EXHIBIT 10.33
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT made as of the first day of February,
2002.
B E T W E E N
VISIBLE GENETICS INC., a corporation duly
incorporated under the laws of the Province
of Ontario and having its head office in the
City of Toronto, in the Province of Ontario
hereinafter referred to as the "EMPLOYER"
- and -
XXXXXXXXXX XXXXXX, an individual
resident in the City of Toronto, in the
Province of Ontario hereinafter referred to
as the "EXECUTIVE"
WHEREAS the Executive has been employed by the Employer since December 13, 1999;
AND WHEREAS the Employer and Executive wish to confirm the terms and conditions
of that employment and to set out the terms and conditions of the employment on
an ongoing basis;
The parties agree as follows:
1. POSITION, DUTIES AND REMUNERATION
1.1 The Executive shall serve as the Vice President and General Counsel of
the Employer. The Executive will be paid an annual salary of two hundred
twenty thousand Canadian dollars (CDN $225,000) payable in accordance
with the company's normal payroll policy.
1.2 In addition to salary, for the performance of her services hereunder,
the Executive shall be entitled to participate in all of the Employer's
benefit plans generally available to its Executives of equal rank,
including the Employer's bonus plan and the Employer's group, life,
medical, dental, hospital, long-term disability, accidental death and
dismemberment insurance benefit plans. In the event the Employer adopts
any new
benefit plans, pensions or perquisites, the Executive shall have the
right to participate on a basis equivalent to other Executives of equal
rank to the Employer. All plans shall be administered and governed by
their respective terms.
1.3 The Executive agrees to perform faithfully the duties inherent in the
position and all other lawful instructions and duties as the Employer
may from time to time reasonably require.
1.4 The Executive agrees to use her best efforts to promote the interests of
the Employer and its affiliates, to devote her full time and attention
to the business of the Employer and to adhere to the instructions and
directives of the Employer.
1.5 During the term of her employment, the Executive agrees to refrain from
engaging in any activity which will in any manner, directly or
indirectly, compete with the trade or business of the Employer or any of
its affiliates.
1.6 During the term of her employment, the Executive agrees not to possess
or acquire, directly or indirectly, any interest in any firm,
partnership, association or corporation, the business operations of
which will in any manner, directly or indirectly, compete with the
business of the Employer or any of its affiliates other than as a
stockholder holding no greater than one per cent (1%) of a public
company whose shares are listed for trading on a recognized stock
exchange or traded on the over-the-counter market.
1.7 The Employer agrees in its sole discretion to review the salary and
benefits payable to Executive hereunder annually.
1.8 Provided the Executive submits reasonably detailed receipts or other
supporting documentation to the Employer, the Employer shall reimburse
the Executive for all proper and reasonable out-of-pocket expenses
actually incurred by the Executive in the performance of her duties
hereunder.
2. EMPLOYMENT CONDITIONS
2.1 The Executive agrees to adhere to and abide by the Employer's policies,
as amended from time to time, regarding holidays, sick leave, hospital
insurance, and other fringe benefits.
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3. TERMINATION OF EMPLOYMENT
3.1 This Agreement and the employment of the Executive may be terminated by
the Employer for any reason upon prior written notice or payment of
salary and benefits in lieu of notice for the Required Notice Period to
be paid as a lump sum payment subject to all statutory deductions within
thirty (30) days following termination. For purposes hereof, the
"Required Notice Period" shall mean a period of twelve (12) months plus
one (1) additional month for each full year of employment with the
Employer after December 13, 2000.
3.2 The Executive may be dismissed at any time by the Employer for Cause.
For purposes of this Article 3, "Cause" means the Executive (a) fails in
any material respect to perform her obligations hereunder as provided
herein, provided that such Cause shall not exist unless the Employer
shall first have provided the Executive with written notice specifying
in reasonable detail the factors constituting such material failure and
such material failure shall not have been cured by the Executive within
10 days after such notice; (b) has been convicted of a felony or has
entered a plea of guilty or NOLO CONTENDERE with respect thereto; (c)
has committed any act in connection with her employment with the
Employer which involved fraud, misappropriation of funds, or breach of
fiduciary duty to the Employer or any affiliate thereof; or (d) has
breached in any material respect any of the provisions of the
Confidentiality, Invention Agreement and Non-Compete Agreement between
the Executive and the Employer dated December 13, 1999.
3.3 The employment of the Executive may be terminated by the Executive for
any reason upon prior written notice to the Employer of one hundred
twenty (120) days.
