EXHIBIT 10D
ADVISORY AND MANAGEMENT AGREEMENT WITH NUVEN ADVISORS, INC.
ADVISORY AND MANAGEMENT AGREEMENT
THIS ADVISORY AND MANAGEMENT AGREEMENT ("Agreement") is made this 1st
day of February, 1994 effective the first day the Services (as defined below)
were first rendered by and between NuVen Advisors, Inc. a Nevada corporation
("Advisor") with offices at 0 Xxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000
and The Toen Group Inc., a Nevada corporation with its principal offices at 0000
Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000 ("Client").
WHEREAS, Advisor and Advisor's personnel have numerous years of
experience in managing and in performing administrative duties for
privately-held companies and development stage investment opportunities; and
WHEREAS, Client desires to retain the Services of Advisor, and Advisor
desires to provide the Services (as defined below) for Client on the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Client and Advisor
agree as follows:
1. Engagement
Client hereby engages Advisor to provide Client with merger and
acquisition advice, and management and general administrative services
("Advisor's personnel"), and Advisor accepts such engagement.
2. Scope of Services to be Provided
Advisor, subject to the control, direction and supervision of Client's
Board of Directors, and in conformity with applicable laws, Client's
Articles of Incorporation, By-laws, registration statements, business
plan objectives, policies and restrictions, shall provide the following
Services, excluding the compensation to Advisor's employees or agents
covered under separate agreements, if any, and their related expenses,
as provided below:
(A) Management of Assets. Advisor will manage the Client's assets
including, by way of illustration, the evaluation of pertinent
economic, statistical, financial and other data, and
formulation and/or implementation of a corporate business
plan; and
(B) Management of Operations. Advisor will conduct and manage the
day-to-day operations of the Client including, by way of
illustration, the furnishing of routine legal, supervisory,
accounting and administrative services, and the supervision of
the Client's administrative personnel, except for services
provided by outside counsel selected by Client; and
(C) Administrative Facilities. Advisor will furnish to Client
office space, facilities, equipment and personnel adequate to
provide the Services.
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3. Term
This Agreement shall have an initial term of three (3) years (the
"Initial Advisory Period"), with an effective date retroactive to the
date the Services were first performed by Advisor, which was on or
about June 1, 1993. At the conclusion of the Initial Advisory Period,
this Agreement will automatically be extended on a month to month basis
(the "Extension Period") unless Advisor or Client shall serve written
notice on the other party terminating the Agreement; provided, however,
that Advisor and Client shall agree in writing as to Advisor's
continuing compensation during any Extension Period. Any notice to
terminate given hereunder shall be in writing and shall be delivered at
least ten (10) days prior to the end of the Initial Advisory Period or
any subsequent Extension Period.
4. Time and Effort of Advisor
Advisor shall cause Advisor's personnel to devote that amount of time,
as necessary, on a weekly basis, to fulfilling Advisor's obligations
under this Agreement. The particular amount of time may vary from day
to day or week to week. Advisor unconditionally agrees that Advisor's
personnel, or his replacement, will at all times, faithfully and to the
best of his experience, ability, and talents, perform all the duties
required of Advisor under this Agreement.
5. Compensation
Client agrees to pay Advisor the following (collectively, the
"Consideration") for the Services rendered hereunder:
(A) The Services. The Client shall pay to the Advisor, as
compensation for the Services rendered, facilities furnished
and expenses paid by the Advisor, a monthly fee equal to Ten
Thousand Dollars ($10,000). Such fee shall be payable for each
calendar month as soon as practicable after the end of that
month.
(B) Options. As incentive to execute this Agreement, Client grants
to Advisor the option to purchase Client's common stock (the
"Option") consisting of One Hundred Thousand (100,000) shares
(the "Option Shares"), exercisable at a price of $1.00 per
share (the"Exercise Price"). The right of Advisor to exercise
such Option will vest to Advisor upon execution hereof.
The parties acknowledge that the consideration for Client's
shares to be delivered to Advisor shall consist of the
Services rendered to Client, and that Advisor is accepting
payment in shares as an accommodation to Client. Client and
Advisor acknowledge that Advisor may be considered an
affiliate subject to Section 16(b) of the Securities Exchange
Act of 1934 and, in this regard, Client and Advisor agree that
for purposes of any "profit" computation under Section 16(b)
the price paid for the Fee Shares is equal to the Base Fee.
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6. Role of Advisor
The Advisor, and any person controlled by or under common control with
the Advisor, shall be free to render similar services to others and
engage in other activities, so long as the Services rendered to the
Client are not impaired.
