EXHIBIT 2.1
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BROKER'S NAME:
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IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING.
SIGNIFICANT REPRESENTATIONS ARE CALLED FOR HEREIN.
SUBSCRIPTION AGREEMENT
and
LETTER OF INVESTMENT INTENT
Semotus Solutions, Inc.
000 Xxxxxxxxxx Xxx., Xxxxx 000
Xxx Xxxxx, XX 00000
Gentlemen:
The undersigned (the "Subscriber") hereby tenders this subscription for
the purchase of securities (the "Securities") of Semotus Solutions, Inc. (the
"Company"), consisting of units ("Units") comprising shares ("Shares") of the
Company's common stock and common stock purchase warrants ("Warrants"). The
Units are described in the Private Placement Memorandum dated August 5, 2005
(the Memorandum"). The Subscriber understands that a subscription for the
Securities may be rejected for any reason and that, in the event that this
subscription is rejected, the funds delivered herewith will be promptly
returned, without interest thereon or deduction therefrom. By execution below,
the Subscriber acknowledges that the Company is relying upon the accuracy and
completeness of the representations contained herein in complying with their
obligations under applicable securities laws.
1. Subscription Commitment. The Subscriber acknowledges that the
minimum subscription is $25,000. The Subscriber hereby subscribes for the
purchase of the number of Securities specified below and, as full payment
therefor, agrees to pay in cash, the amount set forth below by check made
payable to " Semotus Solutions, Inc. Escrow Account," or by wire transfer to the
escrow account of the Company.
___________________ At $1.00 per Unit for
Number of Units an aggregate of $ __________________
The Subscriber understands that this subscription is not binding on the
Company until accepted by the Company, which acceptance is at the discretion of
the Company and is to be evidenced by the Company's execution of this
Subscription Agreement where indicated. If the subscription is rejected, the
Company shall return to the Subscriber, without interest or deduction, any
payment tendered by the Subscriber, and the Company and the Subscriber shall
have no further obligation to each other hereunder. Unless and until rejected by
the Company, this subscription shall be irrevocable by the Subscriber. The
Subscriber understands that the Company may, in the event that the offering to
which the Memorandum relates is oversubscribed, reduce this subscription in any
amount and to any extent, whether or not pro rata reductions are made of any
other investor's subscription.
2. Representations and Warranties. In order to induce the Company to
accept this subscription, the Subscriber hereby represents and warrants to, and
covenants with, the Company as follows:
(a) The Subscriber has received and had the opportunity to review the
Memorandum, including the Exhibits thereto, and has been given access to full
and complete information regarding the Company and has utilized such access to
the Subscriber's satisfaction for the purpose of obtaining such information
regarding the Company as the Subscriber has reasonably requested; and,
particularly, the Subscriber has been given reasonable opportunity to ask
questions of, and receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Securities and to
obtain any additional information, to the extent reasonably available;
(b) Except for the Memorandum, the Subscriber has not been furnished
with any other materials or literature relating to the offer and sale of the
Securities; except as set forth in the Memorandum, no representations or
warranties have been made to the Subscriber by the Company, any selling agent of
the Company, or any agent, employee, or affiliate of the Company or such selling
agent.
(c) The Subscriber believes that an investment in the securities is
suitable for the Subscriber based upon the Subscriber investment objectives and
financial needs. The Subscriber (i) has adequate means for providing for the
Subscriber's current financial needs and personal contingencies; (ii) has no
need for liquidity in this investment; (iii) at the present time, can afford a
complete loss of such investment; and (iv) does not have an overall commitment
to investments which are not readily marketable that is disproportionate to the
Subscriber's net worth, and the Subscriber's investment in the Securities will
not cause such overall commitment to become excessive.
(d) The Subscriber, in reaching a decision to subscribe, has such
knowledge and experience in financial and business matters that the Subscriber
is capable of reading and interpreting financial statements and evaluating the
merits and risk of an investment in the Securities and has the net worth to
undertake such risks.
(e) The Subscriber was not offered or sold the Securities, directly or
indirectly, by means of any form of general advertising or general solicitation,
including, but not limited to, the following: (1) any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
medium of or broadcast over television or radio; or (2) to the knowledge of the
undersigned, any seminar or meeting whose attendees had been invited by any
general solicitation or general advertising.
(f) The Subscriber has obtained, to the extent the Subscriber deems
necessary, the Subscriber's own personal professional advice with respect to the
risks inherent in the investment in the securities, and the suitability of an
investment in the Securities in light of the Subscriber's financial condition
and investment needs;
(g) The Subscriber recognizes that the Securities as an investment
involves a high degree of risk, including those set forth under the caption
"Risk Factors" in the Memorandum.
