EXHIBIT 10.59
EXECUTION COPY

EMPLOYMENT AGREEMENT
Deborah Derby

This EMPLOYMENT AGREEMENT (the “Agreement”) is dated as of March 6, 2013 (the
“Execution Date”) by and between TOYS “R” US, INC. (the “Company”) and Deborah
Derby (“Executive”).
In consideration of the premises and mutual covenants herein and for other good
and valuable consideration, the parties agree as follows:
1.Term of Employment. Subject to the provisions of Section 8 of this Agreement,
Executive shall be employed by the Company and designated indirect subsidiaries
of the Company (each, a “Subsidiary”), for a period commencing on March 6, 2013
(the “Commencement Date”) and ending on the first anniversary of the
Commencement Date (the “Initial Term”), on the terms and subject to the
conditions set forth in this Agreement. Following the Initial Term, the term of
Executive’s employment hereunder shall automatically be renewed on the terms and
conditions hereunder for additional one-year periods commencing on each
anniversary of the last day of the Initial Term (the Initial Term and any annual
extensions of the term of this Agreement, subject to the provisions of Section 8
hereof, together, the “Employment Term”); provided, however, that if the Company
provides Executive with written notice of non-renewal of the Employment Term at
least 180 days prior to the third anniversary of the Commencement Date, then the
Employment Term, and Executive’s employment hereunder, shall terminate on such
third anniversary, and such non-renewal shall constitute an event giving rise
only to the payments and benefits provided under Section 8.a. of this Agreement.
2.    Position.
a.    During the Employment Term, Executive shall serve as the Vice Chairman and
Executive Vice President of each of the Company, Toys “R” Us – Delaware, Inc.
and any other indirect Subsidiaries that the board of directors of the Company
(the “Board”) designates (such entities collectively referred to as the “TRU
Group”). In such positions, Executive shall have such duties and authority as
determined by the Board and the board of directors of each Subsidiary, as
applicable (each, a “Subsidiary Board”) and commensurate with the position of
the Executive Vice President of a company of similar size and nature to that of
the TRU Group. During the Employment Term, the Executive shall report to the
Chief Executive Officer of the Company (the “CEO”).
b.    During the Employment Term, Executive will devote Executive’s full
business time and reasonable best efforts to the performance of Executive’s
duties hereunder and will not engage in any other business, profession or
occupation for compensation or otherwise which would conflict or interfere in
any material respect with the rendition of such services either directly or
indirectly, without the prior written consent of the CEO and/or board; provided
that nothing herein shall preclude Executive from continuing to serve on any
board of directors or trustees, advisory board or government commission which is
listed on Exhibit A attached hereto, or, subject to the prior approval of the
CEO, from accepting appointment to

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serve on any board of directors or trustees of any business corporation or any
charitable organization; provided in each case in the aggregate, that such
activities do not conflict or interfere with the performance of Executive’s
duties hereunder or conflict with Section 9 below.
3.    Base Salary. During the Employment Term, the Company shall pay Executive a
base salary at the annual rate of $700,000, payable in substantially equal
periodic payments in accordance with the Company’s practices for other executive
employees, as such practices may be determined from time to time. Executive
shall be entitled to such increases in Executive’s base salary, if any, as may
be determined from time to time in the sole discretion of the Board, which shall
at least annually review Executive’s rate of base salary to determine if any
such increase shall be made. Executive’s annual base salary, as in effect from
time to time hereunder, is hereinafter referred to as the “Base Salary.”
4.    Signing Bonus. Upon Executive’s commencement of employment with the
Company on the Commencement Date, the Company shall pay Executive a one-time
signing bonus of $115,000.
5.    Annual Bonus. During the Employment Term, Executive shall be eligible to
earn an annual bonus award in respect of each fiscal year of the Company (an
“Annual Bonus”), in a target amount of up to 110% of Executive’s Base Salary
(the “Target Bonus”), payable upon the Company’s achievement of certain
performance targets established by the Board or any appropriate committee or
delegatee thereof and pursuant to the terms of the Company’s incentive plan, as
in effect from time to time. Performance targets and incentive plans shall be
similar to those in place for other senior executives. Notwithstanding the
foregoing, in the event the Company’s performance exceeds such performance
targets, Executive shall be eligible to earn an Annual Bonus in an amount in
excess of the Target Bonus, as determined by the Board or any appropriate
committee or delegatee thereof in accordance with the Company’s incentive plan,
as in effect from time to time. The Annual Bonus, if any, shall be paid to
Executive not later than two and one-half (2½) months after the end of the
applicable fiscal year of the Company.
6.    Employee Benefits; Perquisites; Business and Relocation Expenses.
a.    Employee Benefits. During the Employment Term, Executive and her spouse
and dependents, as applicable, shall be entitled to participate in the Company’s
welfare benefit plans and retirement plans, including, without limitation, the
Company’s 401(k) and supplemental executive retirement plans and medical, dental
and life insurance plans, as in effect from time to time (collectively, the
“Employee Benefits”), on the same basis as those benefits are or may be made
available to the other senior executives of the Company (other than benefits
which have been terminated or for which participation has been frozen). The
Company shall be permitted to modify such benefits from time to time consistent
with any modifications that impact other senior executives of the Company.
b.    Perquisites. During the Employment Term, Executive shall be entitled to
receive such perquisites as are made available to other senior executives of the
Company in accordance with the Company’s policies, as in effect from time to
time. Executive

