Exhibit 5(b)
XXXXXX BROTHERS
Client Agreement
Please read carefully, sign and return:
To: Xxxxxx Brothers Inc.
Customer Account Services
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
In consideration of Xxxxxx Brothers Inc. ("Xxxxxx") accepting my account and
agreeing to act as my broker, I agree to the following with respect to any of my
accounts with you for extensions of credit and the purchase and sale of
securities, put & call options, and other property. This agreement shall not
become effective until accepted by you in your New York office. Acceptance may
be evidenced by internal records maintained by you. Throughout this agreement,
"I," "me," "my," "we," and "us" refer to the client and all others who are
legally obligated on my accounts. "You" and "your" refer to Xxxxxx, its
subsidiaries and parents and any and all divisions or other entities, their
officers, directors, agents and/or employees.
1. MY REPRESENTATIONS. I represent that I am of the age of majority according to
the laws of my place of residence. I further represent that I am not an employee
of any exchange or of a member firm of any exchange or of a member of the
National Association of Securities Dealers, Inc. ("NASD"), or of a bank, trust
company, or insurance company unless I have notified you to that effect. If I
become so employed, I agree to notify you promptly. I also represent that no
persons other than those signing this agreement have an interest in my account.
2. DEFINITION OF "PROPERTY". The word "property" is used herein to mean
securities of all kinds, monies, options, commodities, and contracts for the
future delivery of, or otherwise relating to, commodities or securities and all
other property usually and customarily dealt in by brokerage firms.
3. ORDERS, EXECUTIONS, DELIVERIES, SETTLEMENTS AND ORAL AUTHORIZATIONS. I agree
that, in giving orders to sell, all "short" sales orders will be designated as
"short" and all "long" sales orders will be designated as "long". "Short sale"
means any sale of a security not owned by the seller or any sale that is
consummated by delivery of a borrowed security. I also agree that you may at
your discretion immediately cover any short sales in my account. The designation
on a sale order as "long" is a representation on my part that I own the
security, and if the security is not in your possession at the time of the
contract
for sale, I agree to deliver the security to you by settlement date. In case of
non-delivery of a security, you are authorized to purchase the security to cover
my position and charge any loss, commissions and fees to my account, I agree
that if you fail to receive payment for securities purchased you may, without
prior demand or notice, sell securities or other property held by you in any of
my accounts and any loss resulting therefrom will be charged to my account. By
accepting my limit order for transactions in securities in the NASDAQ or
over-the-counter market, you undertake to monitor the interdealer market and to
seek to execute my order only if the inside bid (in the case of a limit order to
sell, the highest price at which a dealer is being quoted as willing to buy
securities) or the inside asked (in the case of a limit order to buy, the lowest
price at which a dealer is being quoted as willing to sell securities) reaches
my limit price. You reserve the right, while my limit order remains unexecuted,
to trade for your own market-maker account at prices equal to or better than my
limit order price and not to execute my order against incoming orders from other
customers. For example, if the inside market is 10 bid, 10 1/4 asked and I place
a limit order to sell securities at 101/8, you will seek to execute my order
only if the inside bid reaches my limit price of 101/8 (exclusive of any
markdown or commission equivalent that you may charge in connection with the
transaction) and, while my order remains unexecuted, you may continue to sell
securities for your market-maker account at prices at or above 101/8. Unless I
have directed that the order be executed on a specified exchange or market and
you have agreed to such execution, you will, at your sole discretion and without
prior notification to me, execute any order to purchase or sell securities on
the over-the counter market in any location or on any exchange, including a
foreign exchange where such security is traded, either on a principal or agency
basis. I agree that you shall incur no liability in acting upon oral
instructions given to you concerning my account.
4. OPTION POSITIONS. I agree not to enter into any purchase or sale of equity,
debt, foreign currency or index pull & call options or Index Participations
without having read and fully understood the terms, conditions and risks, as set
forth in the Characteristics and Risks of Standardized Options booklet and/or
Index Participations booklet, and applicable supplements which you agree to
furnish me prior to such transactions. I understand clients' short option
positions are assigned on a random selection method pursuant to an automated
system. All short option positions can be assigned at any time including the day
written.
