Document:

exv10w12wii

 

Exhibit 10.12 (ii)

Date: April 6th, 2006

To:

Mr. Gil Bianco

Re: Indemnification for VAT payments

Dear Sir,

On November 30, 2005 you were appointed to serve as an External Director of TopSpin Medical Inc.
(“TopSpin”). On November 7, 2005 the Board of Directors of TopSpin approved that each of the
External Directors of TopSpin will be entitled to certain considerations for the services provided
by them to TopSpin in such capacity (the “Consideration”).

After consulting with its tax advisors, no Value Added Taxes (“VAT”) should be born by you with
respect to the Consideration.

This letter is to confirm to you TopSpin’s undertaking, that if you will be required by the Israeli
tax authorities to pay VAT with respect to the Consideration, TopSpin will indemnify you with
respect to such amounts, subject to any applicable law, TopSpin incorporation documents and to the
following terms: (a) you will inform TopSpin immediately and in writing after you become aware of
any claim, demand or other action or proceeding (actual or potential), if a claim for
indemnification in respect thereof can be made by you under this letter (“Claim”); and (2) TopSpin
will be entitled to defend and settle, on your behalf, such Claim, and you will assist TopSpin to
defense or settle such Claim, including, without limitation, by issuing authorization letters or
proxies to TopSpin and its professional advisors to act on you behalf.

Our agreement is conditioned upon you acceptance of the terms of indemnification with your
signature hereunder.

Sincerely yours,

TopSpin Medical Inc.

I agree:

                                        

Gil Biancoexv10w13

 

Exhibit 10.13

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into in Lod on the       day
of                ,       by and between: TOPSPIN MEDICAL (ISRAEL) LTD., (“Company”),
an Israeli company, whose principal place of business address is Global Park, 2 Yodfat St., North
Industrial Zone, Lod, Israel; and                      (                    ) of                     , Israel
(“Employee”)

WHEREAS Employee wishes to be employed by Company and Company wishes to employ Employee at a
Position as defined below, subject to the terms and conditions detailed below in this Agreement;
and WHEREAS Employee represents and warrants that he has the qualifications and skills required for
the purposes of performing his obligations hereunder and that there is no hindrance — legal,
contractual or otherwise — for the execution by him of this Agreement, and he has expressed his
wish to be employed with Company in the Position, and; WHEREAS the parties wish to set forth in
writing the terms and conditions of Employee’s employment with Company, all as detailed below
herein and subject to the terms and conditions contained herein; NOW, THEREFORE, in consideration
of the premises and the mutual promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the parties agree as follows:

1. EMPLOYMENT — GENERAL

	 	1.1.	 	Employment. Company hereby employs Employee and Employee hereby accepts
employment upon the terms and conditions set forth hereinafter. Employee’s employment
according to this Agreement shall commence on                      (“Effective Date”).
	 
	 	1.2.	 	The Position. The Employee shall be employed as a                     
(“Position”) and in such capacity, he shall be subject to the direction and control of the
Board of Directors of the Company, its CEO and officers.
	 
	 	1.3.	 	Trial Period. Without limiting any right of the Company under this
Agreement and/or in accordance with any applicable law, it is hereby agreed that upon
conclusion of the first 3 (three) months following the commencement of Employee’s
Employment in the Company, which shall be considered as a trial period of Employee’s
employment in the Company, the Company shall consider, upon its sole discretion, either to
continue, or not to continue, Employees’ employment in the Company (“Trial Period”). In the
event the Company decided not to continue Employee’s employment in the Trial Period,
notwithstanding any of the provisions of this Agreement, the Company shall give the
Employee a prior notice of 14 (fourteen) days.
	 
	 	1.4.	 	Personal Service Contract. The Parties hereto confirm that this is a
personal service contract and that the relationship between the parties hereto shall not be
subject to any general or special collective employment agreement or any custom or practice
of Company in respect to any of its other employees or contractors. Except as expressly
provided in this Agreement, Employee shall not be entitled to any payments or other
benefits in respect of his employment and the termination of his employment with Company.

