Exhibit 10.39

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is revised effective September 18,
2012 (the “Effective Date”) by and between U.S. Auto Parts Network, Inc., a
Delaware corporation (the “Company”), and Shane Evangelist, an individual (the
“Executive”). This Agreement was initially effective on October 12, 2007 (the
“Initial Effective Date”) and was subsequently amended on March 29, 2010.

WHEREAS, the parties hereto desire to amend the written agreement documenting
the terms of Executive’s employment with the Company.

1. Duties and Responsibilities.

A. Executive shall continue to serve as the Company’s Chief Executive Officer,
reporting directly to the Company’s Board of Directors. Executive shall have the
duties and powers at the Company that are customary for an individual holding
such positions.

B. Executive agrees to use his best efforts to advance the business and welfare
of the Company, to render his services under this Agreement faithfully,
diligently and to the best of his ability.

C. Executive shall be based at the Company’s office located at Carson,
California, or at such other offices of the Company located within 30 miles of
such offices.

2. Employment Period. Following the Effective Date, Executive’s employment with
the Company shall be governed by the provisions of this Agreement for the period
commencing as of the date hereof and continuing until the earlier of
(i) Executive’s termination of employment with the Company for any reason, or
(ii) the fifth anniversary of the Effective Date (the “Employment Period”).
Provided that Executive’s employment has not been or is not being terminated for
any reason, Executive and the Company agree to negotiate in good faith prior to
the end of the Employment Period to enter into a new Employment Agreement to
take effect after the Employment Period.

3. Cash Compensation.

A. Annual Salary. Executive’s initial base salary shall be $425,000 per year
(the “Annual Salary”), which shall be payable in accordance with the Company’s
standard payroll schedule (but in no event less frequent than on a monthly
basis), and may be increased from time to time at the discretion of the
Compensation Committee of the Company’s Board of Directors (the “Compensation
Committee”). The Compensation Committee shall review Executive’s Annual Salary
at least annually and may increase the Annual Salary from time to time at its
sole discretion. Any increased Annual Salary shall thereupon be the “Annual
Salary” for the purposes hereof. Executive’s Annual Salary shall not be
decreased without his prior written consent at any time during the Employment
Period.

B. Annual Target Bonus. Executive shall also be entitled to receive an annual
target incentive bonus of up to 80% of the Executive’s current salary. The
annual bonus

 

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shall be based upon the Company achieving its revenue and EBITDA goals, and
Executive meeting the annual goals determined by the Compensation Committee. The
amount of the annual target bonus payable to Executive in any given year shall
be determined by the Compensation Committee. The annual bonus shall be paid no
later than the end of February following the year for which such bonus is being
paid.

C. Applicable Withholdings. The Company shall deduct and withhold from the
compensation payable to Executive hereunder any and all applicable federal,
state and local income and employment withholding taxes and any other amounts
required to be deducted or withheld by the Company under applicable statutes,
regulations, ordinances or orders governing or requiring the withholding or
deduction of amounts otherwise payable as compensation or wages to employees.

4. Equity Compensation.

A. Prior Equity Awards. Any equity awards previously granted to Executive shall
continue in effect in accordance with their existing terms.

B. Other Equity Compensation. Executive shall also be entitled to participate in
any other equity incentive plans of the Company. All such other options or other
equity awards will be made at the discretion of the Company’s Compensation
Committee of the Board of Directors pursuant and subject to the terms and
conditions of the applicable equity incentive plan, including any provisions for
repurchase thereof. The option exercise price or value of any equity award
granted to Executive will be established by the Company’s Board of Directors as
of the date such interests are granted but shall not be less than the fair
market value of the class of equity underlying such award. The vesting of all
stock options and other equity compensation awards (both time-based vesting and
performance-vesting at target level) granted to Executive shall accelerate in
full in the event that the Executive’s employment is terminated without Cause
(as defined herein) or Executive resigns for Good Reason (as defined herein)
within the period beginning three months before, and ending twelve months
following, a Change in Control as defined in the Plan.

