Document:

Exhibit
10.17

 

EMPLOYMENT
AGREEMENT

 

This AGREEMENT dated September 1, 2004

 

BETWEEN

 

STRESSGEN BIOTECHNOLOGIES INC. (a
Delaware corporation) and STRESSGEN BIOTECHNOLOGIES
CORPORATION (a Yukon corporation) having an office at 350 –
4243 Glanford Avenue, Victoria, British Columbia

 

(collectively, the “Employer”)

 

AND:

 

DAN KORPOLINSKI,
residing at 935 Sarena, Waterford, Michigan, USA, 48327

 

(the “Executive”)

 

WITNESSES THAT WHEREAS:

 

A.                                                                                   The
Executive has been employed by the Employer pursuant to a contract of
employment dated March 8, 2000 and that Agreement, as amended, expires on August 31,
2004;

 

B.                                                                                     The
Employer wishes to continue to employ the Executive; and

 

C.                                                                                     The
Executive has agreed to the terms and conditions of employment herein.

 

THEREFORE in consideration
of the covenants and agreements herein, and for other good and valuable
consideration given by each party hereto to the other, the receipt and
sufficiency of which are hereby acknowledged by each of the parties, the
parties hereby agree as follows:

 

1.                                                                                      EMPLOYMENT.

 

1.1                               Position.  StressGen Biotechnologies Inc. (“StressGen
U.S.”) agrees to employ the Executive as President and Chief Executive
Officer of its operations in the United States and of StressGen Biotechnologies
Corporation (“StressGen Corp.”).

 

1.2                               Director.  The Executive shall serve, subject to ongoing
shareholder approval, as a Director of StressGen Corp. upon the terms and
conditions set out herein.

 

1.3                               Service.  During the term the Executive shall:

 

(a)                                  well and faithfully serve the Employer and use his best
efforts to promote the best interests of the Employer;

 

 

(b)                                  unless prevented by ill health or injury, devote the whole
of his working time and attention to the business of the Employer; and

 

(c)                                  not, without the prior written consent of the Employer,
which consent may be withheld in the sole discretion of the Employer, engage in
any other business, profession or occupation, or become an officer, director,
employee, contractor for service, agent or representative of any other corporation,
partnership, firm, person, organization or enterprise.

 

1.4                               Term.  The term of this Agreement shall commence on
the date of this Agreement and shall continue until it and the Executive’s
employment are terminated in accordance with section 4 or 5 of this
Agreement.

 

1.5                               Location
of Employment.  The Executive
shall be based in San Diego, CA., but shall be
required to travel to the offices of StressGen Corp. in Victoria, BC as needed
to perform his duties and obligations under this Agreement.  In the event that the Employer relocates its
operations, the Executive agrees to relocate as required by the Board of
Directors of StressGen Corp. to any location in the United States.

 

2.                                                                                      COMPENSATION
AND BENEFITS.  During the
Executive’s employment with the Employer, the Employer shall pay to the
Executive the compensation and provide the benefits as set out in Schedule A,
which sets out completely the compensation and benefits entitlement of the
Executive.

 

3.                                                                                      EXPENSES.
 The Executive shall be reimbursed by
the Employer for all reasonable expenses incurred in connection with his
employment, including business travel. 
The Executive’s expenses shall be reviewed and approved by the
Chairperson of the Audit Committee of the Board of Directors of StressGen Corp.
at least once per quarter.  In the event,
StressGen Corp. or a successor relocates its offices from Victoria, British Columbia, the Employer shall reimburse the Executive for the
reasonable costs of relocating to that new location.

 

4.                                                                                      TERMINATION
OF AGREEMENT AND EMPLOYMENT.

