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Exhibit 10.5 CONFORMED COPY
LOAN AGREEMENT
dated as of
March 3, 1998
between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AIRCRAFT FINANCE
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, DISCOVER & CO.
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TABLE OF CONTENTS
_________________
PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions................................................. 1
ARTICLE 2
LOANS
SECTION 2.01. Loans....................................................... 4
SECTION 2.02. Borrowings.................................................. 4
SECTION 2.03. Termination of Commitment and Maturity of Loans............. 5
SECTION 2.04. Interest.................................................... 5
SECTION 2.05. Repayment of Interest and Loans............................. 5
SECTION 2.06. MSAF Facility Covenant...................................... 6
SECTION 2.07. General Provisions as to Payments........................... 6
SECTION 2.08. Note........................................................ 6
ARTICLE 3
MISCELLANEOUS
SECTION 3.01. Notices..................................................... 6
SECTION 3.02. Amendments and Waivers...................................... 7
SECTION 3.03. No Bankruptcy Petition...................................... 8
SECTION 3.04. Successors and Assigns...................................... 8
SECTION 3.05. Governing Law; Submission to Jurisdiction................... 8
SECTION 3.06. Counterparts; Effectiveness; Third Party Beneficiaries...... 8
SECTION 3.07. WAIVER OF JURY TRIAL........................................ 9
SECTION 3.08. Entire Agreement............................................ 9
SECTION 3.09. Captions.................................................... 9
EXHIBIT A - Form of Note........................................ A-1
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LOAN AGREEMENT dated as of March 3, 1998 between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AIRCRAFT
FINANCE, a Delaware statutory business trust ("MSAF") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, DISCOVER & CO., a Delaware corporation ( "▇▇▇▇▇▇ ▇▇▇▇▇▇▇").
WHEREAS, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ has agreed to make loans to MSAF;
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used in this
Agreement, have the following meanings:
"AGREEMENT" means this Loan Agreement, as amended and in effect from time
to time.
"BUSINESS DAY" means any day on which United States dollar deposits may be
traded on the London inter-bank market and commercial banks and foreign
exchange markets are open in New York, New York and London, England.
"COMMITMENT" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ obligation to make Loans to MSAF at
any time, up to a maximum of the Commitment Amount at such time.
"COMMITMENT AMOUNT" means, at any time, the sum of (A) $10,000,000 less
(B) the aggregate amount of outstanding Loans at such time.
"DRAWING" means any borrowing that MSAF makes under the MSAF Facilities in
order to make a payment of principal of or interest on MSAF's securitization
debt.
"ILFC AGREEMENT" means the Custody and Loan Agreement dated as of March 3,
1998 among MSAF, the other MSAF Lessors (as defined therein) and International
Lease Finance Corporation.
"INDENTURE" means the indenture dated as of March 3, 1998 between MSAF and
Bankers Trust Company, pursuant to which the securitization debt of MSAF is
issued.
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"INDENTURE DEFAULT" means any time following the delivery of "Default
Notice" (as defined in the indenture) under the Indenture or during the
continuance of an "Acceleration Default" (as defined in the Indenture).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated as of
March 3, 1998 among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, International Lease Finance Corporation and
the other MSAF Facility Providers (as defined therein).
"LOAN" means any loan made by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to MSAF pursuant to Section
2.01(a) of this Agreement.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇" has the meaning specified in the preamble to this
Agreement.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DRAWING SHARE" means on the occasion of any Drawing, the
amount which is equal to the product of (x) the applicable Total MSAF
Facilities Drawing Amount multiplied by (y) the fraction which is the quotient
of (A) the Commitment Amount immediately before such Drawing divided by (B) the
aggregate amounts committed and available for drawing under the MSAF Facilities
immediately before such Drawing.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇ REPAYMENT SHARE" means, on each Payment Date, the amount
which is equal to the product of (x) the applicable Total MSAF Facilities
Repayment Amount multiplied by (y) the fraction which is the quotient of (A)
outstanding Loans immediately before the applicable repayment divided by (B)
the aggregate amounts outstanding and required to be repaid under the MSAF
Facilities immediately before such repayment.
"MSAF" has the meaning specified in the preamble to this Agreement.