5. Expense Reimbursement. In addition to the compensation specified in
Section 3, Executive shall continue to be entitled to receive reimbursement from
the Company for all reasonable business expenses incurred by Executive in the
performance of Executive’s duties hereunder, provided that Executive furnishes
the Company, not later than the August 31 of the year following the year in
which the expense was incurred, with vouchers, receipts and other details of
such expenses in the form reasonably required by the Company to substantiate a
deduction for such business expenses under all applicable rules and regulations
of federal and state taxing authorities. The Company shall reimburse such
expenses as soon as practicable, but in no event later than ninety (90) days
after such documentation is received.

6. Fringe Benefits.

A. Group Plans. Executive shall, throughout the Employment Period, continue to
be eligible to participate in all of the group term life insurance plans, group
health plans, accidental death and dismemberment plans, short-term disability
programs,

 

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retirement plans, profit sharing plans or other plans (for which Executive
qualifies) that are available to the executive officers of the Company. During
the Employment Period, the Company will pay for coverage for Executive and his
spouse and dependents residing in Executive’s household (collectively, the
“Dependents”) under the Company’s health plan, and coverage for Executive under
the Company’s accidental death and dismemberment plan and for short-term
disability. In the event Executive elects not to participate in the Company’s
health plan, the Company shall reimburse Executive for the cost of alternative
health care coverage of his choosing for Executive and his Dependents in an
amount up to $1,500 per month. Payment for all other benefit plans will be paid
in accordance with the Company’s policy in effect for similar executive
positions.

B. Vacation. Executive shall continue be entitled to at least four weeks paid
vacation per year. Vacation shall accrue pursuant to the Company’s vacation
benefit policies.

C . Auto Allowance. Executive shall continue to be entitled to an auto allowance
for one vehicle for Executive’s use up to $1,250 per month (“Auto Allowance”).

D. Indemnification. As of the Initial Effective Date and in July 2009, the
Company and Executive entered into the Company’s standard indemnification
agreement for its key executives.

7. Termination of Employment. Executive’s employment with the Company continues
to be “at-will.” This means that it is not for any specified period of time and
can be terminated by Executive or the Company at any time, with or without
advance notice, and for any or no particular reason or cause. Upon such
termination, Executive (or, in the case of Executive’s death, Executive’s estate
and beneficiaries) shall have no further rights to any other compensation or
benefits from the Company on or after the termination of employment except as
follows:

A. Termination For Cause. In the event the Company terminates Executive’s
employment with the Company prior to expiration of the Employment Period for
Cause (as defined below), the Company shall pay to Executive the following:
(i) Executive’s unpaid Annual Salary that has been earned through the
termination date of his employment; (ii) Executive’s accrued but unused
vacation; (iii) any accrued expenses pursuant to Section 5 above, and (iv) any
other payments as may be required under applicable law (subsections (i) through
(iv) above shall collectively be referred to herein as the “Required Payments”).
For purposes of this Agreement, “Cause” shall mean that Executive has engaged in
any one of the following: (i) misconduct involving the Company or its assets,
including, without limitation, misappropriation of the Company’s funds or
property; (ii) reckless or willful misconduct in the performance of Executive’s
duties in the event such conduct continues after the Company has provided 30
days written notice to Executive and a reasonable opportunity to cure;
(iii) conviction of, or plea of nolo contendre to, any felony or misdemeanor
involving dishonesty or fraud; (iv) the violation of any of the Company’s
policies, including without limitation, the Company’s policies on equal
employment opportunity and the prohibition against unlawful harassment; (v) the
material breach of any provision of this Agreement after 30

 

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days written notice to Executive of such breach and a reasonable opportunity to
cure such breach; or (vi) any other misconduct that has a material adverse
effect on the business or reputation of the Company.