2. EMPLOYEE’S UNDERTAKINGS. Employee hereby undertakes as follows:

	 	2.1.	 	Carry out of Instructions. To carry out all of the instructions related
to his employment in accordance with all the resolutions of Company’s Board of Directors or
the instructions of the officers, all as set forth in Section 1.2 above.
	 
	 	2.2.	 	Fidelity. To perform the duties and assignments imposed upon himself in
the scope of his

 

 

	 	 	 	employment with Company with devotion, honesty and fidelity, subject to Company’s policy
in existence from time to time, and to dedicate to the performance of the said duties all
his know-how, qualifications and experience and all the time, diligence and attention
required for the performance thereof efficiently, with fidelity and in accordance with the
requirements of this Agreement, and to use his best endeavors in order to consolidate
Company and to advance the affairs and business of Company and the realization of its
objectives.
	 
	 	2.3.	 	Conflict of Interest. Employee declares that he is not presently
involved, and he undertakes not to become involved in the future, for so long as he is an
employee of Company, in any obligations towards any third party whatsoever which entail any
form of conflict of interest with his employment with Company.

3. COMPENSATION

	 	3.1.	 	Salary. In consideration for Employee’s obligations under this Agreement,
Company shall pay Employee a monthly gross salary of NIS                      (“Base Salary”). The
Company and the Employee agree that, since the Employee’s position, duties and
responsibilities require a varying number of overtime hours and are of such a nature that
it is difficult to keep specific track of all overtime hours of the Employee, the Company
shall pay to the Employee an additional gross amount of NIS                      per month
representing a global payment for the overtime hours the Employee shall reasonably be
expected to work monthly (the “Additional Compensation”; the Base Salary together with the
Additional Compensation, the “Salary”).
	 
	 	3.2.	 	Payment. The Salary shall be paid in New Israel Shekels and shall be paid
to the Employee by no later than the 9th of the following month. Review of
Employee’s Salary shall take place 12 months after the effective date and then annually by
agreement between the Employee’s and the Board of Directors of the Company or the CEO of
the Company. As provided in Section 3.1 above, the Salary includes remuneration for working
overtime, on days of rest and in consideration for Employees non competition obligations,
and Employee shall not be entitled to any further remuneration or payment whatsoever other
than the Salary and/or benefits, unless expressly specified in this Agreement. Employee
acknowledges that the Salary to which he is entitled constitutes due consideration for him
working overtime and for his non-competition obligations towards the Company. The Salary,
as mentioned in Section 3.1 hereto, and it alone, shall constitute the sole basis for
calculating any of Employee’s rights under any applicable law, and any other benefits
provided under this Agreement shall not be deemed as the Salary or any part thereof.
	 
	 	3.3.	 	Statuary Deductions. Company shall make the required statutory deductions
from the Salary and from any other amount paid to Employee by Company under this Agreement,
including income tax, social security and healthcare tax, and make the appropriate payments
on behalf of Employee to the Income Tax Authorities, to the Institute of National Insurance
and any other relevant authority.
	 
	 	3.4.	 	Manager’s Insurance Policy. In respect of the term commencing from the
beginning of Employee’s employment in the Company, the Company shall contribute funds on
behalf the Employee to a Managers Insurance Fund in the name of the Employee (“Fund”) and
disability insurance for loss of ability to work (“Disability Insurance”) as specified
below.

	 	3.4.1.	 	The Company shall allocate to the Fund, an aggregated amount equal to
thirteen and a third percent (13.33%) in the following portions; five percent (5%) of
each monthly Salary for pension compensation and eight and a third percent (8.33%) of
each monthly Salary to severance compensation. Moreover, the Company will allocate
for the purpose of the Disability Insurance a maximum premium of 2.5% of Employee’s

 

 

	 	 	 	monthly Salary, as provided by the general approval of the Minister of Labor and Social
Welfare regarding payments by employers to a pension fund and insurance fund in
lieu of severance pay, (“General Approval”) annexed hereto as Exhibit A.
The Company shall deduct from Employee’s monthly Salary an aggregated amount
equal to five percent (5%) of Employee’s monthly Salary for the Fund.
	 
