EXHIBIT 10.4.2
July 5, 2002
Xxxxx Xxxxxxx
Dear Xxxxx:
RE: AMENDMENT TO EMPLOYMENT AGREEMENT
We refer to the employment agreement (the "Agreement") dated May 1, 2000 between
724 Solutions Inc. ("724") and you, Xxxxx Xxxxxxx. As you know, 724 is currently
considering various strategic options. In order to provide you with comfort and
certainty while 724 considers these options, 724 desires and you have agreed to
make certain amendments to the Agreement, on the terms and conditions set forth
in this letter agreement.
In consideration of the foregoing and the mutual agreements contained herein
(the receipt and adequacy of which are acknowledged), we and you agree as
follows:
1. The entire Sections of the Agreement under the headings "TERMINATION"
on page 4, and "COMPENSATION ON TERMINATION FOR CAUSE" on page 5 are
hereby deleted and replaced with the following:
"TERMINATION
(a) TERMINATION OF EMPLOYMENT. Neither 724 nor you makes any
representation to the other that employment will continue for
a set period of time or that employment will be terminated
only under particular circumstances. Both 724 and you may
terminate your employment at any time or for any reason,
subject to the provisions of this agreement.
(b) TERMINATION OBLIGATIONS. You agree as follows:
(i) All property, including, without limitation, all
equipment, tangible proprietary information
(including confidential data), documents, books,
records, reports, notes, contracts, lists, computer
disks (and other computer-generated files and data),
and copies thereof, created on any medium and
furnished to, obtained by, or prepared by you in the
course of or incident to his employment, belongs to
724 or its affiliates and shall be returned promptly
to 724 upon termination of your employment by either
724, for any reason (and whether for Cause or not),
or you.
(ii) All benefits to which you are otherwise entitled
shall cease upon your termination for any reason (and
whether for Cause or not), unless explicitly
continued either under this agreement, under any
specific written policy or benefit plan of 724 or its
affiliates, or as may be required by statute.
(iii) Upon termination of employment for any reason (and
whether for Cause or not) under this agreement, you
shall be deemed to have resigned from all offices and
directorships then held with 724 or any subsidiary.
You shall sign any document or do such things that
are reasonably required by 724 to give effect to any
such resignation. Should you fail to do so, any
director of 724 is hereby irrevocably authorized in
your name and on his behalf to sign any document or
do any thing that is required to give effect thereto.
(iv) Your obligations under this section "Termination"
shall survive the termination of this agreement and
the termination of employment for any reason (and
whether for Cause or not).
(v) Following any voluntary termination of employment or
termination for Good Reason by you, you shall, where
reasonably requested by 724, reasonably cooperate
with 724 for a reasonable period of time after such
termination of employment in the orderly transition
of duties and work assignments to other employees of
724 and its affiliates, provided that 724 continues
to pay you compensation on a per diem basis, at a
rate equal to your base salary in effect at your
date of termination, during any such reasonable
period of time that your cooperation is requested.
You shall also reasonably cooperate, at 724's
expense, in the defense of any action brought by any
third party against 724 and its affiliates that
relates in any way to your acts or omissions while
employed by 724 and its affiliates.
(c) TERMINATION UPON DEATH. If you die during your employment,
this agreement shall automatically terminate.
(d) TERMINATION UPON DISABILITY. If during your employment, you
shall become physically or mentally incapacitated and as a
result thereof you are unable to perform the essential
functions of your position with or without a reasonable
accommodation, for a continuous period of more than 120 days,
then 724 and you specifically agree that this agreement has
been frustrated, and therefore 724 is entitled to terminate
your employment on one month's notice or grant you one month's
salary in lieu of notice.
(e) TERMINATION OF EMPLOYMENT TERM WITHOUT CAUSE.724 reserves the
right to terminate your employment without Cause at any time
upon paying to the you a lump sum payment of an amount equal
to nine (9) months of On-Target Earnings, less statutory
deductions and withholdings (the "Severance Amount"), which
amount the parties agree is pay-in-lieu
of reasonable notice. You agree to release 724 and its
affiliates from any action, cause of action, claim or demand
against 724 or any other person, which may arise as a
consequence of such termination and to sign a waiver and
release to this effect in a form satisfactory to 724 as a
condition to receiving payment under this Section (e). For
purposes of this agreement, "On-Target Earnings" means, as of
any date, your then current base salary and target bonus.