Except as otherwise required by the Investment Company Act of 1940 (
the "1940 Act"), any of the shareholders, directors, officers and
employees of the Client may be a shareholder, trustee, director,
officer or employee of, or be otherwise interested in, the Advisor, and
in any person controlled by or under common control with the Advisor,
and the Advisor and any person controlled by or under common control
with the Advisor, may have an interest in the Client.
Except as otherwise agreed, in the absence of willful misfeasance, bad
faith, negligence or reckless or reckless disregard or obligations or
duties hereunder on the part of the Advisor or Advisor's personnel,
Advisor shall not be subject to liability to the Client, or to any
shareholder of the Client, for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, management, holding or sale of any asset
of or security issued by Client.
7. Other Services
If, as a result of providing the Services or otherwise, Advisor is
successful in effecting a merger or reverse acquisition between a
Business Opportunity and Client (a "Business Combination"), in addition
to the Advisory Fee set forth in Paragraph 5A, above, Advisor shall be
entitled to a Finder's Fee. Such Finder's Fee shall be equal to ten
percent (10%) of the value of each transaction and shall be payable at
the close of each and every transaction in cash, notes, or capital
stock of Client, or other consideration as the parties shall mutually
agree. Such agreement as to the make-up of such consideration shall be
reduced to writing prior to the execution and a definitive agreement
between Client, and the prospective purchaser/seller. Failing to reach
an agreement as to the make-up of such Finder's Fee, Client agrees that
such fee shall consist solely of cash. In the event that the Finder's
Fee contains capital stock ("Finders Fee Shares"), unless otherwise
mutually agreed between the parties in writing, such stock to be issued
to Advisor shall be valued at the average bid price of such stock
during the ten (10) days preceding the execution of the definitive
agreement relative to such Business Combination, or any public
announcement related to such transaction, whichever is the earlier
date.
In the event that the Finder's Fee Arrangement calls for capital stock,
unless otherwise mutually agreed to by the parties, such stock to be
issued to Consultant shall be valued at fifty percent (50%) of the
average bid price, or if no bid price then the book value, of such
stock during the thirty days' preceding execution of the definitive
agreement relating to such Business Combination or any public
announcement related to such Business Combination, whichever first
occurs.
8. Registration of Client's Shares
No later than ten (10) days following the date of an event giving use
to the obligation by Client to issue Fee Shares, Option Shares or
Finder Fee Shares, Client will register such shares with the Securities
and Exchange Commission under a Form S-8 or other applicable
registration statement. At Client's sole discretion, such shares may be
issued prior to registration in reliance on
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exemptions from registration provided by Section 4(2) of the Securities
Act of 1933 (the "Act"), Regulation D of the Act, and applicable state
securities laws. Such issuance or reservation shall be in reliance on
representations and warranties of Advisor set forth herein.
9. Costs and Expenses
All third party and out-of-pocket expenses, filing fees, copy, and
mailing expenses incurred by Advisor in the performance of the Services
under this Agreement are the responsibility of Client, and shall be
paid by Client, or reimbursed to Advisor, within ten (10) days, of
receipt of written notice by Advisor.
10. Place of Services
The Services provided by Advisor hereunder will be performed primarily
at Advisor's offices except as otherwise mutually agreed by Advisor and
Client. It is understood and expected that Advisor may make contacts
with persons and entities and perform the Services in other locations
as deemed appropriate by Advisor.
11. Independent Contractor
Advisor and Advisor's personnel will act as an independent contractor
in the performance of its duties under this Agreement. Accordingly,
Advisor will be responsible for payment of all federal, state, and
local taxes on compensation paid under this Agreement, including income
and social security taxes, unemployment insurance, and any other taxes
due relative to Advisor's personnel, and any and all business license
fees as may be required.
12. No Agency Express or Implied
This Agreement neither expressly nor impliedly creates a relationship
of principal and agent between Client and Advisor, or Employee and
Employer as between Advisor's personnel and Client. Neither Advisor's
personnel or Advisor are authorized to enter into any agreements on
behalf of Client. Advisor expressly retains the right to approve, in
its sole discretion, each and every transaction introduced to Client,
and to make all final decisions with respect to activities undertaken
by Advisor or Advisor's personnel related to this Agreement.
13. Termination
(A) Termination for Disability. If during the Initial Consulting
Period, Advisor or Advisor's personnel shall be unable to
provide the Services as set forth under this Agreement for 120
consecutive business days because of illness, accident, or
other incapacity, Client shall have the right to terminate
this Agreement upon written notice to Advisor not less than 30
business days after the end of any such 120-day period.