 

4.1                               Termination
by Executive. The Executive may terminate his employment with the
Employer by giving not less than 90 days written notice of resignation to the
Employer.  At the time the Executive
provides the Employer with notice of resignation, or at any time thereafter,
the Employer shall have the right to elect to terminate the Executive’s
employment at any time prior to the effective date of the Executive’s
resignation, and upon such election, shall provide to the Executive a lump sum
equal to ninety days Base Salary or to such proportion of the ninety days that
remain outstanding at the time of the election and shall continue to provide
all medical and healthcare benefits that the Employer is permitted or able to
provide under the applicable rules of the relevant plans for the lesser of
ninety days or the period of time that remains outstanding at the time of the
Employer’s election.  Upon such election
being made by the Employer, the Executive shall not be entitled to any further
Annual Bonus, participation in the Executive Bonus Plan or vesting of stock
options. Upon the effective date of the Executive’s

 

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resignation, the
Employer shall not be obligated to make any further payments under this
Agreement

 

4.2                               Termination
by Employer.  The Employer may
terminate the employment of the Executive by providing the Executive with, in
lieu of reasonable notice, a severance package equivalent to 18 months Average
Salary, as that term is defined herein, payable in equal monthly installments
commencing on the 15th day of the month following the termination of employment
(the “Severance Period”).  The Employer
shall continue to provide all medical and health care benefits and all other
benefits that it is permitted or able to provide under the applicable rules of
the relevant plans during the Severance Period. 
The Employer will also reimburse the Executive for any premiums paid by
the Executive (up to a maximum of US$6,600 per annum) for supplemental life
insurance during the Severance Period. 
The Executive acknowledges that the Employer will not continue any long
term disability insurance during the Severance Period.  The Executive also acknowledges that all
vested stock options granted to the Executive by the Employer must be exercised
in accordance with the terms of the StressGen Corp. stock option plan within 6
months from the date of termination.  The
Executive agrees that the compensation payable pursuant to this section 4.2
shall be the maximum compensation to which the Executive is entitled in lieu of
reasonable notice, and the Employer will have no further obligations to the
Executive with respect to the termination of this Agreement including, without
limitation, further severance pay or damages.

 

4.3                               Average
Salary.  For the purposes of section 4.2
of this Agreement, the Executive’s Average Salary shall be the amount of Base
Salary set out in Schedule A to this Agreement plus an average of the
Annual Bonus, as set out in Schedule A to this Agreement, if any, for the
preceding three fiscal years, but shall not include the amount of any Special
Bonus payable under section 6 of this Agreement.

 

4.4                               Termination
by Death or Permanent Incapacity. 
The Employer’s obligation to the Executive and the Executive’s
obligations to the Employer pursuant to this Agreement shall terminate upon the
Executive’s death or permanent incapacity. 
For the purposes of this section 4.4, the Executive shall be deemed
to have suffered permanent incapacity when the Executive suffers from any
illness or injury that prevents him from performing his usual employment duties
for a period of 12 consecutive months. 
Where the employment of the Executive is terminated under this section 4.4,
the Employer shall be under no obligation to provide the Executive with any
further notice of termination or pay in lieu of notice or any other form of pay
or damages. The Executive acknowledges and agrees that given the nature of the
Employer’s business and the critical importance of his position to the
operations of the Employer, it would constitute an unreasonable accommodation
on the part of the Employer to operate without the services of the Executive
for a period in excess of 12 months. 
Furthermore, the Executive acknowledges that it would be impractical for
the Employer to hire a replacement for the Executive, unless the replacement is
hired on a permanent basis.

 

4.5                               Termination
by the Employer for Just Cause. 
Notwithstanding any other provision of this Agreement, the Employer may
on written notice to the Executive immediately terminate this Agreement and the
Executive’s employment with the Employer at any time for cause, without notice
or pay in lieu of notice or any other form of compensation, severance pay or
damages.

 

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4.6                               Directorship
and Offices.  Upon the
termination of his employment with the Employer, the Executive shall
immediately resign any directorship or office held in the Employer or any
parent, subsidiary or affiliated companies of the Employer and, except as
provided in this Agreement, the Executive shall not be entitled to receive any
written notice of termination or payment in lieu of notice, or to receive any
severance pay, damages or compensation for loss of office or otherwise, by
reason of the resignation or resignations referred to in this section 4.6.  On termination of employment with the
Employer, the Executive shall immediately relinquish all shares or stock and
all equity interests which may be held by the Executive as a nominee for or on
behalf of the Employer or any parent, subsidiary or affiliated companies of the
Employer.

