Exhibit 10.1
COMMITTED LINE OF CREDIT NOTE
(MULTI-RATE OPTIONS)
$20,000,000 July 1, 1999
FOR VALUE RECEIVED, PAPA ▇▇▇▇'S INTERNATIONAL, INC., a Delaware corporation (the
"Borrower"), with an address at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, promises to pay to the order of PNC BANK, NATIONAL ASSOCIATION (the
"Bank"), in lawful money of the United States of America in immediately
available funds at its offices located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other locations as the Bank may
designate from time to time, the principal sum of TWENTY MILLION DOLLARS
($20,000,000) (the "Facility") or such lesser amount as may be advanced to or
for the benefit of the Borrower hereunder, together with interest accruing on
the outstanding principal balance from the date hereof, all as provided below:
1. Advances. This is a committed line of credit pursuant to which the
Borrower may borrow, repay and reborrow, and the Bank, subject to the terms and
conditions of this Note and the Loan Documents (as hereinafter defined), will
make advances to the Borrower and issue letters of credit for the account of the
Borrower (the "Letters of Credit") until the Expiration Date (as hereinafter
defined), provided however, that the total amount of outstanding Letters of
Credit issued hereunder (in the Bank's sole discretion and subject to
documentation satisfactory to the Bank) shall not exceed $3,000,000. Each
payment by the Bank under a Letter of Credit shall in the Bank's discretion
constitute an advance of principal hereunder and shall be evidenced by this
Note. (This is not a pre-advice for the issuance of a letter of credit and is
not irrevocable.) The "Expiration Date" shall mean June 30, 2000, or such later
date as may be designated by the Bank by written notice from the Bank and the
Borrower. The Borrower acknowledges and agrees that in no event will the Bank be
under any obligation to extend or renew the Facility or this Note beyond the
Expiration Date. The Borrower may request advances hereunder upon giving oral or
written notice to the Bank by 11:00 a.m. (Louisville, Kentucky time) (a) on the
day of the proposed advance, in the case of advances to bear interest under the
Base Rate Option (as hereinafter defined) or the As Offered Rate Option (as
hereinafter defined) and (b) three (3) Business Days prior to the proposed
advance, in the case of advances to bear interest under the Euro-Rate Option (as
hereinafter defined), followed promptly thereafter by the Borrower's written
confirmation to the Bank on any oral notice. The aggregate unpaid principal
amount of advances under this Note shall not exceed the face amount of this
Note.
2. Rate of Interest. Each advance outstanding under this Note will bear
interest at a rate or rates per annum as may be selected by the Borrower from
the interest options set forth below (each, an "Option"):
(i) Base Rate Option. A rate of interest per annum which is at all times
equal to the Prime Rate ("Base Rate"). For purposes hereof, the term "Prime
Rate" shall mean the rate
publicly announced by the Bank from time to time as its prime rate. The Prime
Rate is determined from time to time by the Bank as a means of pricing some
loans to its borrowers. The Prime Rate is not tied to any external rate of
interest or index, and does not necessarily reflect the lowest rate of interest
actually charged by the Bank to any particular class or category of customers.
If and when the Prime Rate changes, the rate of interest with respect to any
advance to which the Base Rate Option applies will change automatically without
notice to the Borrower, effective on the date of any such change. There are no
required minimum interest periods for advances bearing interest under the Base
Rate Option.
(ii) Euro-Rate Option. A rate per annum equal to the sum of (A) the
Euro-Rate plus (B) Fifty (50) basis points (.50%), for the applicable Euro-Rate
Interest Period.
(iii) As Offered Rate Option. A rate of interest per annum, as offered from
time to time by the Bank to the Borrower in its sole discretion, as the daily
rate at which the Bank would advance funds to the Borrower (the "As Offered Rate
Interest Period") in the principal amount requested.
For purposes hereof, the following terms shall have the following meanings:
"Business Day" shall mean any day other than a Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required to be
closed for business in Louisville, Kentucky.
"Euro-Rate" shall mean, with respect to any advance to which the Euro-Rate
Option applies for the applicable Euro-Rate Interest Period, the interest
rate per annum determined by the Bank by dividing (the resulting quotient
rounded upwards, if necessary, to the nearest 1/100th of 1%) (i) the rate
of interest determined by the Bank in accordance with its usual procedures
(which determination shall be conclusive absent manifest error) to be the
eurodollar rate two (2) Business Days prior to the first day of such Euro-
Rate Interest Period for an amount comparable to such advance and having a
borrowing date and a maturity comparable to such Euro-Rate Interest Period
by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage.
