EMPLOYMENT AGREEMENT
BETWEEN AMNEX, Inc.
AND
XXXXX X. XXXXXX
This AGREEMENT made this 25th day of June, 1996, by and between AMNEX
Inc., a New York corporation having an office in Orlando, Florida (sometimes
hereinafter referred to as "AMNEX" or the "Company") and Xxxxx X. Xxxxxx
(sometimes hereinafter referred to as "Employee").
WITNESSETH:
WHEREAS, the Company desires to employ the Employee and the Employee
desires to accept employment by the Company and enter into this Agreement; and
WHEREAS, the retention of Employee's services, for and on behalf of the
Company is of material importance to the preservation and enhancement of the
value of AMNEX;
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, AMNEX and Employee do hereby agree as follows:
1. Employment. The Employee is employed as Chief Operating Officer of
the Company from the date hereof through the term of this Agreement. As Chief
Operating Officer of the Company, the Employee shall implement executive policy
and other management services on behalf of the Company as would be customarily
performed by persons serving in a similar executive capacity. As an executive,
the Employee shall be responsible for implementing the policies and directives
of the Chief Executive Officer ("CEO") and the Board of Directors and shall
report only to the CEO. During the term of this Agreement, there shall be no
material decrease in the duties and responsibilities of the Employee other than
provided herein, unless the parties otherwise agree in writing. During the term
of this Agreement, the Employee shall not be required to relocate his or her
principal place of employment beyond 50 miles from Orlando, Florida in order to
perform his services hereunder.
2. Term. The initial term of employment under this Agreement shall be for a one
year period from the date hereof. This Agreement shall be automatically renewed
or extended for one additional year on each annual anniversary date of this
Agreement, unless either the Employee or the Company gives written notice to the
other on or before the sixtieth (60th) day prior to such anniversary date. Such
initial term and all such renewal terms are collectively referred to herein as
the term of this Agreement.
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3. Standards; Devotion of Time. The Employee shall perform his duties and
responsibilities under this Agreement in accordance with such reasonable
standards as may be established from time to time by the CEO of the Company. The
reasonableness of such standards shall be measured against standards for
executive performance generally prevailing in the telecommunications services
industry. During the employment period, the Employee shall expend all of his
working time for the Company and shall devote his best efforts, energy and skill
to the services of the Company and the promotion of its interests.
4. Compensation. The Company agrees to pay the Employee during the term of this
Agreement a salary at the minimum annual rate of $150,000.00. In the event that
this Agreement is renewed or extended, the Employee's salary will be reviewed at
the time of such renewal and may be increased in an amount to be determined by
the CEO in his sole discretion. In determining the Employee's annual salary
increases, if any, the CEO may compensate the Employee for increases in the cost
of living and also provide for performance or merit increases to the extent
appropriate and when compared to the prevailing telecommunications services
industry for like executive positions. The salary of the Employee shall not be
decreased at any time during the term of this Agreement from the amount then in
effect unless the Employee otherwise agrees in writing. Participation in
deferred compensation, bonus, retirement, and other employee benefit plans and
in fringe benefits shall not reduce the salary payable to the Employee. The
salary under this Section 4 shall be payable to the Employee biweekly.
5. Bonus. During the term of this Agreement, the Employee shall be entitled to
participate with other executive employees of the Company in a bonus pool, which
pool shall be equal to 3% of AMNEX Inc.'s consolidated pre-tax profits. The pool
shall be authorized and distributed by the CEO and Chairman of the Board in
their sole discretion. No other compensation provided for in this Agreement
shall be deemed a substitute for the Employee's right to participate in such
bonus if, when and as authorized.
6. Disability. In the event of the inability of Employee to render services
hereunder during the term of the Agreement due to a disability (whether
temporary or permanent), and for so long as such disability continues, Employee
shall continue to receive Employee's salary for a period not to exceed the
remaining term of the Agreement. There shall be deducted from the amount paid to
Employee hereunder during any period of disability any amounts actually paid to
Employee pursuant to any disability insurance or other similar such program
which the Company has instituted or may institute on behalf of its employees for
the purpose of compensating Employee in the event of disability.