 

5.                                                                                      CHANGE
OF CONTROL.

 

5.1                               Termination
By Employer. 
Provided that this Agreement has not been terminated pursuant to section 4
of this Agreement, in the event that within the 12-month period immediately
following a Change of Control (as defined in section 5.2 of this
Agreement), any of the following occur:

 

(a)                                  the
Executive is placed in a position of lesser stature than that of President and
Chief Executive Officer; is assigned duties inconsistent with such position or
duties which, if performed, would result in a significant change in the nature
or scope of powers, authority, functions or duties inherent in such position
immediately prior to the Change of Control; is assigned performance
requirements or working conditions which are at variance with the performance
requirements and working conditions in effect immediately preceding the Change
of Control; or is accorded treatment on a general basis that is in derogation
of his status as President and Chief Executive Officer; or

 

(b)                                  any
requirement of the Company that the location at which the Executive performs
his principal duties be outside a radius of 100 miles from the location at which
the Executive performs such duties immediately before the Change of Control;

 

then, at the Executive’s election, of which the Executive shall advise
the Employer, by notice in writing within 12 months of the Change of Control,
this Agreement shall be deemed to have been terminated by the Employer and the
Employer will, immediately upon such termination, pay to the Executive an
amount equal to his Average Salary (as that term is defined in section 4.3
of this Agreement) for 18 months.  In
addition, all Options held by the Executive shall vest immediately and the
Executive shall have six months to exercise the Options. The Employer shall
continue to provide all medical and health care benefits and all other benefits
that it is permitted or able to provide under the applicable rules of the
relevant plans for a period of 18 months from the date of the Executive’s
election following a Change of Control. 
The Employer will also reimburse the Executive the premium (up to a
maximum of US$6,600 per annum) for supplementary life insurance for a period of
18 months following the date of the Executive’s election following the Change
of Control. The Executive acknowledges that the Employer will not continue long
term disability insurance following his election to terminate his employment

 

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pursuant to this section 5.1.
The Executive further agrees that compensation payable pursuant to this section 5.1
is in lieu of the severance package payable under section 4.2 of this
Agreement and shall be the maximum compensation to which the Executive is
entitled to receive in lieu of reasonable notice, and the Employer will have no
further obligations to the Executive with respect to the termination of this
Agreement or his employment, including, without limitation, further severance
pay or damages.

 

5.2                               Change
of Control.  For the purposes of
this agreement, a “Change of Control” shall be deemed to have occurred upon the
acquisition, directly or indirectly, of more than 50% of the issued voting
shares of the Employer by a purchaser or a group of purchasers related to or
acting jointly or in concert with each other (within the meaning of the Securities Act of British Columbia).

 

6.                                                                                      SPECIAL
BONUS.

 

6.1                               Special
Bonus.  Upon the acquisition,
directly or indirectly of more than 50% of the issued voting shares of
StressGen Corp. by a purchaser or a group of purchasers related to and acting
jointly or in concert with each other (within the meaning of the Securities Act (British Columbia) or upon the Employer
obtaining certain financing milestones, the Employer may pay to the Executive a
special bonus, as agreed between the Employer and the Executive.

 

7.                                                                                      CONFIDENTIALITY.

 

7.1                               Non-Disclosure
of Information of the Employer. 
During the term of this Agreement and thereafter the Executive shall
keep confidential all information of a confidential or proprietary nature
concerning the Employer, its subsidiaries and affiliates and their respective
operations, assets, finances, businesses and affairs and shall not use that
information for the Executive’s personal advantage or the advantage of any
third party, provided that nothing herein shall prevent disclosure of
information which is publicly available or which is required to be disclosed
under applicable law or legal process (“Confidential Information”).  For greater certainty, Confidential
Information shall include, but not be limited to, all documents and records,
whether original, duplicated, computerized, memorized, handwritten or in any
other form, and all information contained therein relating to the business,
intellectual property, technology and know how of the Employer.

 

7.2                               Return
of Records and Employer Property. 
The Executive shall at any time upon request by the Employer, or upon
the termination of his employment with the Employer, irrespective of the time,
manner or cause of the termination of the Executive’s employment by the
Employer, promptly return to the Employer all records, files, lists, drawings,
documents, models, equipment, software, intellectual property, know how and any
other property belonging to the Employer or relating to the Employer’s
business.