"Euro-Rate Interest Period" shall mean the period of one (1), two (2),
three (3) or six (6) months selected by the Borrower commencing on the date
of disbursement of an advance (or the date of conversion of an advance to
the Euro-Rate Option, as the case may be) and each successive period
selected by the Borrower thereafter; provided, that if a Euro-Rate Interest
Period would end on a day which is not a Business Day, it shall end on the
next succeeding Business Day, unless such day falls in the succeeding
calendar month in which case the Euro-Rate Interest Period shall end on the
next preceding Business Day. In no event shall any Euro-Rate Interest
Period end on a day after the Expiration Date.
"Euro-Rate Reserve Percentage" shall mean the maximum effective percentage
in effect on such day as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the reserve
requirements (including, without limitation,
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supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as "Eurocurrency liabilities").
The Euro-Rate shall be adjusted with respect to any advance to which the
Euro-Rate Option applies on and as of the effective date of any change in the
Euro-Rate Reserve Percentage. The Bank shall give prompt notice to the Borrower
of the Euro-Rate as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.
If the Bank determines (which determination shall be final and conclusive) that,
by reason of circumstances affecting the eurodollar market generally, deposits
in dollars (in the applicable amounts) are not being offered to banks in the
eurodollar market for the selected term, or adequate means do not exist for
ascertaining the Euro-Rate, then the Bank shall give notice thereof to the
Borrower. Thereafter, until the Bank notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (a) the
availability of the Euro-Rate Option shall be suspended, and (b) the interest
rate for all advances then bearing interest under the Euro-Rate Option shall be
converted at the expiration of the then current Euro-Rate Interest Period(s) to
the Base Rate Option.
In addition, if, after the date of this Note, the Bank shall determine (which
determination shall be final and conclusive) that any enactment, promulgation or
adoption of or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by a governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any guideline, request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for the
Bank to make or maintain or fund loans under the Euro-Rate Option, the Bank
shall notify the Borrower. Upon receipt of such notice, until the Bank notifies
the Borrower that the circumstances giving rise to such determination no longer
apply, (a) the availability of the Euro-Rate Option shall be suspended, and (b)
the interest rate on all advances then bearing interest under the Euro-Rate
Option shall be converted to the Base Rate Option either (i) on the last day of
the then current Euro-Rate Interest Period(s) if the Bank may lawfully continue
to maintain advances under the Euro-Rate Option to such day, or (ii) immediately
if the Bank may not lawfully continue to maintain advances under the Euro-Rate
Option.
The foregoing notwithstanding, it is understood that the Borrower may select
different Options to apply simultaneously to different portions of the advances
and may select up to four (4) different interest periods to apply simultaneously
to different portions of the advances bearing interest under the Euro-Rate
Option. Interest hereunder will be calculated on the basis of a year of 360 days
for the actual number of days elapsed. In no event will the rate of interest
hereunder exceed the maximum rate allowed by law.
3. Interest Rate Election. Subject to the terms and conditions of this Note, at
the end of each interest period applicable to any advance, the Borrower may
renew the Option applicable to such advance or convert such advance to a
different Option; provided that, during any period in which any Event of Default
(as hereinafter defined) has occurred and is continuing, any advances
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bearing interest under the Euro-Rate Option shall, at the Bank's sole
discretion, be converted at the end of the applicable Euro-Rate Interest Period
to the Base Rate Option and the Euro-Rate Option will not be available to
Borrower with respect to any new advances until such Event of Default has been
cured by the Borrower or waived by the Bank. The Borrower shall notify the Bank
of each election of an Option, each conversion from one Option to another, the
amount of the advances then outstanding to be allocated to each Option and where
relevant the interest periods therefor. In the case of converting to the
Euro-Rate Option, such notice shall be given at least three (3) Business Days
prior to the commencement of any Euro-Rate Interest Period. If no notice of
conversion or renewal is timely received by the Bank, the Borrower shall be
deemed to have converted such advance to the Base Rate Option. Any such election
shall be promptly confirmed in writing by such method as the Bank may require.
4. Advance Procedures. A request for advance made by telephone must be promptly
confirmed in writing by such method as the Bank may require. The Borrower
authorizes the Bank to accept telephonic requests for advances, and the Bank
shall be entitled to rely upon the authority of any person providing such
instructions. The Borrower hereby indemnifies and holds the Bank harmless from
and against any and all damages, losses, liabilities, costs and expenses
(including reasonable attorneys' fees and expenses) which may arise or be
created by the acceptance of such telephone requests or making such advances.
The Bank will enter on its books and records, which entry when made will be
presumed correct, the date and amount of each advance, the interest rate and
interest period applicable thereto, as well as the date and amount of each
payment.