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shall be entitled to not less than four (4) weeks of paid vacation per year,
which vacation shall be taken at such times as are reasonably acceptable to the
Company in light of the Company’s operations, Executive’s performance of her
duties, and in accordance with the terms of the Company’s vacation policy, as in
effect from time to time, applicable to Executive.
c.    Business Expenses. During the Employment Term, reasonable business
expenses incurred by Executive in the performance of Executive’s duties
hereunder shall be reimbursed by the Company in accordance with the Company’s
policies, as in effect from time to time, applicable to senior executive
officers of the Company.
7.    Equity.
a.    During the Employment Term, Executive shall be eligible to participate in
the Toys “R” Us, Inc. 2010 Incentive Plan (the “Incentive Plan”) in accordance
with the policies and procedures of the Incentive Plan and any subsequent plans.
In the event the Company implements a broad-based management restructuring and
transition program, Executive will be entitled to participate in any
equity-based retention or repurchase program that the Company may implement in
connection therewith for the benefit of other senior executives of the Company,
on terms that are consistent therewith. For the avoidance of doubt, Executive
will not be entitled to participate in any cash retention program that the
Company may implement , but Executive will be eligible for the annual “May 2013
Grant.”
b.    At the first meeting of the designated committee of the Board occurring
during the Employment Term:
(i)    Executive will be granted: (x) an option to purchase 26,667 shares of
common stock of the Company (“Common Stock”), which option will have an exercise
price equal to USD $60.00 per share (“2015 Options”), and (y) an option to
purchase 21,014 shares of Common Stock, which option will have an exercise price
equal to USD $44.00 per share (“2016 Options” and together with the 2015
Options, the “Options”), in each case so long as such per share exercise price
is at least equal to the per share fair market value of Common Stock on the date
of such grant, determined in accordance with the requirements of Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”)). These Options will
be granted pursuant to the Incentive Plan and the form of nonqualified stock
option agreement used by the Company to make awards to members of senior
management, except that, subject to Executive’s continued employment with the
TRU Group through the applicable vesting date(s): (A) 50% of the 2015 Options
will vest on each of the first and second anniversaries, respectively, of the
date of grant of the 2015 Options and (B) 50% of the 2016 Options will vest on
the first anniversary, and 25% of the 2016 Options will vest on each of the
second and third anniversaries, respectively, of the date of grant of the 2016
Options.
(ii)    To the extent a plan or program is put in place to address the
undervalued options in section (i) above for senior executives, Executive shall
also be permitted to participate in that plan or program.

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8.    Termination. The Employment Term and Executive’s employment hereunder may
be terminated by either party at any time and for any reason; provided that
Executive will be required to give the Company at least 60 days’ advance written
notice of any resignation of Executive’s employment without Good Reason (as
defined in Section 8.c. below) (other than due to Executive’s death or
Disability). Notwithstanding any other provision of this Agreement, the
provisions of this Section 8 shall exclusively govern Executive’s rights upon
termination of employment with the TRU Group; provided, however, that nothing
contained in this Section 8 shall alter Executive’s or the Company’s rights with
respect to the Incentive Plan, which shall continue to govern Executive’s equity
holdings following any termination in accordance herewith.
a.    By the Company For Cause or By Executive Without Good Reason.
(i)    The Employment Term and Executive’s employment hereunder may be
terminated by the Company for Cause (as defined below) and shall terminate
automatically upon Executive’s resignation without Good Reason (other than due
to Executive’s death or Disability); provided, that Executive will be required
to give the Company at least 60 days’ advance written notice of such
resignation.
(ii)     For purposes of this Agreement, “Cause” shall mean any of the
following, as determined by the CEO: (A) Executive’s willful failure to perform
any material portion of her duties; (B) the commission of any fraud,
misappropriation or misconduct by Executive that causes demonstrable injury,
monetarily or otherwise, to the Company or an Affiliate (as such term is defined
in the Incentive Plan); (C) the conviction of, or pleading guilty or nolo
contendere to, a felony involving moral turpitude; (D) an act resulting or
intended to result, directly or indirectly, in material gain or personal
enrichment to the Executive at the expense of the Company or an Affiliate; (E)
any material breach of Executive’s fiduciary duties to the Company or an
Affiliate as an employee or officer; (F) a violation of the Company’s Code of
Ethical Standards, Business Practices and Conduct; (G) the failure by the
Executive to comply, in any material respect, with the provisions of Sections 9
and 10 of this Agreement; or (H) the failure by the Executive to comply with any
other undertaking set forth in this Agreement or any other agreement Executive
has with the Company or any Affiliate or any breach by Executive hereof or
thereof if such failure or breach is reasonably likely to result in a material
injury to the Company or an Affiliate. Notwithstanding the foregoing, the
conduct in sections (A), (D), (E), (F), (G) and (H), shall not be deemed
“‘Cause” if the basis for such Cause is cured within a reasonable period of time
(determined in light of the cure appropriate to the basis of such Cause), but in
no event more than thirty (30) business days after Executive receives the Notice
of Termination specifying the basis of such Cause.
(iii) If Executive’s employment is terminated by the Company for Cause, or if
Executive resigns without Good Reason, Executive shall be entitled to receive:
(A)    a lump sum payment of the Base Salary that is earned by Executive but
unpaid as of the date of Executive’s termination of employment, paid in
accordance with the Company’s payroll practices, but in no event later than
thirty (30) days following Executive’s termination of employment;