(f) TERMINATION FOR GOOD REASON. You may terminate your employment
for Good Reason at any time. Upon such termination for Good
Reason, 724 shall pay you the Severance Amount. You agrees to
release 724 and its affiliates from any action, cause of
action, claim or demand against 724 or any other person, which
may arise as a consequence of such termination and to sign a
waiver and release to this effect in a form satisfactory to
724 as a condition to receiving payment under this Section
(f). For purposes of this agreement, "Good Reason" will exist
at any time following the occurrence of one or more of the
following events without the your written consent:
(i) the assignment to you of any duties materially
inconsistent with your position, authority, duties or
responsibilities pursuant to this agreement or any
other action by the 724 that results in a material
diminution in such position, authority, duties or
responsibilities;
(ii) a reduction in your compensation and benefits as set
forth in Schedule "A"; or
(iii) relocation, without your consent of your place of
employment by more than fifty (50) miles;
provided however, that you shall not terminate your employment hereunder unless
you first gives notice of his intention to terminate and the grounds for such
termination, and 724 has not, within thirty (30) days following receipt of such
notice, cured such Good Reason.
(g) TERMINATION OF EMPLOYMENT TERM FOR CAUSE. 724 may at any time
and without notice immediately terminate your employment for
Cause and you shall have no right to receive any compensation
or benefit hereunder (with the exception of compensation
earned but unpaid as of the termination date). For purposes of
this agreement, "Cause" will exist at any time following the
occurrence of one or more of the following events:
(i) any willful act of personal dishonesty, fraud or
misrepresentation taken by you in connection with his
responsibilities as an employee
which was intended to result in your substantial
gain or personal enrichment at the expense of 724 or
its affiliates;
(ii) your conviction of a felony (other than
driving-related offenses), or the equivalent in a
jurisdiction other than the United States, on account
of any act which was materially injurious to 724 or
any of its affiliates, or the reputation of 724 or
any of its affiliates, as reasonably determined by
the Board of Directors of 724;
(iii) your willful and continued failure to substantially
perform your principal duties and obligations of
employment (other than any such failure resulting
from incapacity due to physical or mental illness;
provided, that for purposes of this Section (g), no act or failure to act shall
be considered "willful" unless done or omitted to be done by you in bad faith
and without reasonable belief that the act or omission was in or not opposed to
the best interests of 724; provided, further, that 724 shall not terminate your
employment under clause (iii) of this Section (g) unless 724 first gives notice
of its intention to terminate and the grounds for such termination, and you have
not, within thirty (30) days following receipt of such notice, cured such
failure.
(h) VOLUNTARY TERMINATION PERIOD. you may terminate this agreement
upon giving of 12 weeks' prior notice to 724 (or such lesser
period of time as the parties may agree upon), in which case
this agreement shall terminate at the expiration of such 12
week period without any other notice or any payment of salary
or benefit plan contributions subsequent to the termination of
this agreement.
(i) REPAYMENT OF BONUSES AND OTHER ADVANCES. You agree to permit
724 or its affiliates to deduct the amount of any advanced
bonuses or other monies advanced to you during your employment
and so designated as advanced amounts, from any compensation
due you under this Section "Termination".
(j) TREATMENT OF STOCK OPTIONS, RESTRICTED STOCK AND OTHER
SECURITIES. Notwithstanding any other provisions of this
agreement, upon any termination of you for any reason and
whether for Cause or not, any options, restricted stock or
other securities held by you but subject to vesting which is
contingent upon continued employment with 724 or its
affiliates shall be governed by the provisions of the
applicable stock plans and repurchase and award agreements."
2. Schedule "A" to the Agreement is hereby amended effective on the date
of this letter agreement by deleting the amount "$170,000" in Section 1
of Schedule "A" and replacing it with "$169,150 USD"
On and after this date, each reference in the Agreement to "this agreement"
shall mean and be a reference to the Agreement as amended by this letter
agreement. Except as specifically amended by this letter agreement, the
Agreement shall remain in full force and effect and is hereby ratified and
confirmed.