5. Payment Terms. The Borrower shall pay accrued interest on the unpaid
principal balance of this Note in arrears: (a) for the portion of advances
bearing interest under the Base Rate Option, on the first day of each month
during the term hereof, (b) for the portion of advances bearing interest under
the Euro-Rate Option, on the last day of the respective Euro-Rate Interest
Period for such advance, (c) for the portion of advances bearing interest under
the As Offered Rate Option, on the last day of each As Offered Interest Period,
(d) if any Euro-Rate Interest Period or As Offered Rate Interest Period is
longer than three (3) months, then also on the three (3) month anniversary of
such interest period and every three (3) months thereafter, and (e) for all
advances, at maturity, whether by acceleration of this Note or otherwise, and
after maturity, on demand until paid in full. All outstanding principal and
accrued interest hereunder shall be due and payable in full on the Expiration
Date.
If any payment under this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the State where the Bank's office indicated above is
located, such payment shall be made on the next succeeding business day and such
extension of time shall be included in computing interest in connection with
such payment. The Borrower hereby authorizes the Bank to charge the Borrower's
deposit account at the Bank for any payment when due hereunder. Payments
received will be applied to charges, fees and expenses (including attorneys'
fees), accrued interest and principal in any order the Bank may choose, in its
sole discretion.
6. Late Payments; Default Rate. If the Borrower fails to make any payment of
principal, interest or other amount coming due pursuant to the provisions of
this Note within 15 calendar
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days of the date due and payable, the Borrower also shall pay to the Bank a late
charge equal to the lesser of five percent (5%) of the amount of such payment or
$100.00 (the "Late Charge"). Such 15-day period shall not be construed in any
way to extend the due date of any such payment. Upon maturity, whether by
acceleration, demand or otherwise, and at the Bank's option upon the occurrence
of any Event of Default (as hereinafter defined) and during the continuance
thereof, this Note shall bear interest at a rate per annum (based on a year of
360 days and actual days elapsed) which shall be two percentage points (2%) in
excess of the interest rate in effect from time to time under this Note but not
more than the maximum rate allowed by the law (the "Default Rate"). The Default
Rate shall continue to apply whether or not judgment shall be entered on this
Note. Both the Late Charge and the Default Rate are imposed as liquidated
damages for the purposes of defraying the Bank's expenses incident to the
handling of delinquent payments, but are in addition to, and not in lieu of, the
Bank's exercise of any rights and remedies hereunder, under the other Loan
Documents or under applicable law, and any fees and expenses of any agents or
attorneys which the Bank may employ. In addition, the Default Rate reflects the
increased credit risk to the Bank of carrying a loan that is in default. The
Borrower agrees that the Late Charge and Default Rate are reasonable forecasts
of just compensation for anticipated and actual harm incurred by the Bank, and
that the actual harm incurred by the Bank cannot be estimated with certainty and
without difficulty.
7. Prepayment. The Borrower shall have the right to prepay at any time and
from time to time, in whole or in part, without penalty, any advance hereunder
which is accruing interest under the Base Rate Option or the As Offered Rate
Option. If the Borrower prepays (whether voluntary, on default or otherwise) all
or any part of any advance which is accruing interest under the Euro-Rate Option
on other than the last day of the applicable Euro-Rate Interest Period, the
Borrower shall pay to the Bank, on demand therefor, all amounts due pursuant to
paragraph 8 below, including the Cost of Prepayment, if any.
8. Yield Protection. The Borrower shall pay to the Bank, on written demand
therefor, together with the written evidence of the justification therefor, all
direct costs incurred, losses suffered or payments made by Bank by reason of any
change in law or regulation or its interpretation imposing any reserve, deposit,
allocation of capital, or similar requirement (including without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) on the
Bank, its holding company or any of their respective assets. In addition, the
Borrower agrees to indemnify the Bank against any liabilities, losses or
expenses (including loss of margin, any loss or expense sustained or incurred in
liquidating or employing deposits from third parties, and any loss or expense
incurred in connection with funds acquired to effect, fund or maintain any
advance (or any part thereof) bearing interest under the Euro-Rate Option which
the Bank sustains or incurs as a consequence of either (i) the Borrower's
failure to make a payment on the due date thereof, (ii) the Borrower's
revocation (expressly, by later inconsistent notices or otherwise) in whole or
in part of any notice given to Bank to request, convert, renew or prepay any
advance, or (iii) the Borrower's payment, prepayment or conversion of any
advance bearing interest under the Euro-Rate Option on a day other than the last
day of the applicable Euro-Rate Interest Period, including but not limited to
the Cost of Prepayment. "Cost of Prepayment" means an amount equal to the
present value, if positive, of the product of (a) the difference between (i) the
yield, on the beginning date of the applicable interest period, of a U.S.