(h) The information contained in this agreement is true, complete and
correct in all material respects as of the date hereof; the Subscriber
understands that the Company's determination that the exemption from the
registration provisions of the Securities Act of 1933, as amended (the "Act"),
which is based upon non-public offerings and applicable to the offer and sale of
the Securities, is based, in part, upon the representations, warranties, and
agreements made by the Subscriber herein; and the Subscriber consents to the
disclosure of any such information, and any other information furnished to the
Company, to any governmental authority, self-regulatory organization, or, to the
extent required by law, to any other person.
(i) The Subscriber realizes that (i) the purchase of the Securities is
a long-term investment; (ii) the purchaser of the Securities must bear the
economic risk of investment for an indefinite period of
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time because the Securities have not been registered under the Securities Act of
1933 or under the securities laws of any state and, therefore, the Securities
cannot be resold unless they are subsequently registered under said laws or
exemptions from such registrations are available; (iii) there is presently no
public market for the Securities and the Subscriber may be unable to liquidate
the Subscriber's investment in the event of an emergency, or pledge the
Securities as collateral for a loan; and (iv) the transferability of the
Securities is restricted and (A) requires conformity with the restrictions
contained in paragraph 2 below and (B) legends will be placed on the
certificate(s) representing the Securities referring to the applicable
restrictions on transferability; and
(j) The Subscriber certifies, under penalties of perjury, that the
Subscriber is NOT subject to the backup withholding provisions of Section
3406(a)(i)(C) of the Internal Revenue Code.
(k) Stop transfer instructions will be placed with the transfer agent
for the Securities, and a legend may be placed on any certificate representing
the Securities substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN
RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN THE ACT AND
REGULATION D UNDER THE ACT. AS SUCH, THE PURCHASE OF THIS SECURITY WAS
NECESSARILY WITH THE INTENT OF INVESTMENT AND NOT WITH A VIEW FOR
DISTRIBUTION. THEREFORE, ANY SUBSEQUENT TRANSFER OF THIS SECURITY OR
ANY INTEREST THEREIN WILL BE UNLAWFUL UNLESS IT IS REGISTERED UNDER THE
ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. FURTHERMORE,
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY OR ANY
INTEREST THEREIN, WITHOUT THE OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT THE PROPOSED TRANSFER OR SALE DOES NOT AFFECT THE
EXEMPTIONS RELIED UPON BY THE COMPANY IN ORIGINALLY DISTRIBUTING THE
SECURITY AND THAT REGISTRATION IS NOT REQUIRED.
3. Restricted Nature of the Securities. The Subscriber has been
advised and understands that (a) the Securities have not been registered under
the Securities Act of 1933 or applicable state securities laws and that the
securities are being offered and sold pursuant to exemptions from such laws; (b)
the Memorandum may not have been filed with or reviewed by certain state
securities administrators because of the limited nature of the offering; (c)
except as provided in paragraph 11 hereunder, the Company is under no obligation
to register the Securities under the Act or any state securities laws, or to
take any action to make any exemption from any such registration provisions
available. The Subscriber represents and warrants that the Securities are being
purchased for the Subscriber's own account and for investment purposes only, and
without the intention of reselling or redistributing the same; the Subscriber
has made no agreement with others regarding any of the Securities; and the
Subscriber's financial condition is such that it is not likely that it will be
necessary to dispose of any of such Securities in the foreseeable future. The
Subscriber is aware that, in the view of the Securities and Exchange Commission,
a purchase of such securities with an intent to resell by reason of any
foreseeable specific contingency or anticipated change in market value, or any
change in the condition of the Company, or in connection with a contemplated
liquidation settlement of any loan obtained for the acquisition of such
securities and for which such securities were pledged, would represent an intent
inconsistent with the representations set forth above. The Subscriber further
represents and agrees that if, contrary to the foregoing intentions, the
Subscriber should later desire to dispose of or transfer any of such securities
in any manner, the Subscriber shall not do so unless and until (i) said
Securities shall have first been
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registered under the Act and all applicable securities laws; or (ii) the
Subscriber shall have first delivered to the Company a written notice declaring
such holder's intention to effect such transfer and describe in sufficient
detail the manner and circumstances of the proposed transfer, which notice shall
be accompanied either by a written opinion of legal counsel who shall be
reasonably satisfactory to the Company, which opinion shall be addressed to the
Company and reasonably satisfactory in form and substance to the Company's
counsel, to the effect that the proposed sale or transfer is exempt from the
registration provisions of the Act and all applicable state securities laws, or
by a "no action" letter from the Securities and Exchange Commission to the
effect that the transfer of the Securities without registration will not result
in recommendation by the staff of the Commission that action be taken with
respect thereto.