5. NOTICE TO EXERCISE OPTIONS. If I purchase any listed option, I will notify
you of my intention to exercise such option no later than two hours before the
expiration time of the option (one hour in the case of an over-the-counter
option). Failure to give such notice will constitute an abandonment of the
option, in which event it may be exercised for my account if it would be
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profitable to do so. Except as required by the Options Clearing Corporation
Rules, you have no obligation to exercise any option absent specific
instructions from me to that effect. If it would not be profitable for my
account due to commission expenses, it may be permitted to expire or, at your
discretion, sold or acquired by you for some equitable payment to me based on
your expenses and risk, without any liability or responsibility on your part to
me.
6. IMPARTIAL LOTTERY ALLOCATION SYSTEM. When you hold on my behalf bonds or
preferred stocks in street or bearer form which are callable in part, I agree to
participate in the impartial lottery allocation system of the called securities
in accordance with the provisions of the New York Stock Exchange, Inc. ("NYSE")
rules. Further, I understand when the call is favorable, no allocation will be
made to any account in which you, your officers, or employees, have a financial
interest until all other clients' positions in such securities are satisfied on
an impartial lottery basis.
7. RESTRICTIONS ON TRADING; TERMINATION. I understand that you may in your sole
discretion prohibit or restrict trading of securities or substitution of
securities in any of my accounts. You have the right to terminate any of my
accounts (including multiple owner accounts) at any time by notice to me.
8. TRANSFER OF FUNDS BY WIRE. By giving you instructions to transfer funds by
wire from my accounts to any bank or other entity, I agree to provide you with
an accurate account number designating the account to receive such funds. I
acknowledge that the bank or other receiving entity may be under no obligation
to verify the identity of the beneficiary of the funds transfer and may rely
exclusively upon the account number provided by me. I agree to indemnify and
hold you harmless from and against all liabilities arising from the provision by
me of an inaccurate account number.
9. TRANSFER OF EXCESS FUNDS; EXCHANGE RATE FLUCTUATIONS. You may transfer excess
funds between any of my accounts (including commodity accounts) for any reason
not in conflict with the Commodity Exchange Act or any other applicable law. If
any transactions are effected on an exchange in which a foreign currency is
used, any profit or loss as a result of a fluctuation in the exchange rate will
be charged or credited to my account.
10. TEMPORARY INVESTMENT OF FREE CREDIT BALANCES; BOND PRINCIPAL AND INTEREST
PAYMENTS. I authorize, but do not require, you to automatically invest on a
periodic basis the free credit balances in my accounts, including interest and
dividends paid to me, in mutually selected money market funds or, in the absence
of such selection, in money market funds of your designation. You are not
required to remit interest or dividends to me on a daily basis. With respect to
bond principal and interest payments, you may credit my account with principal
and interest due on the
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payment dates and are entitled to recover any such payments from me if the same
are not actually received by you from the trustee or paying agent. With respect
to debits arising from bond principal and interest payments or any other debits,
you may redeem my money market fund shares, without notice, to the extent
necessary to satisfy any debits arising in any of my accounts. I acknowledge
that interest will not be paid to me on credit balances in any of my accounts
unless specifically agreed to by you in writing.
11. FEES AND CHARGES. I understand that you may impose various service charges
and other fees relating to my account as well as charge commissions and other
fees for execution of transactions to purchase and sell securities, put & call
options or other property, and I agree to pay such charges, commissions and fees
at your then prevailing rates. I also understand that such charges, commissions
and fees may be changed from time to time without notice to me and I agree to be
bound thereby. I may be subject to an administrative fee on any of my accounts
which produce insufficient commission revenue for any calendar year and you will
notify me prior to applying this fee. I agree to pay a late charge, to the
extent permitted by law, if I purchase securities on a cash basis and fail to
pay for such securities by settlement date. Any late charge you may impose will
be at the maximum rate of interest set forth in your disclosure statement and
may be charged from the settlement date to the date of payment.