7. Additional Compensation and Benefits. During the term of the Agreement,
Employee will be entitled to participate in and receive the benefits of any
stock option, profit sharing, or other plans, benefits and privileges given to
employees and/or
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executives of the Company or its subsidiaries and affiliates which may come into
existence hereafter, to the extent commensurate with his then duties and
responsibilities, as fixed by the CEO, and to the extent Employee is otherwise
eligible and qualified to so participate in and receive such benefits or
privileges. The Company shall not make any changes in such plans, benefits or
privileges which would adversely affect Employee's rights or benefits
thereunder, unless such change occurs pursuant to a program applicable to all
executives of the Company and does not result in a proportionately greater
adverse change in the rights of or benefits to Employee as compared with any
other executive of the Company. Nothing paid to Employee under any plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the salary payable to Employee pursuant to Section 4 hereof.
Nothing herein shall be deemed to imply that Employee is entitled to receive any
stock options (notwithstanding the grant thereof to other executive employees of
the Company or its subsidiaries or affiliates), it being understood and agreed
that the grant thereof is within the sole discretion of the Board of Directors
or its Compensation Committee.
8. Expenses. The Company shall reimburse Employee or otherwise provide for or
pay for all reasonable expenses incurred by Employee in furtherance of or in
connection with the business of the Company. In addition, the Company shall
reimburse Employee for all reasonable entertainment expenses (whether incurred
at the Employee's residence, while traveling, or otherwise) subject to such
reasonable limitations as may be established by the CEO. If such expenses are
paid in the first instance by Employee, the Company will reimburse Employee
therefor in accordance with its standard expense reimbursement policy.
9. Vacations. The Employee shall be entitled to annual paid vacations in
accordance with the following schedule:
1 - 2 years of service: 3 weeks per year
3 - 5 years of service: 3 weeks plus 2 days per year
6 - 9 years of service: 4 weeks per year
10+ years of service: 5 weeks per year
The timing of paid vacations shall be scheduled in a reasonable manner by the
parties following consultation between the CEO and Employee. The Employee shall
not be entitled to receive any additional compensation from the Company on
account of his failure to take paid vacation. The Employee shall also not be
entitled to accumulate more than two weeks of unused paid vacation time from one
calendar year to the next.
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10. Termination of Employment.
(a) Definitions. For the purposes of this Agreement, the following
definitions shall apply:
(i) A "Change in Control" of the Company shall be deemed to
have occurred: (A) when either the CEO or Chairman of the Board of the Company
as of the date hereof is either removed as a director or not nominated by the
Board for re-election as a director of the Company; or (B) when any nominee for
election as a director of the Company contained in the Company's Proxy Statement
sent to shareholders in connection with the Board of Directors' solicitation of
proxies to be voted at any Annual Meeting of Shareholders shall not be so
elected by the shareholders, except where the person elected instead of the
nominee is acceptable to the CEO and Chairman as of the date hereof; or (C) upon
any person or entity gaining ownership directly or indirectly of securities
that, in the aggregate, represent over thirty-five percent (35%) of the voting
power of the Company's outstanding securities (whether or not such securities
are in fact voted); or (D) upon the sale or disposition of fifty percent (50%)
or more of the voting securities of any of the Company's subsidiaries or all or
substantially all of the assets of any such subsidiary, except where such sale
or disposition was approved by the CEO serving as of the date hereof; or (E)
upon the termination of employment by the Company other than for cause, or the
resignation for good reason of, the CEO or Chairman serving as of the date
hereof.
(ii) Termination "for cause" shall mean termination of the
Employee by the Company because of: (A) conviction of or a plea of nolo
contendere to a felony, or another serious crime which results or is likely to
result in material injury to the Company; (B) breach of fiduciary duty involving
personal profit; (C) continued and habitual neglect to perform material stated
duties; or (D) material breach of any provision of this Agreement.