 

5

 

8.                                                                                      RESTRICTED
ACTIVITIES.  During the term of
this Agreement and for a period of 12 months after the termination thereof
irrespective of the time, manner or cause of the termination of the Executive’s
employment by the Employer, the Executive shall not, directly or indirectly:

 

(1)                                 solicit, divert, or take away from the Employer any client
or account of the Employer or assist any other person, corporation or
partnership to do so;

 

(2)                                 solicit or encourage any employee of the Employer to
terminate his employment with the Employer or assist any other person,
corporation or partnership to do so; or

 

(3)                                 offer employment to any employee of the Employer.

 

9.                                                                                      EXECUTIVE
COOPERATION AND ASSISTANCE.  The
Executive agrees that he shall, both during the term of this Agreement and
thereafter, fully co-operate with and assist the Employer in the resolution of
complaints, claims or disputes against the Employer, including without
limitation civil, criminal or regulatory proceedings.

 

10.                                                                               ENFORCEMENT.  The Executive acknowledges and agrees that
the covenants and obligations under this Agreement are reasonable, necessary
and fundamental to the protection of the Employer’s business interests, and the
Executive acknowledges and agrees that any breach of this Agreement by the
Executive would result in irreparable harm to the Employer and loss and damage
to the Employer for which the Employer could not be adequately compensated by
an award of monetary damages. 
Accordingly, the Executive acknowledges and agrees that in the event of
any breach or threatened breach of any provision of this Agreement by the
Executive, the Employer shall, in addition to any and all remedies available to
the Employer at law or in equity, be entitled as a matter of right to judicial
relief by way of a restraining order, interim, interlocutory or permanent
injunction or an order for specific performance as may be necessary to ensure
that the Executive complies with and performs his obligations under this
Agreement.

 

11.                                                                               SEVERABILITY.  Should any part of this Agreement be declared
or held to be invalid for any reason, the invalidity shall not affect the
validity of the remainder of this Agreement which shall continue in full force
and effect and be construed as if this Agreement had been executed without the
invalid portion, and it is hereby declared the intention of the parties that
this Agreement would have been executed without reference to any portion that
may, for any reason, be hereafter declared or held invalid.

 

12.                                                                               SURVIVAL.  The Employer and the Executive expressly
acknowledge and agree that the provisions of this Agreement, which by their
express or implied terms extend beyond the termination of the Executive’s
employment hereunder, or beyond the termination of this Agreement, shall
continue in full force and effect notwithstanding the termination of the
Executive’s employment or the termination of this Agreement for any reason.

 

13.                                                                               ENTIRE
AGREEMENT AND AMENDMENTS.  The
provisions herein constitute the entire agreement between the parties and
supersede all previous communications, representations and agreements, whether
oral or written, between the parties with respect to the

 

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subject
matter hereof.  This Agreement may not be
amended or modified except by written instrument signed by the Employer and the
Executive.

 

14.                                                                               GOVERNING
LAW.  This Agreement shall be
governed by and interpreted exclusively in accordance with the laws of British
Columbia, and the courts of British Columbia shall have the exclusive
jurisdiction over this Agreement and any claim or dispute arising under it.

 

15.                                                                               ENUREMENT.  This Agreement shall enure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors,
administrators, successors, personal representatives and permitted assigns.

 

16.                                                                               ASSIGNMENT
OF RIGHTS.  The Employer shall
have the right to assign this Agreement to another party.  The Executive shall not assign his rights
under this Agreement or delegate to others any of his functions and duties
under this Agreement without the express written consent of the Employer which
may be withheld in its sole discretion.

 

17.                                                                               AFFILIATED
CORPORATIONS.  The Executive
acknowledges and agrees that all of the Executive’s covenants and obligations
to the Employer, as well as the rights of the Employer under this Agreement, shall run in favour of and shall be enforceable
by the parent, subsidiary and affiliated companies of the Employer. The
Executive acknowledges that notwithstanding references in this Agreement to the
parent, subsidiary and affiliated companies of the Employer, this Agreement is
between the Executive and the Employer and there are no other parties to the
Agreement. The Executive shall have no right to enforce this Agreement against
any party other than the Employer unless this Agreement is assigned to any entity
in accordance with section 14 of this Agreement.