This letter agreement shall be governed by and interpreted and enforced in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
Please sign and date this letter in the space provided below to confirm the
mutual agreements set forth above.
Yours very truly,
724 SOLUTIONS INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
ACCEPTED AND AGREED
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
AGREEMENT
May 1, 2000
Xxxxx Xxxxxxx
RE: EMPLOYMENT AS VICE-PRESIDENT, FINANCE AND CONTROL
724 Solutions is pleased to extend to you an offer as a full-time employee on
the terms and conditions set out in this agreement. We are looking forward to
your joining the team. It is a condition of your employment that you sign and
execute a copy of this agreement and all accompanying documentation and
return it to us by MAY 11, 2000 after which time this offer will terminate.
EMPLOYMENT. 724 Solutions agrees to employ you as a Vice-President,
Finance and Control and you accept such employment on and subject to the
terms of this agreement.
TERM. Your employment with 724 Solutions will start effective JUNE 5, 2000.
DUTIES. So long as you are employed by 724 Solutions:
(a) you will devote your full time and energy to the business and
affairs of 724 Solutions, well and faithfully serve 724 Solutions,
and use your best efforts, skills and abilities to promote the
interests of 724 Solutions and agree to perform such other tasks and
duties related to the foregoing as may from time to time be
determined by the 724 Solutions management;
(a) you acknowledge that the 724 Solutions management reserves the right
during the course of your employment to enhance or modify your
duties and responsibilities as its deems necessary and appropriate
from time to time;
(b) you will abide by any 724 Solutions policies that the Board of
Directors of 724 Solutions may establish or amend having general
application to 724 Solutions' staff and management; and
(c) you acknowledge that the hours of work involved will vary and be
irregular and are those hours required to meet the objectives of 724
Solutions and you acknowledge that this paragraph constitutes an
agreement to work such hours where such agreement is required by
applicable legislation.
COMPENSATION AND BENEFITS. Your compensation and benefits are listed in
Schedule "A" to this agreement. Your compensation will be payable bi-weekly
and will be subject to such periodic review as may be deemed appropriate by
the Board of Directors of 724 Solutions from time to time.
OWNERSHIP OF WORK. You expressly acknowledge that 724 Solutions shall have
all proprietary rights and intellectual property interests, in everything
that you create, develop, discover or conceive, by yourself or with others,
while employed by 724 Solutions, including customer and supplier lists, sales
and marketing plans, reports, drawings, prototypes, schematics, software,
inventions, specifications, confidential data and the like (the
"Developments"), if the Developments:
(a) relate in any manner to the actual business, research or development
of 724 Solutions (or its subsidiaries, affiliates, partnerships and
joint ventures); or
(b) relate in any manner to the reasonably anticipated business,
research or development of 724 Solutions (or its subsidiaries,
affiliates, partnerships and joint ventures); or
(c) are suggested by or result from matters with which you are aware as
a result of your employment with 724 Solutions; or
(d) are suggested by or result from any task assigned to you or work
performed by you for or on behalf of 724 Solutions (or its
subsidiaries, affiliates, partnerships and joint ventures);
You hereby assign fully to 724 Solutions any rights, title and interest that
you may have in the Developments to date or will later do so, whether or not
these Developments are capable of intellectual property protection, and agree
to sign appropriate documentation as requested by 724 Solutions to confirm
such ownership. You also agree, in connection with any Developments, to
promptly disclose them to 724 Solutions or its designee as appropriate,
promptly execute a specific assignment of title to 724 Solutions or its
designee, and do anything else reasonably necessary to enable 724 Solutions
or its designee to secure patent, copyright or other forms of protection for
the Developments in Canada and in all other countries, at 724 Solutions'
expense.
Without limitation, all working papers, notes and memoranda or other
manifestations of confidential data which are made or obtained by you during
the term of your employment relating to the business of 724 Solutions shall
be the property of 724 Solutions and will accordingly be, provided to 724
Solutions upon termination of your employment.