Termination under this Paragraph 13(A) shall be effective upon
receipt by Advisor of the written notice.
(B) Death. In the event of the death of Advisor's personnel with
replacement, this Agreement and all obligations hereunder
shall immediately be terminated.
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(C) Termination for Cause. The Client may, at its option,
terminate this Agreement by giving written notice of
termination to Advisor without prejudice to any other remedy
to which the Client may be entitled either at law, in equity,
or under this Agreement, if Advisor:
(i) Willfully breaches or neglects the duties that
Advisor is required to perform under the terms of
this Agreement;
(ii) Fails to promptly comply with and carry out all
directives of Client's Board of Directors;
(iii) Commits any dishonest or unlawful act, in the
judgment of Client's Board of Directors;
(iv) Engages in any conduct which disrupts the business of
Client or any entity affiliated with Client; or
(D) Termination Other Than For Cause. This Agreement shall
terminate immediately on the occurrence of any one of the
following events:
(i) The occurrence of circumstances, in the judgment of
Client's Board of Directors, that make it
impracticable for Client to continue its present
line(s) of business;
(ii) The decision of and upon notice by Advisor to
voluntarily terminate this Agreement;
(iii) If Client files a petition in a court of bankruptcy
or is adjudicated a bankrupt;
(iv) If Client institutes, or has instituted against it
any bankruptcy proceeding for reorganization for
rearrangement of its financial affairs;
(v) If Client has a receiver of its assets or property
appointed because of insolvency;
(vi) If Client makes a general assignment for the benefit
of creditors; or
(vii) If either party otherwise becomes insolvent or unable
to timely satisfy its obligations in the ordinary
course of business.
(E) Effect of Termination on Compensation. In the event of the
Termination Other Than For Cause prior to the completion of
the Initial Consulting Period, Advisor shall be entitled to
the full Compensation, the rights under the Options, and any
outstanding unpaid portion of the Consideration and expenses.
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14. Representations and Warranties of Client
Client represents and warrants to Advisor that:
(A) Corporate Existence. Client is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Nevada with the corporate power to own property and
carry on its business as it is now being conducted.
(B) Financial Information. Client has or will cause to be
delivered concurrently with the execution of this Agreement,
copies of the Disclosure Documents (as defined in Paragraph
15(D)(1)) which accurately set forth the financial condition
of Client as of the respective dates of such documents.
(C) No Conflict. This Agreement has been duly executed by Client
and the execution and performance of this Agreement will not
violate, or result in a breach of, or constitute a default in
any agreement, instrument, judgment, decree or order to which
Client is a party or to which Client is subject, nor will such
execution and performance constitute a violation or conflict
of any fiduciary duty to which Client is subject.
(D) Full Disclosure. The information concerning Client provided to
Advisor pursuant to this Agreement is, to the best of Client's
knowledge and belief, complete and accurate in all material
respects and does not contain any untrue statement of a
material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under
which they were made, not misleading.
(E) Date of Representations and Warranties. Each of the
representations and warranties of Client set forth in this
Agreement is true and correct at and as of the date of
execution of this Agreement.
15. Representations and Warranties of Advisor
Advisor represents and warrants to Client that:
(A) No Conflict. This Agreement has been duly executed by Advisor
and the execution and performance of this Agreement will not
violate, or result in a breach of, or constitute a default in
any agreement, instrument, judgment, decree or order to which
Advisor is a party or to which Advisor is subject, nor will
such execution and performance constitute a violation or
conflict of any fiduciary duty to which Advisor is subject.
(B) No Litigation. Advisor is not a defendant, nor plaintiffs
against whom a counterclaim has been asserted, in any
litigation, pending or threatened, nor has any material claim
been made or asserted against Advisor, nor are there any
proceedings threatened or pending before any U.S. or other
territorial, federal, state or municipal government, or any
department, board, body or agency thereof, involving as of the
date hereof, that may entitle a successful litigant to a claim
against any assets of Advisor, or interfere in any way with
the duties of Advisor hereunder.
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(C) Registration and/or Exemption of Client's Shares. Option
Shares or Finder's Fee Shares may be issued prior to
registration in reliance on the exemptions from registration
provided by Section 4(2) of the Securities Act of 1933 (the
"Act"), Regulation D, and applicable state securities laws.