12. ACCURACY OF REPORTS; COMMUNICATIONS. Confirmation of orders and statements
of my accounts shall be conclusive if not objected to in writing within ten days
after mailing by you to me. In the event I fail to receive a confirmation within
ten days from the date of a transaction in my account, I agree to notify you
immediately in writing. Communications mailed to me at the address specified by
me shall, until you have received notice in writing from me of a different
address, be deemed to have been personally delivered to me and I agree to waive
all claims resulting from failure to receive such communications.
13. INTRODUCED ACCOUNTS. If my account has been introduced to you and is carried
by you only as a clearing broker, I agree that you are not responsible for the
conduct of the introducing broker and your only responsibilities to me relate to
the execution, clearing and bookkeeping of transactions in my accounts.
14. SECURITY INTEREST. As security for the payment of all liabilities or
indebtedness presently outstanding or to be incurred under this or any other
agreement between us, and for all liabilities or indebtedness I may have to you
now or in the future, I grant you a security interest in any and all property
belonging to me or in which I may have an interest, held by you or carried in
any of my accounts including individual, multiple owner or commodity accounts.
All property shall be subject to such security interest as collateral for the
discharge of my
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obligations to you, wherever or however arising and without regard to whether or
not you have made loans with respect to such property. You are hereby authorized
to sell and/or purchase any and all property in any of my accounts or to
liquidate any open commodity futures or forward contracts in any of my accounts
without notice in order to satisfy such obligations. In enforcing your security
interest, you shall have the discretion to determine which property is to be
sold and the order in which it is to be sold and shall have all the rights and
remedies available to a secured party under the New York Uniform Commercial
Code. Without your prior written consent, I will not cause or allow any of the
collateral held in my account, whether now owned or hereafter acquired, to be or
become subject to any liens, security interests, mortgages or encumbrances of
any nature other than your security interest.
15. LIQUIDATION OF COLLATERAL OR ACCOUNT. You may sell any or all property held
in any of my accounts and cancel any open orders for the purchase or sale of any
property without notice in the event of my death or whenever in your discretion
you consider it necessary for your protection. In such events you also may
borrow or buy-in all property required to make delivery against any sale,
including a short sale, effected for me. Such sale or purchase may be public or
private and may be made without advertising or notice to me and in such manner
as you may in your discretion determine. No demands, calls, tenders or notices
which you may make or give in any one or more instances shall invalidate the
foregoing waiver on my part. At any such sale you may purchase the property fee
of any right of redemption and I shall be liable for any deficiency in my
accounts.
16. LOANS. From time to time you may, at your discretion, make loans to me for
any purpose, including the purpose of purchasing, carrying or trading in
securities ("Margin Loans") or for a purpose other than purchasing, carrying or
trading in securities ("Express Credit Loans"). Pursuant to Regulation T, Margin
Loans will be made in a Margin Account and Express Credit Loans will be made in
a nonsecurities credit account ("Express Credit Account"). The minimum and
maximum amount of any particular loan may be established by you in your
discretion regardless of the amount of collateral delivered to you and you may
change such minimum and maximum amounts from time to time.
17. EXPRESS CREDIT. I agree not to use the proceeds of any Express Credit Loan
to purchase, carry or trade in securities. I also agree not to use Express
Credit Loan proceeds directly or indirectly to repay other debt that I incur for
the purpose of purchasing, carrying or trading in securities.
18. PAYMENT OF LOANS ON DEMAND. I agree to pay ON DEMAND any balance owing with
respect to any of my accounts including interest and commissions and any costs
of collection (including attorneys' fees, if incurred by you). I understand that
you may demand full payment of the balance due in my accounts plus any
interest charges accrued thereon, at your sole option, at any time without cause
and whether or not such demand is made for your protection. I understand that
all loans made are not for any specific term or duration but are due and payable
at your discretion upon a demand for payment made to me. I agree that all
payments received for my accounts including interest, dividends, premiums,
principal or other payments may be applied by you to any balances due in my
accounts.