4. Residence. The Subscriber represents and warrants that the
Subscriber is a bona fide resident of, is domiciled in and received the offer
and made the decision to invest in the Securities in the state set forth on the
signature page hereof, and the Securities are being purchased by the Subscriber
in the Subscriber's name solely for the Subscriber's own beneficial interest and
not as nominee for, or on behalf of, or for the beneficial interest of, or with
the intention to transfer to, any other person, trust or organization, except as
specifically set forth in paragraph 15 of this Subscription Agreement and Letter
of Investment Intent.
5. Investor Qualification. The Subscriber represents and warrants
that the Subscriber or the purchaser of the Securities named in paragraph 15
comes within at least one category marked below, and that for any category
marked the Subscriber has truthfully set forth the factual basis or reason the
Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS
PARAGRAPH WILL BE KEPT STRICTLY CONFIDENTIAL. The Subscriber agrees to furnish
any additional information which the Company deems necessary in order to verify
the answers set forth below.
Category I _____ The Subscriber is an individual (not a partnership,
corporation, etc.) whose individual net worth, or joint
net worth with the Subscriber's spouse, presently exceeds
$1,000,000.
EXPLANATION. In calculation of net worth the Subscriber
may include equity in personal property and real estate,
including the Subscriber's principal residence, cash,
short term investments, stocks 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 II _____ The Subscriber is an individual (not a partnership,
corporation, etc.) who had an individual net income in
excess of $200,000 in each of the last two years, or joint
income with his/her spouse in excess of $300,000 in each
of the last two years, and has a reasonable expectation of
reaching the same income level in the current year.
Category III _____ The Subscriber is an executive officer or director of the
Company.
Category IV _____ The Subscriber is a bank; savings and loan; insurance
company; registered broker or dealer; registered
investment company; registered business development
company; licensed small business investment company
("SBIC"); or employee benefit plan within the meaning of
Title I of ERISA whose plan fiduciary is either a bank,
savings and loan, insurance company or registered
investment advisor or whose total assets exceed
$5,000,000; or a self-directed
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employee benefit plan with investment decisions made
solely by persons that are accredited investors.
_________________________________________________________
_________________________________________________________
(describe entity)
Category V _____ The Subscriber is a private business development company
as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
_________________________________________________________
_________________________________________________________
(describe entity)
Category VI _____ The Subscriber is an entity with total assets in excess of
$5,000,000 which was not formed for the purpose of
investing in the Units and which is one of the following:
_____ a corporation; or
_____ a partnership; or
_____ a business trust; or
_____ a tax-exempt organization described in Section
501(c)(3) of the Internal Revenue Code of 1986,
as amended.
_________________________________________________________
_________________________________________________________
(describe entity)
Category VII _____ The Subscriber is a trustee for a trust that is revocable
by the grantor at any time (including an XXX) and the
grantor qualifies under either Category I or Category II
above. A copy of the declaration of trust or trust
agreement and a representation as to the net worth or
income of the grantor is enclosed.
Category VIII_____ The Subscriber is an entity all the equity owners of which
are "accredited investors" within one or more of the above
categories, other than Category IV or Category V. [IF
RELYING UPON THIS CATEGORY ALONE, EACH EQUITY OWNER MUST
COMPLETE A SEPARATE COPY OF THIS AGREEMENT.]
_________________________________________________________
_________________________________________________________
(describe entity)
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Category IX _____ The Subscriber is a trust with total assets in excess of
$5,000,000, not formed for the specific purpose of
acquiring the Securities, whose purchase is directed by a
person who has such knowledge and experience in financial
and business matters that he is capable of evaluating the
merits and risks of the prospective investment.
6. NASD Questionnaire.
(a) Are you a member of the NASD,(1) a person associated with a
member(2) of the NASD, or an affiliate of a member?
Yes _________ No _________
If "Yes," please list any members of the NASD with whom you are associated or
affiliated.
______________________________________________________________
______________________________________________________________
______________________________________________________________
(b) If you are a corporation, are any of your officers, directors or
5% shareholders a member of the NASD, a person associated with a member of the
NASD, or an affiliate of a member?
Yes _________ No _________
If "Yes," please list the name of the respective officer, director, or 5%
shareholder and any members of the NASD with whom they are associated or
affiliated.