"MSAF FACILITY" means (i) this Agreement, (ii) the ILFC Agreement and
(iii) any other credit or liquidity enhancement facility provided to MSAF that
ranks pari passu with this Agreement and the ILFC Agreement.
"MSAF FACILITY PROVIDER" means the provider of any MSAF Facility.
"NOTE" means the promissory note of MSAF payable to the order of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ substantially in the form of Exhibit A, evidencing MSAF's obligation to
repay the Loans.
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"NOTICE OF ADDITIONAL BORROWING" has the meaning specified in Section
2.02(c).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(a).
"NOTICE OF REPAYMENT" has the meaning specified in Section 2.05(a).
"PAYMENT DATE" means the 15th day of each month (or, if such day is not a
Business Day, the next succeeding Business Day), commencing April 1998.
"PERSON" means an individual, a corporation, a limited liability company,
a partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
of such government or political subdivision.
"SUBSIDIARY" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
"TERMINATION DATE" means the earlier of the date (i) of the repayment or
defeasance (but not refinancing) of all of MSAF's securitization debt and (ii)
of the sale at any time by MSAF and its Subsidiaries of all aircraft owned by
MSAF and its Subsidiaries at such time.
"TOTAL MSAF FACILITIES DRAWING AMOUNT" means, at the time of each Drawing,
the total amount to be drawn by MSAF under the MSAF Facilities in order to make
a payment of principal of or interest on MSAF's securitization debt on the next
Payment Date.
"TOTAL MSAF FACILITIES REPAYMENT AMOUNT" means, on each Payment Date, the
total amount available to MSAF for the repayment of amounts outstanding under
the MSAF Facilities, after the payment of all amounts required to be paid on
such Payment Date pursuant to Section 3.08(a)(x) or, during an Indenture
Default, Section 3.08(b)(vi) of the Indenture.
"UNITED STATES" means the United States of America.
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ARTICLE 2
LOANS
SECTION 2.01. Loans. (a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ agrees, on the terms and
conditions set forth in this Agreement, to make Loans to MSAF from time to time
during the term of this Agreement to enable MSAF to make a payment of principal
of or interest on MSAF's securitization debt; provided that the amount of any
such Loan shall not exceed the Commitment Amount in effect immediately before
such Loan is made.
(b) MSAF may borrow under this Section 2.01, repay Loans as provided in
Section 2.05 and reborrow under this Section 2.01, at any time during the term
of this Agreement.
SECTION 2.02. Borrowings. (a) Not later than 8:30 P.M. (New York City
time) on the Business Day before the date of any Loan that MSAF wishes ▇▇▇▇▇▇
▇▇▇▇▇▇▇ to make, MSAF shall give ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ notice (a "NOTICE OF
BORROWING"), specifying:
(i) the applicable Total MSAF Facilities Drawing Amount;
(ii) the amount of such Loan, which shall be equal to the related
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Drawing Share; and
(iii) the date (which shall be a Business Day) of such Loan.
(b) Not later than 5:30 P.M. (New York City time) on the date of any Loan
specified in a Notice of Borrowing, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall make available the
amount of such Loan to MSAF, in lawful money of the United States in Federal or
other funds immediately available in New York City.
(c) If, for any reason, on the date of any Loan MSAF does not receive the
full applicable Total Drawing Amount under the MSAF Facilities, not later than
8:30 P.M. (New York City time) on the date of such Loan, MSAF may give ▇▇▇▇▇▇
▇▇▇▇▇▇▇ notice of an additional Loan (a "NOTICE OF ADDITIONAL BORROWING"),
specifying:
(i) the shortfall in such Total MSAF Facilities Drawing Amount; and
(ii) the amount of such additional Loan, which may be any amount up
to the Commitment Amount; and
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(iii) the date (which shall be the next Business Day) of such additional
Loan.
(d) Not later than 5:30 P.M. (New York City time) on the date of any
additional Loan specified in a Notice of Additional Borrowing, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
shall make available the amount of the applicable additional Loan to MSAF, in
lawful money of the United States in Federal or other funds immediately
available in New York City.