3.4 Unless Article 4 hereof is applicable, upon the termination of this
Agreement and on termination of the employment of the Executive,
whether upon notice or otherwise, the Executive shall have no claim
against the Employer for any further liability to make payments in
connection with the termination of the Executive's employment, other
than those arising from this Article 3.
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3.5 The parties have negotiated the duration of the notice period set out in
Sections 3.1 and 3.3 and the period of notice forms a part of the
consideration given by the Executive for her salary.
4. CHANGE OF CONTROL AND RETENTION BENEFITS
4.1 DEFINITIONS.
For the purposes of this Article 4, the following terms shall have the meaning
set out below:
(a) "2001 Compensation" shall mean the Executive's gross base salary
paid to her in calendar year 2001, plus the gross amount of any
cash bonuses paid to the Executive in calendar year 2001.
(b) "Cause" shall mean the Employer's right to terminate the
Executive's employment on the basis of (i) the Executive's
willful and continued failure to substantially perform her
material duties of employment provided that the Employer shall
have first provided the Executive with written notice specifying
in reasonable detail the factors constituting such failure and
such failure shall not have been cured within thirty (30) days
after such notice; (ii) any commission of an act of fraud,
misappropriation, or embezzlement with respect to the business
or property of the Employer which is intended to result in
substantial personal enrichment of the Executive or causes
material harm to the Employer, or (iii) the Executive's
conviction of, or plea of guilty or NOLO CONTENDERE to, a
felony; PROVIDED, HOWEVER, the Executive shall not be terminated
for Cause unless and until there shall have been delivered to
the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire
membership of the Employer's (or its successor's) Board of
Directors (the "Board") at a meeting of the Board called and
held for such purpose, finding that, in the good faith opinion
of the Board, the Executive was guilty of the alleged conduct
and specifying the particulars thereof in detail; PROVIDED,
FURTHER, that the Executive must have received a minimum 30-day
notice of such Board meeting and the detailed allegations
against the Executive, and that the Executive has been provided
the opportunity, together with the Executive's counsel, to be
heard
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before the Board in opposition to the alleged conduct.
(c) "Change in Control" shall mean the happening of any one of the
following events:
(i) Upon the acquisition by any person, entity or "group,"
within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934 (the "Exchange Act")
(other than an acquisition by VGI, the Employer, or any
Subsidiary or any employee benefit plan of VGI, the
Employer or any Subsidiary) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of fifty percent (50%) or more of either
the then outstanding shares of common stock of the
Employer or VGI, or the combined voting power of either
the Employer's or VGI's then outstanding voting
securities, entitled to vote generally in the election
of directors;
(ii) If individuals who constitute the Board of Directors of
the Employer or VGI as of the date hereof (each an
"Incumbent Board") cease for any reason to constitute at
least a majority of such Board of Directors, provided
that any person becoming a member of the Board of
Directors of either the Employer or VGI subsequent to
the date hereof whose election, or nomination for
election by the Employer's or VGI's shareholders, was
approved by a vote of at least a majority of the
directors then comprising the respective Incumbent Board
(other than an election or nomination of an individual
whose initial assumption of office is in connection with
the actual or threatened election contest relating to
the election of the directors of the Employer or VGI, as
such terms are used in Rule 141-11 of Regulation 14A
promulgated under the Exchange act) shall be, for
purposes of this Agreement, considered as though such
person were a member of such Incumbent Board; or
(iii) Upon approval of the stockholders of the Employer or VGI
of (A) a reorganization, merger or consolidation, in
each case, with respect to which persons who were
shareholders of the Employer or VGI
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immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more
than fifty (50%) of the combined voting power entitled
to vote generally in the election of directors of the
reorganized, merged or consolidated company, (B) a
liquidation or dissolution of the Employer or VGI (other
than a liquidation or dissolution in connection with a
bankruptcy or insolvency or similar event of the
Employer or VGI, or a liquidation or dissolution in
which shareholders of the Employer or VGI receive less
than a total of US $75 million in connection with such
liquidation or dissolution), or (C) the sale of all or
substantially all of the assets of the Employer or VGI.
(d) "Change of Control Benefit" shall have the meaning set forth in
Section 4.2 hereof.
(e) "Retention Benefit" shall have the meaning set forth in Section
4.3 hereof.
(f) "Retention Benefit Payment Period" shall have the meaning set
forth in Section 4.3 hereof.
(g) "Subsidiary" shall mean any person or entity of whom VGI or the
Employer, directly or indirectly, owns fifty percent (50%) or
more of the combined voting power entitled to vote generally in
the election of directors.
(h) "Voluntary Termination" shall mean a voluntary termination of
employment with the Employer by the Executive for reasons other
than death or disability.