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(B)    a lump sum payment of any Annual Bonus that is earned by Executive but
unpaid as of the date of termination for the immediately preceding fiscal year,
paid in accordance with Section 5 (except to the extent payment is otherwise
deferred pursuant to any applicable deferred compensation arrangement with the
Company);
(C)    reimbursement, within 30 days following submission by Executive to the
Company of appropriate supporting documentation, for any unreimbursed business
expenses properly incurred by Executive in accordance with the Company policy
referenced in Section 6.c. above prior to the date of Executive’s termination;
provided claims for such reimbursement (accompanied by appropriate supporting
documentation) are submitted to the Company within ninety (90) days following
the date of Executive’s termination of employment;
(D)    such Employee Benefits, if any, as to which Executive may be entitled
under the employee benefit plans of the Company; and
(E)    continuation of medical, dental and life insurance benefits (pursuant to
the same benefit plans as in effect for active employees of the Company), as
follows:
(I)
Executive shall pay a portion of such costs as if Executive’s employment had not
terminated, until the earlier to occur of (x) twelve (12) months from the date
of termination and (y) the date on which Executive commences to be eligible for
coverage under substantially comparable medical, dental and life insurance
benefit plans from any subsequent employer (the “Benefit Continuation Period”);
provided that if such continued coverage is not possible under the general terms
and provisions of such plan(s) during such period, the Company shall pay an
amount to Executive equal to the Company’s cost of providing such benefits to
Executive as if Executive’s employment had not terminated (the “Company
Subsidy”). In order to facilitate such coverage, Executive and her spouse and
dependents, as applicable, in accordance with the Company’s policies in effect
at the time of Executive’s termination, shall agree to elect continuation
coverage in accordance with the provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended (“COBRA Coverage”) and the Company may
satisfy its obligations hereunder by paying a portion of the premiums required
for such COBRA Coverage. In the event that the Company, in its sole and absolute
discretion, determines at any time that the continued payment of Executive’s
COBRA premiums is in violation of the nondiscrimination rules set forth in
Section 105(h) of the Code, which will result in a detrimental tax result for
Executive (taxability of Executive’s health benefits), the Company

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reserves the right to discontinue such practice to the extent necessary, and to
thereafter pay to Executive the taxable Company Subsidy each month for the
remainder of the Benefit Continuation Period, less applicable withholding.
(II)
Upon expiration of the Benefit Continuation Period, Executive shall pay the
premium charged to former employees of the Company pursuant to Section 4980B of
the Code until the Executive is sixty-five (65) years of age. The Company may
amend or otherwise alter the plans to provide different benefits to Executive as
long as the benefits provided to Executive are no less favorable than those then
provided or offered to active employees holding similar positions to the
position held by Executive as of her date of termination. To the extent such
continued coverage is not possible under the general terms and provisions of
such plan(s) during such period, or the plans cannot be so amended in any manner
not adverse to the Company, the Company shall pay Executive, on an after-tax
basis, an amount necessary for Executive to acquire such benefits from an
independent insurance carrier, net of the amount Executive would otherwise be
required to pay under this clause (II).

In no event shall the coverage provided pursuant to this Section 8.a.(iii)(E)
extend beyond December 31 of the year in which Executive reaches age 65. The
medical, dental and life insurance coverage under this Section 8.a.(iii)(E)
provided in any one calendar year shall not affect the amount of benefits to be
provided in any other calendar year, and the reimbursement of an eligible
expense must be made no later than December 31 of the year after the year in
which the expense was incurred. Executive’s rights pursuant to this Section
8.a.(iii)(E) shall not be subject to liquidation or exchange for another
benefit. The obligations of the Company under this Section 8.a.(iii)(E) shall be
terminated if, at any time after the date of termination of Executive’s
employment, Executive is employed by or is otherwise affiliated with a party
that offers medical benefits to Executive.
All amounts described in clauses (A) through (E) hereof shall be referred to as
the “Accrued Rights” for purposes of this Agreement. Following such termination
of Executive’s employment by the Company for Cause or resignation by Executive
without Good Reason, except as set forth in this Section 8.a.(iii), Executive
shall have no further rights to any compensation or any other benefits under
this Agreement.
b.    Disability or Death.
(i)    The Employment Term and Executive’s employment hereunder shall terminate
upon Executive’s death and may be terminated by the Company upon the Executive’s
Disability. For purposes of this Agreement, “Disability” shall mean the
determination that the Executive is disabled pursuant to the terms of the
Company’s long term disability plan.

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(ii)    Upon termination of Executive’s employment hereunder for either
Disability or death, Executive or Executive’s estate (as the case may be) shall
be entitled to receive:
(A)    the Accrued Rights (excluding in the case of Executive’s death, those
rights provided under clause (E) of such definition); and
(B)    a pro rata portion of the Annual Bonus, if any, that Executive would have
been entitled to receive pursuant to Section 5 hereof for such year based upon
the Company’s actual results for the year of termination and the percentage of
the fiscal year that shall have elapsed through the date of Executive’s
termination of employment, payable to Executive pursuant to Section 5 had
Executive’s employment not terminated.
Following Executive’s termination of employment due to Executive’s death or
Disability, except as set forth in this Section 8.b.(ii), Executive or her
estate, as applicable, shall have no further rights to any compensation or any
other benefits under this Agreement.
c.    By the Company Without Cause or by Executive for Good Reason.
(i)    Executive’s employment hereunder may be terminated (A) by the Company
without Cause (which shall not include Executive’s termination of employment due
to her death or Disability) or (B) by Executive for Good Reason (as defined
below).
(ii)    For purposes of this Agreement, “Good Reason” shall mean, other than in
connection with a termination of the Executive’s employment by the Company for
Cause or due to Executive’s death or Disability: (A) without the consent of
Executive, the failure of the Company to pay any undisputed amount due under
this Agreement; (B) without the consent of Executive, a reduction in Executive’s
targeted compensation level (other than a general reduction in base salary or
annual incentive compensation opportunities that affects all members of senior
management of the Company proportionally); (C) without the consent of Executive,
Company requiring Executive to be based at any office or location outside
Northern New Jersey; (D) the new Chief Executive Officer of the Company or any
successor (the “New CEO”) and Executive do not mutually agree upon Executive’s
job title and material job responsibilities, (E) prior to the hiring of the New
CEO, change in job title that is not mutually agreed upon by the Company and
Executive, or (F) prior to the hiring of the New CEO, material change in job
responsibilities or reporting relationship that is not mutually agreed upon by
the Company and Executive. Notwithstanding the foregoing: (x) any termination by
Executive for Good Reason may only occur if Executive provides a Notice of
Termination (as defined in Section 8.d.) for Good Reason within 45 days after
Executive learns (or reasonably should have learned) about the occurrence of the
event giving rise to the claim of Good Reason; and (y) resignation by Executive
shall not be deemed for “Good Reason” if the basis for such Good Reason is cured
within a reasonable period of time (determined in light of the cure appropriate
to the basis of such Good Reason), but in no event more than thirty (30)
business days after the Company receives the Notice of Termination specifying
the basis of such Good Reason.