Treasury
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obligation with a maturity similar to the applicable interest period minus (ii)
the yield, on the prepayment date, of a U.S. Treasury obligation with a maturity
similar to the remaining maturity of the applicable interest period, and (b) the
principal amount to be prepaid, and (c) the number of years, including
fractional years from the prepayment date to the end of the applicable interest
period. The yield on any U.S. Treasury obligation shall be determined by
reference to Federal Reserve Statistical Release H. 15(519) "Selected Interest
Rates". For purposes of making present value calculations, the yield to maturity
of a similar maturity U.S. Treasury obligation on the prepayment date shall be
deemed the discount rate. The Cost of Prepayment shall also apply to any
payments made after acceleration of the maturity of this Note. The Bank's
determination of an amount payable under this paragraph shall, in the absence of
manifest error, be conclusive and shall be payable on demand.
9. Other Loan Documents. This Note is issued in connection with a letter
agreement or loan agreement between the Borrower and the Bank dated on or before
the date hereof, and the other agreements and documents executed in connection
therewith or referred to therein, the terms of which are incorporated herein by
reference (as amended, modified or renewed from time to time, collectively the
"Loan Documents"), and is secured by the property described in the Loan
Documents (if any) and by such other collateral as previously may have been or
may in the future be granted to the Bank to secure this Note.
10. Events of Default. The occurrence of any of the following events will be
deemed to be an "Event of Default" under this Note: (i) the nonpayment of any
principal, interest or other indebtedness under this Note within five (5) days
after it becomes due, (ii) the occurrence of any event of default or default and
the lapse of any notice or cure period under any Loan Document or any other
debt, liability or obligation to the Bank of any Obligor, (iii) the filing by or
against any Obligor or any Affiliate of any proceeding in bankruptcy,
receivership, insolvency, reorganization, liquidation, conservatorship or
similar proceeding (and, in the case of any such proceeding instituted against
any Obligor or any Affiliate, such proceeding is not dismissed or stayed within
30 days of the commencement thereof); (iv) any assignment by any Obligor or any
Affiliate for the benefit of creditors, or any levy, garnishment, attachment or
similar proceeding is instituted against any property of any Obligor or any
Affiliate held by or deposited with the Bank; (v) a default with respect to any
other indebtedness of any Obligor or any Affiliate for borrowed money in excess
of $100,000.00, if the effect of such default is to cause or permit the
acceleration of such debt; (vi) the entry of a final judgment in excess of
$1,000,000.00 against any Obligor or any Affiliate and the failure of such
Obligor or any Affiliate either to discharge the judgment or obtain a stay
thereof within thirty (30) days; )vii) any material adverse change in the
business, assets, operations, financial condition or results of operations of
any Obligor or any Affiliate; {viii) the revocation or attempted revocation, in
whole or in part, of any guarantee by any Guarantor; (ix) any representation or
warranty made by any Obligor or any Affiliate to the Bank in any
document,including bit not limited to the Loan Documents is false, erroneous or
misleading in any material respect; (x) the failure of any Obligor or any
Affiliate to observe or perform any covenant or other agreement with the Bank
contained in any Loan Document or any other documents now or in the future
securing the obligations of any Obligor or any Affiliate to the Bank and such
failure is not cured within 30 days after notice from the Bank; or (xi) the
occurrence of any event of default or
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default and the lapse of any notice or cure period under any debt, liability or
obligation to the Bank of any Affiliate.
As used herein, the term "Obligor" means any Borrower and any Guarantor, the
term "Guarantor" means any guarantor of the Borrower's obligations to the Bank
existing on the date of this Note or arising in the future, and the
term "Affiliate" means each of PJ Food Service, Inc. and PJFS of Mississippi,
Inc.
Upon the occurrence of an Event of Default: (a) the Bank shall be under no
further obligation to make advances hereunder; (b) if an Event of Default
specified in clause (iii) or (iv) above shall occur, the outstanding principal
balance and accrued interest hereunder together with any additional amounts
payable hereunder shall be immediately due and payable without demand or notice
of any kind; (c) if any other Event of Default shall occur, the outstanding
principal balance and accrued interest hereunder together with any additional
amounts payable hereunder, at the Bank's option and without demand or notice of
any kind, may be accelerated and become immediately due and payable; (d) at the
Bank's option, this Note will bear interest at the Default Rate from the date of
the occurrence of the Event of Default; and (e) the Bank may exercise from time
to time any of the rights and remedies available under the Loan Documents or
under applicable law.
