Ardent Mines Limited
Ardent
Mines Limited
000
Xxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000, XXX
Afrocan
Resources Ltd.
Head
Office
1710 -
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx,
X.X., Xxxxxx X0X 0X0
Attention:
Mr. Xxxxx Xxxxxxx, CFO
South
Africa
0 Xxxxxx
Xxxxxx, Xxxxxxxx Xxxxx
0000 Xxxxxxxxxxxx
Re: Capri General
Trading Company Limited
Gentlemen:
The
purpose of this Exploration and Acquisition Agreement (this “Agreement”), dated as of the
date set forth on the signature page hereto, is to summarize our recent
discussions and formalize an agreement by and between Ardent Mines Limited
(“Ardent”) -
incorporated in the State of Nevada, U.S.A., and Afrocan Resources Ltd. -
incorporated in British Columbia, Canada (“Afrocan”).
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1
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Terms
of the Transaction.
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1.1
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The
Exploration. Ardent hereby agrees to conduct, and/or pay
for the conduct of exploration activities at the property covered by
License No. PL 1761/2001 (previously known as License No. PL 246/94) as
applied August 14, 2008 (such license is referred to herein as the “Shenda
License”). The Shenda License is the mineral rights for
a property situated approximately 53 kilometers West North West of Kahama
in the Bukombe District, in the Shinyanga Region of
Tanzania. The mining license applied is bound by the
following coordinates: Point Latitude (S) Longitude (E) A 030 39’
54.7” 320 07’ 00”; B 030 39’ 54.7” 320 09’ 30”; C 030 41’ 05.2” 320
09’ 30”; and D 030 41’ 05.2” 320 07’ 00.” The Shenda License covers
the mining rights over approximately 10.0 square kilometers (such
property, the “Shenda
Property”).
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1.2
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Exploration
Cost. Ardent shall pay such amounts for the exploration
of the Shenda Property (such costs, the “Exploration Costs”) as
the officers and directors of Ardent and Afrocan shall mutually,
reasonably determine as appropriate in consultation with geologists and
such other experts as may be reasonably
necessary.
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1.3
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Exploration
Period. Ardent’s exploration of the Shenda Property
shall be conducted over the twelve months from the date hereof, however,
the period of such exploration may be shortened or extended as Ardent may
reasonably determine to implement the terms of this
Agreement.
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Ardent
Mines Limited - Afrocan Resources Ltd. -
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1.4
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The
Acquisition. In the
event that Ardent shall ascertain commercially available and commercially
exploitable reserves, as determined in its sole and reasonable discretion,
of not less than Four Hundred Thousand (400,000) ounces of gold at the
Shenda Property (such gold reserves as referred to herein as the “Acquisition Threshold”),
Ardent shall at Closing (as defined below) acquire from Afrocan 100% of
all issued and outstanding equity interests (the “Capri Shares”) of Capri
General Trading Co. Ltd. - incorporated in Tanzania (“Capri”), subject to the
conditions set forth herein. Capri is the legal and beneficial
owner of the Shenda License.
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1.5
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Purchase
Price. In exchange for the acquisition of the Capri
Shares, Ardent shall pay to Afrocan at Closing the Purchase Price, as
defined below. The Purchase Price shall be equal to the sum of
(i) the Exploration Costs; and (ii) shares of Ardent having an aggregate
value of Nine Million U.S. Dollars ($9,000,000) (the “Ardent Shares” and
together with the Exploration Costs, the “Purchase Price”), with
the Ardent Shares having the lower of a deemed a value of Five U.S.
Dollars ($5.00) per share or the average closing price of the publicly
traded common stock of Ardent on five (5) consecutive days prior to the
Closing. In the event that the Exploration Costs exceed Three
Million U.S. Dollars ($3,000,000), the number of Ardent Shares to be
delivered shall be reduced accordingly, so that the total value of the
Purchase Price shall not exceed Twelve Million U.S. Dollars
($12,000,000).
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1.6
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The Ownership
Interests. At the Closing, Capri will own one hundred
percent (100%) of all mineral rights in the Shenda License. At
Closing, no party other than Ardent shall have any right, title or
interest in the Capri Shares or the Shenda License or any additional
mineral rights associated with the property covered by the Shenda
License. There shall at Closing be no options, or any other
equity interests, contingent or otherwise, of any nature or kind in the
Capri Shares or in the Shenda License except for the rights held by
Ardent. The Capri Shares and the Shenda License shall be free
and clear of all indebtedness, liabilities, liens, encumbrances,
convertible rights, derivative rights, pre-emptive rights and any and all
other rights, contingent or otherwise of any other
persons.