	 	3.4.2.	 	The aforementioned allocations shall be in lieu of Severance Pay
according to the Severance Pay Law 5723-1963 (“Severance Pay Law”), if Employee is
entitled to, and this in view of the General Approval. For clarification purposes, it
is hereby expressed that the Company is waiving its right to a refund of the funds
accumulated in the Fund in accordance with the provisions of the General Approval.

	 	3.5.	 	Education Fund. In respect of the term commencing from the beginning of
Employee’s employment in the Company, the Company shall pay a sum as high as the recognized
deductible cap by the tax authorities, but in no event no more than 7.5% of the Salary and
shall deduct 2.5% from the Salary to be paid on behalf of Employee toward a further
education fund. Use of these funds shall be in accordance with the by-laws of the fund. The
Employee hereby grants his consent to such a deduction provided in this section herein.
	 
	 	3.6.	 	Expenses. The Company will reimburse Employee for any documented,
out-of-pocket expenses from time to time properly incurred by Employee in connection with
his employment by Company, provided that such expenses have been approved
in advance by Company.
	 
	 	3.7.	 	Sick Leave and Recuperation Pay. Employee shall be entitled to sick leave
and Recuperation Pay as provided by law.
	 
	 	3.8.	 	Vacation. Employee shall be entitled to annual leave as provided by the
Annual Vacation Law, 5711-1951, or        days, the higher of the two, and such
annual leave shall be increased annually according to the Annual Vacation Law, 5711-1951.
Leave may not be accumulated for over 2 years, unless otherwise mutually agreed between the
Company and the employee, and Company shall be entitled to redeem leave at any time.
	 
	 	3.9.	 	 Car. During the term of this agreement Employee shall be entitled to the
full time use of a class II Company vehicle. All the expenses in connection with the
maintenance and use of the said car shall be borne and paid by the Company. Employee hereby
undertakes to use the car reasonably and properly, as if he owned the car, and to return
the car to Company immediately upon the termination of this Agreement. For clarification
purposes, the parties agree that Employee shall gross up the value of the benefit to
Employee in placing the car at his disposal as aforesaid in the amount of the tax
applicable to him in respect of the said benefit. The Employee hereby covenants to pay and
to bear any fine regarding parking violation, traffic violation or any other violation, and
to bear any expense with respect to any trial or other proceeding thereto.
	 
	 	3.10.	 	Cellular Phone During the term of this agreement Employee shall be
entitled to use company’s cell phone according to the company procedures. For clarification
purposes, the parties agree that Employee shall gross up the value of the benefit to
Employee in placing the cellular phone at his disposal as aforesaid in the amount of the
tax applicable to him in respect of the said benefit.

4. TERM OF AGREEMENT

	 	4.1.	 	Term. This Agreement is entered into for an indefinite period of time.
	 
	 	4.2.	 	Termination by Employee. Employee shall be entitled to terminate this
Agreement by giving

 

 

	 	 	 	Company a prior notice, to be delivered to Company, in writing, of 30
(thirty) days; It being understood that during such period, Employee shall (subject to the
needs of the Company)
continue to perform his duties for Company, including the training and initiation of his
replacement, and, subject to the performance of such obligations, Company shall make all
payments as required hereunder.
	 
	 	4.3.	 	Termination by Company. Subject to section 1.3 above, the Company shall
be entitled to terminate this Agreement, at any time, by giving Employee a prior notice, to
be delivered to Employee, in writing, of 30 (thirty) days. In such an event Employee shall
(subject to the needs of the Company) continue to perform his duties for the Company,
including the training and initiation of his replacement, and, subject to the performance
of such obligations, Company shall make all payments as required hereunder. The Company
shall be entitled to terminate the actual employment of Employee at any time forthwith,
including prior to the notice, and to make a payment to Employee in lieu of such prior
notice.
	 
	 	4.4.	 	Termination For Cause. Notwithstanding the foregoing provisions of this
Section 4, Company shall be entitled to terminate this Agreement forthwith, and without
prior notice, and Employee shall not be entitled to any severance pay or other compensation
whatsoever, in any of the following events: (i) Employee breaches any of his obligations
pursuant to this Agreement, including those provided in Sections 5, 6 and 7; (ii) Employee
is convicted of a crime or misdemeanor vis-a-vis the Company; (iii) any employee of Company
and/or any director thereof, or the Company has tangible evidence that Employee (A) has
committed an act of fraud vis-a-vis the Company or its directors or any of its employees,
or (B) has embezzled in any way Company moneys, or (C) has, by intentional act or omission,
caused damage to Company, or (D) has in a material conflict of interest situation with the
Company, acted to advance his own private interests, (iv) in any other event according to
any applicable law that entitles an employer not to pay, in whole or in part, severance pay
and not to grant prior notice.