B. Termination Upon Death or Disability. If Executive dies during the Employment
Period, the Executive’s employment with the Company shall be deemed terminated
as of the date of death, and the obligations of the Company to or with respect
to Executive shall terminate in their entirety upon such date except as
otherwise provided under this Section 7B. If Executive becomes Disabled (as
defined below), then the Company shall have the right, to the extent permitted
by law, to terminate the employment of Executive upon 30 days prior written
notice in writing to Executive. Upon termination of employment due to the death
or Disability of Executive, Executive (or Executive’s estate or beneficiaries in
the case of the death of Executive) shall be entitled to receive the Required
Payments. Additionally, upon termination of employment due to the Executive’s
death, or due to the Company’s involuntary termination of Executive’s employment
due to the Executive’s Disability, Executive (or Executive’s estate or
beneficiaries in the case of the death of Executive) shall also be entitled to
the following: (i) Executive’s annual bonus for the year of termination in
accordance with Section 3B above (pro rated up to the termination date), which
bonus shall be paid at the earlier of (A) such time as the Company regularly
pays bonuses, or (B) 2 1 / 2 months following the calendar year in which the
termination occurs; and (ii) continuation of his Annual Salary following such
termination for a period of one year, which shall be payable in accordance with
the Company’s standard pay schedules; and (iii) in the case of termination due
to Disability, the Company shall reimburse Executive’s COBRA payments for
Executive’s health insurance benefits for a period of one year. For the purposes
of this Agreement, “Disability” shall mean a physical or mental impairment
which, the Board of Directors determines, after consideration and implementation
of reasonable accommodations, precludes the Executive from performing his
essential job functions for a period longer than three consecutive months or a
total of one hundred twenty (120) days in any twelve month period.

C. Termination for Any Other Reason; Resignation for Good Reason. Should the
Company terminate Executive’s employment (other than for Cause or as a result of
Executive’s Death or Disability), or the Company does not enter into a new
Employment Agreement with Executive prior to the fifth anniversary of the
Effective Date (other than because the Executive has been or is being terminated
for Cause or because of the Executive’s death or Disability) and this Agreement
expires, or in the event Executive resigns for Good Reason (as defined below)
within two years following the initial occurrence of the event giving rise
thereto, then the Company shall pay Executive the Required Payments; and
Executive shall also be entitled to the following: (i) a pro rated share of
Executive’s target bonus (pro rated up to the termination, expiration or
resignation date, as the case may be), which bonus shall be paid at the earlier
of (A) such time as the Company regularly pays bonuses; or (B) no later than 2 1
/ 2 months following the calendar year in which the termination, expiration or
resignation occurs; (ii) continuation of Executive’s Annual Salary, which shall
be payable in accordance with the Company’s standard pay schedules for a period
of one year; (iii) continuation of Executive’s monthly Auto Allowance for a
period of one year; and (iv) the Company

 

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shall also reimburse Executive’s actual COBRA payments for Executive’s health
insurance benefits for a period of one year. This Section 7C is intended to
qualify as an involuntary separation pay arrangement that is exempt from
application of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) because certain severance payments are treated as paid on account
of an involuntary separation (including a separation for Good Reason) and paid
in a lump sum within the “short-term deferral” period following the time the
Executive obtains a vested right to such payments. For the purposes of this
Agreement, “Good Reason” shall mean Executive’s voluntary resignation for any of
the following events that results in a material negative change to the
Executive; (i) a reduction in the scope of Executive’s authorities, duties and
responsibilities or a reduction in the authority, level of management, duties or
responsibilities of the supervisor to whom the Executive is required to report;
(ii) a reduction without Executive’s prior written consent in either his level
of Annual Salary or his target annual bonus as a percentage of Annual Salary;
(iii) a relocation of Executive more than thirty (30) miles from the Company’s
current corporate headquarters as of the date hereof, (iv) a material breach of
any provision of this Agreement by the Company or (v) the failure of the Company
to have a successor entity specifically assume this Agreement. Following a
Change in Control (as defined the Plan), Good Reason shall include (x) a
material negative change in authority, duties or responsibilities resulting from
the Executive no longer being an executive officer of a publicly-traded company
and (y) the Company’s chief executive officer (immediately prior the Change in
Control) no longer being the chief executive officer of the successor
publicly-traded company. Notwithstanding the foregoing, the Executive shall be
entitled to benefits described in this Section 7C and in Section 4B due to a
resignation resulting from (x) or (y) of the preceding sentence only if such
resignation occurs more than six months after the Change in Control.
Notwithstanding the foregoing, “Good Reason” shall only be found to exist if
prior to Executive’s resignation for Good Reason, the Executive has provided not
more than 90 days following the initial occurrence thereof, written notice to
the Company of such Good Reason event indicating and describing the event
resulting in such Good Reason, and the Company does not cure such event within
90 days following the receipt of such notice from Executive.