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(iii)     If Executive’s employment is terminated by the Company without Cause
(excluding by reason of Executive’s death or Disability), or by Executive for
Good Reason, Executive shall be entitled to receive:
(A)    the Accrued Rights;
(B)    a pro rata portion of the Annual Bonus, if any, that Executive would have
been entitled to receive pursuant to Section 5 hereof for such year based upon
the Company’s actual results for the year of termination and the percentage of
the fiscal year that shall have elapsed through the date of Executive’s
termination of employment, payable to Executive pursuant to Section 5 had
Executive’s employment not terminated; and
(C)    subject to Executive’s continued compliance with the provisions of
Sections 9 and 10 and Executive’s execution (and non-revocation) of a release of
all claims against the TRU Group in a form substantially similar to the
Separation and Release Agreement attached hereto as Exhibit B, an amount equal
to $750,000.00 in a lump sum payment within sixty (60) days following
Executive’s termination of employment, but in no event later than the March 15
following the year in which the Executive terminates employment.
Following Executive’s termination of employment by the Company without Cause
(excluding by reason of Executive’s death or Disability) or by Executive for
Good Reason, except as set forth in this Section 8(c)(iii), Executive shall have
no further rights to any compensation or any other benefits under this
Agreement.
d.    Notice of Termination. Any purported termination of employment by the
Company or by Executive (other than due to Executive’s death or Disability)
shall be communicated by written Notice of Termination to the other party hereto
in accordance with Section 14.g. hereof. For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated. To the extent a
right to cure is triggered, the Notice of Termination shall state the cure
required and a date by which the cure must occur.
e.     Board/Committee Resignation. Upon termination of Executive’s employment
for any reason, Executive agrees to resign, as of the date of such termination
and to the extent applicable, from the Board and any Subsidiary Boards (and any
committees thereof).
9.    Non-Competition.
a.    Executive acknowledges and recognizes the highly competitive nature of the
businesses of the Company and its Affiliates and accordingly agrees as follows:

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(i)    During the Employment Term and a eighteen (18) month period commencing on
Executive’s termination of employment (the “Restricted Period”), Executive will
not, whether on Executive’s own behalf or on behalf of or in conjunction with
any person, firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise whatsoever (“Person”), directly or
indirectly:
(A)    engage in any business that directly or indirectly is a “Competitive
Business.” For purposes of this subsection (A) a “Competitive Business” means,
with respect to the Executive at any time, any Person engaged wholly or in part
(directly or through one or more subsidiaries) in the retail sale or
distribution (including in stores or via mail order, e-commerce, or similar
means) of “Competing Products,” if more than one-third (1/3) of such Person's
gross sales for the twelve (12) month period preceding such time (or with
respect to the period after Executive’s termination date, as of such termination
date) are generated by engaging in such sale or distribution of Competing
Products. Without limiting the foregoing, the term “Competitive Business” shall
in any event include Wal-Mart, K-Mart/Sears, Target, Amazon.com, Buy Buy Baby,
Mattel, Hasbro, Tesco, Carrefour and any of their respective parents,
subsidiaries, Affiliates or commonly controlled entities. For purposes of this
subsection (A) “Competing Products” means, with respect to the Executive at any
time, (1) toys and games, (2) video games, computer software for children, and
electronic toys or games, (3) juvenile or baby products, apparel, equipment,
furniture, or consumables, (4) wheeled goods for children, and (5) any other
product or group of related products that represents more than twenty (20)
percent of the gross sales of the Company and its subsidiaries for the twelve
(12) month period preceding such time (or with respect to the period after the
Executive’s termination date, as of such termination date);
(B)    enter the employ of, or render any services to, any Person (or any
division or controlled or controlling Affiliate of any Person) who or which
engages in a Competitive Business;
(C)    acquire a financial interest in, or otherwise become actively involved
with, any Competitive Business, directly or indirectly, as an individual,
partner, shareholder, officer, director, principal, agent, trustee or
consultant; or
(D)    interfere with, or attempt to interfere with, business relationships
(whether formed before, on or after the date of this Agreement) between the
Company or any of its Affiliates and customers, clients, suppliers, partners,
members or investors of the Company or its Affiliates.
(E)    Notwithstanding anything to the contrary in this Agreement, Executive
may, directly or indirectly own, solely as a passive investment, securities of
any Person engaged in a Competitive Business which are publicly traded on a
national or regional stock exchange or on the over-the-counter market or
privately held if Executive (x) is not a controlling Person of, or a member of a
group which