Representations and warranties by Advisor in this Paragraph
15(C) will be used and relied upon by Client to determine
whether any issuance of Option Shares may be made to Advisor
pursuant to Section 4(2) of the Act and Regulation D and
applicable state securities laws, and Advisor will notify
Client immediately of any material changes. With these
specific understandings, Advisor represents and warrants that:
(1) Advisor has been furnished with a copy of Client's
most recent Annual Report on Form 10-K and all
reports or documents required to be filed under
Sections 13(a), 14(a), and 15(d) of the Securities
and Exchange Act of 1934, as amended, including but
not limited to quarterly reports on Form 10-Q,
current reports on Form 8-K, and proxy statements
(the "Disclosure Documents"). In addition, Advisor
has been furnished with a description of Client's
capital structure and any material changes in
Client's affairs that may not have been disclosed in
the Disclosure Documents.
(2) Advisor has had the opportunity to ask questions and
receive answers concerning the terms and conditions
of the Option Shares and/or Finder's Fee Shares to be
issued and/or reserved for issuance and to obtain any
additional information which Client possesses or can
acquire without unreasonable effort or expense that
is necessary to verify the accuracy of information
furnished under Paragraph 15(D)(1) of this Agreement.
(3) By reason of Advisor's knowledge and experience in
financial and business matters in general, and
investments in particular, Advisor is capable of
evaluating the merits and risks of this transaction
and in bearing the economic risks of an investment in
the Option Shares and the Introduction Shares, if
any, and the company in general, and fully understand
the speculative nature of such securities and the
possibility of such loss.
(4) The present financial condition of Advisor is such
that Advisor is not under any present or contemplated
future need to dispose of any portion of the Option
Shares or the Finder's Fee Shares, if any, to satisfy
an existing or contemplated undertaking, need, or
indebtedness.
(5) Advisor is fully aware that any Option Shares and
Finder's Fee Shares issued to Advisor prior to
registration are "Restricted Securities" as defined
by Rule 144 of the Act and that any resale of such
securities by Advisor may be governed by Rule 144.
Advisor is further aware of the specific restrictions
on resale of such securities contained in Rule 144.
(6) Advisor will not sell, transfer or otherwise dispose
of any Option Shares or Finder's Fee Shares issued or
reserved for issuance prior to registration except in
compliance with the Act.
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(7) Any and all certificates representing Clients share
issued upon exercise of options or otherwise prior to
registration of such shares and any and all
securities issued in replacement thereof or in
exchange therefore, shall bear the following legend:
"The shares represented by this certificate
have not been registered under the
Securities Act of 1933 (the "Act") and are
"restricted securities" as that term is
defined in Rule 144 under the Act. The
shares may not be offered for sale, sold, or
otherwise transferred except pursuant to an
effective Registration Statement under the
Act or pursuant to an exemption from
registration under the Act, the availability
of which is to be established to the
satisfaction of the Company."
(D) Full Disclosure. The information concerning Advisor provided
to Client pursuant to this Agreement is, to the best of
Advisor's knowledge and belief, complete and accurate in all
material respects and does not contain any untrue statement of
a material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under
which they were made, not misleading.
(E) Date of Representations and Warranties. Each of the
representations and warranties of Advisor set forth in this
Agreement is true and correct at and as of the date of
execution of this Agreement.
16. Indemnification
Client and Advisor agree to indemnify, defend and hold each other
harmless from and against all demands, claims, actions, losses,
damages, liabilities, costs and expenses, including without limitation,
interest, penalties and attorneys' fees and expenses asserted against
or imposed or incurred by either party by reason of or resulting from a
breach of any representation, warranty, covenant, condition, or
agreement of the other party to this Agreement.
17. Agreement Does not Contemplate Corrupt Practice - Domestic or Foreign
All payments under this Agreement constitute compensation for services
performed and this Agreement and all payments and the use of the
payments by Advisor, do not and shall not constitute an offer, payment,
or promise or authorization of payment of any money or gift to an
official or political party of, or candidate for political office in
any jurisdiction within or outside the United States. These payments
may not be used to influence any act or decision of an official, party
or candidate to use his/her/its influence with a government to assist
Client in obtaining, retaining, or directing business to Client or any
person or other corporate entity. As used in this paragraph, the term
"official" means any officer or employee of a government, or any person
acting in an official capacity for or on behalf of any government; the
term "government" includes any department, agency, or instrumentality
of a government.
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18. Inside Information - Securities Laws Violations
In the course of the performance of his duties, Advisor may become
aware of information which may be considered "inside information"
within the meaning of the Federal Securities Laws, Rules and
Regulations. Advisor acknowledges that his use of such information to
purchase or sell securities of Client, or its affiliates, or to
transmit such information to any other party with a view to buy, sell
or otherwise deal in Client's securities is prohibited by law and would
constitute a breach of this Agreement and notwithstanding the
provisions of this Agreement, will result in the immediate termination
of the Agreement.