19. MAINTENANCE OF COLLATERAL. I understand that the properties in my Margin
Account and/or Express Credit Account may be carried as general loans and may be
pledged or hypothecated by you separately or in common with other properties.
The pledge or hypothecation by you may secure your indebtedness equal to or
greater than the amount owed to you by me. I agree to deposit additional
collateral, as you may in your discretion require from time to time, in the form
of cash or securities in accordance with the rules and regulations of the
Federal Reserve Board, the NYSE, the American Stock Exchange, Inc. ("AMEX"),
other national securities exchanges, associations or regulatory agencies under
whose jurisdiction you are subject and your own minimum house margin maintenance
requirements. In the event I no longer maintain a debit balance or an
indebtedness to you, it is understood that you will fully segregate all
securities in my accounts in your safekeeping or control (directly or through a
clearing house) and/or deliver them to me upon my request.
20. INTEREST CHARGES AND PAYMENTS. I agree to pay interest, to the extent not
prohibited by the laws of the State of New York, upon all amounts advanced and
other balances due on my accounts in accordance with your usual custom, which
may include the compounding of interest. Your custom, which may change from time
to time, is set forth in your disclosure statement, which by this reference is
herein specifically incorporated. By entering into any transactions with you
after I receive your disclosure statement, I acknowledge that I have read and
agreed to its terms for all past and future transactions in my account. I
understand that interest on all debit balances shall be payable ON DEMAND and
that in the absence of any demand interest shall be due on the first business
day of each interest period. My daily net debit balance will include accrued
interest I have not paid from prior interest periods, if any. I understand that
to the extent permitted by applicable law you may charge me interest on the
unpaid interest previously added to my debit balance; that is, you may charge me
compound interest. Payments of interest and principal and all other payments
made by me under this agreement shall be made to your main office in New York,
New York. You may, in your discretion, not deem any check or other remittance to
constitute payment until it has been paid by the drawee and the funds
representing such payment have become available to you.
21. CREDIT AND BUSINESS CONDUCT INFORMATION AND INVESTIGATION. I authorize you
at your discretion to obtain reports and to provide information to others
concerning my credit standing and
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my business conduct. You may ask credit reporting agencies for consumer reports
of my credit history. Upon my request you will inform me whether you have
obtained any such consumer reports and if you have, you will inform me of the
name and address of the consumer reporting agency that furnished the reports to
you.
22. JOINT ACCOUNTS:
a. If this is a Joint Account, we agree that each of us shall have the authority
on behalf of the account to buy, sell (including short sales), and otherwise
deal in, through you as brokers, securities, options or other property on margin
or otherwise; to receive for the account, confirmations, statements and
communications of every kind; to receive for the account and to dispose of
money, securities and other property; to make, terminate or modify for the
account, agreements relating to these matters or waive any of the provisions of
such agreements; and generally to deal with you as if each of us alone were the
account owner, all without notice to the other account owners. We agree that
notice to any account owner shall be deemed to be notice to all account owners.
Each account owner shall be jointly and severally liable for this account.
b. You may follow the instructions of any of us concerning this account and make
deliveries to any of us, of any or all securities or other property in this
account, and make payments to any of us, of any or all monies in this account as
any of us may order and direct, even if such deliveries and/or payments shall be
made to one of us personally or to third parties. You shall be under no
obligation to inquire into the purpose of any such demand for delivery of
securities, property, or payment of monies, and you shall not be bound to see to
the application or disposition of the said securities, property and/or monies so
delivered or paid to any of us. Notwithstanding the foregoing, you are
authorized, in your discretion, to require joint action by the joint tenants
with respect to any matter concerning the joint account, including the giving or
cancellation of orders and the withdrawal of monies, securities or other
property.