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controls, such Person and (y) does not, directly or indirectly, own 3% or more
of any class of securities of such Person who is publicly traded or privately
held.
(ii)    During the Restricted Period, Executive will not, whether on Executive’s
own behalf or on behalf of or in conjunction with any Person, directly or
indirectly:
(A)    solicit to leave the employment of, or encourage any employee of the
Company or its Affiliates to leave the employment of, the Company or its
Affiliates; or
(B)    hire any such employee (other than clerical or administrative support
personnel) who was employed by the Company or its Affiliates as of the date of
Executive’s termination of employment with the Company or who left the
employment of the Company or its Affiliates coincident with, or within one year
prior to, the termination of Executive’s employment with the Company.
(iii) During the Restricted Period, Executive will not, directly or indirectly,
solicit to leave the employment of, or encourage to cease to work with, as
applicable, the Company or its Affiliates any consultant, supplier or service
provider then under contract with the Company or its Affiliates.
b.    It is expressly understood and agreed that although Executive and the
Company consider the restrictions contained in this Section 9 to be reasonable,
if a final judicial determination is made by a court of competent jurisdiction
that the time or territory or any other restriction contained in this Agreement
is an unenforceable restriction against Executive, the provisions of this
Agreement shall not be rendered void but shall be deemed amended to apply as to
such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this Agreement
is unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
10.    Confidentiality.
a.    Executive will not at any time (whether during or after Executive’s
employment with the Company), except when required to perform her duties to the
TRU Group, (x) retain or use for the benefit, purposes or account of Executive
or any other Person; or (y) disclose, divulge, reveal, communicate, share,
transfer or provide access to any Person outside the TRU Group (other than its
professional advisers who are bound by confidentiality obligations), any
non-public, proprietary or confidential information --including without
limitation rates, trade secrets, know-how, research and development, software,
databases, inventions, processes, formulae, technology, designs and other
intellectual property, information concerning finances, investments, profits,
pricing, costs, products, services, vendors, customers, clients, partners,
investors, personnel, compensation, recruiting, training, advertising, sales,
marketing, promotions, government and regulatory activities and approvals --
concerning the past, current or future business, activities and operations of
the Company and its subsidiaries

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and/or any third party that has disclosed or provided any of same to the Company
and its subsidiaries on a confidential basis (“Confidential Information”)
without the prior written authorization of the Board.
b.    “Confidential Information” shall not include any information that is (x)
generally known to the industry or the public other than as a result of
Executive’s breach of this covenant or any breach of other confidentiality
obligations by third parties; (y) required by law or judicial process to be
disclosed; provided that Executive shall give prompt written notice to the
Company of such requirement, disclose no more information than is so required,
and cooperate with any attempts by the Company to obtain a protective order or
similar treatment; or (z) disclosed in connection with a litigation or
arbitration proceeding between the parties.
c.    Except as required by law or judicial process, Executive will not disclose
to anyone, other than Executive’s immediate family, legal and/or financial
advisors, the existence or contents of this Agreement; provided that Executive
may disclose to any prospective future employer the provisions of Sections 9 and
10 of this Agreement, provided they agree to maintain the confidentiality of
such terms.
d.    Upon termination of Executive’s employment with the TRU Group for any
reason, Executive shall (x) cease and not thereafter commence use of any
Confidential Information or intellectual property (including without limitation,
any patent, invention, copyright, trade secret, trademark, trade name, logo,
domain name or other source indicator) owned by the Company, its subsidiaries or
Affiliates; (y) immediately destroy, delete, or return to the Company, at the
Company’s option, all originals and copies in any form or medium (including
memoranda, books, papers, plans, computer files, letters and other data) in
Executive’s possession or control (including any of the foregoing stored or
located in Executive’s office, home, laptop or other computer, whether or not
the Company’s property) that contain Confidential Information or otherwise
relate to the business of the Company, its Affiliates or subsidiaries (whether
or not the retention or use thereof would reasonably be expected to result in a
demonstrable injury to the Company, its Affiliates or subsidiaries), except that
Executive may retain only those portions of any personal notes, notebooks and
diaries that do not contain any Confidential Information; and (z) notify and
fully cooperate with the Company regarding the delivery or destruction of any
other Confidential Information of which Executive is or becomes aware.
e.    Executive shall not improperly use for the benefit of, bring to any
premises of, divulge, disclose, communicate, reveal, transfer or provide access
to, or share with the TRU Group any confidential, proprietary or non-public
information or intellectual property relating to a former employer or other
third party without the prior written permission of such third party. Executive
hereby indemnifies, holds harmless and agrees to defend the TRU Group and its
respective officers, directors, partners, employees, agents and representatives
from any actual breach of the foregoing covenant. During the Employment Term,
Executive shall comply with all relevant written policies and guidelines of the
Company and its subsidiaries and Affiliates which have been made available or
disclosed to him, including regarding the protection of Confidential Information
and intellectual property and potential conflicts of

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interest. Executive acknowledges that the Company and its subsidiaries and
Affiliates may amend any such policies and guidelines from time to time, and
that Executive remains at all times bound by their most current version;
provided, however, that Executive shall not be bound by any such amendments
unless and until Executive receives notice of such amendments and copies thereof
are made available or disclosed to her.
f.    The provisions of this Section 10 shall survive the termination of
Executive’s employment for any reason.
11.    Specific Performance. Executive acknowledges and agrees that the
Company’s remedies at law for a breach or threatened breach of any of the
provisions of Sections 9 or 10 would be inadequate and the Company and its
subsidiaries and Affiliates would suffer irreparable damages as a result of such
breach or threatened breach. In recognition of this fact, Executive agrees that,
in the event of such a breach or threatened breach, in addition to any remedies
at law, the Company, may seek equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction or
any other equitable remedy which may then be available.
12.    Arbitration. Except as provided in Section 11, any other dispute arising
out of or asserting breach of this Agreement, or any statutory or common law
claim by Executive relating to her employment under this Agreement or the
termination thereof (including any tort or discrimination claim), shall be
exclusively resolved by binding statutory arbitration in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association.
Such arbitration process shall take place in New York, New York. A court of
competent jurisdiction may enter judgment upon the arbitrator’s award. Each
party shall pay the costs and expenses of arbitration (including fees and
disbursements of counsel) incurred by such party in connection with any dispute
arising out of or asserting breach of this Agreement.
13.    Compliance with Code Section 409A.
a.    General. This Agreement shall be interpreted and administered in a manner
so that any amount or benefit payable hereunder shall be paid or provided in a
manner that is either exempt from or compliant with the requirements of Section
409A of the Code (“Code Section 409A”) and applicable advice and regulations
issued thereunder. Nevertheless, the tax treatment of the benefits provided
under the Agreement is not warranted or guaranteed. Neither the Company nor its
directors, officers, employees or advisers (other than Executive) shall be held
liable for any taxes, interest, penalties or other monetary amounts owed by
Executive as a result of the application of Code Section 409A in respect of any
payments or benefits that may be provided under this Agreement or otherwise,
except as provided in this Section 13.a. The parties hereby acknowledge and
agree that at the time that the Executive’s prior employment with the Company
ended, neither party reasonably anticipated that any further services would be
performed by the Executive to the Company or any of its Affiliates, and as such
the Executive experienced a “separation from service” within the meaning of Code
Section 409A at such time. Notwithstanding the foregoing, in the event it is
determined that such a “separation from service” did not occur, the Company
agrees to reimburse the Executive for any additional income taxes, penalties
and/or interest assessed against the Executive pursuant to