 

18.                                                                               EMPLOYMENT
STANDARDS.  In the event that the
minimum standards in the Employment Standards Act,
R.S.B.C. 1996, c. 113, or any other employment standards legislation that may
be applicable, are more favourable to the Executive in any respect, including
but not limited to the provisions herein in respect to notice of termination or
vacation entitlement, the provisions of the Employment Standards Act,
or such other applicable employment standards legislation, shall apply.

 

7

 

19.                                                                               LEGAL
ADVICE.  The Executive
acknowledges that it was recommended to him by the Employer that he obtain independent legal advice before executing this
Agreement and that by executing this Agreement the Executive represents that he
did obtain independent legal advice.

 

IN WITNESS WHEREOF the
parties have hereto have duly executed this agreement as of the day and year
first above written.

 

	
  STRESSGEN
  BIOTECHNOLOGIES INC.

  	
   

  	
  STRESSGEN BIOTECHNOLOGIES
  CORP.

  
	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
  Per:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (signed Gregory M. McKee)

  	
   

  	
  (signed Ian Lennox, Chairman of the Board)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executed by Dan
  Korpolinski in the)

  	
  )

  	
   

  
	
  presence
  of:)

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  (signed
  Gregory M. McKee))

  	
  )

  	
   (signed Daniel
  L. Korpolinski)

  	
   

  
	
  Witness)

  	
  ) DAN
  KORPOLINSKI

  
	
   

  	
  )

  	
   

  
							

 

8

 

SCHEDULE A

 

Salary

 

The Employer shall
pay to the Executive an annual salary of U.S.$395,000
(the “Base Salary”), less applicable statutory deductions, paid in equal
semi-monthly increments.

 

The Executive
shall also be eligible to receive additional incentive compensation of up to
40% of the Base Salary in respect of any 12 month period if he meets individual
objectives on targets to be established by the Employer in consultation with
the Executive (the “Annual Bonus”).

 

Benefits

 

A.                                   Fringe
Benefits

 

The Executive
shall be eligible to participate in the Executive Benefit Plan of StressGen
U.S.  The benefits provided to the
Executive may be subject to change from time to time at the sole discretion of
the Employer.

 

The Employer shall
also provide the Executive with appropriate long term disability insurance and
the opportunity to participate in a 401K plan of StressGen U.S.

 

The Employer shall
reimburse the Executive up to U.S.$6,600 for
additional supplemental life insurance obtained by the Executive.

 

B.                                     Stock
Options

 

The Employer may
from time to time grant to the Executive options to purchase common shares of
StressGen Corp. (the “Options”).  The
number of Options and the terms under which those Options shall vest shall be
determined by the sole discretion of the Board of Directors of StressGen
Corp.  The terms by which the Executive
may be granted Options, including without limitation, the exercise price of
those Options, are subject to the approval of all applicable regulatory
authorities, including the Toronto Stock Exchange, and are subject to the terms
and conditions of StressGen Corp.’s stock option plan.

 

C.                                     Tax
Compensation

 

The Employer shall
indemnify the Executive for the difference between the amount of tax charged on
all amounts payable under this Agreement or the exercise of any stock options
by the governments of Canada and the Province of British Columbia and the
applicable taxation rates that would have been charged on those payments or the
exercise of those stock options by the governments of the United States of
America or the State of California, provided that such difference has been
determined after consultation with the Employer’s auditors or another tax
advisor acceptable to both the Executive and the Employer and the Canadian and
British Columbian tax is payable as a result of the Executive’s performance of
his duties hereunder in the normal course.Exhibit 10.1

 

FOURTH AMENDMENT TO THE

WADDELL & REED FINANCIAL, INC.

1998 STOCK INCENTIVE PLAN

 

Waddell & Reed
Financial, Inc., a Delaware corporation (the “Company”), previously established
the Waddell & Reed Financial, Inc. 1998 Stock Incentive Plan, as amended
and restated (the “Plan”).  Pursuant to
Section 11 of the Plan, the Board of Directors of the Company reserves the
right to amend the Plan.  Pursuant to the
powers reserved in the Plan, the Plan is amended effective as of October 14,
2004 as follows.

 

1.             Section 13 of the Plan is amended
in its entirety to read as follows:

 

“SECTION 13.       Change of Control.