c. In the event of the death of any of us, the survivor(s) shall immediately
give you written notice thereof, and you may, before or after receiving such
notice, take such proceedings, require such documents, retain such portion of
the account as you may deem advisable to protect you against any tax, liability,
penalty or loss under any present or future laws or otherwise. The estate of any
of us who shall have died shall be liable and each survivor will be liable,
jointly and severally, to you for any debt or loss in this account resulting
from the completion of transactions initiated prior to your receipt of a written
notice of such death or incurred in the liquidation of the account or the
adjustment of the interests of the respective parties.
d. Any taxes or other expenses becoming a lien against or being payable out of
the account as the result of the death of any of
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us, or through the exercise by his or her estate or representatives of any
rights in the account shall be chargeable against the interest of the
survivor(s) as well as against the interest of the estate of the decedent. This
provision shall not release the decedent's estate from any liability provided
for in this agreement.
e. DESIGNATION OF TENANCY (This paragraph "22(e)" is not applicable in the State
of Texas, where form no. 3882 "Texas Joint Account Supplement..." must be
executed and returned with this agreement to you.) You may presume that it is
the express intention of us to create an estate or account as joint tenants with
rights of survivorship and not as tenants-in-common, unless otherwise provided
by striking this paragraph and executing a separate Tenancy-in-Common form and
returning it to you. In the event of the death of either or any of us, the
entire interest in the joint account shall be vested in the survivor(s) on the
same terms and conditions as theretofore held, without in any manner releasing
the decedent's estate from the liability.
23. ARBITRATION.
* ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
* THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING
THE RIGHT TO A JURY TRIAL.
* PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM
COURT PROCEEDINGS.
* THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR
LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF
RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED.
* THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS
WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.
Any controversy: (1) arising out of or relating to any of my accounts maintained
individually or jointly with any other party, in any capacity, with you; or (2)
relating to my transactions or accounts with any of your predecessor firms by
merger, acquisition or other business combination from the inception of such
accounts; or (3) with respect to transactions of any kind executed by, through
or with you, your officers, directors, agents and/or employees; or (4) with
respect to this agreement or any other agreements entered into with you relating
to my accounts, or the breach thereof, shall be resolved by arbitration
conducted only at the NYSE, NASD, or AMEX or any self-regulatory organization
("SRO") subject to the jurisdiction of the Securities and Exchange Commission
and pursuant to the
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arbitration procedures then in effect of any such exchange or SRO as I may
elect. If I do not make such election by registered mail addressed to you at
your main office within 5 days after demand by you that I make such election,
then you will have the right to elect the arbitration tribunal of your choice.
Judgment upon any award rendered by the arbitrators may be entered in any court
having jurisdiction thereof.
No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against any person who has
initiated in court a putative class action; or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until: (i) the class certification is denied; (ii)
the class action is decertified; or (iii) the customer is excluded from the
class by the court. Such forbearance to enforce an agreement to arbitrate shall
not constitute a waiver of any rights under this agreement except to the extent
stated herein.
24. GOVERNING LAW AND APPLICABLE REGULATIONS. This agreement, including the
arbitration provisions contained herein, shall be governed by the laws of the
State of New York without giving effect to the choice of law or conflict of laws
provisions thereof. All transactions for my accounts shall be subject to the
regulation of all applicable federal, state and self-regulatory agencies
including but not limited to the Securities and Exchange Commission, the various
securities and commodity exchanges, the Municipal Securities Rulemaking Board,
the NASD, the Board of Governors of the Federal Reserve System and the
constitution, rules and customs of the exchange or market (and its clearing
house, if any) where executed. I understand that information may be transmitted
to such entities as you deem necessary in order to comply with applicable rules
and regulations. Actual deliveries are intended on all transactions. I agree not
to exceed the exercise limits and/or position limits set by the option
exchanges, for my own account, acting alone or in concert with others.