SECTION 2.03. Termination of Commitment and Maturity of Loans. On the
Termination Date, the Commitment shall terminate and on the next Payment Date,
unless repaid earlier pursuant to Section 2.05, each Loan shall mature, and its
principal amount shall, to the extent that there are amounts available to MSAF
on such Payment Date after the payment of all amounts required to be paid on
such Payment Date pursuant to Section 3.08(a)(x) or, during an Indenture
Default, Section 3.08(b)(vi) of the Indenture, be due and payable (together
with any and all interest accrued thereon).
SECTION 2.04. Interest. Each Loan shall bear interest on its outstanding
principal amount, for each day from the date such Loan is made until it is
repaid, at a rate of 3% per annum, on the basis of a 360-day year consisting of
twelve 30-day months.
SECTION 2.05. Repayment of Interest and Loans. (a) On each Payment Date,
to the extent that there are amounts available to MSAF on such Payment Date
after the payment of all amounts required to be paid on such Payment Date
pursuant to Section 3.08(a)(x) or, during an Indenture Default, Section
3.08(b)(vi) of the Indenture, MSAF shall repay interest on and principal of
outstanding Loans in accordance with Section 3.08(a)(xi) or, during an
Indenture Default, Section 3.08(b)(vii) of the Indenture. Not later than 12:30
P.M. (New York City time) on the second Business Day before each Payment Date
on which MSAF intends to repay any interest on or principal of Loans, MSAF
shall give ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ notice (a "NOTICE OF REPAYMENT"), specifying:
(i) the Total MSAF Facilities Repayment Amount that it intends to
repay on such Payment Date; and
(ii) the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Repayment Share.
(b) On each Payment Date following a Notice of Repayment, MSAF shall pay
to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Repayment Share specified in such Notice
of Repayment, which shall be applied to repay:
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(i) first, all interest then accrued in accordance with Section
2.04; and
(ii) second, the principal amount of any Loans then outstanding.
SECTION 2.06. MSAF Facility Covenant. MSAF covenants with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
that it shall not at any time enter into any MSAF Facility unless the
applicable MSAF Facility Provider simultaneously becomes a party to the
Intercreditor Agreement.
SECTION 2.07. General Provisions as to Payments. MSAF shall make each
payment pursuant to Section 2.05 at the times specified in Section 3.06(d) of
the Indenture and at such place as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall specify by notice to
MSAF.
SECTION 2.08. Note. (a) MSAF's obligation to repay any Loans shall be
evidenced by the Note.
(b) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall record the date and amount of each Loan and the
date and amount of each payment of principal made by MSAF with respect to each
such Loan by endorsing on the schedule forming a part of the Note appropriate
notations to evidence such information with respect to each such Loan then
outstanding; provided that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ failure to make (or any error in
making) any such endorsement shall not affect MSAF's obligations under this
Agreement or under the Note. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is hereby irrevocably authorized
by MSAF so to endorse the Note and to attach to and make a part of the Note a
continuation of such schedule as and when required.
ARTICLE 3
MISCELLANEOUS
SECTION 3.01. Notices. Any notice, request or information required or
permissible under this Agreement will be in writing and in English. Notices
will be delivered in person or sent by fax, letter (mailed airmail, certified
and return receipt requested), or by expedited delivery addressed to the
parties as set forth below in this Section 3.01. In the case of a fax, notice
will be deemed received upon the date set forth on the confirmation of receipt
produced by the sender's fax machine immediately after the fax is sent. In the
case of a mailed letter, notice will be deemed received on the tenth day after
mailing. In the case of a notice sent by expedited delivery, notice will be
deemed received on the date of delivery set forth in the records of the Person
which accomplished the delivery. If any
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notice is sent by more than one of the above listed methods, notice will be
deemed received on the earliest possible date in accordance with the above
provisions. Notices will be addressed as follows:
if to MSAF, to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Aircraft Finance
c/o Cabot Aircraft Services Limited
4th floor, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇'▇▇▇▇▇
Fax: ▇▇▇-▇-▇▇▇ 4778
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
25 Cabot Square
Canary Wharf
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: ▇▇-▇▇▇-▇▇▇ 4328
if to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, Discover & Co.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇
or to such other address as either party shall from time to time designate in
writing to the other party.