D. Health Care Reform Compliance. Notwithstanding the foregoing, if the Company
determines, in its sole discretion, that the Company cannot provide the health
insurance premium reimbursement benefits under this Section 7 without
potentially incurring financial costs or penalties under applicable law
(including, without limitation, Section 2716 of the Public Health Service Act),
the Company shall in lieu thereof pay Executive a taxable cash amount, which
payment shall be made regardless of whether Executive elects or pays for health
insurance benefits following termination (the “Health Care Benefit Payment”).
The Health Care Benefit Payment shall be paid in monthly installments on the
same schedule that the health insurance premium reimbursement amounts would
otherwise have been paid. The Health Care Benefit Payment shall be equal to the
amount that the Executive would have otherwise paid for health insurance
premiums (which amount shall be calculated based on the premium for the first
month of coverage), and shall be paid until the expiration of the one year
period following Executive’s termination.

 

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8. Non-Competition During the Employment Period. Executive acknowledges and
agrees that given the extent and nature of the confidential and proprietary
information he will obtain during the course of his employment with the Company,
it would be inevitable that such confidential information would be disclosed or
utilized by the Executive should he obtain employment from, or otherwise become
associated with, an entity or person that is engaged in a business or enterprise
that directly competes with the Company. Consequently, during any period for
which Executive is receiving payments from the Company, either as wages or as a
severance benefit , Executive shall not, without prior written consent of the
Chief Executive Officer, directly or indirectly own, manage, operate, control or
participate in the ownership, management, operation or control of, or be
employed by or provide advice to, any enterprise that is engaged in any business
directly competitive to that of the Company in the aftermarket auto parts market
in the United States; provided, however, that such restriction shall not apply
to any passive investment representing an interest of less than 1% of an
outstanding class of publicly-traded securities of any company or other
enterprise where Executive does not provide any management, consulting or other
services to such company or enterprise.

9. Proprietary Information. Executive has executed or is concurrently executing
the Company’s standard Confidential Information and Assignment of Inventions
Agreement (the “Confidentiality Agreement”), which is hereby incorporated by
this reference as if set forth fully herein. Executive’s obligations pursuant to
the Confidentiality Agreement will survive termination of Executive’s employment
with the Company. Executive agrees that he will not use or disclose to the
Company any confidential or proprietary information from any of his prior
employers.

10. Successors and Assigns. This Agreement is personal in its nature and the
Executive shall not assign or transfer his rights under this Agreement. The
provisions of this Agreement shall inure to the benefit of, and shall be binding
on, each successor of the Company whether by merger, consolidation, transfer of
all or substantially all assets, or otherwise, and the heirs and legal
representatives of Executive.

11. Notices. Any notices, demands or other communications required or desired to
be given by any party shall be in writing and shall be validly given to another
party if served either personally or via overnight delivery service such as
Federal Express, postage prepaid, return receipt requested. If such notice,
demand or other communication shall be served personally, service shall be
conclusively deemed made at the time of such personal service. If such notice,
demand or other communication is given by overnight delivery, such notice shall
be conclusively deemed given two business days after the deposit thereof
addressed to the party to whom such notice, demand or other communication is to
be given as hereinafter set forth:

 

  To the Company:    U.S. Auto Parts Network, Inc.      16941 Keegan Avenue     
Carson, California 90746      Attn: Chief Financial Officer   To Executive:   
At Executive’s last residence as provided by      Executive to the Company for
payroll records.