11. Right of Setoff. In addition to all liens upon and rights of setoff against
the Borrower's money, securities or other property given to the Bank by law, the
Bank shall have, with respect to the Borrower's obligations to the Bank under
this Note and to the extent permitted by law, a contractual possessory security
interest in and a contractual right of setoff against, and the Borrower hereby
assigns, conveys, delivers, pledges and transfers to the Bank all of the
Borrower's right, title and interest in and to, all of the Borrower's deposits,
moneys, securities and other property now or hereafter in the possession of or
on deposit with, or in transit to, the Bank or any other direct or indirect
subsidiary of PNC Bank Corp., whether held in a general or special account or
deposit, whether held jointly with someone else, or whether held for safekeeping
or otherwise, excluding, however, all IRA, ▇▇▇▇▇, and trust accounts. Every such
security interest and right of setoff may be exercised without demand upon or
notice to the Borrower. Every such right of setoff shall be deemed to have been
exercised immediately upon the occurrence of an Event of Default hereunder
without any action of the Bank, although the Bank may enter such setoff on its
books and records at a later time.
12. Miscellaneous. All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder must be in writing (except
as may be agreed otherwise above with respect to borrowing requests) and will be
effective upon receipt. Such notices and other communications may be
hand-delivered, sent by facsimile transmission with confirmation of delivery and
a copy sent by first-class mail, or sent by nationally recognized overnight
courier service, to the addresses for the Bank and the Borrower set forth above
or to such other address as either may give to the other in writing for such
purpose. No delay or omission on the Bank's part to exercise any right or power
arising hereunder will impair any such right or power or be considered a waiver
of any such right or power, nor will the Bank's action or inaction impair any
such right or power. No modification, amendment or waiver of any provision
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of this Note nor consent to any departure by the Borrower therefrom will be
effective unless made in a writing signed by the Bank. The Borrower agrees to
pay on demand, to the extent permitted by law, all costs and expenses incurred
by the Bank in the enforcement of its rights in this Note and in any security
therefor, including without limitation reasonable fees and expenses of the
Bank's counsel. If any provision of this Note is found to be invalid by a court,
all the other provisions of this Note will remain in full force and effect. The
Borrower and all other makers and indorsers of this Note hereby forever waive
presentment, protest, notice of dishonor and notice of non-payment. The Borrower
also waives all defenses based on suretyship or impairment of collateral. If
this Note is executed by more than one Borrower, the obligations of such persons
or entities hereunder will be joint and several. This Note shall bind the
Borrower and its heirs, executors, administrators, successors and assigns, and
the benefits hereof shall inure to the benefit of the Bank and its successors
and assigns; provided, however, that the Borrower may not assign this Note in
whole or in part without the Bank's written consent and the Bank at any time may
assign this Note in whole or in part.
This Note has been delivered to and accepted by the Bank and will be deemed to
be made in the State where the Bank's office indicated above is located. This
Note will be interpreted and the rights and liabilities of the Bank and the
Borrower determined in accordance with the laws of the State where the Bank's
office indicated above is located, excluding its conflict of laws rules. The
Borrower hereby irrevocably consents to the exclusive jurisdiction of any state
or federal court in the county or judicial district where the Bank's office
indicated above is located; provided that nothing contained in this Note will
prevent the Bank from bringing any action, enforcing any award or judgment or
exercising any rights against the Borrower individually, against any security or
against any property of the Borrower within any other county, state or other
foreign or domestic jurisdiction. The Borrower acknowledges and agrees that the
venue provided above is the most convenient forum for both the Bank and the
Borrower. The Borrower waives any objection to venue and any objection based on
a more convenient forum in any action instituted under this Note.
13. WAIVER OF JURY TRIAL. The Borrower irrevocably waives any and all rights
the Borrower may have to trial by jury in any action, proceeding or claim of any
nature relating to this Note, any documents executed in connection with this
Note or any transaction contemplated in any of such documents. The Borrower
acknowledges that the foregoing waiver is knowing and voluntary.
The Borrower acknowledges that it has read and understood all the provisions of
this Note, including the waiver of jury trial, and has been advised by counsel
as necessary or appropriate.
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WITNESS The due execution hereof as a document under seal, as of the date first
written above, with the intent to be legally bound hereby.
WITNESS/ATTEST: PAPA ▇▇▇▇'S INTERNATIONAL,
INC., a Delaware Corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇, Vice President Print Name: ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: CFO & Treasurer
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