SECTION 3.02. Amendments and Waivers. (a) Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement, or
in the case of a waiver, by the party against whom the waiver is to be
effective.
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(b) No failure or delay by either party in exercising any right, power or
privilege under this Agreement shall operate as a waiver of such right, power
or privilege nor shall any single or partial exercise of such right, power or
privilege preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. The rights
and remedies provided in this Agreement shall be cumulative and not exclusive
of any rights or remedies provided by law.
SECTION 3.03. No Bankruptcy Petition. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ agrees that it
shall not take any steps for the purposes of procuring the appointment of any
administrative receiver or the making of any administrative order or for
instituting any bankruptcy, reorganization, arrangement, insolvency,
winding-up, liquidation, composition or any like proceedings under the laws of
any jurisdiction in respect of MSAF or in respect of any of MSAF's liabilities,
as a result of any claim or interest of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ under this Agreement.
SECTION 3.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties to this Agreement
and their respective successors and assigns; provided that neither party may
assign, delegate or otherwise transfer any of its rights and obligations under
this Agreement without the consent of the other party.
SECTION 3.05. Governing Law; Submission to Jurisdiction. (a) This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
(b) The parties to this Agreement agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
by this Agreement may be brought in the United States District Court for the
Southern District of New York or any other New York State court sitting in New
York City, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or in the future have to the laying of the
venue of any such suit, action or proceeding in any such court or that any such
suit, action or proceeding which is brought in any such court has been brought
in an inconvenient forum. Process in any such suit, action or proceeding may
be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 3.01 shall
be deemed effective service of process on such party.
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SECTION 3.06. Counterparts; Effectiveness; Third Party Beneficiaries. (a)
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures to each such
counterpart were upon the same instrument.
(b) This Agreement shall become effective when (i) each party has received
a counterpart of this Agreement signed by the other party or facsimile or other
satisfactory confirmation that the other party has signed a counterpart of this
Agreement and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ has received the duly executed Note.
(c) No provision of this Agreement is intended to confer upon any Person
other than the parties to this Agreement any rights or remedies under this
Agreement.
SECTION 3.07. WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT.
SECTION 3.08. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
SECTION 3.09. Captions. The captions used in this Agreement are included
for convenience of reference only and shall be ignored in the construction or
interpretation of this Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed by its authorized representative or officer, as applicable, as of
the day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AIRCRAFT
FINANCE
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Signatory Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇,
DISCOVER & CO.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Treasurer
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EXHIBIT A
FORM OF NOTE
Wilmington, Delaware
March 3, 1998
For value received, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AIRCRAFT FINANCE, a Delaware statutory
business trust ("MSAF"), promises to pay to the order of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, DISCOVER & CO., a Delaware corporation ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), the unpaid
principal amount of each Loan made by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to MSAF pursuant to the
Loan Agreement referred to below, as provided in the Loan Agreement. MSAF
promises to pay interest on the unpaid principal amount of each such Loan on
the dates and at the rate provided for in the Loan Agreement. All such
payments of principal and interest shall be made in lawful money of the United
States in Federal or other immediately available funds at ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇
address specified in or pursuant to Section 3.01 of the Loan Agreement.
All Loans made by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and all repayments of the principal
thereof shall be recorded by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ by endorsing appropriate notations
to evidence such information with respect to each such Loan then outstanding on
the schedule forming a part of this Note, or on a continuation of such schedule
attached to and made a part of this Note; provided that the failure of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ to make (or any error in making) any such endorsement shall not affect
MSAF's obligations under this Note or the Loan Agreement.
This note is the Note referred to in the Loan Agreement dated as of March
3, 1998 between MSAF and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (as amended and in effect from time to
time, the "LOAN AGREEMENT"). MSAF's obligations under this Note are
subordinated to various other obligations of MSAF, as set forth in the
Indenture. Capitalized terms used and not defined in this Note have the
meanings specified in the Loan Agreement.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AIRCRAFT
FINANCE
By: ________________________________
Name:
Title:
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LOANS AND PAYMENTS OF PRINCIPAL
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AMOUNT OF
PRINCIPAL
DATE AMOUNT OF LOAN REPAID NOTATION MADE BY
______________________________________________________________________
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______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
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______________________________________________________________________
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