 

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Any party may change such party’s address for the purpose of receiving notices,
demands and other communications by providing written notice to the other party
in the manner described in this Section 11.

12. Governing Documents. This Agreement, along with the documents expressly
referenced in this Agreement, constitute the entire agreement and understanding
of the Company and Executive with respect to the terms and conditions of
Executive’s employment with the Company and the payment of severance benefits,
and supersedes all prior and contemporaneous written or verbal agreements and
understandings between Executive and the Company relating to such subject
matter. This Agreement may only be amended by written instrument signed by
Executive and an authorized officer or director of the Company. Any and all
prior agreements, understandings or representations relating to the Executive’s
employment with the Company are terminated and cancelled in their entirety and
are of no further force or effect.

13. Governing Law. The provisions of this letter agreement will be construed and
interpreted under the laws of the State of California. If any provision of this
Agreement as applied to any party or to any circumstance should be adjudged by a
court of competent jurisdiction to be void or unenforceable for any reason, the
invalidity of that provision shall in no way affect (to the maximum extent
permissible by law) the application of such provision under circumstances
different from those adjudicated by the court, the application of any other
provision of this Agreement, or the enforceability or invalidity of this
Agreement as a whole. Should any provision of this Agreement become or be deemed
invalid, illegal or unenforceable in any jurisdiction by reason of the scope,
extent or duration of its coverage, then such provision shall be deemed amended
to the extent necessary to conform to applicable law so as to be valid and
enforceable or, if such provision cannot be so amended without materially
altering the intention of the parties, then such provision will be stricken and
the remainder of this Agreement shall continue in full force and effect.

14. Remedies. All rights and remedies provided pursuant to this Agreement or by
law shall be cumulative, and no such right or remedy shall be exclusive of any
other. A party may pursue any one or more rights or remedies hereunder, or may
seek damages or specific performance in the event of another party’s breach
hereunder, or may pursue any other remedy by law or equity, whether or not
stated in this Agreement.

15. No Waiver. The waiver by either party of a breach of any provision of this
Agreement shall not operate as, or be construed as, a waiver of any later breach
of that provision.

16. Counterparts. This Agreement may be executed in more than one counterpart,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same instrument.

17. Section 409A.

(a) Notwithstanding anything to the contrary herein, the following provisions
apply to the extent severance benefits provided herein are subject to
Section 409A of Code

 

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and the regulations and other guidance thereunder and any state law of similar
effect (collectively “Section 409A”). Severance benefits shall not commence
until Executive has a “separation from service” for purposes of Section 409A.
Each installment of severance benefits is a separate “payment” for purposes of
Treas. Reg. Section 1.409A-2(b)(2)(i), and the severance benefits are intended
to satisfy the exemptions from application of Section 409A provided under
Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(5) to the maximum
extent such exemptions are available. However, to the extent such exemptions are
not available and Executive is, upon separation from service, a “specified
employee” for purposes of Section 409A, then, solely to the extent necessary to
avoid adverse personal tax consequences under Section 409A, the timing of the
severance benefits payments shall be delayed until the earlier of (i) six
(6) months and one day after Executive’s separation from service, or
(ii) Executive’s death. The parties acknowledge that the exemptions from
application of Section 409A to severance benefits are fact specific, and any
later amendment of this Agreement to alter the timing, amount or conditions that
will trigger payment of severance benefits may preclude the ability of severance
benefits provided under this Agreement to qualify for an exemption.

(b) It is intended that this Agreement shall comply with the requirements of
Section 409A, and any ambiguity contained herein shall be interpreted in such
manner so as to avoid adverse personal tax consequences under Section 409A.
Notwithstanding the foregoing, the Company shall in no event be obligated to
indemnify the Executive for any taxes or interest that may be assessed by the
IRS pursuant to Section 409A of the Code to payments made pursuant to this
Agreement. To the extent that any severance benefit payments are delayed as
required by this Agreement due to the application of Section 409A, all suspended
payments shall earn and accrue interest at the prevailing “Prime Rate” of
interest as published by The Wall Street Journal at the time the payment is
made, and any suspended payment when so made, shall be made as a lump sum
payment, including accrued interest.

