Exhibit 10.5
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into this 7th
day of April, 2005 between Aegis Business Group, Inc., a Colorado corporation (
the "Company"), and Navidec Financial Services, Inc., a Colorado corporation
(the "Purchaser"). The Exhibits attached to, and referenced in, this Agreement
shall be deemed incorporated herein.
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an aggregate
of 3,000,000 shares of its $.001 par value common stock (the "Common Stock") and
2,000,000 shares of $.001 par value Series B Convertible Preferred stock (the
"Preferred Stock"); and
WHEREAS, the Purchaser desires to purchase shares of Common Stock and
Preferred Stock, and the Company desires to issue and sell shares of Common
Stock and Preferred Stock to the Purchaser, on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
ARTICLE 1
AGREEMENT TO SELL AND PURCHASE
Subject to the terms and conditions hereof, at the Closing (as defined in
Section 2.1 below) the Company hereby agrees to issue and sell to the Purchaser,
and the Purchaser agrees to purchase from the Company, 3 million shares of
Common Stock (the "Shares") at a purchase price of $0.02 per share for a total
purchase price of $60,000 and 2 million shares of Preferred Stock at a purchase
price of $.28 per share for a total purchase price of $565,000. The Preferred
Stock shall have the designations and rights as set forth on Exhibit A attached
hereto. Collectively, the Common Stock and Preferred Stock sometimes shall be
designated as the "Shares."
ARTICLE 2
CLOSING AND DELIVERY
Section 2.1 Closing. The closing of the purchase and sale of the Shares
under this Agreement (the "Closing") shall take place at 10:00 a.m. local time
on the 7th day of April, 2005, at the offices of Xxxxxxx Xxxxx Xxxxxxx &
Xxxxxxxxx, LLP, 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, or at such
other time or place as the Company and the Purchaser may mutually agree (such
date is hereinafter referred to as the "Closing Date").
Section 2.2 Delivery. Subject to the terms and conditions hereof including
Article 4, Section 4, at the Closing the Company will deliver to the Purchaser
one or more certificates representing the Shares, against payment of the
purchase price therefor by check or wire transfer made payable to the order of
the Company. It is understood that the certificate(s) evidencing the Shares may
bear one or all of the following legends:
(1) "THE SECURITIES REPRESENTED BY THIS STOCK CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR APPLICABLE STATE SECURITIES LAWS ("STATE ACTS")
AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE
TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER, EXCEPT
UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF ITS COUNSEL
OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE
SATISFACTORY TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT ANY SUCH
TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT AND THE STATE
ACTS."
(2) Any legend imposed or required by applicable state law or the
Company's Bylaws.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company. Except as set
forth on the Schedule of Exceptions attached hereto as Schedule 3.1, the Company
hereby represents and warrants to the Purchaser, as of the Closing Date, as
follows:
(1) Organization and Standing of the Company. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado. It has all requisite corporate power and authority to carry
on its business as now being conducted, to enter into this Agreement and to
carry out and perform the terms and provisions of this Agreement. The Company is
duly qualified to do business and is in good standing in each jurisdiction in
which the failure to be so qualified would have a material adverse effect on the
condition (financial or otherwise), business, net worth, assets (including
intangible assets), properties or operations of the Company. The Company has no
direct or indirect interest, either by way of stock ownership or otherwise, in
any other firm, corporation, association, or business.
(2) Capitalization and Indebtedness for Borrowed Moneys.
(a) The Company is duly and lawfully authorized by its Articles to
issue (i) 10,000,000 shares of $.001 par value Common Stock, of which at
closing only 325,018 shares will be issued and outstanding; and (ii)
10,000,000 shares of preferred stock, of which 375,000 shares designated as
Series A Preferred shall be converted to the common stock of Purchaser and
all of the preferred shares shall be cancelled resulting in there being no
preferred shares issued and outstanding. Additionally, 2 million shares of
Preferred shall be designated as Series B Convertible Preferred as set
forth on Exhibit A. The
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Company has no treasury stock and no other authorized series or class of
stock. All the outstanding shares of Common Stock have been duly authorized
and validly issued to the persons set forth on Exhibit B attached hereto
and are fully paid and nonassessable and free of preemptive rights. All
Shares to be issued to the Purchaser pursuant to this Agreement shall be
duly authorized, validly issued, fully paid, nonassessable, and issued in
compliance with state and federal securities laws.
