky" laws or (iii) any untrue statement made by such
Holder.
j. Legends. Such Holder consents to the placement of one or more
restrictive legends on any certificates representing the Exchange Securities
required by applicable securities laws. Such Holder is aware that Hybridon will
make a notation in its appropriate records with respect to the restrictions on
the transferability of such Exchange Securities.
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k. Financial Review. Such Holder understands that Hybridon will review
this Amendment and is hereby given authority by the undersigned Holder to call
such Holder's bank or place of employment or otherwise review the financial
standing of such Holder; and it is further agreed that Hybridon reserves the
unrestricted right, without further documentation or agreement on the part of
such Holder, to reject or limit any tender of Notes.
l. Residence of Holder. Such Holder hereby represents that the address
of such Holder furnished set forth below is such Holder's principal residence if
such Holder is an individual or its principal business address if it is a
corporation or other entity.
m. NASD. Such Holder acknowledges that if he or she is a registered
representative of an NASD member firm, he or she must give such firm the notice
required by the NASD's Rules of Fair Practice, receipt of which must be
acknowledged by such firm in the appropriate space provided below.
n. Securities Laws. Such Holder acknowledges that at such time, if
ever, as the Exchange Securities are registered, sales of such Exchange
Securities will be subject to applicable United States and state securities
Laws.
o. Beneficial Owner. Such Holder, whose name appears on the signature
line below, is the beneficial owner of the Notes being tendered, and will be the
beneficial owner of the Exchange Securities that such Holder acquires pursuant
to the Offer.
p. Accredited Investor. Such Holder represents that it has indicated in
Section B below whether or not it is an "accredited investor" as such term is
defined in Rule 501 of Regulation D.
q. Reliance on Representation and Warranties. Such Holder understands
that the Exchange Securities are being offered and sold to the undersigned in
reliance on specific exemptions from the registration requirements of United
States Federal and state securities laws and that Hybridon is relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the undersigned set forth herein in order
to determine the applicability of such exemptions and the suitability of the
undersigned to acquire the Exchange Securities pursuant to the Offer.
B. Confidential Questionnaire
a. The undersigned represents and warrants that he, she or it comes
within one category marked below, and that for any category marked, he, she or
it has truthfully set forth where applicable the factual basis or reason that
he, she or it comes within that category. ALL INFORMATION IN RESPONSE TO THIS
SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish
any additional information which Hybridon deems necessary in order to verify the
answers set forth below.
Category A:____ The undersigned is an individual (not a partnership,
corporation, etc.) whose individual net worth, or joint net
worth with his or her spouse, presently exceeds $1,000,000.
Explanation. In calculating net
worth you may include equity in
personal property and real estate,
including your principal residence,
cash, short-term investments, stock
and securities. Equity in personal
property and real estate should be
based on the fair market value of
such property less debt secured by
such property.
Category B:____ The undersigned is an individual (not a partnership,
corporation, etc.) who had an individual income in excess of
$200,000 in each of the two most recent years, or joint income
with his or her spouse in excess of $300,000 in each of those
years (in each
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case including foreign income, tax exempt income and full
amount of capital gains and losses but excluding any income of
other family members and any unrealized capital appreciation)
and has a reasonable expectation of reaching the same income
level in the current year.
Category C:____ The undersigned is a director or executive officer of
Hybridon.
Category D:____ The undersigned is a bank; a savings and loan association;
insurance company; registered investment company; registered
business development company; licensed small business
investment company ("SBIC"); or employee benefit plan within
the meaning of Title 1 of Employee Retirement Income
Security Act of 1974, as amended (the "ERISA") and (a) the
investment decision is made by a plan fiduciary which is
either a bank, savings and loan association, insurance
company or registered invest- ment advisor, or (b) the plan
has total assets in excess of $5,000,000 or is a self
directed plan with investment decisions made solely by
persons that are accredited investors.
Category E:____ The undersigned is a private business development
company as defined in section 202(a)(22) of the Investment
Advisors Act of 1940.
Category F:____ The undersigned is either a corporation, partnership,
business trust, or non-profit organization within the meaning
of Section 501(c)(3) of the Internal Revenue Code, in each
case not formed for the specific purpose of acquiring the
Notes or the Exchange Securities, and with total assets in
excess of $5,000,000.
Category G:____ The undersigned is a trust with total assets in excess
of $5,000,000, not formed for the specific purpose of
acquiring the Notes or the Exchange Securities, where its
investment decisions are directed by a "sophisticated person"
as defined in Regulation 506(b)(2)(ii) under the Securities
Act.
Category H:____ The undersigned is an entity (other than a trust), all
the equity owners of which are "accredited investors" within
one or more of the above categories. If relying upon this
category alone, each such equity owner must complete a
separate copy of this Amendment.
Category I:____ The undersigned is not within any of the categories above and
is therefore not an accredited investor.
The undersigned agrees that the undersigned will notify Hybridon immediately in
the event that the representations and warranties in this Amendment shall cease
to be true, accurate and complete.
b. NASD Affiliation.
Are you affiliated or associated with an NASD member firm (please check one):
Yes _________ No __________
If Yes, please describe:
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*If Holder is a Registered Representative with an NASD member firm, have the
following acknowledgment signed by the appropriate party:
The undersigned NASD member firm acknowledges receipt of the notice
required by Article 3, Sections 28(a) and (b) of the Rules of Fair
Practice.
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Name of NASD Member Firm
By: ______________________________
Authorized Officer
Date: ____________________________
c. Reliance on Confidential Investor Questionnaire. The
undersigned is informed of the significance to Hybridon of the foregoing
representations and answers contained in the Confidential Questionnaire
contained above and such answers have been provided under the assumption that
Hybridon will rely on them in the Offer.
I hereby certify that the record owner of the Notes beneficially owned
by the undersigned is
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x___________________________________________________
Signature(s) of Beneficial Owner(s) or Authorized Signatory
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Type or Print Name
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Type or Print Address(es)
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Capacity (Full Title)
Dated:_______________, 1998
Area Code and telephone No(s).:____________________________
Tax Identification or Social Security No(s).:__________________________
See Instruction 4 to the Original Letter of Transmittal. If signature
is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of
a corporation, agent, or other person acting in a fiduciary or representative
capacity, please see Instruction 4 to the Original Letter of Transmittal.
[ ] I do not wish to appoint Mr. Art Xxxxx as the initial Designated
Director (see clause (iii) above). I wish to appoint _________________.
(Please check the box only if you agree with this statement).
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