19. Specific Performance
Advisor and Client acknowledge that in the event of a breach of this
Agreement by either party, money damages would be inadequate and the
non-breaching party would have no adequate remedy at law. Accordingly,
in the event of any controversy concerning the rights or obligations
under this Agreement, such rights or obligations shall be enforceable
in a court of equity by a decree of specific performance. Such remedy,
however, shall be cumulative and non-exclusive and shall be in addition
to any other remedy to which the parties may be entitled.
20. Miscellaneous
(A) Subsequent Events. Advisor and Client each agree to notify the
other party if, subsequent to the date of this Agreement,
either party incurs obligations which could compromise its
efforts and obligations under this Agreement.
(B) Amendment. This Agreement may be amended or modified at any
time and in any manner only by an instrument in writing
executed by the parties hereto.
(C) Further Actions and Assurances. At any time and from time to
time, each party agrees, at its or their expense, to take
actions and to execute and deliver documents a may be
reasonably necessary to effectuate the purposes of this
Agreement.
(D) Waiver. Any failure of any party to this Agreement to comply
with any of its obligations, agreements, or conditions
hereunder may be waived in writing by the party to whom such
compliance is owed. The failure of any party to this Agreement
to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such
provision or a waiver of the right of such party thereafter to
enforce each and every such provision. No waiver of any breach
of or non-compliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or non- compliance.
(E) Assignment. Neither this entire Agreement nor any right
created by it shall be assignable by either party without the
prior written consent of the other.
(F) Notices. Any notice or other communication required or
permitted by this Agreement must be in writing and shall be
deemed to be properly given when delivered in person to an
officer of the other party, when deposited in the United
States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph
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company for transmittal, or when sent by facsimile
transmission charges prepared, provided that the communication
is addressed:
(i) In the case of Client:
The Toen Group, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
(ii) In the case of Advisor and Advisor's personnel, to:
NuVen Advisors, Inc.
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
or to such other person or address designated by Client or
Advisor to receive notice.
(G) Headings. The section and subsection headings in this
agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this
Agreement.
(H) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
(I) Governing Law. This Agreement was negotiated and is being
contracted for in the State of Nevada, and shall be governed
by the laws of the State of Nevada, notwithstanding any
conflict-of-law provision to the contrary.
(J) Binding Effect. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties, their
respective heirs, administrators, executors, successors, and
assigns.
(K) Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior
agreements, arrangements, or understandings between the
parties relating to the subject matter of this Agreement. No
oral understan dings, statements, promises, or inducements
contrary to the terms of this Agreement exist. No
representations, warranties, covenants, or conditions, express
or implied, other than as set forth herein, have been made by
any party.
(L) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in
full force and effect.
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(M) Facsimile Counterparts. A facsimile, telecopy, or other
reproduction of this Agreement may be executed by one or more
parties hereto and such executed copy may be delivered by
facsimile of similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such
party can be seen, and such execution and delivery shall be
considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties agree to execute
an original of this Agreement as well as any facsimile,
telecopy or other reproduction hereof.
(N) Termination of Any Prior Agreements. Effective the date
hereof, all prior rights of Advisor relating to the accrual or
payment of any form of compensation or other benefits from
Client based upon any agreements other than this Agreement,
whether written or oral, entered into prior to the date
hereof, are hereby terminated.
(O) Consolidation or Merger. Subject to the provisions of
Paragraph 7 hereof, in the event of a sale of the stock, or
substantially all of the stock, of Client, or consolidation or
merger of Client with or into another corporation or entity,
or the sale of substantially all of the operating assets of
the Client to another corporation, entity or individual,
Client may assign its rights and obligations under this
Agreement to its successor-in-interest and such
successor-in-interest shall be deemed to have acquired all
rights and assumed all obligations of Client hereunder;
provided, however, that in no event shall the duties and
Services of Advisor provided for in Paragraph 2 hereof, or the
responsibilities, authority or powers commensurate therewith,
change in any material respect as a result of such sale of
stock, consolidation, merger or sale of assets.
(P) Time is of the Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date above written.
"Advisor"
NUVEN ADVISORS, INC.
a Nevada corporation
By: /s/ NuVen Advisors Inc.
"Client"
THE TOEN GROUP INC.
a Nevada corporation
By: /s/ The Toen Group Inc.
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