(b) Except as set forth on Exhibit C, there are no outstanding
subscriptions, options, warrants, calls, contracts, demands, commitments,
convertible securities, or other agreements or arrangements of any
character or nature whatever under which the Company is or may be obligated
to issue or purchase shares of its capital stock.
(c) Except with respect to the Note due to Purchaser in the amount of
$85,000 the Company is not presently liable on account of any indebtedness
for borrowed moneys.
(3) The Company's Authority. The execution, delivery, and performance of
this Agreement shall have been duly authorized by all requisite corporate
action. This Agreement constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms (except as limited by bankruptcy,
insolvency, or other laws affecting the enforcement of creditors' rights). The
execution, delivery and performance of this Agreement will not conflict with any
provision of the Articles, Bylaws, minutes or share certificates of the Company,
or of any contract to which the Company is a party or otherwise bound.
(4) Litigation. There are no legal actions, suits, arbitrations, or other
legal or administrative proceedings pending or threatened against the Company
which would affect it, its properties, assets, or business. The Company is not
aware of any facts which, to its knowledge, might result in any action, suit,
arbitration, or other proceeding which, in turn, might result in a material
adverse change in the business or condition (financial or otherwise), properties
or assets of the Company. The Company is not in default with respect to any
judgment, order, or decree of any court, government agency or instrumentality.
(5) Compliance With the Law and Other Instruments. To the best of the
Company's knowledge, the business operations of the Company have been and are
being conducted in accordance with all applicable laws, rules, and regulations
of all authorities. The Company is not in violation of, or in default under, any
term or provision of the Articles or Bylaws, or of any lien, mortgage, lease,
agreement, instrument, order, judgment, or decree, or subject to any
restriction, contained in any of the foregoing, of any kind or character which
materially adversely affects in any way the business, properties, assets, or
prospects of the Company, or which would prohibit the Company from entering into
this Agreement or prevent consummation of the issuance of securities
contemplated by this Agreement.
(6) Title to Properties and Assets. The Company has good and marketable
title to all its properties and assets, including without limitation, the
intellectual property right and trade secretes and that property used or located
on property controlled by the Company in its business (except assets sold in the
ordinary course of business), subject to no mortgage, pledge, lien, charge,
security interest, encumbrance, or restriction except those which do not
materially adversely affect the use thereof.
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(7) Contracts and Other Obligations. The Company is not a party to or
otherwise bound by, any written or oral:
(a) contract or agreement not made in the ordinary course of business;
(b) contract with any labor union;
(c) bonus, pension, profit-sharing, retirement, share purchase, stock
option, hospitalization, group insurance, or similar plan providing
employee benefits;
(d) advertising contract or contract for public relations services;
(e) any contract, agreement, lease, document, or other arrangement
with which the Company is not in compliance.
(8) Records. The books of account, minute books, stock certificate books,
and stock transfer ledgers of the Company are complete and correct, and there
have been no transactions involving the business of the Company which properly
should have been set forth in said respective books, other than those set forth
therein.
(9) Brokers or Finders. All negotiations on the part of the Company
relative to this Agreement and the transactions contemplated hereby have been
carried on by the Company without the intervention of any person or as the
result of any act of the Company in such manner as to give rise to any valid
claim for a brokerage commission, finder's fee, or other like payment.
(10) Taxes. The Company has duly filed all federal, state, county and local
income, franchise, excise, real and personal property and other tax returns and
reports (including, but not limited to, those relating to social security,
withholding, unemployment insurance, and occupation (sales) and use taxes)
required to have been filed by the Company up to the date hereof. All of the
foregoing returns are true and correct in all material respects and the Company
has paid all taxes, interest and penalties shown on such returns or reports as
being due. The Company has no liability for any taxes, interest or penalties of
any nature whatsoever, except for those taxes which may have arisen up to the
Closing Date in the ordinary course of business and are properly accrued on the
books of the Company as of the Closing Date.
(11) Environmental and Safety Laws. To its knowledge, the Company is not in
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and no material expenditures are
or will be required in order to comply with any such existing statute, law or
regulation.