5. PROPREITARY INFORMATION 

	 	5.1.	 	Proprietary Information. The Employee acknowledge and agrees that he will
have access to confidential and proprietary information concerning the business and
financial activities of the Company and information and technology regarding the Company’s
product research and development, including without limitation, the Company’s banking
investments, investors, properties, employees, marketing plans, customers, trade secrets,
and test results, processes, data and know-how, improvements, inventions, techniques and
products (actual or planned). Such information, whether documentary; written oral or
computer generated, shall be deemed to be and referred to as “Proprietary Information”.
	 
	 	 	 	Proprietary Information shall be deemed to include any and all preparatory information
disclosed by or on behalf of the Company and irrespective of form, but excluding
information that (i) shall have appeared in any printed publication or patent or shall
have become a part of the public knowledge except as a result of a breach of this
Agreement by the Employee; (ii) reflects general skills and experience gained during the
Employee’s engagement by the Company or (iii) reflects information and data generally
known within the industries or trades in which the Company transacts business.
	 
	 	5.2.	 	Nondisclosure. Employee agrees and declares that all Proprietary
Information, patents and other rights in connection therewith shall be the sole property of
the Company and its assignees at all times. Both during his engagement by the Company and
after its termination. Employee will keep in confidence and trust all Proprietary
Information and the Employee will not use or disclose any Proprietary Information or
anything relating to it without the written consent of the Company, except as may be
necessary in the ordinary course of performing the Employee’s

 

 

	 	 	 	duties hereunder and in the
best interests of the Company.
	 
	 	5.3.	 	Return of Documents. Upon termination of his employment with the Company,
and upon the Company’s request, the Employee will promptly deliver to the Company all
documents and materials of any nature pertaining to his work with the Company, including
but not limited to notebooks, notes, memoranda, records, diagrams, blueprints, bulletins,
formulas, reports, computer programs, other data of any kind coming into Employee’s
possession or prepared by him in connection with his Employment, and he will not take with
him any documents or materials or copies thereof containing any Proprietary Information.
	 
	 	5.4.	 	Third Party Information. Employee recognize that the Company received and
will receive confidential or proprietary information from third parties subject to a duty
on the Company’s part to maintain the confidentiality of such information and to use it
only for certain limited purposes at all times. Both during his employment and after its
termination, the Employee undertakes to keep and hold all such information in strict
confidence and trust. He will not trust or disclose any of such information without the
prior written consent of the Company, except as may be necessary to perform his duties as
an employee of the Company and consistent with the Company’s agreement with such third
party. Upon termination of his employment with the Company, Employee shall act with respect
to such information as set forth in Section 5.3, mutatis mutandis.
	 
	 	5.5.	 	Survival. The Employee’s undertakings in this Section 5 shall remain in
full force and effect after termination of this Agreement.

6. DISCLOSURE AND ASSIGNMENT OF INVENTIONS

	 	6.1.	 	Contributions. The Employee understandings that the Company is engaged in
a continuous program of research, development, production and marketing in connection with
its business and that, as an essential part of his employment with the Company, he is
expected to make new contributions to and create inventions of value for the Company.
Employee agrees to share with the Company all his knowledge and experience.
	 
	 	6.2.	 	Obligation to Keep the Company Informed. From and after the date he first
became associated with the Company; Employee undertakes and covenants that he will promptly
disclose in confidence to the Company all inventions, improvements, designs, original works
of authorship formulas, concepts, techniques, methods, systems, processes, compositions of
matter, computer software programs, databases, mask works, and trade secrets, related to
the Company’s business or current or anticipated research and development, whether or not
patentable, copyrightable or protactible as trade secretes, that are made or conceived or
first reduced to practice or created by him, either alone or jointly with others during the
period of his employment, whether or not in the course of his employment (“Inventions”).
	 