25. BINDING EFFECT. This agreement and its terms shall be binding upon my heirs,
executors, successors, administrators, assigns, committee and/or conservators
("successors"). In the event of my death, incompetency, or disability, whether
or not any successors of my estate and property shall have qualified or been
appointed, you may continue to operate as though I were alive and competent and
you may liquidate my account as described in Paragraph 15 above without prior
notice to or demand upon my successors. This agreement shall inure to the
benefit of your assigns and successors, by merger, consolidation or otherwise
(and you may transfer my accounts to any such successors and assigns at your
discretion).
26. WAIVER NOT IMPLIED. Your failure to insist at any time upon strict
compliance with this agreement or with any of its terms or
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any continued course of such conduct on your part shall not constitute or be
considered a waiver by you of any of your rights.
27. SEVERABILITY. If any provision of this agreement is or becomes inconsistent
with any applicable present or future law, rule or regulation, that provision
will be deemed rescinded or modified in order to comply with the relevant law,
rule or regulation. All other provisions of this agreement will continue and
remain in full force and effect.
28. NO ORAL MODIFICATION; AFFECT ON PRIOR AGREEMENTS. No modification of this
agreement shall be effective unless in writing and executed by you and me. This
agreement is not subject to any oral qualification; the signing of this
agreement supersedes any prior Customer's or Client's Agreement (except those
governing transactions in my commodity accounts) made with you or any of your
predecessors or assignors. To the extent this agreement is inconsistent with any
other agreement governing my account, the provisions of this agreement shall
govern.
Tax Certification: Under penalties of perjury, I certify that the number shown
below on this form is my correct taxpayer identification number or if not, then
the number I have entered below per instructions is my correct taxpayer
identification number, and that I am not subject to backup withholding because:
(a) I have not been notified by the Internal Revenue Service (IRS) that I am
subject to backup withholding as a result of a failure to report all interest or
dividends, or (b) the IRS has notified me that I am no longer subject to backup
withholding (see below), or (c) I am exempt from backup withholding (see below).
Note: You must cross out (b) above if you are currently subject to backup
withholding because of underreporting interest or dividends on your tax return.
For Those Exempt From Backup Withholding (see instructions), write the word
"Exempt" here:
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Unless I strike this paragraph and initial the same, you are hereby specifically
authorized to lend, either separately or with other securities, to either
yourself as broker or to others, any securities held by you on margin or as
collateral for an Express Credit Loan for my/our accounts or as collateral
therefor. This agreement shall continue until signed notice of revocation is
received by or from me and, in case of such revocation, it shall continue in
effect as to transactions entered into prior thereto. By signing this agreement
I acknowledge that my securities may be loaned to you or loaned out to others. I
understand that if I decline to accept this provision, you may refuse to extend
margin or other loans in relation to my accounts.
/Init. /____
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NOTICE: Any person, whether married, All rights and benefits of Xxxxxx
unmarried or (but not its obligations) under this
separated, may apply for a shall inure to Xxxxx Xxxxxx Shearson
separate account. Inc. (SB), to the same extent as
Xxxxxx, while SB acts as the clearing
NOTICE: By signing this agreement, I firm for Xxxxxx
acknowledge receipt of a
receipt of a copy of this
agreement.
CAUTION TO CLIENT:
IT IS IMPORTANT THAT YOU THOROUGHLY
READ THIS AGREEMENT BEFORE YOU SIGN IT.
Notice: This agreement contains a pre-dispute
arbitration clause, which is loc9ted
on this page at paragraph 23.
Acct. No.
Branch Acct. T C IR
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Client's This Client's social security
Signature Date or tax identification number
on LB's records is:
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Other Client's Signatures The social security number of this
(All account owners must sign this account is the number of the client
sign this agreement) whose name appears first. Do not
appears first. enter the nubmer of any other
account owner.
----------------------------------- The social security or tax
----------------------------------- identification number shown above
----------------------------------- is incorrect. The CORRECT number
is:
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