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Code Section 409A (but not the regular income taxes payable by the Executive as
a result of receiving such payments) with regard to the severance payments made
to the Executive pursuant to the Separation and Release Agreement between the
Executive and the Company dated February 17, 2012 (the “Severance Payments”),
such that, after payment by the Executive of the additional income taxes,
penalties and/or interest assessed under Code Section 409A, the Executive will
be in the economic position the Executive would have been had such payment or
distribution not been determined to be noncompliant with Code Section 409A. The
Company also agrees to reimburse the Executive for expenses incurred during a
tax audit or litigation addressing the existence or amount of any Code Section
409A tax liability for the Severance Payments in connection with the foregoing
provided, however, that the Company shall reimburse the Executive for such
expenses regardless of the final determination regarding whether any such tax
liability is due. Any Code Section 409A tax gross-up payment made pursuant to
this paragraph shall be made (i) no later than the end of the Executive’s
taxable year next following the Executive’s taxable year in which the Executive
remits the related Code Section 409A taxes, or (ii) where as a result of such
audit or litigation no taxes are remitted, the end of the Executive’s taxable
year next following the Executive’s taxable year in which the audit is completed
and there is a final and nonappealable settlement or other resolution of the
litigation. The Company’s obligations to make the reimbursements described in
this paragraph shall not be conditioned upon the Executive’s employment with the
Company and shall survive and apply even after the Executive’s termination of
employment with the Company or the Executive’s death.
b.    Definitional Restrictions. Notwithstanding anything in this Agreement to
the contrary, to the extent that any amount or benefit that would constitute
non-exempt “deferred compensation” for purposes of Section 409A of the Code
(“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable
hereunder, or a different form of payment of such Non-Exempt Deferred
Compensation would be effected, by reason of a Change in Control or Executive’s
Disability or termination of employment, such Non-Exempt Deferred Compensation
will not be payable or distributable to Executive, and/or such different form of
payment will not be effected, by reason of such circumstance unless the
circumstances giving rise to such Change in Control, Disability or termination
of employment, as the case may be, meet any description or definition of “change
in control event”, “disability” or “separation from service”, as the case may
be, in Section 409A of the Code and applicable regulations (without giving
effect to any elective provisions that may be available under such definition).
This provision does not affect the dollar amount or prohibit the vesting of any
Non-Exempt Deferred Compensation upon a Change in Control, Disability or
termination of employment, however defined. If this provision prevents the
payment or distribution of any Non-Exempt Deferred Compensation, or the
application of a different form of payment, such payment or distribution shall
be made at the time and in the form that would have applied absent the
non-409A-conforming event.
c.    Six-Month Delay in Certain Circumstances. Notwithstanding anything in this
Agreement to the contrary, if any amount or benefit that would constitute
Non-Exempt Deferred Compensation would otherwise be payable or distributable
under this Agreement by reason of Executive’s separation from service with the
TRU Group during a

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period in which Executive is a “specified employee” (as defined under Code
Section 409A regulations), then, subject to any permissible acceleration of
payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic
relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of
employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that
would otherwise be payable during the six-month period immediately following
Executive’s separation from service will be accumulated through and paid or
provided on the first day of the seventh month following Executive’s separation
from service (or, if Executive dies during such period, within 30 days after
Executive’s death) (in either case, the “Required Delay Period”); and (ii) the
normal payment or distribution schedule for any remaining payments or
distributions will resume at the end of the Required Delay Period.
d.    Treatment of Installment Payments. Each payment of termination benefits
under this Agreement, including, without limitation, each installment payment
and each payment or reimbursement of premiums for continued medical, dental or
life insurance coverage under Section 7.c.(iii)(d), shall be considered a
separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for
purposes of Section 409A of the Code.
e.    Timing of Release of Claims. Whenever in this Agreement a payment or
benefit is conditioned on Executive’s execution of a release of claims, such
release must be executed, and all revocation periods shall have expired, within
60 days after the date of termination of Executive’s employment; failing which
such payment or benefit shall be forfeited. If such payment or benefit
constitutes Non-Exempt Deferred Compensation, and if such 60-day period begins
in one calendar year and ends in the next calendar year, the payment or benefit
shall not be made or commence before the second such calendar year, even if the
release becomes irrevocable in the first such calendar year.
f.    Permitted Acceleration. The Company shall have the sole authority to make
any accelerated distribution permissible under Treas. Reg. Section
1.409A-3(j)(4) to Executive of deferred amounts, provided that such distribution
meets the requirements of Treas. Reg. Section 1.409A-3(j)(4).
14.    Miscellaneous.
a.    Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without regard to conflicts
of laws principles thereof.
b.    Entire Agreement/Amendments. This Agreement, that certain letter agreement
between the Executive and the Company related to this Agreement dated as of
March 6, 2013 (the “Side Letter”), and the Incentive Plans contain the entire
understanding of the parties with respect to the employment of Executive by the
TRU Group. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein and therein. This Agreement
may not be altered, modified, or amended except by written instrument signed by
the parties hereto.