(iii) Resignation "for good reason" shall mean the resignation
of his employment by the Employee following: (A) a Change in Control of the
Company which, within two years of said Change in Control, results in (i) the
assignment to Employee, without Employee's express written consent, of any
duties materially inconsistent with Employee's positions, duties,
responsibilities and status with the Company immediately prior to a Change in
Control of the Company; or (ii) a material change or reduction in Employee's
reporting responsibilities, titles or offices as in effect immediately prior to
a Change in Control of the Company; or (iii) any removal of Employee from, or
any failure to re-elect Employee to, any of such positions, except in each case
in connection with the Employee's disability or death and except under
circumstances which would permit the termination of Employee's employment for
cause; or (B) failure by the Company to comply with any material provision of
this Agreement, which failure has not been cured within thirty (30) days after a
notice of non-compliance has been given by Employee to the Company.
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(b) Termination for Cause. The CEO may terminate the Employee's
employment at any time for cause. The Employee shall have no right to receive
compensation or other benefits for any period after termination for cause. If,
within thirty (30) days of receipt of notice of termination, the Employee denies
that termination for cause was warranted, the dispute shall be resolved by
submission of the claim to binding arbitration in accordance with the provisions
hereof. The parties agree that the sole determination by the arbitrators shall
be whether the termination of the Employee's employment was for cause. In the
event it is determined that such termination was without cause, Employee shall
be entitled to such relief as is provided for herein with respect thereto. If
the Employee does not deny that termination for cause was warranted within such
thirty (30) day period, the Employee's termination for cause shall be deemed to
be conclusive.
(c) Termination Without Cause. Any termination of employment by the CEO
other than termination for cause, including but not limited to, the Company's
failure to renew or extend this Agreement pursuant to Paragraph 2, (which shall
be deemed termination without cause), shall not prejudice the Employee's right
to compensation or other benefits under this Agreement. The parties acknowledge
and agree that damages which will result to Employee for termination without
cause shall be extremely difficult or impossible to establish or prove, and
agree that, unless the termination is for cause, the Company shall be obligated
to make a payment to the Employee as liquidated damages in an amount equal to
the greater of (A) one year's minimum annual salary as set forth in Section 4
hereof and (B) the Employee's total compensation hereunder for the twelve (12)
months preceding the termination, provided, however, that in the event that the
Company fails to renew or extend this Agreement and the Employee's employment
continues, then the amount payable to Employee hereunder shall not be paid until
the cessation of Employee's employment. Employee agrees that, except for such
other payments and benefits to which the Employee may be entitled as expressly
provided by the terms of this Agreement, such liquidated damages shall be in
lieu of all other claims, demands or causes of action which Employee may make by
reason of such termination. The liquidated damages amount shall not be reduced
by any compensation which the Employee may receive for any other employment with
another employer after termination of his employment with the Company. At the
election of the Company, the payment of such liquidated damages shall be made
either by a lump sum payment on the Employee's last day of employment with the
Company or over the course of the next twelve months in equal bimonthly payments
in accordance with the Company's then standard payroll policies and practices.
Such bimonthly payments shall be made by wire transfer to the bank account
designated by the Employee. The Company's failure to make each and every payment
when due and the continuance thereof for a period of five (5) days shall be a
material breach of this Agreement and the Employee shall be entitled to demand
and receive in a lump sum all unpaid liquidated damages.
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(d) Termination upon Death. Employee's employment shall automatically
terminate upon Employee's death, provided, however, that the Employee's wife,
Xxxxx Xxxxxx, shall be entitled to receive the payments specified under Section
10 (e)(ii) hereof.
(e) Resignation for Good Reason. (i) Employee may resign his employment
hereunder for good reason upon thirty (30) days notice to the Company, stating
in his notice the basis upon which he believes that good reason exists for such
resignation.