______________________________________________________________
______________________________________________________________
______________________________________________________________
_______________
(1) The NASD defines a "member" as being either any broker or dealer admitted
to membership in the NASD or any officer or partner of such a member, or
the executive representative of such a member or the substitute for such
representative.
(2) The NASD defines a "person associated with a member" as being every sole
proprietor, general or limited partner, officer, director or branch manager
or such member, or any natural person occupying a similar status or
performing similar functions, or any natural person engaged in the
investment banking or securities business who is directly or indirectly
controlling or controlled by such member (for example, any employee),
whether or not any such person is registered or exempt from registration
without the NASD. Thus, "person associated with a member" includes a sole
proprietor, general or limited partner, officer, director or branch manager
or an organization of any kind (whether a corporation, partnership or other
business entity) which itself is a "member" or a "person associated with a
member." In addition, an organization of any kind is a "person associated
with a member" if its sole proprietor or anyone of its general or limited
partners, officers, director or branch managers is a "member" or "person
associated with a member."
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7. Additional Representations. The undersigned, if other than an
individual, makes the following additional representations:
(a) The Subscriber was not organized for the specific purpose of
acquiring the Securities; and
(b) This Subscription Agreement and Letter of Investment Intent has
been duly authorized by all necessary action on the part of the Subscriber, has
been duly executed by an authorized officer or representative of the Subscriber,
and is a legal, valid and binding obligation of the Subscriber enforceable in
accordance with its terms.
8. Sophistication. The Subscriber further represents and warrants
that he has such knowledge and experience in financial and business matters so
as to be capable of evaluating the merits and risks of an investment in the
Securities and protecting the Subscriber's own interests in this transaction,
and does not desire to utilize the services of any other person in connection
with evaluating such merits and risks.
9. Reliance on Representations. The Subscriber understands the
meaning and legal consequences of the representations, warranties, agreements,
covenants, and confirmations set out above and agrees that the subscription made
hereby may be accepted in reliance thereon. The Subscriber agrees to indemnify
and hold harmless the Company and any selling agent (including for this purpose
their employees, and each person who controls either of them within the meaning
of Section 20 of the Securities Exchange Act of 1934, as amended) from and
against any and all loss, damage, liability or expense, including reasonable
costs and attorney's fees and disbursements, which the Company, or such other
persons may incur by reason of, or in connection with, any representation or
warranty made herein not having been true when made, any misrepresentation made
by the Subscriber or any failure by the Subscriber to fulfill any of the
covenants or agreements set forth herein, in the Purchaser Questionnaire or in
any other document provided by the Subscriber to the Company.
10. Transferability and Assignability. Neither this Subscription
Agreement nor any of the rights of the Subscriber hereunder may be transferred
or assigned by the Subscriber. The Subscriber agrees that the Subscriber may not
cancel, terminate, or revoke this Subscription Agreement or any agreement of the
Subscriber made hereunder (except as otherwise specifically provided herein) and
that this Subscription Agreement shall survive the death or disability of the
Subscriber and shall be binding upon the Subscriber's heirs, executors,
administrators, successors, and assigns.
11. Registration Rights. The Company shall include the Shares and the
shares underlying the Warrants in a registration statement to be filed with the
SEC no later than 90 days after the termination of the offering, and to use its
best efforts to cause the registration statement to be declared effective as
soon as possible thereafter.
12. Survival. The representations and warranties of the Subscriber
set forth herein shall survive the sale of the Units pursuant to this
Subscription Agreement.
13. Notices. All notices or other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally
or mailed by certified or registered mail, return receipt requested, postage
prepaid, as follows: if to the Subscriber, to the address set forth below; and
if to the Company to the address at the beginning of this letter, or to such
other address as the Company or the Subscriber shall have designated to the
other by like notice.
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14. (Applicable to FLORIDA residents only.) The Subscriber has been
informed and recognizes that (a) the Units have not been registered under the
Florida Securities Act, and (b) under Section 517.061(12) of the Florida
Securities Act, the Subscriber may void the sale of any Securities within three
(3) days after the tender of this Subscription Agreement and payment hereunder
to the Company.
15. 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 document.
16. Title. Manner in Which Title is To Be Held.
Place an "X" in one space below:
(a)______ Individual Ownership
(b)______ Community Property
(c)______ Joint Tenant with Right of Survivorship
(both parties must sign)
(d)______ Partnership
(e)______ Tenants in Common
(f)______ Corporation
(g)______ Trust
(h)______ Other (Describe):
______________________________________________________________
______________________________________________________________
______________________________________________________________
Please print above the exact name(s) in which the Securities are
to be held.
17. State of Residence. My state of residence and the state in which
I received the offer to invest and made the decision to invest in the Securities
is ________________________.