WAIVER OF MORAL RIGHTS. You hereby expressly and irrevocably waive any and
all moral rights arising under copyright law that you, as author, may have
with respect to any copyrighted works prepared by you for 724 Solutions in
the course of your employment and you agree that 724 Solutions (and is
subsidiaries, affiliates, partnerships, joint ventures, direct and indirect
licensees) may modify, adapt, translate and use such works as it sees fit.
You also expressly waive any right that you may have as author of a work of
authorship to include your name in any Development that is a work of
authorship when such work is distributed publicly or otherwise.
CONFIDENTIAL DATA AND NON-DISCLOSURE. 724 Solutions (and its subsidiaries,
affiliates, partnerships and joint ventures) will expend considerable time
and money in acquiring and developing software, hardware, inventions, trade
secrets, products, technology, techniques, methodologies, programs, present
and future developments, sales literature and brochures, form documents,
customer lists, customer and supplier relationships, marketing or sales
strategies, and other information excluding confidential information and
documents of third parties (the "confidential data") to which you may have
access. You acknowledge that such confidential data is the property of 724
Solutions (and its subsidiaries, affiliates, partnerships and joint
ventures), and third parties from which 724 Solutions has acquired
confidential data, and agree that, during the term of your employment and any
time thereafter, you will not, directly or indirectly, in any manner or for
any reason whatsoever (other than in the ordinary and usual
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course of 724 Solutions' (and its subsidiaries, affiliates, partnerships and
joint ventures) business and for its benefit), disclose to any person, firm
or corporation any of the confidential data or use any of the confidential
data, except if the confidential data:
(i) is or becomes publicly available through no fault of yours;
(i) is rightfully obtained by you from a third party;
(ii) is disclosed with the written consent of the party whose information
it is; or
(iii) is disclosed pursuant to court order, other legal compulsion or
required by law.
On termination of your employment, you agree to return to 724 Solutions (and
its subsidiaries, affiliates, partnerships and joint ventures) all
confidential data embodied or recorded in tangible form which is in your
possession or control. Your obligation under this section will continue if
your employment with 724 Solutions terminates for any reason.
You also agree, not to disclose to 724 Solutions (and its subsidiaries,
affiliates, partnerships and joint ventures), use in its business or cause it
to use any information that is confidential to others. For greater certainty,
you agree to not, at any time, disclose to, or discuss with, 724 Solutions
(and its subsidiaries, affiliates, partnerships and joint ventures) employees
any confidential or proprietary data belonging to your former employers.
NON-COMPETITION AND NON-SOLICITATION. You recognize that in performing the
duties of your employment, you will occupy a position of trust and
confidence, giving you knowledge with respect to many aspects of the business
carried on by 724 Solutions (and its subsidiaries, affiliates, partnerships
and joint ventures). Such knowledge shall be used solely in furtherance of
the business interests of 724 Solutions (and its subsidiaries, affiliates,
partnerships and joint ventures) and not in any manner which would be
detrimental to it. You agree that so long as you are employed by 724
Solutions and for one (1) year thereafter, unless you obtain the prior
written consent of 724 Solutions, you shall not directly or indirectly, in
any manner or capacity whatsoever:
(a) carry on or be engaged in or hold any interest in or advise, manage
or assist in any business enterprise which is in significant
competition (as reasonably determined by 724 Solutions) with the
business of 724 Solutions (and its subsidiaries, affiliates,
partnerships and joint ventures) as it exists at the date on which
your employment terminates ("Competitive Business"); or
(b) solicit or enter into any form, of business arrangement with any
person who was or is proposed to be a client, supplier or business
partner of 724 Solutions (and its subsidiaries, affiliates,
partnerships and joint ventures) at the date that your employment
terminates, or during the prior one (1) year period, if such
business arrangement or proposed business arrangement is in respect
of a Competitive Business;
provided however, that nothing in this paragraph shall prevent you from
owning up to 5% of the voting stock of any entity.