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c.    No Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of such
party’s rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
d.    Severability. In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.
e.    Assignment. This Agreement, and all of Executive’s rights and duties
hereunder, shall not be assignable or delegable by Executive; provided, however,
that if Executive shall die, all amounts then payable to Executive hereunder
shall be paid in accordance with the terms of this Agreement to Executive’s
devisee, legatee or other designee or, if there be no such devisee, legatee or
designee, to Executive’s estate. Any purported assignment or delegation by
Executive in violation of the foregoing shall be null and void ab initio and of
no force and effect. This Agreement may be assigned by the Company to a person
or entity which is an Affiliate, and shall be assigned to any successor in
interest to substantially all of the business operations of the Company. Upon
such assignment, the rights and obligations of the Company hereunder shall
become the rights and obligations of such Affiliate or successor person or
entity. Further, the Company will require any successor (whether, direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, “Company” shall mean the Company and
any successor to its business and/or assets which is required by this Section
14.e. to assume and agree to perform this Agreement or which otherwise assumes
and agrees to perform this Agreement; provided, however, in the event that any
successor, as described above, agrees to assume this Agreement in accordance
with the preceding sentence, as of the date such successor so assumes this
Agreement, the Company shall cease to be liable for any of the obligations
contained in this Agreement.
f.    Set Off; Mitigation. The Company’s obligation to pay Executive the amounts
provided and to make the arrangements provided hereunder shall not be subject to
set-off, counterclaim or recoupment, other than amounts loaned or advanced to
Executive by the Company or its Affiliates, amounts owed by Executive under the
Incentive Plan. Executive shall not be required to mitigate the amount of any
payment provided for pursuant to this Agreement by seeking other employment or
otherwise and the amount of any payment provided for pursuant to this Agreement
shall not be reduced by any compensation earned as a result of Executive’s other
employment or otherwise.
g.    Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or overnight courier or
three days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to

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the respective addresses set forth below in this Agreement, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
If to the Company:
Toys “R” Us, Inc.
One Geoffrey Way
Wayne, New Jersey 07470
Attention: General Counsel

If to Executive:
To the most recent address of Executive set forth in the personnel records of
the Company.
With a copy to:
Kerrie R. Heslin, Esq.
Nukk-Freeman & Cerra, P.C.
636 Morris Turnpike, Suite 2F
Short Hills, New Jersey 07078

h.    Executive Representation. Executive hereby represents to the Company that
the execution and delivery of this Agreement by Executive and the performance by
Executive of Executive’s duties hereunder shall not constitute a breach of, or
otherwise contravene, the terms of any employment agreement or other agreement
or policy to which Executive is a party or otherwise bound.
i.    Prior Agreements. This Agreement supersedes all prior agreements and
understandings (including verbal agreements) between Executive and the Company
and/or its Affiliates regarding the terms and conditions of Executive’s
employment with the Company and/or its Affiliates; provided, however, that the
Incentive Plan shall govern the terms and conditions of Executive’s equity
holdings in the Company.
j.    Cooperation. Executive shall provide Executive’s reasonable cooperation in
connection with any action or proceeding (or any appeal from any action or
proceeding) which relates to events occurring during Executive’s employment
hereunder, but only to the extent the Company requests such cooperation with
reasonable advance notice to Executive and in respect of such periods of time as
shall not unreasonably interfere with Executive’s ability to perform her duties
with any subsequent employer; provided, however, that the Company shall pay any
reasonable travel, lodging and related expenses that Executive may incur in
connection with providing all such cooperation, to the extent approved by the
Company prior to incurring such expenses. Executive is entitled to be paid or
reimbursed for any expenses under this Section 14.j., the amount reimbursable in
any one calendar year shall not affect the amount reimbursable in any other
calendar year, and the reimbursement of an eligible expense

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must be made no later than December 31 of the year after the year in which the
expense was incurred. Executive’s rights to payment or reimbursement of expenses
pursuant to this Section 14.j. shall expire at the end of 20 years after the
Execution Date and shall not be subject to liquidation or exchange for another
benefit.
k.    Withholding Taxes. The Company may withhold from any amounts payable under
this Agreement such Federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.
l.    Counterparts. This Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
[Signatures on next page.]

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IN WITNESS WHEREOF, the parties hereto have duly executed this amended and
restated Agreement as of the day and year first above written.

TOYS “R” US, INC.

By: ___________________________
Name:
Title:

EXECUTIVE

______________________________
Deborah Derby

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EXHIBIT A

Member of the Board of Directors – The Vitamin Shoppe

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EXHIBIT B
SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement (“Agreement”) is entered into as of this
___ day of __________________________, 20__, between TOYS “R” US, INC. and any
successor thereto (collectively, the “Company”) and Deborah Derby (the
“Executive”).
The Executive and the Company agree as follows:
1.The employment relationship between the Executive and the Company and its
subsidiaries and affiliates, as applicable, terminated on
_________________________________ (the “Termination Date”).
2.    In accordance with the Employment Agreement dated as of March 6, 2013 by
and between TOYS “R” US, INC. and Executive (the “Employment Agreement”),
Executive is entitled to receive certain payments and benefits after the
Termination Date.
3.    In consideration of the above, the sufficiency of which the Executive
hereby acknowledges, the Executive, on behalf of the Executive and the
Executive’s heirs, executors and assigns, hereby releases and forever discharges
the Company and its members, parents, affiliates, subsidiaries, divisions, any
and all current and former directors, officers, employees, agents, and
contractors and their heirs and assigns, and any and all employee pension
benefit or welfare benefit plans of the Company, including current and former
trustees and administrators of such employee pension benefit and welfare benefit
plans, from all claims, charges, or demands, in law or in equity, whether known
or unknown, which may have existed or which may now exist from the beginning of
time to the date of this Agreement, including, without limitation, any claims
the Executive may have arising from or relating to the Executive’s employment or
termination from employment with the Company and its subsidiaries and
affiliates, as applicable, including a release of any rights or claims the
Executive may have under Title VII of the Civil Rights Act of 1964, as amended,
and the Civil Rights Act of 1991 (which prohibit discrimination in employment
based upon race, color, sex, religion, and national origin); the Americans with
Disabilities Act of 1990, as amended, and the Rehabilitation Act of 1973 (which
prohibit discrimination based upon disability); the Family and Medical Leave Act
of 1993 (which prohibits discrimination based on requesting or taking a family
or medical leave); Section 1981 of the Civil Rights Act of 1866 (which prohibits
discrimination based upon race); Section 1985(3) of the Civil Rights Act of 1871
(which prohibits conspiracies to discriminate); the Employee Retirement Income
Security Act of 1974, as amended (which prohibits discrimination with regard to
benefits); any other federal, state or local laws against discrimination; or any
other federal, state, or local statute, or common law relating to employment,
wages, hours, or any other terms and conditions of employment. This includes a
release by the Executive of any claims for wrongful discharge, breach of
contract, torts or any other claims in any way related to the Executive’s
employment with or resignation or termination from the Company and its
subsidiaries and affiliates, as applicable. This release also includes a release
of any claims for age discrimination under the Age Discrimination in Employment
Act, as amended (“ADEA”). The ADEA requires that the Executive be advised to
consult with an attorney before the Executive

1

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waives any claim under ADEA. In addition, the ADEA provides the Executive with
at least 21 days to decide whether to waive claims under ADEA and seven days
after the Executive signs the Agreement to revoke that waiver. This release does
not release the Company from any obligations due to the Executive under the
Executive’s Employment Agreement or under this Agreement, any rights Executive
has to indemnification by the Company and any vested rights Executive has under
the Company’s employee pension benefit and welfare benefit plans.
Additionally, in consideration of the foregoing, the Company agrees to release
and forever discharge the Executive and the Executive’s heirs, executors and
assigns from any claims, charges or demands, and/or causes of action whatsoever,
in law or in equity, whether known or unknown, which may have existed or which
may now exist from the beginning of time to the date of this Agreement,
including, but not limited to, any claim, matter or action related to the
Executive’s employment and/or affiliation with, or termination and separation
from the Company and its subsidiaries and affiliates; provided that such release
shall not release the Executive from any loan or advance by the Company or its
subsidiaries or affiliates, as applicable, a breach of Executive’s fiduciary
obligations under New Jersey state law or a breach under Section 9 or 10 of the
Executive’s Employment Agreement.
4.    This Agreement is not an admission by either the Executive or the Company
or its subsidiaries or affiliates of any wrongdoing or liability.
5.    The Executive waives any right to reinstatement or future employment with
the Company and its subsidiaries and affiliates following the Executive’s
separation from the Company and its subsidiaries and affiliates on the
Termination Date.
6.    The Executive agrees not to engage in any act after execution of the
Agreement that is intended, or may reasonably be expected to harm the
reputation, business, prospects or operations of the Company or its subsidiaries
or affiliates or their respective officers, directors, stockholders or
employees. The Company further agrees that it will engage in no act which is
intended, or may reasonably be expected to harm the reputation, business or
prospects of the Executive.
7.    The Executive shall continue to be bound by Sections 9 and 10 of the
Executive’s Employment Agreement.
8.    The Executive shall promptly return all Company and subsidiary and
affiliate property in the Executive’s possession, including, but not limited to,
Company or subsidiary or affiliate keys, credit cards, cellular phones, computer
equipment, software and peripherals and originals or copies of books, records,
or other information pertaining to the Company or subsidiary or affiliate
business.
9.    This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey, without reference to the principles of conflict
of laws. Exclusive jurisdiction with respect to any legal proceeding brought
concerning any subject matter contained in this Agreement shall be settled by
arbitration as provided in the Executive’s Employment Agreement.

2

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10.    This Agreement represents the complete agreement between the Executive
and the Company concerning the subject matter in this Agreement and supersedes
all prior agreements or understandings, written or oral. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
11.    Each of the sections contained in this Agreement shall be enforceable
independently of every other section in this Agreement, and the invalidity or
unenforceability of any section shall not invalidate or render unenforceable any
other section contained in this Agreement.
12.    It is further understood that for a period of 7 days following the
execution of this Agreement in duplicate originals, the Executive may revoke
this Agreement, and this Agreement shall not become effective or enforceable
until the revocation period has expired. No revocation of this Agreement by the
Executive shall be effective unless the Company has received within the 7 day
revocation period, written notice of any revocation, all monies received by the
Executive under this Agreement and all originals and copies of this Agreement.
13.    This Agreement has been entered into voluntarily and not as a result of
coercion, duress, or undue influence. The Executive acknowledges that the
Executive has read and fully understands the terms of this Agreement and has
been advised to consult with an attorney before executing this Agreement.
Additionally, the Executive acknowledges that the Executive has been afforded
the opportunity of at least 21 days to consider this Agreement.
The parties to this Agreement have executed this Agreement as of the day and
year first written above.
TOYS “R” US, INC.

By: /s/ David J. Schwartz            
Name: David J. Schwartz
Title: Executive Vice President – General
Counsel and Corporate Secretary

EXECUTIVE

/s/ Deborah M. Derby                
Deborah Derby

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