Section 3.2 Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company, as of the Closing Date, as follows:
(1) Purchase Entirely for Own Account. This Agreement is made with the
Purchaser in reliance upon the Purchaser's representation to the Company, which
by the Purchaser's execution of this Agreement confirms, that the Shares to be
received by the Purchaser will be acquired for investment for the Purchaser's
own account, not as a nominee or agent, and not with a view to the
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resale or distribution of any part thereof, and that the Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, the Purchaser further
represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to the Shares.
(2) Disclosure of Information. The Purchaser believes it has received all
the information he considers necessary or appropriate for deciding whether to
purchase the Shares. The Purchaser further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Shares and the business, properties,
prospects and financial condition of the Company and to obtain additional
information (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense) and/or conduct its own
independent investigation necessary to verify the accuracy of any information
furnished to the Purchaser or to which the Purchaser had access. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 3.1 of this Agreement or the right of the Purchaser to rely
thereon.
(3) Investment Experience. The Purchaser is experienced in evaluating and
investing in private placement transactions in securities of companies in the
development stage and acknowledges that he is able to fend for itself, can bear
the economic risk of its investment, and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Shares.
(4) Restricted Securities. The Purchaser understands that the Shares are
being sold pursuant to an exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"). The Purchaser also
understands that the Shares may not be sold, transferred or otherwise disposed
of by him without registration under the Securities Act or an exemption
therefrom, and that in the absence of an effective registration statement
covering the Shares or an available exemption from registration under the
Securities Act, the Shares must be held indefinitely. In particular, the
Purchaser is aware that the Shares may not be sold pursuant to Rule 144
promulgated under the Securities Act unless all of the conditions of that rule
are met. Among the conditions for use of Rule 144 may be the availability of
current information to the public about the Company. Such information is not now
available and the Company has no present plans to make such information
available. In this connection, the Purchaser represents that it is familiar with
Rule 144, as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act.
(5) Transfer Restrictions. Without in any way limiting the representations
set forth above, the Purchaser further agrees not to make any disposition of all
or any portion of the Shares unless and until the transferee has agreed in
writing for the benefit of the Company to be bound by this Section 3.2, provided
and to the extent this Section and such agreement are then applicable.
(6) Illiquid Investment. The Purchaser understands that the Company has no
present intention of registering the Shares. The Purchaser further understands
that no market exists for the Shares, and there can be no assurance
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that a market will develop for the Shares. Accordingly, the Shares represent a
very illiquid investment with no assurance of an available exit strategy for the
Purchaser.
(7) Residence. The Purchaser resides at the address listed below his
signature to this Agreement.
(8) Brokers or Finders. All negotiations on the part of the Purchaser
relative to this Agreement and the transactions contemplated hereby have been
carried on by the Purchaser without the intervention of any person or as the
result of any act of the Purchaser in such manner as to give rise to any valid
claim for a brokerage commission, finder's fee, or other like payment.
ARTICLE 4
CONDITIONS TO CLOSING
Except as may be waived in writing by the parties, all of the obligations
of the parties under this Agreement are subject to the fulfillment, prior to or
at the Closing on the Closing Date, of each of the following conditions:
(1) Representations and Warranties True. The representations and warranties
of the Company and the Purchaser set forth in Sections 3.1 and 3.2,
respectively, shall be true and correct in all material respects as of the
Closing Date, subject to any changes contemplated by this Agreement.
(2) Directors' Approval. Consummation of the transactions contemplated
herein shall have been approved by the Board of Directors of the Company at a
meeting of the Board of Directors to be held for the purpose of obtaining such
approval or by unanimous written consent.
(3) Third-Party Consents. On or before the Closing Date, all material
consents or approvals by any third party, if any, which are required to be
obtained by the Company in connection with the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated herein shall have been obtained.
(4) Continuing Obligation to Finance the Company. While at closing, the
Company shall issue in the name of the Purchaser 3 million shares of Common
Stock and 2 million shares of Preferred Stock, 72% of the shares of both the
Common and Preferred Stock certificates issued shall be subject to cancellation
should the Purchaser not pay the full purchase price for all of the Shares.