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EMPLOYEES. You agree that during the term of your employment and for one (1)
year thereafter, you will not, directly or indirectly, or assist others to,
recruit, solicit or endeavour to entice away from 724 Solutions (or its
subsidiaries, affiliates, partnerships and joint ventures) any individual who
was or becomes an employee of or service provider to 724 Solutions (or its
subsidiaries, affiliates, partnerships and joint ventures) at any time within
the one (1) year period before or after termination of your employment.
COVENANTS REASONABLE AND INJUNCTION. You acknowledge that (a) the covenants
contained in the paragraphs entitled "Confidential Data and Non-Disclosure",
"Non-Competition and Non-Solicitation" and "Employees" are essential elements
to this agreement and that, but for your agreement to enter into such
covenants, 724 Solutions would not have entered into this agreement with you;
and (b) since your breach of any of such provisions would cause serious and
irreparable harm to 724 Solutions which could not adequately be compensated
for in damages, and in the event of a breach by you of any of such
provisions, you consent to an injunction being issued against you restraining
you from any further breach of any such provision. The provisions of this
paragraph shall not be construed so as to be derogation of any other remedy,
which 724 Solutions may have in the event of such a breach.
The existence of any claim or cause of action that you may have against 724
Solutions (or its subsidiaries, affiliates, partnerships and joint ventures),
whether pursuant to this agreement or otherwise, shall not constitute a
defence to the enforcement by 724 Solutions of the provisions of this
paragraph or the paragraphs entitled "Confidential Data and Non-Disclosure",
"Non-Competition and Non-Solicitation" and "Employees".
TERMINATION. Your employment may be terminated by 724 Solutions:
(a) without compensation at any time and for any reason during the
first three (3) months of your employment with 724 Solutions
("Probation Period");
(b) without compensation, for cause, which shall include, without
limitation:
(i) any willful and continuing failure by you to observe and
perform any of your covenants and obligations hereunder;
(i) fraud, dishonesty, gross negligence or willful malfeasance
by you in connection with the performance of your duties
hereunder;
(ii) any commission of a crime by you;
(iii) any use or abuse of alcohol or drugs by you which adversely
affects your ability to perform your duties hereunder; or
(iv) your death; or
(c) without cause at any time upon giving you notice or payment in lieu
of notice and severance, as required by any statutory and common law
requirement applying to your employment with 724 Solutions, and as
provided in this agreement, payable on your delivery of a release to
the Board of Directors of 724 Solutions.
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COMPENSATION ON TERMINATION FOR CAUSE. If your employment is terminated for
cause, 724 Solutions shall pay you your salary and benefits through the date
of termination and 724 Solutions shall have no further obligations to you
under this agreement or in connection with your employment by 724 Solutions.
NOTICES. Any notice which may or is required to be given pursuant to this
agreement shall be in writing and shall be sufficiently given or made if
mailed by prepaid registered mail, faxed or served personally upon the party
for whom it is intended, addressed to the other party at the address or fax
number first above written. The date of receipt of any notice, if served
personally or by fax, shall be deemed to be the date of delivery thereof and,
if mailed, the third business day after delivery.
ASSIGNMENT. You acknowledge that 724 Solutions may assign this agreement and
the benefits of your covenants and obligations under this agreement to any
person who purchases all or substantially all the assets of 724 Solutions. In
addition, this agreement and the rights and obligations of 724 Solutions may
be assigned at any time by 724 Solutions to an affiliate of 724 Solutions.
Subject to the forgoing, neither this agreement nor any rights or obligations
hereunder shall be assignable by any party without the prior written consent
of the other party. Subject thereto, this agreement shall enure to the
benefit of and be binding upon the parties and their respective heirs,
executors, administrators, legal personal representatives, successors
(including any successor by reason of amalgamation or statutory arrangement
of any party) and permitted assigns.
INVALIDITY AND SEVERABILITY. If a court of competent jurisdiction would
otherwise adjudge, declare or decree all or any portion of the covenants set
forth in this agreement void or unenforceable in the circumstances, the
portions thereof which would otherwise be held void or unenforceable shall,
automatically and without further act on the part of either of us, but only
as regards those matters or parties before the court, be reduced in scope,
territory or duration of time to such an extent that such court would hold
the same to be enforceable in the circumstances before the court, or
alternatively, that provision shall be deemed to be severed herefrom, and the
remaining provisions of this agreement shall not be affected thereby and
shall remain valid and enforceable.