4.2 CHANGE OF CONTROL BENEFIT.
If the Executive is employed with the Employer on the date that a Change of
Control is deemed to be effective, the Executive shall be entitled to a cash
payment equal to the Executive's 2001 Compensation (the "Change of Control
Benefit"). The Employer shall pay the Executive the Change of Control Benefit in
a lump sum, less applicable withholdings, within five (5) business days
immediately following the Change of Control. The payment of the Change of
Control Benefit shall be in addition to the payment of all salary and any other
amounts otherwise payable
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to the Executive under this Agreement, option agreement or other agreements with
the Employer or VGI or otherwise in connection with her employment by the
Employer whether pursuant to employee benefit plans or policies of the Employer
or any severance or other benefit available to the Executive under applicable
law.
4.3 RETENTION BENEFITS.
If the Executive is employed by the Employer or VGI's other Subsidiaries
following a Change of Control, the Executive shall be entitled to accrue a cash
benefit (the "Retention Benefit") provided the Executive remains employed for
one (1) or two (2) 90-day periods immediately following the Change of Control,
(the "Retention Benefit Payment Period"). The accrued quarterly Retention
Benefit shall be an amount equal to the Executive's 2001 Compensation, so that
if the Executive remains employed for the entire Retention Benefit Payment
Period, he would earn a Total Retention Benefit equal to two hundred percent
(200%) of her 2001 Compensation. The Retention Benefit shall be paid to the
Executive in two (2) installments as so earned: The first installment shall be
paid ninety (90) days following the date that a Change of Control is deemed to
be effective, provided that the Executive is so employed by the Employer, VGI or
a Subsidiary on the ninetieth (90th) following a Change of Control, and, if
applicable, a second and final installment shall be paid at the end of the
Retention Benefit Payment Period, provided, that the Executive is so employed as
of the final day of the Retention Benefit Payment Period. If the Executive's
employment with the Employer and VGI and Subsidiaries is terminated following a
Change of Control, but prior to the end of the second 90 day period for any
reason (including death or disability) other than a termination for Cause by the
Employer or a Voluntary Termination, the Employer shall pay the Executive the
full amount of the Retention Benefit that the Executive would have been entitled
to receive from the effective date of the Change of Control through the end of
the Retention Benefit Payment Period. The Employer shall pay such amount to the
Executive within five (5) business days following the termination of the
Executive's employment. The payment of the Retention Benefit shall be in
addition to the payment of all salary and any other amounts otherwise payable to
the Executive under this Agreement or any option agreement or other agreements
with the Employer or VGI or otherwise in connection with her employment by the
Employer, VGI or one of its Subsidiaries whether pursuant to employee benefit
plans or policies of the Employer, VGI or one of its Subsidiaries, or
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any severance or other benefit available to the Executive under applicable law.
4.4 LIMIT ON CHANGE OF CONTROL AND RETENTION BENEFITS.
Notwithstanding any other provision of this Article 4 to the contrary, if any
Retention Benefit payment or payments, or any portion of the Change of Control
Benefit payment, shall be deemed to be a "parachute payment" as defined in
section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code"), the Employer shall not be obligated to pay any portion of a Retention
Benefit payment or payments, or any portion of the Change of Control Benefit
payment, to the extent that any such payment or payments shall be deemed an
"excess" parachute payment to the Executive as defined in section 280G(b)(1) of
the Code and not deductible by the Employer in accordance with section 280G(a)
of the Code. Any abatement of payment obligations pursuant to this Section 4.3
shall commence with the last Retention Benefit payment that is earned and
accrued by the Executive pursuant to Section 4.4 hereof, and, if necessary,
shall continue with preceding Retention Benefit payment obligations in the order
of last accrued, first abated, with the Change of Control Benefit payment being
the last payment obligation to be abated, if necessary.
4.5 SUCCESSOR LIABILITY.
Any successor to the Employer or VGI (whether directly or indirectly and whether
by purchase, lease, merger, consolidation, or otherwise) or to all or
substantially all of the Employer's or VGI's business and/or assets shall assume
the Employer's or VGI's respective obligations under this Article 4 and agree
expressly to perform the Employer's or VGI's respective obligations under this
Article 4 in the same manner and to the same extent as the Employer or VGI would
be required to perform such obligations in the absence of a succession. For all
purposes under this Article 4, the term "Employer" shall include any successor
to the Employer's business and/or assets and the term "VGI" shall include any
successor to VGI's business and/or assets.