Certificates representing 840,000 shares of Common and 560,000 shares of
Preferred shall be delivered at Closing based on the Closing payment of $175,000
and the balance of the Certificates shall be held by the Aegis board pending
receipt of payment and such shares shall be delivered to the Purchaser as its
funding commitment is paid. Under no circumstances shall the Closing occur until
at least $175,000 of the $625,000 commitment has been completed which amount
shall be offset by any loans pro-offered to the Company prior to the closing
date, which loans shall be deemed paid-in-full at closing. Should the full
amount of the financing not be paid at or prior to Closing, any funds not paid
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shall be due and payable in monthly installments so that on or before the 90th
day following Closing the full $625,000 financing shall be concluded. Pending
the final payment as required by this subparagraph 4, each time funds are
transferred from the Purchaser to the Company, the appropriate number of the
purchased Share certificates shall be released by the Board directly to the
Purchaser as being fully paid and nonassessable. To the extent full payment is
not received by the 90th day following Closing, the Common and Preferred shares
not paid for on a pro rata basis shall be cancelled.
(5) Exchange of Series A Preferred. The 8 holders of all of the issued
Series A Preferred shares which in turn constitute all of the issued and
outstanding preferred stock of the Company shall have entered into the form of
Share Exchange Agreement attached hereto as Exhibit E whereby they have exchange
all of the Series A Preferred shares for shares of the $.001 par value common
stock of the Purchaser.
(6) Cancellation of Outstanding Shares, Options and Warrants. In exchange
for entering into the option agreements in the form attached as Exhibit D, all
of the existing common shareholders of the Company, except those set forth in
Exhibit C, shall have returned all of their common shares, options and warrants
to the company for cancellation so that at the time of closing only a total of
325,018 shares of common stock, no options (other than as set forth on Exhibit
C) and no warrants shall be issued and outstanding prior to the completion of
this Stock Purchase Agreement.
(7) Employment Agreements. J. Xxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx Xxxx and
Xxx Xxxxxxx shall have executed employment agreements essentially in the form
attached hereto as Exhibit G which employment agreements shall have been
approved by the Board of Directors of the Purchaser.
(8) New Board of Directors. At or immediately before closing, the directors
of the Company shall appoint a board consisting of J. Xxxxx Xxxxxx and Xxxxxx
Xxxxxxx. The members of the Company's Board of Directors shall thereafter
resign. The Company agrees to maintain the indemnification rights as they apply
to the outgoing Board of Directors in full force and effect based on the
corporate charter of the Company and the Business Corporation Act of the State
of Colorado during any period legally required.
(9) Compliance with Agreements. The Company shall have performed and
complied with all agreements or conditions required by this Agreement to be
performed and complied with by it prior to or on the Closing Date.
(10) Provision of Financial Systems and Operations. As a material incentive
for the execution of this Agreement, the parties have agreed that the Purchaser
shall provide material financial oversight and treasury functions to the Company
including the appointment of the Purchaser's CFO, Xxxxxx Xxxxxxx, as the Chief
Financial Officer of the Company. Additionally, management oversight for the
Company shall be provided by a management oversight group consisting of the
Company's CEO, CFO, Xxxxxx Xxxxx, Xxx Xxxxxxx, and Xxxxx Xxxx. This group shall
have full responsibility for tactical and strategic direction of the Company and
report to the Purchaser's Board of Directors.
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(11) No Contracts Terminated. The Company shall not have had any contract
or contracts, which in the aggregate would materially affect its business,
terminated prior to the Closing Date.
(12) No Damage to Assets. At the Closing Date the machinery, equipment,
inventory, or other tangible property of the Company shall not have suffered
loss or damage on account of fire, flood, accident, act of war, civil commotion,
or any other cause or event beyond the reasonable power and control of the
Company (whether or not similar to the foregoing), to an extent which
substantially affects the value of the properties and assets of the Company.
Loss or damage shall be considered to affect substantially the value of said
properties and assets within the meaning of this subsection if the book value of
such properties and assets so lost or damaged exceeds 5% in book value of all
such tangible properties and assets.
(13) Certificate of Officer. The Company shall have delivered to the
Purchaser a certificate dated the Closing Date, executed in its corporate name
by, and verified by, the oath of its President certifying to the fulfillment of
the conditions specified in this Article 4.