 

The following acceleration and valuation provisions
shall apply in the event of a “Change of Control” or “Potential Change of
Control,” as defined in this Section 13:

 

(a)  In the
event of a ‘Change of Control’ as defined in paragraph (b) of this Section 13,
unless otherwise determined by the Committee in writing at or after the grant,
but prior to the occurrence of such Change of Control, or, if and to the extent
so determined by the Committee in writing at or after grant (subject to any
right of approval expressly reserved by the Committee at the time of such
determination) in the event of a ‘Potential Change of Control,’ as defined in
paragraph (c) of this Section 13:

 

(i) any Stock Appreciation Rights and any Stock
Options awarded under the Plan not previously exercisable and vested shall
become fully exercisable and vested;

 

(ii) the restrictions and deferral limitations
applicable to any Restricted Stock and Deferred Stock awards under the Plan
shall lapse and such shares and awards shall be deemed fully vested; and

 

(iii) the value of all outstanding Stock Options,
Director Stock Options, Stock Appreciation Rights, Restricted Stock and Deferred
Stock Awards, shall, to the extent determined by the Committee at or after
grant, be settled on the basis of the ‘Change of Control Price’ (as defined in
paragraph (d) of this Section 13) as of the date the Change of Control occurs
or Potential Change of Control is determined to have occurred, or such other
date as the Committee may determine prior to the Change of Control or Potential
Change of Control.  In the sole
discretion of the Committee, such settlements may be made in cash, stock or
other property, or any combination thereof; provided, however, to the extent
any such settlement is made in stock, such shares of stock will be deemed to
have been distributed under the Plan.

 

 

(b)  For
purposes of paragraph (a) of this Section 13, a ‘Change of Control’ means the
happening of any of the following:

 

(i)  when any
‘person’, as such term is used in Sections 13(d) and 14(d) of the Exchange Act
(other than the Company or a Subsidiary or any Company employee benefit plan),
is or becomes the ‘beneficial owner’ (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly of securities of the Company representing
20 percent or more of the combined voting power of the Company’s then
outstanding securities;

 

(ii)  the
effective date of any transaction or event relating to the Company required to
be described pursuant to the requirements of 6(e) of Schedule 14A of Regulation
14A of the Commission under the Exchange Act;

 

(iii)  when,
during any period of two consecutive years during the existence of the Plan,
the individuals who, at the beginning of such period, constitute the Board
cease, for any reason other than death, to constitute at least a majority
thereof, unless each director who was not a director at the beginning of such
period was elected by, or on the recommendation of, at least two-thirds of the
directors at the beginning of such period; or

 

(iv)  the
effective date of a transaction requiring stockholder approval for the
acquisition of the Company by an entity other than the Company or a Subsidiary
through purchase of assets, or by merger, or otherwise.

 

(c)  For
purposes of paragraph (a) of this Section 13, a ‘Potential Change of Control’
means the happening of any of the following:

 

(i)  the
entering into an agreement by the Company, the consummation of which would
result in a Change of Control of the Company as defined in paragraph (b) of
this Section 13; or

 

(ii)  the
acquisition of beneficial ownership, directly or indirectly, by any entity,
person or group (other than the Company or a Subsidiary or any Company employee
benefit plan) of securities of the Company representing 5 percent or more of
the combined voting power of the Company’s outstanding securities and the
adoption by the Board of Directors of a resolution to the effect that a
Potential Change of Control of the Company has occurred for purposes of this
Plan.

 

(d)  For purposes of this Section 13, ‘Change of
Control Price’ means the highest price per share paid in any transaction
reported on the New York Stock Exchange Composite Tape, or paid or offered in
any transaction related to a potential or actual Change of Control of the
Company at any time during the preceding sixty day period as determined by the
Committee, except that (i) in the case of Incentive Stock Options and Stock
Appreciation Rights relating to 

 

 

Incentive Stock Options, such price shall be based only on transactions
reported for the date on which the Committee decides to cashout such options,
and (ii) in the case of Director Stock Options, the sixty day period shall be
the period immediately prior to the Change of Control.”

 

2.             Except as hereby amended, the Plan shall
remain in full force and effect.

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