4.6 TERMINATION UNDER CERTAIN CIRCUMSTANCES.
(a) If the Executive's employment terminates for any reason prior to
a Change in Control, the Executive shall not be entitled to any
payment of a Change of Control Benefit or any Retention Benefits
pursuant to this Article 4, but shall be entitled to any payment
to which the Executive otherwise would be entitled under
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any other provision of this Agreement, under any options
agreement or other agreements with Employer or VGI to the extent
otherwise applicable, under the employer's then existing
employee benefits plans or policies at the time of termination,
and under any required severance benefits pursuant to applicable
law, if any.
(b) If, following a Change in Control, the Executive is terminated
by the Employer for Cause or the Executive has a Voluntary
Termination, the Executive shall not be entitled to any payment
of Retention Benefit under this Article 4 for any period
following said termination, but shall be entitled to any payment
to which the Executive otherwise would be entitled to under any
other provisions of this Agreement, under any options agreement
or other agreements with the Employer or VGI, to the extent
otherwise applicable, under the Employer's then-existing
employee benefit plans or policies at the time of termination,
and under any required severance benefit pursuant to applicable
law, if any.
4.7 TERMINATION OF ARTICLE 4.
The Board of the Employer and VGI shall have the right, in their sole
discretion, to terminate the provisions of this Article 4 effective as of
December 31 of any year of the term by delivery of written notice to the
Executive by no later than January 15 of the following year, provided however,
that if a Change of Control occurs prior to such December 31, or if the Employer
or VGI has entered into a binding agreement prior to such December 31 setting
forth the material terms by which the Change of Control will be effected, this
clause shall have no force or effect.
4.8 NO DUTY TO MITIGATE.
The Executive shall not be required to mitigate the amount of any payment
contemplated by this Article 4, nor shall any such payment be reduced by any
earnings that the Executive may receive from any other source.
4.9 WITHHOLDING.
All payments made pursuant to this Article 4 shall be subject to withholding of
applicable income and employment taxes.
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5. CONTRACT PROVISIONS
5.1 GOVERNING LAW.
Except as otherwise provided in this Agreement, this Agreement shall be governed
by and construed in accordance with the laws of the Province of Ontario and the
laws of Canada applicable therein. Except as otherwise provided in this
Agreement, each of the parties hereby irrevocably attorns to the jurisdiction of
the courts of the Province of Ontario with respect to any matters arising out of
this Agreement.
5.2 Resolution of Disputes under Article 4.
(a) Notwithstanding anything herein to the contrary, any dispute or
controversy arising out of, relating to, or in connection with
Article 4 or the interpretation, validity, construction,
performance, breach, or termination of Article 4, shall be
settled by binding arbitration to be held in New York County,
New York and shall be conducted in accordance with the Expedited
Employment Arbitration Rules of the American Arbitration
Association, in effect at the time of the arbitration ("Rules"),
supplemented, as necessary, by those principles which would be
applied by a court of law or equity. The arbitrator may grant
injunctions or other relief in such dispute or controversy. The
decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having
jurisdiction.
(b) The arbitrator(s) shall apply New York law to the merits of any
dispute or claim, without reference to conflicts of law rules.
The arbitration proceedings shall be governed by federal
arbitration law and by the Rules, without reference to state
arbitration law.
(c) Notwithstanding anything herein to the contrary, the parties may
seek specific performance or injunctive relief with respect to
the matters set forth in Article 4 in the United States District
Court for the Southern District of New York or a state court
located in New York County, New York. Each party (i) submits to
the jurisdiction of any such arbitrator or court for the purpose
of any such suit, action,
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or other proceeding, (ii) agrees that such claims in respect of
any such suit, action or proceeding may be heard and determined
before any such arbitrator or in any such court, (iii) waives,
to the fullest extent permitted by law, any immunity it may have
acquired, or hereafter may acquire, from jurisdiction of any
such arbitrator or court or from any legal process therein, and
(iv) agrees not to commence any such suit, action or proceeding
other than before such arbitrator or in such court, and waives,
to the fullest extent permitted by applicable law, any claim
that any such suit, action or proceeding is brought in an
inconvenient forum. Each party hereby irrevocably designates CT
Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
as agent upon whom process against it may be served for the
purposes of Article 4.