(ii) In the event the Employee resigns, the Employee shall be
entitled to receive as a severance payment, or in lieu of a severance payment,
payment for services previously rendered to the Company, a lump sum cash payment
equal to the greater of (A) one year's minimum annual salary as set forth in
Section 4 hereof and (B) the Employee's total compensation hereunder applicable
to the twelve (12) months preceding such resignation. Payment under this section
shall be in lieu of any amount owed to the Employee as liquidated damages for
termination without cause under Section 10(c) hereof and shall be payable on the
last day of Employee's employment hereunder. However, payment under this section
shall not be reduced by any compensation which the Employee may receive from
other employment with another employer after termination from his employment
with the Company.
(f) Change in Control; Resignation Without Good Reason. If during the
term of this Agreement there is a Change in Control of the Company and the
Employee without good reason resigns his employment within one year after such
Change in Control, the Employee shall be entitled to receive a severance payment
pursuant to Section 10(e)(ii) hereof. Any such resignation shall be on thirty
(30) days notice to the Company.
(g) Other Benefits. In the event liquidated damages and/or severance
payments are payable pursuant to this Section 10, the Employee shall also be
entitled to have any allowances set forth in Section 8 hereof and Employee's
health insurance coverage continue for a period of twelve months. In the event
that any such law or plan may prevent a continuation of Employee's health
insurance for such twelve month period, the Company shall pay for Employee's
C.O.B.R.A. health coverage during such period, or, if earlier, until such time
as Employee becomes eligible to be covered by comparable insurance with another
employer. The Company shall also ensure that all insurance or other provisions
for indemnification, defense or hold harmless of officers or directors of the
Company which are in effect as of the date of the Employee's termination
continue for the benefit of the Employee with respect to all of his acts and
omissions while an officer or director as fully and completely as if such
termination had not occurred, and until the final expiration or running of all
periods of limitation against action which may be applicable to such acts or
omissions.
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(h) Benefit Plans. Notwithstanding any other provisions of this
Agreement or of any other agreement, contract, or understanding heretofore or
hereafter entered into between the Employee and the Company, except an
agreement, contract, or understanding hereafter entered into that expressly
modifies or excludes application of this Section 10 (the "Other Agreements"),
and notwithstanding any formal or informal plan or other arrangement heretofore
or hereafter adopted by the Company for the direct or indirect provision of
compensation to the Employee (including groups of classes of participants or
beneficiaries of which the Employee is a member), whether or not such
compensation is deferred, is in cash, or is in the form of a benefit to or for
the Employee (a "Benefit Plan"), the Employee shall not have any right to
receive any payment or other benefit under this Agreement, or Other Agreement,
or any Benefit Plan if such payment or benefit, taking into account all other
payments or benefits to or for the Employee under this Agreement, all Other
Agreements, and all Benefit Plans, would cause any payment to the Employee under
this Agreement to be considered a "parachute payment" within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended. In the
event that the receipt of any such payment or benefit under this Agreement, any
Other Agreement, or any Benefit Plan would cause the Employee to be considered
to have received a parachute payment under this Agreement, then the Employee
shall have the right, in his sole discretion, to designate those payments or
benefits under this Agreement, and Other Agreements, and/or any Benefit Plans,
which should be reduced or eliminated so as to avoid having the payment to the
Employee under this Agreement be deemed to be a parachute payment.
11. Confidentiality and Non-Solicitation. The services of the Employee are
unique, extraordinary and essential to the business of the Company, especially
since the Employee shall have access to the Company's customer lists, trade
secrets and other confidential network, financial, legal and operational
information essential to the Company's business. Accordingly, during the term of
this Agreement and thereafter, the Employee agrees not to use, divulge, furnish
or make available to any person or entity any knowledge of or information with
respect to any confidential or otherwise proprietary documents, discussions,
plans, policies, procedures, activities, materials, information or data of the
Company. The Employee further agrees to refrain from engaging in any activity
whatsoever that would tend to disparage or diminish the reputation of the
Company or which would tend to have a detrimental effect upon the interests of
the Company. The Employee has executed or will execute the standard AMNEX
Employee Confidentiality Agreement, which agreement is incorporated herein by
reference and made a part hereof.