	 	6.3.	 	Ownership. All Inventions that (a) are or were developed, whole or in
part on Company’s time or with the use of any equipment, supplies, facilities or trade
secrets of the Company, (b) result directly from any work performed by him for the Company,
or (c) relate to the Company’s business or current or anticipated research and development,
are and will be the sole and exclusive property of the Company (“Company Invention”).
	 
	 	6.4.	 	Assignment of Inventions. The Employee hereby irrevocably transfers and
assigns and will transfer and assign in the future to the Company (a) all worldwide
patents, patent applications, copyrights, mask works, trade secrets and other intellectual
property rights in any Company Invention; and (b) any and all “Moral Rights” (as defined
below) that he may have in or with respect to any Company Invention. Employee also hereby
forever waives and agrees never to assert any and all Moral Rights he may have in or with
respect to any Company Invention, even

 

 

	 	 	 	after termination of his work on behalf of the
Company. “Moral Rights” mean any rights of
paternity any right to claim authorship of any Invention and all right, title and interest
worldwide in such Inventions and in all intellectual property rights based upon such
Inventions. To object to any distortion, mutilation or other modification of, or other
derogatory action in relation to any Invention whether or not such would be prejudicial to
his honor or reputation and any similar right, existing under judicial or statutory law of
any country in the world or under any treaty, regardless of whether or not such right is
denominated or generally referred to as a “Moral Right”.
	 
	 	6.5.	 	Assistance in Obtaining Patents and other Legal Protections. The Employee
agrees to assist the Company to obtain for the Company and enforce patents, copyrights,
mask work rights and other legal protections for the Company’s Inventions in any and all
countries. Employee will execute any documents that the Company may reasonably request for
use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and
other legal protections. Employees obligation under this Section 6.5 will continue beyond
the termination of his employment with the Company, provided that the Company will
compensate him at a reasonable rate after such termination for time or expenses actually
spent by him at the Company’s request on such assistance. The Employee hereby irrevocably
appoints the Secretary of the Company as his attorney-in-fact to execute documents on his
behalf for this purpose.

7. NON — COMPETITION 

	 	7.1.	 	Non Competition. The Employee agrees and undertakes that he will not, so
long as he is employed by the Company and for a period of 24 months following termination
of his employment for whatever reason, directly or indirectly as owner, partner, joint
venturer, stockholder, employee, broker, agent principal, corporate officer, director,
licensor or in any other capacity whatever, engage in, become financially interested in, be
employed by, or have any connection with any business or venture that is engaged in
activities competing with products or services offered by the Company; provided,
however, that the Employee may own securities of any corporation which is engaged
in such business and is publicly owned and traded but in an amount not exceed at any one
time, one percent of any class of stock or securities of such company, so long as Employee
has no active role in the publicly owned and traded company as director, employee,
consultant or otherwise.
	 
	 	7.2.	 	No Solicitation. Employee agrees and undertakes that during the period of
his employment and for a period of 24 months following termination, he will not, directly
or indirectly, including personally or in any business in which he is an officer, director
or shareholder, for any purpose or in any place, employ in any activity that competes with
Company’s activities, products or services offered by the Company, any key employee
employed by the Company or retained by the Company as a consultant on the date of such
termination or during the preceding twelve months. Employee agrees that during the period
of his Employment with the Company and for 24 months thereafter, he will not solicit or
encourage or cause others to solicit or encourage any key employees of the Company to
terminate their employment with the Company.
	 
	 	7.3.	 	Severability. If any one or more of the terms contained in this Section 7
shall, for any reason be held to be excessively broad with regard to time, geographic scope
or activity, the term shall be construed in a manner to enable it to be enforced to the
extent compatible with applicable law.

8. MISCELLANEOUS

	 	8.1.	 	Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Israel.

 

 

	 	8.2.	 	Assignments. Employee may not assign or transfer any right, claim or
obligation provided
herein. The Company may assign or transfer any right, claim or obligation provided herein,
provided that any right of the Employee under this Agreement shall not be diminished.
	 
	 	8.3.	 	Notices. The addresses of the parties for the purposes of this Agreement
shall be as specified in the preamble hereto and/or any other address as notified by either
party to the other from time to time.
	 