5.3 Resolution of Other Disputes.
(a) Any dispute, controversy, claim or difference between the
parties hereto arising out of this Agreement other than under
Article 4 including questions of fact, procedures, practices or
standards which cannot be resolved or settled by the parties,
shall be settled and determined by arbitration. The provisions
of this Section shall be deemed to constitute a "submission"
within the meaning of the ARBITRATIONS ACT (Ontario) (the "Act")
and the provisions of the Act, except to the extent that a
contrary intention is expressed herein, shall apply to any
arbitration hereunder. Either party may at any time give written
notice to the other of its desire to submit such dispute to
arbitration stating with reasonable particularity the subject
matter of such dispute. Within five (5) business days after
receipt of such notice, the parties shall appoint a single
arbitrator with appropriate experience to determine such
dispute. If the parties fail to appoint an arbitrator, either
party may apply to a Judge of the Superior Court of Ontario to
appoint an arbitrator to determine such dispute. The arbitrator
so appointed shall forthwith proceed to arbitrate the dispute.
The award of the arbitrator shall be delivered to the parties
within sixty (60) days of his appointment. The costs of the
arbitration shall be paid as determined by the arbitrator.
Notwithstanding anything to the contrary contained in the Act,
the award of the arbitrator shall be final and
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binding upon the parties and all persons claiming through or
under them. An award of the arbitrator shall be in substitution
for and precludes either party or any person claiming through or
under a party to bring any suit, action or other proceeding in
any court of law or equity against either party or any person
claiming through or under a party or against the arbitrator in
respect of any matter for which arbitration is herein provided.
Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction and thereupon execution
or other legal process may issue thereon. The parties hereto and
all persons claiming through or under them hereby attorn to the
jurisdiction of the arbitrator and to the jurisdiction of any
court in which the judgment may be entered. Arbitration may not
be waived except upon delivery by the parties of a written
notice to that effect.
(b) EXECUTIVE HAS READ AND UNDERSTANDS SECTION 5.2 AND SECTION 5.3,
WHICH DISCUSS ARBITRATION. EXECUTIVE UNDERSTANDS THAT SUBMITTING
ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH
THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING
ARBITRATION, CONSTITUTES A WAIVER OF EXECUTIVES RIGHT TO A JURY
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO
AND ARISING FROM THIS AGREEMENT.
5.4 HEADINGS.
The headings of the Sections herein are inserted for convenience of reference
only and shall not affect the meaning or construction hereof.
5.5 WITHHOLDING.
All payment under this Agreement shall be subject to withholding of such
amounts, if any, relating to tax or other payroll deductions as the Employer may
reasonably determine and should withhold pursuant to any applicable law or
regulation.
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5.6 COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be deemed to
be an original but all of which together shall constitute one and the same
instrument.
5.7 WAIVER.
The failure of any party to enforce its rights under this Agreement at any time
for any period shall not be construed as a waiver of such rights and a waiver
shall only be construed as such if made in writing signed by a duly authorized
representative of the waiving party.
5.8 SEVERABILITY.
If any provision of this Agreement or application of any such provision to any
person or circumstances shall be invalid under the law of any jurisdiction the
remainder of this Agreement or the application of such provision to persons or
circumstances other than those as to which it is invalid shall not be effected
thereby. In the event a court of competent jurisdiction rules any provision of
this Agreement to be invalid, then such ruling shall have no effect on the
remaining provisions of this Agreement and they shall continue in full force and
effect.
5.9 ENTIRE AGREEMENT.
This Agreement, contains the entire contract of Employment between the parties
hereto with respect to the subject matter of this Agreement, and supersedes and
replaces all previous negotiations, understandings and agreements whether verbal
or written with respect to any matters herein referred to. The parties
acknowledge that the provisions of the Confidentiality and Invention Assignment
Agreement dated December 13, 1999, between Employer and the Executive remains in
full force and effect.
5.10 SURVIVAL.
The provisions of Articles hereof shall survive the termination of this
Agreement for the periods of time specified or contemplated therein.
5.11 DIRECTORS AND OFFICERS.
If the Executive is a director or officer at the relevant time, the Executive
agrees that after
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termination of her employment with the Employer for any reason, he will, on the
date of her termination, tender her resignation from any position he may hold as
an officer or director of the Employer or any of its affiliated or associated
companies.
5.12 NOTICES.
Notices and all other communications contemplated by this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered by
either FedEx of other reputable overnight courier service or by registered or
certified mail, return receipt requested. In the case of the Executive, mailed
notices shall be addressed to her at the home address which he most recently
communicated to the Employer in writing. In the case of the Employer, mailed
notices shall be addressed to 000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx, X0X ZG Canada,
and all notices shall be directed to the attention of its President. Notices
shall be deemed deliverable and received upon receipt or refusal of receipt.
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IN WITNESS WHEREOF this Agreement is executed as of the day, month
and year first above written.
) VISIBLE GENETICS INC.
)
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) Per:
)
)
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) Per:
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)
)
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Xxxxxxxxxx Xxxxxx
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