The Employee also agrees that, for a period of one (1) year following the
expiration of this Agreement, the Employee shall not, without the prior written
approval of the CEO, anywhere in the United States of America, whether
individually or as a principal, officer, employee, partner, director, agent or
representative of or consultant for any entity, (a) cause or seek to persuade
any director, officer, employee, customer, subscriber, account, agent, vendor or
supplier of, or consultant to, the Company to discontinue or
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modify to the detriment of the Company the status, employment or relationship of
such person or entity with the Company (including, without limitation, to
discontinue or modify to the detriment of the Company the use of the Company's
operator services, long-distance transmission services, 1+ Coin Services and/or
other telecommunications services); (b) hire or retain any such officer,
director or employee; (c) cause or seek to persuade any prospective customer,
subscriber or account of the Company (which at the date of cessation of
employment with the Company was then actively being solicited by the Company) to
determine not to enter into a business relationship with the Company.
The Employee acknowledges and agrees that, in the event he shall violate any of
the restrictions of this Section 11, the Company will be without an adequate
remedy at law and will therefore be entitled to enforce such restrictions by
temporary or permanent injunctive relief in any court of competent jurisdiction
without the necessity of proving damages and without any prejudice to any other
remedies which it may have at law or in equity. The Employee acknowledges and
agrees that, in addition to any other state having proper jurisdiction, any such
relief may be sought in, and for such purpose the Employee consents to
jurisdiction of, the courts of the State of Florida.
12. Assumption of Agreement. In the event of a Change in Control transaction to
which the Company is a party, the Company shall require that the acquiring or
successor entity, if any, expressly assume the obligations and entitlement of
this Agreement following such change of control. Employee shall have the right
to demand that the Company acknowledge in writing the assumption of this
Agreement, if applicable, within thirty (30) days following receipt of such
demand. Failure of the Company to so act timely in response to such demand shall
be deemed a material breach of this Agreement by the Company, thereby entitling
Employee to resign for good reason in accordance with the provisions of this
Agreement but without providing any further notice of non-compliance and
opportunity for cure.
13. Other Employment. The Employee shall not, during the term of this
Agreement, have any other paid employment other than with a subsidiary of the
Company except with the prior approval of the CEO.
14. Section Headings. The section headings used in this Agreement are included
solely for convenience and shall not affect, or be used in conjunction with, the
interpretation of this Agreement.
15. Notices. Any notice required or permitted to be given pursuant to this
Agreement shall be deemed to have been duly given when delivered by hand or sent
by certified or registered mail, return receipt requested and postage prepaid,
overnight mail or courier or telecopier as follows:
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If to the Employee:
00000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
If to the Company:
000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: CEO
Telecopier Number: (000) 000-0000
or at such other address as any party shall designate by notice to the other
party given in accordance with this Paragraph 15.
16. No Waiver; Entire Agreement. Failure to insist upon strict compliance with
any of the terms, covenants or conditions hereof shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times. This Agreement
constitutes the entire agreement between the parties and there are no
representations, warranties or commitments except as set forth herein. This
Agreement supersedes all prior agreements, understandings, negotiations and
discussions, whether written or oral, of the parties hereto relating to the
matters set forth in this Agreement. This Agreement may be amended only by a
writing executed by the parties hereto.
17. Assignability. This Agreement is personal in nature. The Employee shall have
no right to assign or transfer this Agreement. In the event of any attempted
assignment or transfer by the executive of his duties and obligations contrary
to this paragraph, all the Employee's rights under this Agreement shall be
forfeited, and the Company shall have no further liability under this Agreement.
The Company may assign or transfer its rights under this Agreement only to a
subsidiary or affiliate of the Company so long as such assignment shall not
substantially change the current status of this Agreement or its place of
performance. No assignment by the Company shall relieve the Company of the
liabilities and responsibilities created by this Agreement, including its
responsibilities under Section 12 hereof.