	 	8.4.	 	Construction. Words in the masculine gender shall include the feminine
and vice versa.
	 
	 	8.5.	 	Entire Agreement. This Agreement contains the entire understanding of the
parties. There are no restrictions, agreements, promises, warranties, covenants or
undertakings between the parties with respect to the subject matter hereof.
	 
	 	8.6.	 	Amendments. This Agreement may not be altered, modified or amended except
by a written instrument signed by the parties.

IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date first above
written:

	 
	 	 	 	 	 
	 

TOPSPIN MEDICAL (ISRAEL) LTD.

	 	 

EMPLOYEE
	 	 
	 
	 	 	 	 
	By:                               
	 	 	 	 
	 
	 	 	 	 
	Title:                     
	 	 	 	 

 

 

Exhibit A

GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND AND INSURANCE FUND IN
LIEU OF SEVERANCE PAY

By virtue of my power under section 14 of the Severance Pay Law, 5723-1963
(hereinafter: the “Law”), I certify that payments made by an employer commencing from
the date of the publication of this approval publication for his employee to a
comprehensive pension benefit fund that is not an insurance fund within the meaning
thereof in the Income Tax (Rules for the Approval and Conduct of Benefit Funds)
Regulations, 5724-1964 (hereinafter: the “Pension Fund”) or to managers insurance
including the possibility of an insurance pension fund as aforesaid (hereinafter: the
“Insurance Fund), including payments made by him by a combination of payments to a
Pension Fund and an Insurance Fund (hereinafter: the “Employer’s Payments), shall be
made in lieu of the severance pay due to the said employee in respect of the salary from
which the said payments were made and for the period they were paid (hereinafter: the
“Exempt Salary”), provided that all the following conditions are fulfilled:

	(1)	 	The Employer’s Payments -

	 	(a)	 	to the Pension Fund are not less than 141/3% of the Exempt
Salary or 12% of the Exempt Salary if the employer pays for his employee in addition
thereto also payments to supplement severance pay to a benefit fund for severance pay or
to an Insurance Fund in the employee’s name in an amount of 21/3%
of the Exempt Salary. In the event the employer has not paid an addition to the said
12%, his payments shall be only in lieu of 72% of the employee’s severance pay;
	 
	 	(b)	 	to the Insurance Fund are not less than one of the following:

	 	(1)	 	131/3% of the Exempt Salary, if the
employer pays for his employee in addition thereto also payments to secure
monthly income in the event of disability, in a plan approved by the
Commissioner of the Capital Market, Insurance and Savings Department of the
Ministry of Finance, in an amount required to secure at least 75% of the
Exempt Salary or in an amount of 21/2% of the Exempt
Salary, the lower of the two (hereinafter: “Disability Insurance”);
	 
	 	(2)	 	11% of the Exempt Salary, if the employer paid, in addition, a
payment to the Disability Insurance, and in such case the Employer’s Payments
shall only replace 72% of the Employee’s severance pay; In the event the
employer has paid in addition to the aforegoing payments to supplement
severance pay to a benefit fund for severance pay or to an Insurance Fund in
the employee’s name in an amount of 21/3% of the Exempt
Salary, the Employer’s Payments shall replace 100% of the employee’s severance
pay.

	(2)	 	No later than three months from the commencement of the Employer’s Payments, a written
agreement is executed between the employer and the employee in which -

	 	(a)	 	the employee has agreed to the arrangement pursuant to this approval in a text
specifying the Employer’s Payments, the Pension Fund and Insurance Fund, as the case
may be; the said agreement shall also include the text of this approval;
	 
	 	(b)	 	the employer waives in advance any right which it may have to a refund of monies
from his payments, unless the employee has withdrawn monies from the Pension Fund or
Insurance Fund other than by reason of an entitling event; in such regard “Entitling
Event” means death, disability or retirement at after the age of 60.

 

 

	 	(3)	 	This approval is not such as to derogate from the employee’s right to severance pay
pursuant to any law, collective agreement, extension order or employment agreement, in
respect of salary over and above the Exempt Salary.

15th Sivan 5758 (9th June 1998).

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