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1.7
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Financing. Following
the Closing, to the extent determined by the officers of Ardent, in their
reasonable discretion, Ardent shall undertake, on a commercially
reasonable basis, to raise such funds as are necessary for (i) the
development of mining operations at the property covered by the Shenda
License; and (ii) the general operating expenses of Ardent. Such funds
shall be raised in a private placement of new Ardent common
stock.
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1.8
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Share
Capitalization. Afrocan acknowledges that (i) as of the
date hereof, Ardent is publicly traded company in the United States, with
14,957,650 shares issued and outstanding; and (ii) it is Ardent’s intent
to issue additional shares of its common stock subsequent to the date
hereof, including without limitation, in connection with the Financing
Shares, for purposes of acquiring other mineral rights, fund raising for
operations and expansion, and for purposes of compensating employees,
officers and directors.
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2
Ardent
Mines Limited - Afrocan Resources Ltd. -
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1.9
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Adjacent Lands.
Capri has ownership of certain mineral rights on lands adjacent to the
Shenda License. Afrocan agrees that Capri will not enter into
any agreements relative to such adjacent mineral rights prior to the
Closing so that on the date of the Closing they will still be held by
Capri in the same state as they are at the date
hereof.
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1.10
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Failure to
Close. In the event that Ardent is unable to identify
gold reserves at the Shenda Property equal to or greater than the
Acquisition Threshold, Afrocan shall reimburse Ardent for the total
Exploration Costs incurred. Pending the receipt of such
reimbursement, or in the event that Afrocan is unable to pay such funds,
Ardent shall be granted a lien on the Shenda License equal to the total
Exploration Costs incurred. In such event, Ardent shall be
granted the right to approve or deny any proposed sale of the Shenda
License, the Capri Shares or any other ownership or royalty interest
therein until such time as the Exploration Costs are repaid to Ardent in
full. In the event that Ardent is not reimbursed within twelve
(12) months of the completion of its exploration, any and all accumulated
Exploration Costs will commence accruing interest rate of Eight Percent
(8%) per annum.
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2
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Closing
Conditions.
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Consummation
of the acquisition of the Capri Shares and the underlying Shenda License will be
subject to the following closing conditions:
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2.1
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Due Diligence and
Continuity of Capri. At the Closing, Capri shall have
obtained and be in receipt of all necessary consents and approvals of all
applicable governmental authorities and other third parties having
jurisdiction or rights in respect of its ownership of the Shenda
License. Afrocan shall deliver a legal opinion to Ardent at
Closing regarding the continuing legal validity of any and all
governmental authorizations, licenses, permits, and registrations of
Capri, which Capri then has and which shall remain fully effective
following the Closing to legally facilitate continuity of Capri’s ordinary
course of business without impairment of any nature or
kind. The Closing shall be subject to completion of final due
diligence satisfactory to Ardent in its sole discretion. At the
Closing there shall not be any material adverse change in regard to the
corporate status of Capri or in the Shenda License or operations at the
property of the Shenda License. At the Closing, Afrocan shall
represent and warrant to Ardent that Capri has the sole rights with free
and clear ownership titles to the Shenda License, and no other persons,
business organizations or governmental entities have any rights or claims
thereto.
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2.2
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Detailed
Agreements. Afrocan and Ardent will mutually prepare a detailed
long form agreement (the “Long Form Agreement”)
supplementing the terms and conditions herein with customary
representations and warranties, covenants, and other provisions,
including, without limitation, representations regarding the validity of
the Capri Shares, the assessment of all gold ore reserves in the Shenda
License, the status of all governmental licenses, permits, authorizations,
legal and regulatory compliance to engage in the business of mining, valid
continuation of all contracts, absence of any material adverse conditions,
and indemnification provisions covering the
same. Notwithstanding anything to the contrary herein, this
Agreement is fully binding upon the parties and each party may compel
performance by the other party solely on the basis of the terms and
conditions set forth herein. Time is of the
essence.