18. Date of Birth. My date of birth is: ____________________
19. Appendices. The information contained on the attached Stock
Certificate Questionnaire and the American Stock Exchange Questionnaire is
accurate.
IN NO EVENT WILL THE COMPANY, THE PLACEMENT AGENT, OR ANY OF THEIR AFFILIATES OR
THE PROFESSIONAL ADVISORS ENGAGED BY THEM BE LIABLE IF FOR ANY REASON RESULTS OF
OPERATIONS OF THE COMPANY ARE NOT AS PROJECTED IN THE DOCUMENTS. INVESTORS MUST
LOOK SOLELY TO, AND RELY ON, THEIR OWN ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES OF INVESTING IN THE SECURITIES.
SIGNATURE PAGE ON NEXT PAGE
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SIGNATURES
The Subscriber hereby represents he has read this entire Subscription Agreement
and the Memorandum dated August 5, 2005.
Dated: _________________
INDIVIDUAL
Address to Which Correspondence
Should be Directed
______________________________________ ______________________________________
Signature (Individual)
______________________________________
______________________________________ ______________________________________
Signature (All record holders City, State and Zip Code
should sign)
______________________________________ ______________________________________
Name(s) Typed or Printed Tax Identification or Social Security
Number
______________________________________ (____)________________________________
Telephone Number
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CORPORATION, PARTNERSHIP, TRUST, OR OTHER ENTITY
Address to Which Correspondence
Should be Directed
______________________________________ ______________________________________
Name of Entity
______________________________________
By: __________________________________ ______________________________________
*Signature City, State and Zip Code
Its: _________________________________ ______________________________________
Title Tax Identification or Social Security
Number
______________________________________ (____)________________________________
Name Typed or Printed Telephone Number
* If Securities are being subscribed for by an entity, the Certificate of
Signatory must also be completed.
CERTIFICATE OF SIGNATORY
TO BE COMPLETED IF SECURITIES ARE BEING SUBSCRIBED FOR BY AN ENTITY.
I,_______________________________, am the __________________________ of
__________________________________________ (the "Entity").
I certify that I am empowered and duly authorized by the Entity to
execute and carry out the terms of the Subscription Agreement and Letter of
Investment Intent and to purchase and hold the Securities, and certify that the
Subscription Agreement and Letter of Investment Intent has been duly and validly
executed on behalf of the Entity and constitutes a legal and binding obligation
of the Entity.
IN WITNESS WHEREOF, I have hereto set may hand this ______ day of
_______, 2005.
_____________________________________
Signature
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ACCEPTANCE
This Subscription Agreement is accepted as of __________________________, 200__.
SEMOTUS SOLUTIONS, INC.
By: _____________________________
Authorized Officer
Date: ___________________________
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APPENDIX I
STOCK CERTIFICATE QUESTIONNAIRE
Please provide us with the following information:
1. The exact name that your Shares are to be registered in (this is the name
that will appear on your stock certificate(s)). You may use a nominee name
if appropriate:
__________________________________________________________________________
2. The relationship between the Purchaser and the Registered Holder listed in
response to item 1 above:
__________________________________________________________________________
3. The mailing address of the Registered Holder listed in response to item 1
above:
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
4. The Social Security Number or Tax Identification Number of the Registered
Holder listed in response to item 1 above:
__________________________________________________________________________
5. The name of the financial institution of the Purchaser which will be wiring
funds representing the purchase price of the Shares:
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
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APPENDIX II
AMERICAN STOCK EXCHANGE QUESTIONNAIRE
The American Stock Exchange ("Amex") routinely performs a due diligence on
investors who have entered into transactions with Amex listed companies. In an
effort to expedite this process, please respond as accurately as possible to the
questions listed below:
-- Is the investor a domestic or offshore entity? ____________________________
-- Country of domicile or registry of investor. ______________________________
-- Is the investor a private equity fund, investment manager, general partner
or other? _________________________________________________________________
-- List all officers, directors, controlling shareholders, individuals,
general partners with dispositive power or voting control (use attached
sheet).
-- Bank from which investor will wire funds.__________________________________
-- Whether the investor intends to hold the shares in its own name or street
name.
___________________________________________________________________________
-- Which brokerage firm will the investor use to hold the shares, if any?
___________________________________________________________________________
-- Is the investor affiliated with any other purchaser of the Company's
securities pursuant to this transaction?
___________________________________________________________________________
-- How was the investor contacted for an investment in the Company?___________
___________________________________________________________________________
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OFFICERS, DIRECTORS, ETC
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