FURTHER ASSURANCES. You agree to do such acts and execute such further
documents, conveyances, deeds, assignments, transfers and the like, and will
cause the doing of such acts and will cause the execution of such further
documents as are within your power as we may in writing at any time and from
time to time reasonably request be done and or executed, in order to give
full effect to the provisions of this agreement.
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SCHEDULE "A"
COMPENSATION AND BENEFITS OF
XXXXX XXXXXXX
1. SALARY. Your salary will be $170,000 per annum. You will also be
eligible to earn in bonus up to 15% of your salary in the first year
based on 724 Solutions meeting its profit/revenue objectives and
targets AND you meeting the performance and deliverable targets set
by 724 Solutions from time to time.
2. PARKING. Paid parking will be provided within the York Xxxxx Center.
3. VACATION. You will be entitled to a vacation of 3 weeks in each
calendar year. Such vacations shall be taken at such time as 724
Solutions may from time to time approve, having regard to the
operations of 724 Solutions. Vacation time shall be cumulative, in
accordance with 724 Solutions' standard policies.
4. BENEFITS. You will be entitled to participate in any plans
maintained from time to time by 724 Solutions for the benefit of 724
Solutions' employees, including, but not limited to, those
pertaining to group life, accident, dental, prescription, sickness
and medical, and long term disability insurance, provided that
premiums for such coverages are reasonable, as determined by 724
Solutions in its sole discretion. You will be required to pay for
the premiums for 724 Solutions' mandatory long term disability (LTD)
plan. The premium will be automatically deducted from your pay
cheque.
5. OPTIONS TO PURCHASE SHARES.
a. Subject to you and 724 Solutions entering into 724
Solutions' standard Option Agreement, 724 Solutions
hereby grants to you:
(a) the option to purchase 10,000 common shares of 724 Solutions
(or the group of companies that forms 724 Solutions), at their
Market Price (as defined in the Stock Option Plan) on the date
of the grant (your first day of employment with 724
Solutions), which option vests on and continues from the first
anniversary of your employment; and
(b) the option to purchase an additional 10,000 common shares of
724 Solutions (or the group of companies that forms 724
Solutions), at their Market Price (as defined in the Stock
Option Plan) on the date of the grant (your first day of
employment with 724 Solutions), which option vests on and
continues from the second anniversary of your employment; and
(c) the option to purchase an additional 10,000 common shares of
724 Solutions (or the group of companies that forms 724
Solutions), at their Market Price (as defined is the Stock
Option Plan) on the date of the grant (your first day of
employment with 724 Solutions), which option vests on and
continues from the third anniversary of your employment.
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Please note that the terms and conditions of the Option Agreement govern the
options granted in this agreement and from time to time. In particular, you
should note that your entitlement to unvested options will be automatically
forfeited if your employment with 724 Solutions terminates for any reason.
WAIVER OF RIGHTS. Any waiver of, or consent to depart from, the requirements
of any provision of this agreement shall be effective only if it is in
writing and signed by the party giving it, and only in the specific instance
and for the specific purpose for which it has been given. No failure on the
part of any party to exercise, and no delay in exercising, any right under
this agreement shall operate as a waiver of such right. No single or partial
exercise of any such right shall preclude any other or further exercise of
such right or the exercise of any other right.
ENTIRE AGREEMENT. This agreement and the schedules hereto constitute the
entire agreement between us pertaining to your employment by 724 Solutions
and supersedes all prior agreements, negotiations, discussions and
understandings, written or oral, between us. This agreement may be amended or
supplemented only by a written agreement signed by both 724 Solutions and you.
TIME OF THE ESSENCE. Time is and shall remain of the essence of this
agreement and all of its provisions.
CHOICE OF LAW. This agreement is governed by the laws of Ontario.
Yours truly,
724 SOLUTIONS INC.
By: /s/ XXXXX XXXXXX
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Xxxxx Xxxxxx
Chief Financial Officer
Accepted this 10th day of May 2000.
/s/ XXXXX XXXXXXX
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Xxxxx Xxxxxxx