18. Section 280G.

(a) If any payment or benefit Executive will or may receive from the Company or
otherwise (a “280G Payment”) would (i) constitute a “parachute payment” within
the meaning of Section 280G of the Code, and (ii) but for this sentence, be
subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then any such 280G Payment pursuant to this Agreement (a “Payment”) shall
be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the
largest portion of the Payment that would result in no portion of the Payment
(after reduction) being subject to the Excise Tax or (y) the largest portion, up
to and including the total, of the Payment, whichever amount (i.e., the amount
determined by clause (x) or by clause (y)), after taking into account all
applicable federal, state and local employment taxes, income taxes, and the
Excise Tax (all computed at the highest applicable marginal rate), results in
Executive’s receipt, on an after-tax basis, of the greater economic benefit
notwithstanding that all or some portion of the Payment may be subject to the

 

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Excise Tax. If a reduction in a Payment is required pursuant to the preceding
sentence and the Reduced Amount is determined pursuant to clause (x) of the
preceding sentence, the reduction shall occur in the manner (the “Reduction
Method”) that results in the greatest economic benefit for Executive. If more
than one method of reduction will result in the same economic benefit, the items
so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).

(b) Notwithstanding any provision of Section 18(a) to the contrary, if the
Reduction Method or the Pro Rata Reduction Method would result in any portion of
the Payment being subject to taxes pursuant to Section 409A of the Code that
would not otherwise be subject to taxes pursuant to Section 409A of the Code,
then the Reduction Method and/or the Pro Rata Reduction Method, as the case may
be, shall be modified so as to avoid the imposition of taxes pursuant to
Section 409A of the Code as follows: (A) as a first priority, the modification
shall preserve to the greatest extent possible, the greatest economic benefit
for Executive as determined on an after-tax basis; (B) as a second priority,
Payments that are contingent on future events (e.g., being terminated without
Cause), shall be reduced (or eliminated) before Payments that are not contingent
on future events; and (C) as a third priority, Payments that are “deferred
compensation” within the meaning of Section 409A of the Code shall be reduced
(or eliminated) before Payments that are not deferred compensation within the
meaning of Section 409A of the Code.

(c) Unless Executive and the Company agree on an alternative accounting firm or
law firm, the accounting firm engaged by the Company for general tax compliance
purposes as of the day prior to the effective date of the Change in Control
shall perform the foregoing calculations. If the accounting firm so engaged by
the Company is serving as accountant or auditor for the individual, entity or
group effecting the Change in Control, the Company shall appoint a nationally
recognized accounting or law firm to make the determinations required hereunder.
The Company shall bear all expenses with respect to the determinations by such
accounting or law firm required to be made hereunder. The Company shall use
commercially reasonable efforts to cause the accounting or law firm engaged to
make the determinations hereunder to provide its calculations, together with
detailed supporting documentation, to Executive and the Company within fifteen
(15) calendar days after the date on which Executive’s right to a 280G Payment
becomes reasonably likely to occur (if requested at that time by Executive or
the Company) or such other time as requested by Executive or the Company.

(d) If Executive receives a Payment for which the Reduced Amount was determined
pursuant to clause (x) of Section 18(a) and the Internal Revenue Service
determines thereafter that some portion of the Payment is subject to the Excise
Tax, Executive shall promptly return to the Company a sufficient amount of the
Payment (after reduction pursuant to clause (x) of Section 18(a)) so that no
portion of the remaining Payment is subject to the Excise Tax. For the avoidance
of doubt, if the Reduced Amount was determined pursuant to clause (y) of
Section 18(a), Executive shall have no obligation to return any portion of the
Payment pursuant to the preceding sentence.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

U.S. AUTO PARTS NETWORK, INC.     EXECUTIVE

By:

  /s/ Robert J. Majteles     /s/ Shane Evangelist

Print Name:

  Robert J. Majteles     Shane Evangelist

Title:

  Chairman of the Board      

Address:

  16941 Keegan Avenue         Carson, CA 90746      

 

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