ARTICLE 5
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES:
All statements of fact contained herein, or in any certificate or schedule
delivered by or on behalf of the Company or the Purchaser pursuant to the terms
hereof, shall be deemed representations and warranties made by the Company and
the Purchaser, respectively, to each other under this Agreement. The
representations and warranties of the Company and the Purchaser shall survive
the Closing for a period of one year.
ARTICLE 6
MISCELLANEOUS
Section 6.1 Amendment. This Agreement may be amended in any manner as may
be determined in the judgment of the Board of Directors of the Company and the
Purchaser to be necessary, desirable, or expedient in order to clarify the
intention of the parties hereto or to effect or facilitate the purpose and
intent of this Agreement, subject to the provision herein that any amendment
shall be ineffective unless in writing and executed by the parties hereto.
Section 6.2 Counterparts and Facsimile Signatures. In order to facilitate
the execution of this Agreement, it may be executed in any number of
counterparts and signature pages may be delivered by facsimile.
Section 6.3 Waiver of Conditions. Either party may waive any condition
precedent, term or condition of this Agreement but such a waiver shall be
ineffective unless in writing and executed by an authorized representative of
both parties hereto.
Section 6.4 Assignment. Neither this Agreement nor any right created hereby
shall be assignable by the Company or the Purchaser without the prior written
consent of the other party. Nothing in this Agreement, express or implied, is
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intended to confer upon any person, other than the parties hereby and their
respective successors, assigns, heirs, executors, administrators, or personal
representatives, any rights or remedies under or by reason of this Agreement.
Section 6.5 Entire Agreement. This Agreement, the Exhibits hereto, and the
certificates delivered pursuant hereby constitute the full and entire
understanding and agreement between the parties with regard to the subject
hereof and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants or agreements except as specifically set
forth herein. All prior agreements and understandings are superseded by this
Agreement and the Exhibits thereto.
Section 6.6 Governing Law. This Agreement shall be governed by the laws of
the State of Colorado, and that the Business Corporation Law of Colorado shall
govern as to matters of corporate law pertaining to the Company.
Section 6.7 Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 6.8 Notices. All notices and other communications required or
permitted under this Agreement must be in writing and may be given by personal
delivery or U.S. mail, or confirmed facsimile. If given by mail, such notice
must be sent by registered or certified mail, postage prepaid, mailed to the
party at the respective address set forth below, and shall be effective only if
and when received by the party to be notified. For purposes of notice, the
addresses of the parties shall, until changed as hereinafter provided, be as
follows:
(1) If to the Company:
Aegis Business Group, Inc.
0000 X. Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Phone No. to Confirm Fax: (000) 000-0000
(2) If to the Purchaser:
Navidec Financial Services, Inc.
0000 X. Xxxxxxx'x Xxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Phone No. to Confirm Fax: (000) 000-0000
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With a copy to:
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Phone No. to Confirm Fax: (000) 000-0000
or at such other address or facsimile number as any party may have advised
the other in writing.
Section 6.9 Attorney Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret the provisions
of this Agreement, the prevailing party shall be entitled to recover reasonable
attorney fees from the other party or parties, which fees shall be in addition
to any other relief which may be awarded.
Section 6.10 Indemnification by the Company. The Company agrees to
indemnify and hold the Purchaser harmless against any loss, liability, damage or
expense (including reasonable attorney fees and costs) which the Purchaser may
suffer, sustain or become subject to as a result of or in connection with the
breach by the Company of any representation, warranty, covenant or agreements of
the Company contained in this Agreement
Section 6.11 Indemnification by the Purchaser. The Purchaser agrees to
indemnify and hold the Company harmless against any loss, liability, damage or
expense (including reasonable attorney fees and costs) which the Company may
suffer, sustain or become subject to as a result of or in connection with the
breach by the Purchaser of any representation, warranty, covenant or agreements
of the Purchaser contained in this Agreement.
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IN WITNESS WHEREOF, this Common Stock Purchase Agreement is hereby duly
executed by each party hereto as of the date first written above.
COMPANY:
Aegis Business Group, Inc., a Colorado corporation
By: /s/ J. Xxxxx Xxxxxx
-----------------------------------------------
J. Xxxxx Xxxxxx, CEO and President
PURCHASER:
Navidec Financial Services, Inc., a Colorado corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------------
Xxxxxx X. Xxxxxxx, CFO
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