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3
Ardent
Mines Limited - Afrocan Resources Ltd. -
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2.3
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Exclusive
Dealing. Capri and Afrocan and any and all of their
directors, officers, shareholders, agents, representatives, attorneys,
accountants or their respective immediate relatives shall not directly or
indirectly take any action to encourage, initiate, solicit, or engage in
discussions or negotiations with, or provide any information to, any
entity or person other than Ardent concerning any competing transaction or
alternate transaction.
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2.4
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Closing. In the
event that the Acquisition Threshold has been met, Afrocan and Ardent
shall use their best efforts to finalize and sign the Long Form Agreement
reflecting the terms and conditions herein together with all ancillary
agreements and accomplish the Closing as soon as reasonably possible after
such determination, with a target Closing date not later than one
hundred and twenty (120) days thereafter. Upon
satisfaction (or waiver) of the conditions set forth in herein, the
parties shall exchange ownership of the Capri Shares and the Purchase
Price, and execute and deliver any and all necessary ancillary documents,
certificates and instruments required thereof (the “Closing”).
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3
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Other
Terms and Conditions.
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3.1
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Carry on in Ordinary
Course. Afrocan agrees that from and after the date of
execution of this Agreement, Capri shall conduct and carry on its
businesses at the location of the Shenda License only in the ordinary
course consistent with past practices. Capri shall not take any
actions out of the ordinary course of businesses regarding the Shenda
License. Neither Afrocan nor Capri shall take any action that
could reasonably be expected to adversely affect Afrocan’s ability to
execute, deliver or perform in accordance with this
Agreement.
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3.2
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Each Party to Bear Own
Expenses. The parties will each bear their own
respective expenses incurred in connection with the negotiation,
preparation and documentation - including the Long Form Agreement - and
Closing of the transactions contemplated herein, including but not limited
to all legal fees, expenses and disbursements, provided, however, all
fees, due diligence and filing costs incurred by Ardent as well as
on-going corporate expenditures by Ardent related to the acquisition shall
be paid from proceeds of the Financing
Shares.
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3.3
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No Other Agreements;
Forward Looking Statements; Amendments. This Agreement
sets out the parties’ binding agreement and understanding as of this date,
and there are no other written or oral agreements or understandings among
the parties. This Agreement and any and all terms and
conditions herein may only be waived, modified or amended by a writing
executed by the parties. Afrocan acknowledges that Ardent may
from time to time have other business agreements, and may acquire other
properties. Provided that when the Long Form Agreement is signed by Ardent
and Afrocan it will wholly replace this Agreement and the terms in this
Agreement shall cease to be binding on Ardent and
Afrocan. Ardent may engage and pay other professional
organizations, underwriters and service providers as determined by its
Board of Directors. All projections and estimations herein are
forward looking statements based upon general expectations and are
provided solely for illustrative purposes only, and no assurances,
guarantees, or warranties of any nature are made with respect to actual
outcomes.
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4
Ardent
Mines Limited - Afrocan Resources Ltd. -
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3.3.1
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Public Company
Compliance. Afrocan acknowledges that Ardent is a public
company and will be required to make detailed disclosures regarding the
acquisition of Capri (and indirectly the Shenda License), its business,
its management, its financial condition, risk factors associated with the
business, and other matters required by the U.S. Securities Act of 1933
and the U.S. Securities Exchange Act of 1934 (together the “Acts”), and the
respective rules and regulations promulgated thereunder. All
Ardent Shares issued to Afrocan will be restricted securities and will be
subject to compliance with the Acts, as to which Ardent shall assist
Afrocan in respect of such compliance thereof. Afrocan shall
promptly provide any and all information, in form and substance as
reasonably requested by Ardent, to the extent necessary to assure
compliance by Ardent with its filing, disclosure and compliance
requirements.
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3.4
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Confidentiality.