18. Reformation and Severability. The Employee and the Company agree that the
agreements contained herein shall each constitute a separate agreement
independently supported by good and adequate consideration, shall each be
severable from the other provisions of the Agreement, and shall survive the
Agreement. If a court of competent jurisdiction determines that any term,
provision or portion of this Agreement is void, illegal or unenforceable, the
other terms, provisions and portions of this Agreement shall remain in full
force and effect and the terms, provisions and portions that are determined
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to be void, illegal or unenforceable shall be limited so that they shall remain
in effect to the extent permissible by law.
19. Governing Law. This Agreement shall be governed by the laws of the United
States, where applicable, and otherwise by the laws of the State of Florida,
excluding choice of law principles thereof.
20. Arbitration; Attorneys Fees. (I) Except with regard to Section 11 hereof and
any other maters that are not a proper subject of arbitration, all disputes
between the parties hereto concerning the performance, breach, construction or
interpretation of this Agreement or any portion thereof, or in any manner
arising out of this Agreement or the performance thereof, shall be submitted to
binding arbitration in accordance with the rules of the American Arbitration
Association, which arbitration shall be carried out in the manner hereinafter
set forth.
(ii) Within fifteen days after written notice by one party to the other
party of its demand for arbitration, which demand shall set forth the name and
address of its designated arbitrator, the other party shall select its
designated arbitrator and so notify the demanding party. Within fifteen days
thereafter, the two arbitrators so selected shall select the third arbitrator.
The dispute shall be heard by the arbitrators within sixty days after selection
of the third arbitrator. The decision of any two arbitrators shall be binding
upon the parties. In default of either side naming its arbitrator as aforesaid
or in default of the selection of the said third arbitrator as aforesaid, the
American Arbitration Association shall designate such arbitrator upon the
application of either party. The decision of the arbitrators shall be final and
binding upon the Company, its successors and assigns and the Employee.
(iii) The arbitration proceedings shall take place in Orlando, Florida,
and the judgment and determination of such proceedings shall be binding on all
parties hereto. Judgment upon any award rendered by the arbitrators appointed
hereunder may be entered into any court having competent jurisdiction thereof
without any right of appeal therefrom.
(iv) Each party shall pay its or his own expenses of arbitration, and
the expenses of the arbitrators and the arbitration proceeding shall be equally
shared; provided, however, that, (a) if, in the opinion of a majority of the
arbitrators, any claim of defense was unreasonable, the arbitrators may assess,
as part of their award, all or any part of the arbitration expenses of the other
party (including reasonable attorneys' fees) and of the arbitrators and the
arbitration proceeding (collectively, the "Arbitration Expenses") against the
party raising such unreasonable claim or defense, and (b) if the arbitrators
rule in favor of the Employee, then the Company shall be obligated to pay all of
the Arbitration Expenses.
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21. No Restrictions. The Employee hereby represents that neither the execution
of this Agreement nor his performance hereunder will (a) violate, conflict with
or result in a breach of any provisions of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under
the terms, conditions or provisions of any contract, agreement or other
instrument or obligation to which the Employee is a party, or by which he may be
bound, or (b) violate any order, judgment, writ, injunction or decree applicable
to the Employee. In the event of a breach hereof, in addition to the Company's
right to terminate this Agreement, the Employee shall indemnify the Company and
hold it harmless from and against any and all claims, losses, liabilities and
expenses (including reasonable attorney's fees) incurred or suffered in
connection with or as a result of the Company's entering into this Agreement or
employing the Employee hereunder.
22. No Third Party Beneficiaries. Except as provided for in Section 10 (d)
hereof, no person not a party to this Agreement shall have any right to enforce
any of the provisions hereof, there being no third party beneficiaries.
23. Service as Officer of Subsidiaries; Service as Director. During the
employment period, the Employee shall, if elected or appointed, serve as (a) an
officer of any subsidiaries of the Company in existence or hereafter created or
acquired and (b) a Director of the Company and/or any such subsidiaries of the
Company, in each case without any additional compensation for such services.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the day and year above written.
EMPLOYEE AMNEX, Inc.
By: /s/Xxxxx Xxxxxx By: /s/
Name: ________________________ Name: _______________________
Date: ________________________ Date: _______________________
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