The parties acknowledge that public companies are subject to specific
laws, rules and regulations prohibiting “xxxxxxx xxxxxxx” and Afrocan
agrees to not trade in the securities of Ardent until all applicable and
required public announcements have been made by Ardent. The
parties agree to fully comply with any and all applicable securities laws
and not to trade at any time in any securities on the basis of material
non-public information or to disclose any transactions involving Ardent,
Afrocan, Capri, or the Shenda License with any third parties, other than
to authorized representatives of the parties who shall be under strict
instructions not to make any further discloses to any other persons until
after mutually agreement public announcements. The terms herein
shall be maintained as strictly confidential by the parties until a
mutually acceptable press release is prepared regarding the transaction,
unless prior disclosure is required by applicable law or
regulation. Any breach of this covenant of confidentiality
shall be subject to payment of liquidated damages to Ardent of
US$2,000,000 (two million U.S. Dollars) (the “Liquidated Damages”),
which the parties agree shall not be construed as a penalty. If
a breaching party fails to pay any and all Liquidated Damages in full
within five (5) Business Days after the date payable, such party will pay
interest thereon at a rate of one and one-half percent (1.5%) per month
(or such lesser maximum amount that is permitted to be paid by applicable
law) to Ardent, accruing daily from the date such Liquidated Damages are
due, until such amounts, plus all such interest thereon, are paid in
full. Notwithstanding the foregoing, nothing shall preclude any
party from pursuing or obtaining any available remedies at law, specific
performance or other equitable relief in accordance with applicable
law.
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Ardent
Mines Limited - Afrocan Resources Ltd. -
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3.5
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Arbitration. All
disputes and controversies arising out of or relating to this Agreement
shall be finally settled and binding under the Rules of International
Commercial Dispute Resolution of the American Arbitration Association
(“ICDR”). The
place of arbitration shall be New York City. The Arbitration
shall be conducted in English by a single arbitrator appointed in
accordance with the ICDR rules. Any award, verdict or
settlement issued under such arbitration may be entered by any party for
order of enforcement by any court of competent
jurisdiction. The arbitrator shall have no power to take
interim measures he or she deems necessary, including injunctive relief
and measures for the protection or conservation of
property. The prevailing party shall be reimbursed for all
fees, costs, expenses and disbursements by the non-prevailing
party.
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3.6
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Construction. This
Agreement shall be deemed to have been jointly negotiated and drafted by
the parties and shall not be construed against either of the parties
hereto. Should any portion (word, clause, phrase, sentence,
paragraph or section) of this Agreement be declared void or unenforceable,
such portion shall be considered independent and severable from the
remainder, the validity of which shall remain unaffected. This
Agreement shall be governed by and interpreted under the laws of the
jurisdiction of incorporation of
Ardent.
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3.7
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Assignment. Neither
this Agreement nor any of the rights, interests or obligations hereunder
may be assigned by either party hereto, directly or indirectly, by
operation of law or otherwise, without the prior written consent of the
other.
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3.8
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Notices. Any
notice or other communication to any party in connection with this
Agreement shall be in writing and shall be sent by personal delivery,
reputable overnight courier with written confirmation of receipt addressed
to such party at the address of its principal business office, or at such
other address as such party shall have specified to the other party hereto
in writing. Any notice hereof shall be deemed to have been
given only when delivered.
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3.9
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Counterparts.
This Agreement may be executed in one or more counterparts (with the
parties agreeing in principle to produce two counterparts), all of which
together shall constitute one instrument, and each such counterpart may be
executed and delivered by fax or scan without delivery of the original
exemplar thereof.
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Ardent
Mines Limited - Afrocan Resources Ltd. -
We
respectfully request that if you accept the terms and conditions as set forth in
this Agreement, please countersign and deliver to us a counterpart acceptance of
this Agreement. Please do not hesitate to contact us if you have any
questions or comments.
Sincerely
yours,
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Ardent Mines Limited
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By:
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/s/ Xxxxxxxx Xxxxx
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Name:
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Xxxxxxxx Xxxxx
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Title:
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President and CEO
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Date:
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Address for Notices:
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000 Xxxx Xxxxxx, 00xx Xxxxx
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| Xxx Xxxx, XX 00000 XXX | |
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AGREED:
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Afrocan Resources Ltd.
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By:
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/s/ Xxxxx Xxxxxxx
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Print Name:
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Xxxxx Xxxxxxx
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Title:
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President and Chief Financial Officer
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Date:
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December 12, 2010
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Address for Notices:
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Afrocan Resources Ltd.
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1710 - 1177 Xxxx Xxxxxxxx Xxxxxx
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Xxxxxxxxx, X.X. X0X 0X0
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Xxxxx Xxxxxx
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0 Xxxxxx Xxxxxx, Xxxxxxxx Xxxxx
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0000 Xxxxxxxxxxxx
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